Today - Tuesday, October 13, 2015
- Though Linear (NASDAQ:LLTC) missed FQ1 revenue estimates (while posting in-line EPS), it's guiding for FQ2 revenue to be flat to up 3% Q/Q, That implies a range of $342M-$352M, above a $339.8M consensus and suggesting demand is turning a corner following a mid-year chip industry inventory correction.
- CEO Lothar Maier: "[FQ1] revenue declined in all major geographies. The revenue decline was led by the Industrial market, followed by Communications and Transportation though the Computer market grew slightly. Despite the revenue decline, we earned $0.46 per share which we believe to be a good result in a difficult quarter.
We stated last quarter that we expected the current negative cycle to be a short one as inventories are rebalanced to the current demand. However, the second fiscal quarter is historically a weaker quarter for us, particularly for the Industrial market, and we remain cautious due to the macroeconomic climate."
- Financials: Cost controls helped FQ1 EPS meet estimates in spite of a revenue miss: GAAP operating expenses fell 1% Y/Y to $106.8M - R&D spend rose by $1M to $66.6M, but SG&A fell by $1.9M to $40.2M. Gross margin fell 90 bps to 75.1%. $56.6M was spent on buybacks. Linear ended FQ1 with $1.2B in cash/marketable securities, and no debt.
- Shares have risen to $42.75 after hours.
- FQ1 results, PR
- The Information reports Salesforce (NYSE:CRM) COO George Hu, on an unpaid leave of absence since last December, plans to launch a cloud HR software startup by year's end.
- As it is, Hu's name has been removed from Salesforce's executive team page. Salesforce previously said his job would end in June unless he returned to work for the company. Nonetheless, a Salesforce spokesman says Hu remains on personal leave.
- The Information notes Hu's startup (assuming Salesforce backs it) could put Salesforce into competition with cloud HR/financials software leader Workday. For now, Salesforce and Workday remain partners.
- Earlier: Salesforce commits $100M to investing in European startups
- On its Q3 earnings call, Intel (NASDAQ:INTC) stated it now expects low-double digit Y/Y revenue growth for its Data Center Group (DCG). The company previously forecast 15%+ 2015 growth. It has also guided for a 15% DCG revenue CAGR through 2018.
- DCG revenue rose 12% Y/Y in Q3 to $4.1B, with the division's op. profit ($2.1B) nearly matching that of the Client Computing Group ($2.4B, pressured by PC weakness).
- Intel has fallen to $31.10 after hours.
- Q3 results/Q4 guidance, details
- Sources tell Bloomberg SanDisk (NASDAQ:SNDK) is in talks with Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC) about a possible acquisition. No decision has been made.
- Acquiring SanDisk, which partners closely with Toshiba (OTCPK:TOSBF) on NAND flash manufacturing, would turn Micron (NAND partnership with Intel) into a heavyweight within the NAND market - Samsung, SK Hynix, and SanDisk/Toshiba are currently the market's biggest players. Micron received 32% of its August quarter revenue from flash, and 60% from DRAM. The company has been betting on 3D NAND and 3D XPoint to strengthen its flash position.
- Western has made several smaller flash-related acquisitions, as it tries to offset the gradual encroachment of SSDs/flash storage on hard drives. However, none of the buyout targets were comparable in scale to SanDisk, and Western still depends on 3rd-party NAND suppliers who also compete with the company in the SSD market.
- SanDisk +11.5% after hours to $68.90. Micron +2.6% to $18.65. Western +0.8% to $85.00.
- Earlier: SanDisk jumps on reported sale effort
- IDT (IDT +0.4%) posted fiscal Q4 results where earnings and revenues declined Y/Y though core business "performed to expectations," CEO Shmuel Jonas says.
- Revenues fell to $405.8M from $420.7M, and non-GAAP EPS fell to $0.25 from $0.39. EBITDA increased, however, to $12.4M from $10.4M. Affecting the revenue comparison was the Q1 sale of Fabrix, which contributed $5.9M in revenue in the prior year's fourth quarter.
- Revenue by segment: The vast majority is Telecom Platform Services, $400.8M (down 2.3%), which broke down as Retail Communications, $182.9M (up 1%); Wholesale Carrier Services, $153.6M (down 6.8%); Payment Services, 455.7M (up 4.7%); Hosted Platform Solutions, $8.6M (down 21.2%).
- Aside from TPS: Consumer Phone Services, $2M (down 21.9%); All other, $3M (down 63.2%).
- Conference call (877-300-8521) to come at 5:30 p.m. ET.
- Press release
- Intel (NASDAQ:INTC) has cut its 2015 capex budget for the fourth time: It's now at $7.3B (+/- $500M), down from $7.7B in July and $8.7B in April, and below a 2014 level of $10.1B.
- Gross margin: Q3 gross margin was 63%, +50 bps Q/Q and -200 bps Y/Y, and in-line with guidance. Q4 GM guidance is at 62% (+/- 2%). Higher ASPs lifted Q3 GM, while higher platform unit costs weighed. Higher unit costs and factory start-up costs are expected to weigh on Q4 GM, partly offset by lower write-offs.
- PC/mobile CPUs: Client Computing Group revenue -7% Y/Y to $8.5B, thanks largely to a weak PC market. Op. profit fell 20% to $2.4B. Volumes +3% Q/Q and -19% Y/Y. ASPs +9% Q/Q and +15% Y/Y. Desktop volumes -15% Y/Y, notebooks -14%, tablets -39%; all three segments had higher ASPs.
- Server CPUs: With Web/cloud demand and the Grantley Xeon CPU launch still acting as tailwinds, Data Center Group revenue rose 12% Y/Y to $4.1B. Op. profit rose 9% to $2.1B. Volumes +7% Q/Q and +6% Y/Y. ASPs +1% Q/Q and +6% Y/Y.
- Other segments: IoT Group revenue +10% Y/Y to $581M; op. profit +4% to $151M. Software/services revenue flat at $556M; op. profit up over 3x to $102M. Other (NOR/NAND flash, devices, one-time costs, etc.) revenue +19% to $682M; op. loss of $621M.
- Financials: $1B was spent on buybacks, up from $697M in Q2. Thanks to lower R&D spend, R&D/MG&A spend was flat Y/Y at $4.8B ($100M below expectations). The tax rate was 26.9%, 90 bps above expectations. Intel ended Q3 with $20.8B in cash/investments ($10.3B offshore), and $21.2B in debt.
- INTC +0.3% after hours to $32.13.
- Q3 results/Q4 guidance, PR (.pdf), CFO commentary (.pdf)
- Bloomberg reports SanDisk (NASDAQ:SNDK) is working with a banker to explore a potential sale.
- SanDisk and (to a lesser extent) Micron (NASDAQ:MU) have risen after hours. Numerous chipmakers have been acquired over the last two years as the industry consolidates; SanDisk would be one of the biggest if a deal occurred.
- The chairman of China's Tsinghua Unigroup (previously bid for Micron) recently suggested his company wants to be a NAND flash manufacturer, but added it's uninterested in buying SanDisk, Toshiba, or SK Hynix (assuming regulators would allow it).
- Piper has downgraded GoPro (NASDAQ:GPRO) to Neutral after the close following its latest teen survey. Shares -1.6% after hours to $27.50, after dropping 1.7% in regular trading.
- Piper upgraded GoPro to Overweight (as part of a change of coverage) on April 14, when shares were at $44.48. Today's move comes ahead of the action camera leader's Oct. 28 Q3 report.
- The Nasdaq hasn't moved much this week, but the same can't be said of FPGA developers Lattice Semi (LSCC +8.3%) and server adapter/converter appliance maker Silicom (SILC +4.6%). The former is up 17% from Friday's close, and the latter up 12%.
- On Friday, Franklin Resources disclosed it had upped its stake in Lattice to 10.3% from a prior 8.7%. M&A hopes could be giving a lift to the company, given how many small and mid-cap chipmakers have been acquired over the last two years. CEO Darin Billerbeck stated in June he's open to a sale.
- Silicom reports on Oct. 26, and Lattice on Oct. 29.
- Yingli (NYSE:YGE) has repaid $110M worth of mid-term notes (MTNs) via funds obtained by the liquidation of idle land and the demolition of facilities held by subsidiary Fine Silicon.
- On Sep. 30, Yingli promised to pay down the full $157M due on the notes within a year. The full sum was originally due today.
- Shares remain down 76% YTD, thanks in large part to debt/liquidity fears. Yingli had $92.7M in cash, $193.8M in restricted cash, $1.63B in short-term borrowings, $48.4M in medium-term debt, and $332.9M in long-term debt at the end of Q2.
- Intellicheck (NYSEMKT:IDN) has won a contract to supply additional units of its Defense ID identity-confirmation solution at Fort Sill (located near Lawton, OK).
- Intellicheck: "The new contract upgrades the Intellicheck system currently in place with a combination of new Defense ID handhelds, workstations, and a Visitor/Vendor Registration and Credentialing Center running on hardened laptop equipment." No word on the deal size.
- Last month, Intellicheck sold its wireless product assets and bought an identity-verification patent portfolio.
- Janet Masuda, formerly the marketing chief for security hardware vendor Blue Coat Systems, has been named Nimble Storage's (NMBL +0.7%) chief marketing officer. Dan Leary, previously VP of marketing, is now VP of products, solutions, and alliances. Both will report to CEO Suresh Vasudevan.
- Masuda's hiring comes 5 months after Nimble named EMC/Riverbed vet Denis Murphy its VP of sales, and two months after its named EMC/NetApp vet Leonard Iventosch its VP of worldwide channels.
- Like many growth-stage enterprise tech companies, Nimble has been investing heavily in growing its sales reach. GAAP sales/marketing spend rose 31% Y/Y in FQ2 to $47.9M (equal to 60% of revenue).
- The FCC review of Charter Communications' (CHTR +0.7%) $55.1B bid for Time Warner Cable (TWC +0.5%) is, for the moment, focused on what the impact would be on broadband Internet service.
- After pressing Charter and TWC last month about Web video's effect on their customer bases, the agency is now collecting info from AT&T and Verizon, from key competitor Comcast, and from critical peering partners in Netflix and Cogent Communications.
- Questions for companies included whether AT&T and Verizon plan to offer faster service, and their approach to data caps.
- Charter's pledge to abide by net neutrality regulations won it support from Netflix and Cogent for the merger, which would create a business with 17M basic cable subscribers to Comcast's 22M.
- Previously: Time Warner Cable, Cogent strike interconnection deal (Oct. 08 2015)
- Previously: FCC asks Charter, TWC about Web video competition (Sep. 22 2015)
- Previously: Charter, TWC up after interconnection deal wins Netflix support (Jul. 15 2015)
- ETSY has dropped below $12 after the first of three share lockups expired. The craft/vintage goods marketplace is now 27% below its $16 IPO price. Its market cap stands at $1.3B.
- Shares fell ahead of the lockup yesterday after Monness Crespi launched coverage with a Sell rating and $10 target.
- SA author Pat Stout recently defended Etsy, arguing listing growth has remained robust and that new features such as Direct Checkout (Etsy charges 3% + $0.25 for its use in the U.S.) improve the user experience. "The stock price appears to be pricing in bad news ... Listings have increased; the unknown is whether sellers have maintained or increased their conversion rate. If they have, then an upside surprise might be forthcoming."
- Salesforce's (CRM +0.8%) VC arm (Salesforce Ventures) plans to invest $100M in European startups to "fuel cloud innovation and customer success in the region." Translation: Salesforce is eyeing companies developing enterprise cloud apps/services that complement its own. Odds are some will support Salesforce's cloud app development platforms.
- TechCrunch notes only 17 of Salesforce Ventures' 150+ investments to date have been in Europe, where cloud app penetration rates are generally below U.S. levels. Existing investments include location data mapping service CartoDB and call center software provider Talkdesk.
- Salesforce's European revenue rose 16% Y/Y (29% exc. forex) in FQ2, and equaled 17% of total revenue. Last year, Salesforce committed $100M to investing in enterprise mobile app developers.
- The Naval Research Laboratory has granted KEYW (KEYW +0.1%) a contract to "provide a broad range of services including development, evaluation and integration of General Purpose Electronic Test Equipment as well as program specific software development." The contract has one base year and two one-year options, and a max value of $13.5M.
- The software development work includes creating "an enterprise view of risk within the data visualization framework," as well as developing a software-defined radio. Shares are nearly flat after briefly trading higher.
- Two weeks ago: KEYW gains after announcing Hawkeye G deal with energy company
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