Seeking Alpha
  • Today - Thursday, August 21, 2014

  • 12:44 AM
    • 58.com (NYSE:WUBA): Q2 EPS of $0.15 beats by $0.07.
    • Revenue of $64.6M (+84.0% Y/Y) beats by $1.95M.
    • Press Release
    | Comment!
  • Wednesday, August 20, 2014

  • 7:03 PM
    • "The PC business is flat to declining slightly and we think that that will continue," says Meg Whitman on H-P's (NYSE:HPQ) FQ3 CC. However, Whitman argues her company, which just reported 12% Y/Y PC division sales growth, can "continue to gain share in a relatively flat market." (live blog)
    • While upbeat about H-P's PC, server, and networking performance, Whitman admits printing supplies and software (two high-margin businesses) "still face challenges." Supplies revenue (-5% Y/Y in FQ3), hurt by a secular shift towards online/mobile document and picture-viewing, is expected to remain under pressure.
    • CFO Cathie Lesjak states YTD free cash flow has totaled $7.4B; H-P expects to finish FY14 (ends in October) with ~$9B in FCF. Discussing macro conditions, Lesjak mentions Russian demand is expected to be hurt by geopolitical tensions, and Chinese demand by "increased competitive pressures."
    • Whitman asserts H-P has seen an improvement in server win rates against IBM, as it takes advantage of "the uncertainty customers feel" about the sale of Big Blue's x86 server unit to Lenovo. H-P's x86 server sales grew 9% Y/Y in FQ3.
    • HPQ -0.9% AH. FQ3 results, guidance/details.
    | Comment!
  • 6:25 PM
    • Dolby (DLB -0.1%) plans to bring versions of its high-end Atmos cinema audio platform to to home theaters and mobile devices; products supporting the technology are due later this year.
    • Atmos improves upon Dolby's older cinema audio offerings by providing "layers" of audio elements that (per the company) "can be positioned and moved precisely to correspond to the images onscreen." Atmos systems also rely on metadata to record how the elements behave during playback.
    • FastCompany's Harry McCracken, after seeing a movie clip supporting Atmos: "The versions played over the theater-grade Atmos system in Dolby's screening room were by far the gold standard. But the in-home and mobile ones sounded impressive, given the constraints they were working with."
    • Dolby mentioned on its FQ3 CC (transcript) Atmos commitments have been received for ~640 screens, and that the technology has been installed on over 540. ~110 of the installed screens are in China.
    | Comment!
  • 5:22 PM
    • Perceptron's (NASDAQ:PRCP) FQ4 revenue of $17.4M missed a sole analyst estimate of $18.3M. EPS of $0.10 missed an estimate of $0.23.
    • The 3D industrial measurement/inspection system vendor says "several customers delayed system installations" in FQ4, pushing revenue into FY15 and (due to fixed costs) hurting margins.
    • Perceptron adds profits were also hurt by "additional operating costs, primarily related to the management changes made over the course of the year, higher costs associated with additional Sarbanes Oxley compliance requirements and investments we are making to implement our new strategic plan."
    • Bookings totaled $20.4M, -5% Y/Y but exceeding revenue by $3M. Backlog rose by $3M Q/Q and $8.9M Y/Y to $39.3M. Americas sales totaled $6.1M, European sales $7.8M, and Asia-Pac sales $3.5M.
    • Gross margin fell 540 bps Y/Y to 42.7%. SG&A spend was roughly flat at $4.2M, while R&D spend fell 11% to $1.8M.
    • FQ4 results, PR
    | Comment!
  • 5:04 PM
    • Xunlei Limited (NASDAQ:XNET): Q2 ADS of -$4.65.
    • Revenue of $45.8M (-2.3% Y/Y).
    • Press Release
    | Comment!
  • 5:01 PM
    • Though it beat FQ3 estimates, Synopsys (NASDAQ:SNPS) is guiding for FQ4 revenue of $537M-$547M and EPS of $0.59-$0.61, mostly below a consensus of $547M and $0.63.
    • FQ3 time-based license revenue +11% Y/Y to $431.2M; up-front license revenue -21% to $31.6M; maintenance/service revenue +6% to $59M. GAAP R&D spend +10% to $182.8M; sales/marketing +7% to $112.3M.
    • Synopsys says it's seeing "encouraging results" from recently-acquired software quality/testing tool vendor Coverity.
    • Shares -0.8% AH. FQ3 results, PR.
    | Comment!
  • 4:43 PM
    • CloudVolumes asserts its software allows companies to "deliver any number of applications and any amount of data to any number of virtual machines within milliseconds or seconds." It offers products for both server and PC virtualization platforms, and also for migrating/delivering apps on cloud-based servers.
    • The synergies with VMware's (VMW, EMC) server and PC virtualization platforms, each of which have been dealing with tough competition, are easy to see. As it is, CloudVolumes' software integrates with VMware's vCloud Automation Center (aims to automate IT service delivery).
    • VMware hasn't disclosed the acquisition price. The company predicts the combination of CloudVolumes and VMware's Horizon (PC/app virtualization) platform will "allow customers to build a real-time application delivery system that enables all applications to be centrally managed, always available and up-to-date, and delivered to virtualized environments for desktop, server or cloud on-demand."
    • Yesterday: VMware shakes up C-suite
    | Comment!
  • 4:32 PM
    • Semtech (NASDAQ:SMTC): Q2 EPS of $0.42 beats by $0.03.
    • Revenue of $145.7M (-11.7% Y/Y) beats by $3.5M.
    • Press Release
    | Comment!
  • 4:25 PM
    • H-P (NYSE:HPQ) is guiding for FQ4 EPS of $1.03-$1.07, in-line with a $1.05 consensus.
    • PC sales rose 12% Y/Y in FQ3 to $8.6B, better than FQ2's 7% growth and fueling the revenue beat. Commercial PCs +14%, consumer +8%. Also helping: enterprise hardware division sales rose 2% to $6.9B, a turnaround from FQ2's 2% drop.
    • Enterprise services remains weak, falling 6% to $5.6B after dropping 7% in FQ2. Software -5% to $959M, worse than FQ2's flat growth. Printers -4% to $5.6B, an even decline with FQ2. Financial services -3% to $855M, after dropping 2% in FQ2.
    • A mix shift towards PCs appears to have pressured EPS. The PC division has only a 4% op. margin, lower than H-P's total non-GAAP op. margin of 8.5%.
    • Printing hardware units and supplies revenue both fell 5%. x86 server revenue +9%, mission-critical servers -18% (Itanium weakness), storage -4%, networking +4%. Software license revenue (high-margin) fell a steep 16%.
    • GAAP gross margin rose 70 bps Y/Y to 24%. SG&A spend +3% to $3.4B; R&D +11% to $887M. $582M was spent on buybacks.
    • HPQ -1.1% AH. FQ3 results, PR.
    | 2 Comments
  • 4:11 PM
    • Perceptron (NASDAQ:PRCP): FQ4 EPS of $0.10.
    • Revenue of $17.4M (-15.9% Y/Y).
    • Press Release
    | Comment!
  • 4:08 PM
    • Synopsys (NASDAQ:SNPS): FQ3 EPS of $0.65 beats by $0.05.
    • Revenue of $521.8M (+8.0% Y/Y) beats by $0.8M.
    • Shares -0.36% AH.
    • Press Release
    | Comment!
  • 4:06 PM
    • Hewlett-Packard (NYSE:HPQ): FQ3 EPS of $0.89 in-line.
    • Revenue of $27.58B (+1.3% Y/Y) beats by $570M.
    • Shares +0.20% AH.
    • Press Release
    | 3 Comments
  • 2:45 PM
    • Along with its Q2 results, ChinaCache (CCIH +6.2%) has announced Jing An is now the company's permanent CFO. An has been serving as acting CFO since March '13.
    • Healthy Chinese CDN service demand led revenue to rise 6.9% Q/Q and 34.4% Y/Y in Q2 to $55.8M. The company expects revenue to rise to $60.4M-$61.3M in Q3 (no consensus estimate exists).
    • Gross margin fell to 30.1% from 30.5% in Q1 and 31.4% a year ago. On the CC (transcript), ChinaCache attributed the Q/Q drop to higher labor costs and other expenses, rather than price pressure
    • Sales/marketing spend rose 19.4% Y/Y to $5.7M, G&A 8.4% to $6M, and R&D 6.4% to $4.8M.
    • Q2 results, PR
    | Comment!
  • 2:33 PM
    • Brazilian paper O Estado de S. Paulo reports Vodafone (VOD -0.8%) is mulling an acquisition of TIM Participacoes (TSU -0.5%), Telecom Italia's (TI -0.1%) Brazilian mobile/wireline unit.
    • The paper states Vodafone, hungry to expand after receiving its Verizon Wireless windfall, would prefer to enter Brazil by taking a majority stake in one of the country's 3 top mobile carriers - giants Telefonica and America Movil control the other two - rather than by participating in an upcoming 4G spectrum auction.
    • TIM is estimated to have 26.9% of the Brazilian market, Telefonica's Vivo 28.7%, and America Movil's Claro 24.9%.
    • TI's own M&A plans could stand in the way of a Vodafone offer: The Italian carrier is reportedly weighing a bid to acquire Brazilian wireline carrier GVT, with the goal of trumping an existing offer from Telefonica and merging GVT with TIM.
    | Comment!
  • 2:16 PM
    • In addition to beating Q2 revenue estimates by $9.7M (while posting in-line EPS), E-House (EJ +0.4%) is maintaining full-year guidance for revenue of $910M-$930M (+24%-27%); that's above a $907M consensus.
    • A 41% Y/Y increase in SG&A spend to $231.2M pressured EPS - E-House attributes the growth to marketing/promotional spend and higher staff-related costs. However, cost of revenue only rose 8%, much less than revenue growth of 29%.
    • E-House's Leju (LEJU +6.2%) subsidiary beat Q2 revenue estimates (while slightly missing on EPS) on the back of a 159% Y/Y increase in e-commerce services revenue to $68.3M. Its online ad revenue rose just 11% to $44.5M, and its listing services revenue fell 16% to $4.2M.
    • E-House's real estate brokerage services revenue was nearly flat at $65.5M. Its information/consulting services revenue rose 9% to $17.9M, and its other services revenue fell 2% to $9.4M.
    • Leju is maintaining full-year guidance for revenue of $500M-$520M (+49%-55%); that's above a $495.8M consensus.
    • Much like SouFun, E-House/Leju have been contending with Chinese real estate softness and listing fee price pressure.
    • E-House: Q2 results, PR. Leju: Q2 results, PR.
    | Comment!
  • 1:45 PM
    • Due to mix and pricing strategy changes, LightInTheBox's (NYSE:LITB) gross margin fell to 39.5% in Q2 from 41.3% in Q1 and 46% a year ago. That was a major reason EPS was only in-line in spite of a $5M revenue beat.
    • Rising opex also took a toll: Fulfillment spend grew to 6.1% of revenue from 5.2% a year ago due to smaller average order size; sales/marketing spend rose to 27.7% from 27.1%; and G&A spend rose to 12.9% from 12.2%.
    • Apparel revenue +43.5% to $35.4M, while electronics and general merchandise revenue +14.3% to $54.4M. Total orders +52.4% to 2.2M; active customers +44.2% to 1.7M. Mobile accounted for 28.2% of orders, up from 16.8% a year ago.
    • LightInTheBox expects Q3 revenue of $92M-$94M, above an $85M consensus.
    • Q2 results, PR
    | Comment!
  • 1:27 PM
    • Following a CC with compound semi consulting firm Yole Development about GT Advanced's (GTAT -2.4%) supply deal with Apple, CLSA's Mark Heller reports Yole believes at least one iPhone featuring sapphire cover glass will launch next month. However, it also thinks GT and Apple's sapphire finishing suppliers "are still struggling with yields."
    • Yole estimates Apple's all-in sapphire cost is at a steep $25 for a 4.7" display, assuming a 30% growth yield and 60% finishing yield - that's over 8x the $3 cost estimate other analysts have provided for Gorilla Glass (GLW +1.5%) panels. GT is assigned an $8.90 ASP.
    • At the same time, Yole thinks costs could drop to $16 if growth and finishing yields respectively improve to 60% and 75%, boosting GT's margins along the way.
    • Heller writes Yole's base scenario suggests only 4.7M 4.7" sapphire displays, or 3M 5.5" displays, will be available by September.  Worth noting: With Apple having reportedly placed orders for 70M-80M iPhone 6 units, those numbers appear conservative in the event at least one of the models fully uses sapphire.
    • Corning is moving higher. The company stated last month Gorilla Glass sales have been hurt by "lower-than-expected sales for planned new models."
    • Earlier: CLSA downgrades GT Advanced to Underperform
    | 23 Comments
  • 12:47 PM
    • Nokia (NOK +1.8%) states Michael Halbherr, the head of its Here mapping/location services unit, is leaving to pursue "entrepreneurial interests." Bloomberg reports his departure stems from a disagreement with new CEO Rajeev Suri about the division's strategy. SVP Cliff Fox will become Here's acting chief.
    • A source states an internal debate has formed over whether the mapping unit should focus on automotive/enterprise opportunities or also continue going after consumers. While Here has seen decent auto market traction, its PND/mobile sales have been hurt by smartphone cannibalization and tough competition from Google Maps.
    • Here revenue was nearly flat Y/Y in Q2 at  €232M, with higher auto sales and Microsoft licensing revenue offsetting PND weakness. Data licenses for embedded navigation systems within new cars rose by 600K to 3.3M.
    • Previous: Nokia investing $100M in smart car tech
    | 6 Comments
  • 12:18 PM
    • Infineon (OTCPK:IFNNF) is paying $40/share, or $3B, in cash to acquire International Rectifier (NYSE:IRF). The price represents a 51% premium to Tuesday's close, and is well above the ~$2B reported by Bloomberg.
    • Infineon is paying ~$2.4B net of cash for the analog chipmaker. The deal will be financed with a mixture of existing cash and credit facilities, and is expected to close in late 2014 or early 2015.
    • The companies declare IRF's gallium nitride (GaN) power management discrete components and ICs complement Infineon's own GaN offerings, and (echoing arguments made for recent chip deals) that the combined company will benefit from greater R&D scale and manufacturing/operational synergies.
    • IRF is now up 47.4% to $39.16. The company has posted its FQ4 report in tandem with the Infineon announcement.
    | Comment!
  • 12:12 PM
    • International Rectifier (NYSE:IRF): FQ4 EPS of $0.30 beats by $0.01.
    • Revenue of $297.6M (+7.6% Y/Y) beats by $8.91M.
    • Shares +5.71%.
    • Press Release
    | Comment!
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