Dolby crashes 10%
February 7, 2022
By Chris Forrester
Dolby Laboratories, usually one of the more reliable technology stocks, crashed 10 per cent on February 4th following poor Q1 results and warnings that Covid-based problems were still impacting the business. On the upside the company said it had acquired ultralow-latency specialists Millicast.
San Francisco-based Dolby’s numbers saw a near-41 per cent decline in Q1 profits with revenues down 10 per cent on the same period a year ago.
The company said that the pandemic had badly affected cinema installs of its latest audio-video and sound reduction equipment. The end results was that it missed its own guidance for the period. Its earnings per-share for the period were $1.01 and very low compared to the $1.48 per share of a year ago.
Kevin Yeaman, Dolby’s President and CEO told analysts that he remained confident that “over time” he saw strength across Dolby Vision, Dolby Atmos, and its imaging patents portfolio. “We remain confident in our ability to grow these revenues at a rate of over 35 per cent this year. We also see positive signs of momentum with Dolby.io. All of this gives us confidence in the opportunity ahead.”
“At CES last month, we saw our partnership with Samsung grow stronger as they announced the adoption of Dolby Atmos into their TVs for the first time. Samsung has been showcasing Dolby Atmos across their soundbar, PC, and mobile products for some time, and we are excited that they have decided to offer their TV customers the most immersive audio experience with Dolby Atmos,” he added.
“There are currently about 98 percent of Dolby Cinemas opened globally with six new sites launched during our fiscal Q1. Even with the uncertainty of the pandemic, we saw ongoing recovery in the box office with titles like No Time to Die and Spider-Man: No Way Home. As moviegoers return to the cinema, we continue to see a preference toward premium experiences, and Dolby Cinema is the ultimate way to experience movies in the theatre,” he said.
As to hard numbers, total revenues for the quarter were $352 million, down $38 million on the previous year. Q1 revenue was comprised of $332.3 million in licensing and $19.3 million in products and services. Broadcast represented 37 per cent of total licensing in fiscal Q1. Broadcast revenues declined by about $18 million or 13 per cent from the prior-year Q1 due to timing of revenue.
Dolby is maintaining its fiscal 2022 total revenue guidance of $1.34 billion to $1.4 billion. This would mean a result in about 5 to 9 per cent of year-over-year growth as compared to the $1.28 billion in fiscal year 2021. Within this, licensing revenues could range from $1.26 billion to $1.31 billion, compared to $1.21 billion in fiscal year 2021, which will result in a 4 per cent to 8 per cent year-over-year growth.