Tag Archives: amzn

Apple Earnings Quality Better Due To GAAP-Only Reporting, Says UBS

Apple ( AAPL ), IBM, and Cisco Systems ( CSCO ) have higher earnings quality than some 3D printer makers, based on their GAAP vs. non-GAAP accounting, says UBS. Tech companies, and some others, typically report both non-GAAP  earnings — which exclude stock options grants to employees and often other items — and earnings under GAAP (generally accepted accounted principles), which include everything. Financial analysts typically provide non-GAAP estimates for quarterly results, and those numbers frequently get more play in quarterly earnings stories in the business press. “Non-tech investors sometimes recoil at the liberal non-GAAP reporting by tech companies and its acceptance by investors,” noted UBS analyst Steven Milunovich in the research report. Milunovich says a large difference between GAAP and non-GAAP earnings should be taken into account in assessing a stock’s price-to-earnings, or P/E, ratios. “Apple’s financial statements embody the same user-friendly nature as its products in only reporting GAAP numbers,” he wrote. Milunovich also said the GAAP to non-GAAP EPS difference for  IBM ( IBM ) is just “modest,” and is a “relatively conservative” 12% for Cisco. IBM is slated to report its Q1 earnings on April 18, and Apple on April 25. IBM stock fell 0.3% to 152.07 on the stock market today. Apple rose 1% to 111.12, closing just below Apple’s 200-day line after the stock topped that key level intraday for the first time in 2016. Milunovich is the second tech analyst in a week to take a close look at GAAP vs. non-GAAP earnings. Citigroup analyst Mark May last week slashed his price target on LinkedIn ( LNKD )  and also lowered its targets on shares of  Amazon.com ( AMZN ),  Alphabet ( GOOGL ),  Facebook ( FB ) and  Netflix ( NFLX ) in a report that examined the earnings dilution from stock compensation grants . Milunovich says restructuring charges also impact GAAP vs. non-GAAP accounting. The UBS analysts flagged the leading makers of 3D printers. He said that in 2015 “both Stratasys ( SSYS ) and 3D Systems ( DDD ) had large impairments, especially Stratasys’ write-off of MakerBot, creating the biggest gaps (in GAAP vs. non-GAAP accounting)” among the companies he looked at. Storage vendors including Nimble ( NMBL ), NetApp ( NTAP ) and EMC ( EMC ) also had relatively large differences in GAAP vs. non-GAAP earnings, he wrote.

New Amazon Payments Unit Ups Ante Vs. Rivals PayPal, Square

Mighty e-commerce firm Amazon.com ( AMZN ) is launching its payments service on several platforms that cater to small and midsize businesses, the company said Monday. Called the Global Partner Program , the new business will allow firms that build e-tail storefronts on the platforms Amazon is partnering with to integrate the “Pay With Amazon” feature. Pay With Amazon aims to reduce any friction when checking out online. By logging in with Amazon, shoppers don’t have to enter a 16-digit credit card number and other billing details. Rival payments firms such as  PayPal ( PYPL ) have been working on reducing friction at checkout for years. Partners in Amazon’s Global Partner Program include Japan-based FutureShop, France-based PrestaShop and Canada-based  Shopify ( SHOP ). Amazon stock fell nearly 1%, to 593.19, on the stock market today . The company has an IBD Composite Rating of 77, where 99 is the highest. Amazon stock is forming a cup base, with a buy point of 696.54, after touching a seven-month low of 474 in early February. The new payments program “could help Amazon reach a much larger audience of merchants,” Colin Sebastian, an analyst with Robert W. Baird, told IBD via email. “However, I believe there are still channel conflicts that may exist with allowing Amazon to see transaction data. In fact, Shopify and others already have relationships with payment platforms such as PayPal and Stripe. As such, it may still be an uphill battle for Amazon payments to gain a lot more traction with merchants. “That said, Amazon does have a lot of customers who may wish to use Amazon payments, and the plus side for merchants would be higher transaction volumes.” Wedbush analyst Gil Luria says Amazon has struggled for years to make headway in the payments business against firms such as PayPal. Apple ( AAPL ) and Google, a unit of Alphabet ( GOOGL ), also have entered the payments sector with digital wallet technologies that revolve around use of cellphones for payments transactions. The Amazon announcement is hot on the heels of similar moves by PayPal and  Square ( SQ ). On Wednesday,  Square said it planned to add Web checkout capabilities to its payment processing product — a direct challenge to much larger competitor PayPal, which has more than 13 million merchants vs. Square’s 2 million. Also Wednesday, PayPal’s Braintree unit — which boasts that it processes payments for startups such as Airbnb, Jet.com and Uber — announced that it was partnering with several all-in-one e-commerce platforms, such as BigCommerce.

Netflix Investors Too Focused On U.S., Missing Global Opportunity

Investor concern about Netflix ’s ( NFLX ) U.S. subscriber growth “is overdone and myopic relative to the company’s global opportunity,” Pacific Crest Securities analyst Andy Hargreaves said in a research report Sunday. Hargreaves reiterated his overweight rating on Netflix stock with a price target of 140. Netflix stock, though, was down nearly 2%, below 104, in morning trading on the stock market today . The Internet television service is scheduled to report first-quarter results after the market close on April 18. Netflix has missed its U.S. subscriber goals in the last two quarters but has beaten its targets for international subscribers during that period. For Q1, Wall Street expects Netflix to add 1.82 million U.S. streaming subscribers and 4.17 million international subscribers. In January, Netflix guided to 1.75 million U.S. streaming subscribers and 4.35 million international subscribers. For Q2, Wall Street is modeling for Netflix to add 690,000 domestic streaming subscribers and 2.83 million international subscribers. “In both quarters, we see the potential for meaningful upside to consensus estimates for international subscribers, which could vastly outsize any potential downside in the United States,” Hargreaves said. “Investors are currently embroiled in a heated debate over a few hundred thousand U.S. subscribers. In the meantime, Netflix’s global expansion creates potential upside that is measured in the millions.” The potential for an international subscriber miss is the biggest risk to Netflix shares because it would cast doubt on the company’s biggest growth opportunity, he said. In the streaming video market, Netflix competes with Amazon.com ( AMZN ), Hulu and other players. Image provided by Shutterstock . RELATED: Netflix, Amazon, Akamai Benefiting From Cable Cord-Cutters Surveys Show Netflix Winning In U.S., Slow Going In Japan