Showing posts with label Financials. Show all posts
Showing posts with label Financials. Show all posts

Wednesday, May 18, 2022

Cisco cuts revenue outlook to (1)% to (5.5)% decline

Citing solid demand and a $15 billion order backlog, Cisco reported $12.8 billion in revenue for its third quarter of fiscal 2022, flat year over year; GAAP EPS $0.73, up 7% year over year, and Non-GAAP EPS $0.87, up 5% year over year.  

The top-line revenue number missed earlier guidance of $13.34 billion.

  • Total revenue was flat at $12.8 billion, with product revenue up 3% and service revenue down 8%. 
  • Revenue by geographic segment was: Americas up 5%, EMEA down 6%, and APJC down 6%. 
  • Product revenue performance was led by growth in Secure, Agile Networks up 4%, Internet for the Future up 6%, End-to-End Security up 7%, and Optimized Application Experiences up 8%. Collaboration was down 7%.

Cisco also cited progress on business model transformation with total Annualized Recurring Revenue (ARR) at $22.4 billion in the third quarter of fiscal 2022, up 11% year over year.

However, Cisco trimmed its Q4 guidance to the following:  

  • Revenue: (1)% to (5.5)% decline year over year
  • Earnings per Share: GAAP: $0.60 to $0.70; Non-GAAP: $0.76 to $0.84

FY 2022 Guidance:

  • Revenue: 2% to 3% growth year over year
  • Earnings per Share: GAAP: $2.75 to $2.85; Non-GAAP: $3.29 to $3.37

"We continued to see solid demand for our technologies and our business transformation is progressing well," said Chuck Robbins, chair and CEO of Cisco. "While Covid lockdowns in China and the war in Ukraine impacted our revenue in the quarter, the fundamental drivers across our business are strong and we remain confident in the long term."

"We delivered healthy earnings despite unanticipated disruptions through strong pricing and disciplined spend management," said Scott Herren, CFO of Cisco. "Our product backlog is well over $15 billion and product ARR and RPO again grew double digits. The continued progress in our business model transformation reflects the success of our strategy and underpins our long-term confidence."

Wednesday, May 4, 2022

Lumentum posts strong revenue of $395.4 million

Lumentum reported net revenue for its fiscal third quarter of 2022 of $395.4 million, with GAAP net income of $26.0 million, or $0.35 per diluted share. Net revenue for the fiscal second quarter of 2022 was $446.7 million, with GAAP net income of $56.7 million, or $0.75 per diluted share. Net revenue for the fiscal third quarter of 2021 was $419.5 million, with GAAP net income of $225.5 million, or $2.85 per diluted share. Non-GAAP net income for the fiscal third quarter of 2022 was $88.9 million, or $1.19 per diluted share. Non-GAAP net income for the fiscal second quarter of 2022 was $120.2 million, or $1.60 per diluted share. Non-GAAP net income for the fiscal third quarter of 2021 was $99.7 million, or $1.26 per diluted share.

"Our results were at the high end of our guidance on all metrics in the third quarter due to solid execution on a global basis," said Alan Lowe, President and CEO.  "Demand for our products continues to accelerate, and we now expect demand to outpace component supplies by more than $100 million in the fourth quarter.  Our fourth quarter revenue is expected to increase from the third quarter, primarily driven by Telecom product shipments."

Mr. Lowe added, "I am highly optimistic about our outlook and believe market inflections beneficial to Lumentum in our addressable markets will drive double-digit revenue growth in fiscal 2023 and beyond."


Tuesday, May 3, 2022

Infinera posts Q1 revenue of $338.9 million

Infinera reported GAAP revenue for Q1 2022 of $338.9 million compared to $400.3 million in the fourth quarter of 2021 and $330.9 million in the first quarter of 2021. GAAP gross margin for the quarter was 32.9% compared to 35.6% in the fourth quarter of 2021 and 35.4% in the first quarter of 2021. GAAP operating margin for the quarter was (10.8)% compared to (2.5)% in the fourth quarter of 2021 and (7.0)% in the first quarter of 2021. Non-GAAP net loss for the quarter was $(14.0) million, or $(0.07) per share, compared to net income of $5.7 million, or $0.03 per share, in the fourth quarter of 2021, and $(5.5) million, or $(0.03) per share, in the first quarter of 2021.

Infinera CEO David Heard said, “Demand in our fiscal first quarter was quite strong, with double digit year-over-year growth in bookings and record backlog. We won multiple new customer deals at a faster pace and of a larger magnitude than originally expected. However, the suspension of our operations in Russia late in the quarter and the supply chain impact from delayed customer project completions and elevated costs each muted our revenue and margin.”

“In the quarter, we achieved additional success milestones in our 8x4x1 strategy as we ramped ICE6 and began producing key elements of our pluggables ahead of schedule, which is critical to the future expansion of our addressable market and margins. We feel confident that our recent wins, record backlog and focused execution set us up for achieving improved revenue growth and margins in the second half of the year.”

A10 Networks posts strong Q1 security sales

Citing strong sales in North America, A10 Networks reported Q1 2022 revenue of $62.7 million, up 14.3% year-over-year. Non-GAAP net income was $10.0 million, or $0.13 per diluted share, compared with non-GAAP net income of $9.4 million, or $0.12 per diluted share in the first quarter of 2021.

Security-led product revenue grew 20.1% year-over-year.

The Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on June 1st, 2022 to stockholders of record at the close of business on May 16th, 2022.

“Our focus on security-led solutions, improved sales execution in North America, and diversity in terms of customers continues to drive consistent growth above our targets and strong profit margins, moving us closer to our Rule of 40 goal,” said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. “Demand for cybersecurity and infrastructure solutions remains a catalyst for our growth despite headwinds in Asia, continued supply chain challenges and typical fluctuations in buying patterns. We continued our share buyback and dividend program in the quarter, while also investing in future growth.”

“We believe we are now well-positioned to achieve the high end of our full year targets around top line growth of 10 – 12% and expanding EBITDA in the range of 26 – 28%,“ continued Trivedi.

VIAVI posts sales of $315.5 million, up 4% yoy

VIAVI reported revenue of $315.5 million for its third fiscal quarter ended April 2, 2022, up from $303.4 million for the same period a year earlier. GAAP net income was $19.2 million, or $0.08 per share. Non-GAAP net income was $52.0 million, or $0.22 per share.

"In fiscal Q3, VIAVI achieved new highs in revenue and non-GAAP operating profit for a March quarter.  Business strength was led by Fiber and Wireless products with Anti-Counterfeiting and 3D Sensing products demand recovering from the December quarter," said Oleg Khaykin, VIAVI's President and Chief Executive Officer.  "Revenue came in at $315.5 million, up 4.0% year-over-year, exceeding our guidance range of $301 to $315 million."

Khaykin added, "As we look ahead, we expect fiscal 2022 to be another record year for revenue and profitability. We also continue to execute well on our plan to improve our capital structure to enable us to achieve financial flexibility. During fiscal Q3, we redeemed an additional $50.0 million in convertible notes which brings us to a cumulative principal retirement of 54% in fiscal 2022."

  • Americas, Asia-Pacific and EMEA customers represented 34.5%, 36.3% and 29.2%, respectively, of total net revenue for the quarter ended April 2, 2022.
  • As of April 2, 2022, the company held $596.0 million in total cash, short-term restricted cash and short-term investments.

Monday, May 2, 2022

Arista delivers record Q1 sales despite supply chain issues

Arista Networks reported Q1 2022 revenue of $877.1 million, an increase of 6.4% compared to the fourth quarter of 2021, and an increase of 31.4% from the first quarter of 2021.

GAAP gross margin was 63.1%, compared to GAAP gross margin of 63.4% in the fourth quarter of 2021 and 63.7% in the first quarter of 2021. Non-GAAP net income was $268.5 million, or $0.84 per diluted share, compared to non-GAAP net income of $198.8 million, or $0.62 per diluted share in the first quarter of 2021.

“Arista has delivered record Q1 2022 sales despite the sustained supply chain challenges. I am pleased with our enterprise execution and cloud titan strength in these uncertain times,” stated Jayshree Ullal, President and CEO of Arista Networks.

Q1 Investor presentation:

Monday, March 28, 2022

Huawei reports 2021 revenue of CNY142.7 billion, down 28%

Huawei reported 2021 revenue of CNY636.8 billion (US$99.885 billion), down 28.6% compared to CNY891,368 in 2021.

Net profit for amounted to CNY113.7 billion, an increase of 75.9% year-on-year. 

Revenue for Huawei's Carrier Business dropped 7%, while its Enterprise Business revenues rose 2%.

Regionally, sales in its home market of China fell 31% as carrier completed 5G deployments. Sales in dropped in other geographies as well, with EMEA down 27%, Asia-Pacific down 16.7%, and Americas down 26.3%

Total borrowing rose 23.5% to CNY175.10 billion (US$27.46 billion).

Guo Ping, Huawei's Rotating Chairman: "Overall, our performance was in line with forecast. Our carrier business remained stable, our enterprise business experienced steady growth, and our consumer business quickly expanded into new domains. In addition, we embarked on a fast track of ecosystem development."

Meng Wanzhou, Huawei's CFO: "Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty." 

Some 2021 highlights:

  • R&D expenditure reached CNY142.7 billion in 2021, representing 22.4% of its total revenue, and bringing its total R&D expenditure over the past 10 years to over CNY845 billion. 
  • Huawei's carrier business generated CNY281.5 billion in revenues. 
  • By working with carriers and partners, Huawei has signed more than 3,000 commercial contracts for industrial 5G applications. 
  • Huawei's enterprise business generated CNY102.4 billion in revenue during 2021. In the past year, Huawei launched 11 scenario-based solutions for key sectors such as government, transportation, finance, energy, and manufacturing.
  • Huawei's consumer business generated CNY243.4 billion in revenue in 2021 and continued to see steady sales growth in smart wearables, smart screens, true wireless stereo (TWS) earbuds, and Huawei Mobile Services (HMS). In particular, the smart wearable and smart screen segments both saw 30%+ year-on-year growth. In total, HarmonyOS was used in over 220 million Huawei devices as of 2021, becoming the world's fastest growing mobile device operating system.
  • Huawei Cloud has now launched more than 220 cloud services and 210 solutions, and attracted over 30,000 partners and 2.6 million developers worldwide. More than 6,100 applications are now available on the Huawei Cloud Marketplace.

The 192-page report in English is posted online:

Huawei's revenue continues to decline but company remains profitable

 Huawei reported revenue of CNY455.8 billion (approximately US$71.32 billion) for the first three quarters of 2021. The reported net profit margin was 10.2%. No further details were released.

The reported revenue represents a drop of approximately 38% compared with the first nine months of 2020.

"Overall performance was in line with forecast," said Guo Ping, Huawei's Rotating Chairman. "While our B2C business has been significantly impacted, our B2B businesses remain stable. Through our ongoing commitment to innovation, R&D, and talent acquisition, and rigorous attention to operating efficiency, we are confident we will continue to create practical value for our customers and the communities in which we work."

Huawei's first half 2021 revenue drops 29% yoy - shift to enterprise

Huawei released the following business results for the first half of 2021:

In H1, Huawei generated CNY320.4 billion (approximately US$49.4 billion) in revenue, down 29.4% yoy, with its net profit margin reaching 9.8%.

  • Carrier business revenue: CNY136.9 billion, down 14.2% yoy 
  • Enterprise business revenue: CNY42.9 billion, up 36.3% yoy
  • Consumer business revenue: CNY135.7 billion, down 46.9% yoy

"We've set our strategic goals for the next five years," said Eric Xu, Huawei's Rotating Chairman. "Our aim is to survive, and to do so sustainably. We'll do this by creating practical value for our customers and partners. Despite a decline in revenue from our consumer business caused by external factors, we are confident that our carrier and enterprise businesses will continue to grow steadily."

Xu continued, "These have been challenging times, and all of our employees have been pushing forward with extraordinary determination and strength. I want to thank every single member of the Huawei team for their incredible effort. Going forward, we continue to believe deeply in the power of digital technology to provide fresh solutions to the problems the world is facing right now. We will keep on innovating to help build a low-carbon, intelligent world."

Wednesday, February 16, 2022

Infinera reports revenue of $403 million, up 13% yoy, record bookings

Infinera reported revenue of $400.3 million (GAAP) for its fourth quarter and fiscal year ended December 25, 2021. This compares to $355.8 million in the third quarter of 2021 and $353.5 million in the fourth quarter of 2020. GAAP gross margin for the quarter was 35.6% compared to 33.2% in the third quarter of 2021 and 35.7% in the fourth quarter of 2020. GAAP net loss for the quarter was $(33.1) million, or $(0.16) per share, compared to $(53.8) million, or $(0.26) per share, in the third quarter of 2021, and $(9.9) million, or $(0.05) per share, in the fourth quarter of 2020. Non-GAAP net income for the quarter was $5.7 million, or $0.03 per share, compared to net loss of $(3.0) million, or $(0.01) per share, in the third quarter of 2021, and a net income of $16.7 million, or $0.13 per share, in the fourth quarter of 2020.

Infinera CEO David Heard said, “Q4 was a pivotal quarter for us. We achieved record revenue and bookings for the company, and exited the year with substantial backlog. Our strong performance in the quarter was the perfect way to wrap-up 2021, a year in which we strengthened our portfolio, bolstered our management team, accelerated growth and expanded margins.”

“Looking ahead to 2022, we intend to build on the foundation we established in 2021,” continued Heard. “The demand drivers fueling our business are robust. While we expect the industry-wide supply chain challenges to remain intense through at least the first half of the year, we are focused on driving 8-12% revenue growth in 2022 and delivering on our longer-term target business model.”

An investor presentation is online.

Tuesday, February 15, 2022

Citing supply disruption and strong demand, Ciena updates outlook

 Citing supply chain issues, Ciena now expects revenue for its fiscal first quarter 2022, ended January 29th, to be in the range of $840 to $850 million, compared to the company’s previous expectation of $870 to $910 million. Ciena’s GAAP gross margin for the fiscal first quarter is expected to be approximately 44% to 45%. Adjusted (non-GAAP) gross margin for fiscal first quarter is expected to be approximately 45% to 46%, at the high end of the previous guidance of 43% to 46%. Ciena’s GAAP operating expense for the fiscal first quarter is expected to be approximately $324 million. Adjusted (non-GAAP) operating expense for the quarter is expected to be approximately $290 million, in line with the previous guidance. 

On a conference call, Ciena executives said the supply chain delays included semiconductors, ICs and memory devices -- low value, commercial parts, which were delivered too late in the quarter for manufacturing into finished products. Ciena reiterated that the production issues are resolved, and that many customers are giving visibility into their full year of demand, which remains strong.

“In our fiscal first quarter, we experienced several specific disruptions in the supply chain late in the quarter that exacerbated an already-challenging macro supply situation, which reduced our flexibility to fully mitigate these additional disruptions in the quarter. Nevertheless, we continue to see an unprecedented level of demand for our products and services, as evidenced by extraordinary orders growth and underpinned by an overall acceleration of cloud adoption and traffic growth,” said Gary Smith, president and CEO, Ciena.

Smith continued, “The combination of a very positive demand environment as well as expanding supply chain capacity aligned with increased visibility into the remainder of the year based on our order flow and backlog, provides us greater confidence in our ability to achieve our fiscal 2022 financial objectives. Accordingly, we continue to expect to achieve our revenue guidance of 11% to 13% annual growth for fiscal 2022.”

Ciena expects to announce full fiscal first quarter financial results on March 7, 2022.

Thursday, February 3, 2022

Nokia reports Q4, restores dividends, raises ambitions

Nokia reported Q4 2021 net sales of EUR 6.414 billion, a decline of 5% yoy in constant currency. The company sai strong growth in Network Infrastructure of +10% offset by Mobile Networks at -16%. Gross margin was 39.5%. Profit for the period was EUR 731 million, down 7% yoy. EPS (diluted) was EUR 0.13. The company plans to re-instate a dividend as well as a share buyback program.

Pekka Lundmark, president and CEO of Nokia, states: 

"All our business groups made significant progress this year to make us more competitive in all the markets in which we compete. Mobile Networks largely closed the gap to competition in 5G and improved its gross margin while continuing to step up R&D investments. Network Infrastructure extended its technology leadership with significant growth driven by Fixed Networks and Submarine Networks. Cloud and Network Services continued to rebalance its portfolio and saw encouraging growth in its key focus areas. Nokia Technologies made good progress expanding in areas such as automotive and consumer electronics."

"The progress we have made with cash generation in the business has strengthened our balance sheet to the point we can look to reinstate shareholder distributions through both a dividend and share buyback program."

"Nokia enters 2022 in a strong position with improved margins, faster than expected strategy execution and a high order backlog, although the global supply chain situation remains tight. We see opportunities in the 5G roll out and growing enterprise market. Accordingly, we expect 2022 to bring another year of sales growth and we are targeting a comparable operating margin of 11-13.5% in 2022."

"Considering how quickly we have executed on our strategy, we are now introducing new long-term targets. We still expect to deliver progress in 2023 but we want to emphasize that is not the end of our ambition. Our long-term target is to grow faster than the market and to achieve a comparable operating margin of at least 14%. The pace of delivery will depend on both the market environment and decisions we may make on R&D investments to secure our long-term competitiveness and sustainable profitability." 

Monday, January 31, 2022

ZTE reports record profit for 2021

 ZTE expects its 2021 net profit attributable to holders of ordinary shares will be in range of RMB 6.5 billion to RMB 7.2 billion (US$1.02 billion to US$1.13 billion), an increase of 52.6% to 69.0% year on year. Net profit after extraordinary items for 2021 amounted to RMB 3.0 billion to RMB 3.5 billion, representing a year-on-year rise of 189.7% to 238.0%. Both of them were the highest in the history of the company. Basic earnings per share was RMB 1.40 to RMB 1.55.

ZTE said that despite complex external environment, it continued to solidify its position in 2021 with innovative initiatives while maintaining steady operations and optimizing its market structure. The company achieved double-digit year-on-year growth in operating revenue, with both domestic and international markets and all its three major businesses (operator networks, government and enterprise services and consumer services) seeing year-on-year growth in terms of operating revenue.

In domestic market, ZTE's key products of 5G, core network, transport network, and server & storage products have witnessed continued growth in terms of market share. 

In the overseas market, ZTE benefited from 4G modernization projects, 5G infrastructure deployments, fiber-based transformation of fixed networks, transport network upgrades and home broadband product upgrades. 

In the IT field, ZTE reported operating revenue of RMB10 billion (US$1.57 billion).

Wednesday, January 26, 2022

Microsoft reports 46% increase in Azure revenue

Citing strong growth in cloud services, Microsoft reported revenue of $51.7 billion for its second quarter ended 31-December-2021, an increase of 20% yoy. Net income was $18.8 billion and increased 21%, Diluted earnings per share was $2.48 and increased 22%.

“Solid commercial execution, represented by strong bookings growth driven by long-term Azure commitments, increased Microsoft Cloud revenue to $22.1 billion, up 32% year over year” said Amy Hood, executive vice president and chief financial officer of Microsoft.

Some highlights:

Revenue in Productivity and Business Processes was $15.9 billion and increased 19%, with the following business highlights:

  • Office Commercial products and cloud services revenue increased 14% driven by Office 365 Commercial revenue growth of 19%
  • Office Consumer products and cloud services revenue increased 15% and Microsoft 365 Consumer subscribers grew to 56.4 million
  • LinkedIn revenue increased 37% (up 36% in constant currency)
  • Dynamics products and cloud services revenue increased 29% driven by Dynamics 365 revenue growth of 45% (up 44% in constant currency)

Revenue in Intelligent Cloud was $18.3 billion and increased 26%, with the following business highlights:

  • Server products and cloud services revenue increased 29% driven by Azure and other cloud services revenue growth of 46%

Revenue in More Personal Computing was $17.5 billion and increased 15%, with the following business highlights:

  • Windows OEM revenue increased 25%
  • Windows Commercial products and cloud services revenue increased 13% (up 14% in constant currency)
  • Xbox content and services revenue increased 10%
  • Search and news advertising revenue excluding traffic acquisition costs increased 32%
  • Surface revenue increased 8%

AT&T cites growth in mobile and fiber subscribers

Citing customer growth in wireless, fiber and HBO Max, AT&T reported consolidated revenues for Q4 2021 of $41.0 billion versus $45.7 billion in the year-ago quarter, down 10.4% reflecting the impact of divested businesses, mainly U.S. Video in the third quarter and Vrio in the fourth quarter, and lower Business Wireline revenues.  Excluding impacts of the U.S. Video business and Vrio from both quarters, consolidated revenues totaled $40.6 billion9 compared to $39.0 billion in the year-ago quarter.

For full-year 2021 when compared with 2020 results, AT&T's consolidated revenues totaled $168.9 billion versus $171.8 billion, reflecting the separation of the U.S. Video business in the third quarter of 2021, and the impacts from other divested businesses. These decreases were partially offset by higher revenues in WarnerMedia and Communications. Excluding impacts of U.S. Video and Vrio from both years, consolidated revenues totaled $153.2 billion9 compared to $144.6 billion in 2020. 

“A year and a half ago, we began simplifying our business to reposition AT&T for growth and we’re extremely pleased with how we’ve executed on that commitment,” said John Stankey, AT&T CEO. “We ended 2021 the way we started it – by growing our customer relationships, running our operations more effectively and efficiently, and sharpening our focus. Our momentum is strong and we’re confident there is more opportunity to continue to grow our customer base and drive costs from the business.  

“We’re at the dawn of a new age of connectivity. Our focus now is to be America’s best connectivity provider and also ensure our media assets are positioned to grow and truly become a global media distribution leader. Once we do this, we’ll unlock the true value of these businesses and provide a great opportunity for shareholders.”

Some highlights for Communications:

Fourth-quarter revenues were $30.2 billion, up 2.4% year over year due to increases in Mobility and Consumer Wireline more than offsetting a decline in Business Wireline. Operating contribution was $6.5 billion, up 1.4% year over year, with operating income margin of 21.4%, compared to 21.6% in the year-ago quarter.


  • Revenues were up 5.1% year over year to $21.1 billion due to higher service and equipment revenues. Service revenues were $14.7 billion, up 4.6% year over year due to subscriber gains and the lapping of pandemic impacts on international roaming revenues. Equipment revenues were $6.5 billion, up 6.2% year over year, driven by increased sales of higher-priced smartphones.
  • Operating expenses were $15.8 billion, up 5.1% year over year due to higher equipment costs, including 3G network shutdown costs of approximately $130 million, and higher HBO Max bundling costs, partially offset by lower marketing and support.
  • Total net adds were 5.3 million including 1,285,000 postpaid net adds and 24,000 prepaid phone net adds
  • Postpaid churn was 1.02% versus 0.94% in the year-ago quarter. Postpaid phone churn was 0.85% versus 0.76% in the year-ago quarter. Prepaid phone churn was less than 3% with Cricket substantially lower.
  • Postpaid phone-only ARPU was $54.06, down 0.7% versus the year-ago quarter, due to the impacts of promotional discount amortization.

Business Wireline

  • Revenues were $5.9 billion, down 5.6% year over year, partially due to the prior-year increase for pandemic-related connectivity, lower demand for legacy voice and data services, and a strategic decision to deemphasize non-core services.
  • More than 675,000 U.S. business buildings are lit with fiber from AT&T, enabling high-speed fiber connections to more than 2.75 million U.S. business customer locations. Nationwide, more than 9.5 million business customer locations are on or within 1,000 feet of AT&T fiber.

Consumer Wireline

  • Revenues were $3.2 billion, up 1.4% year over year due to gains in broadband more than offsetting declines in legacy voice and data services and other services. Broadband revenues increased 5.4%, which reflects fiber subscriber growth and higher ARPU resulting from increases in higher-revenue fiber customers.
  • Total broadband and DSL subscriber net losses were 20,000, reflecting growth in fiber subscribers mostly offsetting losses in slower-speed services. 
  • Full-year 2021 fiber net adds totaled about 1.0 million, the fourth consecutive year in which the company added 1 million or more fiber subscribers. AT&T Fiber is marketed to about 16 million customer locations.

Tuesday, January 25, 2022

Ericsson: steady growth in 5G, improved margins, sales drop-off in China

Ericsson reported steady sales in its core mobile infrastructure business for Q4 2021 despite a significant drop off in business in mainland China. Overall group organic sales for Q4 2022 grew by 2% YoY. Excluding mainland China, organic sales growth was 5%. Reported sales were SEK 71.3 (69.6) billion (approximately US$7.7 billion).

In North America, Europe and Latin America, Ericsson saw strong growth in 5G. Business in South East Asia, Oceania and India declined due to timing of orders and project milestones.

Gross margin improved in all segments to 43.5% (40.6%) excluding restructuring charges. Reported gross margin was 43.2% (40.6%).

For the full year 2021, group organic sales grew by 4%, with an increase in Networks sales of 7%. Reported sales were stable at SEK 232.3 b. The loss of market share in Mainland China impacted sales by SEK -7.7 b. and the growth rate by -3 percentage points, meaning that excluding Mainland China, organic sales growth was 8%.

Some comments from Börje Ekholm, President and CEO of Ericsson:

"Our strategy to invest in technology leadership and grow market share in our core business underpinned a robust financial performance in 2021 and ensured a good Q4 for Ericsson overall. Our commitment to pursue value from growth in wireless enterprise took a significant step forward with the announcement of our ambition to acquire Vonage, which will give us the foundation to develop a Global Network Platform to drive innovation on top of the 5G networks. This adds to already strong progress in 2021 in our organic enterprise portfolio - Dedicated Networks and IoT - and follows the successful integration of Cradlepoint. With a full-year EBIT margin of 13.9%, we reached our 2022 target one year early, while absorbing significantly increased investments in R&D, Enterprise, cybersecurity and compliance."

"Based on current business momentum, we expect fundamentals to remain strong in our core mobile infrastructure business during 2022. We will continue to increase investments in R&D to sustain our technology leadership and strengthen our competitive position to take advantage of the rollout of 5G networks. At the same time, we will continue our efforts to expand our presence in the enterprise market. Over time, we expect the enterprise segment to provide higher growth and profitability than our mobile infrastructure business."

Sunday, January 23, 2022

Ribbon cites supply chain constraints

Ribbon Communications reported the following preliminary estimates for the fourth quarter of 2021: revenue is expected to be $231 million, gross margin is expected to be 50%, non-GAAP gross margin is expected to be 54%, operating loss is expected to be $4 million and adjusted EBITDA is expected to be $26 million. Cash on hand at the end of the quarter increased to $106 million.

Demand for products and services increased in the fourth quarter of 2021 with sequential sales growth of 10% and a product/service book-to-bill ratio of 1.13. 

However, overall sales were below the company's previous guidance range as supply chain and logistics issues increased significantly in the final weeks of the quarter, impacting the Company's ability to deliver products and reducing sales by approximately $10 million. IP Optical Networks segment sales increased more than 20% quarter-over-quarter to approximately $83 million. Cloud & Edge revenue is expected to be $147 million, with several software deals having moved into 2022 and higher Enterprise Edge hardware sales, impacting both revenue and margin.

Higher component costs, expedite and production fees, and logistics expenses in both segments reduced margins by approximately 220 basis points versus expectations. Customer and deal mix contributed an additional 200 basis points to the lower-than-expected margins. Ribbon anticipates a portion of the higher supply chain related costs to persist at least through the first half of 2022.

"While we are disappointed by the results this quarter and the impact from the challenging supply environment, we remain excited by the continued progress we are making on our strategy to position our IP Optical Networks solutions with key Ribbon customers including several new wins with major carriers this quarter in the US, Japan, and Africa regions, and that investment in fiber networks and communications will position us for growth in 2022 and beyond," said Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "We will discuss further details on our conference call on February 16, 2022."

Tuesday, January 11, 2022

Nokia expects to exceed 2021 financial guidance

Nokia updated its financial guidance for 2021, saying its underlying business performed largely as expected in Q4 2021. However, other operating income was higher than expected including further benefits from venture fund investments, leading to a stronger comparable operating margin exceeding the 2021 guidance.

Based on preliminary and unaudited financial results for 2021 Nokia now estimates net sales of approximately €22.2bn within its previous guidance of €21.7 to 22.7bn and a comparable operating margin of 12.4 to 12.6% above its previous guidance of 10 to 12%. The company estimates it has benefited from approximately 150bps of one-offs in financial year 2021 to its comparable operating margin (up from 100bps expected at our Q3 earnings) related to venture fund investments, a one-off software contract in Q2, bad debt provision reversals and some other one-time benefits.

Wednesday, November 17, 2021

Cisco posts $12.9 billion in revenue, up 8% year over year

Cisco reported Q1 FY22 total revenue of $12.9 billion, up 8% year-over-year, with product revenue up 11% and service revenue up 1%. Earnings per Share were: GAAP $0.70 and Non-GAAP $0.82. On a GAAP basis, total gross margin, product gross margin, and service gross margin were 62.4%, 61.5%, and 65.2%, respectively. 

"In Q1, we had robust growth and continued strong demand despite the very dynamic supply environment," said Chuck Robbins, Chair and CEO of Cisco. "Cisco's technology sits at the heart of the accelerated digital transformation happening today. Our breakthrough innovation, strong demand, and the success of our business transformation position us well for another year of growth in fiscal 2022."

Some highlights:

  • Revenue by geographic segment was: Americas up 5%, EMEA up 11%, and APJC up 15%. 
  • Product revenue performance was led by growth in Secure, Agile Networks up 10%, Internet for the Future up 46%, End-to-End Security up 4%, and Optimized Application Experiences up 18%. 
  • Hybrid Work was down 7%, as compared with 63.6%, 62.7%, and 65.8%, respectively, in the first quarter of fiscal 2021.
  • Software revenue of $3.7 billion, with 80% sold as a subscription
  • Cisco noted ongoing supply chain constraints yet said it was able to preserve healthy margins even though it has paid significantly higher logistics costs to get critical components to where they are needed. The company also said it has raised prices to offset its increased costs.

Thursday, November 4, 2021

MACOM posts revenue of $155M, up 5.4% yoy

MACOM reported Q4 revenue of $155.2 million for its fiscal fourth quarter and fiscal year ended October 1, 2021, an increase of 5.4% compared to $147.2 million in the previous year fiscal fourth quarter and an increase of 1.7% compared to $152.6 million in the prior fiscal quarter. Gross margin was 58.1%, compared to 52.8% in the previous year fiscal fourth quarter and 57.2% in the prior fiscal quarter. Net income was $17.1 million, or $0.24 per diluted share, compared to net income of $17.5 million, or $0.22 per diluted share, in the previous year fiscal fourth quarter.

“We remain focused on growth and profitability as we enter our next fiscal year,” said Stephen G. Daly, President and Chief Executive Officer.

Thursday, October 28, 2021

Nokia posts 2% rise in Q3 sales, cites supply chain constraints

Nokia reported Q3 revenue of EUR 5.399 billion, up 2% over EUR 5.294 billion in sales for the same period last year. Sales were contrained by expected supply chain and Mobile Networks North America headwinds. Comparable diluted EPS of EUR 0.08; reported diluted EPS of EUR 0.06.

Pekka Lundmark, President and CEO of Nokia, states: "We delivered another great quarter driven by our increased investments in technology leadership and strong market demand. The highlight of the quarter was the launch of our next generation FP5 IP routing silicon – delivering up to three times more capacity while reducing power consumption by up to 75% per bit compared to previous generation. This will help reduce the carbon footprint of both Nokia and our customers, while also helping customers to manage their operating expenses."

"The third quarter saw us achieve 2% constant currency net sales growth despite the impact of earlier communicated headwinds in North America for Mobile Networks and global supply chain constraints. These headwinds were offset by strong growth in Network Infrastructure against a tough year-on-year comparison and by Cloud and Network Services achieving double-digit growth. Our comparable operating margin for the quarter was 11.7%, which is a further testament to the accountability and financial discipline that our new operating model is driving through the organization.

"We now have over 380 private wireless customers and the business continues to grow strongly. We are further increasing our investment to ensure we maintain the lead we have built with the industry’s most complete offering.

"Overall, I am pleased with our strong financial performance in 2021 so far. We continue to expect seasonality to be less pronounced this year than previously and are reiterating our full year 2021 outlook. Considering our continued strength, we now expect to be towards the upper-end of our comparable operating margin range. As we look ahead, we believe we are well positioned to capitalize on strong demand in our end markets through strengthened technology leadership and improved cost competitiveness. However, the uncertainty around the global semiconductor market limits our visibility into Q4 and 2022. We are working closely not only with our suppliers to ensure component availability but also with our customers to ensure we can meet their needs and mitigate the unprecedented component cost inflation our industry faces. Coupled with the one-offs we’ve benefited from this year, this may limit our margin expansion potential in 2022."

Comcast adds 300K broadband subs as growth rate slows

Comcast reported Q3 revenue of $30.298 billion and earnings per share of $0.86. Cable Communications increased 7.4% to $16.1 billion in the third quarter of 2021, driven by increases in broadband, wireless, business services, video, other, and advertising revenue, partially offset by a decrease in voice revenue.

Some highlights:

  • Cable Communications total customer relationship net additions were 255,000 
  • Total broadband customer net additions were 300,000
  • Cable Communications Wireless Customer line net additions were 285,000
  • Capital expenditures for cable communications decreased 5.4% to $1.7 billion in the third quarter of 2021, primarily reflecting decreased investment in customer premise equipment, partially offset by increased investment in line extensions and scalable infrastructure. 

"I am pleased with our strong operating and financial results this quarter. Each of our businesses posted significant growth in Adjusted EBITDA, contributing to a double-digit increase in our Adjusted EPS. At Cable, our customer and financial metrics remained strong, highlighted by 10% growth in Adjusted EBITDA, the highest level of customer retention on record for a third quarter, and the most wireless net additions since the launch of Xfinity Mobile in 2017. Our results at NBCUniversal continue to be driven by the ongoing recovery at our domestic Theme Parks, as well as the success of our linear and streaming Media platforms. At Sky, our UK business maintained its momentum, delivering healthy growth in revenue, EBITDA, and customer relationships. Going forward, I am excited about the opportunity to continue to invest in our global technology platform and other businesses while returning more capital to shareholders. This strategy is reflected in our most recent product launches – XClass TV in the U.S. and Sky Glass in Europe – as well as the $2.7 billion we returned to shareholders through a combination of share repurchases and dividend payments," commented Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation.