Seeking Alpha
  • Today - Wednesday, April 23, 2014

  • 4:33 PM
    • Apple (AAPL): FQ2 EPS of $11.62 beats by $1.44.
    • Revenue of $45.65B beats by $120M.
    • 43.7M iPhones (above expectations), 16.35M iPads (below expectations), 4.1M Macs.
    • Expects FQ3 revenue of $36B-$38B vs. a $37.8B consensus.
    • Shares halted.
    • CC at 5PM ET. Press Release.
  • 4:28 PM
    • Zynga (ZNGA) Mark Pincus, whose management style has often come under criticism, is stepping down from an operational role at the company, but will remain chairman. Pincus stepped down as CEO last year to make way for Don Mattrick.
    • Zynga also announces it has has hired Microsoft Xbox Live GM Alex Garden to be the head of Zynga Studios, gaming/entertainment industry vet Henry LaBounta to be its chief visual officer, and e-commerce industry vet Jennifer Nuckles to be its marketing chief.
    • Q2 guidance is for bookings of $175M-$195M and EPS of -$0.08 to -$0.07 vs. a consensus of $185.9M and -$0.01. 2014 guidance is for bookings of $770M-$810M and EPS of $0.01-$0.03 vs. a consensus of $783.6M and $0.01.
    • Q1 results, PR
    | Comment!
  • 4:17 PM
    • Facebook (FB) CFO David Ebersman is stepping down on June 1. He'll be succeeded by finance VP and ex-Zynga CFO David Wehner. Ebersman suggests he's taking a position in the healthcare industry.
    • Mobile ad sales rose another 19% Q/Q in Q1 (they rose 41% Q/Q in Q4) and made up 59% of ad revenue, up from 53% in Q4 and 49% in Q3. Total ad revenue rose 82% Y/Y to $2.27B, up from 76% in Q4 and 66% in Q3. Payments/other revenue totaled $237M.
    • Monthly active users (MAUs) +4% Q/Q and +15% Y/Y to 1.28B. Mobile MAUs +7% Q/Q and +34% Y/Y to 1.01B. DAUs +6% Q/Q and +21% Y/Y to 802M - the fact DAUs grew faster than MAUs points to improving engagement.
    • Costs/expenses rose 26% Y/Y to $1.13B, down from +37% in Q4. Capex totaled $363M, and free cash flow $922M (above net income of $885M).
    • Q1 results, PR, slides
    | Comment!
  • 4:09 PM
    • F5 Networks, Inc. (FFIV): FQ2 EPS of $1.27 beats by $0.02.
    • Revenue of $420M (+19.9% Y/Y) beats by $5.63M.
    • Shares +4.3%.
    • Press Release
    | Comment!
  • 4:06 PM
    • Body Central (BODY) announces it will look at strategic alternatives.
    • The firm has hired Houlihan Lokey Capital to assist it in the process.
    • BODY +9.7% AH
    | Comment!
  • 4:05 PM
    • Qualcomm (QCOM): FQ2 EPS of $1.31 beats by $0.09.
    • Revenue of $6.37B (+4% Y/Y) misses by $110M.
    • 188M MSM chip shipments, in-line with guidance of 180M-195M.
    • Expects FQ3 revenue of $6.2B-$6.8B and EPS of $1.15-$1.25 vs. a consensus of $6.59B and $1.25, and MSM chip shipments of 198M-213M.
    • Expects FY14 revenue of $26B-$27.5B and EPS of $5.05-$5.25 vs. a consensus of $26.8B and $5.13.
    • Shares -2.6% AH.
    • Press Release
    | Comment!
  • 4:03 PM
    • TriQuint Semiconductor, Inc. (TQNT): Q1 EPS of -$0.06 beats by $0.05.
    • Revenue of $177.6M (-3.6% Y/Y) beats by $1.38M.
    • Shares +3.3%.
    • Press Release
    | Comment!
  • 3:58 PM
    • Plenty of enterprise software names have underperformed on a down day for tech stocks after VMware (VMW -9.2%) provided soft bookings numbers (sub-10% Y/Y growth in the Americas, EMEA, and Asia-Pac), and blamed it on delays in signing major enterprise licensing deals (ELAs) as it talks with clients about more expansive agreements.
    • VMware rivals Oracle (ORCL -1.6%), Citrix (CTXS -2.8%), and Red Hat (RHT -1.7%) are among the decliners. Others: CRM -2.5%. WDAY -5.6%. SPLK -6.3%. VEEV -4.3%. NOW -4.2%. TIBX -2.9%. INFA -2.2%. QLIK -3.2%.
    • Nomura (Buy) observes that while VMware reported 18% Y/Y billings growth, underlying growth may have been in the single digits after accounting for the AirWatch deal and other adjustments. Nonetheless, it thinks ELA weakness might be a seasonal issue that will correct in Q2.
    • Is vSphere competition taking a toll? In spite of the soft bookings figures, VMware managed to report strong licensing activity for products other than its core vSphere server virtualization platform, and noted on its CC (transcript) solutions other than standalone vSphere made up over 45% of license bookings (up from 30%+ a year ago).
    • Microsoft's Hyper-V has been gradually eating into vSphere's market dominance. Other cheaper alternatives such as the open-source Xen (backed by Citrix) and KVM have also been gaining ground.
    | Comment!
  • 3:20 PM
    • Hercules Offshore (HERO -3.5%) shares continue to swirl lower after the oilfield services company issued a mixed Q1 earnings report.
    • Net income from continuing operations fell by more than 50% from year-ago levels to $19.9M, or $0.12 per share, missing the Capital IQ consensus by $0.01; revenue jumped but still lagged estimates.
    • Average dayrates rose across the board, and management is optimistic that the trend will continue on high activity around the world.
  • 2:54 PM
    • Investors are lining up for Cnooc's (CEO -1.8%) sale of dollar-denominated bonds, placing more than $20B in orders for a deal expected to total ~$4B, WSJ reports.
    • Cnooc reportedly is selling bonds with maturities of three, 10 and 30 years, and seeks to set coupons for these bonds at 1.05, 1.85 and 1.70 percentage points above comparable U.S. Treasurys.
    • Proceeds would be used to help repay loans related to Cnooc's $15B purchase of Canadian oil sands operator Nexen last year.
    | Comment!
  • 2:45 PM
    • BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.
    • The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.
    • On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.
    | Comment!
  • 2:38 PM
    • Investors are breathing a sigh of relief at Boeing's (BA +2%) strong cash flow generation of $615M for Q1, above the $545M forecast by RBC Capital; concerns had been growing that BA's free cash flow might be hit by a build-up of inventory of 787 planes following production snags at its South Carolina assembly plant.
    • RBC also takes heart in Boeing's aggressive stock buybacks - $2.5B during the quarter - while share prices were soft; the results should provide comfort that the company’s 2014 cash guidance may prove as conservative as its cautious EPS guidance.
    • An 18% rise in passenger jet deliveries was a pleasant surprise, and the nearly 20% rise in revenues at the commercial airplane division to $12.7B, with operating margins rising to 11.8% from 11.4%, were solid showings; commercial order backlog totaled $374B, including 235 net new orders during the quarter.
    • In today's earnings call, CEO James McNerney said the company sees no softening of demand for its commercial airplanes; "in fact, underpinning the strength of the cycle relative to past ones is a sustained high level of replacement demand."
    | Comment!
  • 2:29 PM
    • Brean has upped its Xerox (XRX +3.6%) PT to $15 from $13 following yesterday's Q1 report. The firm is upbeat about Xerox's ability to grow earnings and see multiple expansion, as well as to continue growing its services revenue mix.
    • Xerox initially traded lower yesterday after offering soft EPS guidance to go with a Q1 EPS beat, but closed the day with a slight gain.
    | Comment!
  • 2:21 PM
    • Cognex (CGNX +4.4%) has received two orders from an unnamed Asian manufacturer for machine vision systems and barcode readers. The orders have a total value topping $40M; revenue will be recognized in Q3.
    • Cognex notes the orders are the largest it has received from a single customer in its 33-year history, and says it beat out a number of competitors in qualifications.
    • Q1 results are due on April 30.
    | Comment!
  • 2:07 PM
    • IGT (IGT -10.4%) posted FQ2 EPS that was slightly above the guidance provided in a March 25 warning, and reiterated a forecast for FY14 (ends Sep. '14) EPS of $1-$1.10. But the company also reported gaming product sales (40% of revenue) fell 27% Y/Y to $202.6M, after having grown 4% in FQ1. Machine units recognized fell 45% to 7.9K, a reversal from FQ1's 20% growth.
    • Gaming operations revenue fell 9% Y/Y to $230.4M (-8% in FQ1), with IGT's installed base falling 6% to 53.4K and yield declining 5% to $47; weaker MegaJackpots revenue is blamed.
    • Interactive revenue rose 20% Y/Y to $79.8M (thanks to a 27% increase in social gaming revenue), but that's a slowdown from FQ1's 41%. DoubleDown's MAUs fell 1% to 6.2M after growing 26% in FQ1, but its bookings per DAU rose 16% to $0.43.
    • Peers are also lower: BYI -3.9%. MGAM -2.1%. SGMS -4.1%.
    • FQ2 results, PR, CC transcript
    | Comment!
  • 12:46 PM
    • Though investors aren't thrilled with AT&T's (T -3.3%) Q1 wireless numbers, Wells Fargo (Outperform) calls them "big time solid." The firm notes net adds and churn were better-than-expected, and thinks Q1 results suggest the telco's 2014 guidance is "quite achievable."
    • Morgan Stanley (Equal-Weight) is less charitable: It estimates 500K of AT&T's 625K postpaid net adds came from tablets, and notes cheaper Mobile Share plans - launched following intense price competition and promotional efforts from T-Mobile (TMUS -3%) - led wireless service revenue growth to fall.
    • Canaccord observes strong uptake for Next upgrade plans boosted subscriber adds, but expects the trend to moderate. The firm has cut its 2014 EPS estimate to $2.69 from $2.78 (consensus is at $2.71).
    • On the CC (transcript), management talked up the ability of Next adoption to lower subsidy expenses, and mentioned U-verse revenue is now on a ~$14B/year run rate.
    • Strong U-verse growth has narrowed AT&T's wireline revenue declines, albeit while pressuring margins. The company promises wireline margins (-110 bps in Q1 to 10%) will improve in 2016.
    | Comment!
  • 12:45 PM
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  • 12:41 PM
    • Gulfmark Offshore (GLF +1.6%) is upgraded to Buy from Neutral with a $49 price target, up from $44, at Global Hunter, which believes GLF is positioned to deliver more earnings growth than current consensus expectations through 2015.
    • Although market softness is expected to continue in the Gulf of Mexico in 2Q14, the scheduled ramp in the floating rig count and GLF's imminent capacity additions should significantly improve its prospects there by H2 2014, the firm says.
    | Comment!
  • 12:34 PM
    • Shares of Keurig Green Mountain (GMCR -4.4%) fall after a report from Israel indicates Starbucks is closing in on taking a 10% stake in SodaStream.
    • Earlier this year, Keurig fired the first shot in the at-home beverage war by deciding to partner with Coca-Cola.
    • There's some debate amongst industry insiders on what the new lineup card will do to Starbucks' existing deal with Keurig Green Mountain which clearly benefits both firms.
  • 12:29 PM
    • Hugoton Realty Trust (HGT +20.2%) spikes ~20% higher, near a 52-week high, after receiving a positive ruling in its arbitration proceeding against XTO Energy.
    • HGT receives permanent injunctive relief barring XTO from treating the Fankhouser settlement as a production cost, and is awarded ~$6.1M.
    | Comment!
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