Nov. 12, 2014, 8:01 AM| Comment!
Nov. 11, 2014, 5:30 PM
Oct. 29, 2014, 10:08 AM| Comment!
Oct. 27, 2014, 11:46 AM
- Citing the implications of Juniper's Q4 guidance and industry commentary, Chardan Capital's Jay Srivasta has downgraded EZchip (EZCH -2.8%) to Neutral ahead of its Nov. 12 Q3 report, and cut his target by $8 to $22.
- Srivasta notes Juniper stated U.S. carrier spending remains weak, and that demand from enterprises and European carriers is also softening. Juniper also said its "planning assumption" is for growth to resume in 2H15.
- Though admitting Juniper only accounts for 6% of EZchip's revenue, Srivasta thinks Cisco (39% of revenue) and ZTE (20%) could be dealing with similar issues, something that puts EZchip's Q4 consensus estimates at risk.
- Cisco's service provider orders were down 11% Y/Y in the July quarter. Sales of its ASR 9000 edge routers (feature EZchip's network processors) still rose at a double-digit clip.
Oct. 6, 2014, 11:30 AM
- EZchip (EZCH -12.5%), a top supplier of network processors for edge/access routers, now expects Q3 revenue of $19M, below prior guidance of $22M and a $22.6M consensus.
- CEO Eli Fruchter: "We have seen weakness in orders as well as inventory adjustments across most of our key customers that are serving the carrier networking equipment space. We believe this is a temporary slowdown, caused primarily by a weaker carrier spending environment that the market is currently going through." Like others, he's optimistic growth will soon pick up.
- Fruchter's remarks echo those from Cisco (EZchip's top customer), Juniper, Ciena, Finisar, JDS Uniphase, and several other firms. Soft North American wireline capex (led by AT&T) has especially been taking a toll on the industry.
- Several telecom equipment and component/chip suppliers are following EZchip lower. CIEN -2.8%. CAVM -2.8%. OCLR -2.7%. ZHNE -2.7%. CYNI -3.1%. AFOP -2.1%. NPTN -2.4%. OPLK -1.7%.
Aug. 28, 2014, 11:33 AM
- EZchip (NASDAQ:EZCH) has soared over the last 30 minutes of trading. Volume is already over 2x the daily average.
- A rumor that the network processor vendor has cancelled a Roth conference presentation (set for Sep. 3) could be playing a role. Shares have rallied on M&A hopes in the past - a long list of chipmakers have been acquired over the last 9 months.
Aug. 14, 2014, 12:40 PM
- Six firms have hiked their Cisco (CSCO -2.8%) targets after the company beat FQ4 estimates, issued mixed FQ1 guidance, and announced plans to cut another 6K jobs. But that isn't stopping shares from selling off due to worries about weak demand from carriers (orders -11% Y/Y) and emerging markets (orders -9%).
- "Notwithstanding the fact that capex will be fairly weak in [2H14], Cisco's [carrier] order performance in the first calendar half of 2014 demonstrates meaningful share loss in addition to soft carrier spending," says MKM (Neutral).
- Nonetheless, the firm thinks Cisco's total orders will rise at or near a low double-digit % in FQ1 (favorable comps will help). "We still believe it is profitable to own Cisco when orders and revenue growth are accelerating."
- Bulls are focusing on healthy enterprise orders and strong early uptake for the Nexus 9000/ACI SDN and networking virtualization platform. John Chambers mentioned on the CC (transcript) the platform's customer count more than tripled in FQ4 to 580+, and that there are over 60 customers for the related APIC software controller (just launched).
- Several peers and suppliers with strong carrier exposure are selling off. Cisco's numbers follow a soft outlook from JDS Uniphase, and coincide with light guidance from Oclaro. ALU -1.6%. JNPR -1.8%. FN -7.4%. ZHNE -2.1%. EZCH -3.8%.
- Prior Cisco earnings coverage
Aug. 13, 2014, 8:01 AM| Comment!
Aug. 12, 2014, 5:30 PM
Jul. 23, 2014, 12:25 PM
- Among the year's best tech performers, chip stocks are selling off (SOXX -1.8%) on an up day for the Nasdaq following weak numbers from FPGA giant Xilinx (XLNX -14.5%).
- Xilinx missed FQ1 revenue estimates by over $18M, and also guided for FQ2 revenue to be well below consensus. The company blamed the FQ1 shortfall on soft defense and wireless sales. BMO and BofA/Merrill have downgraded Xilinx; the former thinks Xilinx's 28nm share might be peaking.
- Xilinx stated on its CC (transcript) the wireless weakness was mostly due to soft 28nm chip sales to Chinese 4G base station vendors; Chinese 4G rollouts have long been viewed as a catalyst for both Xilinx and Altera (ALTR -4.7%). Aerospace/defense sales were hurt by program timing issues.
- Meanwhile, switch/router vendor Juniper offered light Q3 guidance to go with a Q2 beat. The company noted on its CC (transcript) "market dynamics" for U.S. carriers, including M&A activity, are affecting project rollouts.
- Also: Analog/mixed-signal IC vendor Linear (LLTC -4.1%) is selling off in spite of beating FQ4 estimates and guiding in-line (8%-11% Y/Y FQ1 rev. growth vs. 9.1% consensus).
- Notable decliners: FSL -5.3%. IDTI -6.4%. EZCH -3.3%. PMCS -4.3%. LSCC -6.8%. CAVM -4.7%. SMTC -4.1%. ATML -3.2%. TQNT -3.1%. RFMD -2.9%. IRF -2.9%.
- Qualcomm, NXP, TriQuint, and Cirrus Logic report after the bell.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Jul. 1, 2014, 10:03 AM
- EZchip (EZCH +1.6%) is paying $50M up-front, and up to $80M in performance earn-outs, to buy Tilera. The deal is expected to close in Q3.
- Tilera's network processors (NPUs) pack dozens of cores that can be programmed to handle tasks well-suited to parallel processing. The company launched a 72-core NPU (offered through a PCIe card) last year, and has been prepping a chip with over 100 cores.
- Whereas EZchip's NPUs are generally used in edge/access routers within carrier networks, Tilera's are often used in data center networking, security, and video appliances, and also act as co-processors within x86 servers. Tilera's rivals include Intel, Cavium, Broadcom, and Marvell.
- EZchip declares the deal doubles its addressable market to $2B, and adds 100+ customers. The purchase is expected to be slightly dilutive to 2014 EPS, and accretive to 2015 EPS.
- Tilera CEO Devesh Garg will become the head of EZchip's U.S. ops. EZchip predicts pairing its strengths with Tilera's will yield "new multi-core CPUs that uniquely integrate powerful networking capabilities with the highest number of processor cores addressing a wide range of applications and market segments."
Jun. 17, 2014, 9:55 AM
- Feltl has upgraded EZchip (EZCH +3.1%) to Strong Buy, and set a $31 PT.
- The network processor vendor's shares popped last month following a Q1 beat that was fueled by a 31% Y/Y increase in sales to top customer Cisco (boosted by strong ASR 9000 edge router demand), and a 172% increase in sales to #2 customer ZTE.
- SA author Darspal S. Mann recently argued Street estimates for 25% 2014 revenue growth may be conservative, given the potential for EZchip's next-gen NP5 processor (can handle 240Gbps) to start contributing in 2H. Mann notes the NP-5 has an ASP that's 60% higher than that of the prior-gen NP-4.
May 14, 2014, 8:01 AM| Comment!
May 13, 2014, 5:30 PM
Feb. 26, 2014, 4:12 PM
- Up moderately for much of the day as part of a broader rally in chip stocks, EZchip (EZCH +16%) blasted off in the final 30 minutes of trading on strong volume.
- No news has hit the wires to explain the move. EZchip has occasionally been a party to M&A speculation in the past; shares rallied in December after the Avago/LSI deal fueled hopes of further consolidation among networking chipmakers.
- Short-covering could be a factor: 13% of the float was shorted as of Jan. 31.
Feb. 12, 2014, 8:01 AM| Comment!
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