Tech Business Roundup: Verizon Wins Over Investors, Apple and Sprint Fade
Verizon’s (NYSE:VZ) impressive first quarter statement sends its shares higher Thursday. Earnings per share were up 16 percent year-to-year, while cash flow from operations soared from $922 million to $6 billion. Revenues from wireless all were up, including 7.7 percent from service, 8.9 percent from retail service and 21.1 percent from data, while a net of 734,000 retail customers were added. Wireline adds saw a net of 193,000 FiOS Internet and 104,000 broadband connections since the fourth quarter. The earnings conference call revealed that Verizon sold 3.2 million iPhones contrasted with 4.2 million in the previous period, and 2.1 million LTE smartphones. The iPhone sales slump was expected, but Apple (NASDAQ:AAPL) investors are probably not happy about it. Finally, VZ says that it is leaving the calling card and pay phone businesses, and will reveal shared data plans by mid-summer.
Don’t Miss: Apple Inc. Second Quarter Earnings Sneak Peek.
Apple (NASDAQ:AAPL) shares dropped -1.3% after Canaccord’s Mike Walkley, a long-time bull, slashes his FQ3 iPhone sales estimate to 29.34M from 33.58M, and his FQ4 estimate to a mere 26.11M from 33.58M. Walkley, who is nonetheless raising his PT to $740, says recent checks indicate iPhone sales have “modestly declined in certain developed markets,” and expects this trend to continue due to new Android launches, Verizon’s LTE promos, and iPhone 5 anticipation. FQ2 results are due on Tuesday. Apple Inc. Second Quarter Earnings Sneak Peek>>
Shares of Sprint (NYSE:S) plummet following an announcement from the New York Attorney General that he has filed a lawsuit against the carrier that could cost it $300 million or more. The suit alleges that Sprint did not collect and pay some $100 million in state and local taxes over seven years, so as to make their service more competitive. Moreover, fears are that other states could follow New York’s move. In its defense the company responds that, “We have collected and paid every penny of sales tax owed to New York.”
Don’t Miss: Sprint Accused of Tax Dodging in New York.
A top initial public offering so far this year has to be that of machine data analysis software supplier Splunk (SPLK). The opening share price was $17, but later in the day they were trading at $32.13, up 89 percent, and the $17 price itself was raised twice. Splunk’s high valuation is impressing traders and investors alike, as the company has a market cap of $2.97 billion, representing trading at 24.6 times its fiscal year 2012 revenue of $120.9 million (up 82 percent year-to-year). To add a frame of reference, rivals Tibco (NASDAQ:TIBX) trades at 5.8 times sales, Informatica (NASDAQ:INFA) 7 times sales, and Qlik Technologies (NASDAQ:QLIK) at 8.
Facebook (FB) is on a shopping spree, leading up to its initial public offering. The firm bought patents from IBM, and bid for AOL’s patent portfolio, although Microsoft’s $1.06 billion won out. Meanwhile, Instagram negotiations affirm that Mark Zuckerberg is in complete control as to how Facebook spends its money.