Thu, Mar. 5, 8:58 AM
Wed, Mar. 4, 4:17 PM
- Avago (NASDAQ:AVGO) held "advanced talks" to buy microcontroller/network processor/base station amplifier maker Freescale (NYSE:FSL) before the chipmaker agreed to a $16.7B deal with NXP (NASDAQ:NXPI), Reuters reports.
- Avago reportedly got cold feet after Freescale's shares surged on an NY Post M&A report last month. However, sources state the company is "still looking for an acquisition that could be transformative."
- Over the last 15 months, Avago has struck a $6.6B deal to buy LSI (it later sold parts of LSI to Seagate and Intel), a $309M deal to buy PLX Technology, and (most recently) a $609M deal to buy Emulex, expanding into a number of enterprise hardware markets along the way.
- $31B worth of chip industry M&A deals took place last year, as chipmakers large and small try to reap cost and product synergies by merging with peers.
- Avago rose 0.9% today to $129.40, leaving it close to Monday's all-time high of $130.87.
Wed, Feb. 25, 6:19 PM
- In addition to beating FQ1 EPS estimates (while posting in-line revenue), Avago (NASDAQ:AVGO) is guiding for FQ2 revenue to be down 3% to up 1% Q/Q. That implies a range of $1.59B-$1.65B, above a $1.54B consensus.
- Driving the FQ1 EPS beat: Gross margin was 59%, up from FQ4's 58% and the year-ago period's 52%, and above guidance of 57.5% (+/- 1%). FQ2 GM guidance is at 58.5% (+/- 1%).
- Also helping EPS: Operating expenses totaled $293M, up from $142M a year ago thanks to acquisitions, but down from $303M in FQ4 thanks to cost cuts.
- As expected, strong iPhone-related sales acted as a big FQ1 tailwind: Wireless product sales (40% of total revenue) rose 6% Q/Q and 90% Y/Y. Wired infrastructure (21% of total revenue, boosted by the PLX and LSI acquisitions) fell 1% Q/Q and rose 52% Y/Y. Enterprise storage (29% of revenue, a product of the LSI acquisition) rose 5% Q/Q. Industrial/other (10% of revenue) fell 4% Q/Q and rose 21% Y/Y.
- Avago has risen to $119.03 AH, making new highs in the process. RF component rivals are ticking higher: Skyworks (NASDAQ:SWKS) +0.9% to $88.49. Qorvo (NASDAQ:QRVO) +1.1% to $67.92.
- Avago's FQ1 results, Emulex acquisition, PR
Wed, Feb. 25, 4:48 PM
- In tandem with its FQ1 results, Avago (NASDAQ:AVGO) announces it's buying Fibre Channel/Ethernet connectivity hardware maker Emulex (NYSE:ELX) for $609M net of cash and debt, or $8/share. The price represents a 26% premium to Emulex's Wednesday close.
- The deal is expected to be funded with cash on hand, and to close in the second half of Avago's FY15 (ends Nov. 1). It's expected to be immediately accretive.
- Avago is less than a year removed from buying LSI, whose product line includes RAID storage controllers, storage adapter cards, hard drive SoCs, and network processors. Much of Emulex's product line, which includes Fibre Channel and Ethernet adapter cards, Ethernet and storage controllers, and network monitoring hardware, is complementary to LSI's and/or services the same hardware OEMs.
- Avago is up 5.3% AH to $118.64 following the acquisition news, its FQ1 EPS beat, and strong FQ2 revenue guidance. Emulex is up 24.8% to $7.94. Emulex archrival QLogic (NASDAQ:QLGC) is up 4% to $15.16.
Wed, Feb. 25, 4:13 PM| Comment!
Tue, Feb. 24, 5:35 PM
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Tue, Jan. 27, 6:01 PM
- Apple suppliers Cirrus Logic (NASDAQ:CRUS), NXP (NASDAQ:NXPI), Skyworks (NASDAQ:SWKS), Qorvo (NASDAQ:QRVO), and Avago (NASDAQ:AVGO) are up AH after the tech giant blew away FQ1 estimates on the back of 74.5M iPhone sales (+46% Y/Y and above forecasts of ~66-67M). iPad sales of 21.4M (-18%) were roughly in-line
- CRUS +2.9% to $26.79. NXPI +1.5% to $79.20. SWKS +1.3% to $82.60. QRVO +1% to $74.48. AVGO +2.7% to $107.60.
- Cirrus and Qorvo report tomorrow, and NXP on Feb. 4. Skyworks posted an FQ1 beat and offered strong guidance last week.
Fri, Jan. 23, 1:03 PM
- After barely moving in AH trading yesterday in response to its FQ1 beat and strong FQ2 guidance, Skyworks (SWKS +2.3%) has risen above $81 today as a flurry of bullish analyst reactions arrive. Rivals/fellow iPhone suppliers Qorvo (QRVO +4.8%) and Avago (AVGO +1.6%) are heading in the same direction.
- Brean's Mike Burton, hiking his Skyworks target by $22 to $92: "The [FQ1] upside was predominantly driven by the Integrated Solutions segment as Apple's iPhone 6/6+ ramped ... we believe LTE growth in China and several new model ramps (Samsung Galaxy S6 amongst others to be unveiled in Barcelona) coupled with Skyworks Solutions less seasonal Broad Markets business is driving the better-than-seasonal guidance."
- Burton also thinks Skyworks is on its way to achieving a 50% gross margin (up from FQ1's 46.7%), and notes inventory days (58) were down by 15 Y/Y.
- Canaccord's Mike Walkley: "We believe Skyworks' diverse analog portfolio is enabling content share gains with its smartphone customers. Further, we anticipate Skyworks' share gains in markets such as WiFi 802.11ac, wireless infrastructure, and the IoT market are also driving strong growth trends." His FY16 (ends Sep. '16) EPS estimate has been hiked by $0.66 to $5.89.
- On the CC (transcript), CEO David Aldrich noted Skyworks' non-mobile design wins include a GM telematics platform, Cisco home gateways, ZigBee connectivity modules for Philips/LG smart light bulbs, Amazon's Echo and Fire TV devices, and a DirecTV set-top. China's Xiaomi has joined Apple and Samsung as a major mobile client.
- Qorvo reports on Jan. 28.
Thu, Jan. 8, 4:18 PM
- Hit hard on Tuesday amid a market rout, chip stocks have more than made up for it today: The Philadelphia Semi Index (SOXX +3%) handily exceeded the Nasdaq's 1.8% gain. The index posted a 1% gain yesterday.
- Micron (MU +4.9%) has been one of the standouts, more than recouping yesterday's post-earnings losses. Ditto Freescale (FSL +9.2%), which benefited from a Deutsche target hike, and Marvell, which got a lift from an MKM note. Others: NVDA +3.8%. NXPI +4.7%. AVGO +5%. SWKS +4.5%. CY +6.1%. CODE +5.9%. CAVM +5.2%. SWKS +4.5%. SLAB +4.5%. KLIC +3.8%. SMTC +3.6%. ATML +3.7%. FCS +4.2%. TSEM +4.2%.
- As is their custom, both chipmakers and their clients have been unveiling plenty of new products at CES.
- ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Jan. 1, 2:19 AM
- Dow: INTC +41%; UNH +35%; HD +28%; CSCO +25%; MSFT +25%.
- S&P 500: LUV +125%; EA +106%; EW +95%; AGN +92%; AVGO +91%.
- Nasdaq: AAL +112%; EA +106%; AVGO +91%; GMCR +78%; ILMN +68%.
Dec. 9, 2014, 8:07 AM
Dec. 4, 2014, 12:14 PM
- Avago (AVGO +7.7%) has soared above $100 after beating FQ4 estimates, reporting a stronger-than-expected gross margin, and providing above-consensus FQ1 guidance.
- RF component peers Skyworks (SWKS +4.2%), RF Micro (RFMD +3.9%), and TriQuint (TQNT +4%) are also up, as is fellow iPhone supplier Cirrus Logic (CRUS +2.6%). Cirrus recently sold off after Deutsche cut its calendar Q1 iPhone production forecast.
- On its CC (transcript), Avago noted wireless growth (+73% Q/Q and +83% Y/Y) was "largely driven by the ramp of a new smartphone generation and a large North American smartphone OEM" (undoubtedly Apple).
- Avago added it also saw strong demand for FBAR filter-related products (gaining share due to 4G RF requirements) elsewhere, with demand from Chinese 4G phone OEMs particularly strong. Over 80% of wireless revenue is now FBAR-related.
- Avago expects wireless revenue to be "flat to perhaps slightly down" Q/Q in seasonally weak FQ1, with strong demand from Apple (referred to once more as "a large North American smartphone OEM") offsetting seasonal declines elsewhere. The company notes it remains "very capacity-constrained," and has been making investments to deal with the issue.
- At least 10 sell-side firms have hiked their targets.
Dec. 3, 2014, 5:39 PM
Dec. 3, 2014, 4:35 PM
- Avago (NASDAQ:AVGO) expects FQ1 revenue from continuing ops to be flat to up 4% Q/Q; that implies a range of $1.59B-$1.65B, above a $1.51B consensus.
- FQ4 gross margin was 58%, up from 57% in FQ3 and 51% a year ago, and above guidance of 56% (+/- 1%). FQ1 GM guidance is at 57.5% (+/- 1%).
- Wireless revenue, boosted by iPhone-related sales, rose 73% Q/Q and 83% Y/Y, and made up 39% of total revenue. Enterprise storage (a product of the LSI acquisition) rose 15% Q/Q, and was 29% of revenue. Wired infrastructure (boosted by the PLX acquisition) rose 1% Q/Q and 43% Y/Y, and was 22% of revenue. Industrial/other fell 2% Q/Q and rose 13% Y/Y, and was 10% of revenue.
- Thanks to cost cuts and the sale of the flash storage and Axxia (network processor) units, opex was 18.9% of revenue, down from 23.8% in FQ3 and 19.6% a year ago. In addition, opex is expected to decline by $2M in FQ1 to $301M.
- FQ4 results, PR
Dec. 3, 2014, 4:09 PM| 4 Comments
Dec. 2, 2014, 5:35 PM
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