Category Archives: oud

Cisco Pressured By Enterprise Trends Ahead Of Fiscal Q3 Earnings

Negative trends in the enterprise market — large companies and government agencies — are lowering expectations ahead of Cisco Systems ‘ ( CSCO ) fiscal Q3 earnings, due out Wednesday after the market close. Many large companies are outsourcing business computing workloads to cloud computing service providers such as Amazon Web Services, part of Amazon.com ( AMZN ), lessening their need for the routers, switches and other networking gear sold by Cisco and others. Analysts polled by Thomson Reuters estimate Cisco earnings minus items will rise 2% to 55 cents, though they see revenue falling 1% to $11.97 billion. “We see three major issues into this earnings release, including weak IT data points, all signaling industrywide IT spending weakness, less visibility around service provider spending, and global macro exposure,” Kulbinder Garcha, a Credit Suisse analyst, said in a research report. “Year to date, we have seen weak IT spending indications from large bellwethers including IBM ( IBM ), EMC ( EMC ), Juniper ( JNPR ), Brocade ( BRCD ) and SAP ( SAP ),” added Garcha, who has an underperform rating on the stock. JPMorgan analyst Rod Hall, in a research report, cited negative enterprise market commentary from Intel ( INTC ), Oracle ( ORCL ) and Hewlett Packard Enterprise ( HPE ). Reports of slower tech spending was a factor in the stock market’s plunge early in the year. With many tech companies struggling to meet expectations recently, an in-line quarter for Cisco might be good enough to move shares higher, said Citigroup analyst Jim Suva. RW Baird’s Jayson Noland was another analyst citing slower spending of late. “Our partner survey results indicate a softer-than-expected April quarter, with improved prospects for growth for the remainder of calendar 2016,” Noland wrote in a research note. Cisco stock, up 1% near 27 in early trading in the stock market today , is about even in 2016. Cisco stock is up 20% since touching a two-year low in early February.

Salesforce Billings In Focus Ahead of Q1, Buzz Over AWS Deal

Amid buzz over its deal with Amazon Web Services, Salesforce.com ( CRM ) reports fiscal Q1 earnings after the close Wednesday, with profit minus items expected to rise 46% to 23 cents per share and revenue growing 25% to $1.89 billion. Some analysts are cautious after Salesforce’s Q4 beat, thinking some deals might have closed a quarter earlier than expected, lifting Q4 but hurting Q1. “For Q1, we forecast a year-over-year billings increase of 13%,” said Barclay’s analyst Raimo Lenschow in a research report. “While optically low, Salesforce is seeing more renewals shift into Q4, where billings grew 28%, with some of that coming out of Q1.” Salesforce last week said it would offer a new “Internet of Things” service using AWS, the cloud computing business of Amazon.com ( AMZN ). Salesforce’s service, expected to launch this fall,  collects data from Web-connected devices. AWS is the No. 1 cloud services provider. Salesforce has an IBD Composite Rating of 95 out of a possible 99, putting it among the top 5% of all stocks in such key metrics as sales and revenue growth. But its Computer-Software Enterprise group ranks just No. 115 out of 197 groups tracked by IBD. Salesforce stock, up a fraction near 77 in early trading in the stock market today , is down 1.5% in 2016, but it’s up nearly 35% since touching a 19-month low in February, during the broad market sell-off. The growth trajectory of the software maker’s Marketing Cloud platform should be one topic on the earnings call. “After a monster Q4, first quarter fiscal 2017 optics will look worse,” said Citigroup analyst Walter Pritchard in a research report. Citigroup “inputs suggest strong business activity for Salesforce in Q1, but in context of (its) strong Q4, which likely pulled in some Q1 business,” wrote Pritchard. “We forecast billings +14% to $1.43 billion, at the high end of guidance.” For the June quarter, analysts polled by Thomson Reuters estimate EPS growth of 30% and sales to rise 21%.

Pfizer Acquiring Anacor For Potential Blockbuster Eczema Drug

Big pharma Pfizer ( PFE ) said Monday that it’s acquiring small biopharma Anacor Pharmaceuticals ( ANAC ) for $4.5 billion in cash, sending the latter’s stock up more than 50% in early Monday trading. Pfizer agreed to pay $99.26 a share for Anacor, a 55% premium over Friday’s closing price. The total transaction value is $5.2 billion, assuming the conversion of Anacor’s outstanding convertible notes, Pfizer said. Anacor’s sole commercial product is a toenail-fungus ointment called Kerydin, distributed by Novartis ( NVS ), but Pfizer’s press release on the merger played up Anacor’s eczema treatment crisaborole, which is under FDA review due for completion by Jan. 7. “We believe the acquisition of Anacor represents an attractive opportunity to address a significant unmet medical need for a large patient population with mild-to-moderate atopic dermatitis, which currently has few safe topical treatments available,” said Albert Bourla, head of Pfizer’s innovative businesses, in the release. Pfizer estimates crisaborole could reach peak annual sales of $2 billion. The buyout adds another asset to Pfizer’s innovate drug business, which it is widely expected to separate from its established-products business sometime in the next few years. Pfizer has said that it will make a decision on whether to split by year’s end. Pfizer already has a significant presence in inflammation and immunology, including blockbuster rheumatoid arthritis treatments Enbrel (sold in partnership with Amgen ( AMGN )) and Xeljanz.  Regeneron Pharmaceuticals ( REGN ) recently reported strong late-stage data for its injectable drug dupilumab in atopic dermatitis, so while the market is currently underserved, it may soon become more competitive. Anacor stock was up 54.7% in opens trades  on the stock market today , near 99. Pfizer stock was down a fraction, near 33. Regeneron stock was up almost 3%.