Seeking Alpha
  • Today - Thursday, April 24, 2014

  • 2:11 PM
    • After trading sharply higher premarket, Facebook (FB -0.7%) is now down slightly, as investors balance big top and bottom-line beats (the company's fourth in a row) with concerns about slowing growth and a CFO change.
    • Facebook has announced today it's buying Finland's ProtoGeo, developer of popular fitness-tracking app Moves. ProtoGeo says its team will work on improving Facebook's products/services, but will also continue supporting its standalone app and has no plans to "commingle" its data with Facebook's.
    • The acquisition comes amid surging industry hardware and software investments in mobile health/fitness-tracking solutions. Samsung included a slew of health/fitness features within its Galaxy S5, and Apple will reportedly do the same for the iPhone 6 and its anticipated iWatch. Google's new Android Wear platform also includes health/fitness-monitoring support.
    • Separately, Facebook has launched a newswire page in partnership with startup Storyful in an effort to get more breaking news into feeds. Mark Zuckerberg has wanted Facebook to be the world's "best personalized newspaper," but users haven't always felt the same way.
    | 1 Comment
  • 1:42 PM
    • Lam Research (LRCX +11%) beat FQ3 estimates and guided on its CC (transcript) for FQ4 revenue of $1.19B-$1.29B and EPS of $1.14-$1.28, above a consensus of $1.16B and $1.09. Ultratech (UTEK +3.6%) missed Q1 estimates, but has reiterated guidance for 25%-30% 2014 revenue growth (above a 23.5% consensus).
    • Just as importantly for the industry, Lam has forecast the global wafer fab equipment market will be worth $32B in 2014 - $1B more than what Gartner previously forecast.
    • Lam also mentioned it has "seen some strengthening" in DRAM equipment orders - clients have been conservative with their capex following industry consolidation - and a "sustained commitment" among logic/foundry clients (Intel and TSMC?) to advanced processes (20nm, 3D transistors, etc.). However, there have been "some slight delays" in 3D NAND flash investments.
    • Chip equipment peers are also up: AMAT +1.4%. KLAC +1.5%. ASML +2.1%. ACLS +1.6%. CAMT +5.3%. RTEC +1.5%. PLAB +3.4%. One notable exception is Teradyne (TER -4.1%), which provided light Q2 EPS guidance - $0.36-$0.43 vs. a consensus of $0.49 - to go with a Q1 beat. Revenue guidance is in-line.
    • The group sold off last week after ASML offered soft guidance and a cautious 2H outlook. KLA reports after the bell.
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  • 1:08 PM
    • Re/code reports Amazon (AMZN +3.5%) is paying HBO (TWX +0.1%) $300M over three years for its streaming deal. While steep, that figure is less than many estimated, particularly given the cost of Amazon's deals with Viacom and Epix.
    • The Amazon/HBO deal covers many of HBO's biggest hits, including The Sopranos, The Wire, and Six Feet Under, Boardwalk Empire, and True Blood. (early seasons for the last two). But it doesn't cover HBO's biggest current hit (Game of Thrones).
    • Separtely, Amazon has launched Prime Pantry, its latest salvo at supermarkets and Wal-Mart/Target's grocery ops. Prime Pantry allows Prime subs in the continental U.S. to have up to 45 pounds of groceries shipped for a flat fee of $6. It arrives as Amazon gradually expands the reach of its AmazonFresh same-day delivery service.
    • Shares are up strongly ahead of today's Q1 report. Recent ChannelAdvisor data has been encouraging, a sales tax survey less so.
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  • 12:26 PM
    • In addition to beating Q1 estimates, Infinera (INFN +5.9%) guided on its CC (transcript) for Q2 revenue of $160M-$170M and EPS of $0.02-$0.06 vs. a consensus of $156.3M and $0.05. As is its custom, rival Ciena (CIEN +5.8%) is following Infinera higher.
    • Thanks to a favorable mix, Q1 gross margin was 41.8%, +40 bps Q/Q and +590 bps Y/Y, and above guidance of 40%. Infinera only forecasts a GM of 39%-41% for Q2 due to the margin pressure caused by new large-footprint deployments, but still expects a low-40s GM for the full year and future margin gains as it fulfills capacity expansion orders for major deployments.
    • Strong North American demand allowed revenue to grow 3% Q/Q in seasonally weak Q1. Infinera had two 10%+ customers - a cable MSO and a tier-1 North American carrier, and added one more client for its dense/high-capacity DTN-X optical transmission platform, raising the total to 42.
    • Not surprisingly, a positive outlook was provided for the 100G optical market, where the company and Ciena have leading positions. Infinera says it's confident it can outgrow the broader 100G market in 2014.
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  • 11:43 AM
    • Deutsche's Karl Keirstad has upgraded MicroStrategy (MSTR +12%) to Buy. He reports management comments at yesterday's shareholder meeting suggest the company is finally ready to "open up to the Street and is now willing to meet with top shareholders."
    • Keirstad: "Roughly 10 years ago, MSTR adopted a no-communication policy with the Street, meaning no earnings call, no guidance, no contact with investors, no response to Street inquiries ...  This lack of visibility has been one of the biggest weights on MSTR’s industry-low multiple."
    • He still doesn't expect the BI software vendor to offer guidance, but thinks earnings calls are now "under consideration." With shares only going for 1.4x 2014E EV/sales in spite of MicroStrategy's possession of a best-in-class BI suite, Keirstad sees plenty of room for multiple expansion if the company "truly opens up."
    • If history is any guide, Q1 results could arrive next week.
    | Comment!
  • 11:11 AM
    • The Chinese government has revoked Sina's (SINA -5.8%) online publishing and video licenses after finding articles and videos posted on Sina.com that contained "lewd and pornographic content."
    • For the time being, Sina.com is fully operational. A government official tells Xinhua it's not certain when the punishment will be implemented, and that Sina should have the chance to appeal. Sina's Weibo unit has already run afoul of regulators plenty of times.
    • Sina's shares are off sharply on a down day for Chinese Internet stocks.
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  • 10:40 AM
    • Apple (AAPL +8%) has received 5 PT hikes to go with one upgrade (from CLSA) following its iPhone-driven FQ2 beat, dividend/buyback increases, and split announcement.
    • Jefferies (Buy) isn't crazy about FQ3 guidance (it thinks FQ2 demand pull-in is a factor), but is pleased with the pickup in iPhone sales growth and recommends buying shares "ahead of what we believe will be a successful iPhone 6 launch."
    • Canaccord (Buy): "While our survey work indicates iPhone will likely lose share over the next several months to refreshed Android products, we believe Apple will win back meaningful high-end market share during [2H14]."
    • Nomura (Neutral) is more cautious, noting growth was just 0.4% Y/Y outside of China and Japan. But it also sees "little risk of a material negative disappointment in the coming months."
    • Also: 1) Ahead of Angela Ahrendts' arrival next week, Tim Cook suggests Apple plans to triple its Chinese store count over the next two years. 2) Many observers have pointed out Apple's split could lead it to join the Dow (DIA), given the index is price-weighted rather than valuation-weighted.
    • More on Apple's FQ2. CC transcript.
    | 10 Comments
  • 10:10 AM
    • Verizon (VZ -2%) had only 539K wireless postpaid net adds in Q1 (549K total), down from 677K a year ago (720K total) and for once below AT&T's quarterly postpaid figure of 625K. Also, retail churn rose 7 bps Y/Y to 1.37%, and retail postpaid churn 6 bps to 1.07%.
    • Those figures raise the question of whether Verizon's commitment to a premium pricing strategy in the face of a T-Mobile-launched price war is impacting subscriber adds.
    • Nonetheless, wireless service revenue grew 7.5% Y/Y, nearly even with Q4's 8% and much better than AT&T's 2.2%. Wireless op. margin rose 210 bps to 35%, and retail postpaid ARPA 6.3% to $159.67. Verizon ended Q1 with 103.3M retail connections (97.3M postpaid).
    • Wireline revenue fell 0.4%, as 4.4% and 6.4% declines in enterprise and wholesale revenue (caused in part by voice weakness) offset a 6.2% increase in consumer retail (driven by 15.5% FiOS growth). Wireline op. margin rose 10 bps to 1.5%.
    • 98K and 57K FiOS Internet and TV subs were respectively added, down from 126K and 96K in Q4. Total broadband connections (FiOS or otherwise) rose 1.5% to 9M.
    • Q1 free cash flow was $3.93B, below net income of $5.99B but above illustrative net income of $3.8B. Verizon is still expecting 4% 2014 revenue and EBITDA growth. Its dividend yield stands at 4.6%.
    • Sprint (S -3.2%) and T-Mobile (TMUS -2%) are following Verizon lower. They fell yesterday in the wake of AT&T's report. Sprint reports on April 29
    • Q1 results, PR,
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  • 9:43 AM
    • Silicom (SILC): Q1 EPS of $0.58 misses by $0.01.
    • Revenue of $19M (+26.4% Y/Y) beats by $0.21M.
    • Press Release
    | 2 Comments
  • 9:22 AM
    • NXP (NXPI) expects Q2 revenue of $1.30B-$1.35B and EPS of $1.00-$1.10, largely favorable to a consensus of $1.30B and $1.02. Shares +2.5% premarket. (Q1 results, PR)
    • Yandex (YNDX) expects 25%-30% 2014 ruble-based revenue growth vs. a consensus for 29% growth. Shares -0.9% premarket. (Q1 results, PR)
    • Sonus (SONS) expects Q2 revenue of $73M-$75M ($33M-$35M from SBCs and diameter signaling) and EPS of $0.01 vs. a consensus of $74M and $0.01. Full-year guidance is for revenue of $300M ($168M from SBCs and diameter signaling) and EPS of $0.05 vs. a consensus of $301.8M and $0.05. Shares +2.9% premarket. (Q1 results, PR)
    • Logitech (LOGI) is reiterating FY15 (ends March '15) guidance for revenue of $2.16B and op. income of $145M. The revenue forecast is below a $2.17B consensus. Shares -2.9% premarket. (FQ4 results, PR)
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  • 9:08 AM
    • Parametric (HEAR) hasn't yet provided a price for its stock offering, which at current levels would increase its share count by 12%.
    • News of the offering comes a month after Parametric provided a positive business update.
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  • 9:07 AM
    • Ultratech (UTEK): Q1 EPS of -$0.25 misses by $0.02.
    • Revenue of $31.6M (-47.9% Y/Y) misses by $1.45M.
    • Press Release
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  • 8:06 AM
    • Clearfield (CLFD): FQ2 EPS of $0.09 misses by $0.03.
    • Revenue of $13.21M (+25.7% Y/Y)
    • Press Release
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  • 8:01 AM
    • With Facebook (FB) unsurprisingly getting plenty of sell-side love after its earnings beat, Deutsche's Ross Sandler - who rates Facebook (FB) a Buy - sounds a cautious note, warning the company is "heading into a stage of meaningful growth deceleration and limited upside to consensus ... While the multiple compression to date reflects this, it could degrade further."
    • Stifel: We no longer believe [Facebook] is a stock that will go straight up. The CFO's departure, the recent acquisitions of WhatsApp and Oculus at premium valuations, and increasingly difficult comps will force investors to assess the true long-term sustainable growth rate. The team trims its PT to $80 from $82.
    • Shares +5.2% premarket
    • Earnings coverage from last night
    | 10 Comments
  • 7:35 AM
    • NetScout Systems (NTCT): FQ4 EPS of $0.48 beats by $0.03.
    • Revenue of $112.32M (+14.5% Y/Y) beats by $2.97M.
    • Press Release
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  • 7:31 AM
    • Verizon Communications (VZ): Q1 EPS of $0.84 misses by $0.02.
    • Revenue of $30.81B (+4.7% Y/Y) beats by $110M.
    • Press Release
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  • 7:19 AM
    • Sonus Networks (SONS): Q1 EPS of $0.01 beats by $0.02.
    • Revenue of $70.7M (+2.0% Y/Y) beats by $0.62M.
    • Press Release
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  • 7:13 AM
    • Ericsson (ERIC) intends to split its Network unit into two, with the company creating a business unit called Radop for mobile telecom equipment and another called Cloud & IP.
    • The idea is to enable each unit to better focus on their respective needs. In particular, Ericsson wants to boost its "challenger" position in the cloud and IP space.
    • Networks head Johan Wibergh will remain as the leader of both units.
    • Shares are +1.2% premarket. (PR)
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  • 7:11 AM
    • The Nasdaq 100 (QQQ +1.5%) is leading gains in futures behind a 7.7% premarket jump for Apple post-earnings. Facebook isn't chopped liver, up 5.1% following its earnings beat. Apple accounts for 11.8% of the QQQ, while Facebook makes up for 3.1% of the index. S&P 500 (SPY) is ahead 0.4%, and DJIA (DIA) is up 0.3%.
    • Europe's up 0.7% and Asia was mixed overnight.
    • The 10-year Treasury yield is flat at 2.71% and gold is near its lowest level since the end of January, down $6 per ounce to $1,279.
    • ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, TRND, SFLA, QQXT, BXUC, SPLX, BXDB, TNDQ
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  • 7:07 AM
    • DST Systems (DST): Q1 EPS of $1.12 in-line.
    • Revenue of $505.2M (+2.0% Y/Y) beats by $3.05M.
    • Press Release
    | Comment!
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