Tue, Jan. 27, 9:10 AM
Tue, Jan. 27, 7:43 AM
- "After a lengthy 16-month period of multiple expansion for Microsoft’s (NASDAQ:MSFT) stock, we see a tougher transition ahead, and move to the sidelines," says Nomura's Rick Sherlund, cutting to Neutral with the price target lowered to $50 from $56.
- JPMorgan downgrades to Neutral with price target cut to $47 from $53.
- Never a big fan in the first place, Citi cuts to Sell from Neutral.
- MKM Parters downgrades to Neutral.
- Shares -7.8% premarket
- Previous earnings coverage
Mon, Jan. 26, 6:42 PM
- Microsoft (NASDAQ:MSFT) guides (.ppt) for its reporting units to collectively have FQ3 revenue of $20.6B-$21.4B, below a $23.8B total revenue consensus. Corporate/other revenue, which totaled $314M in FQ2, isn't included in the guidance. Forex is expected to hurt revenue growth by ~4%.
- Full-year operating expense guidance has been cut by $1B to $33.2B-$33.6B. Another $200M worth of restructuring charges are expected over the rest of FY15 (ends June '15), yielding total charges of $1.4B. FY15 tax rate guidance is at 22%-24%; the FQ2 tax rate was 25%.
- In its earnings slides (.ppt), Microsoft states its unearned revenue balance was $21.2B at the end of FQ2, +9% Y/Y but slightly below historical seasonality due to forex and the recognition of $300M worth of prior period deferrals. The contracted but not billed balance was above $24B.
- Office 365 consumer subs rose by 30% Q/Q to 9.2M, and first-party game revenue (boosted by the Mojang acquisition) rose 79%. Though Microsoft is in the midst of paring back its feature phone ops 39.7M non-Lumia phones were still sold (to go with 10.5M Lumias).
- $1.5B was spent on capex during the quarter. Capex is expected to rise Q/Q in FQ3 due to cloud investments. Excluding the Nokia deal, opex fell 8% Y/Y (+1% otherwise).
- MSFT -4.3% AH to $44.99. FQ2 results, details.
Mon, Jan. 26, 4:42 PM
- Microsoft's (NASDAQ:MSFT) Window OEM Pro and non-Pro revenue both fell 13% Y/Y in FQ2. The Pro slowdown is blamed on slowing business PC sales, academic discounts, and "mix returning to pre-Windows XP end of support levels." The non-Pro decline is due to unit growth coming from cheaper hardware that Microsoft is providing discounted license fees for. Commercial Windows volume license revenue rose 3%.
- Total Commercial revenue rose 5% Y/Y in FQ2 to $13.3B, helping drive the revenue beat. Devices & Consumer revenue (lifted by the Nokia deal) rose 8% to $12.9B. Commercial reporting segments accounted for over 2/3 of FQ2 gross profit of $16.3B.
- Segment performance: Commercial licensing revenue -2% Y/Y to $10.7B (hurt by the cloud shift). Commercial other +46% to $2.6B (boosted by cloud growth). Device/consumer licensing -25% to $4.2B (Windows and Android royalty declines). Computing/gaming hardware -11% to $4B (Xbox One launched a year ago). Phone hardware revenue was $2.3B, above guidance of $2B-$2.2B but down from FQ1's $2.6B (feature phone decline).
- Highlights: 1) Commercial cloud revenue (Office 365, Azure, Dynamics online) +114% Y/Y, and now on a $5.5B/year run rate 2) 10.5M Lumias and 6.6M Xboxes were sold. Surface revenue +24% to $1.1B. 3) Server products/services +9%, with double-digit SQL Server and System Center growth. 4) Search ad revenue +23%; Bing's U.S. share is at 19.7% (per comScore).
- With Nokia boosting spending levels in spite of last year's job cuts, R&D spend rose 6% to $2.9B, and sales/marketing 7% to $4.3B. G&A, however, fell 8% to $1.1B.
- $2.1B was spent on buybacks. Microsoft plans to complete its existing $40B buyback program (launched in Sep. 2013) by the end of 2016.
- Microsoft is at $45.59 in AH trading. Guidance will be provided on the CC.
- FQ2 results, PR
Mon, Jan. 26, 4:12 PM
Sun, Jan. 25, 5:35 PM
Fri, Jan. 23, 6:19 PM
- BOX closed up 65.4% from its $14 IPO price, leaving it with a $2.77B market cap (15% above the valuation for its last funding round). 41.4M shares changed hands, or 3.3x the 12.5M sold through its IPO (before factoring the overallotment option).
- Co-founder/CEO Aaron Levie, best known to some for his Twitter one-liners, made the rounds today, arguing more than once his company's offerings are well-differentiated from the aggressively-priced cloud storage/file-sharing services of tech giants.
- Levie during a talk with Barron's: "What we’ve built really is software to help manage and collaborate and share throughout the business ... ultimately our customers buy our solution because we have built an amazing product to manage all that content. We get compared to more storage-oriented products, but there’s more to it."
- He called Microsoft (NASDAQ:MSFT), whose SharePoint collaboration platform is widely deployed and which is now offering unlimited OneDrive storage to Office 365 subs, Box's biggest competitor, but also one Box can stand out relative to. "I think our real differentiation is we do all the enterprise-oriented delivery, the industry compliance for FINRA, the security, and all that — but the really unique part is we deliver that in a consumer-grade experience, with open APIs, and that works across platforms."
- Levie suggests to Forbes Box will focus going forward on giving clients more tools for using/interpreting data, pointing to its recent acquisition of medical image-sharing platform MedXT as an example. He also notes Box is investing in industry-specific machine learning tools that analyze content to organize, surface, and recommend documents.
- Prior Box coverage
- Prospectus, IPO analysis
Fri, Jan. 23, 1:45 PM
- Revolution Analytics provides software (both free and enterprise versions) for using the open-source R statistical data analysis/modeling programming language. The company notes R is used by millions of statisticians and data scientists, and has "become the most popular language for data science and an essential tool for Finance and analytics-driven companies such as Google, Facebook, and LinkedIn."
- Microsoft (MSFT +0.2%) says it's acquiring Revolution to "help more companies use the power of R and data science to unlock big data insights with advanced analytics." Terms are undisclosed.
- The software giant observes Revolution's software enables the use of R-based analytics across giant datasets (including ones leveraging the popular Hadoop big data framework), and that its customers include major banks, pharma companies, manufacturing firms, and tech companies. It adds Revolution's offerings will be supported via Azure's public cloud services, as well as hybrid clouds and traditional on-premise deployments.
- The deal comes on the heels of Microsoft's purchase of legal/compliance text analysis software firm Equivio, whose technology will be integrated with Office. Microsoft has also launched an Azure predictive analytics service and an analytics hardware appliance (sold by OEM partners) since Satya Nadella became CEO.
Wed, Jan. 21, 2:35 PM
- Microsoft (MSFT -1.6%) has followed up on its Windows 10 reveal by unveiling new hardware. Getting the most attention is HoloLens, a headset declared to be "the most advanced holographic computer the world has ever seen."
- The device contains a see-through display that allows users to see holograms in their real-world environments, and doesn't require a connection to a PC or phone. Microsoft has christened the augmented reality platform underpinning it Windows Holographic.
- HoloLens is expected to launch around the same time as Windows 10. LCoS microdisplay vendor Himax (HIMX +5.4%), previously rumored to be working with Microsoft, has spiked higher.
- Also unveiled: Surface Hub, an 84" 4K touch display sporting dual cameras and sensors, running Windows 10, and providing quick access to Skype video calls and a digital whiteboard. The product, which presumably won't be cheap, appears to be aimed at conference rooms.
- As rumored, Microsoft's Spartan browser sports a streamlined UI, Cortana integration, a note-taking/annotating stylus mode, and a new rendering engine that delivers improved performance. It also has a Reading Mode that formats Web pages to resemble e-books.
- A slew of new universal apps (they feature similar PC and phone/tablet UIs) have been shown off. OneDrive, a photos app, and a People app are among the covered products. New Office apps for phones and small tablets have been previewed, and so has the ability to run universal Windows apps on the Xbox One.
- Earlier: Microsoft details Windows 10, promises free upgrades
Wed, Jan. 21, 12:47 PM
- "We think of Windows as a service," says Microsoft (MSFT -0.9%) OS chief Terry Myerson as he reveals Windows 10 in detail at a Redmond event. Microsoft has already suggested it will rely more on services to monetize Windows as it cuts or eliminates licensing fees for touch devices and cheaper PCs. (live blogs: The Verge, Engadget)
- To drive home his claim, Myerson states Windows 10 will be provided as a free upgrade for Windows 7 and 8.1 users during its first year of availability. As one would expect, Windows Phone users will also get a free upgrade for the OS, which aims to provide an integrated developer environment for PCs, phones, and tablets (albeit with different UIs).
- More details have been given about Windows 10's revamped Start Menu: It can work in full-screen mode, and its tiles support live animations. Other new features shown off include an Action Center providing quick access to settings and notifications, new touch gestures, and Cortana integration.
- After most businesses passed on deploying Windows 8, Microsoft reiterates Windows 10 will be very enterprise-friendly. The company showed off a variety of business and productivity-focused features at last September's Windows 10 preview event.
- COO Kevin Turner has said Windows 10 will see a commercial launch in late summer or early fall. A new browser will reportedly accompany it.
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
Fri, Jan. 9, 12:42 PM
- Microsoft's (MSFT -0.5%) Spartan browser (arrives with Windows 10) will contain a slew of major features not found in rival products, The Verge reports. It adds the the browser, meant to succeed Internet Explorer, will also have a common UI across PCs, phones, and tablets.
- Among Spartan's most noteworthy features: The integration of Microsoft's Cortana virtual assistant to "surface information on flights, hotel bookings, package tracking, and other data within the traditional address bar," based on a user's browsing activity. Also, Cortana search is said to replace "every instance of the existing Bing methods in Internet Explorer."
- Other features include the ability to group related tabs, and to annotate Web pages with a stylus and then share them with friends/co-workers. ZDNet reports Spartan will also support third-party extensions a la Firefox and Chrome. BGR reports the browser will even be able to run 3rd-party browsers "with the push of a button."
- IE will still be included with Windows 10, but only for legacy compatibility purposes. The Verge: "Spartan is the main browser in Windows 10, and most users will be accessing the web using it." Given recent Microsoft product launches, iOS/Android support is plausible.
- Spartan will enter a browser market in which IE's global PC browsing share has fallen below 25% (per StatCounter). Microsoft's browser share has a direct effect on traffic for Bing/Cortana, MSN, and other Web services.
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. 26, 2014, 7:33 AM
- Sony’s (NYSE:SNE) PlayStation store and Microsoft’s (NASDAQ:MSFT) Xbox Live network faced outages on Christmas Day, with disruption to the systems continuing into Friday.
- Some users were still having trouble logging in this morning, although Xbox said that its "core services" had returned to normal at 5:30 a.m. EST.
- An online group called Lizard Squad, a hacker collective that has previously disrupted gaming systems, has claimed responsibility for the attack.
Dec. 19, 2014, 1:39 PM
- VirnetX (NYSEMKT:VHC) and Microsoft (NASDAQ:MSFT) have ended their legal battle.
- Microsoft has "agreed to pay $23 million to VirnetX to settle the patent dispute and expand Microsoft's license," and both parties have agreed to end current litigation and patent review proceedings between them. All other deal terms are undisclosed.
- Back in 2010, Microsoft agreed to pay VirnetX $200M in a VPN patent settlement. VirnetX's shares remain halted for now.
- Update (1:45PM ET): Shares have resumed trading, and are up 20.7%.
Dec. 18, 2014, 2:04 PM
- With the help of stronger-than-expected hardware sales, Oracle (ORCL +9.2%) beat FQ2 estimates in spite of a 400 bps forex headwind (twice what was originally expected). FQ3 guidance was conservative after taking forex pressures into account.
- The numbers have been good enough for Oracle to surge to new highs and receive a slew of target hikes, and to lead many enterprise tech names to outperform amid a big market rally. The Nasdaq is up 1.9%.
- Microsoft (MSFT +3.2%), Cisco (CSCO +2.3%), EMC (EMC +3.7%), VMware (VMW +5.1%), and beaten-down IBM (IBM +2.8%) are among the enterprise tech names outperforming today. Others: SPLK +4.6%. CA +3.5%. RHT +3.4%. VRNS +6.3%. PCTY +5.8%. JIVE +4.6%. VMEM +5.2%. SAAS +4.7%. BRCD +3.8%.
- Oracle's healthy cloud software numbers are drawing attention: While traditional software license revenue fell 4% Y/Y, its SaaS/PaaS revenue rose 41%. SaaS/PaaS bookings totaled $170M, and are expected to be "well over" $1B in FY16 (ends May '16). Fusion cloud app bookings rose over 100%.
- On the CC (transcript), Oracle performed its customary trash-talking of cloud app rivals. "We are clearly growing faster than Salesforce (CRM +4%) and were more than three times the size of Workday (WDAY +3.2%)." Both firms are posting solid gains.
- Oracle's numbers come as Bloomberg reports the Chinese government is looking to "purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." IBM, Cisco, and other U.S. firms have already seen their Chinese sales fall sharply following last year's NSA spying uproar.
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