SDxCentral stays on top of the earnings of all the key companies in the telecom, software-defined networking (SDN), cloud computing, security and virtualization arena. Here’s a quick recap of how the public companies that we cover performed in the third quarter of 2016. (Some of these results are from companies that report on a fiscal quarter).
Arista Q3 — November 3
Arista reported $290.3 million in revenue, an 8 percent increase compared to its second quarter and a 33.4 percent increase from its third quarter in 2015. A good portion of Arista’s earnings call was focused on the company’s transition from overseas suppliers to its own manufacturing. This has partly been affected by the company’s ongoing litigation with Cisco and supply shortages.
FireEye Q3 — November 3
Security company FireEye reported revenues of $186.4 million compared to $165.6 million in the same quarter of 2015. Even though the company lost money in its third quarter, FireEye stock was up 15 percent after hours because it beat analysts’ and the company’s expectations. After a three-year spike in security spending, it seems that the trend has died down, which has been reflected among other security companies’ earnings.
Qualcomm Fiscal Q4 — November 2
With strong wireless chip sales, Qualcomm reported revenues of $6.2 billion for its fiscal fourth quarter, a 13 percent increase from its fourth quarter in 2015. It shipped 211 million chips in fourth quarter, resulting in a $1.6 billion profit. The company is predicting strong growth in the Internet of Things (IoT) sector for 2017 as many cellular operators plan to launch narrowband IoT networks next year. Qualcomm’s move into 5G and IoT can be attributed to its $38 billion acquisition of NXP Semiconductors.
AWS Q3 — October 27
While Amazon Web Services (AWS) reported another impressive third quarter, Amazon itself did not see similar success. AWS sales reached $3.2 billion in the third quarter compared to $2.1 billion a year ago. This is not surprising because cloud migration is a big trend among many organizations. Amazon reported revenues of $32.7 billion compared to last year’s $25.4 billion. The company’s stock fell 6 percent after-hours.
Fortinet Q3 — October 27
Fortinet felt the slump in security spending as it reported weak earnings for its third quarter. The security company reported $316.6 million in revenue, which is only a 2.7 percent increase from the same quarter last year. Earlier in October, the company released preliminary financial results that were lower than its original forecast in the range of $343 million to $348 million. However, due to weak sales in North America, the company’s revenue fell even lower than that. During the call, Fortinet placed emphasis on the need for better marketing tactics.
Nokia Q3 — October 27
As 4G networks continue to mature and with 5G networks still waiting, Nokia reported a net loss during its third quarter. Its third quarter network sales dropped 12 percent to $5.81 billion compared to the same quarter a year ago. However, with the acquisition of Alcatel-Lucent, the Nokia’s total revenues increased to $6.42 billion compared to $3.31 billion in third quarter 2015.
F5 Networks Fiscal Q4 — October 26
F5 Networks strengthened its product sales, especially in North America, in the fiscal fourth quarter but the company barely beat is forecasted revenue, which was in the range of $515 million to $525 million. The company reported $525.3 million in revenue for its fiscal fourth quarter, up 6 percent from last quarter and up 5 percent from the same period last year. However, the company did note that its sales in Europe were poor because of macroeconomic issues, specifically surrounding Brexit.
VMware Q3 — October 26
VMware reported third quarter revenues of $1.78 billion, compared to $1.67 billion for the same quarter a year ago. Not only did VMware beat analysts’ expectations, but the company is forecasting higher revenues for the full year in the range of $7.025 billion to $7.075 billion range. VMware is expanding its cloud offerings with its new Products and Cloud Services organization. It also recently teamed with AWS, announcing VMware Cloud on AWS.
Juniper Q3 — October 25
Juniper reported revenues of 1.28 billion, a 3 percent increase in revenue year-over-year for the third quarter. This was an improvement over the flat performance it has seen recently. However, Juniper is forecasting up to a 4.5 percent growth for its fourth quarter. Growth in cloud providers accounted for about 19 percent of the company’s revenues this year. Juniper also recently hired cloud expert Randy Bias to lead its cloud strategy.
Ericsson Q3 — October 21
Swedish equipment maker Ericsson had a rough third quarter due to a slump in service provider spending. It ended the quarter with a $26.2 million net loss — the company’s first net loss in four years, compared with a net profit of $26.2 million the same quarter last year. Ericsson is feeling the effects of a weak mobile operator market, with 5G deployments not expected to start for a couple more years. This has forced the company to layoff thousands, find a new CEO, and cut costs.
Microsoft Azure Fiscal Q1 2017 — October 20
During Microsoft’s first fiscal quarter of 2017, the company reported that Microsoft Azure revenues more than doubled year-over-year. The company reported revenues of $20.5 billion, compared with $20.4 billion the same period a year ago. Azure revenues were up 116 percent, while the cloud division as a whole grew 8 percent year-over-year. Much of the company’s overall growth can be attributed to Azure and the growing use of public clouds for workloads as opposed to just testing and development.
Verizon Q3 — October 20
Verizon reported third-quarter revenues of $30.9 billion, which was down from $33.2 billion the same quarter 2015. During the earnings call, incoming CFO Matt Ellis (who replaced Fran Shammo who is retiring) said the company aims to return to growth in 2017. Verizon plans to capitalize on IoT, which accounted for $217 million of revenues during the quarter. Verizon highlighted that it has been acquiring companies in this space like Telogis, Fleetmatics, and Sensity.
Citrix Q3 — October 19
Citrix’s refocus on the cloud and its divestiture of the GoTo suit of office products fared well for its third quarter and forecasted fourth quarter. The company beat its own forecasted third quarter revenues of $841 million, compared to $813 million it reported in the third quarter a year ago. Its full-year revenues are expected to be between $3.4 billion to $3.41 billion. It is worth noting that Citrix’s NetScaler application deliver controller (ADC) has become a small, yet reliable source of growth for the company.
Intel Q3 — October 19
Intel was able to turn things around during its third quarter with strong growth in its Data Center Group (DCG) and IoT Group. These groups accounted for more than a quarter of its revenue. The company reported third-quarter revenues of $15.8 billion, up 9 percent year-over-year. However, the company’s stock was down 6 percent at press time because of a weak fourth quarter forecast of $15.7 billion.
IBM Watson Q3 — October 17
IBM is finding that selling subscription-based software is more challenging than it anticipated and is in the process of transforming its business toward cloud-based technologies. The company’s revenue dropped, but not as much as much as in past quarters. The company reported $19.22 billion in revenues, compared with $19.28 billion the same period a year ago. IBM’s strategic initiatives, which include Watson and the cloud, accounted for $8 billion of the total revenue, up 15 percent from a year ago.