Today - Friday, July 31, 2015
- In addition to slightly missing Q2 revenue estimates (while posting in-line EPS), Brightcove (NASDAQ:BCOV) has guided for Q3 revenue of $32.9M-$33.4M (below a $33.8M consensus) and full-year revenue of $132.5M-$133.5M (below a $134.7M consensus).
- The online video hosting/monetization service provider blamed its Q2 sales weakness on "the timing of certain customer renewals." It also reported seeing "some softness in our European markets," while adding North America and Japan were healthier.
- Notably, Brightcove's total and premium customer counts respectively fell by 174 and and 17 Q/Q in Q2 to 5,404 and 1,847. The company's recurring dollar retention rate was 88%, below a low-to-mid 90s target range. On the bright side, average revenue per premium customer rose by $1K Q/Q and $4K Y/Y to $64K.
- Shares made a new 52-week low of $4.81 before rebounding a bit to close at $5.47.
- Q2 results, PR
- A10 Networks (NYSE:ATEN) surged to $6.51 today after beating Q2 estimates and guiding on its earnings call (transcript) for Q3 revenue of $48M-$52M and EPS of -$0.08 to -$0.12, favorable at the midpoints to a consensus of $49.3M and -$0.12.
- Thanks in part to easier comps, the midpoint of the Q3 revenue guidance range implies 15% Y/Y growth - a notable improvement from Q2's 5%.
- Enterprise revenue rose by just $100K Y/Y in Q2 to $27.5M, while service provider revenue rose by $2.3M to $20M. A major deal with an unnamed service provider customer (14% of Q2 revenue) provided a lift.
- Q2 results, PR
- In addition to missing Q2 revenue estimates (while posting in-line EPS), ROVI has guided for 2015 revenue of $500M-$530M and EPS of $1.35-$1.60, below a consensus of $546.6M and $1.70. The low end of the guidance range assumes no new/one-time revenue sources, something Rovi considers "unlikely."
- The company plans to spend $50M on buybacks in Q3. Following today's selloff to new 52-week lows, that $50M should go further. Shares trade for 7.6x the midpoint of Rovi's 2015 EPS guidance range.
- Q2 results, PR
- Telecom KT Corp. (NYSE:KT) is up 2% after growing net income 14.7% sequentially, to KRW 321.8B, though revenues of KRW 5,431B declined nearly 4% and missed an expected KRW 5568B.
- EBITDA of KRW 1,206B missed an expected KRW 1,223B.
- Revenue breakout: Service revenue, KRW 4,826.5B (up 1% Y/Y); Merchandise revenue, KRW 604.9B (down 29.4%).
- Wireless subscribers hit 17.7M after net adds of 238K. LTE subscribers came to 11.99M (67.6% of total subscribers). Wireless ARPU was up 3.7% Y/Y,k to KRW 34,879.
- Wireline revenue overall fell 10.9% Y/Y. Meanwhile, in broadband, revenue fell 2.5% though subscribers grew to 8.23M.
- Total capex was KRW 477.8B.
- Press Release
- More than two months after the WSJ reported UBER is looking to raise $1.5B-$2B at a potential $50B valuation, the car-hailing giant has closed a ~$1B round valuing it at almost $51B - more than Netflix, GM, FedEx, and many other S&P 500 companies.
- The WSJ reports Microsoft (MSFT - recently sold Bing mapping/image-collection assets to Uber) is an investor in the latest round, along with Indian media conglomerate Bennett Coleman & Co. The new funds could help pay for big upcoming investments in China and India.
- Update: Bloomberg reports Microsoft is holding talks to invest in Uber at a $50B valuation, but hasn't yet made a decision.
- Though officially missing consensus, Quantum's (NYSE:QTM) FQ1 revenue was roughly in-line with the guidance provided in its July 16 warning. However, the company also guided for FQ2 revenue of $120M-$130M, below a $141.2M consensus, and declined to provide FY16 (ends March '16) sales guidance.
- Scale-out storage hardware/service revenue rose 54% Y/Y in FQ1 to $27.8M; Quantum still expects 50% growth for the business in FY16. But branded tape automation hardware/service revenue fell 30% to $15.1M, OEM tape automation 39% to $9.5M, and devices/media 39% to $10.9M. Disk backup system/service revenue was nearly flat at $17.3M.
- Shares are $0.05 above a 52-week low of $1.02.
- FQ1 results, PR
- Shenandoah Telecommunications (NASDAQ:SHEN) is up 8.4% -- and touching its highest point today since April -- after posting a Q2 report today where profits grew 22% and revenues grew more than 5% and beat expectations.
- Adjusted OIBDA of $37.2M was up 12.7%, and beat an expected $35.1M.
- Revenue by segment: Wireless, $51.6M; Cable, $23.97M; Wireline, $10.1M.
- Capex was $15.6M, flat Y/Y. Cash and equivalents at June 30 were $92.1M, compared to $68.9M at year-end 2014, while outstanding debt was $212.8M.
- Press Release
- Though DigitalGlobe (NYSE:DGI) beat Q2 estimates, the company forecast on its earnings call (transcript) Q3 revenue will be up just slightly Q/Q. Consensus is for revenue to rise 6% Q/Q to $189.4M.
- Full-year sales guidance of $725M-$750M (compares with a $735.2M consensus) is reiterated, as is guidance for 2015 free cash flow to equal ~20% of revenue.
- Discussing the Q3 outlook, CFO Gary Ferrera noted DGI has less visibility for its Diversified Commercial services ops than for its U.S. Government ops, and that the timing of large deals "can be difficult to forecast." He also mentioned Russian and location-based services (LBS) sales are soft - the former is due to political tensions, while the latter is blamed on a contract renewal delay and "a decision to protect 30 centimeter pricing."
- Diversified Commercial revenue rose 4% Y/Y to $64.9M, while U.S. Government revenue rose 18% to $113.1M. SG&A spend fell 9% to $52.9M, and $33M was spent on buybacks.
- Q2 results, PR
- Given a backdrop of weak PC sales and soft guidance from Seagate/Western Digital, Hutchinson's (NASDAQ:HTCH) forecast for hard drive suspension assembly shipments to rise 10%-20% Q/Q in (seasonally stronger) FQ4 is going over well. ASP is expected to slip to $0.57-$0.58 from FQ3's $0.59.
- Also: Hutchinson has unveiled an SMA optical image stabilization (OIS) actuator said to be 70% thinner than its original offering, as well as much cheaper to produce. CEO Rick Penn: "We believe this new design has fundamental advantages that bring superior value and capability to the marketplace and that the product is well aligned with the needs of camera module and smartphone manufacturers."
- Key numbers: Helping FQ3 EPS beat estimates in spite of a revenue miss: Gross margin was 8.8%, down from 10% in FQ2 but up from 6% a year ago. R&D spend rose by ~$1M Y/Y to $5.17M,; SG&A spend rose by ~$500K to $5.73M. Hutchinson ended FQ3 with $36.3M in cash/investments, and $128.6M in debt.
- FQ3 results, PR
- After pricing its IPO at $15 (well below an initial $19-$21 range), TerraForm Global (NASDAQ:GLBL) opened at $14 and is now at $14.16, down 5.6%.
- The SunEdison (NYSE:SUNE) emerging markets solar/wind/hydro project YieldCo is valued at $2.53B. It sold 45M shares through the offering (gross proceeds of $637M), less than the 56.6M it originally planned to sell. Another 4.5M are being sold through a concurrent private placement.
- SunEdison is off sharply. The company's Q2 report arrives on Aug. 6.
- Prospectus. IPO analysis.
- Two days after plummeting in the wake of news the company is cutting 60% of its workforce and reviewing strategic options - it came amid widespread liquidity/solvency fears - Wave Systems (NASDAQ:WAVX) is reversing course. 3.57M shares have been traded, well above a 3-month daily average of 317K.
- Wave's shares are still only around $0.20, far below a 52-week high of $1.42. The security software firm's market cap is at $11.4M.
- In addition to beating Q2 estimates, Neustar (NSR +4.7%) has guided for 2015 revenue of $1.035B-$1.045B (+7%-8% Y/Y) and EPS of $4.34-$4.51 vs. a consensus of $1.03B and $4.43.
- Lifting the 2015 sales guidance a bit: Neustar has announced it's buying Bombora Technologies, an Australian domain name registry service provider, for A$118.5M ($86.9M). Bombora is expected to contribute $8M in revenue and $1.1M in op. income for Neustar's 2015 results.
- Bombora's services covers the .au, .melbourne, and .sydney top-level domains (TLDs), along with 100+ new TLDs. Neustar's existing domain name services cover .biz, .us, and .co, along with 300+ new TLDs.
- Also: Neustar has appointed Deborah Rieman, the former CEO of Check Point Software, and Paul Ballew, Ford's data/analytics chief, to its board.
- Key numbers: Marketing Services revenue (boosted by analytics service demand) rose 17% Y/Y in Q2 to $40.9M, and security services revenue (boosted by domain name services) 18% to $40.5M. Data services was flat at $49.2M, and number portability (NPAC) services up 6% to $126.2M. Operating expenses rose a modest 3% Y/Y to $172.7M, and $38M was spent on buybacks.
- Q2 results, PR
- Expedia (NASDAQ:EXPE) has surged to fresh highs after beating Q2 EPS estimates (and posting in-line revenue) on the back of a 20% Y/Y increase in gross bookings to $15.1B. Bookings growth was slightly better than Q1's 19%, and better than feared given forex headwinds - a strong dollar respectively had 8% and 10% impacts on bookings and revenue growth.
- On the earnings call (transcript), CFO Mark Okerstrom reiterated full-year guidance for 10%-15% adjusted EBITDA growth (exc. the recently-divested eLong). "Though Q2 came in a bit better than expected, we plan to put that upside back into the business mostly in Q3 to drive continued growth."
- CEO Dara Khosrowshahi noted the core Expedia and Hotels.com platforms continued seeing strong growth, as did Travelocity. He also suggested Expedia could follow up its acquisitions of Travelocity and (pending DOJ approval) Orbitz by acquiring assets in overseas markets, where Priceline (NASDAQ:PCLN) and its Booking.com platform loom large. "[F]or the time being, we've got plenty on our plates ... We want our revenue outside the U.S. to be bigger than our revenue in the U.S."
- U.S. bookings rose 18% Y/Y in Q2 to $9.3B, and international bookings (pressured by forex) 25% to $5.8B. Hotel room nights rose 35% (28% organic) to 50.6M, while revenue/night fell 16%. Air tickets sold rose 26% (20% organic), and revenue/ticket fell 10%. Sales/marketing spend rose 19% Y/Y to $885.5M, but tech/content and cost of revenue growth was more moderate.
- Priceline is following Expedia higher ahead of its Aug. 5 Q2 report.
- Expedia's Q2 results, PR
- NBC (CMCSA +0.9%) isn't showing ads for Sling TV (DISH -0.4%) in some markets, even though the other Big Four networks are doing so, Dish Network says.
- Earlier this month, Sling TV unveiled its first nationwide campaign, comparing old-line TV providers to childhood bullies.
- NBC confirmed its locally owned stations in New York, San Diego, San Francisco and Washington, D.C., are declining to run the ads.
- "Maybe these commercials hit a little too close to home for them when we call out tactics like price hikes, equipment fees and just all around terrible customer service," says Sling TV CEO Roger Lynch.
- In April, Verizon said that Walt Disney was refusing to carry ads in some markets for its new "skinny" bundles, saying the new channel lineups violated carriage agreements.
- China Unicom (NYSE:CHU) is up 1.4% on standard volume after HSBC upgraded shares to Hold, from Reduce.
- Analysts' mean recommendation is inching toward a Buy. Consensus price targets are at $19.40, implying more than 37% upside from here.
- China Unicom has had a choppy year and is down 25.8% over the past three months, but is still up 4.9% YTD.
- Also moving today in U.S. trading: peers China Telecom (CHA +1%) and China Mobile (CHL +2.3%).
- Believing telecom capex is improving, Sterne Agee has upgraded NetScout (NTCT +2.4%) to Buy a day after the company posted mixed results for the last quarter (FQ1) prior to its $2.3B acquisition of Danaher's telecom hardware and software product lines (closed in mid-July). Shares are now up 8.2% from Wednesday's close.
- NetScout used its FQ1 report to guide for FY16 (ends March '16) revenue of $1.05B-$1.1B and EPS of $1.80-$1.95. Consensus, which doesn't account for the Danaher deal, is at $503.1M and $2.18. The company noted demand for its nGenius One network service assurance/traffic analysis platform was strong.
- Up in AH trading yesterday after beating Q2 estimates, offering light Q3 guidance, reiterating full-year sales guidance, and cutting its full-year opex and gross margin guidance, CRAY is heading in the opposite direction today.
- The supercomputer maker made a fresh 52-week low of $23.70 before bouncing a little. Shares now trade for 17x a 2016 EPS consensus of $1.49.
- On the earnings call (transcript), CEO Peter Ungaro noted storage accounted for over 15% of 1H15 revenue, and is set to "grow substantially" Y/Y in 2015. Cray recently hired engineers from Boston-based storage startup Terascala.
- Over 14M copies of Windows 10 were downloaded in the first 24 hours following its July 29 launch, Microsoft (MSFT -0.2%) exec Yusuf Mehdi discloses.
- As announced months ago, the OS is a free upgrade to Windows 7 and 8 users ... including those with pirated copies. Microsoft has said pirated copies will continue to be labeled non-genuine/unsupported, but some have apparently been converted to genuine copies.
- Reviewers generally declare Windows 10 a major improvement over the oft-criticized Windows 8, though some recommend users wait to upgrade until lingering bugs are fixed. The Verge's Tom Warren (8.8/10) likes the revamped Start menu, Cortana/search integration, and the Xbox app (allows Xbox One games to be streamed). "Everything about Windows 10 feels like a new approach for Microsoft ... I rarely touch my MacBook Air anymore..."
- Ars Technica's Peter Bright is a fan of Windows 10's notification center, Continuum feature (allows apps to have both touch and keyboard/mouse UIs), and support for touch-friendly Metro apps on the traditional Windows desktop. He calls the new Edge browser "tremendously promising" on account of its speed, stability, and streamlined UI, but adds it's "severely feature-deficient" for the time being.
- Slate's Will Oremus: "[Windows 10] is, as of today, the most versatile and forward-looking operating system in the world. That’s because it is the first to recognize and embrace the future of computing: a world in which all your devices are just different-sized screens running the same software ... Microsoft has embraced the convergence while respecting key differences between the mobile and desktop use cases"
- In tandem with the Windows 10 launch, Microsoft has rolled out touch-friendly Office Mobile apps for the OS.
- RingCentral (NYSE:RNG) has jumped, +11.3%, as Raymond James upgrades the stock to Strong Buy, from Outperform, following the company's earnings beat yesterday.
- RingCentral grew revenues 34% to $70.7M in moving to an adjusted loss per share of $0.05, $0.03 better than expected. EBITDA of -$200K beat an expected -$1.4M.
- The enterprise market is showing strength, the company said, and subscription gross margins that improved to 75.1% (from year-ago 69.8%) are pointing the way to profitability.
- Shares have moved up 10.2% in the past month and are up 33.8% YTD.
- CenturyLink (NYSE:CTL) is up 2.7% as Jefferies upgrades the stock to Hold, from Underperform.
- The firm lowered its price target, however, to $26 from $30. Shares closed yesterday at $28.16 and have now moved up to $28.92.
- Jefferies is still negative on fundamentals. But the stock is already down 26.8% YTD and "further near-term downside is likely limited," writes Mike McCormack.
- They expect guidance will be lowered on earnings -- the firm now sees fiscal 2015 EPS of $2.56, down from $2.62, and fiscal 2016 EPS of $2.43, down from $2.60 -- but that's probably priced in.
- "Our long-term concerns remain, but with a 7.7% dividend yield and the stock trading at 5.4x 2016E EBITDA, we see limited additional downside," McCormack says.
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