Net neutrality supporters won't like this: The NYT and WSJ report the FCC will propose rules tomorrow that let ISPs charge content providers extra for priority access to their networks. The commission will continue prohibiting ISPs from limiting or blocking individual services.
FCC chairman Tom Wheeler has already hinted the commission could make such a move. Today's reports come after an appeals court threw out the FCC's existing neutrality rules in January; Netflix (NFLX) shares fell on the ruling.
Netflix, which accounts for a giant chunk of downstream U.S. broadband traffic, recently joined other Internet giants in paying direct peering fees to Comcast; that quickly led to a big improvement in Comcast's Netflix streaming speeds. But Reed Hastings has made it clear he's not thrilled with the deal, and wants tougher neutrality laws imposed.
Over 200M of Facebook's (FB) 1.28B MAUs use Facebook Messenger, Mark Zuckerberg shares on the Q1 CC. That figure, which comes as Facebook begins requiring mobile users download the standalone Messenger app to use it, suggests Messenger's user base is on par with Instagram's and ~40% of WhatsApp's. (CC live blogs I, II)
Outgoing CFO David Ebersman notes headcount rose 39% Y/Y in Q1, and expects GAAP costs/expenses will grow 35%-40% in 2014; GAAP growth was 32% in Q1, and non-GAAP growth 26%.
Ebersman also warns Y/Y ad sales growth (+82% Y/Y in Q1) will slow meaningfully going forward. Facebook's 2014 revenue growth consensus (also accounts for payments/other revenue) was at 44.6% going into earnings.
Sheryl Sandberg cautions Facebook's auto-play video ads (launched last month amid high expectations) won't be a major contributor this year. On the other hand, she notes use of Facebook's custom targeting ad tools has grown 10x Y/Y, boosting ROI (and with it, ad prices).
Though accounting for just 16% of Facebook's MAU base, North America produced 47% of Facebook's Q1 revenue, down just slightly from Q4's 48%. Facebook's North American ARPU ($5.85, up $2.35 Y/Y) remains well above its ARPUs for Europe ($2.44, up $0.84), Asia ($0.93, up $0.29), and elsewhere ($0.70, up $0.20).
EROC says the FTC's request for additional information concerning the midstream sale has extended its original timeframe for closing the transaction and created the need to preserve greater liquidity in the interim to fund growth capex and other financial obligations.
EROC expects Q1 higher distributable cash flow than in Q4 2013, but says it may need to amend its credit facility if the sale does not close by the close of Q2.
Texas Instruments (TXN) expects Q2 revenue of $3.14B-$3.4B and EPS of $0.55-$0.63, largely above a consensus of $3.15B and $0.52. Shares +3.4% AH. (Q1 results, PR)
Xilinx (XLNX) expects FQ1 revenue to be flat to up 4% from an FQ4 level of $617.8M. That implies a midpoint of $630.2M, below a $638.4M consensus. Shares -5.1% AH. Rival Altera (ALTR) -4% ahead of tomorrow's FQ1 report. (FQ4 results, PR)
ServiceNow (NOW) expects Q2 revenue of $160M-$162M and full-year revenue of $652M-$657M, above consensus forecasts of $156.7M and $644.2M. Shares -1.6% AH. (Q1 results, PR)
GE names former Vanguard mutual fund group chairman John Brennan as lead independent director on its board, a potential signal that the company is listening to shareholders as it seeks to restore its share price from its plunge during the financial crisis.
The elevation of an investor representative to a board leadership position puts GE "in the distinct minority" among large companies, said Ann Yerger, executive director of the Council of Institutional Investors, praising the move that "bring(s) a perspective that isn't always in abundance on boards."
Core Laboratories (CLB) -4.5% AH after reporting Q1 earnings and revenues that came in below Street expectations.
Reservoir Description operations, which focus primarily on offshore complex crude oil projects, posted Q1 revenues of $125M, up slightly from a year ago but less than expected as several deepwater projects were delayed because of projected cost overruns precipitating redesign of production facilities; operating margins rose 40 bps to ~28%.
Production Enhancement operations, which focus primarily on North American tight oil plays, posted Q1 revenues of ~$110M, up 3% Y/Y but lower than expected because of weather disruptions to tight oil operations and delays in deepwater Gulf of Mexico projects; operating margins rose 270 bps to ~35%.
Sees Q2 EPS of $1.48-$1.53 vs. analyst consensus estimate $1.54 and revenue of $280M-$286M vs. consensus $290M; sees FY 2014 EPS of $6.00-$6.25 vs. consensus $6.24 and revenue of $1.155B-$1.175B vs. consensus $1.176B.
Apple (AAPL) aims to deliver annual dividend hikes going forward, new CFO Luca Maestri states on the CC. With the company's domestic cash balance now at $18B, Apple will once more tap debt markets to help pay for its dividend and freshly-expanded buyback program. (CC live blogs: I, II)
Tim Cook partly attributes FQ2's soft iPad sales to inventory changes; slowing tablet market growth might also be playing a role. iPad ASP was at $465, up from $440 in FQ1 and and $439 in FQ4 (suggests a mix shift towards the iPad Air).
Healthy emerging markets demand contributed to iPhone strength - BRIC sales hit a record, thanks in part to China Mobile. iPhone ASP came in at $596 vs. $637 in FQ1 and $577 in FQ4; Maestri suggests a mix shift towards the 4S contributed to the Q/Q drop.
Cook states Apple has bought 24 companies in the last 18 months - some are known to the public, but not all - and is "on the prowl" for deals. "We look for companies that have great people and great technology and that fit culturally and we don’t have a rule that says we can’t spend a lot or whatever."
Also: 1) Angela Ahrendts will begin working as Apple's retail chief next week. 2) 20M Apple TVs have now been cumulatively sold. 3) Roughly half of all iPhone buyers and 2/3 of iPad buyers were new buyers of the respective products. 4) There are now nearly 800M iTunes accounts. Will credit cards linked to them be leveraged for a payments service?
Liveris said Dow had learned lessons from Loeb’s criticism, such as the need to be more transparent about its business, but still rejected his call for a breakup, saying he lacked the management’s “sheer weight of knowledge” about how the company earns its profits.
The CEO also confirmed Dow is committed to a more active sale program than it proposed last year, and now plans to sell businesses worth $4.5B-$6B by the end of next year, including ~$800M of sales already announced.
TriQuint (TQNT) expects Q2 revenue of $215M-$225M and EPS of $0.06-$0.08, above a consensus of $200.3M and $0.04. Shares +6.5% AH. Merger partner RF Micro (RFMD), which reports on April 29, is up 3.1%. Both companies might also be getting a lift from Apple's March quarter iPhone sales print. (Q1 results, PR)
Fortinet (FTNT) guides in its earnings slides (.pdf) for Q2 revenue of $169M-$172M (above a $168.9M consensus), EPS of $0.10 (below an $0.11 consensus), and billings of $185M-$190M (+17% Y/Y). Q1 billings totaled $188M, +26% Y/Y and well above guidance of $168M-$173M. Shares +4.4% AH. (Q1 results, PR)
Crown Castle (CCI) has raised its full-year AFFO forecast to $1.346B-$1.361B ($4.04-$4.08/share) from a prior $1.318B-$1.333B. Site rental revenue guidance has been raised by $11M to $2.983B-$2.993B. (Q1 results, PR)