Thu, Jun. 25, 3:43 AM
- Executive compensation is generally geared toward results, but some CEOs still got massive pay packages in 2014 even though their investors didn't do so well. Notables:
- Philippe Dauman of Viacom (VIA, VIAB) +19.2% to $44.3M (shareholder return -6.6%)
- Jeff Immelt of General Electric (NYSE:GE) +88.4% to $37.3M (shareholder return -6.7%)
- James McNerney of Boeing (NYSE:BA) +24.1% to $28.9M (shareholder return -2.5%)
- Virginia Rometty of IBM (NYSE:IBM) +38.5% to $19.3M (shareholder return -12.4%)
- James Tisch of Loews (NYSE:L) +77.6% to $10.5M (shareholder return -12.4%)
Wed, Jun. 24, 8:25 AM
- IBM is partnering with enterprise cloud storage, file-syncing, and collaboration software vendor BOX to integrate Box's software and services with many of IBM offerings.
- Among the specifics: 1) Box will be integrated with IBM's content management and enterprise social networking software. 2) The companies will make Box's content accessible to the cloud-based Watson Analytics platform. 3) Box will enable joint clients to store content via IBM's cloud infrastructure. 4) IBM's security technologies will be used to expand Box's security offerings. 5) Box/IBM will develop content management solutions for, and integrate Box's technology with, the iOS apps IBM developed with Apple.
- The alliance fills a hole in IBM's product line - though offering standard cloud storage services, Big Blue didn't have a platform for enterprise workers similar to Box's. For Box, the deal expands the company's ecosystem and gives it a partner with huge enterprise and channel reach. It follows a narrower deal with rival Microsoft that focused on Office integration.
- BOX +5.4% premarket to $18.50.
Mon, Jun. 15, 10:20 AM
- Believing its valuation still doesn't fully reflect the competitive challenges from big data and cloud-based platforms, JMP's Greg McDowell has downgraded Teradata (NYSE:TDC) to Underperform, and set a $30 target. The data warehousing hardware/software provider has made fresh 52-week lows; shares now go for 13x a 2016 EPS consensus of $2.75.
- Many other analysts have already argued big data/analytics platforms focused on handling massive unstructured datasets, such as Hadoop and NoSQL, are major long-term competitive threats; some have also cited Amazon's Redshift cloud-based warehousing service. Teradata has been using M&A to grow its Hadoop exposure.
- IBM (a traditional Teradata warehousing rival) just made a big commitment to Spark, an alternative to Hadoop's MapReduce programming model that offers much faster analytics performance on account of processing data in-memory (rather than on disks), and also reduces network I/O activity. Major Hadoop distribution provider Hortonworks (HDP -1.1%), which Teradata maintains a stake in, has launched tools for running Spark via Hadoop.
Mon, Jun. 15, 3:06 AM
- IBM (NYSE:IBM) has announced several initiatives related to its free big data/analytics software platform named Spark.
- At the core of the commitment, IBM will offer Spark as a service on IBM Cloud and will donate its SystemML software to the Spark open source ecosystem.
- According to Beth Smith, general manager of the company’s analytics division, IBM will invest "hundreds of millions a year" into the free data analytics technology.
Wed, Jun. 3, 1:26 PM
- IBM (IBM +0.1%) has acquired Blue Box, a provider of managed cloud services for companies deploying private and hybrid clouds based on the open-source OpenStack cloud infrastructure (IaaS) platform.
- Cisco (CSCO +0.1%) is buying Piston Cloud Computing, a provider of software (called CloudOS) for managing and deploying services on commodity servers running OpenStack, as well as popular big data/analytics software platforms such as Hadoop and Spark. Terms for both deals are undisclosed.
- IBM, whose SoftLayer unit already offers OpenStack services, will use Blue Box to "help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud," and that the deal allows it to offer a remotely-managed OpenStack private cloud solution.
- Cisco asserts Piston and its engineers will "help accelerate the product, delivery, and operational capabilities" of its Intercloud platform, which (via service provider partners) provides a network of OpenStack cloud infrastructures running on Cisco hardware and software, and within which workloads can be moved between data centers. It also expects Piston to strengthen its OpenStack private cloud offering, the fruits of last year's acquisition of private cloud services provider Metacloud.
- IBM ended Q1 on a $3.8B/year run rate for its various "cloud delivered as a service" offerings. Synergy Research believes IBM is the third-largest player in the public/private/hybrid cloud services space, trailing Amazon (easily the market leader) and Microsoft.
- Many tech/telecom giants have embraced OpenStack in their efforts to compete against Amazon, Microsoft, and Google's proprietary platforms. Rackspace (RAX +0.7%) remains a top independent OpenStack provider
Thu, May 21, 9:30 AM
- Alongside Goldman's list of 50 stocks appearing most as top holdings at hedge funds is its list of the 50 top shorts.
- New additions this quarter: Baxter Intl (NYSE:BAX), UPS, Marriott (NASDAQ:MAR), NextEra (NYSE:NEE), Ford (NYSE:F), National Oilwell Varco (NYSE:NOV), McDonald's (NYSE:MCD), M&T Bank (NYSE:MTB), CenturyLink (NYSE:CTL), Amgen (NASDAQ:AMGN), Pioneer Natural (NYSE:PXD), Duke Energy (NYSE:DUK), Seagate (NASDAQ:STX), AbbVie (NYSE:ABBV), Cisco (NASDAQ:CSCO).
- The full list (in order of $ value of short interest): AT&T (NYSE:T), Disney (NYSE:DIS), IBM, Verizon (NYSE:VZ), Intel (NASDAQ:INTC), Kinder Morgan (NYSE:KMI), Exxon (NYSE:XOM), Pfizer (NYSE:PFE), J&J (NYSE:JNJ), Deere (NYSE:DE), Caterpillar (NYSE:CAT), Exelon (NYSE:EXC), GE, Boeing (NYSE:BA), Halliburton (NYSE:HAL), Fox (NASDAQ:FOXA), Comcast (NASDAQ:CMCSA), UTX, Regeneron (NASDAQ:REGN), Merck (NYSE:MRK), salesforce.com (NYSE:CRM), AbbVie (ABBV), Conoco (NYSE:COP), Wal-Mart (NYSE:WMT), Eli Lilly (NYSE:LLY), Celgene (NASDAQ:CELG), Schlumberger (NYSE:SLB), AutoZone (NYSE:AZO), Wells Fargo (NYSE:WFC), Emerson (NYSE:EMR), McDonald's (MCD), Reynolds (NYSE:RAI), Target (NYSE:TGT), Accenture (NYSE:ACN), Coca-Cola (NYSE:KO).
Fri, May 8, 4:35 PM
- Tangoe (NASDAQ:TNGO) sold off today after slightly missing Q1 revenue estimates (while posting in-line EPS) and offering mixed guidance.
- The company has also announced it's buying IBM's Emptoris Rivermine telecom expense management (TEM) software business for an undisclosed sum. Tangoe declares Emptoris has a "global blue chip customer base," and complements its Matrix suite of cloud telecom asset/expense management apps. The deal is expected to close at month's end.
- Q2 guidance is for revenue of $56.5M-$57.5M and EPS of $0.18-$0.19 vs. a consensus of $58.4M and $0.19. Full-year guidance is for revenue of $245M-$250M and EPS of $0.73-$0.78 vs. a consensus of $239.7M and $0.79. Emptoris (naturally isn't factored into estimates) is expected to boost Q2 and full-year revenue by $1M and $10M, and hurt EPS by $0.01 and $0.04.
- Tangoe blames the Q1 sales miss on "quarter-to-quarter variability of non-recurring revenue," while insisting it's "the less strategic component of our business."
- Q1 results, PR
Wed, May 6, 12:34 PM
- Less than 2 months after launching cloud-based analytics services for mining Twitter data, IBM (IBM -1.9%) is partnering with Facebook (FB +1.1%) to deliver improved marketing/targeting tools for Facebook ad clients.
- IBM, which has made several marketing software acquisitions over the last few years, will provide analytics and cloud-based marketing apps that give clients deeper insights into users being shown ads via Facebook targeting tools such as Custom Audiences (enables targeting based on both Facebook and non-Facebook activity), and help them design and run personalized ad campaigns covering Facebook and other channels.
- IBM: "[A] retailer launching a new line of running gear can use Facebook's Custom Audiences and targeting solutions to segment its customer groups that are interested in long-distance running. The retailer can then glean aggregated insights into the audience's preferences in running gear and, based on location, offer deals on apparel that fit the appropriate training climate."
- Separately, Oculus has announced a commercial version of the Oculus Rift VR headset will launch in Q1 2016, with pre-orders starting later in 2015. The Facebook unit states the commercial model will improve upon Oculus' 2014 Crescent Bay prototype through "an improved tracking system that supports both seated and standing experiences, as well as a highly refined industrial design, and updated ergonomics for a more natural fit."
- Details about hardware, software, input, and game support will be given shortly. Samsung plans to launch a consumer-focused version of its Oculus-based Gear VR headset (relies on a phone's display and camera, currently aimed at developers and early adopters) by year's end. Oculus is widely seen as having an early tech lead over VR rivals such as Sony and HTC.
Wed, May 6, 12:51 AM
- Intel's (NASDAQ:INTC) new Xeon E7 v3 server CPU line follows the Sep. 2014 launch of the company's Xeon E5 v3 (Grantley) line. Whereas Grantley is aimed at smaller servers (1-4 CPUs) going into distributed HPC systems or hyperscale Web/cloud data centers, the E7 v3 line is aimed at high-end/mission-critical servers running up to 32 CPUs.
- Like Grantley, E7 CPUs are made using Intel's 22nm Haswell architecture and support up to 18 cores (the prior-gen E7 v2 supports up to 15) able to run two threads at a time. With an eye towards catering to memory-intensive analytics and in-memory database workloads (a rapidly growing market segment), the chips support up to 45MB of Level 3 cache and up to 1.5TB of DRAM per CPU socket (Intel claims this is an industry high).
- 17 OEMs, including HP, Dell, Cisco, Lenovo, and Oracle, plan to launch E7 v3 servers. Intel is counting on the CPUs to take further high-end share from RISC CPU lines such as Oracle's SPARC and IBM's Power. IBM is trying to drive a rebound in Power sales by licensing the platform to 3rd-party OEMs and CPU developers; its massive Power8 CPUs support up to 12 cores and 8 threads/core.
- Analyst Patrick Moorhead argues Intel is "closing the gap" with RISC vendors on the high-end with its latest offerings. "If you want the absolutely highest performance on SAP, you would look to IBM, but it comes with some caveats. The big difference comes in performance per dollar, where Intel-based systems from HP, Dell, or Lenovo could perform better by 5-10x versus an IBM Power-based system."
Sat, May 2, 4:24 PM
- "I make no apologies whatsoever for Clayton's lending practices," says Warren Buffett, responding to a Berkshire Hathaway (BRK.A, BRK.B) shareholder who says he's disgusted Berkshire would support Clayton Homes' allegedly predatory lending practices. "Clayton," says Buffett, "has behaved very well."
- Previously: Berkshire mobile homes unit accused of predatory tactics (April 6)
- Only about 3% of Clayton's $12B in mortgages on 300K homes fail, says Buffett, noting Clayton does not securitize the paper, but instead holds the notes on its books.
- The Oracle also defended his partnership with 3G - an outfit which has won a well-deserved reputation for ruthless cost-cutting, seemingly at odds with Buffett's distaste for layoffs and other expense reductions.
- See: Zero-Based Budgeting, 3G's secret sauce
- Buffett: “I don’t know of any company that says, as a policy, ‘we will have more people than we need,’ but a lot of companies ended up that way." Layoffs at 3G-run companies have spurred those companies to perform "exceedingly well."
- On American Express (NYSE:AXP): While the payments industry is subject to innovation, AmEx has an incredible history of adapting.
- On IBM: Asked if this is a "cigar butt" company - a great old company on the slide, but still a couple of puffs left (like Berkshire Hathaway when Buffett bought) - Charlie Munger says it isn't. He reminds that IBM was the dominant player in punch cards and has adapted over the years. It helps, says Munger, that Berkshire bought its stake at a reasonable price. "If people weren't often so wrong, we wouldn't be so rich."
- Live blog of the meeting at the WSJ
Tue, Apr. 28, 10:31 AM
Tue, Apr. 21, 4:20 AM
- 1. Flat is the new up: "Revenue numbers dropped for the 12th consecutive quarter and the company managed to miss estimates this quarter too. But CEO Ginni Rometty noted that if you exclude results from foreign currency exchange as well as businesses that IBM will be divesting itself of overall revenue growth was flat."
- 2. Cloud computing results were mostly positive: "The cloud business was generating revenue at an annualized rate of $3.8 billion, up from $2.3 billion a year ago. It’s a move in the right direction but for a company that generates around $90 billion a year in revenue the cloud services business isn’t moving the needle just yet."
- 3. IBM is a slow ship to turn: "Rometty is in her fourth year as CEO and while she has doing some things to spread out and revive IBM’s revenue streams the results have been slow in coming."
- Source: Dave Dierking
- Previously: International Business Machines beats by $0.09, misses on revenue (Apr. 20)
- Related: International Business Machines' (NYSE:IBM) Q1 2015 Results - Earnings Call Transcript (Apr. 20)
- Related: IBM Stock And The Case For Exceptional Patience (Apr. 20)
Mon, Apr. 20, 4:33 PM
- With a Q1 EPS beat in tow, IBM is reiterating full-year EPS guidance of $15.75-$16.50 (compares with a $15.89 consensus). Big Blue also still expects free cash flow to be flat relative to a 2014 level of $12.4B.
- Forex had an 8% impact on Y/Y revenue growth, up from Q4's 4.4%. Divestments had a 4% impact.
- Helping EPS beat estimates in spite of a revenue miss: 1) Gross margin rose 80 bps Y/Y to 49.3%. 2) Non-GAAP SG&A spend fell 18% Y/Y to $5B, and R&D spend fell 9% to $1.3B (forex and divestments played a role). 3) $1.2B was spent on buybacks.
- Segment performance: Global tech services revenue -11% Y/Y to $7.9B; op. profit of $994M. Global business services -13% to $4.3B; op. profit of $597M. Software -8% to $5.2B; op profit of $1.94B. Hardware -23% to $1.7B; op. profit of $24M. Financing -10% to $0.5B; op. profit of $515M.
- Geographic performance: Americas revenue -3% to $9.3B (+2% adjusted for forex and asset sales). EMEA -19% to $6.1B (-2% adjusted). Asia-Pac -18% to $4.1B (-2% adjusted).
- The services backlog fell by $17B Y/Y to $121B; IBM says it's flat on an adjusted basis. Hardware revenue was up 30% adjusted for forex and the x86 server division sale, thanks to a 118% increase System z mainframe revenue (upgrade cycle). Power systems revenue fell 3%, a smaller drop than in recent quarters; storage revenue fell 8%. Within software, middleware fell 5%.
- Free cash flow was $1.1B, trailing net income of $2.9B. "Cloud delivered as a service" revenue is now on a $3.8B/year run rate, up $500M Q/Q. Analytics revenue rose 12% Y/Y.
- IBM -0.4% AH to $165.50. Shares rose 3.4% in regular trading ahead of the report, aided by a market rally and possibly an upbeat Barron's column.
- Q1 results, PR,
Mon, Apr. 20, 4:06 PM
Mon, Apr. 20, 11:30 AM
- IBM is posting solid gains ahead of this afternoon's Q1 report. 2M shares have been traded thus far vs. a 3-month daily average of 4.6M. The S&P is up 1%, and the Nasdaq 1.2%.
- A positive weekend column from Barron's' Vito Racanelli might be helping Big Blue's cause. Racanelli: "Expectations and sentiment for the Armonk, N.Y.-based tech giant seem so low now that it’s time to take a second look ... Like a supertanker, IBM takes a while to change direction but there’s identifiable change coming."
- He takes issue with the image of IBM as a tech dinosaur that has missed out on the cloud services boom, and observes its cloud revenue grew 60% in 2014 to $7B. Worth noting: IBM's definition of "cloud revenue" also covers ancillary products/services. Its "cloud delivered as a service" revenue totaled $3B in 2014, and was on a $3.5B/year run rate at year's end.
- Racanelli also highlights IBM's 2.7% dividend yield, low multiples, investments in other growth markets, and passes on upbeat remarks from two fund managers, one of whom sees the company benefiting from a server upgrade cycle - the System z mainframe line was recently refreshed.
- Last week, Credit Suisse (a long-time bear) forecast a slight Q1 miss thanks to forex pressures, and also voiced concerns about order/deal softness, internal turmoil/underinvestment, and the margin impact of a shift towards cloud revenue streams.
- IBM is up 6% since providing mixed Q4 results and light 2015 guidance on Jan. 20.
Sun, Apr. 19, 5:35 PM
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