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Dec. 19, 2013, 2:15 PM
- A number of enterprise IT hardware names are moving higher on a slightly down day for the Nasdaq after Oracle provided better-than-expected numbers for its long-struggling hardware unit.
- After falling 14% Y/Y in the August quarter and badly missing estimates,, Oracle's hardware product sales only fell 3% in the November quarter, a decline that's favorable to a guidance midpoint of -6%. In addition, Oracle has set an FQ3 guidance range for the business of -2% to +8%.
- H-P (HPQ +2.4%), EMC (EMC +1.7%), NetApp (NTAP +1.3%), SGI (SGI +2.1%), Cray (CRAY +1.5%), Fusion-io (FIO +1.9%), and newly-public Nimble Storage (NMBL +1.8%) are among the companies rallying.
- Mellanox (MLNX +5.5%), which supplies InfiniBand hardware for Oracle's engineered systems (now 30% of hardware product revenue), is up sharply.
Dec. 4, 2013, 1:49 PM
- Citing the impact of faster-than-expected cloud computing adoption, Morgan Stanley's Katy Huberty has downgraded Accenture (ACN -1.9%) and NetApp (NTAP -0.9%) to Equal Weight. Meanwhile, citing more favorable risk/reward, Huberty has upgraded Western Digital (WDC +2.8%) to Overweight and Brocade (BRCD +0.5%) to Equal Weight.
- Concerns about the impact of cloud services on sales of IT outsourcing services such as Accenture's, and enterprise storage hardware such as NetApp's, have been around for some time. Recent numbers (I, II) provided by the companies, and by peers such as IBM and EMC, haven't done much to soothe those fears. Synergy Research recently estimated sales of cloud infrastructure (IaaS) and app platform (PaaS) services rose 46% Y/Y in Q3.
- Accenture now trades at 15x estimated FY14 (ends Aug. '14) EPS exc. net cash, and NetApp trades at just 10x estimated FY14 (ends April '14) EPS exc. net cash.
- Western Digital, whose hard drive sales have been pressured by PC weakness and SSD adoption, recently began shipping its first helium drives (they're lighter, denser, and more power-efficient than traditional drives), in part to better meet the needs of Web/cloud companies.
Nov. 13, 2013, 4:17 PM
- NetApp (NTAP) expects FQ3 revenue of $1.575B-$1.675B and EPS of $0.68-$0.73, largely below a consensus of $1.69B and $0.73. The enterprise storage giant asserts it's gaining share, but also says it's facing "an ongoing uncertain macro environment."
- Revenue grew only 1% Y/Y in FQ2 after rising 5% in FQ1. Branded (non-OEM) revenue rose 5% vs. 9% in FQ1.
- However, with NetApp's numbers having come a month after EMC and IBM provided disappointing Q3 storage hardware figures, some bad news was priced in.
- $151M was spent on buybacks. That helped EPS beat consensus in spite of a revenue miss.
- Enterprise storage sales have been hurt by soft IT hardware spend, U.S. federal weakness, and the cannibalizing impact of cloud infrastructure services running on commodity hardware.
- CC at 5:30PM ET. FQ2 results, PR
Nov. 13, 2013, 4:05 PM
- NetApp (NTAP): FQ2 EPS of $0.66 beats by $0.04.
- Revenue of $1.55B misses by $0.05B. (PR)
Nov. 13, 2013, 12:10 AM
Nov. 12, 2013, 5:35 PM
Nov. 4, 2013, 10:06 AM
- Qlik (QLIK +5.9%) has bee upgraded to Buy by Citi ten days after crashing due to a Q3 revenue miss and soft Q4 guidance.
- Alcatel-Lucent (ALU -1.9%) has been upgraded to Neutral by BNP Paribas, and to Buy by UBS, after announcing plans to raise $2.7B via fresh equity and debt.
- Digital Realty (DLR -2.2%) has been cut to Neutral by Baird. The data center owner has now received three downgrades in response to its Q3 results and Q4/2014 guidance.
- NetApp (NTAP -0.9%) has been cut to Neutral by Piper ahead of its Nov. 13 FQ2 report.
- Bottomline Technologies (EPAY -2.1%) has been cut to Equal Weight by Stephens.
Oct. 22, 2013, 9:36 AM
- Even as 80%-owned VMware flies higher thanks to its Q3 beat and guidance/CC remarks, EMC (EMC -4.8%) is lower after missing Q3 estimates thanks to a rough quarter for its core storage business. Full-year EPS guidance has been lowered to $1.80 from $1.85 (consensus is $1.86). NetApp (NTAP -2.2%) is off in sympathy.
- EMC's core Information Storage unit had 1% Y/Y sales growth vs. 4% in Q2. Product sales were down slightly, services +3%. While emerging storage sales (inc. Isilon, Atmos, flash storage) rose 66% Y/Y to $380M, high-end storage sales (Symmetrix) -8% to $1.05B, unified & backup/recovery (inc. mid-range hardware) +3% to $1.47B, other storage -6% to $880M.
- The RSA security unit was a bright spot, sales +11% to $250M. EMC and VMware's Pivotal spinoff, set to go public, had revenue of $80M (+21% Y/Y).
- Thanks in part to VMware, North American sales +3%, EMEA +8%, Asia-Pac +8%, Latin America +13%. EPS was boosted by $1B in buybacks. Gross margin was 63.9%, -20 bps Y/Y.
- A major question likely on investors' minds: how much of the storage weakness is due to a demand shift towards cloud infrastructure providers and Internet giants relying on some combo of commodity and flash hardware?
- Q3 results, PR, slides
Oct. 18, 2013, 1:36 PM
- Nimble Storage, a provider of hybrid storage appliances that pair flash memory and hard drives, has made good on rumors by filing for a $150M IPO under the symbol NMBL. Goldman, Morgan Stanley, Pac Crest, William Blair, Stifel, Oppenheimer, and Needham are underwriting. (S-1)
- Nimble asserts its CASL architecture, built to address hybrid appliance needs, offers better performance than traditional systems that offer flash as a caching option (e.g. EMC's VNX, NetApp's (NTAP) FAS line). CASL is also said to support the independent scaling of storage performance and capacity.
- Nimble had revenue of $50.6M in the six months ending July 31, +164% Y/Y. Net loss totaled $19.7M, thanks to 100%+ increases in sales/marketing ($31.4M) and R&D ($14.4M) spend. Nimble had 1,750+ cumulative customers as of July, up over 3x Y/Y, and 600+ resellers.
- Competition is provided both from incumbents such as EMC, NetApp, H-P, Cisco, and IBM, many of whom have been busy acquiring flash startups, and from smaller firms such as Fusion-io (FIO +2.3%), Violin Memory (VMEM +0.8%), and Nimbus Storage. Violin, which is seeing slower growth and much bigger losses than Nimble, recently turned in a disappointing IPO. Fusion-io entered the hybrid appliance in April by acquiring NexGen Storage.
Oct. 15, 2013, 10:05 AM
- A week after some of them temporarily fell in response to Citrix's warning, enterprise IT names are slumping on account of Teradata's Q3/2013 warning, which was largely the result of weaker-than-expected Asian numbers.
- Three other data warehousing/business intelligence software providers - Informatica (INFA -4.4%), MicroStrategy (MSTR -4.1%), and Qlik (QLIK -3.3%) are among the biggest decliners. The companies rallied in August in response to Teradata's better-than-feared Q2 report.
- Other decliners: EMC -1.8%. NTAP -2.1%. CVLT -2.5%. FFIV -2%. JIVE -2.2%. NOW -2%.
- Teradata isn't alone among enterprise IT names in seeing its Asian ops underperform. Cisco and Oracle have reported similar issues.
Sep. 28, 2013, 2:40 PM
- John Chambers (CSCO): "We do everything in wireless except for the radio ... Now, we have a creative idea there, and I’ve just funded our first startup to see if that works ... The market is ripe for a new player."
- Chambers won't name the startup, but his remarks suggest Cisco plans to directly take on Ericsson (ERIC), Nokia (NOK), and Alcatel-Lucent (ALU) in the giant mobile base station market. Cisco recently bought small cell base station vendor Ubiquisys, and also sells switches/routers and management software to mobile carriers, but until now has argued the core base station market is too commoditized.
- Separately, Chambers predicts "IT as a service and white label will be [Cisco's] biggest competitors three to five years out." That's a reference to cloud infrastructure providers (none larger than Amazon), who often rely on cheap white-label switches, as well as the use of similar hardware from Web giants such as Facebook and Google.
- Chambers also: 1) Insists Cisco's storage alliances with the likes of EMC and NetApp (NTAP) will stay in place, in spite of the Whiptail deal. 2) Predicts Cisco's upcoming Insieme switches will help it compete against private Arista. Arista, whose high-density switches use 3rd-party silicon (unlike Cisco's), could do a huge IPO next year. 3) Questions the scalability of the software-defined networking platform offered by VMware's (VMW) Nicira unit (generally seen as a threat), and claims Nicira has less than $10M worth of deployments. Of course, the value of the switches managed by Nicira's products could be much larger.
- Previous: Cisco lower, Chambers cautious about macro trends
Sep. 24, 2013, 12:50 PM
- Several enterprise IT names are lower after Red Hat reported weaker-than-expected Aug. quarter billings and issued soft top-line guidance yesterday afternoon, and Red Hat, EMC (EMC -1.2%), NetApp (NTAP -0.5%), and F5 (FFIV -2.2%) were hit with downgrades this morning.
- Notable decliners include Citrix (CTXS -2.6%), VMware (VMW -1.9%), SolarWinds (SWI -2.1%), Teradata (TDC -2.1%), CommVault (CVLT -2.1%), and Radware (RDWR -2.4%). Red Hat partly blamed its performance on weak European demand.
- Barclays' Ben Reitzes suggests his downgrades of EMC and NetApp are partly valuation calls (both companies are near his PTs). But he adds "there may be more upside in networking names today" in light of "long-term headwinds to storage demand." The growth of cloud infrastructure platforms relying on commodity hardware (AWS being the most notable) is generally viewed as a threat to storage incumbents.
- William Blair cut NetApp to Underperform last week, raising concerns about executive departures, a flash memory-focused refresh to EMC's VNX mid-range storage line, and the Cisco-Whiptail deal.
- Goldman's Kent Schofield, who cut F5 to Neutral, says he thinks Street estimates now take into account F5's application delivery controller (ADC) refresh cycle and Cisco ADC displacements.
Sep. 24, 2013, 10:11 AM
- Red Hat (RHT -12.3%) has been cut to neutral ratings by Piper and Pac Crest in the wake of its disappointing FQ2 billings data and mixed guidance.
- Storage giants EMC (EMC -1.7%) and NetApp (NTAP -1.2%) have been cut to Equal Weight by Barclays.
- F5 (FFIV -2.4%) has been cut to Neutral by Goldman.
- Rovi (ROVI +2.5%) has been upgraded to Buy by B. Riley.
- Microchip (MCHP +0.7%) has been upgraded to Buy by Goldman.
Sep. 20, 2013, 9:53 AM
- Facebook (FB +0.7%) has been upgraded to Outperform by Cowen. The upgrade comes with shares having risen 73% since the Q2 report.
- Tibco (TIBX +4.6%) and Informatica (INFA +4.3%), two companies frequently hyped as big data/analytics plays, have been upgraded to Positive by Susquehanna. Tibco delivered an FQ3 beat and provided in-line FQ4 guidance yesterday afternoon.
- SunEdison (SUNE +2.5%) has been upgraded to Outperform by RBC.
- Portugal Telecom (PT +4.8%) has been upgraded to Outperform by Bernstein.
- Synaptics (SYNA +2.1%) has been upgraded to Outperform by Oppenheimer.
- NetApp (NTAP -1%) has been cut to Underperform by William Blair.
- SolarWinds (SWI -4.4%) has been cut to Sell by Goldman.
- Ericsson (ERIC -2.1%) has been cut to Hold by DNB.
- Level 3 (LVLT -1.9%) has been cut to Equal Weight by Morgan Stanley.
- ExOne (XONE -0.3%) has been started at Outperform by FBR.
Sep. 10, 2013, 6:49 PM
- Cisco's (CSCO) $415M purchase of flash storage system vendor Whiptail marks the networking giant's official entry into the storage hardware market.
- Though Cisco has become a major player in the server market through its UCS line, and has had a large presence in storage networking for some time, it has been content to leave storage sales to partners such as EMC, IBM, and NetApp (NTAP), along with server/Ethernet switch rivals such as H-P and Dell.
- In a blog post explaining the deal, exec Paul Perez states Cisco concluded "UCS needed to be best-in-class at accelerating hot data layers" (i.e. mission-critical data), and that a flash storage offering was needed to achieve this goal.
- Perez declares Whiptail to offer "the highest scalability in performance and capacity of any scale-out flash vendor on the market today," (rivals such as Violin Memory might beg to differ), and imagines solutions leveraging Whiptail, UCS, and Nexus switches enabling customers to load "vast amounts of data in seconds and minutes, not hours or days," among other things.
- Whiptail relies on a proprietary OS built from the ground up to handle flash storage, something it argues yields superior performance.
- The startup's products compete directly against systems from EMC's XtremIO unit, and indirectly against other flash-based EMC products. They also compete against IBM's Texas Memory unit and NetApp's flash offerings.
- The Cisco-EMC partnership has already been pressured by the software-defined networking efforts of VMware's Nicira unit, which stand to make it easier for companies to replace Cisco gear with rival/commodity hardware (if adopted). There have been reports EMC has considered further encroaching on Cisco's turf by acquiring a networking hardware firm.
Sep. 9, 2013, 9:40 AM
- Expedia (EXPE +3.2%) has been upgraded to Buy by Lazard.
- Brocade (BRCD +3.2%) has been upgraded to Outperform by RBC.
- NetApp (NTAP +1.1%) has been upgraded to Buy by UBS.
- Micron (MU +1%) has been upgraded to Neutral by Susquehanna.
- LTX-Credence has been upgraded to Buy by Craig-Hallum.
- Open Text (OTEX +1.2%) has been upgraded to Buy by Paradigm Capital.
- Nanometrics (NANO +6.1%) has been upgraded to Overweight by Piper.
- InterActiveCorp (IACI -0.5%) has been cut to Hold by Canaccord.
- Multimedia Games (MGAM -2.2%) has been cut to Neutral by Janney.
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