Weekly Tech Business Recap: Sony Sinking, RIM Expands to Middle East
In a downsizing move that might be a portent of a possible fourth consecutive annual loss, Sony (NYSE:SNE) is ready to slash about 6 percent of its workforce, some 10,000 positions. There is no word as to whether the cuts will be temporary.
Private exchanges value Facebook (FB) as high as $109 billion, which is higher than Amazon, eBay and Starbucks, whose shares trade on the Nasdaq 100. Chatter is that FB will soon join that exclusive club.
Leap Wireless (NASDAQ:LEAP) will add broadband spectrum in Phoenix and Texas to its territory, while T-Mobile USA (DTEGY.PK) will gain wavelengths in Alabama, Illinois, Missouri, Minnesota and Wisconsin, following a license-exchange agreement reached by the two companies. The new arrangements reinforce the firm’s efforts to deploy 4G.
Shares of First Solar (NASDAQ:FSLR) move down following discouraging margin estimates from BofA Merrill Lynch, which point to pressures on profits from costs and project pipeline growth. The analyst reports that current checks imply a cost per watt for leading silicon vendors below $0.65 by the middle of 2013.
Local.com (NASDAQ:LOCM) shares benefit from praise from Ladenburg, which sees the company as an emerging industry leader. Pronouncing the recent weakness of Local’s shares as related to Groupon’s (NASDAQ:GRPN) recent problems and not intrinsically fundamental, the analyst says that the current low share price is a buying opportunity.
Also gathering analytical praise and seeing its shares jump on Monday is Seagate Technology (NASDAQ:STX). Brean Murray thinks that recent share slumps in Seagate and Western Digital (NYSE:WDC) were the products of spot channel pricing which was lower but that fresh drive pricing remained strong. Craig-Hallum calls the current situation a buying opportunity, and describes worries over channel pricing concerns as ‘misguided’.
Was the Easter Sunday launch of Nokia’s (NYSE:NOK) Lumia 900 Windows Phone such a bad idea after all? The Phone has moved to the top of Amazon’s list of best selling cell phones, bettering the devices offered by Samsung, HTC, and Motorola.
Attributing the move to “solid order momentum and an improved outlook from our customers across the board”, Semiconductor Manufacturing International (NYSE:SMI) raises its first quarter forecast. The company now projects an increase in revenue of between 14 and 15 percent, which is up from a previous forecast of 7 to 9 percent, and it raises gross margin guidance from between 4 and 7 percent to 10 to 12 percent.
Shares of Dell (NASDAQ:DELL) move up early as its partnership with Lockheed Martin (NYSE:LMT) is announced. As part of the U.S. government’s largest information tech contract (five years, $7.5 billion), Dell would provide computers and support services, according to the general manager of Dell’s federal government business.
In an all-stock deal, Wizzard Software (AMEX:WZE) expects to buy Digital Entertainment International, which is a licensor and distributor of copyright-protected digital media content in China. The 2011 net income for Digital was $15.3 million, with revenues totaling $70.9 million; the price of the Wizzard acquisition was unreported.
A complication in Microsoft’s (NASDAQ:MSFT) $1 billion purchase of AOL’s (NYSE:AOL) patents is the huge break-up fee ($211 million, which is 20 percent of the deal price), if the transaction does not close ‘in a timely manner’. Apparently AOL was more concerned with the specific terms of the purchase than the price tag, amidst a “really competitive” auction process, says The Wall Street Journal. Meanwhile, AOL has a problem coming from activist investor Starboard; although the value of the group’s shares has jumped about 43 percent since last week, Starboard has written that the divestiture of the patents “does little to address our serious concerns” with AOL’s operating performance and losses in the display advertising business.
Yahoo (NASDAQ:YHOO) laid off 2,000 employees and rearranged its structure regarding three divisions. However, investors also want some closure around YHOO’s Asian assets and indication that the new CEO Scott Thompson possesses a clear strategy for moving forward.
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Shares of Computer Sciences (NYSE:CSC) move down as a forecast for its fiscal fourth quarter revenue of $4.1 billion and earnings per share of $0.19 to $0.21 disappoints investors. Revenue is approximately equivalent to the $4.11 billion consensus, but earnings sink far below its $0.97 Street projection, for which the still-unsettled services deal with the U.K.’s National Health Service is given the blame. However, CSC’s free cash flow is expected to amount to between $225 million and $275 million, and its new business awards $6 billion.
Four firms begin coverage on Yelp (NASDAQ:YELP) with neutral stances, although shares are mostly unaffected by the ratings. The company’s high valuation is the constant criterion for Citi, Oppenheimer, Goldman, and Jefferies, which give Yelp kudos for its dominant position in the local reviews market, and giant advertiser base.
In a negative twist to Wednesday’s hubbub over a possible sale of Travelzoo (NASDAQ:TZOO), Benchmark’s Daniel Kurnos doubts out loud the idea that a public equity firm wouldn’t pay more than $26 a share, and also recommends that investors should sell if shares go above $27. Kurnos’ comments dampened the takeover rumors at midday.
American Superconductor (NASDAQ:AMSC) shares get a break from Maxim Group, and pop on Wednesday. Reasons given for the analyst’s optimism include its expectation that the unpredictable voltage changes produced by wind and solar plants will boost demand for AMSC’s grid-management solutions, and also that the company’s lawsuit against ex-customer Sinovel will soon be settled, which could bring a “surprising lifeline”. Meanwhile, AMSC appealed a dismissal of another of its Sinovel suits to China’s supreme court, some few days ago.
Delaying the release of its fourth quarter results by two and one half weeks, sends LDK Solar (NYSE:LDK) shares up. The firm says that it needs extra time to finalize impairment provisions and certain inventory writedowns, and will post the report on April 30 rather than on the 12th.
The announcement of a solution to low-cost LED streetlighting takes shares of Cree (NASDAQ:CREE) higher for the second straight day. The shares are behaving oppositely from notes from Raymond James which say that investors are overly bearish about the company’s operating leverage, and also doubts that Cree’s gross margin (35.3 percent in its fiscal second quarter), will ever return to the mid-40s. Otherwise, Raymond James expects the firm to post fiscal third quarter results on April 17 that are roughly in-line with guidance.
To make up for its declining sales in the U.S., Research In Motion (NASDAQ:RIMM) plans to open stores spanning the Middle East, and is nearing completion of a lease on a flagship store in Dubai. An expected expansion into Africa will probably be next.
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A big cloud win for Microsoft (NASDAQ:MSFT), as the All India Council for Technical Education signs an agreement to employ the company’s Live@edu online education platform for use in more than 10 thousand technical colleges and institutes in that country. This will be MSFT’s largest cloud account to date.
Seemingly in response to competitor Avid Technology’s (NASDAQ:AVID) first quarter warning that was issued Wednesday, Adobe (NASDAQ:ADBE) introduces a major upgrade to its Premiere Pro video editing solution, which includes a new UI and playback engine, support for higher resolutions, and expanded multicam editing capabilities. This upgrade is a part of Avid’s much-anticipated CS6 suite.
Angry Birds‘ invasion of China moves full steam ahead, as its Finnish maker Rovio confers with Renren (NYSE:RENN), Baidu (NASDAQ:BIDU), and Sohu.com (NASDAQ:SOHU), which are Chinese companies it has retained to assist in exploring strategic ways in which projected game downloads there can be expedited. It’s estimated that more than 500 million Internet users in China comprise the market for what is called “explosive” growth in game downloads, and Rovio seeks to boost its advertising and merchandising within that sector.
Apple (NASDAQ:AAPL) is not taking the Justice Department’s antitrust suit lying down, as its spokesperson Tom Neumayr brands the allegations as “simply not true”. On the contrary, Neumayr contends that Apple’s arrival upon the e-book scene “fostered innovation and competition, breaking Amazon’s (NASDAQ:AMZN) monopolistic grip on the publishing industry.”
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Facebook’s (FB) purchase of Instagram seems to be humming right along, as the latter says that it has added 10 million users during the last 10 days, which swells its total base to 40 million. Instagram’s Android intro and the free press it received when it was acquired didn’t hurt much either.
Server-based application platforms supplier Network Engines (NASDAQ:NEI) reports that its largest customer, EMC, will move away from certain of its products, which could bring a loss of around $21 million by this year’s end. Shares drop accordingly.
Thursday’s strategy meeting at Sony (NYSE:SNE) apparently disappointed most everyone, including investors. Hopes were that Sony’s early-week warning of a larger fiscal year loss than had been forecast, would be ameliorated by the contents of the meeting, but Credit Suisse reports that it “did not contain any surprises”, and that “explanations regarding the timeframe for execution and assessment of proposed initiatives fell somewhat short.”.
Verizon (NYSE:VZ) will start merchandizing the Samsung Galaxy Tab 2 7.0 tablet for only $49.99 with a new mobile broadband plan that will begin on April 22. The tablet ordinarily retails for $499.99 and Verizon normally sells it for $229.99 with a new two-year contract, thus offering a $180 markdown.
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