Seeking Alpha
  • Today - Friday, October 24, 2014

  • 5:37 PM
    • Top gainers, as of 5:15 p.m.: NGD +4.4%. LAKE +2.4%. RGLS +2.1%. FBR +1.3%. MLNX +1.1%.
    • Top losers, as of 5:15 p.m.: PX -7.2%. HTCH -2.6%. VSR -2.3%. CIG -2.2%. OCR -2.2%.
    | Comment!
  • 5:16 PM
    • A Brazilian site has reported acquisition-hungry Alibaba (BABA +1.4%) is looking for local M&A targets. Latin American e-commerce giant MercadoLibre (MELI +4.4%), which gets a large chunk of its revenue from Brazil, rallied today.
    • Alibaba already has a sizable Brazilian presence courtesy of its AliExpress site, which sells Chinese goods at wholesale prices to non-Chinese consumers. An estimated 12M+ Brazilians visited AliExpress (available in Portuguese) in July. Steep local prices for various consumer goods has boosted Alibaba's appeal.
    • Altogether, Alibaba's international commerce revenue rose 31% Y/Y in calendar Q2 to $237M, and made up 9% of total revenue.
    • Earlier: Alibaba thinking of buying 37% stake in Lion's Gate
    | 1 Comment
  • 4:14 PM
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  • 3:57 PM
    • Citing valuation, Sidoti has downgraded 8x8 (EGHT -5.4%) to Neutral.
    • The downgrade comes a day after the VoIP/unified communications service provider jumped on account of its FQ2 beat and strong customer metrics.
    | 1 Comment
  • 2:45 PM
    • Though its Q3 revenue was only in-line (EPS beat by $0,03), Constant Contact (NASDAQ:CTCT) is forecasting 2015 revenue growth of ~17%, above a 14.3% consensus. Adjusted EBITDA margin is expected to grow by ~150 bps.
    • Q4 guidance is mixed: Revenue of $87.4M-$87.8M vs. a consensus of $87.2M and $0.32.
    • In spite of intense competition in the cloud marketing automation space from the likes of Salesforce, Oracle, and Marketo, CTCT ended Q3 with 625K customers, up from 615K at the end of Q2 and 585K a year ago. ARPU rose to $44.89 from $44.40 in Q2 and $41.40 a year ago.
    • Gross margin rose 60 bps Y/Y to 72.2%. GAAP opex rose 13% to $52.2M.
    • Q3 results, PR
    | Comment!
  • 2:31 PM
    • Down AH yesterday due to the light Q4 guidance offered with a Q3 EPS beat, Freescale (NYSE:FSL) has reversed course. Some bullish sell-side notes are helping.
    • Credit Suisse's Jonathan Pitzer likes the face Freescale's gross margin rose 110 bps Q/Q in Q3 (better than guidance for a 50 bps drop), and that op. margin reached a record high of 18.7% thanks to a 3.5% Q/Q opex drop. " This should alleviate investor concerns relative to margin drivers that often seemed ambiguous."
    • Deutsche's Ross Seymore: "Despite near term revenue headwind, we continue to view FSL as a company that is righting the ship on revenue, focusing on gross margin progression and opex discipline, which should result in better free cash flow to further de-lever the balance sheet and unlock earnings power."
    • Oppenheimer's Rick Schafer is more cautious, calling Chinese 4G infrastructure demand "the lone bright spot" for the chipmaker's sales as it deals with auto/industrial softness.
    | Comment!
  • 2:17 PM
    • Chegg (NYSE:CHGG) is turning in a strong day after Amazon partly blamed a shift in demand from textbook sales to rentals for slowing North American media revenue growth.
    • Chegg obtained $45.8M in Q2 revenue from its print textbook rental ops, and $18.7M from faster-growing digital revenue streams. Q3 results are due on Nov. 3.
    | Comment!
  • 12:54 PM
    • Initially up over 15% yesterday in response to its leveraged recap plans, KLA-Tencor (KLAC +6.6%) has given back over half those gains after guiding on its FQ1 CC (transcript) for FQ2 revenue of $620M-$700M and EPS of $0.46-$0.70, below a consensus of $755M and $0.89.
    • A broad bookings guidance range of $700M-$900M has been provided. FQ1 bookings totaled $567M, below guidance of $600M-$800M. As was the case 3 months ago, KLA blamed delayed orders from a foundry customer related to FinFET (3D transistor) process investments.
    • Like many of its peers, KLA is maintaining an optimistic tone for 2015, predicting strong demand from foundry, logic, and memory clients due to investments in advanced technologies and processes (14nm/16nm FinFET, 3D NAND, etc.). After accounting for just 25% of FQ1 orders (lower than normal), foundries are expected to account for 62% of FQ2 orders.
    • Credit Suisse and B. Riley have both downgraded KLA to Neutral. Each cites valuation.
    | Comment!
  • 12:52 PM
    • Shares of Education Management (NASDAQ:EDMC) are in freefall after the company indicates it will voluntarily delist itself from the Nasdaq.
    • EDMC -36.96% to $0.725 on volume 2X normal activity.
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  • 12:48 PM
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  • 12:32 PM
    • Though Ericsson (ERIC -3%) beat Q3 estimates, the mobile infrastructure giant stated North American business activity "slowed down during the quarter as operators currently focus on cash flow optimization." It added North American spending patterns make it tough to judge near-term demand.
    • Ericsson's North American sales fell 3% Y/Y to $1.93B, partly offsetting strong growth in China, India (+56%), the Middle East (+38%), and other emerging markets. Top-line figures were boosted some by M&A.
    • AT&T and Verizon have been taking cautious approaches to capex, and Sprint (though investing heavily in 4G following the SoftBank deal) has been looking to cut costs under new CEO Marcelo Claure. The U.S. and Japan have been ahead of many other developed markets in ramping 4G coverage.
    • Juniper (JNPR -6.3%) offered light Q4 guidance two weeks after delivering a Q3 warning, and reported its service provider sales were down 6% Y/Y due to soft demand from Asia-Pac, EMEA, and (especially) U.S. carriers.
    • When the world's #2 carrier router vendor was asked on the CC (transcript) about 2015 sales, CEO Shaygan Keradpir admitted Juniper has poor near-term visibility, and that a rebound could take time. "Because we think these cycles typically take 2 to 4 quarters ... our planning assumption is that growth will return in the second half of 2015."
    • Nokia and Infinera recently offered more positive numbers/commentary. Bulls have argued strong data/video traffic growth will lift capex. Bears have argued soft (if not negative) carrier revenue growth will continue pressuring spending.
    • Decliners: ALU -1.6%. JDSU -2%. INFN -3.1%. CIEN -2.5%. CALX -2.5%. FNSR -1.8%. ADTN -1.5%. The Nasdaq is up 0.4%.
  • 11:42 AM
    • SodaStream (SODA +23.6%) spikes off of reports that indicate the company will conduct tests on PepsiCo-branded products.
    • The initiative will last ten weeks, according to reporting from CNBC.
    | 1 Comment
  • 11:41 AM
    • Nano cap IsoRay (ISR +29.2%) is up on double average volume on no news. The stock made a similar move on October 7 but couldn't hold the gain. Shares reversed off the high of $2.12 all the way down to $1.22 on October 16.
  • 11:39 AM
    • Citing execution issues and slowing organic growth, Goldman has downgraded Colfax (CFX -2.2%) to Neutral, and cut its target by $21 to $57.
    • The downgrade comes a day after Colfax posted a Q3 miss.
    | Comment!
  • 11:20 AM
    • In addition to beating Q3 revenue estimates (while posting in-line EPS), Ingram Micro (NYSE:IM) has guided for Q4 Y/Y revenue growth of 8%-12% and EPS of $0.95-$1.02, mostly above a consensus for 5.1% growth and EPS of $0.97.
    • CLSA has given the IT hardware distributor a two-notch upgrade to Outperform. A fall selloff had tempered expectations going into earnings.
    • A near-50% Y/Y increase in Mobility product sales (boosted by a new Verizon channel deal) to $2B helped drive the Q3 revenue beat. EPS was pressured by 15 bps drop in gross margin to 5.75%, which was caused by a mix shift towards mobility and systems sales.
    • Q3 results, PR
    | Comment!
  • 11:11 AM
    • An outlier of a poll shows opposition candidate Aecio Neves with a sizable (though shrinking) lead over President Dilma Rousseff. Other polls have consistently shown Rousseff with a lead of six to eight percentage points. Still to come is big debate between the two contenders tonight. The election is on Sunday.
    • The credibility of opinion polling is somewhat suspect in Brazil, with different surveys showing wildly different results, not to mention all the major pollsters failing to capture the extent of Neves' support ahead of the first round of elections earlier this month.
    • The Bovespa is up 3.6%. EWZ +5.3%
    • Petrobas (PBR +6.3%), Vale (VALE +4.4%), Itau Unibanco (ITUB +6.1%), Banco Bradesco (BBD +5.5%), Gol Linhas (GOL +6.6%)
    • The iShares S&P Latin America 40 (ILF +3%)
    • Broad South American ETFs: ILF, LBJ, GML, EEML, FLN
  • 10:43 AM
  • 10:42 AM
    • A Chinese paper reports China Unicom (CHU +0.9%) and China Telecom (CHA +1%) plan to launch (through a JV) a local content delivery network. The JV, which would aim to profit from China's rapid mobile data and online video traffic growth, would be run by CHA's cloud services unit.
    • Leading Chinese CDN owner ChinaCache (CCIH -5.1%) isn't responding well to the news, which comes two weeks after CHA announced a CDN partnership with Akamai. Alibaba launched its own CDN services last year.
    | Comment!
  • 10:29 AM
    • Goldman has cut QIWI to Sell from Buy, and slashed its target by $35 to $24. The firm is worried regulators will crack down on the Russian online payments leader due to its non-compliance with user identification requirements.
    • Qiwi has already sold off more than once on fears about new regulations. Shares are close to a 52-week low of $26.14.
    | Comment!
  • 10:06 AM
    • The FT reports P-E firms Bain and Apax Partners are weighing offers for Portugal Telecom (PT +3.7%). Both PT and merger partner Oi (OIBR +6.1%) are rallying in early trading.
    • French cable giant Altice has also been reported have interest in acquiring PT, and thus undoing the Oi merger. Shares of both companies have cratered this year, thanks in part to the Rioforte debt scandal.
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