Seeking Alpha
  • Today - Wednesday, August 27, 2014

  • 2:45 PM
    • With the Hittite Microwave acquisition having closed near the end of FQ3, Analog Devices (ADI -2.2%) is guiding for FQ4 revenue of $790M-$820M and EPS of $0.66-$0.70. The consensus (doesn't fully take the acquisition into account) is for revenue of $761.2M and EPS of $0.67.
    • FQ3 gross margin was 66.5%, +40 bps Q/Q and +200 bps Y/Y, but slightly below guidance of 66.6%. GM is expected to fall to 66.2% in FQ4.
    • Not counting the Hittite deal and related expenses, opex was 34% of revenue vs. 34.3% in FQ2 and 33.6% a year ago. $57.4M was spent on buybacks.
    • Industrial revenue +12% Y/Y to $350.6M; automotive +8% to $130M; consumer -19% to $80.9M; telecom +19% to $166.3M. Industrial and telecom respectively received $2.3M and $3.1M boosts from Hittite.
    • Jefferies (Buy) calls ADI's FQ3 numbers (excluding Hittite) and FQ4 guidance (including Hittite) in-line with Street expectations, and says it remains a fan of the chipmaker's cash-return efforts and strong auto/industrial/telecom exposure. But it's also slightly lowering its FY14 and FY15 EPS estimates.
    • FQ3 results, PR
    | Comment!
  • 2:19 PM
    • JD.com (JD +2.6%) has made new highs after Alibaba reported a 45% Y/Y increase in Q2 revenue and GMV, and a 111% Q/Q increase in mobile revenue.
    • Shares have gradually rallied since JD posted a Q2 beat on Aug. 15. They're now up 73% from May's $19 IPO price.
    | 1 Comment
  • 1:59 PM
     
    • Top P2P lending platform LendingClub has filed for a $500M IPO. No symbol has been proposed yet. The underwriters are Goldman, Morgan Stanley, Citi, Stifel, BMO, Allen & Co., William Blair, and Wells Fargo. (prospectus)
    • LendingClub had 1H14 revenue of $87.3M (+135% Y/Y), and a net loss of $16.5M. Sales/marketing spend totaled $39.8M, and origination/servicing costs $15.7M.
    • 1H14 Loan originations totaled $1.8B (+125% Y/Y), with contribution margin coming in at 41.8% (+70 bps Y/Y). The company had $2.33B in loans on its balance sheet as of June 30.
    • LendingClub was valued at $3.75B in a funding round that took place earlier this year. The FT has reported the company is aiming for a ~$5B IPO valuation.
    | Comment!
  • 1:44 PM
    • Stifel has launched coverage on Axcelis (ACLS +5.8%) with a Buy and $3 target.
    • The launch comes 7 weeks after the chip equipment maker announced (along with a Q2 warning) it has hired Blackstone to evaluate "financing and strategic alternatives."
    | Comment!
  • 1:38 PM
    • In addition to showing off the iPhone 6, Apple (AAPL +1.2%) will "unveil a new wearable" on Sep. 9, re/code's John Paczkowski reports.
    • Paczkowski, who originally reported of a Sep. 9 iPhone event date and has a decent track record, doesn't use the term "iWatch" in his report. He does state Apple's wearable will "make good use" of its recently-announced HealthKit and HomeKit platforms.
    • The Nikkei previously reported the iWatch will have a flexible OLED display and initial production of 3M-5M units/month. The WSJ has reported of multiple models, sapphire cover glass, and "more than 10 sensors to track and monitor health and fitness data."
    | 15 Comments
  • 1:12 PM
    • With its Q2 results disclosed, Alibaba (Pending:BABA) is expected to provide an IPO price range "as soon as Tuesday," the NYT reports.
    • After setting a price range, Alibaba will reportedly kick off a 2-week roadshow (covering both Asia and the U.S.) ahead of an IPO the company hopes will take place during the week of Sep. 15.
    • Sources caution the Chinese e-commerce giant's plans could still change. The NYT previously reported Alibaba was planning an IPO "sometime after Labor Day." At one point, the company was rumored to be eying an early-August IPO.
    • Yahoo (YHOO +0.7%) continues to trade modestly higher.
    | 1 Comment
  • 12:52 PM
    • Ahead of Finisar's (FNSR -3.9%) Sep. 4 FQ1 report, MKM's Michael Genovese has respectively cut his revenue and EPS estimates for the quarter by $3M and $0.01, albeit while reiterating a Buy.
    • Genovese predicts "soft 2HCY14 carrier capex and the mix shift to low margin Chinese sales is likely to result in fairly anemic Telecom revenue growth and limited [gross margin] expansion in the near term." But he's still upbeat about Finisar's datacom sales (boosted by Web data center buildouts), and thinks telecom sales "should improve in 2HCY15 as the 100G Metro market positively inflects."
    • Likewise, RBC's Mark Sue is reiterating an Outperform, but offering cautious remarks. "Inventories are creeping upward, inventory lead-times are decreasing and there’s concern that current soft-pricing may continue or spread to higher speed products."
    • Sue thinks Chinese competition is affecting pricing for "low-mid speed components," and suggests Finisar should slash capex and launch a buyback. Shares plunged in June due to light FQ1 EPS guidance that stemmed from margin pressure.
    • A slew of other firms with strong telecom capex exposure are also trading lower. JDSU -1.8%. INFN -1.6%. CYNI -2.4%. AFOP -1.5%. CAVM -1.4%. ZHNE -1.6%. Juniper and multiple component vendors have already reported seeing soft near-term capex trends.
    • For component vendors, a decent amount of bad news has been priced in since April.
    | 1 Comment
  • 12:16 PM
    • Youku (YOKU +2.8%) CEO Victor Koo tells Bloomberg his company is working on a platform that will allow it to "recognize clothing, furniture and other products in a video, and deliver pop-up ads with links to buy the items on an Alibaba store." He compares the ads to the floating text ads that often appear in YouTube videos.
    • Alibaba bought a 16.5% stake in Youku this spring. At the time, Koo promised the Chinese e-commerce giant will help Youku "build an immersive cultural entertainment platform that integrates online and offline entertainment." Alibaba, for its part, said the deal would "bring new products and services to Alibaba's customers."
    • Youku sold off last week after missing Q2 estimates and issuing light Q3 guidance. The deferral of revenue from a mobile carrier (pending the renewal of a service agreement) played a role.
    | Comment!
  • 11:52 AM
    • Credit Suisse has started STMicroelectronics (STM -1%) at Underperform, and European chip peer Infineon (OTCPK:IFNNF +0.7%) at Outperform.
    • Bernstein downgraded STM to Underperform a month ago, predicting 2015 revenue growth will be 300 bps below consensus. Shares go for only 0.9x 2015E sales.
    • Infineon has rallied since announcing last week it's buying International Rectifier for $3B.
    | 1 Comment
  • 11:33 AM
    • Macquarie's Kevin Smithen has upgraded Level 3 (LVLT +3.5%) to Outperform, and set a $51 target. Merger partner TW Telecom (TWTC +2.7%) is following Level 3 higher.
    • After talking with management, Smithen thinks Level 3 "has set conservative cost-savings targets" for the merger - the company previously forecast $240M/year in savings. He also considers TW easier to integrate than past acquisitions such as Global Crossing, given its lack of international assets and the fact the company isn't a roll-up of various properties.
    • He admits there's still "a decent risk" of an integration misstep, but also believes "the risk of not owning [Level 3] if the company executes well is too great."
    | Comment!
  • 11:08 AM
    • Oi (OIBR +9.6%) says it has hired i-bank BTG Pactual to help it explore options for buying Telecom Italia's (TI +4.3%) TIM Participacoes (TSU +6.2%) Brazilian mobile/wireline unit. Shares of all 3 companies are rallying, as are those of Portugal Telecom (PT +6%) and Telefonica's Brazilian unit (VIV +2.4%).
    • Given Oi's debt load (almost $20B) and potential antitrust concerns, many think a bid for TIM (would lower the number of Brazilian mobile carriers to 3) can only work if Oi partners with other carriers to acquire and break up TIM. America Movil (AMX +0.7%), which owns rival carrier Claro, is viewed as a potential partner.
    • Oi's disclosure comes as a bidding war between TI and Telefonica (TEF +0.8%) for Vivendi-owned (OTCPK:VIVHY) Brazilian wireline carrier GVT heats up. Reuters reports TI will make a €7B ($9.2B) bid for GVT that would give Vivendi a 15%-20% stake in TI; the WSJ reports Telefonica's board is meeting today to consider upping its €6.7B ($8.8B) GVT bid.
    | Comment!
  • 10:31 AM
    • China's National Quality Control & Inspection Center for Buses has approved the sale of Highpower's (HPJ +11%) 20Ah lithium-ion battery, which is aimed at hybrid and plug-in hybrid EVs.
    • Highpower calls the approval "one solid step" in its efforts to sell lithium batteries for the Chinese EV market. In July, the company announced it had received funding for a Chinese production line meant for solar/energy storage products.
    | Comment!
  • 10:09 AM
    • Citing valuation, Goldman has downgraded E-House (EJ -2.1%) and subsidiary Leju (LEJU -5.4%) to Neutral. Its targets for the companies respectively remain at $14 and $19.
    • E-House and Leju have soared from their late-June lows. Leju jumped last week after posting mixed Q2 results and reiterating full-year guidance that was above consensus.
    | Comment!
  • 9:52 AM
    • In a revised F-1, Alibaba (Pending:BABA) discloses it had calendar Q2 revenue of $2.54B (+45% Y/Y), and net income of $1.99B (boosted by $1.1B in interest/investment income). Op. income was $1.1B (+27% Y/Y). Revenue growth accelerated from Q1's 39% clip, a figure that had disappointed some investors.
    • Q2 free cash flow was $1.71B. Sales/marketing spend +70% Y/Y to $195M; R&D +68% to $315M.
    • GMV was RMB501B ($81.6B), +17% Q/Q and +45% Y/Y (46% growth was seen in Q1). Mobile accounted for 32.8% of GMV (up from Q1's 27.4%), and mobile revenue more than doubled Q/Q to $400M.
    • Annual orders +14% Q/Q to 14.5B; annual active buyers +9% to 279M; annual active sellers +11% to 8.5M; mobile monthly active users (MAUs) +15% to 188M.
    • Alibaba's Taobao marketplace (focused on smaller merchants) had a Q2 GMV of RMB342B, +33% Y/Y. The Tmall marketplace (focused on larger merchants) had a GMV of RMB159B, +81%.
    • Yahoo (YHOO +0.3%) is up slightly following Alibaba's release, which might be the company's last earnings update before its IPO.
    • Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
    | 7 Comments
  • 9:23 AM
    • Citing valuation and expectations of slower 2015 growth, Janney's Tony Wible has downgraded Facebook (NASDAQ:FB) to Neutral. His target remains at $82.50.
    • Wible launched coverage on Facebook at Buy a year ago, when shares were at $37.81. Like others, he remains upbeat about new monetization opportunities (Instagram, video ads, etc.).
    • Facebook goes for 37x 2015E EPS. Estimates have steadily risen thanks to a string of earnings beats.The 2014 revenue growth consensus is at 55.6%, and the 2015 consensus at 34.4%.
    • Shares -0.9% premarket.
    | 6 Comments
  • 9:17 AM
    • Gravity (NASDAQ:GRVY): Q2 EPS of KRW109
    • Revenue of KRW10.25B (-19.8% Y/Y)
    • Press Release
    | Comment!
  • 9:11 AM
    • Kulicke & Soffa (NASDAQ:KLIC) has launched a $100M buyback program. At current levels, it's good for repurchasing 9% of outstanding shares.
    • The chip equipment maker had $600M in cash as of June 28, and no debt. Activist Lemelson Capital called for a buyback in April, and Barron's had also taken note of Kulicke's huge cash balance and lack of a capital return program.
    • Shares +1.7% premarket.
    | Comment!
  • 7:47 AM
    • Yingli Green Energy (NYSE:YGE) -7.3% premarket after missing Wall Street estimates for Q2 earnings and revenues, and lowering full-year shipment guidance.
    • YGE now sees FY 2014 PV module shipments of 3.6-3.8 GW, down from its previous forecast of 4.0-4.2 GW, which still represents Y/Y increases in the range of 11.3% to 17.5%.
    • Q2 PV shipments totaled 887.9 MW, up 40.8% Q/Q; overall gross margin was 15.6% vs. 15.7% in Q1 and 11.8% in the year-ago quarter.
    • Separately, YGE says it will supply 66 MW of products to Push Energy Ltd. for four large-scale projects in the U.K.
    | 2 Comments
  • 7:33 AM
    • Medical Transcription (NASDAQ:MTBC): Q2 EPS of -$0.01 beats by $0.04.
    • Revenue of $2.6M (+13.0% Y/Y) in-line.
    • Press Release
    | Comment!
  • 7:08 AM
    • Yingli Green Energy Holding (NYSE:YGE): Q2 EPS of -$0.25 misses by $0.11.
    • Revenue of $549.5M (-0.2% Y/Y) misses by $38.5M.
    • Press Release
    | 1 Comment
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