Seeking Alpha
  • Today - Tuesday, April 21, 2015

  • 9:29 PM
    • HBO (NYSE:TWX) has taken a loose stance with its paywalls and password sharing in the U.S., but it's begun taking action against external customers of new streaming service HBO Now who may be using virtual private networks to access the U.S.-only offering.
    • The network began sending e-mails today threatening account cancellations to those users (often in Germany, the UK, Australia/New Zealand or Canada) suspected of masquerading as U.S. users, and instructing them to call and explain themselves to maintain the account.
    • The likely impetus is a (more complicated) extension of issues that HBO Now's launch faced in the U.S. -- namely, the fraught relationship that HBO has from its traditional revenue partnerships with cable partners. Australians, for example, should be accessing HBO via $45/month to Foxtel rather than $14.99/month to HBO through a VPN.
    • Previously: HBO Now rolls out via Apple and Cablevision (Apr. 07 2015)
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  • 9:11 PM
    • Mobile infrastructure spending in China rose 51% last year, according to an Infonetics report, primed by "robust" TD-LTE deployments at wireless leader China Mobile (NYSE:CHL) and W-CDMA expansions at China Unicom (NYSE:CHU).
    • Those increases countered a significant capex cut by third competitor China Telecom (NYSE:CHA).
    • China Mobile in particular had a goal of raising TD-LTE rollouts from 150K TD-LTE eNodeBs to 500K, but ended the year with 720K in a next-gen push. The company has 60% of China's mobile subscribers.
    • The mobile operators added 58M subscribers in 2014 to push the total market to 1.3B subscribers.
    • Gains today: China Mobile (CHL) up 4.3%; China Telecom (CHA) up 1.5%; China Unicom (CHU) up 3%.
    • Previously: China telecoms: Providers gain again; Unicom adds 1.6M net subs (Apr. 21 2015)
    • Previously: Chinese wireless firms up on PBOC easing; China Mobile notes Q1 results (Apr. 20 2015)
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  • 8:06 PM
    • Google (NASDAQ:GOOG) is ready to push out its wireless phone service as soon as tomorrow, the WSJ reports, and it's expected to allow customers to pay only for data used.
    • That could put pressure on existing providers who have pocketed excess fees spent on data "buckets" that typically waste a reported $28/month per subscriber.
    • As previously reported, the service will work only on Google's latest Nexus 6 devices and will use Wi-Fi nets to route calls and data. Wireless service will be via Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) networks, switching between them depending on stronger signal.
    • The deal represents a threat to the wireless status quo, even as transit agreements are good for Sprint and T-Mobile. The decision in Sprint's case to go along reportedly went all the way to Chairman Masayoshi Son.
    • Previously: WSJ: Google's phone service to initially have just one (giant) phone (Mar. 05 2015)
  • 7:29 PM
    • Tesla Motors' (NASDAQ:TSLA) April 30 product announcement will be unveiling a home battery as well as a large-scale utility battery, Bloomberg reports, citing an e-mail from the company's investor-relations chief.
    • The mail notes that Tesla “will explain the advantages of our solutions and why past battery options were not compelling.”
    • Speculation has been widespread that the coming announcement -- which Tesla chief Elon Musk tweeted about at the end of March -- would be about a product that would either supplement or threaten the traditional utility power grid.
    • Musk said during a February earnings call that such a battery was coming from them, sooner or later.
  • 7:22 PM
    • With 100G optical transport demand still acting as a big tailwind, Infinera (NASDAQ:INFN) has guided on its Q1 CC for Q2 revenue of $195M-$205M and EPS of $0.14-$0.18, above a consensus of $192.1M and $0.12. "I believe we are in an optimal position with customers that are building the largest networks the fastest," says CEO Tom Fallon.
    • Driving the Q1 EPS beat: Gross margin (non-GAAP) was 47.8%, +170 bps Q/Q and +600 bps Y/Y, and above guidance of 43%-45%. GAAP operating expenses rose 23% Y/Y to $73M (compares with 31% revenue growth) - R&D spend totaled $39.3M, sales/marketing $21M, and G&A $12.7M.
    • Shares have risen to $20.70 AH, putting them slightly above a 52-week high of $20.59.
    • Q1 results, PR
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  • 7:17 PM
    • FCC officials tomorrow will brief staff about the proposed $45B merger of Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC), Reuters is reporting -- though with no news about which way officials are thinking.
    • The briefing may be light on specifics but might offer some clues to how the FCC will deal with recent public opposition to the buyout. The FCC's ruling on the deal will focus on public interest, while the Department of Justice focuses on antitrust concerns.
    • The staff will also be briefed tomorrow on AT&T's (NYSE:T) $48B deal to buy DirecTV (NASDAQ:DTV), according to Reuters.
    • Previously: WSJ: Comcast, Time Warner Cable to meet with Justice Dept. (Apr. 18 2015)
    • Previously: Comcast defends TWC deal, announces 2-Gbps California plan (Apr. 17 2015)
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  • 7:10 PM
    • VMware (NYSE:VMW) guides in its Q1 earnings CC slides (.pdf) for Q2 revenue of $1.58B-$1.6B (+8%-10% Y/Y) and EPS of $0.90-$0.92, unfavorable to a consensus of $1.6B and $0.92.
    • Likewise, full-year guidance is for revenue of $6.57B-$6.69B (9%-11%) and EPS of $3.94-$4.02 vs. a consensus of $6.69B and $4.00. However, with forex already expected to have a big impact - it's respectively expected to hurt Q2 and full-year sales growth by 4% and 3% - the numbers are being taken in stride.
    • License revenue rose 3% Y/Y in Q1 to $576M, down from Q4's 13% growth but in-line with guidance of 2%-3%. 3%-4% license growth is expected in Q2, and 4%-7% growth in 2015. Services revenue (driven by past license deals) rose 17% in Q1 to $935M.
    • As was the case in Q4, products other than standalone vSphere server virtualization licenses (hurt by high penetration rates and low-cost rivals) fared well. End-user computing (PC virtualization, AirWatch's enterprise mobility management offerings) license bookings rose over 50% in constant currency, with desktop licenses rising 15%. Hybrid cloud/SaaS revenue, which includes the vCloud Air cloud infrastructure platform, now makes up over 6% of revenue.
    • Enterprise license agreements (ELAs - they cover a variety of products, and don't come cheap) made up 30% of bookings, down from 39% in seasonally strong Q4. CRN recently reported VMware is thinking of hiring a global sales chief in part to boost ELA sales.
    • $438M was spent on buybacks, giving a boost to EPS. The unearned (deferred) revenue balance rose a healthy 14% Y/Y to $4.74B. Costs/expenses (non-GAAP) rose 13% to $1.06B.
    • VMW -0.5% AH to $85.00. Q1 results, PR.
  • 6:38 PM
    • Intuit (NASDAQ:INTU) sold 30.2M federal TurboTax units this year through April 16 (the end of tax season), up 8% Y/Y. TurboTax Online +13% to 23.8M; TurboTax Desktop -6% to 5.4M; TurboTax Free File Alliance -11% to 1M.
    • Thanks to the numbers, Intuit now expects 8% FY15 (ends July '15) consumer tax revenue growth, above prior guidance of 5%-7%.
    • INTU +1% AH to $98.23. The all-time high (set on March 20) is $100.88.
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  • 6:37 PM
    • Mobile ad network VisionChina Media (NASDAQ:VISN) posted revenue that tumbled 33% Y/Y, and down 27% sequentially, leading to a $0.23/share loss (-$4.56/ADS).
    • The company pointed to a dispute with Guangzhou Metro Television where Guangzhou suspended VisionChina's ad placements during contract renegotiations. The as returned to the Guangzhou Subway in December and VisionChina expects revenue from that placement will return to normal in Q2.
    • Ad service cost was $34.1M, up from the prior year's $24.4M, primarily due to a penalty provision of $10.4M resulting form the early termination of the Guangzhou contract. Aside from the penalty, ad service cost dropped 2.8% Y/Y and 7.5% Q/Q.
    • The company also got an extension of a 100M-yuan ($16.3M) credit facility from China Construction Bank and noted that it's searching for a new director after Kit Leong Low, Focus Media's representative on VisionChina's board, resigned.
    • Conference call at 8 p.m. ET.
    • Press release
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  • 6:11 PM
    • Windstream (WIN +2.1%) spinoff Communications Sales & Leasing (CSAL; currently trading when-issued at CSALV) will replace Cliffs Natural Resources (NYSE:CLF) in the S&P MidCap 400 after Friday's close, pending the spinoff's completion around then.
    • Cliffs, down 4.4% today, has a market cap below $800M and is no longer representative of the mid-cap space, the indexers said.
    • Windstream will remain in the MidCap 400 after the spinoff.
    | Comment!
  • 5:43 PM
    • Marissa Mayer states on Yahoo's (NASDAQ:YHOO) Q1 CC her company has hired advisors to explore options for its 35.5% Yahoo Japan (OTCPK:YAHOY) stake, and expects to announce a plan on a future CC.
    • Based on today's Tokyo close, the Yahoo Japan stake (not part of the Alibaba stake spinoff) is worth $8.8B (equal to 21% of Yahoo's market cap). SoftBank (owns 43% of Yahoo Japan) is a potential buyer of the asset.
    • After initially trading lower in response to Yahoo's Q1 miss and Q2 guidance, shares have risen to $45.14.
  • 5:42 PM
    • (COUP +2.2%) says Michael Walsh resigned from its board effective in June, and the board confirmed Steve Horowitz's appointment to join them June 11.
    • Horowitz, a former CTO at the company and currently VP of engineering at Snapchat, was set to join the board in June. He's been reclassified to Class I from a previous Class III director.
    • He'll get a stock option with grant date value of $250K along with a $30K annual retainer, and another option with grant date value of $150K at the 2016 annual meeting.
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  • 5:35 PM
    • In addition to beating Q1 estimates, Broadcom (NASDAQ:BRCM) is guiding for Q2 revenue of $2.1B (+/- $75M), above a $2.07B consensus. Strong Galaxy S6 sales could be partly responsible - Broadcom is believed to supply a Wi-Fi/Bluetooth combo chip and a GPS/sensor hub IC. Continued iPhone 6 and data center hardware strength (driven by Web/cloud demand) might also be factors.
    • Q1 gross margin (non-GAAP) was 54.4%, -30 bps Q/Q and +250 bps Y/Y, and slightly below a guidance midpoint of 54.7%. However, GM is expected to rise to 56% (+/- 75 bps) in Q2.
    • In addition, R&D/SG&A spend is expected to drop ~$15M Q/Q (+/- $10M). Thanks to Broadcom's baseband modem exit, R&D spend was down 15% Y/Y in Q1 to $539M, and SG&A spend 4% to $177M.
    • $335M was spent on buybacks, providing a lift to EPS. Broadcom established a $1B 2015 buyback authorization last December.
    • BRCM +5.5% AH to $46.38, slightly topping a 52-week high of $46.31.
    • Q1 results, PR
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  • 5:32 PM
    • Charter Communications (NASDAQ:CHTR) says it's closed on the sale of $2.7B in senior unsecured notes in total.
    • The notes come due in 2023 ($1.15B worth at 5.125%), 2025 ($750M at 5.375%) and 2027 ($800M at 5.875%).
    • Net proceeds came to about $2.68B, which will be used to roll notes due in 2017, 2019 and 2020 and for general purposes.
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  • 5:20 PM
    • CalAmp (NASDAQ:CAMP) is guiding for FQ1 revenue of $63M-$67M, below a $67.4M consensus. However, it also expects wireless datacom revenue (87% of total FQ4 revenue) to grow "at or above" a mid-teens clip in FY16 (ends Feb. '16), with further margin expansion. The consensus for total FY16 revenue growth is at 14.3%.
    • FQ1 EPS guidance of $0.24-$0.28 is in-line with a $0.26 consensus. Wireless datacom revenue is expected to be up significantly Y/Y but down modestly Q/Q due to shipment timings for a major heavy equipment OEM customer; shipments are expected to pick up in future quarters. Satellite revenue is expected to be soft in the first half of FY16, and grow in the second half as a key client transitions to next-gen products.
    • Wireless datacom revenue rose 23% Y/Y in FQ4 to $60.5M, a pickup from FQ3's 10% growth and driving the FQ4 beat. Satellite revenue fell 18% to $8.7M. Strong demand for mobile resource management (MRM) and fleet management products drove the wireless growth.
    • Gross margin rose to 35.5% from FQ3's 35% and the year-ago period's 34.4%. Thanks to lower R&D spend, operating expenses fell by $200K Y/Y to $15.7M.
    • Shares have jumped to $18.30 AH.
    • FQ4 results, PR
  • 5:05 PM
    • Yahoo (NASDAQ:YHOO) has guided in its Q1 earnings slides (.pdf) for Q2 revenue (ex-TAC) of $1.01B-$1.05B vs. a $1.04B consensus. Op. income is expected to fall to $90M-$110M from $194M in Q2 2014.
    • With share loss and a shift to native ad formats still weighing, Yahoo's display ad revenue (ex-TAC) fell 7% Y/Y in Q1 to $381M, a bigger drop than Q4's 5%. Ads sold +29%, price per ad -17%.
    • Search revenue (ex-TAC) fell 3% to $432M after coming in flat in Q4, in spite of the boost provided by the U.S. Firefox deal. A 21% increase in paid clicks was offset by lower Microsoft payments and a 3% drop in price per ad click. Yahoo's restructured Microsoft deal (increases Yahoo's gross revenue cut to 93% from 88%) could improve matters.
    • GAAP mobile revenue (doesn't back out traffic acquisition costs) rose 73% Y/Y to $234M. GAAP PC revenue fell 2% to $873M. Non-traffic driven revenue (e.g. royalties, license fees) rose 18% to $119M. GAAP "Mavens revenue," which covers mobile, video, native, and Tumblr ads, rose 58% to $363M.
    • CFO Ken Goldman, perhaps looking to appease Starboard Value: "We are tightly managing our overall cost structure as EBITDA remains a key measurement for the Company." With job cuts limiting spending growth, operating expenses (non-GAAP) rose 3% Y/Y to $963M. Ex-TAC, Americas revenue (78% of total revenue) fell 2%, EMEA fell 16%, and Asia-Pac fell 9%.
    • $204M was spent on buybacks, much less than Q4's $980M. Yahoo "satisfied" its $3.3B tax liability related to Alibaba IPO proceeds during Q1, leaving its quarter-ending cash balance at $6.9B.
    • YHOO -1.2% AH to $43.95.
    • Q1 results, PR
  • 5:00 PM
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  • 4:36 PM
    • Navient (NASDAQ:NAVI): Q1 EPS of $0.48 misses by $0.02.
    • Net interest income of $583M (-23.9% Y/Y).
    • Press Release
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  • 4:33 PM
    • CREE is guiding for FQ4 revenue of $420M-$440M and EPS of $0.24-$0.28 vs. a consensus of $434.4M and $0.29.
    • Gross margin (closely watched) fell to 31.4% in FQ3 from 33.9% in FQ2 and 37.8% a year ago, and missed guidance of ~33.5%. FQ4 GM guidance is at ~32%.
    • Segment performance: LED product (chip/component) revenue -23% Y/Y to $154.4M (tough Asian mid-power competition); gross margin -970 bps to 35.9%. Lighting products +27% to $224.1M (strong U.S. retail sales); gross margin -140 bps to 26%. Power/RF products +13% to $31M; gross margin -400 bps to 53.1%.
    • GAAP SG&A spend +10% to $71.9M; R&D -6% to $43.8M. Cree ended FQ4 with $782M in cash/short-term investments, and $150M in long-term debt.
    • Shares have fallen to $33.94 AH.
    • FQ3 results, PR
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  • 4:31 PM
    • Dolby Laboratories (NYSE:DLB): FQ2 EPS of $0.56 beats by $0.08.
    • Revenue of $271.9M (-2.4% Y/Y) beats by $6.44M.
    • Shares +2.3%.
    • Press Release
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