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Profits climb at Microsoft as the company looks to recruit new workers | Xilinx meets its own forecasts and books USD41 million in profits
The world's biggest software company, Microsoft, saw fourth-quarter profits rise significantly compared to last year, although the company did fail to meet the expectations of Wall Street analysts. On Thursday the maker of the Windows operating system said that for the quarter ending 30 June, profits were USD1.53 billion, or USD0.28 per share, compared to its meagre profit of USD65 million, or USD0.01 a share, a year earlier. The company had revenues of USD7.25 billion in its fourth quarter, a 10 percent increase over Q4 2001.
Analysts polled by Thomson Financial/First Call were expecting earnings of USD0.42 per share for the quarter on revenues of USD7.1 billion. The company's failure to meet Wall Street's targets can be chalked up, in part, to an after-tax charge of USD806 million in "investment impairments" stemming from investments Microsoft made in AT&T and other telecoms.
Commenting on separate divisions of the company, Microsoft said that sales of the Xbox video-game consoles had reached 3.9 million for the fiscal year. It also said that Microsoft's MSN Internet access business grew and now has 8.7 million subscribers. In one other important note, Microsoft said it plans to hire 5,000 new workers, with as many as 40 percent of those new jobs in the Seattle area. In Ireland, Microsoft employs around 1,800.
Microsoft archrival Sun Microsystems posted fourth-quarter earnings of USD20 million on Thursday, as it continued to wrestle with the economic downturn. For the period ended 30 June, Sun earned USD20 million, or a penny a share, compared with a big loss of USD88 million, or USD0.03 a share, last year. Revenues fell almost 17 percent to USD3.4 billion, though they came in ahead of analysts' expectations, who, according to Thomson Financial/First Call, were calling for revenues of USD3.3 billion with USD0.01 in per-share earnings.
Canadian telecoms equipment maker Nortel Networks posted more losses in its second quarter but matched analyst estimates. The company also said it may need to cut more costs.
Nortel predicted that its customers will continue to keep capital spending down until 2003, and subsequently the firm forecast flat sales in the current quarter. Moreover, the company said in this difficult environment it may have to cut more costs as it reviews its break-even target of USD3.2 billion in quarterly sales. It's worth noting, however, that the firm did not announce any specific job-cutting measures as part of its cost-cutting plans, and it declined to say if any such plans were in the works. Currently, the firm is in the midst of cutting 3,500 jobs, which will leave it with a workforce of 42,000.
The Canadian company matched forecasts with a pro forma loss of USD0.09 a share in the quarter with sales of USD2.77 billion, just slightly below consensus targets of USD2.8 billion. Second-quarter net loss was USD697 million, or USD0.20 a share, much better than last year's loss of USD19.4 billion, or USD6.08 per share, which was mostly due to a USD14 billion write-down for acquisitions.
Nortel has 240 workers in Galway in an R&D centre and over 100 employees in its sales and administration office in Dublin. It also employs 1,100 people in its Monkstown operation outside Belfast, but hundreds of jobs have been cut in this location over the last 12 months, as well as in Galway.
Xilinx saw shares fall in after-hours trading as its results fell behind expectations. The figures did however match Xilinx's own forecasts. The chipmaker reported net revenue of USD289.9 million, flat compared with the same period last year. Net income amounted to USD41 million, or USD0.12 a share, a 20 percent gain over the previous quarter, and 122 percent higher year-on-year. Still, analysts had expected more revenue from the company, driving the shares down after hours, with Thomson Financial/First Call calling for USD295.21 million in sales.
Xilinx employs around 350 in Ireland and is expected to complete its EUR52 million expansion programme at its Citywest facility by the end of the year. That facility will employ an additional 500 workers, with recruitment there expected to take place in line with market demands.
eBay recorded revenues and earnings in line with guidance as strong on-line sales boosted figures. However, the e-auction company predicted that revenues would be slightly lower than expectations. The company earned USD54.3 million, or USD0.19 per share, in the second quarter, compared with USD24.6 million, or USD0.09 per share, a year ago. Its revenues were USD266.3 million, up 47 percent from USD180.9 million in the year-ago quarter. The company said it now expects revenues for Q3 to be between USD278 million and USD281 million and earnings to be USD0.19 per share.
Struggling computer maker Gateway recorded a net loss of USD61 million in the second quarter as sales plummeted 33 percent. On a positive note, the company said it sold more computers than it had in the previous quarter and the average selling price went up. Gateway now says it must sell between 900,000 and 1 million units a quarter to achieve profitability and predicted that this would happen by next year. It sold 651,000 units during Q2.
Gateway reported a net loss of USD61 million, or USD0.19 a share, on revenue of USD1 billion. During the same quarter last year, Gateway's net loss was USD20.8 million, or USD0.06 a share, on revenue of USD1.5 billion. Analysts surveyed by Thomson Financial/First Call expected a loss of USD0.17 a share on revenue of USD987.8 million, on average.
Contract electronics manufacturer Sanmina-SCI also posted a loss in its most recent quarter but said the current quarter would meet Wall Street estimates. San Jose, California-based Sanmina-SCI reported a loss of USD4.9 million, or USD0.01 a share, compared with a year-earlier pro forma profit of USD30.1 million, or USD0.09 a share. Excluding restructuring costs and other items, Sanmina-SCI posted an operating profit of USD3 million, or USD0.02 a share. Revenue in the quarter was USD2.61 billion, compared with pro forma revenue of USD2.84 billion a year earlier.
Earlier this year Sanmina-SCI announced that it would cut 130 jobs and close its Blanchardstown facility, following Sanmina's acquisition of SCI in December. Although some staff from Dublin were given the option of transferring to Cork or to one of the 100 other global facilities in the Sanmina-SCI group, the majority of jobs are expected to go.
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