ITV

Category: Financials

  • HUL marketing expenses down in Q2-17, HY1-17

    HUL marketing expenses down in Q2-17, HY1-17

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) spent 7.6 per cent less towards Advertisement and Promotions expense (marketing spends, ASP) in the quarter ended 30 September 2016 (Q2-17, current year) as compared to Q2-16(year-over-year or y-o-y) on a standalone basis. Also, quarter-over-quarter (q-o-q) ASP declined 3.2 per cent in the current quarter as compared the immediate trailing quarter Q1-17. HUL spent Rs 851.38 crore (10 per cent of Total income from operations or TIO) in Q2-17, Rs 921.04 crore (11 per cent of TIO) in Q2-16 and Rs 879.75 crore (10 per cent of TIO) in Q1-17 towards ASP.

    ASP was also down, both in terms of absolute rupees as well as percentage of TIO during the half year ended 30 September 2016 (HY1-17) versus the corresponding half year period of the previous year. As a matter of fact, ASP in HY1-17 was the lowest since HY1-13.

    HUL chairman Harish Manwani said, “In challenging market conditions, we delivered another quarter of profitable growth. We remain focused on market development, consumer led innovations and an even sharper drive on operating efficiencies. With a good monsoon, weexpect a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry. Our strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged.”

    Trends

    During aneighteen quarter period starting Q1-13 until Q2-17, HUL’s ASP in Q4-15 was the highest in absolute rupees at Rs1,027.89 crore (13.4 per cent of TIO), while in terms of per centage of TIO in current fiscal, it was highest in Q2-14 at Rs954.02 crore (13.8 per cent of TIO). Please refer to Fig A below. ASP shows linear increasing trend in terms of absolute rupees while in terms of ASP as per centage of TIO, the trend shows a decline during the eighteen quarter period under consideration in this report.

    Please refer to Fig B below. HUL’s ASP in HY1-17 at Rs 1,731.13 (10 per cent of TIO) was 4.6 per cent lower than the Rs 1,813.77 crore (11.2 per cent of TIO) in HY1-16. As is obvious, HY1-17 ASP is the lowest over a five year period starting HY1-13 in terms of per centage of TIO and second lowest during the same period in terms of absolute rupees. ASP during the first half period of a fiscal shows a declining trend in terms of per centage of TIO during the period HY1-13 to HY1-17.

    The company’s TIO in the current quarter increased 1.6 per cent y-o-y to Rs8.480.26 crore as compared to Rs8,348.60 crore but declined 3.7 per cent q-o-q  from Rs8,802.82 crore q-o-q. Please refer to Fig C below. TIO represented by the broken light blue line shows a linear increasing trend during the eighteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in Q2-17 increased11.6 per cent y-o-y to Rs 1,095.60 crore (12.9 per cent margin) as compared to Rs982.06 crore (11.8 per cent margin) and increased by 11.5 per cent q-o-q from Rs 982.17 crore (11.2 per cent margin). PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the eighteen quarter period under consideration in this report.

    HUL’s Q2-17 reporton categories

    Home Care: Robust growth with continued momentum on premium laundry In Fabric Wash, growth was driven by the premium segment as Surf maintained its strong volume-led growth. In Household Care, Vim liquiddid well on the back of sustained market development. The water business continued to do well.

    Personal Care: Growth impacted by slowing markets and Personal Wash volumes. In Personal Wash, the performance was impacted by price increases taken during the quarter. Skin Care growth was driven by the BB andCC creams. Hair Care growth was led by the premium brands Dove and TRESemmé. The recently acquired Indulekha brand continued toperform well and was extended to four new states in the quarter. In Oral Care, the overall performance was subdued, though Pepsodent started recovering post relaunch. Lakme Colour Cosmetics sustained its broad based innovation led growth. In Deodorants, Axe Signature continuedto gain ground during the quarter.

    Refreshment: Strong growth led by Tea. In Tea, all key brands grew well driven by focused in-market initiatives. Lipton Green Tea and the Natural Care portfolio registered anotherquarter of high growth on sustained market development. In Coffee, Bru Gold continued to lead premiumisation and performed well. In Ice Cream & Frozen Desserts, Magnum Minis were launched during the quarter.

    Foods: Modest growth in a challenging market. The focus continues to be on market development for the category. Kissan range of premium Jams gained further traction with consumersand Instant Soups led the growth for Knorr.

  • HUL marketing expenses down in Q2-17, HY1-17

    HUL marketing expenses down in Q2-17, HY1-17

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) spent 7.6 per cent less towards Advertisement and Promotions expense (marketing spends, ASP) in the quarter ended 30 September 2016 (Q2-17, current year) as compared to Q2-16(year-over-year or y-o-y) on a standalone basis. Also, quarter-over-quarter (q-o-q) ASP declined 3.2 per cent in the current quarter as compared the immediate trailing quarter Q1-17. HUL spent Rs 851.38 crore (10 per cent of Total income from operations or TIO) in Q2-17, Rs 921.04 crore (11 per cent of TIO) in Q2-16 and Rs 879.75 crore (10 per cent of TIO) in Q1-17 towards ASP.

    ASP was also down, both in terms of absolute rupees as well as percentage of TIO during the half year ended 30 September 2016 (HY1-17) versus the corresponding half year period of the previous year. As a matter of fact, ASP in HY1-17 was the lowest since HY1-13.

    HUL chairman Harish Manwani said, “In challenging market conditions, we delivered another quarter of profitable growth. We remain focused on market development, consumer led innovations and an even sharper drive on operating efficiencies. With a good monsoon, weexpect a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry. Our strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged.”

    Trends

    During aneighteen quarter period starting Q1-13 until Q2-17, HUL’s ASP in Q4-15 was the highest in absolute rupees at Rs1,027.89 crore (13.4 per cent of TIO), while in terms of per centage of TIO in current fiscal, it was highest in Q2-14 at Rs954.02 crore (13.8 per cent of TIO). Please refer to Fig A below. ASP shows linear increasing trend in terms of absolute rupees while in terms of ASP as per centage of TIO, the trend shows a decline during the eighteen quarter period under consideration in this report.

    Please refer to Fig B below. HUL’s ASP in HY1-17 at Rs 1,731.13 (10 per cent of TIO) was 4.6 per cent lower than the Rs 1,813.77 crore (11.2 per cent of TIO) in HY1-16. As is obvious, HY1-17 ASP is the lowest over a five year period starting HY1-13 in terms of per centage of TIO and second lowest during the same period in terms of absolute rupees. ASP during the first half period of a fiscal shows a declining trend in terms of per centage of TIO during the period HY1-13 to HY1-17.

    The company’s TIO in the current quarter increased 1.6 per cent y-o-y to Rs8.480.26 crore as compared to Rs8,348.60 crore but declined 3.7 per cent q-o-q  from Rs8,802.82 crore q-o-q. Please refer to Fig C below. TIO represented by the broken light blue line shows a linear increasing trend during the eighteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in Q2-17 increased11.6 per cent y-o-y to Rs 1,095.60 crore (12.9 per cent margin) as compared to Rs982.06 crore (11.8 per cent margin) and increased by 11.5 per cent q-o-q from Rs 982.17 crore (11.2 per cent margin). PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the eighteen quarter period under consideration in this report.

    HUL’s Q2-17 reporton categories

    Home Care: Robust growth with continued momentum on premium laundry In Fabric Wash, growth was driven by the premium segment as Surf maintained its strong volume-led growth. In Household Care, Vim liquiddid well on the back of sustained market development. The water business continued to do well.

    Personal Care: Growth impacted by slowing markets and Personal Wash volumes. In Personal Wash, the performance was impacted by price increases taken during the quarter. Skin Care growth was driven by the BB andCC creams. Hair Care growth was led by the premium brands Dove and TRESemmé. The recently acquired Indulekha brand continued toperform well and was extended to four new states in the quarter. In Oral Care, the overall performance was subdued, though Pepsodent started recovering post relaunch. Lakme Colour Cosmetics sustained its broad based innovation led growth. In Deodorants, Axe Signature continuedto gain ground during the quarter.

    Refreshment: Strong growth led by Tea. In Tea, all key brands grew well driven by focused in-market initiatives. Lipton Green Tea and the Natural Care portfolio registered anotherquarter of high growth on sustained market development. In Coffee, Bru Gold continued to lead premiumisation and performed well. In Ice Cream & Frozen Desserts, Magnum Minis were launched during the quarter.

    Foods: Modest growth in a challenging market. The focus continues to be on market development for the category. Kissan range of premium Jams gained further traction with consumersand Instant Soups led the growth for Knorr.

  • Q3-16: Time Warner revenue up 9.2 percent

    Q3-16: Time Warner revenue up 9.2 percent

    BENGALURU: Time Warner Inc., (Time Warner) reported 9.2 percent year-over-year (y-o-y) growth in revenue for the third quarter ended 30 September 2016 (Q3-16, current quarter).

    Time Warner reported total revenue of $7,167 million for the current quarter versus $6,564 million in the corresponding year ago quarter. Among its three divisions – Turner, Home Box Office, and Warner Bros, Turner reported 8.8 percent y-o-y increase in revenue of $2,610 million in Q3-16 vis-à-vis $2,398 million in Q3-15. HBO revenue grew 4.3 percent y-o-y in the current quarter to $1,426 million from$1,367 million, while Warner Bros revenue increased 6.6 percent y-o-y to $3,402 million from $3,190 million.

    Operating Income increased 9.8 percent y-o-y to $2,014 million in Q3-16 from $1,834 million. Adjusted Operating Income increased 12.4 to $2,070 million from $1,842 million, which the company says was due to increases at all operating divisions and lower intercompany eliminations. Revenues included the unfavourable impact of foreign exchange rates of approximately $55 million in the quarter.

    Breakup of numbers

    Turner

    A 12.4 percent y-o-y) increase in subscription revenue helped boost Turner revenue, while Advertising (ad) revenue increased 1.2 percent y-o-y during the current quarter.  Time Warner’s Subscription revenue in Q3-16 was $1,480 million as against $1,317 million in the corresponding year ago quarter. The division’s ad revenue in the current quarter was $996 million, while it was $980 million in Q3-15.

    Turner’s operating income increased 8.4 percent y-o-y in Q3-16 to $1,612 million from $1,072 million in Q3-15.

    Time Warner says that Subscription revenues increased due to higher domestic rates and growth at Turner’s international networks, partially offset by the impact of lower domestic subscribers and foreign exchange rates. Advertising revenues benefited from growth at Turner’s domestic news business, partially offset by lower delivery at certain domestic entertainment networks. International advertising was essentially flat with local currency growth offset by the impact of foreign exchange rates. Content and other revenues increased due to higher international licensing revenues.

    HBO

    HBO revenues increased on account of a 5.2 percent y-o-y increase in subscription revenue in Q3-16 to $1,262 million from $1,200 million. Content and other revenue declined 1.8 percent y-o-y in the current quarter to $164 million from $167 million.

    HBO’s operating income in Q3-16 increased 2.1 percent y-o-y to $530 million from $519 million.

    The company says that Subscription revenues increased due to higher domestic rates and international growth. The decrease in Content and other revenues was due to lower domestic licensing revenues, partially offset by higher international licensing revenues.

    Warner Bros

    Warner Bros revenues increased due to a 44.9 percent y-o-y gain in its Theatrical product to $1,605 million in Q3-16 from $1,108 million. This gain was offset by a 2.1 percent y-o-y decline in Warner’s Television product to $1,430 million from #1,460 million and a 41 percent decline in its ‘Videogames and other’ revenue to $367 million from$672 million.

    The company says that Theatrical revenues increased due to the box office releases of Suicide Squad, The Legend of Tarzan, Sully and Lights Out. Videogames revenues declined due to the comparison to the launch ofLEGO Dimensions and carryover revenues from Mortal Kombat X in the prior year quarter.

    Warner Operating Income increased 11.2 percent ($43 million) y-o-y in the current quarter to $428 million from $385 million, due to the increase in revenues, partially offset by higher costs of revenues associated with the mix of film releases.

    Company speak

    Time Warner chairman and CEO Jeff Bewkes said, “We had a strong third quarter, which keeps us on track to exceed our original 2016 outlook and underscores our leadership in creating and distributing the very best content. In television, HBO took home more Primetime Emmy Awards than any other network for the 15th consecutive year and Time Warner’s divisions won a total of 40 Emmys, more than any other company. CNN’s standout election coverage made it the #1 news network in primetime among adults 18-49 for the fourth consecutive quarter and Turner’s momentum doesn’t stop there. Year-to-date, TBS, TNT and Adult Swim are three of the top five ad-supported cable networks in primetime among adults 18-49. In film, Warner Bros. had a strong quarter led by Suicide Squad and has the #1 release of the fall in Sully, while anticipation is off the charts for J.K. Rowling’s Fantastic Beasts and Where to Find Them, which hits the big screen on November 18.”

    Bewkes continued, “The agreement we announced on October 22 to be acquired by AT&T Inc. represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future. Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”

  • Q3-16: Time Warner revenue up 9.2 percent

    Q3-16: Time Warner revenue up 9.2 percent

    BENGALURU: Time Warner Inc., (Time Warner) reported 9.2 percent year-over-year (y-o-y) growth in revenue for the third quarter ended 30 September 2016 (Q3-16, current quarter).

    Time Warner reported total revenue of $7,167 million for the current quarter versus $6,564 million in the corresponding year ago quarter. Among its three divisions – Turner, Home Box Office, and Warner Bros, Turner reported 8.8 percent y-o-y increase in revenue of $2,610 million in Q3-16 vis-à-vis $2,398 million in Q3-15. HBO revenue grew 4.3 percent y-o-y in the current quarter to $1,426 million from$1,367 million, while Warner Bros revenue increased 6.6 percent y-o-y to $3,402 million from $3,190 million.

    Operating Income increased 9.8 percent y-o-y to $2,014 million in Q3-16 from $1,834 million. Adjusted Operating Income increased 12.4 to $2,070 million from $1,842 million, which the company says was due to increases at all operating divisions and lower intercompany eliminations. Revenues included the unfavourable impact of foreign exchange rates of approximately $55 million in the quarter.

    Breakup of numbers

    Turner

    A 12.4 percent y-o-y) increase in subscription revenue helped boost Turner revenue, while Advertising (ad) revenue increased 1.2 percent y-o-y during the current quarter.  Time Warner’s Subscription revenue in Q3-16 was $1,480 million as against $1,317 million in the corresponding year ago quarter. The division’s ad revenue in the current quarter was $996 million, while it was $980 million in Q3-15.

    Turner’s operating income increased 8.4 percent y-o-y in Q3-16 to $1,612 million from $1,072 million in Q3-15.

    Time Warner says that Subscription revenues increased due to higher domestic rates and growth at Turner’s international networks, partially offset by the impact of lower domestic subscribers and foreign exchange rates. Advertising revenues benefited from growth at Turner’s domestic news business, partially offset by lower delivery at certain domestic entertainment networks. International advertising was essentially flat with local currency growth offset by the impact of foreign exchange rates. Content and other revenues increased due to higher international licensing revenues.

    HBO

    HBO revenues increased on account of a 5.2 percent y-o-y increase in subscription revenue in Q3-16 to $1,262 million from $1,200 million. Content and other revenue declined 1.8 percent y-o-y in the current quarter to $164 million from $167 million.

    HBO’s operating income in Q3-16 increased 2.1 percent y-o-y to $530 million from $519 million.

    The company says that Subscription revenues increased due to higher domestic rates and international growth. The decrease in Content and other revenues was due to lower domestic licensing revenues, partially offset by higher international licensing revenues.

    Warner Bros

    Warner Bros revenues increased due to a 44.9 percent y-o-y gain in its Theatrical product to $1,605 million in Q3-16 from $1,108 million. This gain was offset by a 2.1 percent y-o-y decline in Warner’s Television product to $1,430 million from #1,460 million and a 41 percent decline in its ‘Videogames and other’ revenue to $367 million from$672 million.

    The company says that Theatrical revenues increased due to the box office releases of Suicide Squad, The Legend of Tarzan, Sully and Lights Out. Videogames revenues declined due to the comparison to the launch ofLEGO Dimensions and carryover revenues from Mortal Kombat X in the prior year quarter.

    Warner Operating Income increased 11.2 percent ($43 million) y-o-y in the current quarter to $428 million from $385 million, due to the increase in revenues, partially offset by higher costs of revenues associated with the mix of film releases.

    Company speak

    Time Warner chairman and CEO Jeff Bewkes said, “We had a strong third quarter, which keeps us on track to exceed our original 2016 outlook and underscores our leadership in creating and distributing the very best content. In television, HBO took home more Primetime Emmy Awards than any other network for the 15th consecutive year and Time Warner’s divisions won a total of 40 Emmys, more than any other company. CNN’s standout election coverage made it the #1 news network in primetime among adults 18-49 for the fourth consecutive quarter and Turner’s momentum doesn’t stop there. Year-to-date, TBS, TNT and Adult Swim are three of the top five ad-supported cable networks in primetime among adults 18-49. In film, Warner Bros. had a strong quarter led by Suicide Squad and has the #1 release of the fall in Sully, while anticipation is off the charts for J.K. Rowling’s Fantastic Beasts and Where to Find Them, which hits the big screen on November 18.”

    Bewkes continued, “The agreement we announced on October 22 to be acquired by AT&T Inc. represents a great outcome for our shareholders and an excellent opportunity to drive long-term value well into the future. Combining with AT&T is the natural next step in the evolution of our business and allows us to significantly accelerate our most important strategies.”

  • A-Pac region leads in ad revenue growth for FB in Q3-16

    A-Pac region leads in ad revenue growth for FB in Q3-16

    BENGALURU: Facebook Inc., (Facebook) advertisement revenue increased 58.5 percent year-on year (y-o-y) for the third quarter ended 30 September 2016 (Q3-16, current quarter) at $6,816 million as compared to $4,299 million in Q3-15. Like the previous quarter, Advertisement revenue growth in percentage terms was led by the A-Pac (63.8 percent growth) and US and Canada (61.8 percent growth) regions. Ad revenue share by geography in Q3-16 was: US and Canada –50.3 percent; Europe – 22.9 percent, A-Pac 16.7 percent and Rest of the world (ROW) 10 percent.

    Facebook reported 55.8 percent growth in total revenue at $7,011 million as compared to $4,501 million in the corresponding quarter of the previous year.The social media giant’s net income in Q3-16 almost tripled (by 2.86 times) year-on-year (y-o-y) to $2,055 million, as compared to $719 million in Q2-15.

    Growth in revenue in percentage terms was also led by growth from the the A-Pac (63.8 percenty-o-y growth) US and Canada (61.8 percent y-o-y growth) geographical regions. A major share of Facebook’s revenue (50.8 percent) came from the US and Canada region, while the A-Pac region contributed 16.5 percentto revenue in Q3-16. Europe’s contribution to Facebook revenue was 22.9 percent and ROW contributed 9.9 percent during the same period.

    “We had another good quarter,” said Facebook founder and CEOMark Zuckerberg. “We’re making progress puttingvideo first across our apps and executing our 10 year technology roadmap.”

    Please refer to Fig 1 for Facebook’s revenue and Fig 2 for Facebook’s advertisement revenue breakup by geography below.

    It is evident from Fig 2 below that the share of advertising revenue from US and Canada, and A-Pac regions has been increasing, while share of revenue from Europe and ROW has been declining, though since Q2-16, revenue share from the ROW has shown a slight resurgence.

    Facebook’s daily average users (DAU) increased 17.5 percenty-o-yin the current quarter to 1,179 million as compared to 1,007 million in Q3-15. For the current quarter, A-Pac (22.7 percenty-o-y growth) and the ROW (22.4 percenty-o-ygrowth) regions lead DAU growth in percentage terms. In Q3-16 DAU from US and Canada grew by 6.6 percenty-o-y, while Europe DAU grew 9.9 percenty-o-y. Please refer to Fig 3 below.

    The proportion of people logging on to Facebook on their mobiles has grown to 92.5 percent in the current quarter as compared to 88.2 percent in Q3-15 and 91.6 percent in the immediate trailing quarter (Q2-16).

    Mobile DAU’s in Q3-16 have increased 22 percent y-o-y to 1,091 million as compared to 894 million in Q3-15. Please refer to Fig 3 below.

    ARPU

    Facebook’s worldwide average revenue per user (ARPU) in the current quarter was $4.01 as compared to $2.97 in Q3-15 and $3.82. in Q2-16. The US and Canada regions lead in terms of ARPU by far. ARPU for the US and Canada region was $15.65, $10.65 in Q3-15 and $14.34 in Q2-16. Corresponding numbers for other regions for Q3-16 were Europe $4.72; A-Pac $1.89; ROW $1.21. Please refer to Fig 4 for ARPU details.

  • A-Pac region leads in ad revenue growth for FB in Q3-16

    A-Pac region leads in ad revenue growth for FB in Q3-16

    BENGALURU: Facebook Inc., (Facebook) advertisement revenue increased 58.5 percent year-on year (y-o-y) for the third quarter ended 30 September 2016 (Q3-16, current quarter) at $6,816 million as compared to $4,299 million in Q3-15. Like the previous quarter, Advertisement revenue growth in percentage terms was led by the A-Pac (63.8 percent growth) and US and Canada (61.8 percent growth) regions. Ad revenue share by geography in Q3-16 was: US and Canada –50.3 percent; Europe – 22.9 percent, A-Pac 16.7 percent and Rest of the world (ROW) 10 percent.

    Facebook reported 55.8 percent growth in total revenue at $7,011 million as compared to $4,501 million in the corresponding quarter of the previous year.The social media giant’s net income in Q3-16 almost tripled (by 2.86 times) year-on-year (y-o-y) to $2,055 million, as compared to $719 million in Q2-15.

    Growth in revenue in percentage terms was also led by growth from the the A-Pac (63.8 percenty-o-y growth) US and Canada (61.8 percent y-o-y growth) geographical regions. A major share of Facebook’s revenue (50.8 percent) came from the US and Canada region, while the A-Pac region contributed 16.5 percentto revenue in Q3-16. Europe’s contribution to Facebook revenue was 22.9 percent and ROW contributed 9.9 percent during the same period.

    “We had another good quarter,” said Facebook founder and CEOMark Zuckerberg. “We’re making progress puttingvideo first across our apps and executing our 10 year technology roadmap.”

    Please refer to Fig 1 for Facebook’s revenue and Fig 2 for Facebook’s advertisement revenue breakup by geography below.

    It is evident from Fig 2 below that the share of advertising revenue from US and Canada, and A-Pac regions has been increasing, while share of revenue from Europe and ROW has been declining, though since Q2-16, revenue share from the ROW has shown a slight resurgence.

    Facebook’s daily average users (DAU) increased 17.5 percenty-o-yin the current quarter to 1,179 million as compared to 1,007 million in Q3-15. For the current quarter, A-Pac (22.7 percenty-o-y growth) and the ROW (22.4 percenty-o-ygrowth) regions lead DAU growth in percentage terms. In Q3-16 DAU from US and Canada grew by 6.6 percenty-o-y, while Europe DAU grew 9.9 percenty-o-y. Please refer to Fig 3 below.

    The proportion of people logging on to Facebook on their mobiles has grown to 92.5 percent in the current quarter as compared to 88.2 percent in Q3-15 and 91.6 percent in the immediate trailing quarter (Q2-16).

    Mobile DAU’s in Q3-16 have increased 22 percent y-o-y to 1,091 million as compared to 894 million in Q3-15. Please refer to Fig 3 below.

    ARPU

    Facebook’s worldwide average revenue per user (ARPU) in the current quarter was $4.01 as compared to $2.97 in Q3-15 and $3.82. in Q2-16. The US and Canada regions lead in terms of ARPU by far. ARPU for the US and Canada region was $15.65, $10.65 in Q3-15 and $14.34 in Q2-16. Corresponding numbers for other regions for Q3-16 were Europe $4.72; A-Pac $1.89; ROW $1.21. Please refer to Fig 4 for ARPU details.

  • Pictures, Music and Financial Services prop Sony’s sagging Q2-17 revenue

    Pictures, Music and Financial Services prop Sony’s sagging Q2-17 revenue

    BENGALURU: Sony Corporation (Sony) reported 10.8 per cent drop in sales and operating (sales) revenue for the quarter ended 30 September 2016 (Q2-17, current quarter) vis-à-vis the corresponding year ago quarter. Sony reported sales of ¥1,688.9 billion for the current quarter as compared to ¥1,892.7 billion in Q2-16. The company says that the decrease was mainly due to the impact of foreign exchange rates.

    On a constant currency basis, sales were essentially flat year-on-year, due to a decrease in Mobile Communications (MC) segment sales reflecting a significant decrease in smartphone unit sales, substantially offset by an increase in revenues in the Financial Services segment, as well as an increase in sales in the Pictures segment. The company’s Music segment also reported a year-over-year (y-o-y) improvement in revenues for the current quarter.

    Operating income decreased ¥42.3 billion year-on-year to ¥45.7 billion. This decrease was mainly due to the deterioration of operating results in the Semiconductors and Components segments, partially offset by improvements in the Pictures and MC segments says the Sony. Net income attributable to Sony’s stockholders decreased ¥28.7 billion y-o-y to ¥4.8 billion.

    Business segments

    Mobile Communications

    Sales decreased 39.6 per cent y-o-y in Q2-17 (a 34 per cent decrease on a constant currency basis) to ¥168.8 billion from ¥279.2 billion. The company says that this decrease was mainly due to a reduction in mid-range smartphone unit sales, as well as a reduction in smartphone unit sales in unprofitable regions where downsizing measures were implemented during the previous fiscal year, partially offset by an improvement in the product mix of smartphones as a result of a concentration on high value-added models.

    Operating income of ¥3.7 billion was recorded, compared to an operating loss of ¥20.6 billion recorded in the same quarter of the previous fiscal year. Despite the effect of the above-mentioned decrease in sales, profitability improved significantly due to cost reductions, mainly resulting from the benefit of restructuring initiatives, an improvement in product mix, the positive impact of foreign exchange rates and a decrease in restructuring charges. During the current quarter, there was a ¥5.4 billion positive impact from foreign exchange rate fluctuations (net of the impact of foreign exchange hedging).

    Imaging Products & Solutions (IP&S)

    The segment’s sales decreased 25.2 per cent y-o-y (a 14 per cent decrease on a constant currency basis) to ¥135.4 billion from ¥180.9 billion. This decrease in sales was mainly due to lower sales of Still and Video Cameras, primarily reflecting a contraction of the market and the difficulty of procuring components due to the 2016 Kumamoto Earthquakes, as well as the impact of foreign exchange rates, partially offset by an improvement in the product mix of Still and Video Cameras, reflecting a shift to high value-added models.

    Operating income decreased ¥8.2 billion y-o-y to ¥14.9 billion from ¥23.9 billion. This decrease was mainly due to the impact of the above-mentioned decrease in sales and the negative impact of foreign exchange rates, partially offset by such factors as the above-mentioned improvement in product mix and a reduction of fixed costs. During the current quarter, there was a ¥9.5 billion negative impact from foreign exchange rate fluctuations.

    Home Entertainment & Sound (HE&S)

    HE&S Sales decreased 18.7 per cent y-o-y (a 5 per cent decrease on a constant currency basis) to ¥234.9 billion. This was primarily due to the impact of foreign exchange rates and a decrease in home audio and video unit sales reflecting a contraction of the market.
    Operating income increased ¥1.8 billion y-o-y in Q2-17 to ¥17.6 billion yen from ¥15.8 billion. This increase was primarily due to an improvement in product mix reflecting a shift to high value-added models and cost reductions, partially offset by the negative impact of foreign exchange rates as well as the above-mentioned decrease in sales. During the current quarter, there was a ¥6.0 billion negative impact from foreign exchange rate fluctuations.

    Semiconductors

    Semiconductors sales in Q2-17 decreased 5.0 per cent y-o-y (a 12 per cent increase on a constant currency basis) to ¥193.7 billion from ¥203.9 billion. This decrease was primarily due to a decrease in sales of image sensors, reflecting the impact of foreign exchange rates, partially offset by an increase in the unit sales of image sensors for mobile products. Sales to external customers increased 1.1 per cent y-o-y.

    Operating loss of ¥4.2 billion) was recorded, compared to operating income of ¥34.1 billion recorded in the same quarter of the previous fiscal year. This deterioration was primarily due to the negative impact of foreign exchange rates and ¥9.4 billion in inventory write-downs of certain image sensors for mobile products, partially offset by the above-mentioned increase in the unit sales of image sensors for mobile products. Operating loss in the current quarter includes the net expense of 1.2 billion yen resulting from the 2016 Kumamoto Earthquakes. During the current quarter, there was a ¥19.7 billion negative impact from foreign exchange rate fluctuations.

    Components

    Sales decreased 23.7 per cent y-o-y (an 11 per cent decrease on a constant currency basis) to ¥46.7 billion. This decrease was primarily due to the impact of foreign exchange rates and a decrease in sales in the battery business due to increasingly competitive markets.
    Operating loss increased ¥35.1 billion y-o-y to ¥36.6 billion. This increase was primarily due to a ¥32.8 billion yen impairment charge related to the planned transfer of the battery business. During the current quarter, there was a ¥1.6 billion negative impact from foreign exchange rate fluctuations.

    Pictures

    Pictures sales increased 4.6 per cent y-o-y (a 25 per cent increase on a U.S. dollar basis) to ¥192.1 billion. The increase in sales on a US dollar basis was due to higher sales for Motion Pictures, Television Productions and Media Networks. The increase in Motion Pictures sales was primarily due to higher theatrical revenues from films released in the current quarter including Ghostbusters, Sausage Party and Don’t Breathe. Sales in Television Productions increased significantly due to higher subscription video-on-demand licensing revenues for The Crown and The Get Down. Media Networks sales increased primarily due to higher advertising and subscription revenues in India, Europe and Latin America.

    Operating income of ¥3.2 billion was recorded, compared to an operating loss of ¥22.5 billion recorded in the same quarter of the previous fiscal year. This significant improvement in operating results was primarily due to the above-mentioned increase in sales.

    Music

    Music Sales increased 8.0 per cent y-o-y (a 19 per cent increase on a constant currency basis) to ¥150.2 billion from ¥139.1 billion. The increase in sales was primarily due to an increase in sales of Visual Media and Platform as well as Recorded Music, partially offset by the negative impact of the appreciation of the yen against the US dollar. Visual Media and Platform sales increased due to the strong performance of Fate/Grand Order, a game application for mobile devices. Recorded Music sales increased primarily due to an increase in digital streaming revenues. Best-selling titles included Celine Dion’s Encore un soir, Nogizaka46’s Hadashi de Summer and Kana Nishino’s Just Love.

    Operating income increased ¥2.3 billion y-o-y to ¥16.5 billion. This increase was primarily due to the higher sales of Recorded Music as well as Visual Media and Platform above, partially offset by the negative impact of the appreciation of the yen against the US dollar.

    Financial Services

    Financial services revenue increased 23.6 per cent yo-y to ¥260.5 billion primarily due to a significant increase in revenue at Sony Life. Revenue at Sony Life increased 29.9 per cent y-o-y to ¥230.8 billion due to an improvement in investment performance in the separate account. This improvement was mainly due to a rise in the Japanese stock market during the current quarter, as compared with a decline in the same quarter of the previous fiscal year.

    Operating income decreased ¥7.6 billion y-o-y to ¥33.6 billion yen. This decrease was mainly due to a foreign exchange loss incurred at Sony Bank on foreign currency-denominated customer deposits compared to a gain in the same quarter of the previous fiscal year. Operating income at Sony Life decreased ¥3.7 billion y-o-y to ¥31.0 billion mainly due to a decline in net gains on sales of securities in the general account.

  • Pictures, Music and Financial Services prop Sony’s sagging Q2-17 revenue

    Pictures, Music and Financial Services prop Sony’s sagging Q2-17 revenue

    BENGALURU: Sony Corporation (Sony) reported 10.8 per cent drop in sales and operating (sales) revenue for the quarter ended 30 September 2016 (Q2-17, current quarter) vis-à-vis the corresponding year ago quarter. Sony reported sales of ¥1,688.9 billion for the current quarter as compared to ¥1,892.7 billion in Q2-16. The company says that the decrease was mainly due to the impact of foreign exchange rates.

    On a constant currency basis, sales were essentially flat year-on-year, due to a decrease in Mobile Communications (MC) segment sales reflecting a significant decrease in smartphone unit sales, substantially offset by an increase in revenues in the Financial Services segment, as well as an increase in sales in the Pictures segment. The company’s Music segment also reported a year-over-year (y-o-y) improvement in revenues for the current quarter.

    Operating income decreased ¥42.3 billion year-on-year to ¥45.7 billion. This decrease was mainly due to the deterioration of operating results in the Semiconductors and Components segments, partially offset by improvements in the Pictures and MC segments says the Sony. Net income attributable to Sony’s stockholders decreased ¥28.7 billion y-o-y to ¥4.8 billion.

    Business segments

    Mobile Communications

    Sales decreased 39.6 per cent y-o-y in Q2-17 (a 34 per cent decrease on a constant currency basis) to ¥168.8 billion from ¥279.2 billion. The company says that this decrease was mainly due to a reduction in mid-range smartphone unit sales, as well as a reduction in smartphone unit sales in unprofitable regions where downsizing measures were implemented during the previous fiscal year, partially offset by an improvement in the product mix of smartphones as a result of a concentration on high value-added models.

    Operating income of ¥3.7 billion was recorded, compared to an operating loss of ¥20.6 billion recorded in the same quarter of the previous fiscal year. Despite the effect of the above-mentioned decrease in sales, profitability improved significantly due to cost reductions, mainly resulting from the benefit of restructuring initiatives, an improvement in product mix, the positive impact of foreign exchange rates and a decrease in restructuring charges. During the current quarter, there was a ¥5.4 billion positive impact from foreign exchange rate fluctuations (net of the impact of foreign exchange hedging).

    Imaging Products & Solutions (IP&S)

    The segment’s sales decreased 25.2 per cent y-o-y (a 14 per cent decrease on a constant currency basis) to ¥135.4 billion from ¥180.9 billion. This decrease in sales was mainly due to lower sales of Still and Video Cameras, primarily reflecting a contraction of the market and the difficulty of procuring components due to the 2016 Kumamoto Earthquakes, as well as the impact of foreign exchange rates, partially offset by an improvement in the product mix of Still and Video Cameras, reflecting a shift to high value-added models.

    Operating income decreased ¥8.2 billion y-o-y to ¥14.9 billion from ¥23.9 billion. This decrease was mainly due to the impact of the above-mentioned decrease in sales and the negative impact of foreign exchange rates, partially offset by such factors as the above-mentioned improvement in product mix and a reduction of fixed costs. During the current quarter, there was a ¥9.5 billion negative impact from foreign exchange rate fluctuations.

    Home Entertainment & Sound (HE&S)

    HE&S Sales decreased 18.7 per cent y-o-y (a 5 per cent decrease on a constant currency basis) to ¥234.9 billion. This was primarily due to the impact of foreign exchange rates and a decrease in home audio and video unit sales reflecting a contraction of the market.
    Operating income increased ¥1.8 billion y-o-y in Q2-17 to ¥17.6 billion yen from ¥15.8 billion. This increase was primarily due to an improvement in product mix reflecting a shift to high value-added models and cost reductions, partially offset by the negative impact of foreign exchange rates as well as the above-mentioned decrease in sales. During the current quarter, there was a ¥6.0 billion negative impact from foreign exchange rate fluctuations.

    Semiconductors

    Semiconductors sales in Q2-17 decreased 5.0 per cent y-o-y (a 12 per cent increase on a constant currency basis) to ¥193.7 billion from ¥203.9 billion. This decrease was primarily due to a decrease in sales of image sensors, reflecting the impact of foreign exchange rates, partially offset by an increase in the unit sales of image sensors for mobile products. Sales to external customers increased 1.1 per cent y-o-y.

    Operating loss of ¥4.2 billion) was recorded, compared to operating income of ¥34.1 billion recorded in the same quarter of the previous fiscal year. This deterioration was primarily due to the negative impact of foreign exchange rates and ¥9.4 billion in inventory write-downs of certain image sensors for mobile products, partially offset by the above-mentioned increase in the unit sales of image sensors for mobile products. Operating loss in the current quarter includes the net expense of 1.2 billion yen resulting from the 2016 Kumamoto Earthquakes. During the current quarter, there was a ¥19.7 billion negative impact from foreign exchange rate fluctuations.

    Components

    Sales decreased 23.7 per cent y-o-y (an 11 per cent decrease on a constant currency basis) to ¥46.7 billion. This decrease was primarily due to the impact of foreign exchange rates and a decrease in sales in the battery business due to increasingly competitive markets.
    Operating loss increased ¥35.1 billion y-o-y to ¥36.6 billion. This increase was primarily due to a ¥32.8 billion yen impairment charge related to the planned transfer of the battery business. During the current quarter, there was a ¥1.6 billion negative impact from foreign exchange rate fluctuations.

    Pictures

    Pictures sales increased 4.6 per cent y-o-y (a 25 per cent increase on a U.S. dollar basis) to ¥192.1 billion. The increase in sales on a US dollar basis was due to higher sales for Motion Pictures, Television Productions and Media Networks. The increase in Motion Pictures sales was primarily due to higher theatrical revenues from films released in the current quarter including Ghostbusters, Sausage Party and Don’t Breathe. Sales in Television Productions increased significantly due to higher subscription video-on-demand licensing revenues for The Crown and The Get Down. Media Networks sales increased primarily due to higher advertising and subscription revenues in India, Europe and Latin America.

    Operating income of ¥3.2 billion was recorded, compared to an operating loss of ¥22.5 billion recorded in the same quarter of the previous fiscal year. This significant improvement in operating results was primarily due to the above-mentioned increase in sales.

    Music

    Music Sales increased 8.0 per cent y-o-y (a 19 per cent increase on a constant currency basis) to ¥150.2 billion from ¥139.1 billion. The increase in sales was primarily due to an increase in sales of Visual Media and Platform as well as Recorded Music, partially offset by the negative impact of the appreciation of the yen against the US dollar. Visual Media and Platform sales increased due to the strong performance of Fate/Grand Order, a game application for mobile devices. Recorded Music sales increased primarily due to an increase in digital streaming revenues. Best-selling titles included Celine Dion’s Encore un soir, Nogizaka46’s Hadashi de Summer and Kana Nishino’s Just Love.

    Operating income increased ¥2.3 billion y-o-y to ¥16.5 billion. This increase was primarily due to the higher sales of Recorded Music as well as Visual Media and Platform above, partially offset by the negative impact of the appreciation of the yen against the US dollar.

    Financial Services

    Financial services revenue increased 23.6 per cent yo-y to ¥260.5 billion primarily due to a significant increase in revenue at Sony Life. Revenue at Sony Life increased 29.9 per cent y-o-y to ¥230.8 billion due to an improvement in investment performance in the separate account. This improvement was mainly due to a rise in the Japanese stock market during the current quarter, as compared with a decline in the same quarter of the previous fiscal year.

    Operating income decreased ¥7.6 billion y-o-y to ¥33.6 billion yen. This decrease was mainly due to a foreign exchange loss incurred at Sony Bank on foreign currency-denominated customer deposits compared to a gain in the same quarter of the previous fiscal year. Operating income at Sony Life decreased ¥3.7 billion y-o-y to ¥31.0 billion mainly due to a decline in net gains on sales of securities in the general account.

  • Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    BENGALURU: An overall 4.1 per cent decline in advertising revenue for the quarter ended 30 September 2016 (Q3-16, current quarter) vis-à-vis the corresponding year ago quarter resulted in flat revenue for Discovery Communications Inc., (Discovery). The company reported overall revenue of $1,556 million for the current quarter versus $1,557 million in Q2-15. Overall Advertising revenue declined in Q3-16 to $670 million as compared to $699 million in Q2-15.

    Discovery’s other major revenue stream – Distribution, reported 3.9 per cent year-over-year (y-o-y) increase in the current quarter at $806 million as compared to $770 million. Discovery’s ‘Other’ revenue declined 2.4 per cent y-o-y to $80 million from $82 million.

    Operating income declined 9.3 per cent y-o-y in Q3-16 to $458 million from $505 million. The company’s adjusted Operating Income before Depreciation and Amortisation (OIBDA) declined 2.4 per cent in the current quarter to $562 million from $576 million.

    Geographical breakup:

    US Networks

    Discovery’s US Network’s revenue increased 1.5 per cent y-o-y in Q3-16 to $793 million from $781 million.  US Networks adjusted OIBDA improved 3.4 per cent y-o-y in Q3-16 to $458 million from $443 million.

    US Networks distribution revenue in the current quarter increased 6.7 per cent y-o-y to $458 million versus $443 million. US Networks advertising revenue declined 3.4 per cent y-o-y to $396 million in the current quarter from $410 million. US Networks ‘Other’ revenues in Q3-16 increased 14.3 per cent y-o-y to $16 million from $14 million.

    Discovery says that Distribution revenue growth was primarily driven by higher rates, partially offset by a slight decline in subscribers. Advertising revenues decreased primarily due to expected ratings declines, partially offset by higher pricing and inventory management.

    US Networks Operating expenses decreased 1 per cent mainly due to lower content amortization, partially offset by higher marketing costs. Adjusted OIBDA increased due to higher revenues and lower operating expenses.

    International Networks

    Discovery’s International Revenue in Q3-16 declined 2.7 per cent to $720 million from $740 million.  International Networks OIBDA declined 16.1 y-o-y per cent in the current quarter to $183 million from $218 million.

    International Networks Distribution revenue increased 1.4 per cent y-o-y in Q3-16 to $425 million from $419 million. International Networks Advertising revenue in the current quarter declined 5.5 per cent y-o-y in the current quarter to $273 million from $289 million. International Networks ‘Other’ revenue in Q3-16 declined 31.25 per cent y-o-y to $22 million from $32 million.

    The company says that changes in foreign currency exchange rates reduced third quarter International revenues and adjusted OIBDA growth by 5 per cent and 7 per cent, respectively. Distribution revenues, excluding the impact of currency effects, grew 8 per cent mostly due to higher affiliate rates in Latin America, Northern Europe and CEEMEA as well as higher volume in Latin America.

    Advertising revenues, excluding the impact of currency effects, declined, primarily due to lower ratings and pricing in Northern Europe, partially offset by higher volume in Southern Europe. Other revenues declined primarily due to lower Eurosport sub-licensing revenues.

    Education and Other

    ‘Education and Other’ revenues increased 19.4 per cent y-o-y to $43 million in the current quarter from $36 million. ‘Education and Other OIBDA improved by 80 per cent to a loss of $1 million from a loss of $5 million.

    The company says that Education and Other revenues for the third quarter increased by $7 million primarily due to higher production deliveries at the Studios production business and increased international revenues at the Education business. Adjusted OIBDA improved primarily due to higher revenues, partially offset by additional investments in the Education business.

    Other Developments

    On October 13, 2016, Discovery announced a plan to contribute $100 million and its digital network Seeker and production studio SourceFed in exchange for a 39 per cent minority interest in a new holding company, Group Nine Media. Group Nine Media includes digital companies Thrillist Media Group, Now This Media, and The Dodo. Discovery has the option to buy a controlling stake in Group Nine Media in the future. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions.

    Company speak

    “While we faced challenging but expected headwinds this quarter, Discovery is well positioned for long-term growth driven by our well-defined global brands, differentiated content and favourable distribution agreements,” said Discovery president and CEO David Zaslav, “We have continued to strengthen and maximize our traditional pay-TV offering with robust new programming while aggressively exploiting new opportunities to leverage our content across numerous digital platforms around the world. Amid an ever shifting global media ecosystem, Discovery is evolving to reach more consumers on more screens and platforms than ever before.”

  • Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    BENGALURU: An overall 4.1 per cent decline in advertising revenue for the quarter ended 30 September 2016 (Q3-16, current quarter) vis-à-vis the corresponding year ago quarter resulted in flat revenue for Discovery Communications Inc., (Discovery). The company reported overall revenue of $1,556 million for the current quarter versus $1,557 million in Q2-15. Overall Advertising revenue declined in Q3-16 to $670 million as compared to $699 million in Q2-15.

    Discovery’s other major revenue stream – Distribution, reported 3.9 per cent year-over-year (y-o-y) increase in the current quarter at $806 million as compared to $770 million. Discovery’s ‘Other’ revenue declined 2.4 per cent y-o-y to $80 million from $82 million.

    Operating income declined 9.3 per cent y-o-y in Q3-16 to $458 million from $505 million. The company’s adjusted Operating Income before Depreciation and Amortisation (OIBDA) declined 2.4 per cent in the current quarter to $562 million from $576 million.

    Geographical breakup:

    US Networks

    Discovery’s US Network’s revenue increased 1.5 per cent y-o-y in Q3-16 to $793 million from $781 million.  US Networks adjusted OIBDA improved 3.4 per cent y-o-y in Q3-16 to $458 million from $443 million.

    US Networks distribution revenue in the current quarter increased 6.7 per cent y-o-y to $458 million versus $443 million. US Networks advertising revenue declined 3.4 per cent y-o-y to $396 million in the current quarter from $410 million. US Networks ‘Other’ revenues in Q3-16 increased 14.3 per cent y-o-y to $16 million from $14 million.

    Discovery says that Distribution revenue growth was primarily driven by higher rates, partially offset by a slight decline in subscribers. Advertising revenues decreased primarily due to expected ratings declines, partially offset by higher pricing and inventory management.

    US Networks Operating expenses decreased 1 per cent mainly due to lower content amortization, partially offset by higher marketing costs. Adjusted OIBDA increased due to higher revenues and lower operating expenses.

    International Networks

    Discovery’s International Revenue in Q3-16 declined 2.7 per cent to $720 million from $740 million.  International Networks OIBDA declined 16.1 y-o-y per cent in the current quarter to $183 million from $218 million.

    International Networks Distribution revenue increased 1.4 per cent y-o-y in Q3-16 to $425 million from $419 million. International Networks Advertising revenue in the current quarter declined 5.5 per cent y-o-y in the current quarter to $273 million from $289 million. International Networks ‘Other’ revenue in Q3-16 declined 31.25 per cent y-o-y to $22 million from $32 million.

    The company says that changes in foreign currency exchange rates reduced third quarter International revenues and adjusted OIBDA growth by 5 per cent and 7 per cent, respectively. Distribution revenues, excluding the impact of currency effects, grew 8 per cent mostly due to higher affiliate rates in Latin America, Northern Europe and CEEMEA as well as higher volume in Latin America.

    Advertising revenues, excluding the impact of currency effects, declined, primarily due to lower ratings and pricing in Northern Europe, partially offset by higher volume in Southern Europe. Other revenues declined primarily due to lower Eurosport sub-licensing revenues.

    Education and Other

    ‘Education and Other’ revenues increased 19.4 per cent y-o-y to $43 million in the current quarter from $36 million. ‘Education and Other OIBDA improved by 80 per cent to a loss of $1 million from a loss of $5 million.

    The company says that Education and Other revenues for the third quarter increased by $7 million primarily due to higher production deliveries at the Studios production business and increased international revenues at the Education business. Adjusted OIBDA improved primarily due to higher revenues, partially offset by additional investments in the Education business.

    Other Developments

    On October 13, 2016, Discovery announced a plan to contribute $100 million and its digital network Seeker and production studio SourceFed in exchange for a 39 per cent minority interest in a new holding company, Group Nine Media. Group Nine Media includes digital companies Thrillist Media Group, Now This Media, and The Dodo. Discovery has the option to buy a controlling stake in Group Nine Media in the future. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions.

    Company speak

    “While we faced challenging but expected headwinds this quarter, Discovery is well positioned for long-term growth driven by our well-defined global brands, differentiated content and favourable distribution agreements,” said Discovery president and CEO David Zaslav, “We have continued to strengthen and maximize our traditional pay-TV offering with robust new programming while aggressively exploiting new opportunities to leverage our content across numerous digital platforms around the world. Amid an ever shifting global media ecosystem, Discovery is evolving to reach more consumers on more screens and platforms than ever before.”