Friday, July 31, 2015
- Film content distributor Cinedigm (NASDAQ:CIDM), up 1.1% after hours, has settled a dispute with activist investors by co-opting one of them as a strategic adviser and agreeing to four additional board members.
- The move expands the board to 12 members from eight. Investor Ronald Chez will officially advise the company as a result of Cinedigm's action.
- Chez and Zvi Rhine have pressed Cinedigm to take drastic measures to turn around its fortunes, as it risks delisting from Nasdaq. The company has a market cap of $47M, lost $11M in its most recent quarter, and closed today at $0.632/share.
- Chez and Rhine asked to join the board, with Chez as chairman; of the two, however, only Rhine is joining the board, along with Blair Westlake, Andy Schuon and Patrick O'Brien.
- Cinedigm is evaluating candidates to become an independent chairman, replacing current chairman and CEO Chris McGurk.
- After five weeks of closure, the Athens stock exchange will reopen on Monday, after what seems like a geological time frame's worth of developments in Greek solvency.
- After the government's compromise with creditors, investors say it will take some time, likely months, before the companies there can raise money internationally.
- “The Greek crisis has had an adverse impact on all sectors of the economy,” said Apostolos Gkoutzinis of law firm Shearman & Sterling.
- The Luxembourg stock exchange lifted a suspension on trading of Greek bonds a week ago.
- GREK +2.6% today, though still down 21.7% over the past three months. The National Bank of Greece (NYSE:NBG) gained 6% today (and is down 19.9% over the past month).
- Related tickers: OTC:ALBKY, OTC:BPIRY, OTC:EGFEY
- Previously: IMF drops bombshell on Greece (Jul. 31 2015)
- Previously: Greece, creditors begin talks to secure bailout deal (Jul. 28 2015)
- For the second quarter in a row, LinkedIn (NYSE:LNKD) fell hard post-earnings. Evercore and Avondale Partners downgraded to neutral ratings, while various other firms defended the company.
- Evercore's Ken Sena notes LinkedIn's 2H15 sales (officially guided above consensus) were guided down if one excluded an accounting benefit related to the Lynda.com acquisition. "The reasons for the company’s more conservative outlook have mostly to do with limited visibility on its Marketing Solutions line, where it continues to make a transition away from higher-priced premium display to feed-based and more performance-based ads."
- Though Sena thinks the ad transition can be managed, he declares "the combination of another FY effective guide down, a steep deceleration in the company’s 2Q sequential user growth (measured on unique visitors), and margins showing compression (with and without Lynda) leads [Evercore] to move to the sidelines on shares." He also compared LinkedIn's ad challenges to Twitter's.
- BGC's Colin Gillis, on the other hand, considers ad concerns overblown in light of the strong performance of LinkedIn's Sponsored Updates ads. "[D]isplay advertising is approximately 3% of overall revenue, and in our view its low quality revenue ... The irony is that the marketing solutions business that contains display advertising is the only business segment that accelerated its growth in the June quarter, growing at 32% YoY compared to 24% growth in the June 2014 quarter."
- Jefferies' Brian Pitz also sees reasons to stay bullish. "The company is still early in large market opportunities, including Sales Navigator, Lead Accelerator, Bizo and Lynda ... The company saw dramatic improvements in Sales Navigator customer satisfaction as well as higher than expected customer renewal at the higher Sales Navigator prices implemented this year.”
- Q2 results/Q3 guidance, details, CC transcript
- Giants Exxon Mobil (XOM -4.5%) and Chevron (CVX -4.9%) finished significantly lower at the close after each attempted a midday rally, in the wake of earnings misses marked by the continuing crude supply glut and price pressure.
- Oil ETFs fared not much better today: USO -3.2%, OIL -3.7%.
- Producers have key differences that make for advantages and disadvantages, like Chevron's downstream cushion. Exxon's edge over Chevron, Liam Denning notes: M&A. Its stock is down just 19% over the past year while the sector has tumbled 47%.
- As oil's selling point -- big cash distribution -- gets squeezed, Exxon is in relatively good shape. It's still raising its dividend, and it's cut its projected Q3 buybacks to just $500M (vs. zero for Chevron, Shell and BP).
- Exxon says it shops worldwide, but the U.S. may be a more natural hunting ground. Possible targets? According to Wolfe Research's Paul Sankey, Pioneer Natural Resources (PXD -2.4%) and Hess (HES -2.2%).
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
- Previously: ConocoPhillips -3.3% as dividend gets scrutiny out of earnings (Jul. 31 2015)
- Previously: Chevron -1.8% as earnings tumble, paced by $2.2B upstream loss (Jul. 31 2015)
- Previously: Exxon Mobil off 1.8% premarket after lowest profit since 2009 (Jul. 31 2015)
- Down sharply this morning in response to its FQ4 miss and soft FQ1 guidance, Synaptics (NASDAQ:SYNA) managed to close up 0.1%. Likely helping: The company guided on its earnings call (transcript) for FY16 (ends June '16) revenue to rise 20%-25%, above a 19.3% consensus. (hat tip: SA commenter Philip Marlowe).
- Also: Multiple analysts defended Synaptics, arguing the FQ1 guidance (blamed on LCD driver weakness) shouldn't be taken as a sign of Apple share loss. Stifel's Kevin Cassidy thinks supply chain inventory issues are the culprit, and Pac Crest's John Vinh predicts Synaptics' LCD drivers will retain their sole-sourced status with the iPhone 6S.
- When asked by Needham's Rajvindra Gill about squaring the LCD driver outlook with a pending iPhone refresh, CEO Rick Bergman downplayed the magnitude of the expected sales decline, albeit without getting specific. "Specifically around [display drivers] there's various product cycles and customer ramps and so on that impact that business. And some of those were favorable in our fiscal Q4 and in Q1, they're down. Now, down is a relative term. It's relatively a small decrease in the grand scheme of things, but it is a little bit lower than what we saw in Q4. And again, we depend on certain customer ramps, inventories, where we are in the [bill of materials], and so forth."
- Regarding the company's just-launched TDDI (integrated touch controller/display driver) ICs, Bergman cautioned design wins could take longer to ramp than for standard touch controllers, but added TDDI could provide a lift in the second half of FY16. CFO Wajid Ali stated TDDI gross margins should be higher than LCD driver GMs.
- Whole Foods Market's (WFM +0.9%) Chief Information Officer, Jason Buechel, has been lifted into the company's executive leadership team.
- The move means he has the same voting power as other senior execs -- he previously reported to CFO Glenda Flanagan -- and it underscores the growing importance of IT at the grocery chain.
- Whole Foods is investing heavily in infrastructure to satisfy customer demand for information. The moves include a new unified point-of-sale system and a rewards program to enhance loyalty, which it hopes to have nationwide by late this year.
- Previously: Whole Foods Market slumps after earnings disappoint (Jul. 29 2015)
- Enterprise Products Partners (NYSE:EPD) sold off for the second day, -2%, after a huge miss on revenues yesterday ($7.09B, more than 26% off a consensus expectation of $9.7B).
- Revenues fell by 43%, and analysts had baked in a 20% revenue decline. But costs and expenses fell 45% as well, to $6.4B.
- Shares fell 1.9% yesterday after earnings, bringing the two-day decline to 3.8%.
- Stifel Nicolaus cut its price target on the shares to $34, from $38. Shares closed today at $28.33. But Wunderlich's Jeff Birnbaum said the results were "satisfying," maintaining a Buy rating on one of his top picks coming into earnings season.
- "While not huge growth, it comes despite a tough macro backdrop, particularly for natural gas gathering and processing," he writes. "With [more than] $8.3B in new projects set to enter service by YE17, we believe it can continue its 6% distribution growth and 1.3x distribution coverage with potential upside should commodities rebound over time or additional M&A opportunities materialize."
- Though Control4 (NASDAQ:CTRL) beat Q2 estimates, it guided for Q3 EPS of $0.10-$0.16 vs. a $0.16 consensus.
- Revenue guidance is a little better: Q3 revenue of $44M-$47M vs. a $44.9M consensus, and 2H15 revenue growth of 12%-18% vs. a 16.1% consensus.
- On the earnings call (transcript), the home automation tech provider suggested an online ad campaign will weigh on Q3 EPS. Sales/marketing spend rose 22% Y/Y in Q2 to $7.8M.
- North American revenue rose 24% Y/Y in Q2 to $44.6M, and international revenue 20% to $9.8M. 143 dealers were added, raising the active dealer count to 3,421.
- Shares had rallied strongly ahead of earnings.
- Q2 results, PR
- AppliedMicro (NASDAQ:AMCC) rallied to $6.21 today after beating FQ1 estimates and guiding on its earnings call (transcript) for FQ2 revenue of $39M (+/- $2M) and EPS of -$0.03 (+/- $0.02). That's close to a consensus of $39.2M and -$0.03, and better than feared given the light calendar Q3 outlooks offered by many other chipmakers with strong networking/telecom exposure.
- Also: AppliedMicro said it landed over 20 new "end-customer engagements" during FQ1 for its X-Gene ARM server CPUs - clients are said to include several large financial institutions and a major Asia-Pac data center operator. A second-gen CPU (X-Gene 2) is undergoing customer evaluation, and a 3rd-gen product that will rely on an advanced 16nm FinFET manufacturing process (presumably TSMC's) has reached the tape-out stage.
- FQ1 book-to-bill was above 1. Strong demand for AppliedMicro's X-Weave Ethernet/OTN connectivity chips (100G-capable) partly offset soft PowerPC processor sales.
- FQ1 results, PR
- Alliance Resource Partners (ARLP -1.7%) says it's completed acquiring the rest of the White Oak Resources equity interests that it didn't already own, and has updated production and financial guidance accordingly.
- The move means an Alliance unit takes operating control of White Oak Mine No. 1 in Illinois, producing 6M tons/year of high-sulfur coal.
- The company now guides to coal production of 42.8M-43.5M tons for the year, and sales volumes of 42.7M-43.8M tons.
- It also sees 2015 revenues (excluding transportation) of $2.37B-$2.41B -- above consensus of $2.36B -- and full-year EBITDA of $765M-$795M (in line) and net income of $405M-$435M.
- Alliance paid $50M at closing and may owe contingent consideration in the future. The company will hold a conference call to talk about the guidance on Monday at 11 a.m. ET.
6:03 PM| Comment!
- On the eve of a labor contract expiration, Verizon (NYSE:VZ) says it's making little progress on talks with its East Coast wireline workers.
- Two unions representing the workers (the CWA and IBEW) have authorized a strike as needed, and Verizon says it's ready in case of work stoppage. The current contract -- covering 39,000 wireline employees in nine states along the coast -- expires at midnight tomorrow.
- The unions say Verizon's demanding that workers sharply increase their health care contributions and make concession on pensions.
- The CWA also says Verizon is refusing to build its FiOS network in lower-income areas, while letting the copper network degrade -- leaving many consumers in the hands of a cable monopoly.
- For its part, the CWA has enlisted help from the mayors of Syracuse, N.Y., and Kingston, N.Y., who it had join them at a bargaining session pointing to their support. Three other state mayors have written letters to Verizon urging fiber-to-the-home buildouts.
- "The CWA owes these mayors an apology," said a Verizon spokesman. "Unfortunately, the mayors were seemingly misled to think FiOS deployment is an issue that’s being negotiated. It’s not. Sadly, it seems the mayors were just a ploy as part of this bargaining publicity gimmick."
- In addition to beating Q2 estimates, Web.com (NASDAQ:WWWW) used its earnings call (transcript) to guide for Q3 revenue of $138.5M-$140M and 2015 revenue of $554M-$558M, favorable at the midpoints to consensus estimates of $138.6M and $554.7M.
- Q3 and full-year EPS guidance is at $0.59-$0.61 and $2.36-$2.42 vs. consensus estimates of $0.61 and $2.38. 2015 free cash flow guidance has been hiked by $15M to $115M.
- Subscribers rose by 21K Q/Q to 3.32M, and ARPU by $0.16 to $13.91. For now, the company is sticking to a net subscriber add target range of 10K-15K.
- Shares rallied to $24.89 today, making new 52-week highs in the process.
- Q2 results, PR
- Bank of America (NYSE:BAC) is likely to put shareholders to a vote this year to decide whether CEO Brian Moynihan keeps his title as chairman of the board, Reuters reports.
- The bank had said that a vote wouldn't take place any later than its 2016 annual meeting, but didn't set specifics. Today's proxy filing sets a special meeting that a source says will come this year.
- The date isn't set in pen yet because the SEC must review the proxy first, the source said.
- Polyvore, whose site and apps bear a strong resemblance to Pinterest, relies on its community to deliver fashion/beauty product recommendations to other users, via the Pinterest-like "sets" they create. The company generates revenue by driving referral traffic to online retailers whose products are displayed.
- Yahoo (NASDAQ:YHOO) is buying Polyvore for an undisclosed sum. Marissa Mayer: "Polyvore has perhaps the most amazingly engaged digital community of passionate style lovers creating shoppable content anywhere ... We believe that bringing this type of community and commerce-driven experience to Yahoo’s industry-leading content will transform the user experience across our digital magazines and verticals. And, when it comes to advertising, Polyvore’s technology will bring a proven native ad model, new compelling native ad formats, and strong advertising relationships with more than 350 retailers to Yahoo’s fast-growing native advertising platform, Yahoo Gemini."
- Polyvore CEO Jess Lee will join Yahoo and report directly to Mayer.
- Notable Yahoo acquisitions: Flurry, BrightRoll, Tumblr
- With its new arrangement with ex-ESPN Sports Guy Bill Simmons, HBO (NYSE:TWX) will experiment with what is essentially video blogging and more granular pieces -- asking Simmons to record short clips of 5-8 minutes in addition to his weekly program, HBO exec Michael Lombardo says.
- Armed with its over-the-top service in HBO Now, it means an interesting experiment that could blow up the idea of traditional HBO, and mean the most direct competition yet between old-line TV and YouTube.
- Simmons is no stranger to different formats, as he did podcasts for ESPN -- and in fact his podcast criticizing NFL Commissioner Roger Goodell is thought to be the key blow to his relationship with his old network.
- The ultimate use of short clips is still a work in progress, Lombardo says, as they could be bundled into a newsmagazine or put online for on-demand viewing.
- “If Bill does a five-minute piece, eight-minute piece, which I want him to, you know exactly what that is on digital,” Lombardo says. “It’s a vertical ‘Simmonsworld.’”
- Previously: HBO inks ESPN expat Simmons to multi-year deal (Jul. 22 2015)
- Goldman Sachs (NYSE:GS) has agreed to pay about $270M in a settlement with pension funds who sued saying Goldman misled them about the safety of residential mortgage-backed securities, Bloomberg reports.
- The suit is among the last few of the lawsuits related to the credit crisis of 2008.
- Goldman had set aside $1.45B this quarter for mortgage-related litigation and regulation.
- Last week, JPMorgan Chase said it would pay $388M to settle a similar suit, filed by the Fort Worth Employees' Retirement Fund over $10B of RMBS.
- In addition to slightly missing Q2 revenue estimates (while posting in-line EPS), Brightcove (NASDAQ:BCOV) has guided for Q3 revenue of $32.9M-$33.4M (below a $33.8M consensus) and full-year revenue of $132.5M-$133.5M (below a $134.7M consensus).
- The online video hosting/monetization service provider blamed its Q2 sales weakness on "the timing of certain customer renewals." It also reported seeing "some softness in our European markets," while adding North America and Japan were healthier.
- Notably, Brightcove's total and premium customer counts respectively fell by 174 and and 17 Q/Q in Q2 to 5,404 and 1,847. The company's recurring dollar retention rate was 88%, below a low-to-mid 90s target range. On the bright side, average revenue per premium customer rose by $1K Q/Q and $4K Y/Y to $64K.
- Shares made a new 52-week low of $4.81 before rebounding a bit to close at $5.47.
- Q2 results, PR
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