Oct. 25, 2013, 11:33 AM
- Raymond James has upped Amazon (AMZN +8%) to Strong Buy following its Q3 revenue beat, while setting a PT of $446. It's far from alone in raising its PT; RBC has set an upside scenario target of $500, while declaring the quarter "something of an inflection point."
- Jefferies observes Amazon's op. income has topped the high end of guidance for 8 straight quarters. Evercore likes the fact Amazon's North American 33% electronics & general merchandise (EGM) sales growth (~2x U.S. e-commerce growth) beat the firm's 27% estimate.
- Accelerating growth - Q3 rev. growth of 24% topped Q2's 22% - and ongoing gross margin improvement - Q3 GM rose 240 bps Y/Y to 27.7% - are getting attention. Global media revenue ($5.03B) +9% Y/Y in Q3 vs. +7% in Q2, EGM ($11.05B) +29% vs. +28%.
- Amazon's total Q3 paid unit growth was 29%, even with Q2, and 3rd-party sellers still made up 40% of unit sales. Active accounts +9M Q/Q to 224M after rising by 6M in Q2. Also, North American "Other" sales (dominated by AWS) rose 56% Y/Y to $1.01B.
- At the same time, Amazon's aggressive spending isn't letting up. Fulfillment spend rose to 11.5% of revenue from 10.5% a year ago, and tech/content spend to 9.2% from 7.8%. TTM capex +$320M Q/Q to $4.59B.
- Interestingly, eBay (EBAY -1.6%) is lower even as Amazon soars. When contrasted with Amazon's figures, eBay's Q3 Marketplaces numbers and Q4 guidance point to further share losses on a relative basis.
- Q3 results, details/guidance, CC transcript
Oct. 25, 2013, 9:22 AM
Oct. 24, 2013, 4:25 PM
- Amazon (AMZN) grew product sales at a fast clip of 19.6% in Q3, and services sales rose even faster at 45%, but total operating expenses didn't just go away as the company's cost of sales rose 20% to $12.366B during the period.
- Sales grew 31% for the company's North America segment and 15% for International as the net sales mix moved 3 bps back toward North America.
- The company sees Q4 revenue of of $23.5B - $26.5B to top its earlier forecast, but with a mid-point below the analysts' consensus estimate of $25.9B.
- The guidance for Q4 operating income is -$500M to +$500M, a nifty $1B range for a single quarters' worth of sales. (PR)
- AMZN +6.0% AH to $351.36.
Oct. 18, 2013, 10:29 AM
- "We believe that Google's (GOOG +12.8%) ability to monetize experiences through engagement-based services will allow it to disrupt many hardware and software layers over time," writes Evercore's Ken Sena, exemplifying the glowing analyst commentary that has followed Google's Q3 beat.
- Sena, who is raising his PT to $1,100, sees Google's services investments pressuring near-term margins, but also creating "a stronger platform ecosystem in which more collected data, better predictive analytics, and an increased amount of screen connectivity will lead to better overall search economics in addition to new opportunities."
- Needham and Jefferies have raised their PTs to $1,150, and Deutsche has raised its target to $1,220. YouTube's mobile growth, strong paid click volumes, and the potential for Enhanced Campaigns to lift search ad sales (after doing less damage than expected in Q3) are all mentioned as reasons to stay bullish.
- U.S. Internet peers continue to rally in sympathy: FB +4.1%. LNKD +3.7%. YELP +7.8%. AMZN +3.3%. Z +3.9%. TRLA +4.8%. ZNGA +2.8%.
- Foreign Internet names are also moving higher: BIDU +5%. YOKU +6.9%. SINA +3.7%. RENN +4.4%. QIHU +4.9%. DANG +5.9%. YNDX +4%. SIFY +3.4%.
- Google's Q3 results, details, CC remarks, transcript
Oct. 18, 2013, 9:34 AM
- AMD (AMD -12.7%) has been cut to Neutral by BofA/Merrill after beating Q3 estimates and providing above-consensus Q4 revenue guidance, but also reporting a 15% Y/Y drop in CPU division sales due to PC weakness.
- Verizon (VZ +0.8%) has been upgraded to Buy by Stifel a day after beating Q3 estimates and reporting better-than-expected mobile subscriber adds.
- Amazon (AMZN +2.4%) has been upgraded to Buy by UBS ahead of its Oct. 24 Q3 report.
- VMware (VMW +2.8%) has been upgraded to Overweight by JPMorgan ahead of Monday's Q3 report.
- T-Mobile USA (TMUS +2.7%) has been added to Goldman's Conviction Buy list ahead of its Nov. 5 Q3 report.
- Intuit (INTU +2.6%) has been upgraded to Buy by BofA/Merrill.
- Align Technology (ALGN +24.4%) has been upgraded to Buy by Cantor following its Q3 beat.
- LG Display (LPL -0.2%) has been cut to Hold by Craig-Hallum after issuing a Q4 warning.
- Ultratech (UTEK -10.2%) has been cut to Hold by Canaccord following its Q3 miss.
- Sierra Wireless (SWIR -1%) has been cut to Market Perform by Raymond James; Q3 results arrive on Nov. 7.
- Aspen Technology (AZPN -0.9%) has been cut to Neutral by JPMorgan.
- Analog chipmakers International Rectifier (IRF -1.7%) and Monolithic Power (MPWR -1.3%) have been cut to Market Perform by Wells Fargo.
- U.S. Cellular (USM -1.2%) has been started at Underperform by FBR.
Oct. 16, 2013, 4:42 PM
- EBAY expects Q4 revenue of $4.5B-$4.6B and EPS of $0.79-$0.81, below a consensus of $4.64B and $0.83. In a quote talking up eBay's Q3 numbers, CEO John Donahoe calls the macro environment "fairly lackluster." Back in July, European and Korean macro issues were blamed for eBay's below-consensus Q3 guidance.
- Payments division (PayPal) growth remained strong in Q3: sales +19% Y/Y (to $1.62B) vs. +20% in Q2. Payment volume +25% (to $43.8B) vs. +24%, active accounts rose by 5M Q/Q to 137M (+17% Y/Y). Merchant services (non-eBay) transaction volume +30% Y/Y.
- Marketplaces revenue +12% Y/Y (to $2.03B) vs. +10% in Q2; mobile provided a lift. GMV (exc. vehicles) +13%, even with Q2. U.S. GMV +15% vs. +16%, international +12% vs. +11%. Total listings topped 500M. Active users rose by 3.9M vs. 3.5M in Q2, +14% Y/Y and reaching 124M.
- EBAY -4.2% AH. AMZN -1.2% in sympathy. CC at 5PM ET.
- Q3 results, PR
Oct. 3, 2013, 9:44 AM
- PayPal (EBAY -0.1%) is partnering with a handful of retailers to provide free two-day shipping within the U.S. for a limited time on purchases paid via PayPal. Partners include Levi's, Sports Authority, Aeropostale, and iRobot.
- No word on whether PayPal plans to expand the test, or eventually offer some kind of permanent service (perhaps for a fee). The test appears squarely aimed at Amazon Prime (AMZN -0.2%), which provides free two-day shipping on millions of items on Amazon's site, in exchange for a $79/year fee. Amazon was estimated in March to have 10M Prime subs.
- Separately, Groupon (GRPN +2.4%) announces it has hired Amazon Prime VP Robbie Schweitzer to be its SVP of operations. The company has also hired Angie's List (ANGI -14.7%) e-commerce exec David Kerr to help create "a marketplace experience for Groupon customers to find, schedule and purchase deals from local service providers" (will likely compete with Angie's).
- Two other hires: A VP to head the Groupon Reserve high-end restaurant reservation/deals service (Lisa Kennedy), and one to head Groupon's commercial finance ops (Hoke Horne).
- Yesterday: Angie's List testing price cuts
Aug. 13, 2013, 11:13 AM
- BlackBerry (BBRY +9%) is now up 27% since Reuters first reported the company is thinking of going private. The company's enterprise value (excludes $3.1B in cash/investments) has grown to $3B.
- While Prem Watsa reportedly talks to both P-E firms and "industry players" about a deal, the NY Post reports BlackBerry would prefer to be acquired by a "Google-like" buyer rather than a P-E firm. One source speculates Amazon (AMZN - believed to be interested back in 2011, and possibly able to leverage BlackBerry's NOCs to bolster AWS) could be an option.
- AllThingsD reports Silver Lake "has no interest in working with Watsa or BlackBerry" on a bid.
- Another upgrade has come in: Scotia Capital has lifted shares to Outperform.
- More on BlackBerry
Jul. 18, 2013, 11:12 AMNeedham downgrades eBay (EBAY -6.4%) to Hold following its Q2 revenue miss and light Q3 guidance, citing international softness and "slowing Marketplace fundamentals." Though granting eBay is taking steps to revamp Marketplaces, the firm doesn't "expect any single investment to serve as a momentum-changing catalyst in the near term." Top-rated sellers (22% Q2 same-store sales growth) and mobile (2M new users, 5.6M listings/week, $20B+ in 2013 transactions expected) remain areas of strength for Marketplaces. Amazon (AMZN -1.2%) continues to follow eBay lower, but Overstock (OSTK +15.7%) is soaring after trouncing Q2 estimates and reporting a 170 bps Y/Y increase in gross margin to 19.7%. (eBay transcript) | Jul. 18, 2013, 11:12 AM
Jul. 17, 2013, 4:36 PM
eBay (EBAY) is guiding for Q3 revenue of $3.85B-$3.95B and EPS of $0.61-$0.63, below a consensus of $3.97B and $0.65. 2013 guidance is for revenue of $16B-$16.5B and EPS of $2.70-$2.75 vs. a consensus of $16.3B and $2.75. The company says "macroeconomic headwinds in Europe and Korea will continue to be a challenge" in 2H. PayPal revenue +20% Y/Y in Q2, up from Q1's 18%. But Marketplaces revenue (exc. a tax gain) only +10%, down from Q1's +13%. Shares -5.5% AH. Amazon (AMZN) -0.7% in sympathy. CC at 5PM ET (webcast). (Q2 results) (slides) (PR)| Jul. 17, 2013, 4:36 PM
Jul. 17, 2013, 1:59 PMMore bad news for leading Groupon (GRPN +5.7%) rival LivingSocial: the company has shuttered both its NYC office and local events unit in an effort to pare costs. The moves come a month after the company closed its Seattle office and requested employees work remotely. LivingSocial, 29%-owned by Amazon (AMZN), posted a $50M net loss in Q1 to go with revenue of $135M (+23% Y/Y). | Jul. 17, 2013, 1:59 PM | 1 Comment
Jul. 10, 2013, 9:57 AM
Rackspace (RAX -3.3%) dives after Amazon Web Services (AMZN +0.2%) cuts EC2 cloud computing prices for dedicated instances (i.e. hardware dedicated to a single client) by up to 80%. Though AWS is known for cutting prices early and often, the size of this cut makes it noteworthy. Moreover, the fact it covers dedicated hardware suggests Amazon is taking aim not only at the cloud infrastructure services provided by the likes of Rackspace, Microsoft, and Google, but also the traditional hosting services offered by Rackspace and others.| Jul. 10, 2013, 9:57 AM | 3 Comments
Jun. 25, 2013, 2:00 PMBarnes & Noble (BKS -20.3%) is exiting the tablet market and will focus its hardware efforts on e-readers, the book retailer announces in tandem with its bleak FQ4 results and FY14 guidance. With B&N's tablet share having cratered and the Nook division reporting $133M in inventory charges for FQ4, the decision isn't hard to fathom. B&N says it will "continue to offer its existing inventory" of Nook tablets through the holiday season, and will seek out partners to make B&N-branded tablets. Amazon (AMZN) must be pleased, given the overlap between the Nook HD and Kindle Fire's targeted customers, and the fact B&N remains a top e-book competitor. | Jun. 25, 2013, 2:00 PM | 4 Comments
May 28, 2013, 10:58 AM
Apr. 26, 2013, 1:29 PM
Amazon (AMZN -6.9%) is giving back most of its 2013 gains as the Street decides a revenue miss and light profit guidance outweigh a still-improving gross margin. Slowing growth and a lack of profits for the international ops is a concern for many, even if forex is a factor - international media sales rose only 1% Y/Y, though other merchandise sales rose 28%. On the earnings call, management admitted (echoing eBay) "there is some [international] softness from a macro standpoint," while adding Amazon is investing heavily in China, Italy, and Spain. Nomura is staying bullish, touting the fact total growth is holding steady.| Apr. 26, 2013, 1:29 PM | 12 Comments
Apr. 25, 2013, 7:28 PM
Amazon's (AMZN) Q1 Y/Y paid unit growth was 30%, the company discloses in its CC; that's down from Q4's 32% and Q3's 39%, but still above rev. growth of 22%. 3rd-party sellers (some of them upset over fee hikes) made up 40% of unit sales vs. 39% in Q4 and 41% in Q3; they've been a major source of gross margin growth. Digital content sales growth slowed down, leading physical units to rise over 300 bps Y/Y as a % of total units. Forex expected to have a 275 bps impact on Q2 rev. growth. North America had a $457M op. profit in Q1, international a $16M op. loss. Active customer accounts rose to 209M+ from 200M+ in Q4. AMZN now -3% AH. (Q1: I, II)| Apr. 25, 2013, 7:28 PM | 4 Comments