Wed, Apr. 15, 2:32 PM
- InfiniBand and Ethernet adapter/switch/controller vendor Mellanox (MLNX +4.8%) is up strongly after Intel reported 19% Y/Y server CPU division growth. Fibre Channel and Ethernet adapter/switch/controller vendor QLogic (QLGC +2.4%) is also having a good day.
- On its CC (transcript), Intel (NASDAQ:INTC) stated its Grantley Xeon E5 CPUs (launched last September, used in HPC deployments featuring Mellanox hardware) now account for over half of its 2-socket server CPU volume. Not surprisingly, the company also reported seeing strong cloud and telco server CPU demand.
- Mellanox reports on April 21. QLogic hasn't set a calendar Q1 earnings date yet.
Sat, Mar. 7, 3:26 PM
- With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
- Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
- IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
- HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
- Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
- EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
- Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
- Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
- Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
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.
Fri, Jan. 30, 10:22 AM
- QLogic (QLGC +4.8%) has jumped to new 52-week highs after beating FQ3 estimates and issuing strong FQ4 guidance on its CC: Revenue of $132M-$138M and EPS of $0.24-$0.28 vs. a consensus of $133.1M and $0.25 (transcript).
- Archrival Emulex (ELX -8.1%), however, is off sharply after providing in-line FQ3 guidance - revenue of $97M-$103M and EPS of $0.11-$0.15 vs. a consensus of $100.1M and $0.13 - to go with an FQ2 beat.
- QLogic CEO Prasad Rmapalli asserts his company has been gaining share in the Fibre Channel adapter card market (59% estimated revenue share over the first three quarters of calendar 2014), and has seen "significant share gains" in the high-end 16G Gen 5 segment.
- He added strong Q/Q growth was seen for QLogic's 10G Ethernet adapters and ASICs - the company bought Broadcom's Ethernet controller business a year ago - aided by major design wins for servers running Intel's recently-launched Grantley Xeon CPUs. 25G Ethernet adoption is forecast to be "a disruptive force in the Ethernet ecosystem."
- Likely hurting Emulex: CFO Kyle Wescoat stated on the CC (transcript) "sequential [FQ3] growth in our Ethernet products is offset by Fibre Channel seasonality that could be more pronounced than usual, given the stronger-than-expected December quarter performance."
- A BMO analyst pressed Emulex about its 10G Ethernet share during the Grantley server cycle, and an RBC analyst asked if IBM's recent woes are hurting the company. CEO Jeff Benck declared Emulex is confident it can gain share during the Grantley cycle, and noted a weak UNIX server market (where IBM is a major player) can have an impact.
Fri, Jan. 30, 9:12 AM| 4 Comments
Thu, Jan. 29, 4:37 PM
Wed, Jan. 28, 5:35 PM
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Tue, Jan. 13, 10:33 AM
- Emulex (NYSE:ELX) now expects FQ2 revenue of $110M-$111M and EPS of $0.23-$0.24, above prior guidance of $102M-$108M and $0.14-$0.18; consensus is at $105.7M and $0.16.
- CEO Jeff Benck: "Emulex finished calendar year 2014 in a much stronger position led by a resilient Fibre Channel sector and benefiting from solid execution and customers' embrace of our current product cycles." The company sees a "broad slate of OEM qualifications of our 10Gb Ethernet products designed for next generation x86 servers [ramping] in the market over the next year."
- Full FQ2 results arrive on Jan. 29. Improving server demand appears to have provided a lift.
- Archrival QLogic (QLGC +5.7%) and InfiniBand/Ethernet adapter and switch vendor Mellanox (MLNX +3%) are also outperforming, as is Fibre Channel switch leader Brocade (BRCD +3.2%). The Nasdaq is up 1.7%.
Dec. 30, 2014, 8:53 AM
- "We believe QLGC is well-positioned to return to sustainable growth driven by new Ethernet connectivity products, with new storage architectures allowing Fibre Channel connectivity to grow as well," writes D.A. Davidson's Mark Kelleher, launching coverage with a Buy rating.
- Kelleher: "Based on our assumption of a 10% growth rate, a P/E/G ratio of 1.2 (a P/E multiple of 12x) and our calendar 2016 EPS estimate of $1.14, and adding $3.14 per share in cash, we calculate a 12-18 month price target for QLGC of $17."
- An improving server market has helped QLogic's Fibre Channel ops stabilize. The recent acquisition of Broadcom's Ethernet controller unit has provided a top-line boost, but also pressured margins.
- Morgan Stanley upgraded QLogic less than two weeks ago.
Dec. 17, 2014, 11:44 AM
- Five months after upgrading QLogic (NASDAQ:QLGC) to Equalweight, Morgan Stanley has upped its rating for the adapter card/switch vendor to Overweight. Archrival Emulex (NYSE:ELX) is catching a sympathy bid.
- MS also hiked its server industry growth forecast today, thanks in part to a belief Microsoft's ending of Windows Server 2003 support (set for July 2015) will drive strong upgrade activity. IDC, which recently estimated server industry revenue rose 4.8% Y/Y in Q3, holds a similar view.
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
Oct. 17, 2014, 12:52 PM
Oct. 16, 2014, 5:37 PM
Oct. 16, 2014, 5:07 PM
- QLogic (NASDAQ:QLGC) has launched a $100M buyback, good for repurchasing 11% of shares at current levels.
- FQ2 results beat estimates thanks to both 5%+ Q/Q growth for QLogic's Fibre Channel ops (struggling in recent quarters), and a $5M increase for an Ethernet business expanded earlier this year through the purchase of Broadcom's Ethernet controller ops.
- Altogether, sales of "advanced connectivity platforms" (server/storage adapters and chips) rose 22% Y/Y, an improvement from FQ1's 14% growth and offsetting an ongoing decline in legacy switch products.
- Emulex (NYSE:ELX) could follow QLogic higher. Its shares jumped yesterday following an FQ1 guidance hike.
- FQ2 results, PR
Oct. 16, 2014, 4:32 PM
Oct. 15, 2014, 5:35 PM
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