Motorola reports a loss in 2Q07 of $38m on sales of $8.7bn. If the results in the Home and Networks Mobility and Enterprise Mobility Solutions businesses are solid (+9% and +42% respectively), the result in the Mobile Devices division is particularly poor: -40% in sales to $4.3bn, and a loss of $264m. What wrong? Product portfolio needs improvement, and product mix seems wrong. Motorola heavily paying its success in HLCH (ultra low cost handsets) with the GSMA in emerging markets. As a results, its market share dropped to 13.5% this quarter, down almost 8 points. Motorola is of course taking decisions to turn around difficulties: cost controls and headcount reductions to save about $1bn. It expect its financial results to improve in the second half of the year, even if the Mobile Devices division will remain unprofitable in 2007.
Airspan announced 1H07 revenues of $49m, down 30%, of which WiMAX accounts for almost 60%. WiMAX business grew 8% in the first half. Gross profit eroded 30% to $10m, and net loss increased 5% to $17m.
Nokia Very strong results once more. 2Q07 revenues reached €12.6bn, up 28%, operating profit jumped 57% to €3.2bn, and net profit soared 148% to €2.8bn, but all figures non-proforma. Nokia shipped more than 100m mobile phones in the quarter, up 29%, with an ASP of €90, and had €5.9bn revenues (+1%) in its mobile handsets division. Nokia claims a 38% market share in the global mobile phone market. The multimedia division reported revenues of €2.7bn, up 42% and the Enterprise Solutions division saw its revenues jump 94% to €549m. Two issues, however, in the report: the USA where Nokia still lags and its NSN JV (with Siemens) which offers disappointing results.
NSN The first JV results are disappointing, and short of expectations. 2Q07 revenues were €3.4bn and the operating loss amounted to €1.3bn. Sales and margins were hit by unusually aggressive price erosion, especially in wireless infrastructure, and challenges related to the start of operations. Gross margins were below 24%, instead of normal 5%-40%. As a result, NSN will accelerate its cost savings plan, and an additional €500m cost savings is being targeted.
Nortel said its 2Q07 revenues reached $2.6bn, down 8%, and reported a loss of $37m, vs $342m profit last year, both below expectations. Gross margin, however, improved 3 points to 41% (the highest in 2 years). Revenues in the Carrier Networks business unit were $1.1bn, down 5%; the Global Services business posted sales of $494m, down 9%, but hit by the sale of the UMTS business; the Enterprise unit had sales of $590m, up 23%.
In 1H07, Nortel had revenues of $5bn, down 2.5%, and a net loss of $140m, vs earnings of $171m.
Cisco posted a 18% increase in FY 4Q revenues to $9.4bn, and 25% increase in earnings to $1.9bn. Routing revenues grew 14%, switching revenues rose 18%, and advanced technologies revenues increased 24%. Scientific Atlanta reported revenues of $791m, up above 30%. The Service Provider segment rose in low 20s, while the Global Enterprise segment posted growth in the mid 10s
For its fiscal year, revenues were $35bn, up 23%, with gross margin of over 64%, net income of $7.3bn, up 22%.
Ericsson announced 2Q07 net earnings of €1bn, up 12%, on revenues of €5.3bn, up 8%, in line with expectation. Sales improved 32% in Asia, 12% in Latam and were down 18% in NA. The operational margin was up 1 point to 19.4%.
ALU announced a weaker-than-expected second quarter, with 2Q07 loss of €586m, on sales of €4.3bn, down 4%, with mobile sales down 11% in the quarter. ALU attributed its bad performance to an adverse product and geographic mix, worsening currency exchange rates and its merger challenges. Gross margin fell to 33% from 38% a year earlier, and it is the main source of concern. ALU argued that it is due to very challenging competitive environment and pricing pressure. It has shed 1900 jobs in the quarter and about 3800 in 1H07, about 30% of the targeted 12,500 jobs.
ALU, however remains optimistic and “anticipate sequential revenue growth as the year progresses, (implying) a strong ramp-up in the second half 2007”. On Friday, the share had fallen over 26% this year.