Seeking Alpha
  • Tuesday, April 15, 2014

  • 7:03 PM
    • Microsoft's (MSFT) new Azure Intelligent Systems Service allows companies to capture and manage machine data from various embedded devices and sensors, regardless of the OS they use. The service aims to enable Web-connected embedded platforms in verticals such as retail, health, manufacturing, and transportation.
    • IT outsourcing firms Cognizant and Infosys are among Microsoft's service partners. Intel and ARM are already going after this market by via solutions that combine their CPU designs with related software.
    • Microsoft is also unveiling its Analytics Platform System, a hardware appliance (to be sold by OEMs) that allows data handled by SQL Server's data warehousing solution (used to process/analyze structured data) and the Hadoop big data framework (used for giant unstructured datasets) to be integrated and jointly queried.
    • Satya Nadella calls the solution "big data in a box." Teradata (TDC) and Informatica (INFA) are among the companies in Microsoft's crosshairs.
    • SQL Server 2014 has also been launched. As promised, the latest update to Microsoft's database platform (produces $5B+/year in sales) features in-memory capabilities that arguably make it a meaningful rival to SAP's popular Hana in-memory database.
    • While going over the products, Nadella declares Microsoft needs to create a "data culture" to thrive, in part by using its own products. "Think of Office as the canvas, or the surface area, or the scaffolding from which you can access the data."
  • 5:43 PM
    • Linear (LLTC) expects FQ4 revenue to grow 2%-6% Q/Q; the midpoint of that range is below a consensus for 5% growth.  Book-to-bill was above 1, and bookings rose Q/Q for all of the chipmaker's top markets.
    • Gross margin rose 90 bps Y/Y in FQ3 to 75.7%, and opex rose 6% to $102.8M (less than rev. growth of 10.6%). $10.9M was spent on buybacks.
    • LLTC -0.3% AH. FQ3 results, PR.
    | Comment!
  • 5:20 PM
    • Intel's (INTC) PC Client Group (PC CPUs + connectivity and living room chips) saw its sales fall 1.5% Y/Y to $7.94B (62% of revenue). The Data Center Group (server/networking/storage chips) saw its sales rise 11% to $3.09B.
    • Internet of Things Group (embedded products) sales rose 32% to $482M. But Mobile & Communications Group (mobile products, inc. Atom CPUs) sales fell 61% to just $156M.
    • Software/service sales rose 6% to $553M, and all other sales (inc. flash memory) rose 18% to $545M.
    • While the PC and data center units respectively had op. income of $2.80B and $1.32B, the mobile unit had a whopping $929M op. loss, and the "Other" unit a $773M op. loss. Internet of Things had a $123M op. profit, and software/services a $7M op. loss.
    • The groups are the product of a new reporting structure.
    • PC and data center unit volumes respectively rose 1% and 3% Y/Y. PC ASPs -1% Q/Q and -3% Y/Y, data center ASPs +1% Q/Q and +8% Y/Y. Desktop ASPs +4%, notebooks -8%.
    • In its CFO commentary (.pdf), Intel attributes it strong Q2 GM forecast to lower 14nm start-up costs, higher volumes, and lower platform write-offs, partly offset by higher tablet volumes and related contra revenue for OEMs.
    • Intel's cash/investment balance fell by $1B Q/Q to $19B ($11B offshore). Inventories fell by $409M to $3.76B, and headcount by 1K to 106K.
    • INTC +2% AH. Q4 results, guidance, PR
  • 5:02 PM
    • Linear Technology (LLTC): FQ3 EPS of $0.48 in-line.
    • Revenue of $348M (+10.6% Y/Y) misses by $2.01M.
    • Press Release
    | Comment!
  • 4:55 PM
    • Chinese Internet stocks, hit hard by March/April's momentum stock selloff, are up in AH trading after Yahoo reported Alibaba's Q4 sales and net income respectively rose 66% and 110% Y/Y.
    • BIDU +3.4% AH. SINA +1.7%. DANG +2.8%. VIPS +3%. QIHU +1%. WUBA +1.1%. YY +1.3%. YOKU +2.2%.
  • 4:34 PM
    • Yahoo (YHOO) discloses in its earnings slides (.pdf) Alibaba (ABABA) had Q4 revenue of $3.06B (+66% Y/Y), and net income of $1.35B (+110%). Revenue growth accelerated from Q3's 51% clip.
    • Yahoo Japan's sales fell 14% Y/Y in Q4 to $1.03B (worse than Q3's 4% drop), and its net income fell 11% to $304M.
    • Yahoo itself is guiding for Q2 revenue of $1.12B-$1.16B, above a $1.08B consensus. Op. income is expected to fall to $130M-$170M from a year-ago level of $224M, and adjusted EBITDA to $290M-$330M from $386M.
    • Yahoo's long-struggling display ad ops staged a turnaround in Q1: Sales (ex-TAC) rose 2% Y/Y to $409M after falling 6% in Q4 and 7% in Q3. Search revenue (ex-TAC) rose 9% to $444M after growing 8% in Q4. All other revenue fell 11% to $234M.
    • Display ads sold +7% vs. +3% in Q4, price per ad -5% vs. -7%. Search paid clicks +6%, down sharply from Q4's +17%. But price per click rose 8% after dropping in each quarter of 2013. Did Henrique de Castro's firing contribute to the display/search improvement?
    • $450M was spent on buybacks, up from $231M in Q4 and boosting EPS. While revenue rose 0.9% Y/Y, opex rose 15.5% to $1.1B.
    • Q1 results, PR
  • 4:15 PM
    • Intel (INTC) expects Q2 revenue of $12.5B-$13.5B vs. a $12.96B consensus. Full-year guidance for flat revenue growth (compares with a consensus for 0.8% growth) and capex of $10.5B-$11.5B is reiterated.
    • Q1 gross margin was 59.7%, -230 bps Q/Q and +350 bps Y/Y, and above a guidance midpoint of 59%. GM is expected to rise to 63% (+/- 2%) in Q2, and full-year GM guidance has been raised 100 bps to 61% (+/- a few percentage points).
    • Full-year R&D/MG&A spending guidance has been raised by $300M to $18.7B-$19.1B. While revenue rose just 1.7% Y/Y in Q1, opex rose 12% to $5.09B.
    • $545M was spent on buybacks, up from $528M in Q4.
    • Q1 results, PR
  • 4:06 PM
    • Yahoo (YHOO): Q1 EPS of $0.38 beats by $0.01.
    • Revenue of $1.08B (+0.9% Y/Y) in-line.
    • Press Release
  • 4:04 PM
    • Intel (INTC): Q1 EPS of $0.38 beats by $0.01.
    • Revenue of $12.8B (+1.7% Y/Y) in-line.
    • Press Release
  • 4:00 PM
    • Daniel Graf, Google's (GOOG +0.8%) Maps chief since 2012, is leaving to become Twitter's (TWTR +11.4%) consumer products VP. Among other things, Graf spearheaded the launch of Google's widely-praised iOS Maps apps after Apple controversially opted to use a home-grown Maps app in iOS 6.
    • Graf takes over Twitter's consumer product efforts at a time when the microblogging leader is attempting to boost flagging user growth by launching and testing a slew of changes meant to make its platform more photo/video-friendly and less intimidating to new users more Facebook-like news feeds.
    • Separately, Google has announced the first phone for its Project Ara custom/modular phone initiative will arrive in January, and sell for just $50; presumably, adding various custom parts will increase that figure.
    • Google plans to have Ara, which aims to let smartphone buyers mix and match components such as a device's camera, display, and CPU, support three device sizes. Google will supply "electronics backbones" for the devices, but will rely on third parties to provide the modules that run on top of them.
    • Twitter shares have flown higher amid an afternoon market rebound.
  • 3:59 PM
    • Highpower International (HPJ +12.8%) is one of the day's biggest gainers following news that it signed a deal to become an official supplier of Sony (SNE).
    • HPJ says the initial orders for its lithium polymer batteries will be used for Sony’s wireless products, and it has already begun receiving orders and shipping products to SNE.
    | Comment!
  • 2:26 PM
    • Zebra Technologies (ZBRA -11.1%) aren't thrilled with the company's plans to spend $3.45B in cash to buy Motorola Solutions' (MSI -1.3%) enterprise hardware/software unit. (FT report)
    • Zebra, which had only $416M in cash/investments at the end of 2013, says it will pay with $200M in cash on hand and $3.25B in new debt. Zebra's current market cap only stands at $3.05B. The deal is expected to close by year's end.
    • Motorola's enterprise unit offers barcode scanners and RFID readers that complement Zebra's inventory/location-tracking and specialized printing products. It also sells Wi-Fi hardware, interactive kiosks, handheld computers, and two-way radios.
    • The unit had 2013 pro forma sales of $2.5B, easily surpassing Zebra's 2013 sales of $1B. But it has been struggling: Sales were down 2% in 2013, and op. income fell 9% to $358M.
    • Along with the deal, Motorola has announced it expects to report Q1 revenue of $1.8B (-9% Y/Y) and EPS of $0.50, below a consensus of $1.88B and $0.51. 2014 revenue is now expected to fall by a single-digit %; the consensus is for a 0.7% increase.
    • Excluding acquisition expenses, Zebra expects to report Q1 revenue of $287M-$289M and EPS of $0.88-$0.91, above a consensus of $281.6M and $0.83.
    | Comment!
  • 1:49 PM
    • While broader equity markets are only seeing modest declines, tech stocks aren't so lucky. The Nasdaq-100 (QQQ -0.8%) had its lowest print since October this morning before recovering slightly.
    • Chinese tech stocks (KWEB -4.3%), including 2013 solar high-flyers (TAN -4.2%), are especially hard-hit following a Shanghai selloff triggered by PBOC withdrawals. Other Internet (PNQI -2.3%) and social media (SOCL -2%) stocks aren't faring much better.
    • Will earnings season come to the rescue? Intel and Yahoo report after the bell today, and Google and IBM after the bell tomorrow.
    • Update: Tech stocks rallied in the final hours of trading. The Nasdaq closed up 0.3%.
    | 1 Comment
  • 1:26 PM
    • ValueAct Capital, which won a Microsoft board seat last year, is among the activist investors thinking of taking a stake in Symantec (SYMC), sources tell Reuters.
    • Meanwhile, P-E firms including Bain, Blackstone, and Carlyle have reportedly "started assessing the possibility of a leveraged buyout of all or parts of Symantec." Reuters adds some P-E firms "have approached Symantec in recent weeks to discuss deal possibilities," but there are currently no serious talks going on.
    • 11 days ago, Reuters and Bloomberg reported Symantec is hiring one or more banks to explore its options and defend itself against activists following the firing of CEO Steve Bennett.
    • Shares are near breakeven on a rough day for the Nasdaq.
    | Comment!
  • 1:13 PM
    • FeedMagnet provides software tools that allow brands to aggregate, share, and personalize social media content (inc. photos and videos) involving them.
    • Bazaarvoice (BV -2.7%) is buying the company for $9M in cash, and says the deal will complement its existing online/social media customer interaction tools.
    • Last week, Bazaarvoice announced it has signed an LOI to sell its PowerReviews unit, which the DOJ has wanted the company to unload for some time.
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  • 12:50 PM
    • BlackBerry (BBRY -0.8%) has taken a stake in NantHealth, developer of a cloud-based clinical software platform that's used by ~250 hospitals and gathers data from 16K+ connected medical devices.
    • NantHealth suggests it will leverage BlackBerry's QNX OS to "put the power of a supercomputer in the palm of the caregiver's hand." The company will also use BlackBerry's upcoming BBM Protected secure messaging platform (part of the eBBM Suite).
    • BlackBerry and NantHealth plan to develop a smartphone for the healthcare industry that's optimized for viewing 3D images and CT scans. It's expected to arrive in late 2014 or early 2015.
    • The deal is part of an effort by BlackBerry to carve out niches for its mobile hardware and software in enterprise/institutional verticals. John Chen: "The future of BlackBerry lies in creative opportunities like this that take our many core disciplines and combine them in ways no one else can match."
  • 12:14 PM
    • Infosys (INFY -6.7%) expects 7%-9% FY15 (ends March '15) revenue growth; that's below a consensus for 9.4% growth.
    • After providing a $0.50/share final dividend for FY13, the IT outsourcing giant has recommended a $0.72/share final dividend for FY14 (1.4% current yield). Moreover, it's raising its target payout ratio to 40% of post-tax profits from a prior 30%.
    • 50 clients were added in FQ4, down from 54 in FQ3 and 56 a year ago.
    • Gross margin rose 210 bps Y/Y to 37%. Opex rose 9.1% Y/Y, slightly exceeding rev. growth of 7.9%. 11K employees were added, raising Infosys' total headcount to 160.4K.
    • FQ4 results, PR
    • Previous: Infosys CEO to retire by Jan. 2015
    | Comment!
  • 11:53 AM
    • Hanwha (HSOL -5%) chairman/CEO Ki-Joon Hong has retired from the company. The company expects to name a replacement by month's end.
    • After opening near breakeven, Hanwha has joined several Chinese solar peers in selling off.
    | 1 Comment
  • 11:33 AM
    • Amazon's (AMZN -1.9%) rumored smartphone will have a 4.7" display sporting a modest 720p resolution (most high-end Android phones are now at 1080p), sources tell BGR, which has published photos said to show a prototype.
    • The device also reportedly features Qualcomm's (QCOM +0.2%) Snapdragon processor (no model # is given), 2GB of RAM, and a 13MP rear camera. Qualcomm is already the CPU provider for the latest Kindle Fire tablets, and the just-launched Fire TV set-top.
    • BGR joins the WSJ in reporting the phone will have a 3D display enabled by four front-facing cameras (one at each corner) to complement regular rear and front cameras. The cameras allow Amazon to enable 3D viewing without the parallax barrier needed by other glasses-free solutions (hurts image quality) .
    • With the 3D display Amazon's main point of differentiation - Google-backed Android phones will have a major app/services ecosystem edge - Amazon is reportedly supporting 3D viewing "in as many areas as possible," including wallpapers, app icons, its maps app, and its media stores.
    • The WSJ reported Amazon plans to ship its phone in September after unveiling it in June. Re/code followed up by reporting a low-end phone is also on tap, and that Amazon is working hard to woo Android developers.
    | Comment!
  • 11:05 AM
    • Gnip provides businesses with real-time and historical datasets (as well as value-added data "enrichments") for nine social sharing platforms, including Twitter (TWTR +0.5%), Foursquare, Tumblr, and WordPress. The company also offers managed API access for Facebook, Instagram, Google+, and several other platforms.
    • Twitter: "Gnip has played a crucial role in collecting and digesting our public data and delivering the most essential Tweets to partners ...  Together we plan to offer more sophisticated data sets and better data enrichments."
    • Gnip complements a data licensing business that accounted for 9% of Twitter's Q4 revenue, and which has been trying to grow via industry-specific partnerships.
    • The startup could also help Twitter provide higher-quality data to advertisers (already a priority) as it continues fleshing out its ad product lineup. Gnip's clients include ad tech and social media monitoring firms.
    • Deal terms are undisclosed. The acquisition might not go over well with Gnip rivals/fellow Twitter partners such as DataSift. Apple bought Twitter search engine/data provider Topsy last year.
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