Seeking Alpha
  • Today - Monday, October 20, 2014

  • 7:25 PM
    • "I think that if you’re not already spending a lot of capital in the order of four or five billion dollars each year to just grow your cloud, probably it’s a little too late to enter the market," Satya Nadella (NASDAQ:MSFT) asserted during a CNBC interview (video). Rackspace and VMware would probably beg to differ; Amazon and Google, maybe not so much.
    • The CNBC talk was followed by a webcast in which Nadella unveiled the Cloud Platform System, an on-premise appliance (to be sold by Dell) that enables Azure private cloud and (by linking with Microsoft's public cloud) hybrid cloud services. Microsoft has long argued Azure's strong hybrid cloud support (aided by the company's on-premise software) acts as a differentiator relative to Amazon/Google).
    • Also unveiled: 1) An Azure Marketplace that allows clients to quickly add apps and services from third parties; Amazon has something similar. 2) New high-performance Azure virtual machine and storage options. 3) Azure support for CoreOS, a Linux variant that's popular among companies deploying app containers (a lightweight alternative to virtualization software from the likes of Microsoft and VMware).
    • Driving home his multi-platform push, Nadella made the CoreOS announcement in front a sign that (amusingly enough) read "Microsoft [hearts] Linux." Last week, the company announced support for Docker's app containers (already big on Linux) would be included in the next version of Windows Server, which is expected in mid-2015.
    • Prior Azure announcements: I, II
  • 6:35 PM
    • RightSignature provides a solution for quickly adding electronic signatures to PDFs and Word docs, both on PCs and mobile devices. Citrix (NASDAQ:CTXS) has acquired the startup for an undisclosed sum.
    • RightSignature's solution is already integrated with Citrix's ShareFile cloud file-storage/document-syncing platform (acquired in 2011), as well as with cloud services from the likes of Dropbox and Salesforce.
    • Over the last few years, Citrix has bought a a slew of startups (I, II, III) providing cloud and/or mobile productivity tools for office workers. VMware and SAP are among its top rivals in this space.
    • Q3 results arrive on Wednesday.
    | Comment!
  • 6:35 PM
    • HealthStream (HSTM +0.3%Q3 results: Revenues: $44.5M (+32.0%); Cost of Revenues: $19.1M (+35.5%); Operating Expenses: $39.8M (+33.6%); Net Income: $4.7M (+20.5%); EPS: $0.12 (+50.0%); Quick Assets: $116.4M (+7.6%); CF Ops: $28.7M (+23.7%).
    • Total subscribers implemented: 3.83M, Subscribers contracted: 4.13M. Workforce Development Solutions annualized revenue per implemented subscriber: $35.91 (+16.0%).
    • 2014 guidance: Revenue Growth: 28 - 30% from 26 - 29%, Workforce Development Systems revenue growth: 33 - 35% from 28 - 32%, Research/Patient Experience Solutions revenue growth: 10 - 12% from 15 - 19%; Operating Income: ~$2M (up 5 - 10% yoy) from $2.5M - $3.0M; CAPEX: $9.0M - 10.0M from $9.0M - $12M; tax rate: 37 - 39% from 42 - 44%.
    | Comment!
  • 6:15 PM
    • Though FQ4 iPhone sales beat estimates, iPhone channel inventory is below Apple's (NASDAQ:AAPL) historical 4-6 week target range, the company disclosed on the CC. Apple is upping its target range to 5-7 weeks, but doesn't expect to reach it in FQ1. (live blogs: BI, WSJ)
    • As expected, a mix shift towards the iPhone 6 and the costlier/supply-constrained 6 Plus is boosting iPhone ASPs. "We're selling everything that we make," Tim Cook interjected during a question about product mix.
    • iPad channel inventory fell by 500K during FQ4. In spite of the 14% Y/Y drop in iPad revenue, Cook dismisses suggestions the market is saturated, noting over half of sales still go to first-time buyers. He did, however, admit consumers hold onto iPads (less likely to be sold with subsidies/installment plans) longer than they hold onto iPhones.
    • CFO Luca Maestri Maestri noted Apple, like many other U.S. companies, is dealing with forex headwinds caused by a strong dollar. He added forex is factored into FQ1 guidance.
    • Other details: 1) Apple bought 7 more companies in FQ4 (only 4 are known), bringing the FY14 total to 20. 2) App Store revenue rose 36% Y/Y. 3) Cook asserts Mac market share (previous) is at its highest level since 1995. FQ4 Mac revenue was 25% above iPad revenue. 4) Apple expects to open 25 new stores in FY15, ~75% of which will be outside the U.S.
    • AAPL +1.5% AH. FQ4 results, details.
  • 5:34 PM
    • Cadence (NASDAQ:CDNS) expects Q4 revenue of $417M-$427M and EPS of $0.26-$0.28, below a consensus of $427.4M and $0.29.
    • Q3 product/maintenance revenue +10% Y/Y to $374.1M; services revenue +9% to $400.5M.
    • Excluding restructuring charges, opex rose 5% Y/Y to $346.4M. R&D spend +8% to $148.7M, and equal to 37% of revenue.
    • Q3 results, PR
    | Comment!
  • 5:21 PM
    • iPhone suppliers are trading higher after Apple beat FQ4 estimates and issued FQ1 guidance that was mostly above consensus. FQ4 iPhone sales of 39.3M were better than expected, and iPad sales of 12.3M worse than expected.
    • Cirrus Logic (NASDAQ:CRUS) +1.4% AH. Avago (NASDAQ:AVGO) +1.2%. Skyworks (NASDAQ:SWKS) +1.2%. RF Micro (NASDAQ:RFMD) +2.4%. NXP (NASDAQ:NXPI) +2%.
  • 5:00 PM
    • Apple (NASDAQ:AAPL) had an FQ4 gross margin of 38%, +100 bps Y/Y and at the high end of a 37%-38% guidance range. FQ1 GM guidance is at 37.5%-38.5%.
    • Product line performance: iPhone revenue (56% of total revenue) +21% Y/Y to $23.7B, after growing 9% in FQ3; units +16%. iPad revenue -14% to $5.3B, after falling 8% in FQ3; units -13%. Mac revenue +18% to $6.6B, after rising 13% in FQ3; units +21%.
    • iTunes/software/services revenue +8% to $4.6B. Accessories +13% to $1.5B. iPods -28% to $410M.
    • Regional performance: Excluding retail, Americas revenue +17% to $16.2B (stronger than in recent quarters); Europe +19% to $9.5B (likewise); Greater China +1% to $5.8B; Japan +5% to $3.5B. Rest of Asia-Pac -3% to $1.9B. Retail +15% to $5.1B.
    • Helping margins: iPhone ASP rose to $603 from $561 in FQ3 and $596 in FQ2. iPad ASP fell to $432 from $443 in FQ3 and $465 in FQ2. Mac ASP fell to $1,200 from $1,255 in FQ3 and $1,334 in FQ2.
    • GAAP R&D spend +44% Y/Y to $1.69B. SG&A spend +18% to $3.16B.
    • $17B was spent on buybacks in FQ4, and $45B over the whole of FY14. Apple ended the quarter with over $155B in cash/investments, and over $35B in long-term debt and commercial paper.
    • AAPL +1.2% AH. CC at 5PM ET. FQ4 results, PR.
  • 4:43 PM
    • Ultra Clean Holdings (NASDAQ:UCTT): Q3 EPS of $0.12 misses by $0.03.
    • Revenue of $117.04M (+9.2% Y/Y) misses by $0.15M.
    • Shares -8.84% AH.
    • Press Release
    | Comment!
  • 4:40 PM
    • HealthStream (NASDAQ:HSTM): Q3 EPS of $0.12 may not be comparable to consensus of $0.08.
    • Revenue of $44.67M (+32.1% Y/Y) beats by $1.37M.
    • Press Release
    | Comment!
  • 4:35 PM
    • Texas Instruments (NASDAQ:TXN) expects Q4 revenue of $3.13B-$3.39B vs. $3.25B consensus. Expects EPS of $0.64-$0.74 vs. $0.63 consensus.
    • Shares +3.02% AH.
    • Previous: Texas Instruments' Q3 results
  • 4:34 PM
    • Apple (NASDAQ:AAPL): FQ4 EPS of $1.42 beats by $0.11.
    • Revenue of $42.12B (+12.4% Y/Y) beats by $2.27B.
    • 39.3M iPhones (above expectations), 12.3M iPads (below expectations), 5.5M Macs (above expectations).
    • Expects FQ1 revenue of $63.5B-$66.5B, mostly above a $63.52B consensus.
    • Shares +0.5% AH.
    • Press Release
  • 4:32 PM
    • Texas Instruments (NASDAQ:TXN): Q3 EPS of $0.76 beats by $0.01.
    • Revenue of $3.5B (+8.0% Y/Y) beats by $40M.
    • Shares +2.57%AH.
    • Press Release
    | Comment!
  • 4:21 PM
    • Rambus (NASDAQ:RMBS) expects Q4 revenue of $70M-$75M; the midpoint is below a $74.4M consensus.
    • Q3 revenue fell 9% Q/Q and 5% Y/Y due to lower Nvidia royalty revenue, and "a one-time catch-up payment from the new license agreement signed with Qualcomm" during Q2.
    • Royalty revenue -8% Q/Q and -10% Y/Y to $64M. Contract/other revenue was $5.7M, down from $6.8M in Q2 but up from $2.3M a year ago.
    • Cost controls helped EPS beat estimates in spite of a revenue miss: GAAP R&D spend -2% Y/Y to $27M. and MG&A spend -3% to $18.2M. The cash balance rose by $24.7M Q/Q to $271.1M.
    • Shares are nearly unchanged AH for now.
    • Q3 results, PR
    | Comment!
  • 4:07 PM
    • Rambus (NASDAQ:RMBS): Q3 EPS of $0.13 beats by $0.08.
    • Revenue of $69.71M (-4.9% Y/Y) misses by $1.29M.
    • Press Release
    | Comment!
  • 4:07 PM
    • Cadence Design Systems (NASDAQ:CDNS): Q3 EPS of $0.26 beats by $0.02.
    • Revenue of $400.49M (+9.2% Y/Y) beats by $4.29M.
    • Shares -0.16% AH.
    • Press Release
    | Comment!
  • 4:04 PM
    • Though Starboard Value has called on Yahoo to merge with AOL (AOL +3.1%), there are "no explicit talks about a deal with Yahoo," says CEO Tim Armstrong. As it is, Re/code has reported more than once Marissa Mayer isn't a fan of an AOL/Yahoo deal.
    • Armstrong also declares the online ad market is going to see a major shakeup, with future solutions for marketers either completely programmatic (automated) or custom-made. "Everything in the middle is going to die."
    • AOL has been betting big on programmatic growth; the company claims over 1/3 of its ad sales now come from programmatic offerings. Last month, AOL expanded its partnership with ad giant Publicis to cover programmatic video and linear TV ads.
    | Comment!
  • 3:50 PM
    • Lemelson Capital says it has taken a 2% stake in Geospace (NASDAQ:GEOS). Tthe firm notes shares trade only a little above tangible book value, and argues they have a "fair value" of $78 (nearly 3x Friday's close).
    • Earlier this year, Lemelson urged chip equipment maker Kulicke & Soffa to do a buyback; Kulicke announced one 4 months later.
    • Seismic equipment peer Ion Geophysical (NYSE:IO) is also having a good day. Both Geospace and Ion sold off on Friday after Cowen downgraded the former.
  • 2:47 PM
    • Spotify is now offering family discounts: While the first family member signing up for its premium service pays the standard $10/month, each additional member pays only $5/month. "This is one of the most asked for features from our audience," says content chief Ken Parks.
    • Meanwhile, Re/code reports Apple (NASDAQ:AAPL) has been pushing music labels to agree to price cuts that would allow it to sell an overhauled Beats Music streaming service (previous) for just $5/month. However, the site suspects Apple doesn't think the labels will give in, and considers an $8/month rate a more realistic goal.
    • Pandora (P -1.9%) is lower on an up day for tech. Thus far, the company has done a decent job of staving off threats from subscription-based streaming services.
    • Spotify, still possibly eying an IPO, had 10M paid subs and 40M active users spread out over 56 markets as of May. Pandora had 3.5M active subs and 76.4M active listeners (mostly in the U.S.) at the end of Q2. Its Q3 report arrives on Thursday.
  • 2:28 PM
    • Cisco (CSCO -1.7%), VMware (VMW -1.5%),  F5 (FFIV -1.5%), NetApp (NTAP -1.5%), Teradata (TDC -3.3%), and SGI (SGI -3.5%) have joined several other enterprise tech names in declining after IBM and SAP each posted disappointing Q3 reports. The Nasdaq is up 1% on the day.
    • IBM provided a smorgasbord of bad news: A Q3 miss, soft full-year guidance, the pulling of a $20/share 2015 EPS target, a 15% Y/Y hardware revenue decline, and a 7% Y/Y services backlog drop. In addition, the IT giant said it "saw a marked slowdown in September in client buying behavior."
    • Citing the impact of a shift in customer spending towards subscription-based cloud apps from on-premise software (typically paid through an up-front license fee), SAP slashed its full-year op. profit forecast. Q3 revenue was slightly below consensus, and EPS in-line.
    • VMware reports tomorrow, F5 on Thursday, SGI on Oct. 29, and Teradata on Nov. 6.
    | Comment!
  • 2:07 PM
    • With Apple Pay hype running high, SuperCom (SPCB +16.9%) announced this morning it would show off its SuperPOS mobile point-of-sale solution at upcoming Las Vegas and Paris conferences.
    • SuperPOS relies on biometric authentication, and  allows iOS/Android devices to pay via NFC (leveraged by Apple Pay) and Bluetooth, among other radio interfaces. It's one of several mobile payments tools offered by SuperCom.
    | Comment!
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