Alibaba beats forecasts with 61% growth and predicts more of the same for the next year

Alibaba is forecasting yet more growth for its business after it beat analyst forecasts with its fourth-quarter results.

Revenue came in at 61.9 billion RMB ($9.9 billion), an increase of 61 percent year-over-year, which topped a 59.6 billion RMB prediction from analysts polled by S&P Global Market Intelligence. The company’s net income for the quarter did drop, however, to 6.6 billion RMB ($1.1 billion) from 9.9 billion RMB one year previous on account of increased investment activity.

Alibaba earned 24.51 RMB per share for its full fiscal year 2018, with total revenue of 250.3 billion RMB and 58 percent annual growth.

The firm expects that impressive rate to be held into its next financial year. Alibaba CFO Maggie Wu said she expects “overall revenue growth above 60 percent, reflecting our confidence in our core business as well as positive momentum in new businesses.”

The company said its annual base of active years rose by 37 million to reach 552 million; its monthly active user count reached 617 million, up by the same factor of 37 million.

Breaking things down it was a familiar story. The company’s core commerce business delivered the bulk of the revenue — 214 billion RMB, $34 billion for the quarter — while its cloud computing business was again the star performer, notching 100% growth to record its first $2 billion (13.4 billion RMB) revenue quarter.

Alibaba has always been keen to invest, but during the last quarter it doubled down on a range of initiatives.

The firm is taking an option to buy one-third of Ant Financial, which resulted terminated a long-standing revenue-sharing agreement that some analysts believe to be worth as much as one billion RMB ($160 million) per quarter. While other impacting deals included the full buyout of food delivery services Ele.me, for upwards of $5 billion, as part of an offline retail push in China and, in Southeast Asia, a $2 billion investment in Lazada, which saw original Alibaba co-founder Lucy Peng installed as new CEO.

Costly? Maybe. But these ventures are what makes CFO Wu and others in management optimistic that Alibaba can sustain its growth. That’s been a key question since its blockbuster IPO in 2014 and Alibaba has long invested in international expansion and new revenue channels in China to offset a demand on its core business.

Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce
business and investments we have made over the past several years in longer-term growth initiatives,” added Alibaba CEO Daniel Zhang.

Pandora shares up 8% after surprise earnings beat

Pandora’s quarterly earnings report was music to investor’s ears.

The digital radio platform reported a better-than-expected first quarter report after the bell on Thursday, sending shares up 8% in after-hours trading.

Wall Street liked that the company showed a sizable increase in subscriber revenue, posting $104.7 million, a 63% increase from last year. Pandora has 5.63 million paid listeners, up 19% from the same timeframe in 2017.

By contrast, Apple Music says it has 40 million subscribers and Spotify has 75 million, so Pandora is a distant third in terms of paid users.

But the competition is already reflected in Pandora’s stock price. It closed Thursday at $5.75, which is up a buck for the past month. It’s also substantially beneath the $37 per share that the stock was trading at in 2014. Its market cap is currently $1.45 billion.

In addition to subscribers, Pandora makes money from its unpaid users via ads. The company had 72.3 million active listeners, bringing in $319.2 million in revenue. Analysts had expected $304.3 million.

Its adjusted loss per share was 27 cents, well above the negative 38 cents that Wall Street forecast.

“Pandora is exactly where we want to be: at the center of a growing market with huge potential,” said Roger Lynch, CEO of Pandora, in a statement.

 

 

 

Fitbit beats revenue expectations slightly, but tracker sales are still down

Fitbit scored a small coup on earnings this week, ever so slightly beating revenue expectations for the quarter. The company pulled in $247.9 million, up over Wall Street’s expected $247.3 million. Of course, that’s still a notable drop from this time last year, when the company pulled in $298.9 million.

The numbers are down as the overall fitness tracking category has declined, and the company sold 2.2 million devices in the quarter, missing analyst expectations of 2.33 million. Fitbit has adjusted its second quarter revenue expectation, accordingly. “We expect results to be impacted by the reduced demand by the channel for trackers, partially offset by an increase in smartwatch revenue, driven primarily by Versa sales,” the company wrote in a release announcing earnings. “We expect smartwatches to grow as a percentage of revenue, but our overall mix to continue to be skewed towards trackers.”

That’s in line with the company’s overall strategy over the past year, which saw a marked shift into the world of smartwatches — a rare overall bright light in the fitness wearable space, thanks in large part to the success of the Apple Watch. Fitbit has invested a good chunk of change in acquisitions, resulting in the release of the Ionic and Versa. And given the devices’ higher per unit price, the company ultimately has to sell fewer to maintain revenue. 

The release mostly glosses over the existence of the Ionic, save for a mention of the fact that the device was announced in the past year — and that it helped reduce “development hours by around 45-percent on the Versa.” That makes perfect sense, of course — the hard work of incorporating all of its recent acquisitions and distilling all of those learnings into a hardware and software offering were mostly accomplished with the Ionic.

The point of all of that being that now Fitbit knows how to make a smartwatch, so doing so in the future should be less resource-intensive, moving forward. That will likely come in handy as the company seems poised to invest more and more of its resources into its growing healthcare sector.

Fitbit stock jumped recently, courtesy of its announced partnership with Google, which will help make health info tracked on its devices more easily accessible by doctors. There is, of course, plenty of money to be made in the healthcare sector, but Fitbit is going to have a bit of an uphill battle getting providers to take its offerings more seriously as medical devices.

“We continued to deepen our relationship with our users, investing in software and services that deliver on our promise of helping people achieve better health outcomes,” CEO James Park said in a release tied to the earnings. “To this end, we closed the acquisition of Twine Health and, most recently announced a long-term collaboration with Google that will accelerate innovation in digital health and wearables.” 

Tesla earnings show record revenues with record losses

Tesla reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues on $3.4 billion. This is technically a beat, as analysts expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago.

Tesla also ended Q1 with $2.7 billion in cash, down from $3.4 billion in cash at the beginning of the year.

This quarter, Tesla’s net losses were a record $784.6 million ($4.19 per share). So, while it’s revenue was higher than ever before, it also reported record losses.

In September 2017, Tesla stock hit a record high of $389.61 a share. At market close today, Tesla was trading at $301.15. In after-hours, Tesla is trading around $287.

In its letter to investors, Tesla provided some updates to its Model 3 production, noting it hit 2,270 cars produced per week for three straight weeks in April.

“Even at this stage of the ramp, Model 3 is already on the cusp of becoming the best-selling mid-sized premium sedan in the US, and our deliveries continue to increase,” Tesla CEO Elon Musk and CFO Deepak Ahuja wrote in a letter to investors. “Consumers have clearly shown that electric vehicles are simply more desirable when priced on par with their internal combustion engine competitors while offering better technology, performance and user experience.”

Model 3 production updates

Just as Tesla did in Q1, it plans to take planned downtime as part of its Model 3 production process. Prior to the downtime in April, Tesla said it had hit a record of producing 4,750 Model 3 vehicles in two weeks.

Once Tesla hits its ideal production rate of 5,000 Model 3 cars per week, which the company expects to do within about two months, the plan is to increase that goal to 10,000 Model 3 cars produced per week.

“In the end, this is all about having factories that are producing the world’s highest quality cars as quickly and as cost-effectively as possible, and with as close to zero injuries as we can possibly get,” the investor letter states. “Our automation strategy is key to this and we are as committed to it as ever.”

However, Musk has previously said that Tesla over-relied on automation for the production of Model 3 cars. That’s something he still stands by, saying Tesla mistakenly added “too much automation too quickly” early in the process.

Musk and Ahuja added:

In those select areas where we have had challenges ramping fully automated processes, such as portions of the battery module line, part of the material flow system, and two steps of general assembly, we have temporarily dialed back automation and introduced certain semi-automated or manual processes while we work to eventually have full automation take back over.

Model S and Model X demand is “very strong”

Tesla Model S

Although much attention has been paid to the Model 3, Tesla said demand for the Model S and Model X is still quite strong. In Q1, Tesla had its highest order number ever, with demand exceeding supply. Tesla said it produced 24,728 Model S cars and X vehicles, while delivering a total of 21,815 of them.

“Short-term operational and logistical issues led to an increase in the number of Model S and Model X vehicles in transit to customers at the end of Q1,” the letter states.

Looking forward into Q2, Tesla expects Model S and X deliveries to be similar to the ones in Q1. But Tesla said that number will increase in Q3 in order for Tesla to hit its goal of 100,000 deliveries for 2018.

Tesla expects to be profitable in Q3

Assuming Tesla hits its 5,000 Model 3 cars produced per week goal, Tesla expects to be profitable in Q3 and Q4, excluding non-cash, stock-based compensation. Tesla also expects to achieve full GAAP profitability in Q3 and Q4 as well.

Analysts, regulators and customers alike have been paying close attention to Tesla over the past few months. In March, a Tesla owner died following a car crash that involved the Model X’s Autopilot mode. In April, after cooperating with the National Transportation Safety Board for the investigation, the NTSB removed Tesla as a party. That’s because the NTSB was unhappy with the way Tesla released information pertaining to the crash to the public.

“The NTSB took this action because Tesla violated the party agreement by releasing investigative information before it was vetted and confirmed by the NTSB,” the NTSB wrote in a press release. “Such releases of incomplete information often lead to speculation and incorrect assumptions about the probable cause of a crash, which does a disservice to the investigative process and the traveling public.”

Nintendo’s annual profit rockets by 500% after selling 15M Switch consoles

Nintendo has announced impressive financial results thanks to strong sales its Switch console, and a new CEO for its business.

Operating profit rose by a huge 505 percent to reach 178 billion yen ($1.6 billion) over the last financial year. Revenue was also up by an impressive 116 percent to hit 1.06 trillion yen ($9.7 billion) over the period as Nintendo sold 15 million Switch units, vastly out-performing the initial target of 10 million set last year. (The firm later updated its forecast to match the 15 million.)

On the games front, Super Mario Odyssey was the biggest seller at 10 million copies, followed by Mario Kart 8 Deluxe (nine million) and Splatoon 2 (six million.) The firm also revealed that it sold over five million of the SNES Classic Edition product, too.

Going forward, Nintendo is aiming to grow Switch sales to 20 million over the next year. Aside from continued games, it is banking on reaching new segments through Labo, its carboard-based product that literally brings games to life. The firm is already forecasting annual revenue of 1.2 trillion yen with an operating profit of 225 billion yen.

That period will see the firm helmed by Shuntaro Furukawa, an existing board member, who is stepping up into the president and CEO role to replace incumbent Tatsumi Kimishima. Kimishima, who is 68, stepped into the breach following the death of Satoru Iwata in 2015. Furukawa is far younger at 46. He joined the company in 1994, has worked in global marketing and was a board member with Pokemon Co.

LG forecasts record Q1 profit despite its struggling smartphone division

LG’s mobile business may be a serial loss-maker, but the rest of the Korean firm’s interests are doing pretty well… better than ever actually according to its newest earnings forecast.

Like fellow countryman Samsung, LG is on course for company-record Q1 financial results. The company is predicting an operating profit of 1.1 trillion KRW ($1.03 billion) on total sales of 15.1 trillion KRW ($14.1 billion) for the quarter.

That’s up 20 percent year-on-year and it represents the first time LG has made a profit of over 1 trillion KRW in the first quarter of the financial year.

The financial forecasts don’t include in-depth analysis of LG’s divisions — the full earnings are due later this month — so we don’t yet know what is driving this record for sure. Carrying on from its Q4 earnings, which helped 2017 become LG’s most-profitable financial year since 2009, we know that the firm’s home appliance and TV divisions were the star performers, while its home entertainment division saw operating income jump 134 percent to hit $345.96 million.

LG Mobile is likely to once again drag the numbers down.

Its newest device — the V30S ThinQ — is unlikely to move the needle with consumers as TechCrunch’s Brian Heater noted when he reviewed the device at Mobile World Congress in February.

To give credit, new LG Mobile CEO Hwang Jeong-hwan — who took the top job in November — managed to reduce losses from 375.3 billion KRW ($331.37 million) in Q3 to 213.2 billion KRW ($192.33 million) in Q4, but turning the division profitable is much harder than cutting the bleeding.

LG Mobile has posted just one-quarter of profitability over the last two years, that was a small $3.2 million profit Q1 2017, the first quarter of sales of its G6 flagship. Previous to that, you have to go way back to Q1 2015 to find a positive quarter for its mobile division.

“Due to the challenging business environment of smartphones, the mobile communications arm is presumed to have not posted a sharp improvement in performances,” NH Investment & Securities said in a note according to Yonhap.

That said, the company’s newest flagship phone — the G7 — is rumored to be dropping next month, so it won’t be too long before we can see what the new management team has in mind.

Stitch Fix falls 6% after posting earnings

 Stitch Fix, the on-demand fashion styling business, saw its shares quickly fall 6% following the bell on Monday, after missing earnings projections for its second-quarter release.  The company posted a diluted adjusted earnings per share of two cents, beneath the six cents that analysts surveyed by Yahoo! Finance were hoping for. Revenue for the quarter surpassed expectations, however. The… Read More

Angry Birds maker Rovio sinks to new low on missed Q4 sales of €73.9M and EPS of €0.10

 Gaming and entertainment company Rovio continues to have a very hard time of it as it faces the music on the waning popularity of its once-might Angry Birds franchise. Today, the Helsinki-based company reported Q4 and full-year financials that fell short of even analysts’ most conservative estimates as it blamed lower-than-expected interest in its new slate of games. “In the… Read More

Square’s bets beyond a register brought in $253M last year as it posts a largely positive fourth quarter

 Square posted a largely successful fourth quarter that showed continuing growth with its Cash App — with users spending around $90 million on its Cash card in December, putting it on a potentially $1 billion run rate. That would offer another significant avenue for Square to snap up additional customers as it looks to chip away at the alternatives available for directly sending cash… Read More

Nvidia up 10% after Q4 earnings beat, says cryptocurrency demand ‘exceeded expectations’

 Nvidia’s successes are continuing to pile on as the company’s gaming and data center businesses drove revenues up 34 percent year-over-year. Nvidia shares were up around 10 percent after-hours following the company’s release of its fourth-quarter earnings report. The company reported EPS of $1.78 on revenue of $2.91 billion, beating analyst expectations of $1.17 per share… Read More