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Jan. 13, 2014, 3:32 PM
- "Options markets suggest this will be one of the most important earnings seasons in 10 years for stock pickers given low expected correlation and limited pre-positioning," says Goldman analyst John Marshall.
- "We expect outsized profitability for call buying strategies on single stocks this quarter," he adds, noting options markets are actually pricing in a lower earnings-day move than any time on record for the average stock. "We expect earnings surprises to spark unexpectedly large stock moves."
- The average earnings-day move last quarter was 3.5x as large as the average daily move, he says, greater than any other time in the past 17 years.
- Goldman analysts see above-consensus reports from KORS, RYL, TIF, EOG, PXD, WNR, BBT, BX, LAZ, STI, BMY, THC, CMI, DOW, STZ, ARUN, OLED, QCOM, and XLNX.
- Goldman's below the Street on ANN, IGT, MAT, COL, JOY, and MSFT.
Dec. 12, 2013, 11:51 AM
- Cisco (CSCO -2.3%) is now targeting annual revenue growth of 3%-6% over the next 3-5 years, down from a prior 5%-7%, says CFO Frank Calderoni states at the networking giant's analyst meeting. In addition, Calderoni says Cisco's FY14 (ends July '14) revenue growth outlook is "basically" in-line with a Street forecast for a 4% decline.
- Cisco is now aiming for services revenue growth of 7%-10% over the next 3-5 years, down from 9%-11%; services accounted for 22% of Cisco's Oct. quarter revenue. Businesses related to "enabling the cloud" (a somewhat nebulous term) are expected to show a 12%-18% growth rate.
- Cisco, already pressured by John Chambers' macro comments, continues to trade lower. Many networking equipment peers and component/chip suppliers are also selling off; in addition to Cisco, Ciena's mixed FQ4 results and slightly soft FQ1 guidance could be playing a role here.
- Notable networking equipment/component/chip decliners: JNPR -3.1%. BRCM -2.5%. PKT -2.8%. FFIV -2.2%. ERIC -2.1%. JDSU -1.9% (getting pulled from the S&P 500). AFOP -5.5%. CAVM -1.7%. AMCC -1.8%. BRCD -1.8%. MRVL -1.6%. ARUN -1.7%. CALX -1.7%.
Nov. 27, 2013, 5:28 PM
- Stifel's Sanjiv Wadhwani, who started coverage on Ruckus (RKUS +4.7%) with a Buy and $17 PT today, notes that while U.S. mobile data traffic is expected to rise 53x-153x from 2010-2020 (growth will likely be stronger in some foreign markets), cellular network capacity is only expected to grow 25x. That leads him to think carrier Wi-Fi deployments will see an "inflection point" in 12-18 months.
- Much like William Blair and Piper analysts, Wadhwani sees the arrival of the Hotspot 2.0 standard (allows mobile uses to be automatically logged into carrier Wi-Fi networks) acting as a growth driver.
- He also sees healthy enterprise Wi-Fi growth, thanks in part to the adoption of the new 802.11ac standard (enables transmission speeds of up to 1Gbps), and calls Ruckus' BeamFlex tech "highly differentiated" due to its ability to limit signal interference in noisy environments.
- A number of Wadhwani's arguments for Ruckus are also applicable to rival Aruba (ARUN +1%), which surged last week after posting an FQ1 beat and in-line FQ2 guidance.
Nov. 21, 2013, 5:46 PM
Nov. 21, 2013, 5:40 PM
- Aruba (ARUN) has guided on its FQ1 CC for FQ2 revenue of $165M-$169M and EPS of $0.16-$0.17. That's only in-line with a consensus of $166.1M and $0.16, but is music to the ears of investors nervous following Cisco's numbers and cautious analyst commentary.
- Enterprise/carrier Wi-Fi rival Ruckus (RKUS), which has a habit of moving in the same direction as Aruba, is up 2.3% AH.
- Aruba's FQ1 EPS was boosted by $113M in buybacks. The company announced a new $100M buyback plan last month.
Nov. 21, 2013, 4:22 PM
- Aruba Networks (ARUN): FQ1 EPS of $0.16 beats by $0.02.
- Revenue of $160.9M (+11% Y/Y) beats by $3.4M. Shares +1.74% . (PR)
Nov. 21, 2013, 12:10 AM
Nov. 20, 2013, 5:35 PM
Nov. 18, 2013, 5:21 PM
- Wells Fargo's Jess Lubert thinks Aruba (ARUN -9.8%) will report solid FQ1 results on Thursday, but also thinks its FQ2 guidance might be in-line "in line to slightly below [Wells Fargo's] estimate of $167 million and consensus of $166 million."
- Lubert is also forecasting FQ2 EPS of $0.15, below a $0.16 consensus. He also thinks the enterprise/carrier Wi-Fi hardware vendor might not meet 2H14 growth and op. margin expectations.
- Though expecting Aruba to likely "remain confident in its ability to capitalize on enterprise wireless demand and the ramp of new product," but could "express incremental near-term caution due to macro concerns and the need to invest for growth."
- Enterprise Wi-Fi kingpin Cisco recently reported only 8% Y/Y Oct. quarter revenue growth for its wireless ops, after reporting 32% growth for the July quarter.
- Rival Ruckus (RKUS -5.8%), which has relatively higher carrier Wi-Fi exposure, also sold off. Shares of both companies have priced in some bad news this year.
Nov. 13, 2013, 8:34 PM
- Cisco's (CSCO) dispiriting Jan. quarter guidance and Oct. quarter order data has produced an AH selloff in enterprise IT and telecom equipment names, as well as a couple of the companies supplying them. NetApp's below-consensus guidance might not be helping either.
- HPQ -2.1% AH. IBM -1.1%. ALU -2%. FFIV -1.9%. CIEN -0.9%. CAVM -3%. BRCM -1.3%.
- Cisco's slumping FQ1 service provider (-13% Y/Y) and emerging markets (-12%) orders are bound to fuel concerns about carrier capex and macro trends. At the same time, it's worth noting Juniper and Alcatel-Lucent have been seeing better router sales to carriers (though not to Asia), and that Huawei has been doing better in emerging markets.
- The rest of Cisco's order data for major regions and customer groups was relatively better, but not exactly encouraging. Americas orders -2%, EMEA -4%, Asia-Pac (hurt by emerging markets weakness) -9%. Enterprise orders +2%, commercial (SMBs) +1%, public sector -1%.
- Switch sales (31% of revenue) rose 3% Y/Y, while routers (17% of revenue) fell 1%. Collaboration rose 1%, and service provider video fell 14% due to set-top weakness. Cisco's ASR 9000 edge router line, which EZchip (EZCH) supplies network processors for, grew 20% in FQ1 vs. 43% in FQ4.
- Data center (UCS servers) had another strong quarter, growing 44%, but still only accounts for 5% of revenue. Wireless (dominated by Wi-Fi gear) grew only 8% after growing 32% in FQ4 (could be a negative for ARUN and RKUS).
- John Chambers was asked on the CC (transcript) if the NSA spying uproar was affecting Cisco. He admitted it's a problem in China, but denied it was a major issue elsewhere.
Nov. 8, 2013, 9:49 AM
- Ubiquiti (UBNT +12.7%) is once more close to its all-time high of $43.99 after blowing away FQ1 estimates and providing strong guidance. The wireless networking hardware vendor expects FQ2 revenue of $130M-$136M and EPS of $0.42-$0.46, above a consensus of $123.8M and $0.40.
- Sales of Ubiquiti's airMAX high-speed transmission systems (47% of revenue) soared 88% Y/Y in Q3 after rising just 12% Y/Y in Q2, and declining 10% in Q1; the resolution of the the counterfeit hardware issues Ubiquiti dealt with last year had much to do with the airMAX turnaround.
- Total service provider sales (including airMAX) rose 82% Y/Y to $94.2M, while enterprise sales rose over 3x to $35.5M.
- Strong demand for Ubiquiti's new UniFi Wi-Fi hardware/software platform. fueled much of the enterprise growth. On the CC (transcript), CEO Robert Pera talked up UniFi's "disruptive pricing" relative to offerings from incumbents such as Cisco and Aruba (ARUN +1.1%), something he thinks make it an ideal solution for the SMB, hospitality, and education markets.
- Ubiquiti continues to run a very tight ship: opex was just 9.3% of revenue, down from a paltry 11% in Q2. R&D spend amounted to just $6.3M (4.9% of revenue). Gross margin was 44.7%, +400 bps Y/Y. However, CFO Craig Foster says Ubiquiti is now close to a "steady state" with regards to gross margin.
- Wedbush has upgraded shares to Outperform. The firm sees more room for enterprise Wi-Fi share gain, and notes wireless ISPs (some of whom use Ubiquiti's hardware) are taking share from cable/DSL providers.
Oct. 21, 2013, 10:04 AM
- SolarCity (SCTY +7.3%) has been started at Buy by BofA/Merrill.
- Salesforce (CRM +2.1%) has been upgraded to Strong Buy by Raymond James.
- Activision (ATVI +1%) has been started at Overweight by Barclays.
- MA-Com (MTSI +2.7%) has been upgraded to Overweight by Stephens.
- Russian carriers VimpelCom (VIP -0.5%) and MTS (MBT -1.8%) have been cut to Hold by Deutsche, and so has Aixtron (AIXG +3.2%)
- NII Holdings (NIHD -4.3%) has been cut to Underperform by Credit Suisse.
- Celestica (CLS -1.4%) has been cut to Hold by Canaccord.
- Aruba (ARUN +1.7%) has been started at Outperform by Northland.
- Applied Optoelectronics (AAOI +10.9%) has been started at Strong Buy by Raymond James.
- Xoom (XOOM +6.9%) has been started at Buy by SunTrust.
- Montage (MONT -0.4%) has been assigned five bullish ratings, and no neutral/bearish ones, on underwriter coverage day.
Oct. 18, 2013, 12:55 PM
- Reuters reports Motorola Solutions (MSI +0.1%) is thinking of selling its slumping enterprise Wi-Fi unit. One source cautions talks are in their early stages.
- Motorola's Wi-Fi division sales fell by a mid-single digit % Y/Y in Q2, and by 30% in Q1. By contrast, IDC estimates global enterprise Wi-Fi sales rose 14.8% during the quarter.
- Potential buyers include rivals Aruba (ARUN +1%), Ruckus (RKUS +0.1%), and Ubiquiti (UBNT +3%). Market leader Cisco could also make a bid, but with the company already having an estimated 58.4% Q2 share (per IDC), regulators might not be thrilled. Also, Cisco is in the midst of integrating Wi-Fi hardware/software vendor Meraki, which it bought for $1.2B.
- Motorola's total enterprise sales fell 12% Y/Y in Q2, if one excludes the impact of the Psion acquisition; the Wi-Fi unit accounted for 8% of 2012 enterprise sales, or $216.7M. Q3 results arrive on Wednesday.
Oct. 9, 2013, 5:23 PM
- Aruba (ARUN) says it has used up "substantially all" of a $100M buyback plan announced only in July, and is thus creating a new authorization of equal size. The new program is good for repurchasing 5% of shares at current levels. (PR)
- Aruba also announced a $100M buyback program in June '12. That one took a year to be exhausted. The enterprise Wi-Fi hardware/software vendor had $414M in cash/investments on its balance sheet as of July 31 to fund its buyback activities with, and no debt.
Oct. 1, 2013, 1:24 PM
- Aruba (ARUN +3.2%) has unveiled Aruba Central, a management software platform for the company's Wi-Fi hardware that (thanks to a cloud-based architecture) can be remotely accessed, and promises lower network deployment times. (PR)
- Aruba insists Central offers better performance than rival solutions, thanks in part to a management database "designed with web-scale performance" in mind. The company also asserts it's the only vendor that can "deliver a single architecture across controller-based and cloud-based Wi-Fi deployments."
- With Central, Aruba is looking to take on Cisco's (CSCO -0.4%) newly-acquired Meraki unit, which has long trumpeted its use of a cloud-based architecture; Cisco claims Meraki saw 100% Q/Q order growth in the July quarter.
- Network Computing's Lee H. Badman says he's "intrigued but not impressed" by Aruba's offering. While calling Central's interface "simple and effective," he observes the software lacks several features found in competing products, such as guess access and managed services support.
- Badman: "[Central is] pretty spartan beyond basic wireless management and monitoring, and feels small branch-oriented and 'first generation.'"
Sep. 25, 2013, 9:55 AM
- Brocade (BRCD +2.1%) has more than tripled it the size of its outstanding buyback authorization to $1B from a prior $308M. The new authorization is good for repurchasing 27% of outstanding shares at current levels. (PR)
- The announcement comes ahead of Brocade's analyst day, which starts at 11:30AM ET (webcast), and shortly after the company announced a networking hardware/software partnership with enterprise Wi-Fi vendor Aruba (ARUN +0.5%) with the goal of taking on common rival Cisco.
- Brocade and Aruba will create and sell joint solutions that combine the former's HyperEdge architecture (aims to simplify network management and services deployment) with the latter's MOVE architecture (manages/tracks enterprise Wi-Fi activity and sets policies).
Aruba Networks Inc provides enterprise mobility solutions. It develops, markets and sells products and services designed to solve its customers' secure mobility requirements through its Mobile Virtual Enterprise (MOVE) architecture.
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