Weekly Tech Business Recap: Intel Earnings, Brazil Loves Facebook
Oracle’s (NASDAQ:ORCL) suit against Google (NASDAQ:GOOG) for allegedly violating its Java patents begins Monday, as jury selection commences. However, the stakes for Google are sharply lower as Oracle is seeking only $1 billion now, for damages arising from seven patents and copyright claims. The company originally sought $6.1 billion, but Google says that the figure should be below $100 million, mere pocket change.
Barron’s weekend kudos for disk drive producer Seagate Technology (NASDAQ:STX) sends shares up in early trading. The article noted that Seagate will gain from its strong market position, and ‘a management that’s kindly disposed toward shareholders’.
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A California state appeals court overturns a previous ruling, in which Boeing was to pay $604 million to Pendrell (NYSE:PCO), formerly ICO Global Communications Ltd., from a 2008 suit. Consequently, the latter company’s shares fall over the cliff.
Electronic Arts (NASDAQ:EA) has suffered lately from the weak position of U.S. console game sales, and also from the disappointing reception for its online role-playing game Star Wars: The Old Republic. The firm had made a huge investment in the game, and to compensate is reported to be planning the lay-offs of some 500 to 1,000 employees out of its workforce of 7,600, according to Startup Grind.
A March revenue fall induces ChipMOS Technologies’s (NASDAQ:IMOS) shares to do the same. Revenue was posted at $51 million, which was down 3.4% year-to-year. First quarter revenues were also lower at $148 million, which was down 1.9 percent from the same period, and missed consensus of $152 million.
It’s only a correction. It’s only a correction… Apple (NASDAQ:AAPL) shares are currently down 9 percent from their high last Tuesday. The company’s large-cap index peers Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) are up, so it’s not a sector thing. There are speculations afoot that the selloff might arise from NASDAQ 100′ (NASDAQ:QQQ) inclusion of Texas Instruments (NYSE:TXN), since the index funds would have to sell some Apple shares for rebalancing, but other large-caps would need to be sold as well. However, Apple is up 43 percent year-to-date, so perhaps a correction is timely.
Investing Insights: Apple Rumored to Reveal This New Device.
Yahoo’s (NASDAQ:YHOO) new commerce group, which emerged from the company’s recent restructuring, will be managed by Sam Shrauger, who is currently head of products at PayPal. Yahoo CEO Scott Thompson made the announcement of the appointment of his former PayPal colleague, who will now oversee fee-based Yahoo services such as real estate and job listings. Yahoo! Inc. Earnings Cheat Sheet: Beats Expectations>>
After some time, Amazon (NASDAQ:AMZN) completes its e-book distribution deals with several major Japanese publishing houses, according to The Asahi Shimbun. The hangups included disagreements with local publishers regarding the setting of retail prices, as the top impediment. However, Jeff Bezos could only project that a release date for Japanese Kindles could be set by the end of the current year.
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Tuesday’s bullish remarks by certain analysts might be saving Apple’s (NASDAQ:AAPL) apple, as its shares rebound nicely. Cowen’s Matthew Hoffman credits a ‘strong international demand’ as raising the sales of the iPhone, which in the second quarter could impressively beat consensus of 30.5 million, with sales of 4 to 6 million. But: Hoffman trims his third quarter estimate to 28 million, when he sees demand slumping ahead of yet another launch.
Executives of Zynga (NASDAQ:ZNGA) published remarks Tuesday that the company is ‘very interested in making acquisitions’ and shares plummeted, without any specifics being mentioned. It wasn’t a sector thing, as Zinga’s rivals had no such problems with their shares.
Intel (NASDAQ:INTC) releases its first quarter statement after hours on Tuesday. Earnings per share of 53 cents exceeds consensus by 3 cents, while flat year-to-year revenue of $12.91 billion beats projections by $70 million. Intel’s second quarter revenue is forecast as between $13.1 billion to $14.1 billion, contrasted to a consensus of $13.4. The 2012 guidance is unchanged as the first quarter gross margin posts at 65.1 percent, which beats current guidance of 65 percent, but the second quarter margin is expected to fall to 63 percent. Intel Earnings: What’s All the Fuss?>>
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Leadership in ‘green innovation’ in the electronics industry is the goal of Panasonic (NYSE:PC), as it creates a new Eco Solutions division in order to concentrate on “end-to-end energy solutions” in the U.S. and Canada. The company’s shares have declined 34.3 percent over the last 52 weeks.
A joint venture between Sony (NYSE:SNE) and AU Optronics (NYSE:AUO) could be in the offing, as the firms are in talks to that effect, with the production of organic light-emitting diode (OLED) TVs as the goal. Such a deal would create rivalry for Samsung (SSNLF.PK) and LG, but would be welcomed by OLED technology developer Universal Display (NASDAQ:PANL), which shares jumped on Tuesday following a good word from Goldman.
A new all-in-one keyboard and screen protector for third-generation iPads and the iPad 2 will be introduced by Logitech (NASDAQ:LOGI) later this month in the U.S. and in Europe. The price tag will be $99, and a GigaOm review calls it “A simple but elegant looking solution.
Shares of Western Digital (NYSE:WDC) move up in sympathy with competitor Seagate (NASDAQ:STX), whose fiscal third quarter earnings exploded for a second consecutive quarter due to pent-up demand and higher prices for hard drives. However, profits might slump with productions levels as Thailand return to normal following the floods there, and the window for easy returns for investors might soon be closing.
AT&T (NYSE:T) reacts to low-cost deals given to prepaid customers by rivals such as Sprint’s (NYSE:S) Boost Mobile and Leap’s (NASDAQ:LEAP) Cricket, by upping the amounts of data it offers in its own packages. Customers who use AT&T’s GoPhone service will now be enabled to double their data for the same price.
The most popular site in Brazil is now Facebook (FB), says Experian Hitwise. On Sunday, FB topped Google Brazil’s (NASDAQ:GOOG) claimed Web visits of 10.55 percent, by reaching 10.98 percent of Brazil’s total. Already in January, FB exceeded Google’s Orkut, becoming the country’s most popular social networking site, while also claiming in its S-1 that Brazilian monthly active users jumped 267 percent last year to 37 million.
Verizon Wireless (NYSE:VZ) plans to divest a parcel of radio frequencies worth potentially billions of dollars, if it gains government approval of its pending spectrum acquisition from cable companies, along with other deals, all which total around $4 billion. A BTIG analyst remarks that “This is a reflection that their approval process is not going well.”
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.
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.”
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.
Samsung’s (SSNLF.PK) first quarter results are due next week, but Edward Zabitsky of ACI Research thinks that the company sold more than 40 million smartphones during that period, which would easily top the 30 to 33 million estimates. In addition, Zabitsky thinks that ‘Samsung’s massive internal sourcing of components makes it the smartphone market’s cost leader,’ as he maintains his Sell rating and price target of $270 on Apple (NASDAQ:AAPL) against whom the former filed another patent suit, on Friday. A federal judge has ordered the two rivals to hold settlement talks, even as more suits come.
Shares of RealD (NYSE:RLD) jump following the company’s announcement that it has okayed a $50 million stock buyback program and has entered into a $125 million credit agreement, which is comprised of a $75 million revolving credit facility and a $50 million term loan facility.
Driven by impressive enterprise Windows sales, and increasing subscription license revenue for Office and server solutions, Microsoft’s (NASDAQ:MSFT) fiscal quarter report exceeded estimates, and shares are nearing new 52-week highs. Bank of America maintains a Buy, while it forecasts valuations remaining low, plus a huge upcoming product refresh to push shares even higher. However, Goldman keeps its Neutral as it expects shares to stay within their limits until the launch of Windows 8 in autumn.
Two Friday initial public offerings have yielded diverse reactions. Analytics-based security software supplier Proofpoint (PFPT) opened its 6.3 million $13 shares at $16.56, but they sold off down to $14.02 midday. The firm currently has a market cap of $13 million, posted revenue last year of $81.8 million (+26 percent year-to-year) with a net loss of $20.1 million. Meanwhile, Infoblox (BLOX), which supplies software for managing and automating enterprise networks, is doing better as its 7.5 million shares are so far retaining a healthy premium (38 percent at midday) of their opening price of $16, which will help support a market cap of $972 million. This company saw revenues of $80.7 million (up 31 percent year-to-year) over the 6 months ending Jan. 31, along with a net loss of $2.9 million.
Finland has been hit hard by its favorite company’s slide. Nokia’s (NYSE:NOK) local workforce, by the end of 2012, is projected to have fallen by 40 percent at the end of a 6-year period. Equally as bad, around 10 percent of the company’s shares are owned by households in the country, and the shares have plummeted 90 percent off their 2007 highs. Finns are hoping that this steep decline in their fortunes will be ameliorated by a success with Rovio’s Angry Birds.
Zynga (NASDAQ:ZNGA) shares have lost their temporary glow that followed the company’s purchase of Draw Something developer OMGPOP, falling nearly 30 percent after a $13.55 high. Disappointment from declining activity with some of its top games in the wake of a competitive Facebook market, could be driving the slump. AppData reports that Draw Something, CastleVille, FarmVille, and Hidden Chronicles have all seen daily user rates shrink in recent weeks, with Texas HoldEm Poker alone standing against the trend.
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