Seeking Alpha
  • Today - Wednesday, April 23, 2014

  • 3:31 PM
    • Squashing rumors he's turned sour on IBM, Warren Buffett - appearing on CNBC - says he's not surprised by the company's weak Q1 results. He hasn't sold a share of the stock, he says, and expects to add more to his holdings. The stock has peaked about $0.50 higher on the Oracle's comments, now back to flat on the session.
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  • 2:47 PM
    • SunEdison (SUNE +1%) has obtained C$115M ($103.5M) in financing from Deutsche for two Ontario solar plants.
    • The plants are expected to be operational by year's end, and will feature over 100K locally-manufactured SunEdison solar modules. Following completion, they'll be managed by SunEdison's ROC ops.
    • Shares are ticking higher on a down day for tech stocks. They soared yesterday after David Einhorn disclosed he has added to his position.
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  • 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.
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  • 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.
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  • 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
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  • 1:43 PM
    • Google (GOOG -1%), which already offers app promotion/install ads for its AdWords search ad platform and AdMob mobile display ad network, has updated its offerings to allow marketers to target users based on app usage, as well as offer ads urging users to open apps they've already installed (but might be ignoring).
    • Much like Twitter's newly-launched app install ads, Google's revamped offering is aimed at Facebook (FB -2.4%), which drove 245M downloads last year via ads allowing developers struggling to get noticed within app stores to promote themselves on news feeds.
    • Google is also rolling out new reporting, automated bidding, and bulk-action tools for AdWords clients - the company calls them "enterprise-class" - and has confirmed it's testing the use of offline data to measure search ad effectiveness (previous).
    • Meanwhile, WhatsApp CEO Jan Koum says his company has reached 500M MAUs - up from 450M in mid-February, when the Facebook deal was announced. Koum notes India (48M MAUs), Brazil (45M), Mexico, and Russia are WhatsApp's biggest growth drivers, and promises to keep its apps simple and uncluttered; some rivals have a different strategy.
    • Facebook is lower ahead of today's Q1 report. Pre-earnings commentary has been mixed.
    | 1 Comment
  • 1:05 PM
    • The Verge reports the Start menu, beloved by many Windows 7 fans unhappy with Windows 8's big UI changes, will likely be added to Windows 8.1 courtesy of an August update.
    • Microsoft (MSFT -1%) announced on April 2 (at its BUILD conference) the Start menu will return, but didn't provide an ETA; past reports suggested it wouldn't come back until the launch of Windows 9 (expected in spring 2015).
    • The company showed off a revamped Start menu at BUILD that included live tiles, and also demoed a feature that allows (touch-optimized) Metro-style apps to appear within distinct windows in desktop mode. The Verge's sources state Microsoft is trying to get the latter feature ready in time for the August update.
    • Though PC sales are showing signs of stabilizing, Microsoft's efforts to gain tablet share via dual-UI Windows 8 systems haven't gone according to plan. Gartner estimates Windows 8/RT had a 2.1% 2013 tablet share, up from 1% in 2012.
    | 2 Comments
  • 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.
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  • 12:08 PM
    • InterCloud (ICLD -7.1%) has filed to sell over 1.7M shares on behalf of buyers of its December 12% convertible debt offering (used to finance its acquisition of managed telecom services firm Integration Partners-NY). The company says the filing was necessary to comply with its obligations under the offering.
    • Separately, CEO Mark Munro has issued an open letter talking up InterCloud's acquisitions and cloud services efforts, and defending his company against recent paid promotion allegations.
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  • 11:31 AM
    • NetApp (NTAP -1.1%), Fusion-io (FIO -2.1%), and Nimble Storage (NMBL -3.2%) are all lower after EMC reported a 3% revenue drop for its core Information Storage ops, and a 7% drop in the unit's product sales.
    • EMC's high-end storage sales were particularly weak, falling 22% Y/Y. On the other hand, emerging storage sales (inc. flash storage, object storage, and scale-out NAS) rose 81%, and unified storage and backup/recovery sales rose 4%.
    • NetApp is EMC's biggest rival in the unified storage space. All three of the aforementioned companies compete to varying degrees against products offered by EMC's emerging storage ops.
    • EMC's numbers follow a relatively healthy Q4 for the storage industry. But they also come amid concerns about the long-term impact of cloud infrastructure services on traditional storage arrays from the likes of EMC, IBM, NetApp, and H-P - concerns heightened by an ongoing price war.
    • Separately, upstart flash array vendor Pure Storage has raised $225M at a $3B valuation. CEO Scott Dietzen says Pure, which asserts its flash arrays are cheaper than rival solutions and offer a superior data-reduction feature set, isn't in any rush to go public.
    • Nutanix, a maker of clustered server/storage systems for web-scale data centers, raised funding earlier this year at a ~$1B valuation.
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  • 10:52 AM
    • A day after getting crushed thanks to a Q1 miss, Medidata (MDSO +4.8%) is higher following an upgrade to Buy from B. Riley. The firm's PT is $49.
    • In spite of the Q1 miss, Medidata reiterated its full-year outlook on yesterday's CC (transcript), and also reported billings rose 43% Y/Y to $90M (exceeded revenue of $76.6M, +21% Y/Y). Analysts pressed the company on platform deal activity, services margin pressure, and the demand environment among biotech clients.
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  • 10:20 AM
    • Morgan Stanley has downgraded Quality Systems (QSII -5.2%) to Underweight. Its PT stands at $15.
    • Shares of the patient care software provider have made fresh 52-week lows. They fell hard in January thanks to an FQ3 warning.
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  • 10:03 AM
    • Joseph Dunsmore, Digi's (DGII -1.3%) CEO since 1999 and chairman since 2000, will retire at year's end or "upon the earlier appointment of his successor." Executive search firm Spencer Stuart has been hired to find his replacement.
    • Aside from a post-Dot.com bubble crash and rebound, Digi shares have largely tread water since Dunsmore took over.
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  • 9:59 AM
    • BrightWire reports Ku6 (KUTV +0.6%) CEO Du Fang is leaving the company due to "a strategy disagreement," and will be succeeded by controlling shareholder Xu Xudong.
    • Ku6 announced at the beginning of April parent Shanda Media is selling a 41% stake in the company to Xu, the founder of Chinese social networking/messaging platform iSpeak.
    • Xu reportedly wants Ku6 to work more closely with iSpeak parent Sky Profit. Du, on the other hand, has wanted Ku6 to focus on buying and creating online video content.
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  • 9:45 AM
    • RGS Energy (RGSE +2.5%) will design, install, and operate a 2.6MW ground-mount solar system in Auburn, MA. The town of Auburn has agreed to buy all of the electricity produced by the system.
    • The deal will be financed via RGS' $150M JV with Altus Power America. It follows a January agreement to install and maintain 4 Massachusetts solar farms featuring 3.5MW of capacity, and a December agreement to co-develop Vermont solar projects sporting 4.5MW of capacity.
    | 2 Comments
  • 9:32 AM
    • Following a Q1 revenue beat, EMC has slightly upped its full-year revenue guidance to $24.575B from a prior $24.5B. But EPS guidance has been lowered by $0.05 to $1.90. The consensus is at $24.51B and $1.94.
    • After rising 11% Y/Y in Q4, product revenue fell 3% in Q1 to $3.01B. Services revenue (driven by product revenue) rose 9% to $2.47B, after growing 10% in Q4.
    • EMC's core Information Storage ops (67% of revenue) saw sales fall 3% Y/Y (product sales -7%) after growing 10% in Q4, thanks largely to a 22% drop in high-end storage sales (a high-margin business) to $940M. Unified storage and backup/recovery sales +4% to $1.44B, other storage -12% to $830M.
    • Emerging Storage (inc. Atmos, Isilon, and flash storage) remains a bright spot, with sales growing 81% to $81% to $470M. RSA Security +5% to $244M, Pivotal (still waiting for its IPO) +41% to $49M.
    • North American sales were flat at $2.99B, and EMEA grew 8% to $1.59B. But Asia-Pac fell 2% to $720M, and Latin America 11% to $180M.
    • Gross margin -30 bps Y/Y to 62.8%, higher SG&A spend contributed to a 270 bps drop in op. margin to 20.5%. $390M was spent on buybacks in Q1; EMC still expects to repurchase $2B worth of shares in 2014.
    • EMC is off thanks to its EPS guidance cut and VMware's (VMW -6.8%) soft bookings. VMware blames delays in closing enterprise license agreements (ELAs) as it holds "deeper conversations" about expanded deals.
    • Q1 results, PR, slides
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  • 8:41 AM
    • Google (GOOG) and SunPower (SPWR) team to provide financing for about $250M of residential solar lease projects, with Google committing up to $100M and SunPower about $150M.
    • The program is expected to allow thousands more to finance solar power systems through SunPower, joining about 20K who already do so.
    • Press release
    • SPWR +8.6% premarket
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  • 8:05 AM
     
  • 8:03 AM
    • Amphenol (APH): Q1 EPS of $0.99 beats by $0.03.
    • Revenue of $1.25B (+15.7% Y/Y) beats by $40M.
    • Press Release
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  • 7:11 AM
    • Celestica (CLS): Q1 EPS of $0.26 beats by $0.06.
    • Revenue of $1.31B (-4.4% Y/Y) misses by $50M.
    • Press Release
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