Legal disputes hit financial performance

Operators and vendors reported mixed fortunes in their fourth quarter earnings results, with some suffering the consequences of a quarter fraught with legal disputes. Despite that, Samsung had reason to celebrate, Motorola Mobility saw steady revenues but AT&T took a huge hit.

Samsung saw its operating profit jump an impressive 75.8 per cent to reach $4.7bn, but the firm’s ongoing spats with Apple have begun to take a toll on the firm, with disputes now spilling into ten countries, according to Samsung officials. The costs of the dispute restricted the Korean firm’s fourth quarter net profit to $3.5bn; a slightly less impressive 17 per cent rise from the $3bn recorded in the same quarter a year earlier.

The performance over the quarter brought the firm’s net profit for 2011 to $12.2bn, down 15 per cent from 2010.

Meanwhile, Motorola Mobility reported that its fourth quarter revenue barely changed from the same period a year ago, standing firm at $3.4bn. Despite that, the firm made a loss of $80m over the quarter, compared with profit of $80m a year ago.

The firm blamed the drop in profit on tough competition and legal costs with rivals such as Apple, although net revenue for the Mobile Devices division stood at $2.5bn, up five per cent from 4Q10.

“In the fourth quarter, we received very positive consumer response to Motorola RAZR, which combined an iconic brand with ultra-thin in an innovative smartphone. Our Home business continues to be a leader in the industry’s transformation to all IP, with unique solutions that enable rich media experiences across any screen,” said Sanjay Jha, chairman and CEO at Motorola Mobility.

“We remain energised by the proposed merger with Google and continue to focus on creating innovative technologies.”

Meanwhile AT&T reported that, despite seeing its revenue rise by 3.9 per cent to $32.5bn year-on year for the quarter, it made a huge net loss of $6.7bn.

The operator sold 9.4m smartphones, which the firm said it was its best-ever quarter and 50 per cent more than its previous quarterly record, and nearly double its smartphones sales in 3Q11 sales. This included 7.6 million iPhone activations.

However, it arrived at a net loss due to the combination of the costs associated with the failed merger with T-Mobile, pension provisions and write downs, as it had to reducing the book value of some of its assets that were overvalued compared to the market value.

The firm’s proposed $39bn takeover of T-Mobile USA collapsed due to antitrust concerns, and it took a $4bn charge for the failure of the deal. During the quarter, the US Justice Department sued to block the deal, while the Federal Communications Commission declared that it opposed the merger as well.

Randall Stephenson, AT&T chairman and CEO, said: “This was a blowout quarter for sales. Our network performance is at a high level on voice quality and best-in-class mobile download speeds. Sales continue to be strong and business revenue trends are on a good track.”

“Looking ahead, we start 2012 with the best visibility we’ve had in some time, and we’re well positioned to deliver solid results — including continued revenue growth with margin expansion, solid earnings per share growth and strong cash flow,” he added.


Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


There are no upcoming events.


Do you agree public funding should be used to support mobile operators to more broadly deploy Open RAN?

Loading ... Loading ...