PlayStation Gives Sony A Boost

Sony reported a 6% year-on-year increase in sales for the quarter ending September 30th to 2.18 trillion Japanese yen (19.6 billion US dollars). The growth was driven by a 27% rise in revenues from games and network services (the PlayStation business) to 550 billion yen.

Sony increased its sales forecast for the year ending March 31 2019 to 8.7 trillion yen (77.1 billion dollars), which would represent an annual increase of just under 2% - see graphic below. Source: Sony presentation

International Operations Drag Down Amazon

Amazon reported a 30% year-on-year increase in net sales to 56.6 billion US dollars in the third quarter, on a constant currency basis. It forecast net sales will be between 66.5 billion and 72.5 billion dollars in the current quarter, representing an increase of between 10% and 20% compared with fourth quarter 2017. This guidance anticipates an unfavourable impact of approximately 80 basis points from foreign exchange rates.

In the third quarter of 2018, there was a marked slowdown in Amazon's international business, where sales grew just 13% compared with 29% a year ago. Sales at AWS were up 46%, compared with 42% a year ago, while sales growth in North America was 35% - the same as in the third quarter of 2017. 

Brian T. Olsavsky, CFO of Amazon.com, said: "We did the Souq acquisition last year in May. So the full pickup on that year-over-year was in 2017 and now we're lapping that. There's also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they'll be fully in Q4. So those are a couple factors that hit the international growth area in particularly."

Explaining the cautious fourth quarter guidance,  Olsavsky added: "Whole Foods.. was purchased in August of last year and that has impacted every quarter since then, Q4 will be the first solid non-Whole Foods comp since before we bought them since Q2 of last year." Source: Amazon statements

Intense Competition Slows Orange Down

Orange reported an increase in revenues on an organic basis of just 0.6% year-on-year for the third quarter. It blamed particularly intense competition in its key markets. Source: Orange statements

Alphabet Anticipates Hardware Uplift

Alphabet reported a 22% year-on-year increase in revenues, on a constant currency basis, for the third quarter of 2017 to 33.7 billion US dollars.  That represents a slight slowdown on the 23% increase in the second quarter. Although the number of paid clicks on adverts on Google properties rose 62% in the third quarter year-on-year, the average selling price was down 28%.

Ruth Porat, CFO of Alphabet, said: "We continue to be pleased with the underlying momentum in our advertising businesses as we apply our strengths in machine learning to improve the experience for users and advertisers. As we noted, hardware was only a modest contributor in the third quarter as we launched a new Made by Google family of products for the fourth quarter holiday season."

Other Bets' revenues were 146 million dollars in the quarter, primarily generated by Fiber and Verily.  Verily is partnering with pharmaceutical companies "to move medicine from reactive to proactive." Alphabet's self-driving car developer, Waymo, has expanded its early rider programme to include more participants and is now beginning to test pricing models. Source: Alphabet statements

AT&T Leans Heavily on Mobile

Stripping out the impact of an accounting change, AT&T reported a 17.5% increase in third quarter revenues to 46.6 billion US dollars. The increase was driven by the Time Warner acquisition. Revenue declines in domestic video, legacy wireline services and Vrio (its DirecTV business in Latin America) were offset by growth in wireless equipment and services, WarnerMedia and its advertising unit Xandr.

AT&T said wireless revenues were up 5.1%, propelled by equipment sales, as wireless service revenue was up just 2.3%. Warner Media revenues were up 7% thanks to higher subscription revenues and higher TV licensing earnings at Warner Bros. AT&T's video-on-demand service DIRECTV NOW added 49,000 subscribers taking its total subscriber base to nearly 1.9 million. AT&T WatchTV, its latest video product, also added subscribers in the quarter. Source: AT&T statements

Model 3 Drives Tesla Forward

Tesla reported a 129% year-on-year increase in revenues in the third quarter to 6.82 billion U.S. dollars, fuelled by a 158% rise in automotive revenues. Energy generation and storage revenue climbed 26%.

Tesla claimed its Model 3 was the best-selling car in the U.S. in terms of revenue (and the 5th best-selling car in terms of volume) in the third quarter, during which Tesla delivered 56,065 Model 3s to customers.

Competing with Alphabet's Waymo and GM's Cruise in the race to develop self-driving cars, Tesla said: "Our Autopilot software is now much improved..... The main functionality we added to our early access users is “Navigate on Autopilot” where on most controlled-access roads, such as highways, any Tesla vehicle made from October 2016 with Enhanced Autopilot will be able to automatically change lanes with driver confirmation, transition from one freeway to another, and ultimately exit the freeway when approaching the final destination."

At the end of third quarter, there were almost 450,000 Tesla vehicle owners around the world, the company said, adding: "Ultimately, we believe this group will become the largest demand generator for our residential solar and Powerwall business." Source: Tesla statement

Customer Upgrades Lift Verizon

Bolstered by strong wireless results, Verizon reported a 2.8% increase in revenues for the third quarter of 2018 to 32.6 billion US dollars. Excluding the impact of a new revenue recognition standard, revenues were up 2.6% year over year.

Verizon Wireless reported a 6.1% increase in revenues to 23 billion US dollars, excluding the impact of the revenue recognition standard. However, much of that increase was down to stronger equipment revenues, with service revenues up 2.6%, driven primarily "by customer step-ups to higher price plans and an increase in average connections per account."

Moreover, Verizon’s media business, Oath, saw its revenue fall 6.9% year-on-year to 1.8 billion dollars. The company said Oath revenues will be relatively flat in the near term and it does not expect to meet its target of 10 billion dollars in Oath revenues by 2020. "We are seeing revenue pressure from search and desktop usage, which is more than offsetting positive growth in mobile usage and video products, including our distribution partnership with the NFL," the company added.

In the telematics business, total Verizon Connect revenues, excluding the impact of the revenue recognition standard, were 241 million dollars in the quarter. Internet of Things revenues, including Verizon Connect, increased approximately 12% year over year.

Verizon has just begun to rollout a "5G" fixed wireless proposition. Matt Ellis, CFO, said: "We started doing installs earlier this month... The technology works, our customers are getting the experience they expected, and we are getting a lot of good learning which will benefit us next year when we roll out the product to that much larger audience. 5G Home will become more significant as we expand coverage and we get on the global standards equipment in 2019. And I would expect that that would start to have an impact on consolidated revenues as we get into 2020 and beyond." Source: Verizon earnings call transcript

Quarter of Million Connections for Reliance Jio

Reliance Jio, India's all-4G mobile operator, reported a 50% year-on-year rise in operating revenue for the quarter ending September 30th to 92.4 billion Indian rupees (1.26 billion US dollars).  The growth was driven by a net increase of 37 million connections, taking the total to more than 252 million. Jio said that customers are consuming an average of 11 GB per month and making 761 minutes of voice calls per connection (using the VoLTE standard). Source: Reliance Industries presentation

Ericsson's Sales Inch Up

Ericsson said its revenues rose 1% in the third quarter of 2018, adjusted for comparable units and currency changes, to 53.8 Swedish krona (almost 6 billion US dollars).  The telecoms equipment maker was boosted by strong demand in North America, where telcos are preparing for the rollout of 5G. source: Ericsson presentation

Netflix Beats its Own Forecasts

Netflix forecast that revenues in the fourth quarter of 2018 will rise almost 28% to 4.2 billion US dollars, following an increase of 34% in the third quarter. The company said it added seven million subscribers in the third quarter (two million more than it forecast) "driven by greater-than-expected acquisition globally, with strong growth broadly across all our markets including Asia." The average selling price of subscriptions was also up 8% year-on-year. Source: Netflix statement

Amazon Tops Tech Investors

Source: Mary Meeker's Internet Trends Report, Kleiner Perkins