Narrowing Second Quarter Loss, Yelp Raises Sales Forecast for Year

The quarter's loss was smaller and revenue growth was bigger than analysts had expected. Yelp shares gained more than 5 percent in after-hours trading.

Yelp is getting clicks, helping it increase its ad sales. It drew 108 million unique visitors per month in the second quarter, a 38 percent increase from a year earlier. It's also adding content, with 42.5 million total reviews, up 41 percent from a year ago.

But it's still losing money. The company reported a loss of $878,000, or a penny per share, compared with a loss of $2 million, or 3 cents per share, in the April-June period last year. Revenue soared 69 percent to $55 million.

Analysts expected a loss of 4 cents per share on $53.3 million in revenue, according to a FactSet survey.

The San Francisco company predicted revenue of $58 million to $59 million in the third quarter revenue and raised its outlook for the year to $222 million to $224 million from its previous guidance of $216 million to $218 million.

Both would slightly beat the forecasts of analysts, who were expecting $57.3 million in the September quarter and $219.8 million for all of 2013.

Yelp is trying to expand its presence on mobile devices, where Yelp users conduct about 59 percent of their searches. It's also launching features to draw advertisers to the site, and this month it acquired the SeatMe app used to reserve seats in restaurants.

The company is also spending much more as it grows. Sales and marketing costs rose 52 percent to $30.8 million, while research and development expense jumped 86 percent to $8 million and overhead costs climbed 69 percent to $10.1 million.

The stock ended regular trading up a penny at $41.80. Shares have more than doubled this year. In aftermarket trading Wednesday, they added $2.25, or 5.4 percent, to $44.05.

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Revenue Falls, but Profit Tops Forecast at I.B.M.

The company’s software delivered a strong performance, profit margins rose, and new contract signings in its major services like data analysis rose sharply — an encouraging sign of future business. But its hardware business continues to struggle.

“The results are positive compared to earnings expectations,” said A. M. Sacconaghi, an analyst at Sanford C. Bernstein. “But it’s mixed.”

I.B.M. and investors focused on the positive side. The company raised guidance for earnings per share for the year by 20 cents to “at least $16.90 a share.”

In after-hours trading, I.B.M. shares rose 2.6 percent, or more than $5. The stock closed the regular trading session up 70 cents at $194.55.

The company’s net income fell 17 percent, to $3.2 billion, or $2.91 a share, compared with nearly $3.9 billion in the year-ago period. That includes a charge of about $1 billion for trimming its work force. I.B.M. announced in April that it would take that charge this quarter and that most of the affected workers would be outside the United States.

In recent years, I.B.M. has taken annual charges that average several hundred million dollars for what it calls “work force rebalancing.” The company sheds workers in higher-cost nations and in businesses that are being trimmed, and it adds employees elsewhere, especially in India.

I.B.M. says the process reflects both financial discipline and globalization as it hires and invests in faster-growing markets. The net effect has been an expansion of its global work force to more than 430,000.

What is mainly different this time, analysts say, is that the work force charge is being taken in a single quarter rather than being spread across an entire year. The company’s operating earnings, which exclude the charge for work force cuts, rose 3 percent, to $4.3 billion, or $3.91 a share. The result was well above the average analyst estimate of $3.77 a share, according to Thomson Reuters.

Operating earnings per share rose 8 percent, reflecting fewer shares outstanding, because I.B.M. steadily buys back its own shares. Revenue fell 3 percent, to $24.9 billion, below the Wall Street forecast of $25.4 billion.

I.B.M. is the largest supplier of information technology — hardware, software and services — to corporations and government agencies worldwide, and its results are watched as a guide to broader trends in business technology spending.

Globally, the growth in technology spending has softened, as once-hot markets like China and Brazil cool and Europe remains in an economic slump. For I.B.M., the China business was soft, but Brazil did well, Mark Loughridge, I.B.M.’s chief financial officer, said in a conference call.

I.B.M. has met the challenge of economic turmoil and new waves of technology more nimbly than most of its established rivals. It moved quickly to expand in emerging markets, shift to higher-profit products and services, and cut costs.

But in the first quarter of this year, I.B.M. reported disappointing earnings, below analysts’ forecast for the first time since early 2005.

Businesses that I.B.M. has earmarked for growth are thriving. One of these is software and services for mining vast amounts of data from the Web, sensors and smartphones, to be used to find ways to increase sales or cut costs.

But the question for established companies like I.B.M. is whether newer, more profitable businesses can grow fast enough to offset the competition from emerging rivals and new technology.

A prime example is cloud computing, a fast-growing market for computing sold to businesses as a service over the Internet. The low-cost cloud model threatens traditional technology suppliers. Amazon is the early leader in the cloud business.

I.B.M. is investing in cloud computing. Last month, it announced plans to buy SoftLayer Technologies, a cloud computing company, in a deal valued at about $2 billion.

“I.B.M. is making strong plays in new technologies like cloud, but the question is whether it is moving fast enough,” said Frank Gens, chief analyst at the International Data Corporation, a research group.

In the past, I.B.M. has also aggressively pulled out of areas with declining margins, like its personal computer business, which it sold to Lenovo in 2005.

Recently, I.B.M. has talked to Lenovo about a deal for I.B.M.’s unit that sells so called industry-standard data center computers, typically powered by Intel chips, analysts say. Talks apparently broke off in May, when the two sides could not agree on a price. But Mr. Loughridge said I.B.M. was in “active discussions.” That business represents about $5 billion in sales for I.B.M., but competition is fierce.

Adobe Cuts Forecast as Users Migrate Online

The company’s forecast, which disappointed Wall Street, came as Adobe reported revenue for its third fiscal quarter that was below analysts’ expectations.

Adobe projected that its earnings in its fourth fiscal quarter would range from 53 cents to 58 cents a share, excluding onetime items, on revenue of $1.075 billion to $1.125 billion.

That forecast was below analysts’ average estimate of earnings of 67 cents a share in the current quarter on revenue of $1.2 billion, according to the equity research firm StarMine, which gives more weight to estimates from analysts with better track records.

These targeted ranges factor in 25,000 additional new Creative Cloud subscriptions in the quarter, the company said Wednesday.

Adobe introduced its Creative Suite 6, which includes Photoshop, Illustrator, InDesign, Flash and Dreamweaver, and the Web-based Creative Cloud products in its second fiscal quarter in an effort to provide a more stable revenue model.

Analysts have expressed concern that the Web-based Creative Cloud subscription service would hurt Adobe’s financial growth at least over the short term.

Josh Olson, an analyst at Edward Jones, said Adobe’s fourth-quarter earnings and revenue targets indicated that the company’s transition to a more stable revenue model was happening faster than anticipated.

“What happens with the subscription model is that revenue is recognized over time, so if adoption is faster there is more of a delay,” he said. “The long-term take-away is that it’s good thing.”

Adobe reported net income for its third fiscal quarter of $201.4 million, or 40 cents a share, compared with $195.1 million, or 39 cents a share, a year earlier. Excluding onetime items, the company said it earned 58 cents a share in the most recent quarter.

Adobe’s revenue totaled $1.08 billion in the third quarter, compared with $1.01 billion in the 2011 quarter. Wall Street expected revenue of $1.10 billion. Adobe said its revenue was pulled down by about $9 million because of currency fluctuations.

Sony Reports Loss and Lowers Full-Year Earnings Forecast

TOKYO (AP) — Sony’s losses worsened in the April-to-June quarter, and the company lowered its full-year earnings forecast on Thursday, citing problems caused by a strong yen and declining sales of its liquid-crystal-display products.

The Japanese electronics and entertainment company reported that it lost 24.6 billion yen ($315 million) in its fiscal first quarter, compared with a 15.5 billion yen loss a year earlier.

Sales increased 1.4 percent to 1.52 trillion yen ($19.4 billion), helped by cameras, professional broadcasting products and mobile phones.

Sony lowered its earnings forecast for its fiscal year ending in March 2013 to 20 billion yen ($256 million), down from 30 billion yen projected in May, citing uncertainty in foreign exchange rates and global demand.

The company said it was hurt in the quarter by a strong yen, which erodes overseas earnings, and by declining sales of liquid-crystal-display TVs and video game machines. It also reported 20 billion yen in income tax expense and 11.3 billion yen in restructuring charges for the quarter, and invested heavily in image sensor production.

Sony posted a loss of 456.7 billion yen ($5.84 billion) in its last business year. That was the fourth straight year of losses and the biggest loss in the 66-year history of the company, maker of PlayStation game machines, the “Spider-Man” movies and the Walkman portable audio player.

Once the stellar brand symbolizing Japan’s technological prowess, Sony has lost its shine. It is getting beaten by Samsung Electronics of South Korea in TVs, and by Apple with devices like the iPhone and iPod.

The key to Sony’s turnaround is stopping the red ink in its TV business, which has lost money for eight consecutive years. The losses are expected to continue for the current business year, and the company has yet to carve out the new areas for profit that it has long promised, like smartphones and tablet computers.

Sony is aiming for a comeback under its new president, Kazuo Hirai, chosen in February, who previously led the company’s game division and built his career in the United States.

The company said that TV sales had fallen in the latest quarter, but that operating losses in the division had been cut to less than half of what they were the year before.

In its movies division, Sony achieved a 6.2 percent increase in sales with the hit “Men in Black 3” and better cable and network program revenue. But it reported an operating loss in part because of marketing expenses for this year’s films, including “The Amazing Spider-Man.”

In music, the company had lower sales and profit partly, it said, because the overall music market shrank. Best sellers included Carrie Underwood’s “Blown Away” and Usher’s “Looking 4 Myself.”

Sony also struggled in games, with lower sales of its PlayStation Portable hand-held console and PlayStation 3 home console, as well as software for those machines. These losses were only partly offset by sales of the PlayStation Vita portable, which went on sale in December.

Sony shares, which have lost more than half of their value over the last year, gained 2.44 percent to 964 yen ($12.33) in Tokyo. Earnings were announced after the market closed.

This article has been revised to reflect the following correction:

Correction: August 4, 2012

A subheading on Friday with an article about Sony’s fiscal first-quarter earnings characterized the results incorrectly. The biggest loss in the company’s 66 years was the $5.84 billion loss for its last business year, not the loss it posted for the first quarter.

Sony Reports Loss and Lowers Full-Year Earnings Forecast

TOKYO (AP) — Sony’s losses worsened in the April-to-June quarter, and the company lowered its full-year earnings forecast on Thursday, citing problems caused by a strong yen and declining sales of its liquid-crystal-display products.

The Japanese electronics and entertainment company reported that it lost 24.6 billion yen ($315 million) in its fiscal first quarter, compared with a 15.5 billion yen loss a year earlier.

Sales increased 1.4 percent to 1.52 trillion yen ($19.4 billion), helped by cameras, professional broadcasting products and mobile phones.

Sony lowered its earnings forecast for its fiscal year ending in March 2013 to 20 billion yen ($256 million), down from 30 billion yen projected in May, citing uncertainty in foreign exchange rates and global demand.

The company said it was hurt in the quarter by a strong yen, which erodes overseas earnings, and by declining sales of liquid-crystal-display TVs and video game machines. It also reported 20 billion yen in income tax expense and 11.3 billion yen in restructuring charges for the quarter, and invested heavily in image sensor production.

Sony posted a loss of 456.7 billion yen ($5.84 billion) in its last business year. That was the fourth straight year of losses and the biggest loss in the 66-year history of the company, maker of PlayStation game machines, the “Spider-Man” movies and the Walkman portable audio player.

Once the stellar brand symbolizing Japan’s technological prowess, Sony has lost its shine. It is getting beaten by Samsung Electronics of South Korea in TVs, and by Apple with devices like the iPhone and iPod.

The key to Sony’s turnaround is stopping the red ink in its TV business, which has lost money for eight consecutive years. The losses are expected to continue for the current business year, and the company has yet to carve out the new areas for profit that it has long promised, like smartphones and tablet computers.

Sony is aiming for a comeback under its new president, Kazuo Hirai, chosen in February, who previously led the company’s game division and built his career in the United States.

The company said that TV sales had fallen in the latest quarter, but that operating losses in the division had been cut to less than half of what they were the year before.

In its movies division, Sony achieved a 6.2 percent increase in sales with the hit “Men in Black 3” and better cable and network program revenue. But it reported an operating loss in part because of marketing expenses for this year’s films, including “The Amazing Spider-Man.”

In music, the company had lower sales and profit partly, it said, because the overall music market shrank. Best sellers included Carrie Underwood’s “Blown Away” and Usher’s “Looking 4 Myself.”

Sony also struggled in games, with lower sales of its PlayStation Portable hand-held console and PlayStation 3 home console, as well as software for those machines. These losses were only partly offset by sales of the PlayStation Vita portable, which went on sale in December.

Sony shares, which have lost more than half of their value over the last year, gained 2.44 percent to 964 yen ($12.33) in Tokyo. Earnings were announced after the market closed.