Seeking Alpha
  • Today - Friday, August 22, 2014

  • 11:28 AM
    • Rackspace (RAX +3.9%) could receive a ~$45/share bid from H-P, UBS speculates in a morning note. Shares have rallied in response.
    • Last month, TechCrunch reported hearing of an H-P bid for Rackspace, but later backtracked a bit. The following week, re/code stated multiple sources had "categorically denied" the H-P report.
    • Shares are up 20% from their Aug. 12 post-earnings lows, aided by Dan Loeb and Blue Harbour Group's disclosures.
    | Comment!
  • 10:22 AM
    • Morgan Stanley has downgraded 58.com (WUBA -5.8%) to Underweight a day after the Chinese online classifieds leader sold off due to its soft Q3 guidance and aggressive spending plans.
    • Much like Credit Suisse, MS is worried 58.com's spending will pressure margins. Its target is $37.50.
    | Comment!
  • 10:12 AM
    • The major equity averages remain little-changed as do Treasury prices following the release of Janet Yellen's Jackson Hole address. Her talk sticks to the game plan - the first rate hike remains on tap for next year; the headline unemployment rate overstates labor market improvement; if employment or inflation picks up, hikes could come sooner than expected.
    • SPY +0.1%, TLT +0.1%, TBT -0.2%
    • Gold (NYSEARCA:GLD) remains as it was prior to the speech, +0.2% to $1,278 per ounce.
    • The dollar (UUP +0.2%) creeps higher.
    | 1 Comment
  • 9:58 AM
    • Shares of Inter Parfums (IPAR +3.4%) are on the move after Citi upgrades the stock to a Buy rating from Neutral and sets a $33 price target.
    • The investment firm likes valuation at current levels.
    | Comment!
  • 9:41 AM
    • Keurig Green Mountain (GMCR +8.5%) and Kraft Foods Group (KRFT +0.3%) sign a new licensing deal which will see Kraft-branded packs sold for Keurig commercial and consumer coffee brewing systems in the U.S.
    • Distribution will begin this fall.
    • Financial terms of the arrangement weren't disclosed.
    • What to watch: The deal is a bit of a coup for Keurig with Kraft selling unlicensed K-cup packets previously.
    | 1 Comment
  • 9:38 AM
    • Outliers to the downside in the industrial REIT sector in early action are DCT Industrial (DCT -1%) and Liberty Property Trust (LPT -1.2%) after BMO Capital pulls its Outperform ratings on the two.
    | Comment!
  • 9:24 AM
    • Investment firms weigh in on Gap (NYSE:GPS) following the retailer's Q2 report.
    • Sterne Agee liked what it saw, reiterating its Buy rating and taking its price target to $50,
    • Canaccord Genuity highlighted the potential for Gap to see long-term margin gains.
    • Janney Capital upgrades the retailer to Buy from Neutral on the promise that omni-channel will drive sales growth.
    • GPS +2.8% premarket
    | Comment!
  • 9:15 AM
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  • 9:05 AM
    • The Fresh Market (NASDAQ:TFM) trades higher after recording a slim earnings beat with its FQ2 report.
    • Though higher costs dragged down the company's profit compared to a year ago, its plan to open more stores in the Southeast and reaffirmed guidance is helping to boost sentiment.
    • TFM +6.7% premarket
    | Comment!
  • 8:31 AM
    • Alongside its downgrade of AGCO, Macquarie also cuts Deere (NYSE:DE) to Underperform with price target of $75, citing weakening demand and excess inventories as pressuring revenue.
    • Deere is lower by 1.1% premarket; AGCO by 1.5%.
    • Previously: AGCO lower after Macquarie downgrade
    | 3 Comments
  • 8:27 AM
    | 1 Comment
  • Thursday, August 21, 2014

  • 6:12 PM
    • Tony Navarra, head of Globalstar's (NYSEMKT:GSAT) space operations and a 20-year company vet, is retiring. He'll remain a consultant for one year following his retirement.
    • Navarra's duties will be divided between Globalstar's satellite operations and satellite engineering chiefs, each of whom will report to CEO Jay Monroe.
    | 2 Comments
  • 5:56 PM
    • Strong Xbox One/PS4 sales fueled a 124.8% Y/Y FQ2 increase in GameStop's (NYSE:GME) new hardware sales to $332.3M (19% of revenue), which in turn drove the company's big revenue beat. Comparable store sales rose 21.9%.
    • New software sales +15.6% Y/Y to $497M; pre-owned value game sales +5.5% to $558M; game accessories +17% to $107.5M; digital +6% to $52.3M; mobile/consumer electronics +85.1% to $112.1M.
    • A mix shift towards hardware led gross margin to fall 260 bps Y/Y to 31.8%. SG&A spend fell to 27.5% of revenue from 30.5%. $75.5M was spent on buybacks.
    • GameStop expects FQ3 EPS of $0.58-$0.64 (above a $0.57 consensus), with comp. sales growth of 1%-5%. FY14 EPS guidance of $3.40-$3.70 is being maintained for now (consensus is already up to $3.67); 6%-12% full-year comp. sales growth is expected.
    • FQ2 results, PR
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  • 5:35 PM
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  • 5:22 PM
    • Brocade (NASDAQ:BRCD) guides in its earnings slides (.pdf) for FQ4 revenue of $550M-$570M and EPS of $0.21-$0.23, in-line with a consensus of $561.3M and $0.22.
    • In spite of the Fibre Channel struggles seen by adapter card/embedded switch vendors Emulex and QLogic, Brocade's SAN product revenue (60% of total) rose 1% Q/Q and 4% Y/Y in FQ3 to $325M. SAN switch and director sales respectively rose 9% and 5% Y/Y, offsetting an adjusted 11% drop in server product (adapter/embedded switch) sales.
    • IP networking revenue rose 9% Q/Q and fell 1% Y/Y to $133M; the Y/Y drop is better than FQ2's 9%. Router weakness, product strategy changes, and the sale of Brocade's adapter card business to QLogic offset switch growth.
    • SAN products are expected to be down 1%-2% Q/Q in FQ4, and IP networking up 6%-15%. Geopolitical issues and transitions at OEM partners (i.e. IBM) are expected to weigh on SAN revenue, while high-density router launches and federal seasonality are expected to boost IP networking.
    • Gross margin rose 50 bps Q/Q and 160 bps Y/Y to 67.2%, beating guidance of 65.5%-66.5%. FQ4 GM guidance is at 66%-67%. $112M was spent on buybacks. EMC/IBM/Hitachi made up 48% of revenue vs. 47% a year ago.
    • FQ3 results, PR (.pdf)
    | 1 Comment
  • 5:15 PM
    • Aeropostale (NYSE:ARO) -9.2% AH despite posting a narrower than expected Q2 loss, as the struggling teen apparel retailer issues downside guidance for Q3, sees a loss of $0.44-$0.48/share vs. analyst consensus for a $0.35 loss.
    • Q2 gross margin narrowed to 15.8% from 17.9%, but input costs fell 11% to $333M.
    • ARO had pre-announced some of its Q2 results earlier in the week while announcing the return of former CEO Julian Geiger to replace Thomas Johnson.
    | Comment!
  • 4:58 PM
    • In addition to beating Q2 revenue estimates (while missing on EPS), Qunar (NASDAQ:QUNR) is guiding for 90%-95% Y/Y Q3 revenue growth; the consensus is for revenue to grow 83% to $72M.
    • Mobile revenue rose 511.8% Y/Y in Q2 to $22.9M (35.5% of revenue), fueling the revenue beat. Flight revenue +143.3% to $45M; hotel revenue +79.5% to $11.5M. Flight ticket volume +66.1%, and revenue/ticket +46.4%. Hotel room night volume +105.2%, but revenue per room night -12.5%.
    • Gross margin fell to 73.6% from 78.1% in Q1 and 78.2% a year ago (hurt EPS). Qunar notes higher payment-processing fees pressured its gross profit.
    • Spending was heavy: R&D spend +181.6% Y/Y to $29.3M, sales/marketing +212.4% to $34.7M, product sourcing spend +416.1% to $10.9M, G&A spend +432.9% to $18M. Online marketing spend +120.5% Q/Q to $23.8M.
    • If history is any guide, Ctrip (NASDAQ:CTRP) and/or eLong (NASDAQ:LONG) could follow Qunar higher.
    • Q2 results, PR
    | Comment!
  • 4:38 PM
    • Though Marvell (NASDAQ:MRVL) posted in-line FQ2 revenue and beat EPS estimates, it's guiding for FQ3 revenue of $960M-$1B and EPS of $0.29 (+/- $0.02), below a consensus of $1.01B and $0.32. No explanation is provided in the earnings release for the outlook.
    • FQ2 gross margin was 50.6%, +180 bps Q/Q and -140 bps Y/Y, and near the high end of a 49%-51% guidance range (drove the EPS beat). FQ3 GM guidance is also at 49%-51%.
    • GAAP opex fell 2% Y/Y to $363.4M (compares with a slight revenue increase), with R&D spend nearly flat at $294.8M. No buybacks were carried out.
    • FQ2 results, PR
    | 1 Comment
  • 4:30 PM
    • ScanSource (NASDAQ:SCSC): FQ4 EPS of $0.60 beats by $0.01.
    • Revenue of $758.1M (+6.4% Y/Y) beats by $18.07M.
    • Shares +1.88% AH.
    • Press Release
    | Comment!
  • 4:26 PM
    • The Fresh Market (NASDAQ:TFM): Q2 EPS of $0.36 beats by $0.01.
    • Revenue of $422.23M (+19.0% Y/Y) beats by $10.38M.
    • Shares +5.16% AH.
    • Press Release
    | Comment!
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