Fri, Feb. 13, 7:22 PM
- Dan Loeb added new stakes in Citigroup (NYSE:C), Alibaba (NYSE:BABA), AIG, EMC and Allergan (NYSE:AGN) in the fourth quarter as the latest 13F from his Third Point fund indicates.
- The Alibaba addition of 2.8M shares to an existing 7.2M-share position brings Third Point to 10M shares. A new Citigroup position is 25M shares.
- Meanwhile, a 400K-share stake in Allergan is a new position, as is 7M shares in EMC and 3.5M shares of AIG.
- Loeb also unloaded a 750K-share position in FedEx (NYSE:FDX).
- Overall Third Point increased the value of equity holdings 27%, to $11.09B.
- After hours: BABA -0.5%; AGN +0.5%.
Thu, Feb. 12, 2:22 PM
- A slew of enterprise IT names are outperforming after Cisco beat estimates and respectively reported 10%, 8%, and 7% Y/Y growth in enterprise, SMB, and public sector orders. The Nasdaq overall is up 1%.
- Cisco reported particularly strong figures for enterprise-focused business lines: Switching revenue rose 11%, wireless (Wi-Fi-dominated) 18%, collaboration 10%, and data center (UCS servers) 40%. Service provider demand (orders -1%) remained soft.
- Enterprise standouts include EMC (EMC +2.5%), VMware (VMW +2.3%), SAP (SAP +3.1%), Salesforce.com (CRM +3.8%), NetSuite (N +2.6%), Teradata (TDC +4.6%), Splunk (SPLK +2.5%), Varonis (VRNS +3.9%), Gigamon (GIMO +2.8%), and NetScout (NTCT +2.7%).
- EMC's gains comes in spite of rival NetApp's FQ3 miss and soft FQ4 guidance; share loss to EMC, which has been seeing healthy mid-range and scale-out NAS storage growth, could be partly to blame. VMware is adding to the Wednesday gains seen following a Bernstein upgrade.
- Earlier: Telecom/networking stocks rally thanks to Cisco
Tue, Feb. 3, 2:52 PM
- VMware (VMW +0.7%) has launched vSphere 6, an anticipated update to the company's bread-and-butter server virtualization platform that's said to have 650+ new features. Among them: Better support for cloud apps, improved scalability and reliability for big data/analytics and database workloads, long-distance virtual machine migration, and the ability to rapidly clone/provision thousands of virtual machines and container instances.
- Getting a lot of attention: Virtual Volumes, a new set of storage APIs for vSphere that allows 3rd-party storage arrays - Dell, HP, IBM, EMC, and NetApp are on board - to become aware of virtual machines, thereby allowing them to provision capacity and services on a per-machine basis. VMware has also updated its Virtual SAN storage virtualization platform (has 1K+ paid clients), doubling the number of supported nodes to 64 and adding support for all-flash storage architectures.
- Other product announcements: 1) The vRealize cloud management platform has been updated. 2) VMware has unveiled its own distribution for the open-source OpenStack cloud infrastructure software platform (competes against VMware's vCloud Suite, has been widely adopted). 3) VMware has followed up on last week's vCloud Air service announcements by adding new hybrid cloud networking services.
- With soft vSphere demand taking a toll on VMware's bookings in recent quarters, the company is banking on vSphere 6 to drive a strong upgrade cycle, as well as keep Microsoft's Hyper-V and other aggressively-priced rivals at bay.
- While VMware's PR team goes into overdrive, Macquarie has upgraded parent EMC (EMC +1.2%) to Outperform: The firm cites vSphere 6, low expectations, and a belief storage spending will improve in 2015. VMware and EMC have both followed equity markets higher.
- VMware's August 2014 product launches: I, II, III
- Update: More VMware news: The company has bought Immidio, a developer of software that "provides a consistent and dynamic desktop experience that is independent of operating system, device and location." Immidio's offerings complement VMware's PC/app virtualization products.
Thu, Jan. 29, 10:07 AM
- With forex and VMware's soft outlook taking a toll, EMC (EMC - unchanged) is guiding for 2015 revenue of $26.1B and EPS of $1.98, below a consensus of $26.21B and $2.13.
- The company plans to buyback $3B worth of shares this year; VMware plans to repurchase at least $2B of its own shares. EMC spent $1.6B on buybacks in Q4, and $3B over the whole of 2014.
- The storage giant says it plans to cut jobs, but hasn't yet given a figure. Activist Elliott Management, which EMC just reached a truce with, has been pushing EMC to make changes.
- EMC's core Information Storage ops saw revenue rise 3% Y/Y in Q4 to $4.84B, with product revenue (drives future services revenue) rising 2% to $3.3B. High-end storage sales remained weak, falling 13% to $1.19B (contributed to the revenue miss).
- However, emerging storage (flash, scale-out NAS, object storage) revenue rose 52% to $800M. Unified and backup/recovery storage (includes mid-range NAS/SAN) grew 4% to $1.88B, and all other storage fell 4% to $960M.
- RSA revenue +5% to $290M; Information Intelligence (content management software) -1% to $170M; Pivotal (still awaiting an IPO) +18% to $65M.
- Gross margin rose to 65.4% from 64.6% a year ago, and op. margin to 28.9% from 27.4%. EMC ended 2014 with $8.3B in cash/short-term investments, $6.3B in long-term investments, and $5.5B in debt.
- Q4 results, PR, earnings slides (.pdf)
Thu, Jan. 29, 7:06 AM
Wed, Jan. 28, 5:30 PM
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Wed, Jan. 28, 10:08 AM
- Though VMware (NYSE:VMW) beat Q4 estimates and added $1B to its buyback, the company guided on its CC (transcript, earnings slides) for Q1 revenue of $1.49B-$1.51B and full-year revenue of $6.64B-$6.76B, below consensus estimates of $1.55B and $6.85B.
- Also: License revenue growth is expected to fall to 2%-3% in Q1 from Q4's 13%, and amount to 6%-9% for the whole of 2015. If not for forex, guidance would respectively be for 5%-6% and 9%-12% growth.
- VMware plans to buy back at least $1B worth of shares in 2015, up from 2014's $700M. The capex budget (boosted by cloud investments) is $400M.
- Given the outlook, and the fact that VMware's Q4 license bookings for products other than its vSphere server virtualization platform (when sold by itself) grew nearly 40% in Q4, traditional vSphere sales appear to be under heavy pressure. Microsoft has been claiming share gains for its Hyper-v platform, and open-source solutions (Xen, KVM) have also been gaining ground.
- On the bright side, end-user computing bookings (PC virtualization and AirWatch's enterprise mobility management offerings) rose over 60%. AirWatch now has 15K+ customers (declared by VMware to be twice that of its nearest rival), and saw over $200M worth of 2014 bookings.
- The NSX SDN/networking virtualization platform is on a $200M+ bookings run rate, and saw its paid customer count rise over 60% Q/Q in Q4 to 400+. Paid customers for the VSAN storage virtualization platform have topped 1K.
- Needham has downgraded VMware to Hold. Parent EMC (EMC +0.5%) is up moderately ahead of tomorrow's Q4 report, aided by a 1% gain for the Nasdaq.
Mon, Jan. 26, 12:49 PM
- Due to the Northeast blizzard, EMC (EMC -1.3%) is pushing back its Q4 earnings release from Wednesday to Thursday. Results arrive at 7AM, and the CC starts at 8:30AM.
- EMC's Q4 consensus is for revenue of $7.1B (+6.3% Y/Y) and EPS of $0.68. Subsidiary VMware (based out of Silicon Valley) is still set to report on Tuesday afternoon.
- Pac Crest's Brent Bracelin is reiterating an Outperform and $30 target on EMC today: He expects strong 2016 profit growth as EMC curtails its spending following four years of aggressive investments.
- The storage giant's shares are off moderately after Seagate provided soft calendar Q1 guidance. HP and NetApp are seeing bigger declines.
Mon, Jan. 12, 10:04 AM
- Jose Almeida, the CEO of medical device/supplies giant Coviden, and Donald Carty, the former CEO of American Airlines, are joining EMC's (EMC -1.8%) board, thereby increasing its size to 13. (PR)
- Activist Elliott Management, which has been aggressively lobbying EMC to spin off VMware (VMW +3.1%), is said to have "worked collaboratively with EMC to identify and review candidates." As part of the deal, Elliott has "agreed to certain limited standstill and voting provisions through September 2015, including voting in favor of the Company's proposed slate of directors at EMC's 2015 Annual Meeting."
- EMC is trading lower following the truce, thanks in part to a broader market selloff, while VMware is up strongly. With the opposite having typically happened in response to spinoff-related reports, the market is assuming the deal lowers odds of a spinoff, at least in the near-term.
Dec. 18, 2014, 2:04 PM
- With the help of stronger-than-expected hardware sales, Oracle (ORCL +9.2%) beat FQ2 estimates in spite of a 400 bps forex headwind (twice what was originally expected). FQ3 guidance was conservative after taking forex pressures into account.
- The numbers have been good enough for Oracle to surge to new highs and receive a slew of target hikes, and to lead many enterprise tech names to outperform amid a big market rally. The Nasdaq is up 1.9%.
- Microsoft (MSFT +3.2%), Cisco (CSCO +2.3%), EMC (EMC +3.7%), VMware (VMW +5.1%), and beaten-down IBM (IBM +2.8%) are among the enterprise tech names outperforming today. Others: SPLK +4.6%. CA +3.5%. RHT +3.4%. VRNS +6.3%. PCTY +5.8%. JIVE +4.6%. VMEM +5.2%. SAAS +4.7%. BRCD +3.8%.
- Oracle's healthy cloud software numbers are drawing attention: While traditional software license revenue fell 4% Y/Y, its SaaS/PaaS revenue rose 41%. SaaS/PaaS bookings totaled $170M, and are expected to be "well over" $1B in FY16 (ends May '16). Fusion cloud app bookings rose over 100%.
- On the CC (transcript), Oracle performed its customary trash-talking of cloud app rivals. "We are clearly growing faster than Salesforce (CRM +4%) and were more than three times the size of Workday (WDAY +3.2%)." Both firms are posting solid gains.
- Oracle's numbers come as Bloomberg reports the Chinese government is looking to "purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." IBM, Cisco, and other U.S. firms have already seen their Chinese sales fall sharply following last year's NSA spying uproar.
Dec. 12, 2014, 8:33 AM
Nov. 26, 2014, 6:58 PM
- Pivotal, which EMC and VMware (NYSE:VMW) spun off from their core ops in late 2012, is laying off 60 employees, sources tell CRN. The company reportedly has 1,800 workers.
- Though EMC announced IPO plans for Pivotal back in March 2013, no offering appears to be on the horizon for now. The company's product line is headlined by its Greenplum analytics database and Cloud Foundry app platform (PaaS); each faces plenty of competition. A Big Data Suite featuring Greenplum and several other analytics-focused products was launched in April.
- Pivotal had Q3 revenue of $58M (+23% Y/Y), and an op. loss of $52M. GE paid $105M last year to buy a 10% stake.
Nov. 5, 2014, 12:56 PM
- Greenlight Capital made a new "medium-sized" investment in EMC (EMC +0.5%) in Q3, David Einhorn discloses in his quarterly letter. Greenlight took a 2.9M-share position in EMC back in Q4 2013.
- Much like Elliott Management (pushing for a VMware spinoff) and Barron's, Einhorn thinks EMC is undervalued on a sum-of-the-parts basis. He notes EMC's core storage ops are implicitly valued at less than 5x EBIT, and that management "acknowledges that the combined business trades at a discount and has recently committed to trying to address it in early 2015."
- He's much less kind to Amazon (AMZN -1.2%), asserting the company's latest numbers are especially disappointing since they suggest the growth used to justify a dearth of profits is slowing, and in doing so is yielding higher losses.
- Einhorn: "One of the principal bullish assumptions supporting many bubble stocks is, 'the company is growing too fast to be very profitable.' We think AMZN is just one of the many stocks for which this narrative will ultimately prove false."
- Einhorn doesn't explicitly state he's short Amazon, though he does say Greenlight increased its exposure to "bubble basket" shorts in Q3.
Oct. 28, 2014, 1:41 PM
- Art Coviello is being replaced as the operational head of EMC's (EMC +0.4%) RSA security hardware/software unit by product SVP Amit Yoran. Coviello will remain the unit's executive chairman.
- Separately, the storage giant has created a new cloud management/orchestration unit that (in-line with EMC's recent software investments and acquisitions) will create products for managing workloads spread out between many different cloud platforms.
- Brian Gallagher, the head of the new unit: "If you buy into the idea of hundreds and thousands of clouds, like we do, then you buy into the idea of a need for software to broker the movement of workloads between them ... Analysts tell us this will be a $2 billion opportunity in two years."
- RSA had Q3 revenue of $261M (+4% Y/Y). Its gross margin was 66.3%.
Oct. 28, 2014, 1:26 PM
- EMC (EMC +0.5%) has acquired Maginatics, provider of a software platform built from the ground up to jointly manage public and private cloud storage. It has also acquired Spanning, provider of a data backup/recovery service for cloud business apps. Terms are undisclosed.
- EMC touts Maginatics' ability to provide a global namespace (enabled by its Virtual Filer file system) for far-flung cloud storage resources, thereby simplifying data management and protection. Its platform also uses client software that optimize storage delivery based on device type.
- "This would provide EMC with the industry’s most capable cloud and on-premise software defined storage platform," said industry analyst Ben Woo ahead of the deal (rumors existed). Woo added EMC could integrate Maginatics' offerings with its ViPR platform for managing on-premise storage.
- The purchases follow the acquisitions of cloud infrastructure (IaaS) software firm Cloudscaling and cloud storage software firm TwinStrata, and mesh with a broader EMC effort to deliver storage platforms that work with both EMC and non-EMC hardware; the 2013 ScaleIO acquisition also fits with this goal.
- In tandem with the acquisitions, EMC has unveiled its Enterprise Hybrid Cloud platform, which the storage giant claims can allow a hybrid cloud to be set up in 28 days.
- The solution relies on several VMware (VMW +1.5%) products, including its virtualization, IT self-service, and cloud/data center management software. It also features EMC storage hardware (VMAX, VNX, Vblock, and Avamar) and software (ViPR, VPLEX), and integrates with VMware's vCloud AIR IaaS platform.
- Microsoft is already a major player in the hybrid cloud software/services space (via Azure), and various supporters of the OpenStack IaaS platform (IBM, H-P, Cisco, Red Hat, etc.) have their own efforts underway.
Oct. 22, 2014, 9:28 AM
- Confirming yesterday's Bloomberg report, Cisco (NASDAQ:CSCO) and EMC state the latter will take control of the companies' VCE JV. Cisco's stake will be cut to 10% from 35%, VMware (currently has a sub-10% stake) will maintain an interest, and the business will be included in EMC's income statement after the deal closes in Q4.
- The companies add VCE was on a $2B/year run rate for its Vblock converged server/storage/networking systems exiting Q3, and that the quarter was its sixth consecutive one of 50%+ Y/Y growth. VCE previously forecast 2014 sales of $1.8B. Gartner and IDC have ranked VCE the leader in a converged infrastructure market that also features Oracle, H-P, IBM, and Dell.
- The Vblock like makes use of Cisco's servers and data center switches, EMC's storage systems, and VMware's virtualization and systems management software. Cisco, EMC, and VCE have "existing and renewed multi-year engineering, resell and support agreements" between them.
- Nonetheless, Cisco's decision to cut its VCE stake could pave the way for it to directly compete against Vblock through its UCS server ops, particularly given the recent launch of the UCS Mini (less powerful than Vblock hardware, but also a converged system).
- Separately, EMC has issued nearly in-line guidance to go with its its mixed Q3 results: The company expects 2014 revenue of $24.5B and EPS of $1.90 vs. a consensus of $24.54B and $1.91.
- EMC +0.7% premarket. CSCO +0.3%.
EMC Corp supports the businesses and service providers to transform information technology (IT) operations to an as a service model (ITaaS). It operates in three segments: EMC Information Infrastructure, Pivotal and VMware Virtual Infrastructure.
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