Apple's iPhone disappointment fans doubt on growth

SAN FRANCISCO (Reuters) - Apple Inc missed Wall Street's revenue forecast for the third straight quarter after iPhone sales came in below expectations, fanning fears that its dominance of the mobile industry was slipping.

Shares of the world's largest tech company fell 10 percent to $463 in after-hours trade, wiping out some $50 billion of its market value - nearly equivalent to that of Hewlett-Packard and Dell, combined.

On Wednesday, Apple said it shipped a record 47.8 million iPhones in the December quarter, up 29 percent from the year-ago period. But that lagged the 50 million that analysts on average had projected.

Expectations heading into the results had been subdued by news of possible production cutbacks by some component suppliers in Asia, triggering fears that demand for the iPhone, which accounts for half of Apple's revenue, and the iPad could be slowing.

But many investors clung to hopes for a repeat of years of historical outperformance, analysts said.

"It's going to call into question Apple's dominance in the space. It's still one of the strong players, the others being Samsung and Google. It's still a two-horse race, but Android continues to grow rapidly," said Sterne Agee analyst Shaw Wu.

"If you step back a bit, it's clear they shipped a lot of phones. But the problem is the high expectations that investors have. Apple's conservative guidance highlights the concerns over production cuts coming out of Asia recently."

Apple projected revenue of $41 billion to $43 billion in the current, second fiscal quarter, lagging the average Wall Street forecast of more than $45 billion.

Fiscal first quarter revenue rose 18 percent to $54.5 billion, below the average analyst estimate of $54.73 billion, though earnings per share of $13.81 beat the Street forecast of $13.47, according to Thomson Reuters I/B/E/S.

Apple also undershot revenue targets in the previous two quarters, and these results will prompt more questions on what Apple has in its product pipeline, and what it can do to attract new sales and maintain its growth trajectory, analysts said.

Net income of $13.07 billion was virtually flat with $13.06 billion a year earlier on higher manufacturing costs. The year-ago quarter also had an extra week compared to this year.

Gross margins consequently slid to 38.6 percent, from 44.7 percent previously.

"You can't just keep rolling out iPhones and iPads and think that everybody needs a new one," said Jeffrey Gundlach, who runs DoubleLine Capital LP, the $53 billion bond firm. "The mini? What is that all about? It is a slightly smaller iPad — so what? So that is our new definition of innovation?"

"There are plenty of competitors like Samsung and other legitimate competitors like them," added Gundlach, one of the highest-profile Apple bears. He maintains a $425 price target.

Shares of several of Apple's suppliers crumbled. Chip suppliers Skyworks and Cirrus Logic both fell more than 6 percent. Qualcomm Inc slipped 1.8 percent.

CHINA IS NEXT BIG GROWTH DRIVER

Apple shares are down nearly 30 percent from a record high in September, in part on worries that its days of hyper growth are over and its mobile devices are no longer as popular.

Intense competition from Samsung's cheaper phones - powered by Google's Android software - and signs that the premium smartphone market may be close to saturation in developed markets have also caused a lot of investor anxiety.

Meanwhile, sales of the iPad came in at 22.9 million in the fiscal first quarter, roughly in line with forecasts.

On the brighter side, Chief Financial Officer Peter Oppenheimer told Reuters that iPhone sales more than doubled in greater China - a region that Apple Chief Executive Tim Cook has vowed to focus on as its next big growth driver.

The company will begin detailing results from that country going forward. Revenue from the region totaled $7.3 billion, up 60 percent from the year-ago December quarter.

"These results were OK, but they definitely raised a few questions," said Shannon Cross, analyst with Cross Research. "Gross margin trajectory looks fine so that's a positive and cash continues to grow. But I think investors are going to want to know what Apple plans to do with growing cash balance."

"And other questions are going to be around innovation and where the next products are coming from and what does Tim Cook see in the next 12 to 18 months."

ADDRESSING PRODUCTION RUMORS

In an unusual move for Apple, which typically does not respond to speculation, Cook addressed the production cutback rumors at length on the conference call and questioned the accuracy of rumors about its plans.

Media reports earlier this month said the company is slashing orders for iPhone 5 and iPad screens and other components from its Asian suppliers.

"Even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business, because the supply chain is very complex," he said, adding that Apple has multiple sources for components.

"Yields might vary. Supplier performance can vary. The beginning inventory positions can vary. There's just an inordinately long list of things that would make any single data point not a great proxy for what's going on," he said.

Apple's initial iPhone and iPad mini sales were hurt by supply constraints, but Cook expects supply to balance demand for the iPad mini this quarter. He also acknowledged that iPad was cannibalizing its high-margin Macintosh computers, but said it was a huge opportunity for the company.

"On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is," he said. And I think it is clear that it's already cannibalizing some."

In another departure from tradition, Apple intends to tweak the way it both reports results and publishes forecasts.

Apart from breaking out results from China, the company also will no longer provide a single revenue or gross margin outlook. From Wednesday, it began providing the range it expects to hit, rather than the often-ludicrously conservative estimates that Apple was once notorious for.

The new policy took many by surprise.

"Before people could always ignore the guidance," said Dan Niles, Chief Investment Officer of AlphaOne Capital Partners, LLC. "Apple is telling investors that they need to pay attention to the guidance and you can't ignore it, which is basically what we all did in the past."

(Additional reporting by Alistair Barr and Alexei Oreskovic in San Francisco and Jennifer Ablan in New York; Editing by Bernard Orr and Edwin Chan)

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No. 1 Duke routed by No. 25 Miami 90-63

CORAL GABLES, Fla. (AP) — With a steady din coming from the sea of orange behind the visitors' basket, No. 1 Duke had a tough time making a shot.

The Blue Devils went more than 8 minutes without a field goal in the first half Wednesday night, and a sellout became a blowout for No. 25 Miami, which delighted a boisterous crowd with a 90-63 victory.

The defeat was the third-worst ever for a No. 1 team. The last time Duke lost a regular-season game by a bigger margin was in January 1984.

"It wasn't demoralizing; they played better," Blue Devils guard Rasheed Sulaimon said. "I believe we have them on the schedule again."

"We expected them to be terrific, and we have to match terrific, and then you have a terrific game," Duke coach Mike Krzyzewski said. "What you had was a terrific win for them, but not a terrific game. We didn't hold our end of the bargain."

Miami (14-3, 5-0 Atlantic Coast Conference) beat a No. 1 team for the first time, taking control with a stunning 25-1 run midway through the opening half. The Blue Devils missed 13 consecutive shots despite numerous good looks, while four Hurricanes hit 3-pointers during the run that transformed a 14-13 deficit into a 38-15 lead.

Duke (16-2, 3-2) fell to 0-2 when playing on an opponent's court. The Blue Devils' other loss came at North Carolina State, a defeat that cost them the No. 1 ranking.

They regained the top spot this week but seemed rattled by the capacity crowd, only the 10th in 10 years at Miami's on-campus arena. Students began lining up for seats outside the arena almost 24 hours before tipoff, a rarity for the attendance-challenged Hurricanes.

"I don't know how you can sit outside for a basketball game for that long," Miami guard Durand Scott said. "That made me want to win for them even more."

The Hurricanes, who are alone atop the league standings, won their sixth consecutive game. They beat Duke for the second straight time — but only the fourth time in the 19-game series.

Miami had been 0-6 against No. 1 teams. Coach Jim Larranaga also beat a No. 1 team for the first time.

"This is a great memory," Larranaga said.

Scott scored a season-high 25 points for the Hurricanes, and Kenny Kadji added a season-high 22. Shane Larkin had 18 points, 10 rebounds and five assists, and Durham, N.C. native Julian Gamble had 10 rebounds and four blocked shots.

Miami senior center Reggie Johnson came off the bench in his first action since being sidelined with a broken left thumb Dec. 18. He had two points and five rebounds in 16 minutes.

The Hurricanes, ranked this week for the first time in three years, improved to 8-0 at home.

Seth Curry, Tyler Thornton and Quinn Cook went a combined 1 for 29 for the Blue Devils, who shot a season-low 30 percent. Sulaimon led them with 16 points.

Duke went 4 for 23 from 3-point range, while Miami went 9 for 19 and shot 57 percent overall.

"Especially in the first couple of minutes, we got a lot of great shots," Blue Devils forward Mason Plumlee said. "You're going to miss some, but you have to keep shooting. The biggest mistake you can make is questioning your shot because you're missing open shots."

Kadji made two 3s during the Hurricanes' first-half spurt, then capped it with a three-point play. Duke shot 22 percent in the first half, including two for 11 on 3-pointers, and trailed 42-19 at halftime.

There was no letup by the Hurricanes to start the second half. They scored the first seven points for a shocking 49-19 lead, and punctuated the drubbing with five dunks in the final 10 minutes.

"Some teams come out in the second half flat and think they have the game won," Larkin said, "but we stayed with it with the same energy in the second half. We played great the whole game."

A Duke mistake — one in a long series — early in the second half had Krzyzewski red-faced and on the court, screaming at his team. But he couldn't inspire a turnaround.

"Over-rated," fans chanted with 3 minutes left. When the game ended, they poured onto the court and mobbed their team.

"The crowd I'm sure helped them some," Krzyzewski said. "But they didn't need much help."

Back in North Carolina, fans of the Tar Heels savored the loss by their rivals. When the final score of the Duke game was posted on the video board at the North Carolina-Georgia Tech game, students chanted, "Go to hell, Duke!"

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AP Sports Writer Joedy McCreary in Chapel Hill, N.C., contributed to this report.

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“Thrift Shop” bests Timberlake’s “Suit & Tie” on Billboard chart

LOS ANGELES (Reuters) – Justin Timberlake’s first single in five years – “Suit & Tie” – fell short of sales expectations for its first week and was kept from the top spot on the Billboard digital songs chart by a novelty rap act.

“Suit & Tie,” which features rapper Jay-Z, sold 314,000 downloads, according to figures released on Wednesday by Nielsen SoundScan.

Industry experts had expected about 350,000 downloads for Timberlake’s widely publicized single, which precedes a new album later in 2013 – his first since 2006.

But Timberlake, 31, who has been focused on building a Hollywood acting career, was dressed down on the digital chart by Macklemore and Ryan Lewis’ “Thrift Shop” featuring rapper Wanz, which sold some 341,000 downloads in the week ending on January 20.

It was the second consecutive week atop the digital songs chart for the novelty rap song about eschewing designer clothes for a second-hand look.

Timberlake will perform his first concert in five years during a private Super Bowl-related event in New Orleans on February 2, DirectTV announced on Wednesday. The invitation-only concert will not be shown on TV, the satellite providers said.

On the Billboard 200 album chart, rapper A$ AP Rocky’s debut album “Long.Live.A$ AP” entered at the top spot, selling about 139,000 units last week.

The New York rapper outpaced the child-focused compilation “Kidz Bop 23,” also in its first week, that features children performing recent pop hits.

“Kidz Bop 23″ sold 78,000 units last week and the series of albums have sold some 13.3 million albums since its 2001 debut.

TOMLIN TUMBLES

The soundtrack to musical-film “Pitch Perfect” landed at the No. 3 spot on the Billboard 200 and was followed by country-pop starlet Taylor Swift’s “Red” and singer Bruno Mars’ “Unorthodox Jukebox” in the top five.

The soundtrack to the stage-to-screen adaptation of musical “Les Miserables” fell to sixth from third, failing to capitalize on three big wins at the Golden Globe Awards, Hollywood’s second-biggest prize to the Oscars, on January 13.

Last week’s top album, “Burning Lights” by Christian singer-songwriter Chris Tomlin, tumbled to No. 22 on the chart. The album’s sharp fall was expected as opening week sales were largely boosted by pre-orders through churches and a national Christian convention, Billboard said.

Album sales for the past week totaled 4.97 million, down 2 percent from the same week last year, but year-to-date album sales were up 2 percent from 2012, totaling 16.32 million so far in 2013.

Some 27.82 million songs were downloaded last week, which was flat compared with the same week last year. A total of 91.17 million songs have been downloaded in 2013, a rise of 2 percent.

(Reporting by Eric Kelsey; Editing by Jill Serjeant and Mohammad Zargham)

Music News Headlines – Yahoo! News

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Women have caught up to men on lung cancer risk

Smoke like a man, die like a man.

U.S. women who smoke today have a much greater risk of dying from lung cancer than they did decades ago, partly because they are starting younger and smoking more — that is, they are lighting up like men, new research shows.

Women also have caught up with men in their risk of dying from smoking-related illnesses. Lung cancer risk leveled off in the 1980s for men but is still rising for women.

"It's a massive failure in prevention," said one study leader, Dr. Michael Thun of the American Cancer Society. And it's likely to repeat itself in places like China and Indonesia where smoking is growing, he said. About 1.3 billion people worldwide smoke.

The research is in Thursday's New England Journal of Medicine. It is one of the most comprehensive looks ever at long-term trends in the effects of smoking and includes the first generation of U.S. women who started early in life and continued for decades, long enough for health effects to show up.

The U.S. has more than 35 million smokers — about 20 percent of men and 18 percent of women. The percentage of people who smoke is far lower than it used to be; rates peaked around 1960 in men and two decades later in women.

Researchers wanted to know if smoking is still as deadly as it was in the 1980s, given that cigarettes have changed (less tar), many smokers have quit, and treatments for many smoking-related diseases have improved.

They also wanted to know more about smoking and women. The famous surgeon general's report in 1964 said smoking could cause lung cancer in men, but evidence was lacking in women at the time since relatively few of them had smoked long enough.

One study, led by Dr. Prabhat Jha of the Center for Global Health Research in Toronto, looked at about 217,000 Americans in federal health surveys between 1997 and 2004.

A second study, led by Thun, tracked smoking-related deaths through three periods — 1959-65, 1982-88 and 2000-10 — using seven large population health surveys covering more than 2.2 million people.

Among the findings:

— The risk of dying of lung cancer was more than 25 times higher for female smokers in recent years than for women who never smoked. In the 1960s, it was only three times higher. One reason: After World War II, women started taking up the habit at a younger age and began smoking more.

—A person who never smoked was about twice as likely as a current smoker to live to age 80. For women, the chances of surviving that long were 70 percent for those who never smoked and 38 percent for smokers. In men, the numbers were 61 percent and 26 percent.

—Smokers in the U.S. are three times more likely to die between ages 25 and 79 than non-smokers are. About 60 percent of those deaths are attributable to smoking.

—Women are far less likely to quit smoking than men are. Among people 65 to 69, the ratio of former to current smokers is 4-to-1 for men and 2-to-1 for women.

—Smoking shaves more than 10 years off the average life span, but quitting at any age buys time. Quitting by age 40 avoids nearly all the excess risk of death from smoking. Men and women who quit when they were 25 to 34 years old gained 10 years; stopping at ages 35 to 44 gained 9 years; at ages 45 to 54, six years; at ages 55 to 64, four years.

—The risk of dying from other lung diseases such as emphysema and chronic bronchitis is rising in men and women, and the rise in men is a surprise because their lung cancer risk leveled off in 1980s.

Changes in cigarettes since the 1960s are a "plausible explanation" for the rise in non-cancer lung deaths, researchers write. Most smokers switched to cigarettes that were lower in tar and nicotine as measured by tests with machines, "but smokers inhaled more deeply to get the nicotine they were used to," Thun said. Deeper inhalation is consistent with the kind of lung damage seen in the illnesses that are rising, he said.

Scientists have made scant progress against lung cancer compared with other forms of the disease, and it remains the leading cause of cancer deaths worldwide. More than 160,000 people die of it in the U.S. each year.

The federal government, the Canadian Institutes of Health Research, the Bill and Melinda Gates Foundation, the cancer society and several universities paid for the new studies. Thun testified against tobacco companies in class-action lawsuits challenging the supposed benefits of cigarettes with reduced tar and nicotine, but he donated his payment to the cancer society.

Smoking needs more attention as a health hazard, Dr. Steven A. Schroeder of the University of California, San Francisco, wrote in a commentary in the journal.

"More women die of lung cancer than of breast cancer. But there is no 'race for the cure' for lung cancer, no brown ribbon" or high-profile advocacy groups for lung cancer, he wrote.

Kathy DeJoseph, 62, of suburban Atlanta, finally quit smoking after 40 years — to qualify for lung cancer surgery last year.

"I tried everything that came along, I just never could do it," even while having chemotherapy, she said.

It's a powerful addiction, she said: "I still every day have to resist wanting to go buy a pack."

___

Online:

American Cancer Society: http://www.cancer.org

National Cancer Institute: http://www.cancer.gov/cancertopics/tobacco/smoking and http://www.cancer.gov/cancertopics/types/lung

Medical journal: http://www.nejm.org

___

Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Artist Christo takes small steps on Colo. project

DENVER (AP) — Construction of the proposed "Over the River" project in Colorado is on hold pending legal challenges, but artist Christo said Wednesday his team is doing other work so he can one day suspend nearly six miles worth of silvery fabric in sections over the Arkansas River.

Railroad tracks are being cleared along the project route that traces U.S. 50 between Canon City and Salida, and work is beginning to mitigate impacts to bighorn sheep.

Christo is also preparing for his upcoming exhibit in Oberhausen in Germany of "Big Air Package," a 295-foot air-filled fabric bubble that will help raise funds for Over the River, which has cost $13 million so far.

As envisioned by Christo and his late wife, Jeanne-Claude, Over the River would be displayed for two weeks in late summer. The earliest it could be displayed is August 2016, but even that timeline may be unlikely.

The Bureau of Land Management's approval of a permit for it is being appealed, and a group called Rags Over the Arkansas River has filed lawsuits challenging permit approvals by the BLM and Colorado State Parks.

Opponents contend the project poses environmental, safety, traffic and economic risks and will require more than two years of industrial-scale construction work. Christo's team has said it plans dozens of measures to mitigate impacts.

Christo and Jeanne-Claude's massive projects have survived delays before.

"I don't consider it a pause," Christo said. "It's part of the dynamics of the project."

During the work on Over the River, he also is actively working on The Mastaba, a giant sculpture of 410,000 barrels planned for Abu Dhabi that he conceived in 1977. Because he is 77, Christo said he is trying to complete both projects simultaneously rather than focusing on one at a time.

Christo was in Denver for an exhibit Wednesday at Metropolitan State University of Denver's Center for Visual Art of two sketches he donated to Colorado.

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Find Catherine Tsai on Twitter at http://www.twitter.com/ctsai_denver

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U. of I. to launch tech research center in Chicago

Plans to launch a University of Illinois-affiliated technology research center in Chicago will be unveiled Thursday — the latest regional effort to stem an exodus of high-tech brainpower and entrepreneurship to the coasts.

A private, not-for-profit company, to be called UI Labs, is expected to open offices in or near the Loop to foster collaboration between the region's scientists and engineers from academia, industry and government.

The project, expected to be financed by private donations, corporate partnerships and federal grants, will be outlined for U. of I. trustees Thursday. The goal is to raise $20 million for first-year operations.

The aim is build a research and engineering powerhouse that will attract a range of industries to Chicago, along the lines of what the former Bell Labs did for the East Coast. The University of Illinois at Urbana-Champaign will offer up its vast tech resources, including the National Center for Supercomputing Applications and its Blue Waters supercomputer. It is anticipated other local universities and national research centers will participate.

"I was in India last week, talking with firms that were thinking of coming to Illinois to engage with university scientists," said U. of I. President Robert Easter. "And they say, 'We have a presence in Chicago or we're thinking of having a presence in Chicago, and it would be much more convenient if we could work with you there.'"

Or as project adviser James Duderstadt, president emeritus of the University of Michigan, put it, the U. of I. is among the top five universities in the nation in such high-tech fields as computer science and engineering, "but it's down there in the cornfields."

"All the pieces are there, but some of the things Chicago is lacking are things Urbana-Champaign has," he said.

The idea is to marry the two, helping Chicago attain the sort of direct scientific underpinnings that long have fostered tech hotbeds in Boston and the San Francisco Bay Area.

"This is an opportunity to essentially build some of the glue and connective tissue … and that's needed to keep students from leaving and, frankly, to grow some companies in Chicago," said Lesa Mitchell, vice president of innovation and networks for the Kansas City, Mo.-based Kauffman Foundation, which focuses on entrepreneurship.

Chicago faces intense competition nationwide, as many cities aim for technological prowess and growth. The start of the year brought the launch of a Cornell NYC Tech campus, for instance, a graduate program in applied sciences that will turn out high-level scientists in New York City.

In Illinois, the challenge is retaining talent. One telling statistic: 32 percent of computer science graduates from the U. of I. in Urbana-Champaign get jobs in California, said Larry Schook, the university's vice president for research.

Among U. of I. grads who made their names out West are Marc Andreessen, co-founder of Netscape; software entrepreneur Thomas Siebel, a major U. of I. donor; and Ray Ozzie, who recently retired as chief software architect for Microsoft Inc.

The goal of this project, supported by Gov. Pat Quinn and Mayor Rahm Emanuel, is to retain the next generation of Illinois-trained innovators.

The University of Illinois will have an affiliation agreement with the lab that would outline the flow of personnel, resources and services between them. The goal is to attract 250 faculty fellows during the first three years. Additionally, more than 1,000 undergraduate and graduate students are expected to participate in UI Labs training and entrepreneurial programs during the first five years.

"Some students and researchers prefer the city to a smaller community … so this could increase the quality of the faculty," said Bruce Rauner, a prominent Chicago venture capitalist who has worked on the development of this plan. "This can drive better research."

The intent is to develop a "junior year abroad program" as well, with the aim of attracting top students from overseas.

The UI Labs project will start within the next month or so, Schook said, with the naming of board members and a director search.

"We'd love to have … the smartest tech students in the world come to participate and stay here to create companies," Schook said.

Rauner, who made his fortune as co-founder of private equity firm GTCR and heads venture firm R8 Capital Partners, said he intends to participate in fundraising and to donate millions personally. Ultimately, to bring the center to world-class status, it may be necessary to raise a $300 million endowment, he said.

The University of Illinois has programs aimed at linking businesses to applicable academic research, including the University of Illinois at Chicago's Innovation Center and research parks at Chicago and Urbana. While those attempt to match faculty research with companies that could use it, the UI Labs model would aim for even deeper collaborative brainstorming, Easter said.

"A company struggling with a problem related to its technology could come in and sit with faculty who do theoretical work to see if those principles could lead to a solution," he said. "Out of that will come innovation, and that will drive economic growth."

kbergen@tribune.com

Twitter @kathy_bergen

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Firefighters battling extra-alarm fire in Bridgeport warehouse

Firefighers battle an extra-alarm blaze in Bridgeport Tuesday night. (WGN-TV / January 22, 2013)

Staff report

10:02 p.m. CST, January 22, 2013

An 5-11 alarm fire has engulfed two warehouse buildings, causing part of one to collapse, in the Bridgeport neighborhood Tuesday night.

A four-story building caught fire after 9 p.m. and then jumped to another building, according to the Chicago Fire Department. Extra alarms, bringing more fire equipment, firefighters and paramedics were called shortly after firefighters arrived.

The south wall of one of the buildings collapsed, according to authorities, and there is “extreme fire” throughout the buildings.

About 170 firefighters from 50 fire department companies responded to the fire.

Check back for more information.

lford@tribune.com
Twitter: @ltaford

pnickeas@tribune.com
Twitter: @peternickeas

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Google's fourth-quarter results shine after ad rate decline slows

SAN FRANCISCO (Reuters) - Revenue from Google Inc's core Internet business outpaced many analysts' expectations during the crucial holiday quarter and advertising rates fell less than in previous periods, pushing its shares up roughly 5 percent.

The world's largest Internet search company introduced new product listings during the fourth quarter - typically its strongest - and also benefited from business growth in international markets, analysts said.

Excluding traffic-acquisition costs, the business generated net revenue of $9.83 billion, up from $8.13 billion a year earlier, Google reported on Tuesday. That surpassed a $9.6 billion average forecast from six analysts polled by Reuters.

"Business looked really strong, especially from a profitability perspective. They really grew their margins in the core business," said Sameet Sinha, an analyst with B. Riley Caris. "Most of that strength seems to be coming from international markets which grew revenues quite substantially: up 23 percent year over year, versus the 15 percent growth in the third quarter."

Average cost-per-click, a critical metric that denotes the price advertisers pay Google, declined 6 percent from a year ago, the fifth consecutive quarter of decline but an improvement over the third quarter's 15 percent slide.

Google executives told analysts on a conference call that policy changes related to the quality and quantity of ads appearing on certain of its Web properties had helped shore-up click prices while lowering the overall growth rate of paid clicks in the holiday quarter.

"Click prices are still declining, but it's better than expected," said BGC Partners analyst Colin Gillis.

The decline in Google's click prices is partly a result of consumers' shift to smartphones, where Google's ad rates are lower than those on Google's standard website.

Google cited growing demand for its spectrum of online advertising services, including mobile ads, display ads, video ads and its newly-launched product listings, though the company did not provide specific financial results for the individual businesses.

"More small enterprises increasing their spending collectively on Google's various products," continues to drive Google's growth, said Pivotal Research Group Analyst Brian Wieser.

MOTOROLA MOBILITY "STILL LOSING MONEY"

Investors shrugged off another quarterly loss at the Motorola Mobility mobile phone business Google acquired last year, one of various "big bets" that Google Chief Executive Larry Page has made to better position the company for a changing technology landscape defined by mobile gadgets and social networking.

"We now live in a multi-screen world," said Page, adding that "we feel naked without our smartphone."

Page said that Google had work to do in "managing our supply better as well as building a great customer experience," but said Google remains squarely focused on opportunities around newfangled devices such as smartphones.

Asked about the potential threat from Facebook Inc's recently-launched social networking search product, Page cited Google's years of online search experience and innovations such as voice-based search.

Consolidated net income in the fourth quarter was $2.89 billion or $8.62 per share, compared with $2.71 billion, or $8.22 per share, in the year-ago period when Google had not yet acquired Motorola.

Excluding certain items, Google said it earned $10.65 per share in the fourth quarter.

"The core business is a great business and the fourth-quarter is always a time for Google to shine. However, Motorola is still losing money and click rates still declined. They only declined 6 percent, but go back four or five quarters and click prices were improving. So mobile is still pressuring click prices," Gillis said.

The company posted consolidated revenue - which includes its Motorola Mobility mobile phone business but not the television set-top box business it recently agreed to sell - off $14.42 billion on Tuesday.

Motorola Mobility had an operating loss of $353 million during the quarter.

Google Finance Chief Patrick Pichette warned of more fluctuations in Motorola's financial results in the coming quarters as Google continues to restructure that business.

And he noted that Google was working through 12 months to 18 months of product pipeline that Google inherited in the acquisition.

Google announced plans to sell the Motorola Home television set top box business to Arris Group Inc for $2.35 billion. The company also has said it is focused on developing a smaller line-up of products in the mobile phone business.

Shares of Google rose roughly 5 percent to $738.20 in after-hours trading on Tuesday.

(Reporting By Alexei Oreskovic; Editing by Bernard Orr)

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Djokovic getting the hang of winning in Australia

MELBOURNE, Australia (AP) — Novak Djokovic is really starting to get the hang of how to handle himself at the Australian Open.

An expression often used Down Under — "Keep your shirt on" — is designed to discourage anyone from becoming unnecessarily overexcited.

Djokovic took it literally after his 6-1, 4-6, 6-1, 6-4 win Tuesday night over fifth-seeded Tomas Berdych, advancing to the semifinals at an 11th consecutive Grand Slam tournament.

The 2-hour, 31-minute victory took exactly half the time of his five-set, fourth-round win two nights previously against Stanislas Wawrinka. In the early hours of Monday morning, Djokovic ripped his sweat-drenched shirt off and flexed his muscles, mimicking his victory celebration after the 5:53 victory over Rafael Nadal in the 2012 Australian Open final.

That was acceptable at the time to the Rod Laver Arena crowd, which was still abuzz at 1:40 a.m. following five sets of high-level tennis.

After the Berdych match, however, he realized there was no need to raise the roof. Djokovic calmly pumped his fist once and walked to the net; he later joked about the ice baths he'd taken in between matches on the advice of local hero Lleyton Hewitt.

"It was a great performance. I was hoping to have a shorter match ... just not to go over 5 hours," Djokovic said, in a comparatively subdued mood after a considerably more routine victory. "It's always going to be tough against Tomas; he's an established player. He has a big game, big serve. He can compete against anyone on any surface."

In the semifinals, Djokovic will meet No. 4-seeded David Ferrer.

Ferrer survived a quarterfinal battle with fellow Spaniard Nicolas Almagro. Almagro had three chances to serve for the match, but Ferrer broke each time.

A usually mild-mannered pro, Ferrer showed his aggression at times when he threatened to spike his racket and even smashed his water bottle in the changeover after he'd dropped serve in a frustrating fourth set that featured eight breaks of serve.

He'd never lost to Almagro in 12 previous meetings and, as the No. 1 Spaniard in the draw in the absence of 11-time major winner Rafael Nadal, felt a responsibility to reach the semis.

"It was (a) miracle I won this match," Ferrer said of his comeback 4-6, 4-6, 7-5, 7-6 (4), 6-2 win. "I tried to fight every point; that's my game. I always fight."

Ferrer survived once in the third set and twice in the fourth when Almagro was serving for the match, but held his nerve and finally advanced to his third semifinal in the last four Grand Slam events.

"In the important moments, I played more consistent in my game," Ferrer said. "Of course, in the next round, the semifinals, I need to play my best tennis, better than today."

Djokovic acknowledged Ferrer's work ethic, saying the 30-year-old Spaniard was "one of the most respected guys on the tour because he never gives up."

"He plays every single match of his career with 100 percent," Djokovic said.

"I'm expecting a long one," he added.

Ferrer has never been past a major semifinal.

There are only three men left in the draw who have won Grand Slam titles — Djokovic has won five, including the last two in Australia. He's aiming to be the first man in the Open era to win three consecutive Australian titles.

The other two are in action Wednesday, with 17-time Grand Slam winner Roger Federer against 2008 Australian finalist Jo-Wilfried Tsonga of France. Andy Murray, who broke the 76-year drought for British men at the major tournaments by winning the U.S. Open last year, will play Jeremy Chardy of France.

On the women's side, defending champion Victoria Azarenka faces Svetlana Kuznetsova, who has won the U.S. Open and the French Open, and 15-time major winner Serena Williams is against 19-year-old American Sloane Stephens, who is playing her first quarterfinal at a Grand Slam.

Maria Sharapova completed a career Grand Slam last year by winning the French Open, a few months after losing the Australian Open final to Azarenka. After her 6-2, 6-2 quarterfinal win over Ekatrina Makarova on Tuesday, she has conceded only nine games in five matches — a record in Australia.

"To be honest, those are not the stats you want to be known for," Sharapova said.

After opening with a pair of 6-0, 6-0 wins, Sharapova thrashed seven-time major winner Venus Williams 6-1, 6-3 in the third round and Belgian Kristen Flipkens 6-0, 6-1 in the fourth.

Li Na has reached the semifinals in three of the last four years at Melbourne Park after beating Agnieszka Radwanska 7-5, 6-3. The 30-year-old Chinese player lost the 2011 final in Australia to Kim Clijsters, then won her breakthrough Grand Slam at the French Open a few months later. She hasn't been back to a major final since.

Djokovic won his first major title in Australia in 2008, then didn't make another final in his next 11 Grand Slam events. He's won four since then and is the top-ranked man in tennis, crediting the lessons from his experiences back then.

"At the start of my career, I went through a lot of different kinds of challenges physically, mentally," he said. "Everybody makes mistakes. I was aware of the fact that I need to improve because I wasn't feeling well, especially in the heat. I had lots of health issues.

"I don't want to go through it again. I am aware of the importance of an everyday practice and recovery basis. So as long as it's like that, I think I'll be all right."

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Walhberg: Boy band union is strong for summer tour

NEW YORK (AP) — For Donnie Wahlberg it’s not a matter of why now, rather “why not?”

The recording artist-turned-actor was referring to the news of a major tour with his New Kids on the Block, who’ll be joined this summer on “The Package Tour” by 98 Degrees and Boyz II Men.

“The state of the boy band union is strong,” Wahlberg joked Tuesday. “Even though technically we’re not really boy bands, but we’re OK with that, so we’ll accept it.”

The three bands sold millions of records in the 1980s and ’90s and helped usher in a wave of vocal groups that continues today.

The Boston-based NKOTB formed in 1984 and amassed ten Top 20 hits. They broke up in 1994 but got back together after a 14-year hiatus. Wahlberg said he feels the break coincided with the maturation of their fan base.

“They needed time to have families and husbands and children and get jobs and live their life,” Wahlberg said.

But now he sees his band’s music as a complement to the fans’ adult lives.

“We created an outlet for them to feel good about themselves and tap into that youthfulness that had been put to bed for a long time … you may be 40, but the euphoria of it makes you feel 14 all over again,” Wahlberg said.

The band also announced a new single, “Remix (I Like The),” which will be released Jan. 28, and a new album, “10,” which is out April 2.

That music will be a bit more mature than some of the band’s previous material, member Joey McIntyre said.

“It is about the decisions that a grown man makes and goes through, as opposed to singing songs like ‘Popsicle,’” he said.

Nathan Morris, one of the members of Boyz II Men, known since the early 1990s for such hits as “I’ll Make Love to You” and “End of the Road,” said the tour is going to be all about performing.

“If the boy band thing is attached, it’s wonderful, but for all of us in here, we’re ready to get out there and sing and perform,” he said. “That’s just what we do.”

Though 98 Degrees is the youngest group on the bill, it has been apart the longest, 12 years.

“So we’re excited to get back together and doing what we do,” member Nick Lachey said. “We feel reinvigorated by our bond and by our group, so we’re very excited by that.”

Wahlberg, who stars as Detective Danny Reagan on the CBS television series “Blue Bloods,” said the boy bands’ tour, kicking off May 31 in Uncasville, Conn., and continuing into July with more than 30 dates, is going to be “great.”

“You have three acts that have lots of records, lots of fans,” he said. “Fans that are anxious to sing those records and anxious to sing other bands’ records, too.”

___

John Carucci covers entertainment for The Associated Press. Follow him at http://www.twitter.com/jcarucci_ap

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