Dolby Q3 Revenue Declines on Lower Prices for 3D and D-Cinema, Discloses That Dolby Technology Not Part of Windows 8

Posted by Joe Zaller
Aug 06 2011

Dolby announced that its revenue for the third quarter of its 2011 fiscal year was $219, down 5% from the same period a year ago, and down 12% versus the previous quarter. GAAP net income in the third quarter was $61.7m, down from $63.5m last year.

The company attributed the results to price drops for its 3D and digital cinema products.

Licensing revenue during the quarter was $181.8m, a 7% increase versus the third quarter of last year, and down 15 versus the previous quarter. Product revenue in the quarter was $28.4m, down 46% from a year ago, and up 8% from last quarter. Service revenue in the quarter increased 21%
versus last year to $8.8m. The overall gross margin for the quarter was 87%.

The biggest news came during the company’s conference call with equity analysts, where it was disclosed that Dolby technology will not be included in the next version of the Windows operating system from Microsoft.

Company president & CEO told analysts: “What we know today is that we’re not in the current build of the [MS Windows 8] software. And so we are planning for a scenario where we’re not in Windows 8. And that would mean for us working more extensively with OEMs and ISVs, each of whom we
work with today, but working with them more extensively not only to support DVD playback but to really make for the best online experience.”

 

Financial Guidance

For fiscal 2011, Dolby says it is now targeting revenue of $930 million to $955 million, up from previous guidance of $905 million to $945 million.

 

Related Content:

Dolby Press Release: Dolby Laboratories Reports Third Quarter Fiscal 2011 Results

Dolby Q3 2011 Conference Call Transcript

Previous Quarter: Dolby Says Q2 Revenue Increased 3%, But Lowers Outlook for Full Year

Business Insider Article: Why Did Microsoft Cut Dolby Out Of Windows 8?

Forbes Article: Dolby Says Not Included In Windows 8; Shares Fall Hard

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