Today - Wednesday, October 7, 2015
- Samsung Electronics (OTC:SSNLF) shares surged the most in more than two years today after the tech giants's Q3 guidance blew past expectations, suggesting the company is getting back on track after a number of weak quarters.
- Samsung estimated its operating income rose 79.8% on year to 7.3T won ($6.29 B), as a renewed reliance on its semiconductor business offset weak performance at its smartphone division.
- Samsung Electronics +8.7% to 1.251M won.
Tuesday, October 6, 2015
- Following its FQ3 miss, YUM expects FY15 (ends in early December) EPS growth to be in the low-single digits, below prior guidance of "at least" 10%. Consensus is for EPS to rise 14% to $3.51.
- "[T]he pace of recovery in our China Division is below our expectations," says CEO Greg Creed. Pizza Hut Casual Dining was particularly weak. Yum now expects low-single digit negative FY15 Chinese same-store sales growth, with mid-single digit positive FQ4 growth.
- China division sales rose 8% Y/Y in FQ3 (year-ago sales were weak on account of the OSI scandal), with units rising 7% and same-store sales 2%. Division restaurant margin rose 470 bps to 19.6%, and op. profit 62% to $327M. A new China chief was appointed in August.
- India was also soft: System sales fell 9% as an 18% drop in same-store sales offset 10% unit growth. The India division had an $8M op. loss vs. $3M a year ago.
- Globally, system sales rose 6%, and restaurant margin 330 bps to 18.2%. KFC Division sales +6% (3% same-store growth); Pizza Hut +2% (1% same-store growth); Taco Bell +7% (4% same-store growth).
- Company sales rose 3% to $3B; franchise and license fee revenue fell 1% to $459M. Total costs/expenses fell 1% to $2.8B. $370M has been spent year-to-date in FY15 to repurchase 4.5M shares at an average price of $82.
- Yum has tumbled to $69.41 after hours.
- FQ3 results, PR
- Ahead of an analyst meeting at its annual Adobe MAX conference, Adobe (NASDAQ:ADBE) has guided for FY16 (ends Nov. '16) revenue of $5.7B and EPS of $2.70, below a consensus of $5.93B and $3.19.
- The company forecasts a 20% revenue CAGR, 25% op. cash flow CAGR, and 30% EPS CAGR from FY15 to FY18.
- Digital Media (Creative Cloud, Document Cloud) and Marketing Cloud (online ad software) revenue are both expected to rise 20% in FY16, with Marketing Cloud bookings rising 30% and Digital Media annualized recurring revenue (ARR) 25%.
- Digital Media revenue, Marketing Cloud revenue, and Digital Media ARR are each expected to see 20%+ CAGRs from FY15 to FY18. Marketing Cloud bookings are expected to see a 30% CAGR.
- Shares have tumbled to $77.97 after hours. The analyst meeting starts at 5PM ET (webcast).
- Update (5:33PM ET): Adobe is now only down 2.5%.
- The Female Health Company (FHCO +7.5%) sees FC2 (female condom) unit sales of 61M for its fiscal year ended September 30 (FY15), up 43% over FY14's 42.5M units. It expects 13.7M units (+41%) in FQ4.
- Consensus view revenue for FY15 and FQ4 is $29.7M and $4.8M, respectively.
- Full results will be reported on December 1.
- Skyworks (NASDAQ:SWKS) has tumbled towards $75 after announcing it's buying storage and telecom IC vendor PMC-Sierra (NASDAQ:PMCS) for $2B in cash on hand. (PR)
- Fellow RF chipmaker Avago (AVGO -6.7%), which (thanks to the LSI acquisition) competes against PMC-Sierra in the storage controller market, is also off, as is merger partner Broadcom (BRCM -3.2%), which competes against PMC to an extent in the telecom IC and network processor markets. RF peer Qorvo (QRVO -3.3%) is also getting hit. The Nasdaq is down 1.2%.
- Possibly hurting the group: Skyworks has used the PMC deal to announce it expects FQ4 (calendar Q3) revenue of $880M and EPS of $1.52. That's slightly above prior guidance of $875M and $1.51 and a consensus of $876M and $1.51, but expectations have been high following a long string of beat-and-raise quarters.
- The PMC acquisition expands Skyworks' reach to a slew of non-RF chip markets and enterprise/telecom infrastructure end-markets. It's expected to yield $75M in cost synergies within 12 months of closing (expected in 1H16), and subsequently boost Skyworks' annual EPS by $0.75. Assuming that target is hit, Skyworks is paying 14x forward EPS.
- Update (1:04PM ET): BofA/Merrill is defending Skyworks and Avago, arguing forward P/Es of less than 10 make shares very cheap.
- Update 2 (5:01PM ET): The group staged a comeback in afternoon trading. Skyworks closed down 1.4%, Avago 3.4%, Qorvo 1.1%, and Broadcom 1.6%. The Nasdaq closed down 0.7%.
- PepsiCo (NYSE:PEP) reports organic revenue rose 7.4% in Q3.
- Foreign exchange translation negatively impacted revenue by 12%.
- Revenue by segment: Frito-Lay North America: $3.56B (+1%); Quaker Foods North America: $583M (-0.5%); Latin America: $2.28B (-5%); North America Beverages: $5.36B (+4%); Europe Sub-Saharan Africa: $2.92B (-23%); AMEA: $1.63B (-7%).
- Frito-Lay North America operating profit grew 6% to $1.09B.
- North America beverages operating profit +14% to $860M.
- Total core gross margin increased 120 bps to 54.8%.
- Total core operating margin expanded 60 bps to 17.7%.
- FY2015 Guidance: Organic revenue: mid-single-digit growth; Core tax rate: ~25%; Core EPS: +9%; Net capital expenditure: ~$3B; Cash flow from operating activities: over $10B; Free cash flow: more than $7B; Productivity savings: ~$1B.
Monday, October 5, 2015
- Radware (NASDAQ:RDWR) now expects Q3 revenue of $48M and EPS of $0.10, below prior guidance of $57M-$59M and $0.23-$0.24, and a consensus of $$58M and $0.24.
- No explanation has been given in the PR for the shortfall. A conference call will be held at 8:45AM ET tomorrow (webcast).
- Shares have fallen to $15.97 after hours. The 52-week low is $15.70.
- In late July: Radware tumbles after Q2 miss, soft guidance
- CEVA now expects Q3 revenue of $16.2M, above prior guidance of $15M-$16M and a $15.4M consensus. EPS is expected to top prior guidance of $0.14-$0.16; consensus is at $0.15. (PR)
- The company cites "robust licensing demand" across its IP portfolio, and growing shipments of 4G smartphones containing chips featuring CEVA's DSP cores.
- Shares are at their highest levels since June. Full Q3 results are due on Nov. 2.
Sunday, October 4, 2015
Friday, October 2, 2015
- Micron (NASDAQ:MU) remains up strongly after beating FQ4 estimates and issuing soft FQ1 guidance against a backdrop of low expectations. NAND flash rival SanDisk (NASDAQ:SNDK) is also rallying.
- A slew of firms with Micron targets in the $20s or higher have cut them, while reiterating bullish ratings. Credit Suisse's John Pitzer (Outperform, target cut by $9 to $25) thinks the fact Micron is staying profitable during a downcycle trumps near-term negatives. "While we remain concerned with F2Q (Feb) – (1) seasonally weaker pricing, (2) mobile mix (72% of Op Profit) weakens post iPhone 6s builds, and (3) Company specific operational improvements still geared more toward F3Q (May) – we see trough EPS ABOVE break-even ... and SIGNIFICANT Company specific drivers in F3Q – full impact of 20 nm cost downs and Inotera pricing agreement. While fundamentals are not great, trough EPS above break- even would be definitive proof of a structurally better industry."
- Susquehanna's Mehdi Hosseini (Positive) offers a similar brand of cautious optimism. "Our expectation is for NAND ASP declines to exceed that of DRAM. However, if MU can execute on cost reductions ... we possess line-of-sight to a bottoming of margins in the Nov-Feb timeframe ... we believe the risk/reward profile remains favorable at current levels, as our “worst-case” EPS scenario (~$0.90-$1.00 in annual EPS), combined with a 10x P/E would suggest ~$4-$5 downside risk from current levels, while we view upside to our PT at $7-$8." Deutsche's Sidney Ho (Buy) thinks "potential capex cuts by memory suppliers (esp Samsung) should lead to better supply-demand next year."
- Nomura's Romit Shah (Neutral): "We continue to see the bottom in Feb-qtr, as we leave our seasonal decline unchanged -5% Q/Q vs. cons. of up slightly. We see stronger leverage in 2HF16 driven by more rationale supply (potentially helped by Samsung) and a more optimized cost structure in DRAM (mainly 20nm crossover) and NAND (TLC, XPoint)."
- On the earnings call (transcript), president Mark Adams stated mobile made up a low-30s % of DRAM revenue, PCs low-20s, servers low-to-mid 20s, and specialty DRAM (GPUs, autos, networking, etc.) low-20s. Consumer products (cards, USB drives, components) made up ~40% of trade non-volatile memory revenue, mobile low-20s, SSDs mid-teens, and embedded markets (autos, industrial, etc.) also mid-teens.
- Micron's FQ4 results, guidance/details
Thursday, October 1, 2015
- Autobytel (NASDAQ:ABTL) has acquired AutoWeb, owner of an search engine/marketplace linking car buyers with dealers/OEMs, and monetized on a pay-per-click basis. AutoWeb CEO Matias de Tezanos is joining the board, as is AutoWeb president Jose Vargas and director Robert Mylod.
- Autobytel, which previously owned 15% of AutoWeb, is issuing 170K series B junior convertible preferred shares, and warrants for 150K series B preferred shares. Each series B preferred share is convertible into 10 shares of common stock. The warrants have an exercise price of $184.47, and become exercisable 3 years after issuance "in three tranches based on the performance of the closing price of the company common stock during the term of the warrants."
- The company asserts AutoWeb's provides "a sophisticated analytics platform with data methodologies that provide insights into consumer shopping and purchasing behavior" and a "world-class technology development team with proven expertise in the clicks and display ad marketplaces," and "further expands Autobytel's suite of dealer offerings, including TextShield, SaleMove and GoMoto."
- Autobytel now expects Q3 revenue of $39M, above a $37.6M consensus. With AutoWeb on the books, 2015 revenue has been hiked to $132M-$134M from a prior $128M-$132M. EPS guidance has been cut to $1.17-$1.23 from $1.21-$1.27 due to the dilution produced by the acquisition. AutoWeb is expected to be accretive to EPS in 2016.
- With expectations fairly low going into its FQ2 report, CalAmp (NASDAQ:CAMP) has jumped to $17.05 after hours after beating estimates with the help of a 23% Y/Y increase in wireless datacom revenue to $61.8M - growth slightly improved from FQ1's 21% - and offering in-line FQ3 and FY16 guidance.
- Datacom sales benefited from strong demand for CalAmp's mobile resource management (MRM) hardware and software offerings from fleet-management and asset-tracking clients, as well as for its wireless networking products. Satellite revenue fell 11% Y/Y to $8M. However, both datacom and satellite sales are expected to be "solidly higher" Q/Q and Y/Y in FQQ3.
- Financials: Gross margin rose 20 bps Q/Q and 160 bps Y/Y to 36.2%. GAAP operating expenses rose 12% Y/Y to $17.4M. CalAmp ended FQ2 with $217.7M in cash/marketable investments, and $136.7M in debt.
- CalAmp's results/guidance, PR
- In addition to missing FQ3 revenue estimates (while beating on EPS), Progress Software (NASDAQ:PRGS) is guiding for FQ1 revenue of $113M-$118M, below a $121.6M consensus. EPS guidance is healthier: $0.47-$0.51 vs. a $0.47 consensus.
- The enterprise software firm has also announced a $100M buyback, good for repurchasing 9% of shares at after hours levels.
- No explanation is given in the FQ3 report for the sales miss or guidance. License revenue rose 21% Y/Y to $31.8M; maintenance/services revenue rose 19% to $62.8M. GAAP operating expenses rose 36% Y/Y to $70.9M. Progress ended FQ3 with $218M in cash, and $144M in long-term debt. The deferred revenue balance stood at $131M.
- Shares have fallen to $22.29 after hours.
- FQ3 results, PR
- While it beat FQ4 estimates, Micron (NASDAQ:MU) has guided on page 20 of in its earnings slides (.pdf) for FQ1 revenue of $3.35B-$3.6B and EPS of $0.20-$0.26, below a consensus of $3.74B and $0.38. However, much has been priced in over the last several months.
- FQ4 performance: DRAM bit shipments -1% Q/Q, ASP -7% (in-line with guidance), cost/bit +3%. Non-volatile memory (primarily NAND, with some NOR included) bit shipments -6%, ASP -1% (close to NAND ASP guidance), cost/bit -1%. DRAM was 60% of revenue, non-volatile memory 32%, and other 4%.
- Financials: Gross margin fell to 27% from 31% in FQ3 and 30% a year ago; FQ1 non-GAAP GM guidance is at 24.5%-27%. GAAP SG&A spend fell by $10M to $170M; R&D rose by $21M to $379M. Micron ended FQ4 with $5.6B in cash/marketable investments, and $7.3B in debt.
- The company states DRAM end-market demand is healthy in non-PC markets, and that NAND demand is relatively stable. "We expect the demand environment to stabilize and improve as we move through calendar 2016 ... We expect industry supply and demand for both DRAM and NAND to be relatively balanced in 2016."
- Shares have risen to $15.76 after hours.
- Micron's FQ4 beat, PR
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