Wednesday, January 23, 2008

PMC-Sierra Post Q4 Revenue of $124 Million, up 21% YoY

PMC-Sierra reported Q4 2007 net revenues of $123.6 million compared with $117.5 million in the third quarter of 2007, and $101.9 million in the fourth quarter of the prior year. The revenues in the fourth quarter of 2007 represent a quarterly sequential increase of 5% and a year-over-year increase of 21%.

Net loss in the fourth quarter of 2007 on a GAAP basis was $5.1 million (GAAP loss per share of $0.02) compared with GAAP net loss of $5.9 million (GAAP loss per share of $0.03) in the third quarter of 2007.

"In the fourth quarter of 2007, PMC experienced its best operational results in years," said Bob Bailey, Chairman and CEO of PMC-Sierra. "We had strong demand for most of our diversified portfolio, especially enterprise storage and printer-related products."

Sprint Nextel Announces Executive Changes

Sprint Nextel announced the departure of three executives in its senior management team. Paul Saleh, Chief Financial Officer, Tim Kelly, Chief Marketing Officer, and Mark Angelino, president, Sales and Distribution will leave the company Friday, January 25. No reason was given.

William G. Arendt, currently senior vice president and controller of Sprint Nextel, will serve as acting Chief Financial Officer. John Garcia, currently senior vice president, Product Development and Management, will serve as acting Chief Marketing Officer. Paget Alves, currently Sprint Nextel's regional president for sales and distribution, will serve as acting president, Sales and Distribution. All will report directly to Dan Hesse, the company's new CEO.

Sprint Files VoIP Lawsuits

Sprint filed four patent infringement actions in the United States District Court against NuVox Communications, Broadvox Holdings, Big River Telephone Company, and Paetec Communications. Sprint alleges that each of these companies has infringed at least 6 VOP patents by selling VOP services that utilize the Sprint patents. Sprint seeks monetary damages from these companies and an injunction that would enjoin the companies from ongoing infringement.

Sprint noted that these lawsuits follow its recent successful legal action against Vonage Holdings. In October 2005, Sprint filed suit against Vonage Holdings and Voiceglo Communications in the same Kansas court asserting infringement of seven VOP patents. In August 2006, Voiceglo agreed to a settlement of its case by paying a confidential sum for a license to Sprint's VOP patent portfolio. Sprint's case against Vonage, however, proceeded to trial. In September of 2007, an eight-person jury found that Vonage had willfully infringed all of Sprint's asserted patents and awarded Sprint $69.5 million in damages. Less than one month later, Vonage agreed to take a license under Sprint's VOP portfolio and paid Sprint $80 million. The same patents asserted against Vonage and Voiceglo in the 2005 case have been asserted in the four new cases.

Juniper Posts Q4 Revenue of $809.2 million, up 36% YoY

Juniper Networks reported Q4 net revenues of $809.2 million, compared with $595.8 million for the fourth quarter of 2006, an increase of 36 percent. Net revenues for the twelve months ended December 31, 2007 were $2,836.1 million, compared with $2,303.6 million for the 2006 fiscal year, an increase of 23 percent. Net income on a GAAP basis for the fourth quarter of 2007 was $122.9 million or $0.22 per share on a diluted basis, compared with a GAAP net income of $71.0 million or $0.12 per share for the fourth quarter of 2006.

"2007 was a strong year for Juniper Networks," said Scott Kriens, Chairman and Chief Executive Officer of Juniper Networks, Inc. "Our people and products delivered a clear competitive advantage to our customers in the high-performance networking market, and our results speak for themselves. We look forward to 2008 as another high-performance year, where we believe the intensity of our focus and execution will produce accelerating growth and leverage across our business."

NTT DoCoMo and Google to Partner in Mobile Internet Services

NTT DoCoMo announced a partnership with Google to provide search services, search-related advertisement and potential applications to i-mode users. The companies will also collaborate to enhance the user-friendliness of i-mode services, by making various Google services easier to access through i-mode handsets. The default pre-loading of Google Maps application into upcoming DoCoMo i-mode handsets is one of the initial initiatives being discussed.

Google Maps for Mobile is under discussion to become a standard pre-installed application on upcoming i-mode handsets to be launched in the near future.

The companies are also considering the possibility of bringing Google Android based handsets to the Japanese market.

AT&T Adds 2.7 million Net Wireless, 162K U-Verse TV Subscribers

AT&T reported strong wireless growth in Q4 2007 with a record net gain of 2.7 million wireless subscribers, up 13.5 percent from 2.4 million net adds in the year-earlier fourth quarter. AT&T's reported fourth-quarter revenues totaled $30.3 billion, up from $15.9 billion in the year-earlier quarter. AT&T's 2007 reported results reflect the Dec. 29, 2006 acquisition of BellSouth and the accompanying consolidation of wireless results.

AT&T's reported net income for the fourth quarter totaled $3.1 billion, or $0.51 per diluted share, compared with $1.9 billion, or $0.50 per diluted share, in the year-earlier quarter.

Some highlights:

AT&T Wireless

  • AT&T's net gain of 2.7 million wireless subscribers was almost entirely driven by stronger growth in retail postpaid net adds, which totaled 1.2 million, up 36.8 percent versus results in the year-earlier quarter. In addition, AT&T's acquisition of Dobson Communications, which was completed on Nov. 15, 2007, added 1.7 million subscribers, bringing AT&T's wireless subscriber base at year end to 70.1 million.

  • Q4 was also the industry's best-ever quarterly gross wireless subscriber additions, which totaled 6.0 million, up 9.6 percent versus the year-earlier fourth quarter. Total average monthly subscriber churn was 1.7 percent, down 10 basis points versus the year-earlier quarter, and postpaid churn was 1.2 percent, down 30 basis points from the fourth quarter of 2006.

  • AT&T's total wireless revenues were $11.4 billion, up 16.3 percent versus the year-earlier quarter.

  • Wireline

  • At the end of Q4, subscribers to AT&T U-verse totaled 231,000, up from 126,000 three months earlier.

  • AT&T's U-verse TV weekly install rate in mid-December was approximately 12,000, above the company's year end target of 10,000.

  • AT&T's broadband revenues grew 13.7 percent in the fourth quarter to $1.4 billion.

  • Total high speed Internet connections, which include DSL, AT&T U-verse high speed Internet and satellite broadband services, increased by 396,000 in the quarter to reach 14.2 million, up 2.0 million, or 16.3 percent, over the past year.

  • Enterprise

  • Recurring enterprise service revenues, which exclude revenues from CPE and from assets acquired during the past year, increased 1.8 percent, up from 0.3 percent year-over-year growth in the third quarter of 2007 and a 3.5 percent decline in the fourth quarter of 2006.

  • Fourth-quarter enterprise services growth was led by a 20.9 percent increase in revenues from IP-based data services such as virtual private networking (VPN), hosting and managed Internet services.

  • Total enterprise revenues declined 1.9 percent year over year, reflecting a decreased emphasis on CPE sales following the fourth quarter of 2006.

For the full year 2007, cost savings from BellSouth and AT&T Corp. merger integration initiatives totaled approximately $4.0 billion, approximately 75 percent expense and 25 percent capital.

Full-year 2007 capital expenditures totaled $17.7 billion.

Free cash flow totaled $16.4 billion, and free cash flow after dividends totaled $7.6 billion, significantly above AT&T's original outlook of $5 billion to $6 billion. (Free cash flow is cash from operations minus capital expenditures; free cash flow after dividends also subtracts dividends paid.)

Level 3 and BT Team in Central and Eastern Europe

Level 3 Communications' European Markets Group is working collaboratively with BT Global Services to expand backbone capacity in Central and Eastern Europe (CEE). The joint project has ensured that there is a 2,400 km fiber network fully equipped with next generation networking capability. In addition, under the terms of this new multi-year agreement, Level 3 will deliver wavelength services to BT within the CEE region and more broadly through Europe.

Level 3 said the deal enables it to further expand its fiber-based network, offering full services in the existing markets of Prague and Vienna while adding new points of presence in Budapest, Bratislava and Ivancice.

BT Global Services is focusing on the service layer and optimization.

FCC Auction Gets Underway for 700 MHz Band

The FCC auction for licenses in the 700 MHz Band got underway. Over $2.8 billion in bids have been recorded in the initial rounds. The full auction is expected to take about a month.

Bidding information is posted on the FCC's electronic auction website.

  • The auction (designated as Auction 73) will include 1,099 licenses in the 698-806 MHz bands, including 176 licenses over Economic Areas (EAs) in the A Block, 734 licenses over Cellular Market Areas (CMAs) in the B Block, 176 licenses over EAs in the E Block, 12 licenses over Regional Economic Area Groupings (REAGs) in the C Block, and one nationwide license, to be used as part of the 700 MHz Public/Private Partnership, in the D Block.
  • One Minute Video: What is IDP

    One Minute Video presented by Rajneesh Chopra, Juniper Networks -- What is IDP?

    Jargon Buster

    Verizon Business Rolls Out HD Video Conferencing

    Verizon Business announced its rollout of video conferencing in high definition. The service is immediately available for customers around the world, who are increasingly turning to video conferencing as an alternative to face-to-face meetings to boost productivity, hold the line on business travel costs, and help reduce carbon emissions associated with business travel.

    The HD video supported by Verizon conferencing provides a quality high- definition experience with a screen resolution frame size of 1,280 x 720 pixels and a transmission speed of 30 frames per second. To take advantage of the offering, customer equipment must support high definition at each location participating in HD meetings. The access may be provided through the public Internet or over Verizon Private IP service, with four access speeds available -- 1,152 kbps, 1,472 kbps, 1,536 kbps and 1,920 kbps.

    Avaya Transition Ethernet Switching Lines to Extreme Networks

    Avaya is recommending the Extreme Networks BlackDiamond and Summit Ethernet switches to its customers as the Avaya Cajun family of switches approach end-of-sale status. Ethernet switches are typically used to accommodate the bandwidth required for advanced applications in IP telephony, security and wireless local area networks.

    "Avaya has been integrating and supporting the Extreme Networks product lines worldwide in its Intelligent Communications solutions for more than four years," said Simon Woollett, vice president, Converged Communications Division, Avaya. "It's only natural that Extreme would be Avaya's preferred offer for our customers who want to transition from Avaya's Cajun switches."http://www.avaya.com

    Broadcom Posts Q4 Revenue of $1.027 billion, up 8.1% Sequentially

    Broadcom reported Q4 2007 revenue of $1.027 billion, an increase of 8.1% compared with the $950.0 million reported for the third quarter of 2007 and an increase of 11.2% compared with the $923.5 million reported for the fourth quarter of 2006. Net income (GAAP) for the fourth quarter of 2007 was $90.3 million, or $.16 per share (diluted), compared with GAAP net income of $27.8 million, or $.05 per share (diluted), for the third quarter of 2007, and GAAP net income of $45.1 million, or $.08 per share (diluted), for the fourth quarter of 2006.

    Net revenue for the year ended December 31, 2007 was $3.78 billion, an increase of 3.0% compared with the $3.67 billion reported for the year ended December 31, 2006. Net income computed in accordance with GAAP for the year ended December 31, 2007 was $213.3 million, or $.37 per share (diluted), compared with GAAP net income of $379.0 million, or $.64 per share (diluted), for the year ended December 31, 2006.

    "2007 ended strongly as Broadcom generated record revenue for the fourth quarter and the full year, driven by the ramp in new product cycles occurring in the Bluetooth, wireless LAN and digital TV markets," said Scott McGregor, Broadcom's President and Chief Executive Officer. "Broadcom remains a product cycle driven company, and to continue this product cycle momentum into the future, we made a number of strategic acquisitions and significant internal investments in 2007. We believe that as the convergence of technologies, products and markets continues, the winners will be the companies that possess all of the communication technologies required to build these next generation products. Broadcom remains well positioned to benefit from this trend."

    "As we look into 2008, we believe that Bluetooth, wireless LAN and digital TV will continue to be key revenue drivers, plus we look forward to the emergence of new product areas such as HD DVD, cellular and GPS, in addition to continued growth opportunities within our traditional end markets, such as switching and set-top boxes. While Broadcom will continue to invest to bring these and other new products to market, we have tightened our processes and made additional strategic portfolio management decisions in the fourth quarter to help moderate expense growth across 2008, with the goal of trending back towards our long-term business model."

    Extreme Networks Reports Quarterly Revenue up 7%; Gross Margins up 14%

    Extreme Networks reported that quarterly revenue increased 7 percent to $92.5 million, from $86.9 million in the year ago quarter. For the quarter, net income on a GAAP basis for the fiscal second quarter of 2008 was $4.1 million or $0.04 per diluted share, compared to a net loss of $1.9 million or a loss of $0.02 per diluted share in the year-ago quarter. GAAP results include stock-based compensation charges.

    "This quarter represents our highest revenues in two years, driven largely by our newer products, which are being broadly accepted by the market," said Mark Canepa, president and CEO of Extreme Networks.

    Nokia Posts Q4 2007 Net Sales of EUR 15.7 Billion

    Nokia's fourth quarter 2007 net sales increased 34% to EUR 15.7 billion, compared to EUR 11.7 billion in the fourth quarter 2006. At constant currency, group net sales would have been up 40% year on year. Nokia's fourth quarter 2007 operating profit increased 64% to EUR 2.5 billion (including the EUR 13 million net negative impact of special items), compared to EUR 1.5 billion in the fourth quarter 2006 (including a negative special item of EUR 39 million).

    Some highlights from Q4:

    • Nokia diluted EPS of EUR 0.47, growing 57% from Q4 2006, excluding special items.

    • Nokia operating margin of 15.9%, up sequentially from 14.6% in Q3 2007, excluding special items.

    • Nokia operating cash flow of EUR 2.7 billion.

    • Nokia device volumes of 133.5 million units, up 20% sequentially and up 27% year on year.

    • Estimated industry device volumes of 336 million units, up 17% sequentially and up 16% year on year.

    • Nokia estimated device market share of 40%, up from 39% in Q3 2007 and up from 36% in Q4 2006.

    • Nokia device ASP of EUR 83, up from EUR 82 in Q3 2007.

    • Total device gross and operating margins increased significantly sequentially and year on year.

    • Several key devices started shipping in volume across the product range including: Nokia 1200/1208, Nokia 2630, Nokia 5310, Nokia 6500 and Nokia N95 8GB.

    • Nokia Siemens Networks net sales increased 25% sequentially.

    • Nokia Siemens Networks operating margin, excluding special items, was 1.4%, and was 4.3% excluding special items and Purchase Price Accounting related items.

    • Nokia Siemens Networks continued to be on track to deliver the targeted annual EUR 2 billion cost synergy target, as previously announced.

    Olli-Pekka Kallasvuo, Nokia CEO said "It was a year of important strategic initiatives by Nokia, with Nokia Siemens Networks starting operations, our internet services effort taking shape around Ovi, and the announcement of the pending acquisition of NAVTEQ. Facing a market that remains intensely competitive, we are continuing to improve our leading device portfolio as well as execution at Nokia Siemens Networks. With this we believe Nokia is well positioned for growth in 2008."