Posts Tagged ‘LG’

Dolby Announces 2016 Results; Continued Dolby Vision Progress

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Nov 03 2016

Dolby announced fiscal fourth quarter and full year revenue for the twelve months ending September 30, 2016.  2016 fiscal year revenue was $1,025.7 million, a 5.68% increase versus the 2015 fiscal year.  Dolby_logo.svg

Full year revenue was within the guidance provided at the end of fiscal 2015 for total revenue between $1 billion and $1.03 billion.

2016 FY GAAP net income was $185.9 million or $1.81 earnings per share (diluted).  This represents a 2.5% increase over the net income for the 2015 fiscal year of $181.4 million ($1.75 earnings per share).

GAAP gross margins were 89.4% for the year, a slight decrease versus the gross margins of 90.2% from the year earlier period.  Operating margins were 23%, an increase of 100 basis points over the operating margins from fiscal 2015.

2016 Fiscal Year Revenue by Type:

Dolby reports revenue across licensing, product, and service activities.  Product revenues consists primarily of sales of Digital Cinema Servers and Dolby Cinema Audio Products.

  • Licensing revenue for fiscal year 2016 was $917.0 million, an increase of 5.6% versus fiscal year 2015.
  • Product revenue was $90.5 million for the year, an increase of 7.9% compared to the 2015 fiscal year.
  • Services revenue were $18.2 million during fiscal year 2016, a decrease of 2.5% against 2015.

Product gross margins for 2016 were 28%, a substantial increase over the 16% gross margins from 2015.

2016 Fiscal Year Licensing Revenue by Customer Vertical:

Licensing revenue in the Broadcast vertical for televisions and set-top box sales was 46% of total licensing revenue or $421.8 million during fiscal 2016.  On an aggregate basis, broadcast licensing grew 10.4% versus the 2015 fiscal year.

As part of management’s prepared comments on the Dolby’s earnings call, President and CEO Kevin Yeaman drew attention to the strong performance in the broadcast sector.  “We had another strong year in broadcast. Dolby Audio is an established format in developed markets like North America and Western Europe, and we are well positioned in areas like Africa, India and China, when the transition to digital broadcast is underway. Future growth in broadcast will come from the continued migration of emerging markets to digital televisions and the rollout of high-definition and 4K set-top boxes with Dolby Audio in both developed and emerging markets” said Mr. Yeaman (Sourced from Seeking Alpha transcript).

Fiscal Q4 2016 Results:

Fiscal fourth quarter revenue was $233 million, flat against the year earlier period, and a decrease of 16.1% versus the preceding quarter, FQ3 2016. Management attributed the sequential drop in revenue to the higher timing of licensing payments in Q3 compared to Q4.

For the quarter, Dolby’s GAAP net income was $23.9 million or $0.23 earnings per share, a 48.6% decline when measured against the fiscal fourth quarter of 2015, and a 62.4% decline against the preceding quarter.

GAAP Gross Margins were 87% during the fourth quarter, a 210 basis point decline from the year earlier period and a 410 basis point decline versus FQ3 2016.  Operating margins were 16%, an increase over the 12% from FQ4 2015 and a decrease versus the 29% operating margins during the preceding quarter.

Management guidance at the end of third fiscal quarter was for revenue in the range of $220 million to $230 million for the fourth quarter with gross margins between 88% and 89%, and GAAP earnings per share of $0.16 and $0.22.  Dolby exceeded its guidance on both revenue and earnings per share, though underperformed on gross margins.

Update on Dolby Atmos, Doly Cinema, and Dolby Vision:

Among the revenue drivers cited by management were the growing adoption of Dolby Atmos (next-generation immersive audio technology), Dolby Vision (next-generation imaging technology), and Dolby Cinema (premium cinema experience combining multiple Dolby technologies).

  • Dolby Atmos is now installed or committed in over 2,400 cinematic screens worldwide. 550 feature films using Dolby Atmos have been announced or released.
  • The first televisions incorporating Dolby Vision become available in the past year. LG is including Dolby Vision in their OLED and Super UHD LCD TVs; VIZIO is including Dolby Vision in their R, P, and M Series; and TCL and Skyworth are also shipping TVs with Dolby Vision.  Content incorporating Dolby Vision is now available from Warner Bros., Sony Pictures, MGM, Universal, Lionsgate, Netflix and Amazon Studios.
  • Over 30 Dolby Cinema locations were added during 2016, bringing the total to over 40.

“We are well on our way to establishing that Dolby Vision is the best way to experience HDR content” stated Mr. Yeaman on Dolby’s earning call with analysts.  “Our job this year is to accelerate the deployment of Dolby Vision” continued Mr. Yeaman.

Financial Guidance

Dolby’s guidance for the fiscal year 2017 is for revenue between $1.06 billion and $1.09 billion.  Broadcast licensing revenue is expected to remain relatively flat in 2017.

Guidance for the first quarter of fiscal 2017 is revenue in the range of $250 million to $260 million, gross margins between 88% and 89%, and earnings per share between $0.34 and $0.40.

 

 

Related Content:

Press Release: Dolby Fiscal Fourth Quarter and Full Year 2016 Earnings Release

Earnings Transcript: Dolby Fiscal Fourth Quarter Results (SeekingAlpha)

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Rovi Ends All Current Lawsuits Against LG, Licenses Patents for Use in All LG Products

Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Mar 04 2013

Electronic program guide technology provider Rovi disclosed through a regulatory filing that it has entered into a multi-year licensing agreement with LG Electronics for the use of its patent portfolio in “all LG products.”  Deal terms were not provided.

According to the filing, the new licensing agreement “includes the dismissal of all current lawsuits,” which presumably includes this complaint for patent infringement filed by Rovi against LG in May 2012 in the US District Court for Delaware.

The catalyst for the new arrangement between Rovi and LG may be the fact that LG recently won a patent infringement case filed by Rovi in German courts.

According to Korea Times article, Rovi filed for an injunction with the German court against LG Electronics in April 2012, to ban sales of its televisions, claiming LG has infringed on technology patents for its products.  The lawsuit came as LG Electronics rejected Rovi’s request to pay license fees for its patent. LG Electronics argued that the patent claimed by Rovi Corporation is irrelevant to its products, adding the U.S. firm’s stance on the scope of patent is “too broad.”

German Courts ruled in favor of LG in December 2012.

 

Re-Affirms Business Outlook

Rovi, which also owns Divx and codec provider MainConcept, used the filing to re-affirm its business outlook for 2013, saying that “while the settlement with LG was successfully achieved earlier in the company’s fiscal year 2013 than previously anticipated by the company, the company continues to expect the timing of adjusted pro forma revenue to be approximately 47% and 53% in the first and second halves of 2013, respectively.”

Rovi says it expects its adjusted pro-forma revenue for 2013 to be between $630m and $660m, and adjusted pro-forma income per common share to be between $1.90 and $2.20, excluding discontinued operations.  The company also said its revenue expectations for the fiscal first quarter, ending March 31, 2013, are unchanged from previously issued guidance.

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Related Content:

Rovi SEC Filing: Discloses LG Patent Licensing Agreement, and Dismissal of all Current Lawsuits

Korea Times Article: LG defeats patent infringement claims in German court

Rovi Complaint for Patent Infringement against LG Electronics, Delaware District Court May 2012

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© Devoncroft Partners. All Rights Reserved.

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CES 2011 – Connected TV, Mobile DTV, 3D and Big Crowds

broadcast industry technology trends, broadcast industry trends, broadcast technology market research | Posted by Joe Zaller
Jan 13 2011

Last week I was shocked back to post-holiday reality by my annual winter pilgrimage to Las Vegas for the 2011 CES exhibition.  I spent a couple of days in the conference session and walking the (very crowded) show floor.

As in 2010, some of the key themes at CES were making money (or not) from online content, connected TV, 3D TV, and mobile TV broadcasting.

The conference session I attended focused on connected TV, online TV and the monetization of content via these channels.  On the monetization point, I lost count of the number of times I heard the word “experimentation” during these sessions – particularly from content owners.  In other words, although everyone agrees that multi-platform content delivery is a very important trend, many players have still not figured out the business model.

Connected TV however is another story – it’s an area where the business model is a bit more straightforward.

A long time ago, I used to work in the interactive TV space, and this is what connected TV reminds me of… it’s an interactive EPG that just happens to point at web content and your media library in addition to the channels that you receive from your provider.  However there is one critical difference with today’s connected TV platforms versus the interactive TV technology of a decade ago – the ability to deliver target advertising to specific viewers. 

Although I look at connected TV as a fancy EPG that’s connected to a sophisticated ad serving platform, I think it’s where I think we’ll be seeing real innovation (and revenue) over the next few years.  To me the promise of connected TV is stronger than that of 3D, another hot topic at CES.

After all that 3D hype at the beginning of 2010, the hysteria over 3D seems to have cooled down a bit in 2011.  3D set sales are slow, there’s not much content out there, and on the professional side broadcast vendors have significantly toned down their statements about 3D, as evidenced by the IBC press conferences of companies such as Grass Valley and Harris.

Nevertheless, there was still a great deal of 3D at CES this year – particularly at Panasonic, which as you can see in the photo below dedicated a considerable portion of its CES booth to 3D technologies.

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I am still a 3D skeptic, particularly in terms of its real impact on the professional market. Yes, there is some equipment being sold, and yes there are a few dedicated 3D channels out there… but in terms of the overall market 3D today is still a drop in the bucket.  Only time will tell if 3D ever really becomes mainstream.  Nevertheless the 3D hype goes on, albeit in a somewhat toned-down form.

Another technology platform on which many have pinned their hopes is mobile TV broadcasting.  US OTA broadcasters are fighting a battle on many fronts – from the government, to Gary Shapiro at the CEA, to the need to generate new revenue streams, to the need to remain relevant in a multi-channel, always-on media environment — and they see mobile DTV broadcasting as a key way to help them succeed on all fronts. 

 

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At CES, there was a small group of booths that were showing off technologies for ATSC mobile DTV broadcasting.  US broadcasters are serious about mobile TV, and they were there in force along with some well established (Harris, LG) and new technology vendors.  Over the course of the show, I ran into broadcasters from most of the networks and major station groups.  There were also a large number of broadcast vendors in attendance with one (Evertz) even having a booth at the show.

From the conversations I had at CES, I expect mobile DTV broadcasting to be a major theme of the NAB show in April.  Given the political climate this could be the make or break year for mobile DTV broadcasting in the US.  It’s going to be interesting to watch.

Impressions of CES 2010 — 3D and ATSC Mobile DTV

broadcast industry technology trends, content delivery, technology trends | Posted by Joe Zaller
Jan 12 2010

Last week I made my annual winter pilgrimage to Las Vegas for the 2010 CES exhibition.

Walking the crowded show floor was like being inside of a giant Best Buy with 100,000+ other people. 

I spent most of my time at CES at the conference, and I have mixed feelings about the sessions I attended. While there were some quite good panels — particularly in the USC Emerging Tech and the excellent Arlen / Greenwald “UpNext” tracks — I found many of the sessions to be disappointing. Many sessions were long on commercial plugs and short on new information.  I also found the multiple concurrent sessions difficult to navigate, something that was not helped by CEA’s show guide / conference program, which was poorly laid out and confusing.

As most know by now, the big topics at CES were 3D, think TVs, mobile broadcasting and making money (or  not) from online content.

3D was everywhere at the show, and there have been countless reports of how many companies are betting their future on 3D.   In many of conference sessions, panelists expressed optimism for 3D — tech vendors talked about how they will have the products available, while broadcasters & content owners talked about the amount of 3D content they are going to produce / broadcast.  Personally I am skeptical about near-term consumer take-up of 3D.  Consumers who have recently upgraded to HD are unlikely to re-up for 3D any time soon, and even my early-adopter friends have said they are unlikely to put on 3D glasses to watch sports or movies.  Time will tell, and I am sure we will all be hearing much about 3D between now and the NAB show in April.

Other than they hype surrounding 3D the most interesting aspect of CES for me was a small group of booths that were showing off ATSC mobile DTV broadcasting.  US broadcasters are serious about mobile, and they were there in force along with some well established (Harris, LG) and new technology vendors.  According to several of the broadcasters and exhibitors I spoke with, there are already 30 broadcasters on the air with mobile ATSC DTV. 

More significantly according to these sources however, is that there are 200+ more local broadcasters who are planning to launch a mobile service in the near future.  These broadcasters have already spent a significant amount of money to convert to DTV, and the incremental cost to also broadcast to mobile is very small (the maximum number I heard was $150,000, with many broadcasters saying they could do it for much less).

This low cost of entry, combined with a potential of new revenue as well as the political controversy about use of spectrum is sure to make ATSC mobile DTV one of the major topics at NAB this year.  Whereas 3D is a future possibility for broadcasters, it seems to me that ATSC mobile DTV is going to happen in the near term. Broadcasters such as Sinclair, ION and others are absolutely committed to the technology, and there are many vendors on board — with more undoubtedly to follow — despite the fact that there are very few receivers and even fewer viewers at this time. 

It remains to be seen whether ATSC mobile DTV can be developed into a viable commercial offering, but this will not stop a great deal of hardware and software being sold to US broadcasters.  The barriers to entry are low (in terms of incremental cost), and the potential political victory with regard to spectrum, not to mention a new potential revenue stream practically guarantees that ATSC mobile DTV  will be coming soon to a local broadcaster near you.

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