Seeking Alpha
  • Today - Wednesday, January 28, 2015

  • 6:21 PM
    • Cavium (NASDAQ:CAVM) has guided on its Q4 CC (webcast) for Q1 EPS of $0.38-$0.40, above a $0.37 consensus.
    • The network processor/ARM server CPU developer is up to $64 in AH trading. Its 52-week high is $64.61.
    • Q4 results, PR
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  • 6:15 PM
    • Qualcomm (NASDAQ:QCOM) partly blames its soft FY15 (ends Sep. '15) guidance on "a shift in share among OEMs at the premium tier, which has reduced our near-term opportunity for sales of our integrated Snapdragon" processors." That's undoubtedly a reference to Apple, which (though using Qualcomm's 4G baseband modems and other ICs) relies on its home-grown A-series app processors, and just reported huge FQ1 iPhone sales.
    • The mobile chip/IP giant also cites "heightened competition in China," where its issues are well-known and MediaTek/Intel have been hungry to gain share, and "expectations that our Snapdragon 810 processor will not be in the upcoming design cycle of a large customer's flagship device." Bloomberg has reported Samsung won't use the 810 in its Galaxy S6 (ostensibly due to overheating issues), instead relying on its own (Exynos) processors.
    • In addition to a Snapdragon processor (the 805), Qualcomm supplies a 4G baseband modem and several other ICs for many Galaxy S5 models. It's unknown if Samsung, which has developed an app processor with an integrated 4G baseband, will be using similar Qualcomm parts in the S6.
    • On the bright side, Qualcomm says it has resolved a dispute with a Chinese licensee. But it still believes other Chinese licensees aren't fully complying with their obligations.
    • QCT (chip division) sales rose 14% Y/Y in FQ1 to $5.2B, and division op. profit rose 26% to $1.15B. With China taking a toll, QTL (licensing division) revenue fell 4% to $1.82B, and op. profit 5% to $1.58B.
    • $1.7B was spent on buybacks. Qualcomm ended FQ1 with $31.6B in cash/marketable securities (equal to 29% of its current market cap), and no debt. Shares are down to $65.32 AH.
    • FQ1 results, PR
  • 5:45 PM
    • McDonald's (NYSE:MCD) says Don Thompson is retiring as president and CEO of the company.
    • Current Chief Brand Officer Steve Easterbrook has been elected to replace Thompson.
    • Shares +2.6% after hours.
  • 5:44 PM
    • Along with its Q4 numbers, Citrix (NASDAQ:CTXS) has announced it's laying off 700 full-time employees (8% of them) and 200 contractors through a restructuring expected to yield $90M-$100M/year in pre-tax savings. Pre-tax charges of $49M-$55M are expected.
    • With forex taking a toll (and perhaps also VMware's end-user computing growth), Q1 guidance is for revenue of $780M-$790M and EPS of $0.70-$0.72, below a consensus of $796.7M and $0.80. Full-year guidance is for revenue of $3.29B-$3.33B and EPS of $3.60-$3.65, below a consensus of $3.36B and $3.69.
    • Product/license revenue (drives future update/maintenance revenue) rose 1% Y/Y in Q4 to $267.4M; SaaS rose 12% to $168.4M; license update/maintenance rose 9% to $367M; and professional services rose 26% to $48.8M.
    • 3.3M shares were repurchased in Q4, and 26.1M over the whole of 2014.
    • Q4 results, PR
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  • 5:35 PM
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  • 5:26 PM
    • With Intel's Grantley Xeon server CPU launch providing a big tailwind, Mellanox (NASDAQ:MLNX) expects Q1 revenue of $140M-$145M, above a $135.4M consensus.
    • CEO Eyal Waldman declares the Q4 beat was fueled by 40G Ethernet adoption by major clients, growing HPC deployments (boosted by share gains), and "additional penetration into Web 2.0, storage and cloud markets." Mellanox's 100G InfiniBand offerings are expected to see initial deployments in Q1, as are its 25/50/100G Ethernet adapters and cables.
    • Gross margin rose 300 bps Y/Y in Q4 to 72.3%; it's expected to be at 70%-71% in Q1. Opex rose 14% to $73M.
    • Mellanox ended Q4 with $389M in cash/investments, and no debt. Jefferies' downgrade wasn't timed well.
    • Q4 results, PR
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  • 5:13 PM
    • In its first quarter as a merged company (FQ4), Qorvo (NASDAQ:QRVO) expects revenue of $615M-$625M and EPS of $0.80-$0.90 vs. a consensus of $619M and $0.82. Expectations were high going in, following strong numbers from peers and major client Apple.
    • Total FQ3 revenue was $742M - $397.1M from RF Micro, $344.9M from TriQuint - beating a consensus of $723.4M. EPS of $1.46 topped a $1.16 consensus.
    • RF Micro had an FQ3 gross margin of 49.3%, up from 48% in FQ2 and 39.7% a year earlier. TriQuint had a gross margin of 48.8%, up from 46.6% in FQ2 and 37.2% a year ago. The combined company expects a GM of 46%-48% in seasonally weak FQ4, and a tax rate of just 5%-10%.
    • FQ3 results, PR
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  • 4:58 PM
    • Core Labs (NYSE:CLB) -12.9% AH after Q4 results come in as expected but Q1 is guided lower, now seeing EPS of $1.05-$1.10 vs. $1.33 analyst consensus estimate and revenues of $230Mvs. $245.7M consensus.
    • CLB says it may enjoy some insulation from the industry downturn because of its technology and its clients' historical flight to value-added service providers, but warns that North American land rig counts will continue to fall sharply into Q2 while deepwater Gulf of Mexico activities continue at or near Q4 2014 levels.
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  • 4:47 PM
    • Though the Nasdaq fell 0.9%, Arista (NYSE:ANET) closed up 2.9% on healthy volume.
    • Possibly helping: Juniper beat Q4 estimates yesterday afternoon, and offered better-than-expected Q1 guidance. However, it's worth noting Juniper (unlike Arista) gets a majority of its revenue from carriers rather than enterprises/governments.
    • Northland issued an upbeat note about Arista yesterday, arguing the company will benefit from top client Microsoft's aggressive cloud spending. The firm suspects Microsoft, which spent $1.5B on capex in calendar Q4 and expects to spend more in Q1, makes up nearly 20% of Arista's revenue. Nonetheless, it maintains a Market Perform rating on valuation and legal risk concerns.
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  • 4:38 PM
    • Alliant Techsystems (NYSE:ATK): FQ3 EPS of $3.02 beats by $0.14.
    • Revenue of $1.25B (+3.3% Y/Y) in-line.
    • Shares +1.9%.
    • Press Release
  • 4:29 PM
    • Cabot (NYSE:CBT): FQ1 EPS of $0.80 beats by $0.15.
    • Revenue of $812M (-9.6% Y/Y) misses by $51.67M.
    • Shares +1.5%.
    • Press Release
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  • 4:18 PM
    • Aspen (NASDAQ:AZPN): FQ2 EPS of $0.36 beats by $0.06.
    • Revenue of $107.8M (+9.1% Y/Y) beats by $2.18M.
    • Shares +2.97%.
    • Press Release
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  • 4:16 PM
    • A 16% drop in revenue at Sands China took its toll on Las Vegas Sands (NYSE:LVS)  in Q4.
    • Macau casino revenue was off more than room revenue on softer VIP traffic.
    • The company also saw a 6% drop in revenue from its Las Vegas operations during the quarter.
    • Adjusted EBITDA property margin for Vegas was down 140 bps to 21.5%.
    • Marina Bay Sands in Singapore accounted for more than a third of Las Vegas Sands' EBITDA growth.
    • LVS +2.5% after-hours
  • 4:14 PM
    • Cavium Networks (NASDAQ:CAVM): Q4 EPS of $0.42 beats by $0.01.
    • Revenue of $101.22M (+24.7% Y/Y) beats by $0.4M.
    • Shares +3.42%.
    • Press Release
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  • 4:09 PM
    • Mellanox Technologies (NASDAQ:MLNX): Q4 EPS of $0.59 beats by $0.15.
    • Revenue of $141.11M (+33.7% Y/Y) beats by $5.98M.
    • Shares +3.6%.
    • Press Release
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  • 4:06 PM
    • Extreme Networks (NASDAQ:EXTR): FQ2 EPS of $0.05 beats by $0.01.
    • Revenue of $148M (-0.2% Y/Y) beats by $4.87M.
    • Shares +3.23%.
    • Press Release
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  • 4:05 PM
    • The iShares Barclays MBS Bond Fund (MBB +0.2%) hit a new lifetime high, which should be good for the book values of mortgage REITs (assuming they weren't too hedged), but the yield curve continues to sharply flatten. The 10-year Treasury yield is all the way down to 1.71% and the 30-year at a record-low 2.29% - this as the Fed says it's on track for a mid-year rate hike.
    • In addition to shaving margins for leveraged holders of mortgages, the lower rates could result in another refinance wave, and thus a surge in prepayments.
    • Annaly Capital (NLY -1%), American Capital Agency (AGNC -1.6%), Armour Residential (ARR -0.7%), Hatteras Financial (HTS -0.7%), Western Asset (WMC -2.2%), Apollo Residential (AMTG -0.7%)
    • Previously: Bond yields slide after FOMC (Jan. 28)
    • Previously: FOMC: Still "patient," but rate hike remains on the way (Jan. 28)
  • 3:59 PM
  • 3:52 PM
    • Sony (NYSE:SNE) is shuttering its Music Unlimited streaming service (had seen limited uptake, from all indications) in favor of an alliance with Spotify: The online music giant will power a new service called PlayStation Music, with the offering initially launching on the PS3, PS4, and Xperia phones/tablets.
    • PS4 users will be able to have Spotify music serve as the soundtrack for their games. The PS3 and PS4 respectively have installed bases above 80M and 18M.
    • Pandora (NYSE:P), already dealing with concerns about active listener growth and competition, has slumped below $17 following the news, which comes eight days before the company's Q4 report. Pandora has long argued Spotify's subscription streaming services aren't a major threat to its personalized Web radio services.
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  • 3:49 PM
    • The U.S. Air Force says it has selected Boeing's (BA +5.7%) commercial 747-8 airliner to replace its current fleet of Air Force One presidential aircraft.
    • Boeing has not secured a contract, but the Pentagon says it likely would win deals for the aircraft and modifications that include sophisticated communications equipment and antimissile devices.
    • The Sikorsky unit of United Technologies (UTX -1.7%) and Lockheed Martin (LMT -0.5%) win a $1.24B contract to build the first six of a planned fleet of 23 helicopters for the Marine Corps to transport the president, vice president, cabinet members and other dignitaries.
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