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  • IBM To Discontinue Selling NetApp Storage Products
    Thu, May. 29 NTAP 2 Comments

    Summary

    • Earlier this week, IBM announced its decision to stop sourcing and reselling NetApp's N series products from May 27 onwards.
    • A continued slump in its hardware sales coupled with a declining market share in the storage hardware market led IBM management to make this decision.
    • Still, NetApp is likely to continue to witness growth from its non-product based revenue streams such as software entitlements and maintenance and hardware maintenance contracts.
  • Factors That Can Lower Our Valuation For Cree By 30%
    Thu, May. 29 CREE 13 Comments

    Summary

    • Cree's stock price has declined by more than 20% year-to-date.
    • The rising proportion of lighting sales puts pressure on Cree's overall gross margin as lighting products offer lower profit margins compared to LED devices.
    • However, with $1.1 billion in cash and no debt, the company has a strong balance sheet, which gives it the ability to invest in growing its business.
  • Microsoft Strengthens Its Hardware Vertical With Surface 3 Launch
    Wed, May. 28 MSFT 22 Comments
  • New Products To Expand TI's Presence In The Growing Embedded Market
    Wed, May. 28 TXN Comment!

    Summary

    • TI has been focusing on transitioning its operations to become a pure analog and embedded processing company.
    • The company is one of the leading player in the analog semiconductor market and derives over 60% of its revenue from this division.
    • TI plans to reduce investment in certain embedded processing product lines that either have matured or do not offer the return opportunities it is looking for.
  • EMC Acquires Chip-Maker DSSD To Boost Flash Portfolio
    Wed, May. 28 EMC Comment!

    Summary

    • The acquisition should help the company improve its flash portfolio by providing new technology for pooling server-based flash which will be used to access Big Data.
    • Sustained growth in emerging storage products could help the company meet its top line guidance.
    • EMC has had success with acquisitions in the past, including VMware. The company's acquisitions are currently fast-growing and profit-generating businesses.
  • Will Amazon Have A Tough Time In India?
    Wed, May. 28 AMZN 3 Comments

    Summary

    • While India presents a growth opportunity for Amazon, lack of foreign direct investment in retail and local consolidation could prove challenging.
    • Still, Amazon has the financial muscle and expertise to create a formidable presence in the region.
    • The retail market in India stands at over $350 billion and is growing at a healthy compounded annual growth rate of 15-20%.
  • Intuitive Surgical: New Products Offer Little Help As Future Uncertainties Remain
    Tue, May. 27 ISRG 12 Comments

    Summary

    • Intuitive Surgical has faced significant headwinds in the past year owing to several factors.
    • Considering concerns surrounding its da Vinci system, Intuitive Surgical lowered its guidance for growth in the number of procedures from 9-12% to 2-8% for 2014.
    • Although market concerns are likely to continue to weigh on its performance in the near term, we expect the company to gradually benefit from sales of its new products.
  • Is Spotify A Threat To Pandora?
    Tue, May. 27 P 13 Comments

    Summary

    • Spotify reported that it has crossed the milestone of 10 million paid subscribers.
    • In the U.S., the company is estimated to have around 3 million paying subscribers, which is slightly below that for Pandora.
    • Still, Pandora's brand catalog of user-created stations and device reach have found a strong reception among customers.
  • Increasing Investment In China Can Help Expand Intel's Mobile Presence
    Tue, May. 27 INTC 8 Comments
  • NetApp Earnings: Storage Slump Continues, Services Drive Growth
    Fri, May. 23 NTAP Comment!

    Summary

    • The company reported an 8% year-over-year decline in its storage product revenues to just over $1 billion.
    • However, revenues generated by NetApp's services division grew by almost 8% over the year ago period to $378 million.
    • We expect NetApp to gradually gain market share in the storage hardware market.
  • Trina Solar Has A Solid Q1 On Better Costs And Pricing
    Fri, May. 23 TSL 1 Comment

    Summary

    • The strong results were primarily driven by improved sales into high priced markets such as Japan and the United States, as well as better cost management.
    • That had a positive impact on the company's average selling prices and revenues, since prices in Japan and the United States are comparably higher than in China.
    • For the second quarter, the company expects to ship 950 MW to 1,010 MW of modules.
  • HP Earnings: Cost Restructuring Takes Center Stage As Revenues Remain Tepid
    Fri, May. 23 HPQ 5 Comments

    Summary

    • HP's revenues declined by 1% year-over-year to $27.3 billion, albeit at a slower pace.
    • As part of its cost restructuring, HP said a reduction in workforce will reach 41,000 employees by the end of 2014 and will likely total 45,000 to 50,000 by 2015.
    • The company expected this to create additional run-rate savings in fiscal 2016 of approximately $1 billion per year.
  • Medtronic Reports Modest Revenue Growth But Litigation Hurts Profits
    Thu, May. 22 MDT 2 Comments

    Summary

    • Medtronic's recently reported fourth-quarter fiscal 2014 results reflected operational revenue growth of 3.3% year-over-year to about $4.57 billion.
    • Medtronic also announced it had negotiated a settlement with Edwards Lifesciences over their patent infringement legal dispute concerning its CoreValve device.
    • As part of that litigation, Medtronic incurred a one-time charge of $589 million in the fourth quarter, increasing its total expenses over 23% y-o-y to about $4.1 billion.
  • Why Micron's Stock Price Doubled In The Last Year
    Thu, May. 22 MU 29 Comments
  • Perfect World Posts Strong Growth Despite Lowered Promotional Activity
    Thu, May. 22 PWRD 1 Comment

    Summary

    • The company generated $143 million in revenue from online games in Q1 2014.
    • Although revenues were down by about 2.5% sequentially, we believe the performance was still impressive given that annual growth was 44%.
    • The company generated $7.3 million in licensing revenues in Q1, nearly even with the prior quarter.
    • Licensing revenues will remain close to this level in coming quarters, as the company expands into international markets, which will cannibalize licensing activity.
  • AT&T-DirecTV Deal Could Provide Financial, Strategic Benefits If Approved
    Wed, May. 21 T, DTV 2 Comments

    Summary

    • The deal will provide AT&T an opportunity to rapidly expand TV services along with its wireless and broadband services.
    • In addition to the strategic benefits, AT&T was likely drawn to DirecTV's significant cash flows.
    • The deal also is expected to help AT&T enter into lucrative markets in Latin America, where DirecTV is the leading pay-TV provider with over 18 million subscribers.
  • Salesforce.com Earnings: Revenue Growth Strategy Continues To Trim Margins
    Wed, May. 21 CRM 3 Comments

    Summary

    • Quarterly revenues reached approximately $1.28 billion for the company, with $1.15 billion recognized from its subscription and support business.
    • The subscription and support business is Salesforce's largest division, and the company has been reinvesting aggressively to accelerate its revenue growth rate.
    • Revenues from its professional services business, which include various consulting and other training services to its customers, expanded 58% on a year-on-year basis.
  • Focus On China To Expand Broadcom's Wireless Business
    Wed, May. 21 BRCM Comment!

    Summary

    • China accounts for more than 90% of Broadcom's exports.
    • The issuance of 4G licenses, promotion of the Broadband China project and popularization of HD videos provide significant growth opportunities in the region.
    • Broadcom has been focusing on building relationships with low-cost smartphone makers in China.
  • NetApp Earnings Preview: Slowdown In Storage Hardware Sales Could Weigh On Results
    Tue, May. 20 NTAP Comment!

    Summary

    • Storage hardware product sales declined by 3% across the industry in 2013.
    • EMC reported a decline in its storage products revenues - a trend which is likely to be seen in NetApp's earnings as well.
    • On the other hand, NetApp's maintenance revenues (both software and hardware) could continue to grow on the back of a solid customer base.
  • Demand For Higher-Generation Glass Substrates Will Drive Corning's Display Volumes
    Tue, May. 20 GLW 1 Comment

    Summary

    • Since 2011, declining LCD prices for Corning have taken a toll on the segment's revenues, which dropped to $2.54 billion in 2013.
    • In coming years, Corning will benefit from the growing demand for higher-Generation (larger-sized) glass substrates from device manufacturers.
    • Additionally, demand for LCD TVs, PC monitors, mobiles and tablets, especially with larger screen sizes, will continue to drive display volumes at Corning.
  • Best Buy Earnings Preview: Key Initiatives That Will Drive Growth
    Tue, May. 20 BBY 3 Comments

    Summary

    • After witnessing a significant decline in its top line in fiscal 2013, the company saw its growth re-accelerate in fiscal 2014 as it benefited from its restructuring initiative.
    • Accelerating growth in its online segment remains one of the main focuses for the company.
    • The company also is emphasizing dedicated selling space For Microsoft, Apple and Samsung products.
  • Xiaomi Launches World's First Tablet Based On Nvidia's Tegra K1
    Tue, May. 20 NVDA Comment!

    Summary

    • Nvidia believes that Tegra K1 will help the company set new mobile standards by supporting the latest PC-class gaming technologies on the mobile platform.
    • The Xiaomi MiPad will be available in China starting in June as an open beta.
    • Nvidia will benefit from Xiaomi's dominance in the Chinese smartphone market as well as its potential growth in the tablet market.
  • Lexmark Set To Acquire Swedish Company ReadSoft
    Mon, May. 19 LXK Comment!

    Summary

    • ReadSoft will be integrated with Perceptive Software, and this will give Lexmark a foothold in the fast growing content and business process management market in Europe.
    • The Perceptive Software division is the company's second biggest business unit and makes up over 10% of Lexmark's estimated value.
    • Perceptive experienced annual growth of 53% in 2013 and reported $239 million in revenues for FY13.
  • Rising Weibo Monetization Bodes Well For Sina's Advertising Business
    Mon, May. 19 SINA Comment!

    Summary

    • According to a pre-announcement from Sina, net revenues for Q1 should come in at about $171 million.
    • The figures include $135 million from advertising and $36 million from non-advertising, representing an annual increase of 36%.
    • We believe Weibo will continue to be the biggest contributor to Sina's growth, at least in the near-term.
  • Cisco Continues To Face Top Line Challenges But Upbeat Order Growth A Good Sign
    Fri, May. 16 CSCO 7 Comments

    Summary

    • Cisco saw revenues drop year-over-year by 5.5% as sustained weakness in emerging markets and sluggish spending by service providers weighed on results.
    • The company was able to offset some of the pressure with a strong showing in the U.S., where both commercial as well as enterprise orders grew by over 10% y-o-y.
    • Cisco seems well positioned to reclaim some of its lost market share as the strong order flow translates into revenues, possibly toward the back half of the year.
  • Salesforce.com Pre-Earnings: Expect Top Line Acceleration, Margin Contraction
    Fri, May. 16 CRM Comment!

    Summary

    • Revenues for the company have seen tremendous growth, registering an annualized growth rate exceeding 30% since 2008.
    • This high growth $4 billion software company also is aggressively investing in its business.
    • Salesforce.com recently announced a strategic shift to offer specific solutions across industry verticals, a move that may depress operating profit margins.
  • Higher Semiconductor And Display Spending Drives Applied Materials' Growth In Q2
    Fri, May. 16 AMAT 1 Comment

    Summary

    • Operating profit exceeded 20% of revenue for the first time in nearly three years and earnings per share increased 75%, significantly outpacing revenue growth.
    • The company generated orders of $2.63 billion in the quarter, up 15% from Q1 2014, led by growth in display and silicon systems.
    • Growing TV demand and mobile investments are two key factors driving growth in the company's display segment.
  • Microsoft's Office For iPad Gains Traction
    Thu, May. 15 MSFT 10 Comments

    Summary

    • The Office For iPad suite, which includes Word, Excel and Power Point, has hit the 27 million download mark.
    • The Office productivity suite is Microsoft's biggest revenue driver and makes up 40% of its estimated value.
    • We think Microsoft can boost its revenues by seamlessly integrating its other products with Office and offering these bundled services to iPad users.
  • F5 Networks: Increased Focus On Security Solutions To Drive Growth
    Thu, May. 15 FFIV 1 Comment

    Summary

    • F5′s security and service provider business was an important growth driver behind its strong performance in Q2 2014.
    • The company's partnership with VMware will enhance its network and security program.
    • F5 claims that is has started to see sales wins for its Versafe services, a business it acquired in 2013.
  • How AMD's Market Share Can Rise To 30% After The MacPro Deal
    Thu, May. 15 AMD 24 Comments

    Summary

    • Competitive pricing and improving hardware has helped increase AMD’s professional graphics market share.
    • In December last year, Apple announced that it is using AMD’s dual FirePro professional graphics solutions in its new Mac Pro.
    • The deal could increase AMD’s professional GPU market share to 30% by the end of 2014.
  • Factors Responsible For Our $95 SAP Price Estimate
    Thu, May. 15 SAP Comment!

    Summary

    • We believe the company's management team has the capability to drive revenue growth and execute margin expansion through fiscal 2017.
    • Subscription-based deployments, including software solutions such as Business Suite and Business Warehouse, and the HANA in-memory database module, should resonate well with customers.
    • Margin targets are expected to be met thanks to lower cost of revenues and a realigned business structure to accommodate the shift to cloud offerings.
  • Netflix: The Impact Of The Recent Price Rise
    Wed, May. 14 NFLX 8 Comments

    Summary

    • Netflix recently raised the monthly price for its streaming service in the U.S. by $1.
    • We believe that, unlike in 2011, when abrupt price changes led to a loss of customers, the price increase won't impact the company’s subscriber growth.
    • Our analysis shows that Netflix can add roughly $500 million in annual incremental revenues in the U.S. alone by 2017 with this move.