Sunday, January 25, 2015
Friday, January 23, 2015
- Though 8x8 (NASDAQ:EGHT) met FQ3 estimates, its total business customers only rose by 617 Q/Q to 41,051 - a smaller gain than FQ2's 1,094 and the year-ago period's 2,079.
- On the CC (transcript), CFO Mary Ellen Genovese attributed the slowdown to "the end-of-life reduction of very small iTEL Connect customers which we acquired in 2008 and an emphasis on the part of our SMB team on selling larger deals." She added 8x8 expects this trend to continue as the SMB team keeps focusing on bigger deals and iTEL customers continue declining.
- CEO Vik Verma stated 8x8's SMB sales team, which has historically focused on deals involving less than 50 lines, is now selling deals "that we would have traditionally had sold through our mid-market channel." He also notes 8x8 is facing off against larger service providers as it expands in the mid-market, and argues the company's patents allow it to differentiate its cloud-based telecom services.
- While customer growth slowed, business ARPU rose to $305 from $299 in FQ2 and $274 a year ago. Also, churn was 1%, up slightly from 0.9% in FQ2 but down from 1.5% a year ago. Sales/marketing spend rose 28% Y/Y to $20.6M, and R&D spend 16% to $3.9M.
- FQ3 results, PR
- Even as the steep drop in oil prices raises questions about the prospects for GE's (GE +1.2%) oil business, CFO Jeff Bornstein says the company will "play offense" and separate itself from rivals offering oil equipment and services.
- GE's oil and gas unit performed “as expected” during Q4, with sales falling 5.6% and operating profit up 1.5%; GE says it is starting to receive customer calls about the pricing of previously booked orders for oil exploration and production equipment, but not an onslaught - "That's to come in 2015," the CFO says. "Having said that, we’re going to play offense... like crazy in 2015."
- Bornstein says GE, which has spent $14B on deals to build its oil business since 2007, is even open to further acquisition opportunities, pointing out that "a lot of these companies are worth 30%-40% less than they were five months ago."
- Earlier: General Electric beats expectations
- Applied Materials (AMAT -1.7%) and ASML (ASML -1.5%) are off moderately after chip equipment peer KLA-Tencor (KLAC -7.1%) offered soft guidance (for the third quarter in a row) to go with an FQ2 beat. The Nasdaq is up 0.3%
- On the CC (transcript), CEO Rick Wallace stated KLA has seen orders from both foundry and logic clients for sub-20nm manufacturing equipment "pushed to later in the calendar year." KLA thinks the delays "reflect yield and process stability issues associated with bringing these advanced device architectures to market."
- In July and October, KLA primarily referenced foundry clients when explaining its light guidance. The logic client reference could be about Intel (by the far the biggest of them), which provided a conservative 2015 capex budget last week.
- Wallace also mentioned some orders related to "trailing-edge" manufacturing processes have been "a bit elusive," and that (notably) KLA thinks this is due to "some competitive dynamics in terms of second source strategies and so on."
- Analysts pressed KLA regarding its foundry-related issues, given TSMC is spending heavily and ASML reported strong Taiwanese foundry bookings (presumably from TSMC) earlier this week. On the other hand, memory was a strong point for both KLA and ASML in calendar Q4, respectively accounting for 44% and 27% of the companies' bookings.
- After barely moving in AH trading yesterday in response to its FQ1 beat and strong FQ2 guidance, Skyworks (SWKS +2.3%) has risen above $81 today as a flurry of bullish analyst reactions arrive. Rivals/fellow iPhone suppliers Qorvo (QRVO +4.8%) and Avago (AVGO +1.6%) are heading in the same direction.
- Brean's Mike Burton, hiking his Skyworks target by $22 to $92: "The [FQ1] upside was predominantly driven by the Integrated Solutions segment as Apple's iPhone 6/6+ ramped ... we believe LTE growth in China and several new model ramps (Samsung Galaxy S6 amongst others to be unveiled in Barcelona) coupled with Skyworks Solutions less seasonal Broad Markets business is driving the better-than-seasonal guidance."
- Burton also thinks Skyworks is on its way to achieving a 50% gross margin (up from FQ1's 46.7%), and notes inventory days (58) were down by 15 Y/Y.
- Canaccord's Mike Walkley: "We believe Skyworks' diverse analog portfolio is enabling content share gains with its smartphone customers. Further, we anticipate Skyworks' share gains in markets such as WiFi 802.11ac, wireless infrastructure, and the IoT market are also driving strong growth trends." His FY16 (ends Sep. '16) EPS estimate has been hiked by $0.66 to $5.89.
- On the CC (transcript), CEO David Aldrich noted Skyworks' non-mobile design wins include a GM telematics platform, Cisco home gateways, ZigBee connectivity modules for Philips/LG smart light bulbs, Amazon's Echo and Fire TV devices, and a DirecTV set-top. China's Xiaomi has joined Apple and Samsung as a major mobile client.
- Qorvo reports on Jan. 28.
- Baidu's (BIDU +1.1%) Q4 report will arrive after the close on Wednesday, Feb. 11. CC at 8PM ET.
- Consensus is for revenue of RMB14.14B ($2.27B, +48.5% Y/Y) and EPS of RMB9.89 ($1.59). Shares +3% since the Chinese search giant provided mixed Q3 results, slightly soft guidance, and strong mobile metrics on Oct. 29.
- Deutsche recently offered positive pre-earnings commentary, and Brean did the same a few days later.
- Q4 earnings of $531M or $0.64 per share vs. $443M and $0.63 one year ago. Share count of 833.8M up from 705.3M. Tangible book value per share of $10.81 vs. $6.68.
- Net interest income of $2.978B vs. $2.849B a year ago. Loan loss provisions of $797M vs. $818M.
- Loan receivables of $61B up 7% Y/Y. Purchase volume up 11%.
- Conference call is underway.
- Previously: Synchrony Financial beats by $0.04, beats on revenue (Jan. 23)
- SYF +3.1%
- The conference call is scheduled to begin at 11.00 a.m. ET.
- Consensus view is EPS of $0.64 on revenues of $807.21M.
- The conference call is scheduled to begin at 9.00 a.m. ET (2.00 p.m. GMT / 3.00 p.m CET).
- Consensus view is EPS of $0.30 on revenues of $25.50B.
- Infinera (INFN +17.7%) knocked the cover off the ball yesterday afternoon, soundly beating Q4 estimates and issuing strong Q1 guidance on the back of growing demand for its DTN-X optical transmission/switching platform for 100G deployments.
- Rival Ciena (CIEN +3.7%) and optical component vendors JDS Uniphase (JDSU +2.7%) and Finisar (FNSR +2.3%) are rallying in response. The companies followed equity markets higher yesterday after Verizon guided for its 2015 capex to be slightly above 2014 levels (contrasts with AT&T's planed capex cut).
- On its CC (transcript), Infinera said it added 10 new invoiced DTN-X customers in Q4 (3 new to Infinera altogether), raising its total to 59, and that nearly half of all DTN-X clients are now opting for the company's Instant Bandwidth rapid provisioning tech. Initial revenue for the Cloud Xpress point-to-point interconnect platform was received in December, and 8 customer commitments have been received to date.
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