Samsung expecting Q1 2018 profit to jump by 50%

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Back in the second half of 2017, Samsung started posting record after record in its quarterly financial reports, mostly due to the high demand for memory chips. According to latest information, acquired by Reuters, the Korean manufacturer is expected to post over 50% YoY rise of profits in its financial results for the January-March period of 2018. Expecting to announce guidance numbers on Friday, analysts say Samsung has achieved an operating profit of $ 13.7 billion, more than 50% higher compared to the same period last year – $ 8.8 billion. According to Reuters, Samsung is bringing…

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HomePod’s High-Quality Reflected By Slim Profit Margins

Apple’s profit margins for HomePod are actually slimmer than the margins generated by its other products — and slimmer than similar devices on the market.

HomePod costs an estimated $ 216 for Apple to build, according to an analysis report by TechInsights. With its $ 349 retail price, that means Apple generates a profit margin of just about 38 percent on each device.

For comparison’s sake, Amazon makes a margin of about 56 percent for its Amazon Echo speaker. Google, on the other hand, generates a margin of 66 percent. Those are higher margins despite those products’ lower sound quality, according to TechInsights. In other words, Apple is making less per HomePod (percentage-wise) than Google and Amazon are making on respective devices speakers.

The iPhone X, for example, generates margins of about 64 percent for Cupertino, while the iPhone 8 sells for a 59 percent profit margin, according to cost analysis reports by IHS Markit. That’s pretty typical for Apple devices and products.

Suffice to say, it’s uncommon for Apple to have slimmer margins than similar products on the market. But HomePod’s higher-quality audio components and internals are likely driving up its cost — and Apple may be intentionally reducing the cost of HomePod to make the device more competitive in its saturated smart speaker market.

TechInsights’ Costing Manager, Al Cowsky, speculates that Apple may be “compressing” its margins on HomePod. In other words, Apple has reduced the price from its typical margins in order to sell more smart speakers, Cowsky told Bloomberg.

As far as how HomePod’s production costs break down, TechInsights estimates the following.

  • $ 58 for the device’s array of speaker tech, including microphones, tweeters, woofer and power management components.
  • $ 60 for miscellaneous components, such as the LED system for HomePod’s top display.
  • $ 25.50 for HomePod’s A8 chipset.
  • $ 25 for external housing and “other items.”
  • $ 17.50 for the actual manufacturing costs, testing and HomePod’s packaging.

HomePod has been widely lauded by critics and media outlets for its high-quality audio — many publications praised the device as the best-sounding smart home speaker currently on the market. On the other hand, Apple’s first smart home speaker has attracted some criticism for Siri’s lack of refinement and HomePod’s relatively poor support for third-party streaming services like Spotify.

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Apple HomePod Costs $216 to Build; Generates Thinner Profit Margins than Other Apple Products

The $ 349 HomePod costs Apple $ 216 to build as per an analysis by TechInsights. The product also carries a thinner profit margin for Apple compared to the likes of the Apple Watch, the iPad, and iPhone. Continue reading
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Twitter made a profit by cutting costs, not by growing its business

Twitter made $ 91 million in Q4, its first profitable quarter ever.

Twitter is finally making some money. After nearly 12 years, the company reported its first-ever profitable quarter: It made $ 91 million in the last three months of 2017.

Investors loved the flip, and Twitter stock is up almost 16 percent.

But it didn’t get there by growing its business. It got there by cutting costs.

Twitter revenue only grew by 2 percent from a year ago. That makes sense since Twitter’s user base only grew by 4 percent in 2017, and the company didn’t add any net new users in Q4, maintaining its monthly user count of 330 million.

So Twitter cut costs to make profit instead. A quick look at the company’s income statement shows us where: 1) Stock-based compensation, or stock awards given to employees as part of their salary; 2) research and development; and 3) sales and marketing. Twitter made notable cuts to all three categories in the past year.

  • Twitter spent just over $ 102 million on stock-based compensation in Q4, down from $ 138 million the year earlier. That’s a 26 percent decrease.
  • Twitter also spent just $ 134 million on research and development, down from $ 202 million the year prior. That includes a decrease of roughly $ 26 million in stock-based compensation for R&D employees, folks like engineers and designers who work on Twitter products. If you take out stock-based compensation entirely (it’s already accounted for above), Twitter’s R&D budget went from $ 120.3 million in 2016 to $ 78.3 in 2017 — a decrease of roughly 35 percent.
  • Twitter also spent almost $ 70 million less on sales and marketing in Q4 2017 than it did in the same quarter in 2016 — that means spending less on things like agency help, conferences and events for the company. Excluding stock-based compensation for sales and marketing employees, Twitter’s sales and marketing budget went from roughly $ 233 million in 2016 to $ 163.5 million in 2017 — a decline of almost 30 percent.

Taken in aggregate, those changes help explain the bulk of Twitter’s turnaround.

Talk to the folks at Twitter and they will point out that cost cuts weren’t the only reason the company turned a profit.

Twitter claims its business is stronger than it looks on paper — that 2 percent revenue growth would have been 8 percent growth if you ignore the fact that some of Twitter’s 2016 revenue came from now-defunct marketing platform Tellapart, which it shuttered in early 2017. (Of course, shuttering Tellapart also helped with the cost-cutting, too.)

The bottom line is that Twitter achieved profitability by getting smarter about its spending.

Don’t expect that profit margin to soar. “We’re investing to make 2018 a year of growth and expect our expenses to more closely align with revenue after a year of significant margin improvement,” CEO Jack Dorsey said on Thursday’s call.

That roughly translates to a promise from Twitter to spend what it makes this year.

One quarter of profitability down. Now it’s up to Twitter’s revenue business to keep it going.


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Recode Daily: Twitter finally turned a profit — but it didn’t add any new users in in Q4

Plus, Snap rides its positive earnings report to a 45 percent stock jump, RIP internet pioneer John Perry Barlow, and welcome the Year of the Dog in style.

Twitter reported its first profitable quarter ever — but it didn’t add any new users. The company reported profit of $ 91 million on $ 732 million in revenue. Wall Street was looking for $ 686 million in sales. But Twiter’s user base didn’t grow at all — it still has 330 million. We’ll listen in on the earnings call this morning at 5 am PT / 8 am ET. We’ll want to hear for how the strategy will change without COO Anthony Noto, who resigned last month. [Kurt Wagner / Recode]

Following Snap’s first positive earnings report since going public last march, Snap stock rose 45 percent yesterday — the biggest price jump in the company’s history; it was also its second-biggest trading day. Meanwhile, Snapchat has built a new feature called Live for streaming live video inside the app — but for the time being, it’s only for Snapchat’s publishing partners, including NBC, which will use the video feature during its live coverage of the winter Olympics.[Rani Molla and Kurt Wagner / Recode]

Senate leaders reached a two-year budget agreement yesterday to raise military and domestic spending caps by hundreds of billions, disregarding President Trump’s threats to shut down the government. But Nancy Pelosi, the leader of the House Democrats said she would not support a budget deal without a promise to debate legislation to protect the young undocumented immigrants known as Dreamers — Pelosi took the House floor for a record-setting eight-hour speech. [Thomas Kaplan / The New York Times]

Software engineer James Damore, the author of the infamous“Google Manifesto,” has dropped his National Labor Relations Board case against Google — to focus on his civil suit against Google. [Mark Bergen]

Here’s what happened on day three of the Uber-Waymo trial over self-driving tech secrets: Relatively restrained and compliant during his first day of testimony, former Uber CEO Travis Kalanick’s strategy yesterday was to play the chump, complaining that he had been betrayed by Alphabet CEO Larry Page, who was “super unpumped” when Kalanick and Uber started their own autonomous-car effort in 2015. At the trial, it also emerged that Uber rival Lyft considered buying Otto, the self-driving truck startup at the center of the lawsuit. [Johana Bhuiyan / Recode]

Internet pioneer John Perry Barlow, a co-founder of the Electronic Frontier Foundation and sometime lyricist for the Grateful Dead, died yesterday at age 70. Best known for his writings on the emerging philosophy of the internet during the ’90s, including 1996’s “A Declaration of the Independence of Cyberspace,” Barlow brought together the countercultural and libertarian strains in early internet ideology. [Cory Doctorow / BoingBoing]


Recode Presents …

Code Media is next Monday and Tuesday, and the agenda is jam-packed with the most interesting and influential names in media and technology. And we just added three more must-see speakers: Disney EVP Kevin Mayer, NBA Commissioner Adam Silver and Turner CEO John Martin. There are still a couple of tickets left; if you want to join us in Huntington Beach, Calif., check here for availability.


Top stories from Recode

SoftBank’s tech funds have invested 40 percent of their $ 100 billion target.

They said it couldn’t be done.

Austin tech workers make the most and are seeing the sharpest rise in pay.

When adjusted for cost of living, Austin tech workers are getting paid around $ 202,000 a year.

The president of Walmart-owned Jet is becoming a venture capitalist with an early investor in Jet.

Liza Landsman will join the venture firm NEA in New York City.

Behind the math of MoviePass, the $ 10-a-month movie subscription service that sounds too good to be true.

The startup is burning money now, but on the latest episode of Recode Media with Peter Kafka, its CEO says he has a plan.

This is cool

Everything you need to know to welcome the Year of the Dog in style.


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Apple Reports Record Results for 1Q 2018: $20B Profit on $88B Revenue, 77.3M iPhones

Apple today announced financial results for the first fiscal quarter of 2018, which corresponds to the fourth calendar quarter of 2017.

For the quarter, Apple posted revenue of $88.3 billion and net quarterly profit of $20.1 billion, or $3.89 per diluted share, compared to revenue of $78.4 billion and net quarterly profit of $17.9 billion, or $3.36 per diluted share, in the year-ago quarter. The revenue and earnings per share numbers were company records for any quarter in the company’s history.

Gross margin for the quarter was 38.4 percent, compared to 38.5 percent in the year-ago quarter, with international sales accounting for 65 percent of revenue. Apple also declared an upcoming dividend payment of $0.63 per share, payable February 15 to shareholders of record as of February 12.


For the quarter, Apple sold 77.3 million iPhones, compared to 78.3 million in the year-ago quarter. iPad sales were up slightly to 13.2 million, up from 13.1 million a year ago, and Mac sales slipped to 5.1 million from 5.4 million.

“We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup. iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” said Tim Cook, Apple’s CEO. “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30 percent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.”

Apple’s guidance for the second quarter of fiscal 2018 includes expected revenue of $60-62 billion and gross margin between 38 and 38.5 percent.


Apple will provide live streaming of its fiscal Q1 2018 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

A loose summary of Apple’s earnings call is embedded below in reverse chronological order. Continue reading Apple Reports Record Results for 1Q 2018: $20B Profit on $88B Revenue, 77.3M iPhones

Apple Reports Record Financial Results: $88B Revenue, $20B Profit

Apple profits have risen despite the fact that the company sold less iPhones than it previously expected in the final months of 2017, according to reports.

During the last three months of 2017, iPhone sales dipped slightly when compared to 2016 numbers, but the tech giant made $ 20 billion in profit.

It’s believed that higher prices resulted in this profit growth. As well as this, Apple achieved strong growth numbers throughout Europe and Asia.

During the period, Apple shipped 77.3 million iPhones, which is a decrease of 1 percent compared to 2016. Shares in the company slipped initially too, but they grew by 3 percent after the announcement.

Overall, the company has posted “record” revenue of $ 88.3 billion, increasing by 13 percent from a year ago. Apple said international sales made up 65 percent of this number.

Tim Cook, CEO of Apple, praised his company’s financial performance. “We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup,” he said.

Despite slightly disappointing iPhone sales, Cook said the iPhone X “surpassed our expectations and has been our top-selling iPhone every week since it shipped in November.”

He added: “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30 percent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.”

Luca Maestri, chief financial officer of Apple, attributed these profits to “great operational and business performance”. He said: “We achieved all-time record profitability during the quarter, with EPS up 16 percent.

“Cash flow from operations was very strong at $ 28.3 billion, and we returned $ 14.5 billion to investors through our capital return program.”
The news comes as multiple analysts have downgraded Apple shares. As CNBC reported last week, Atlantic Equities downgraded  shares to neutral from overweight.

James Cordwell, an analyst at Atlantic, said he’s seeing “signs that iPhone demand is starting to soften, limited visibility into the potential for future iPhone cycles and emerging challenges to the smartphone’s dominance at the centre of consumer technology.”

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Amazon has posted a profit for 11 straight quarters — including a record $1.9 billion during the holidays

Amazon is on fire.

Amazon is putting its reputation as a money-loser in the rearview mirror.

The e-commerce giant posted a record profit of $ 1.9 billion during the last three months of 2017, marking the 11th straight quarter of positive net income for Jeff Bezos’s company.

Amazon profitable for 11 quarters

About $ 789 million of that can be attributed to a tax benefit resulting from President Trump’s tax plan. But even without the benefit, the profit number would have been the largest in the company’s history.

Amazon Chief Financial Officer Brian Olsavsky said the fact that Amazon’s revenue came in at the high end of internal projections — $ 60.5 billion — helped margins, because warehouses can operate more efficiently when more products are running through them.

He also called the company’s advertising business, which boasts much higher profit margins than the core retail business, “a key contributor” in the fourth quarter.

The operating margins at Amazon Web Services, the company’s most profitable business unit, also expanded 1 percentage point from the previous quarter.

Amazon profit margin

Still, Amazon’s profits are modest for a company of its size. The company essentially runs its core retail machine at break-even, pumping as much cash as possible into big new initiatives that may not produce meaningful financial results until years down the line.

Amazon revenue versus profit

Expect Amazon to continue to invest heavily into one of these growth areas, its Alexa voice assistant technology, based on comments made by Bezos in the company’s earnings release.

“Our 2017 projections for Alexa were very optimistic, and we far exceeded them,” he said. “We don’t see positive surprises of this magnitude very often — expect us to double down.”

Amazon’s stock was trading up 6 percent in after-hours trading.


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