Thursday, December 12, 2013
5:57 PMTwitter makes new highs again as ad product barrage continues
- Following today's gains, Twitter (TWTR +5.7%) is up 23% on the week, and 113% from its $26 IPO price.
- The microblogging service continues to unleash a torrent of new ad products. After launching its Tailored Audiences ad retargeting solution last week and a new TV ad product shortly before that, Twitter has launched Broad Match, an ad product that allows a keyword purchase to cover similar words.
- In addition, the company's MoPub mobile ad network unit has added support for in-stream ads similar to Twitter's Promoted Tweets and Facebook's sponsored news feed ads. The products aims to profit from a general boom in demand for native advertising formats.
- Short-covering could be contributing to this week's gains. As of Nov. 29, 17.8M Twitter shares were shorted; the company sold only 70M through its IPO.
5:33 PMQualcomm COO reportedly added to Microsoft CEO candidate list
- Bloomberg reports Qualcomm (QCOM) COO/chip division chief Steve Mollenkopf has been added to Microsoft's (MSFT) list of potential Steve Ballmer replacements.
- The news service adds Alan Mulally's candidacy "has faded in the last two weeks amid concerns about his lack of technology experience." However, it adds scenarios still exist in which Mulally would get the job, such as one where he grooms an internal candidate (previous).
- MSFT -0.6% AH. All signs suggest the Street would prefer Mulally, reportedly being pressed by Ford about his future plans, to take over the reins at the software giant.
5:00 PMAmazon reportedly taking on Costco, Sam's with bulk goods service
- USA Today reports Amazon (AMZN) is prepping a service that will allow Prime subscribers to place as many consumer goods items as they wish into a set-sized box, provided a weight limit isn't exceeded.
- Sources state the service, called Pantry, will launch next year, feature a small shipping fee, and initially support ~2K items "typically found in the center of grocery stores." It would act as new competition bulk consumer goods sellers such as Costco (COST) and Sam's Club (WMT).
- Amazon appears intent on grabbing a larger share of grocery and consumer packaged goods spending. The company is in the midst of rolling out its AmazonFresh same-day/grocery delivery service in major U.S. metro areas, and its Quidsi unit has rapidly expanded into many consumer/household goods markets.
4:35 PMAdobe +3.9% AH; FY14 guidance light, but long-term forecast strong
- With its near-term results continuing to be pressured by the shift to Creative Cloud subscriptions from up-front Creative Suite licenses, Adobe (ADBE) is guiding for FQ1 revenue of $950M-$1B and EPS of $0.22-$0.28, below a consensus of $1.02B and $0.34. Likewise, Adobe forecasts flat FY14 (ends Nov. '14) revenue growth and EPS of $1.10, below a consensus for 7.8% growth and EPS of $1.60.
- On the other hand, with much of the revenue getting pushed out by the Creative Cloud shift set to be recognized in future years, Adobe expects to see a 20% revenue CAGR from FY14-FY16. The company is also targeting FY15 EPS of $2 and FY16 EPS of at least $3.
- 402K paid Creative Cloud subs were added in FQ4, up from 331K in FQ3, 221K in FQ2, and 153K in FQ1. The total base is now at 1.439M. Creative annual recurring revenue (ARR) rose 41% Q/Q to $768M, and total digital media ARR rose 39% to $911M.
- Thanks to both strong organic growth and the Neolane acquisition, Marketing Cloud (online/mobile ad tech) revenue rose 38% Y/Y to $316.2M (30% of total revenue). That represents an acceleration from FQ3's 28% growth.
- Deferred revenue rose by $94.7M Q/Q to $828.8M, and EPS was boosted by $405M in buybacks.
- CC at 5PM ET. FQ4 results, PR, datasheet, slides
4:13 PMAvon halts $125M SAP implementation, cites user frustration
- Beauty products giant Avon (AVP -1.3%) expects to take a $100M-$125M charge related to the failed rollout of an SAP-based (SAP -0.6%) order management software system. The WSJ states the system was "so burdensome and disruptive to Avon representatives' daily routine that they left in meaningful numbers."
- As Steve Rosenbush notes, Avon's decision, and the employee backlash triggered it, shines a light on how corporate workers are increasingly demanding the business apps they use be as intuitive and user-friendly as the consumer apps they rely upon.
- This trend, which ties into the "consumerization" of IT, poses a challenge to traditional enterprise software giants such as SAP, Oracle (ORCL), and IBM, and often works to the benefit of enterprise cloud software providers whose offerings emphasize ease-of-use and flexibility over the richest possible feature set.
3:43 PMFCC panel votes 3-2 in favor lifting ban on in-flight phone calls, Gogo spikes 3.5%
- An FCC panel votes 3-2 in favor of a proposal to end the ban on in-flight phone calls.
- Shares of in-flight WiFi provider Gogo spiked 3.5% on the news and are now in the green (GOGO +0.6%).
- Another federal agency may have a different view, however. Department of Transportation Secretary Anthony Foxx said in a statement earlier that given the department's role in consumer protection, his agency wants to determine if a lifting of the ban "is fair to consumers." Foxx noted "consternation among travelers, airlines and airline workers."
2:58 PMTSMC slips after providing foundry, chip industry growth outlook
- TSMC (TSM -1.8%), estimated to have ~50% of the global chip foundry services market, thinks the market's growth will slow to 9% in 2014 from 11% in 2013. At the same time, the company thinks total chip industry growth will increase to 5% from 2013's 4%. Trade association WSTS has forecast 4.4% 2013 growth and 4.1% 2014 growth.
- Foundries have been steadily growing their share of chip industry output for years, as the exorbitant cost of building new fabs leads more and more chipmakers to outsource manufacturing. But with dozens of major chipmakers already fully relying on foundries, the market could be hard-pressed to significantly outpace broader industry growth going forward.
- Other foundries: UMC, SMI, TSEM
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
2:34 PMCare.com files public S-1; company looking to raise $80M
- A month after the WSJ reported Care.com had confidentially filed for an IPO, the company has filed a public S-1. Care.com, which acts as a marketplace for hiring nannies and other home caregivers, is looking to raise $80M and trade on the NYSE; no symbol has yet been given. Morgan Stanley, BofA/Merrill, JPMorgan, Allen & Co, and Stifel are the underwriters.
- Over the first nine months of 2013, Care.com had revenue of $59M (+81% Y/Y), and a net loss of $24.7M. Sales/marketing expenses rose 57% Y/Y to $43.9M, and equaled 77% of revenue.
- The company claims 9.5M registered members - 5.1M families and 4.4M caregivers - and has seen an average of 6.4M+ monthly unique visitors in 2013 (over 2.2M via mobile devices). 60% of 2013 job listings have been for part-time services, and 40% for full-time services.
2:08 PMGoogle targets brand advertisers with major display ad pricing change
- Google (GOOG -0.3%) is now allowing auction-based purchases of display ads for the Google Display Network (features 2M+ sites) to be based on how often users view an ad, rather than how often an ad is loaded (CPM-based pricing) or how often it's clicked (CPC-based pricing).
- The Web giant asserts making viewability "a basis for buying, selling and measuring media" will allow brand advertisers to run more creative campaigns, and allow publishers to "more fairly value all of their inventory."
- Wells Fargo agrees: The firm argues Google's move "aligns internet advertising with the foundational measurement standard of all measured media types," and will be well-received by brand advertisers, who often have a harder time than other marketers (such as e-commerce firms) in measuring ROIs for Internet campaigns.
- The pricing policy change follows a Q3 in which Google's ad network revenue only rose 1% Y/Y (compares with 22% growth for Google sites), thanks in large to policy changes meant to create a better user experience.
1:32 PMFCC, U.S. carriers reach phone unlocking deal
- The FCC has reached a deal with major U.S. carriers (VZ, T, S, TMUS) to make it easier for consumers to unlock their phones. The deal will guarantee postpaid users can unlock their phones once their contracts end, and will reportedly also cover some prepaid phones.
- In addition, carriers will have to approve or deny unlocking requests within two business days, and (according to sources) will also have to notify consumers when their phones become eligible for unlocking.
- A big increase in the number of unlocked phones in use could results in higher customer churn, as users no longer find it necessary to buy a new phone and (if they want a subsidy) agree to a new contract to switch carriers. At the same time, it could lower phone subsidy expenses.
- Previous: FCC wants carriers to allow unlocking
1:07 PMSparton acquires electronic controls contract manufacturer Beckwood Services
- Sparton (SPA -0.3%) acquires electronic controls and assemblies contract manufacturer Beckwood Services in an all-cash deal. Terms were undisclosed.
- Beckwood generates annual revenue of $18M. Its customers include Fortune 1000 manufacturers of industrial control systems, measurement/detection equipment, analytical instruments, and military/DHS equipment.
- Sparton expects the acquisition to be accretive to earnings within the first year.
12:47 PMEU to reportedly give Telefonica/KPN deal close scrutiny
- Reuters reports the E.C. will "open an in-depth probe" into Telefonica's (TEF -0.9%) $11.9B cash/stock purchase of KPN's (KKPNF) German unit on Friday, and will reject a German proposal to handle regulatory scrutiny of the deal.
- Many expected the E.C. to closely scrutinize the acquisition, which stands to lower the number of German mobile carriers from four to three (Telefonica/KPN, Deutsche Telekom, and Vodafone). Citi has estimated the deal could produce €4B ($5.5B) in annual synergies.
12:13 PMTelus receives approval for $500M 2014 buyback
- The Toronto Stock Exchange has signed off on a Telus (TU -1.2%) proposal to buy back $500M worth of shares in 2014. (PR)
- The buyback is good for repurchasing 2.6% of the Canadian carrier's shares at current levels. Telus has already bought back $1B worth of shares this year at a weighted average purchase price of $32.07.
11:55 AMSapiens International climbs on William Blair initiation
- Sapiens International (SPNS +3.6%) climbs after William Blair initiates coverage on the Israeli insurance industry software maker at Outperform, helping the stock notch fresh 52-week highs.
- Blair is the third firm out of 3 to issue bullish coverage on the name, the other 2 being Barclays and Needham.