Seeking Alpha
  • Today - Wednesday, August 20, 2014

  • 2:16 PM
    • In addition to beating Q2 revenue estimates by $9.7M (while posting in-line EPS), E-House (EJ +0.4%) is maintaining full-year guidance for revenue of $910M-$930M (+24%-27%); that's above a $907M consensus.
    • A 41% Y/Y increase in SG&A spend to $231.2M pressured EPS - E-House attributes the growth to marketing/promotional spend and higher staff-related costs. However, cost of revenue only rose 8%, much less than revenue growth of 29%.
    • E-House's Leju (LEJU +6.2%) subsidiary beat Q2 revenue estimates (while slightly missing on EPS) on the back of a 159% Y/Y increase in e-commerce services revenue to $68.3M. Its online ad revenue rose just 11% to $44.5M, and its listing services revenue fell 16% to $4.2M.
    • E-House's real estate brokerage services revenue was nearly flat at $65.5M. Its information/consulting services revenue rose 9% to $17.9M, and its other services revenue fell 2% to $9.4M.
    • Leju is maintaining full-year guidance for revenue of $500M-$520M (+49%-55%); that's above a $495.8M consensus.
    • Much like SouFun, E-House/Leju have been contending with Chinese real estate softness and listing fee price pressure.
    • E-House: Q2 results, PR. Leju: Q2 results, PR.
    | Comment!
  • 1:45 PM
    • Due to mix and pricing strategy changes, LightInTheBox's (NYSE:LITB) gross margin fell to 39.5% in Q2 from 41.3% in Q1 and 46% a year ago. That was a major reason EPS was only in-line in spite of a $5M revenue beat.
    • Rising opex also took a toll: Fulfillment spend grew to 6.1% of revenue from 5.2% a year ago due to smaller average order size; sales/marketing spend rose to 27.7% from 27.1%; and G&A spend rose to 12.9% from 12.2%.
    • Apparel revenue +43.5% to $35.4M, while electronics and general merchandise revenue +14.3% to $54.4M. Total orders +52.4% to 2.2M; active customers +44.2% to 1.7M. Mobile accounted for 28.2% of orders, up from 16.8% a year ago.
    • LightInTheBox expects Q3 revenue of $92M-$94M, above an $85M consensus.
    • Q2 results, PR
    | Comment!
  • 1:27 PM
    • Following a CC with compound semi consulting firm Yole Development about GT Advanced's (GTAT -2.4%) supply deal with Apple, CLSA's Mark Heller reports Yole believes at least one iPhone featuring sapphire cover glass will launch next month. However, it also thinks GT and Apple's sapphire finishing suppliers "are still struggling with yields."
    • Yole estimates Apple's all-in sapphire cost is at a steep $25 for a 4.7" display, assuming a 30% growth yield and 60% finishing yield - that's over 8x the $3 cost estimate other analysts have provided for Gorilla Glass (GLW +1.5%) panels. GT is assigned an $8.90 ASP.
    • At the same time, Yole thinks costs could drop to $16 if growth and finishing yields respectively improve to 60% and 75%, boosting GT's margins along the way.
    • Heller writes Yole's base scenario suggests only 4.7M 4.7" sapphire displays, or 3M 5.5" displays, will be available by September.  Worth noting: With Apple having reportedly placed orders for 70M-80M iPhone 6 units, those numbers appear conservative in the event at least one of the models fully uses sapphire.
    • Corning is moving higher. The company stated last month Gorilla Glass sales have been hurt by "lower-than-expected sales for planned new models."
    • Earlier: CLSA downgrades GT Advanced to Underperform
    | 12 Comments
  • 12:47 PM
    • Nokia (NOK +1.8%) states Michael Halbherr, the head of its Here mapping/location services unit, is leaving to pursue "entrepreneurial interests." Bloomberg reports his departure stems from a disagreement with new CEO Rajeev Suri about the division's strategy. SVP Cliff Fox will become Here's acting chief.
    • A source states an internal debate has formed over whether the mapping unit should focus on automotive/enterprise opportunities or also continue going after consumers. While Here has seen decent auto market traction, its PND/mobile sales have been hurt by smartphone cannibalization and tough competition from Google Maps.
    • Here revenue was nearly flat Y/Y in Q2 at  €232M, with higher auto sales and Microsoft licensing revenue offsetting PND weakness. Data licenses for embedded navigation systems within new cars rose by 600K to 3.3M.
    • Previous: Nokia investing $100M in smart car tech
    | 4 Comments
  • 12:18 PM
    • Infineon (OTCPK:IFNNF) is paying $40/share, or $3B, in cash to acquire International Rectifier (NYSE:IRF). The price represents a 51% premium to Tuesday's close, and is well above the ~$2B reported by Bloomberg.
    • Infineon is paying ~$2.4B net of cash for the analog chipmaker. The deal will be financed with a mixture of existing cash and credit facilities, and is expected to close in late 2014 or early 2015.
    • The companies declare IRF's gallium nitride (GaN) power management discrete components and ICs complement Infineon's own GaN offerings, and (echoing arguments made for recent chip deals) that the combined company will benefit from greater R&D scale and manufacturing/operational synergies.
    • IRF is now up 47.4% to $39.16. The company has posted its FQ4 report in tandem with the Infineon announcement.
    | Comment!
  • 12:12 PM
    • International Rectifier (NYSE:IRF): FQ4 EPS of $0.30 beats by $0.01.
    • Revenue of $297.6M (+7.6% Y/Y) beats by $8.91M.
    • Shares +5.71%.
    • Press Release
    | Comment!
  • 11:51 AM
    • Fairchild (FCS +2.5%), Intersil (ISIL +1.3%), Semtech (SMTC +2.6%) and Power Integrations (POWI +3.3%) have all given back a chunk of their early gains. Peer International Rectifier, which also rallied, has been halted.
    • All 5 companies had jumped on a Bloomberg report stating Infineon is nearing a deal to buy a U.S. chipmaker for ~$2B.
    | Comment!
  • 11:43 AM
    • International Rectifier (IRF +6.1%) was among the companies whose shares jumped in response to a report Infineon is set to buy a U.S. chipmaker for ~$2B.
    | Comment!
  • 11:14 AM
    • As expected, Vringo (VRNG -8.2%) plans to file a petition for an en banc review of the adverse federal appeals court ruling it received last week for its infringement suit against Google.
    • Federal Circuit rules require Vringo to file a petition by Sep. 15. However, the company has filed an unopposed motion for a 30-day extension.
    • SA author Alexander Maxwell has argued Justice Raymond Chen, who dissented from the appeals court ruling, will likely push for an en banc hearing to be granted.
    | 4 Comments
  • 10:50 AM
    • China Telecom plans to add NQ Mobile's (NQ +2.2%) vLife interactive Android wallpaper to its E Surfing mobile data services platform. NQ declares vLife will allow China Telecom to "present dynamic content, recommendations and promotions across video wallpapers, lock screen wallpapers and theme galleries."
    • NQ notes vLife, which underpins Sprint's NQ Live offering, is often used as a promotional tool in China, with movie studios relying on the platform to promote new releases.
    • The company bought a 58% stake in vLife developer Tianjin HuaYong Wireless earlier this year, a move that didn't sit well with some investors.
    | 5 Comments
  • 10:28 AM
    • Bloomberg reports P-E firm Hellman & Friedman is among the P-E firms to have submitted offers for Shutterfly (SFLY +2.6%).
    • The news service adds Shutterfly may be been valued at ~$2B in a sale, and that Bain has also expressed interest. However, tech/Internet companies have shown little interest.
    • Shares have moved higher in response to Bloomberg's report. Shutterfly's market cap is currently right around $2B.
    • Previous: The Deal reports Shutterfly has received buyout offers
    | Comment!
  • 10:15 AM
    • Bloomberg reports Infineon (OTCPK:IFNNF) "nearing an agreement to acquire a U.S.- based semiconductor company for about $2 billion," and that a deal could be announced as soon as today.
    • No word on whom Infineon is looking to buy. Bloomberg notes it reported last month analog/mixed-signal chipmakers Fairchild (FCS +5.6%), Power Integrations (POWI +11.3%), and Semtech (SMTC +8%) are considered M&A targets, as the chip industry continues to consolidate.
    • Shares of all three companies are up sharply, as are those of peers International Rectifier (IRF +5.8%) and Intersil (ISIL +4.4%). FCS and IRF are currently worth $2B; POWI is worth $1.9B; ISIL is worth $1.8B; and SMTC is worth $1.7B.
    • "[Infineon] would like to build a stronger presence in power management," says Liberum Capital's Janardan Menon. He adds the market has "high barriers to entry and strong growth prospects," a fact that also hasn't been lost on Texas Instruments and other industry players.
    | Comment!
  • 9:54 AM
    • D.A. Davidson has upgraded Skullcandy (SKUL +3.9%) to Buy, and raised its target by $2 to $10.
    • The firm thinks Skullcandy's U.S. ops are stabilizing, and is pleased with a mix shift towards higher-margin in-ear headphones.
    • The move comes a week after Jefferies upgraded Skullcandy to Hold, declaring it's seeing "signs of sustained fundamental improvement." Shares are at their highest levels since April.
    | Comment!
  • 9:35 AM
    • 500.com (NYSE:WBAI) CFO Zhengming Pan has been promoted to the role of president. Chairman/CEO Vincent Law says Pan will "take over the day-to-day running of our business," thus leaving Law to "focus on the overall management of the Company, our growth strategy and the substantial opportunities that we see ahead of us."
    • Min Yu, a Deutsche VP for the last four years, is 500.com's new CFO. The company notes Yu was part of the team that worked on 500.com's IPO.
    | Comment!
  • 9:30 AM
    • Highpower (NASDAQ:HPJ) will start supplying Timex with advanced compact lithium batteries developed specifically for Timex's IRONMAN ONE GPS+, a smartwatch that offers stand-alone wireless connectivity without a phone.
    • "We are excited to work with Timex as a contributor to this innovative smartwatch technology," says CEO George Pan.
    • HPJ +13.4% premarket
    | Comment!
  • 9:24 AM
    • CLSA has downgraded GT Advanced (NASDAQ:GTAT) to Underperform from Outperform.
    • The downgrade comes a month after CLSA lowered its estimates for GT, citing potentially low sapphire yields at the company's Mesa, AZ facility. It also arrives with shares up 111% YTD amid strong Apple-related hopes.
    • Previous: GT Advanced gains on iPhone screen production report
    | 33 Comments
  • 9:18 AM
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  • 9:03 AM
    • Raven (NASDAQ:RAVN): Q2 EPS of $0.21 misses by $0.05.
    • Revenue of $94.5M (+1.2% Y/Y) misses by $4.97M.
    • Press Release
    | Comment!
  • 8:38 AM
    • Fusion Telecom (NASDAQ:FSNN): Q2 EPS of -$0.42.
    • Revenue of $23.1M (+62.7% Y/Y).
    • Press Release
    | Comment!
  • 8:15 AM
    • JA Solar (NASDAQ:JASO) -6.1% premarket after Q2 earnings and revenues come in short of Wall Street expectations, even as shipments soared.
    • On a Y/Y basis, results were much improved: Excluding special items, earnings swung from a year-ago loss, and revenue surged 53% to 2.4B yuan ($390.5M).
    • Total shipments during Q2 jumped 47% Y/Y to 681.8 MW, while shipments of modules surged 76% to 445.8 MW; JASO says it expects total cell and module shipments of 730-760 MW in Q3.
    • Gross margin was 15.2%, vs. 8.1% in the year-ago quarter and 16.7% in Q1 2014.
    • Raises FY 2014 shipment guidance, now expecting to ship 2.9-3.1 GW, vs. prior guidance of 2.7-2.9 GW.
    • CEO Baofang Jin expects sustained growth and profitability in H2 "due to accelerating activity in China, and continued favorable product and geographic mix."
    | Comment!
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