Written by Dawinderpal Sahota
It’s
quarterly results time again, with Vodafone, Verizon, Microsoft and
Google reporting varying degrees of success for the quarter ended June
30.
Operator group Vodafone reported almost flat revenues for the
quarter, climbing by just one per cent, to reach £10.8bn ($17bn). Group
service revenue grew by just 0.6 per cent although group data revenue
saw a significant increase of 17.1 per cent, which the firm attributed
to an increase of smartphone penetration to 28.7 per cent.
“Despite
the difficult market conditions, particularly in southern Europe, we
continue to make progress in the key areas of data, enterprise and
emerging markets, while maintaining tight control of our cost base” said
CEO Vittorio Colao. “We remain focused on driving
through significant improvements to our customers’ experience through
our ongoing investment in our networks, stores and IT platforms.”
Emeka
Obiodu, senior telco strategy analyst at Ovum, said that the
significant point from this result is that emerging markets are no
longer sufficiently rescuing poor performances from Vodafone’s European
markets. He explained that Vodafone is not alone in noting the impact of
competition, further regulator-mandated price cuts and the poor economy
for Europe’s telcos.
“Unfortunately, these dynamics are not going
to change soon and the industry will have to work a lot harder to
stabilise its performance while unlocking additional value in their
business,” he said.
“Ironically, the main shining star in the
results is Verizon Wireless. Had Vodafone’s management capitulated to
shareholder pressure few years ago to sell the stake, the Vodafone
group’s results would have even being more worrying.”
As another
bonus, Vodafone is waiting to hear whether it will get a $4.5bn dividend
from Verizon, which would give credence to the operator’s decision to
hold onto its stake in the US carrier.
Verizon Wireless also
released its earnings results for Q2, in which it saw a 7.3 per cent
year-on-year increase in service revenue, an 8.6 per cent increase in
retail service revenue. Data revenue grew 18.5 per cent and operating
income margin stood at 30.8 per cent.
The firm’s wireline business
saw a 2.5 per cent increase in consumer revenue, which it said was the
highest the firm has seen in several years, and revealed that ARPU now
stands at over $100 per month.
“We reported sequential improvement
in second-quarter Wireline margins, and we expect to see that improving
trend carry through the second half of the year,” said Lowell McAdam,
Verizon chairman and CEO. “We also look forward to the closing of
strategic transactions and to the integration of process improvements
that will set the stage for continued long-term profitable growth across
all our business units.”
Meanwhile, Microsoft posted its first
ever loss as a public company in the quarter ended June 30, 2012. The
firm recorded a net loss of $492m, down from the $5.8bn that the firm
made in the same quarter in 2011. This is despite revenue growing to
$18.1bn, up from $17.4bn in the same quarter a year earlier.
“Costs
of goods sold increased 12 per cent primarily due to Nokia platform
payments, inclusion of Skype costs, and growth in enterprise services,” said Bill Koefoed, general manager for investor relations.
CEO
Steve Ballmer tried to put a positive spin on the results, opting to
focus on the revenue generated rather than the net loss made.
“We
delivered record fourth quarter and annual revenue, and we’re fast
approaching the most exciting launch season in Microsoft history,” he
said.
He added that over the coming year, Microsoft will release
the next versions of Windows, Office, Windows Server, Windows Phone, and
other products and services.
And web giant Google had a better
quarter in terms of net income, which stood at $2.79bn. The firm also
saw its quarterly revenue grow 35 per cent for the quarter ended June
30, 2012 to reach $12.21bn.
Motorola revenues came in at $1.25bn,
with $843m from the mobile segment and $407m from the home segment, or
ten per cent of consolidated revenues in the second quarter. GAAP
operating loss for Motorola was $233m ($192m for the mobile segment and
$41m for the home segment), or -19 per cent of Motorola revenues in the
second quarter of 2012. Non-GAAP operating loss for Motorola in the
second quarter of 2012 was $38m, or -3 per cent of Motorola revenues.
“Google
standalone had a strong quarter with 21 per cent year-on-year revenue
growth, and we launched a bunch of exciting new products, in particular
the Nexus 7 tablet, which has received rave reviews,” said Larry Page,
CEO of Google. “This quarter is also special because Motorola is now
part of the Google family, and we’re excited about the potential to
build great devices for users.”
