Fri, Feb. 13, 11:31 AM
- Dennis Ruhl of the JPMorgan Intrepid Value fund sees some potential bargains hatching in the slumping energy sector, and he particularly favors ConocoPhillips (NYSE:COP).
- Ruhl says COP looks better than its energy peers from a momentum standpoint, and likes that the company was one of the first to cut capex in response to the collapse in energy prices and has done so aggressively.
- COP trades at just 1.5x book value vs. the energy sector average of 1.8x and the S&P 500's 2.8x; the stock boasts a 4.3% dividend yield, which Ruhl believes is safe.
- The fund manager's other four favorite value picks are ANTM, NOC, HPQ and KR.
Mon, Feb. 9, 7:14 PM
- HP (NYSE:HPQ) is acquiring Voltage Security, a provider of enterprise encryption, tokenization, and encryption key management software for e-mails, documents, payments data, and other content. Terms are undisclosed.
- Voltage's offerings will complement HP's Atalla data/payments security software. The IT giant praises the ability of Voltage's products to "allow enterprises to use protected data in applications without having to re-architect their applications or adopt fragmented frameworks" - technologies such as format-preserving encryption and stateless tokenization help - and proclaims the deal will allow it to "offer customers unparalleled data protection capabilities built to close the gaps that exist in traditional encryption and tokenization approaches."
- Security spending has been easily outpacing broader IT spend, and that trend is expected to continue in 2015 as companies invest heavily in cybersecurity following a slew of high-profile breaches. However, fast-growing upstarts such as Palo Alto Networks, FireEye, and Fortinet have been taking share at the expense of IT giants.
Thu, Jan. 29, 7:46 AM
Tue, Jan. 27, 9:22 AM
- After selling off yesterday in response to Seagate's guidance, Intel (NASDAQ:INTC) and HP (NYSE:HPQ) are showing steep losses in premarket trading today after Microsoft (NASDAQ:MSFT) reported 13% Y/Y drops in both its Windows OEM Pro and non-Pro revenue, and offered conservative guidance. Microsoft is down 8.3%, and Nasdaq 100 futures are off 1.4%.
- Microsoft blamed the Windows OEM Pro decline on slowing business PC demand (following a boost driven by the end of Win. XP support), an unfavorable mix, and academic discounts. The OEM non-Pro decline was blamed on a mix shift towards cheaper hardware for which the software giant has cut or eliminated Windows licensing fees.
- Microsoft's server/data center-related sales were healthier: Server product/services revenue rose 9%, and commercial cloud revenue (Office 365/Azure) grew 114%. But on the CC (transcript), the company stated transactional server revenue "was down primarily due to a declining traditional server market." A shift in demand towards Web/cloud data centers often relying on Linux servers might also be a factor here.
Mon, Jan. 26, 5:57 PM
- As disclosed at the time of the split announcement, Meg Whitman will be the CEO of HP's (NYSE:HPQ) enterprise ops, and PC/printing EVP Dion Weisler the CEO of HP Inc.
- Current CFO Cathie Lesjak will be the CFO of HP Enterprise, and current CTO Martin Fink its CTO. The company won't have a COO.
- Jon Flaxman, currently the CFO of HP's PC and printing ops, will be HP Inc.'s COO. PC/printing CTO Shane Wall will be the company's CTO, inkjet & Web solutions SVP Stephen Nigro will be its printing chief, and personal systems GM Ron Coughlin will be its PC chief.
- A "selection process is ongoing" to find a CFO, general counsel, and chief marketing officer for HP Inc., and an HR chief for HP Enterprise.
- HP shook up its enterprise management in November to better prepare for the split.
Mon, Jan. 26, 11:27 AM
- Seagate slightly missed calendar Q4 revenue guidance and guided for calendar Q1 revenue of "at least $3.45 billion," compared with a $3.59B consensus.
- The hard drive giant reported 4% Y/Y Q4 increase in PC drive shipments - notebooks were up, desktops were down - and a 17% increase in enterprise shipments (lifted by demand from Internet giants).
- Intel (INTC -1.8%), HP (HPQ -3%), and NetApp (NTAP -2%) are all selling off on a day the Nasdaq is near breakeven. Intel has already guided for its PC CPU division's sales to drop by a low-single digit % in 2015, but has also forecast its server CPU division's sales will see a 15% CAGR through 2018.
- Separately, the WSJ reports (citing an internal e-mail) HP has named a new leader for its H3C Technologies Chinese networking hardware unit, following worker protests. The paper reported in October HP wants to sell at least a 51% stake in the business, as China tries to cut its reliance on U.S. IT hardware in the wake of the 2013 NSA spying uproar.
Sun, Jan. 18, 12:57 PM
- TechCrunch reports Google (NASDAQ:GOOG) is interested in acquiring Softcard, the mobile payments platform launched by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (NYSE:TMUS) in 2010 - it was previously known as Isis, before changing its name for obvious reasons. Though Softcard's owners have invested hundreds of millions in the venture, sources state Google's purchase price could be below $100M.
- Like Apple Pay and Google Wallet, Softcard relies on NFC radios to enable transactions. And like Wallet, it has struggled to get off the ground, as U.S. consumers overwhelmingly stick with card swipes. Hard data on Apple Pay usage remains limited for now.
- Softcard recently laid off 60 employees. Meanwhile, it was reported in 2013 that Google had spent $300M on Wallet-related acquisitions, with little to show for it. The adoption of EMV (chip-and-PIN) readers by U.S. retailers could give NFC solutions a boost, by making card payments a little less convenient.
- The WSJ reports Google is partnering with consulting giant PwC to bid on a $2B+ contract to update the DoD's electronic health records system. PwC says Google's tools could both improve the system's security and performance, and lower costs. A group featuring IBM, HP (NYSE:HPQ), and CSC has made a rival bid.
- Ad tech firm Marin Software (NYSE:MRIN) provides some encouraging mobile search data ahead of Google's Jan. 29 Q4 report. A Marin study found mobile accounted for 49% of Q4 U.S. search ad spend, up from 42% in Q3, and that smartphone ad click rates were 38% higher than PC rates (thanks in part to accidental clicks?). On the other hand, mobile still only accounted for 32% of conversions.
- Medium writer Backchannel provides a deep dive into Google Search's evolution in an era where users increasingly want search engines to know the precise meaning of their queries. Part 1 looks at Google's efforts to optimize for mobile (aided by its Knowledge Graph and Google Now). Part 2 looks at Google's real-world research into the information needs of users. Part 3 looks at Google's investments in A.I./deep learning to deliver far more intelligent search results and spontaneously surface useful information.
Tue, Jan. 13, 2:26 PM
- "After significantly outperforming in 2013 and 2014, rising by 145% and more than tripling from the 2012 bottom, HPQ's 2015 should be a transitional year," writes Pac Crest, downgrading the IT giant to Sector Perform.
- Pac Crest observes HP (HPQ -0.7%) has surpassed its $40 target - it's back below $40 today - and argues optimism about improving fundamentals is now priced in.
- Shares currently go for 10x estimated FY15 (ends Oct. '15) EPS. The FY15 revenue growth consensus is at -1.7%.
Mon, Jan. 12, 5:58 PM
- IDC estimates global PC shipments fell 2.4% Y/Y in Q4 to 80.8M - a bigger decline than Q3 and Q2's 1.7%, but better than expectations for a 4.8% drop. Gartner is more positive, estimating shipments rose 1% to 83.7M.
- Both firms observe emerging markets, where tablet cannibalization remains a major issue, remain in worse shape than developed markets. IDC also states commercial PC demand (boosted earlier this year by MSFT's ending of Win. XP support) has slowed, and that "market progress has been fueled by low-priced systems, including growth of Chromebooks and [Microsoft's] promotion of Windows 8 + Bing."
- On the bright side, both IDC and Gartner report Asia-Pac returned to positive growth, and that broader consumer demand is gradually improving. The U.S. consumer market is expected to return to positive growth in 2015, aided by slowing tablet demand and the Windows 10 launch.
- IDC believes all top-5 vendors gained share from rivals with less scale. A quarter after cracking the top-5 for the first time with a 6.3% share, Apple's (NASDAQ:AAPL) unit share is believed to have risen to 7.1% (+130 bps Y/Y) on the back of 4.9M shipments (+18.9%). Given higher ASPs, revenue share might be around 15%.
- Market leader Lenovo's (OTCPK:LNVGY) share rose 140 bps to 19.9%; #2 HP's (NYSE:HPQ) rose 300 bps to 19.7%; #3 Dell's rose 140 bps to 13.5%; #4 Acer's (OTC:ASIYF) rose 40 bps to 7.7%. Non-top 5 firms saw their share drop 740 bps to 32.2%, with their shipments declining 20.7%.
- Intel (NASDAQ:INTC), which tends to have good visibility into industry demand, reports on Thursday.
- Related tickers: AMD, NVDA, STX, WDC, HTCH
Mon, Jan. 5, 5:33 PM
- HP (NYSE:HPQ) has launched the Stream Mini and Pavilion Mini, tiny Windows desktops that respectively sell for just $180 and $320, and take aim at desktops running Google's Chrome OS (i.e. Chromeboxes). The Stream Mini has only an Intel Celeron, CPU 2GB of RAM, and a 32GB SSD. The Pavilion Mini has a Pentium CPU, 4GB of RAM, and a 500GB hard drive.
- The tech giant has also launched a slew of high-end displays: The 23.6" Zr virtual reality display, which lets users view 3D images (comes ahead of HP's 3D printer launch); new 27" 4K and 5K-resolution displays; and several displays with curved panels.
- Seagate (NASDAQ:STX) has launched the Seven, a 500GB portable hard drive that's just 7mm thick, as well as a 500GB Wi-Fi-capable hard drive (the Wireless) that lets users offload content from mobile devices to PCs. Also unveiled: The Personal Cloud and Personal Cloud 2-Bay, home media servers that respectively feature 3TB-5TB and 4TB-8TB of capacity. The 2-Bay backs up files to a second drive.
- SanDisk (NASDAQ:SNDK) has launched: 1) The Ultra Dual, a line of of flash drives that connect PCs with Android phones by featuring standard USB connectors on one end, and micro USB connectors on the other. Prices range from $23-$64. 2) The SSD Plus, an entry-level SSD line using 19nm NAND flash, and priced at just $70-$110 (120GB-240GB capacities).
- Ahead of the Apple Watch launch, Garmin (NASDAQ:GRMN) has rolled out three smartwatches. The Vivoactive starts at $250, and pairs a GPS radio with support for mobile notifications. The Fenix 3 starts at $500, and features a number of advanced sports/fitness tracking features. The Epix starts at $550, and combines many of the Fenix 3's features with a moving map.
- Lenovo (OTCPK:LNVGY) has launched: 1) The Vibe Band V10, an $89 fitness tracker with a 1.4" e-ink display. 2) The P90, a 5.5" smartphone with a quad-core Intel Atom CPU and optical image stabilization. 3) The Vibe X2 Pro, a phone that sports an 8-core Qualcomm Snapdragon CPU and (notably) 13MP cameras on both the front and rear.
- Prior CES coverage
Dec. 4, 2014, 7:04 PM
- With a corporate upgrade cycle and Web/cloud demand boosting sales, IDC estimates global server revenue rose 4.8% Y/Y in Q3 to $12.7B, an improvement from Q2's 2.5% growth and Q1's 2.2% decline. Gartner is more conservative, estimating revenue only rose 1.7%.
- "IDC has seen increasing market influence from Greater China, hyperscale datacenters, ODMs and native Chinese OEMs, all of which grew sharply in the third quarter," says VP Matt Eastwood. Like others, IDC expects Intel's recent Grantley Xeon CPU launch, together with the pending end of Windows Server 2003 support, to keep demand healthy.
- Thanks to weak demand for its high-end, Itanium-based, Integrity servers, market leader H-P's (NYSE:HPQ) share fell 140 bps Y/Y to 26.5%, after having risen 40 bps in Q2. H-P just rolled out Integrity servers running (x86-based) Intel Xeon CPUs in an attempt to stop the bleeding.
- #2 IBM's share fell 500 bps to 18.2%, thanks to both high-end (mainframe/Power) and x86 weakness. The sale of IBM's x86 server unit to Lenovo closed early in Q4. #3 Dell's share rose 80 bps to 17.8%.
- Cisco (NASDAQ:CSCO) passed Oracle (NYSE:ORCL) to take the #4 slot: Cisco's share rose 130 bps to 6.2% on the back of 31% revenue growth, while Oracle's was flat at 4.1% (3.4% revenue growth). Today, Cisco and IBM announced a converged hardware solution that pairs the former's UCS servers with the latter's Storwize storage arrays.
- As expected, white-label servers sold to Internet giants (called ODM Direct by IDC) continued gaining ground: Their share rose 250 bps to 8.9%. Everyone else saw their share collectively rise 210 bps to 18.4%.
- Related tickers: SMCI, MLNX, QLGC, ELX
Dec. 4, 2014, 11:34 AM
- Mohamed Ali, H-P's (HPQ -0.8%) chief strategy officer for the last two years, has left to become cloud backup service provider Carbonite's (CARB -1.7%) CEO. Ali replaces co-founder David Friend, who remains Carbonite's chairman.
- Ali's departure comes as H-P gets set to spin off its PC/printing ops, and signals an interest in making acquisitions for its enterprise IT ops. The company recently shook up its enterprise hardware leadership.
- Yesterday: Carbonite receives buyout offer from J2 Global
Nov. 26, 2014, 11:32 AM
- Though H-P's (NYSE:HPQ) FQ4 revenue missed estimates and fell 2.5% Y/Y, margins "increased Y/Y in all businesses as cost cuts flowed through more so than in past quarters," notes Morgan Stanley, reiterating an Overweight. "We continue to like the risk:reward at just 8x FY14 reported [free cash flow]."
- Barclays (Overweight) feels likewise: "Though revenues need to come down a bit due to currency, we believe each business is showing some gross margin progress. With the buyback picking up and the model basically intact, we see room for further appreciation in the shares due to valuation."
- Those less positive, such as BMO (Market Perform), are worried about top-line pressures. "While HP's compares were difficult, we nevertheless believe that, for the stock to work, HP needs to demonstrate improved revenue growth ... we project revenues to decline in FY2016."
- On its CC (transcript), H-P reiterated its FY15 FCF guidance of $6.5B-$7B, and said it plans to "make up" for the fact it didn't return 50% of FY14 free cash flow to shareholders in FY15. FY14 FCF was $9.3B, of which $3.9B was returned.
- Meg Whitman noted H-P continues to gain PC share, and has seen its x86 server ops get a lift from the IBM/Lenovo deal. On the other hand, the company is seeing printing price pressure as rivals take advantage of a weak yen, storage has been hurt by a demand shift from high-end to mid-range systems, and enterprise services was hit in FQ4 by account revenue run-off and EMEA weakness.
- FQ4 results, guidance/details
Nov. 25, 2014, 4:25 PM
- H-P (NYSE:HPQ) expects FQ1 EPS of $0.89-$0.93 vs. a $0.93 consensus, and FY15 (ends Oct. '15) EPS of $3.83-$4.03 vs. a $3.95 consensus.
- FQ4 PC revenue rose 4% Y/Y to $8.9B, a slowdown from FQ3's 12% growth. Commercial PCs +7%; consumer -2%.
- Printing -5% to $5.7B vs. -4% in FQ3. Hardware units -1%; supplies -7%.
- Enterprise hardware division revenue -4% to $7.3B, a reversal from FQ3's +2%. x86 servers -2%; storage -8%; business critical systems (Itanium) -29%; networking +2%; tech services -3%. The division just saw a leadership change.
- Enterprise services -7% to $5.5B. App/business services -6%; IT outsourcing -7%.
- Software -1% to $1.1B. License revenue +2%, an improvement from FQ3's 16% drop. But SaaS revenue was flat, and professional services down 5%. Financial services -1% to $906M.
- GAAP gross margin rose 160 bps Y/Y to 24.6%. SG&A spend rose slightly to $3.36B, and R&D spend rose 20% to $876M. $750M was spent on buybacks.
- HPQ -1.7% AH. FQ4 results, PR.
Nov. 25, 2014, 4:07 PM
Nov. 24, 2014, 5:35 PM
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