Tag Archives: earnings

Apple iPhone 7 Ramp In July Will Stoke Q4 Sales: Analog Devices

Apple ( AAPL ) iPhone 7 demand could falter, but 3D Touch supplier Analog Devices ( ADI ) expects a strong fiscal Q4 on boosted dollar-content in Apple’s newest flagship smartphone, likely to be released in September. But that ramp won’t be apparent in Q3. Wednesday, Analog Devices reported  sales fell 5% year over year for its fiscal Q2 ended April 30, and guided to another 5% dip in Q3. Over the past two years, Analog Devices has grown an average 13.5% during its July quarter. This year, Analog Devices’ second-generation 3D Touch will ramp in timing with chips from other Apple suppliers, Analog Devices CFO Dave Zinsner told analysts during the company’s Q2 earnings conference call. “And really that means that we really don’t see the demand pick up until the July time frame,” he said. “So, it’s probably going to be more of the end of Q3 and more into Q4 this time vs. last year where it was more of a ramp in Q3.” Analog Devices’ Q3 will be back-end loaded on Apple’s iPhone 7, Edward Jones analyst Bill Kreher told IBD. More encouraging, the company is seeing stable demand within its automotive and industrial segments, he says. “The outlook suggests the company is weathering the near-term softness in Apple,” he said. “And, as it relates to Apple, the company indicated this would be a trough in terms of orders. They expect to see sequential growth, and from that perspective it is encouraging because there will be a ramping in orders.” MKM analyst Ian Ing reiterated a neutral rating and 56 price target on Analog Devices stock. In morning trading on the stock market today , Analog Devices stock was down more than 1%, near 55, after rising nearly 1% on Wednesday. Despite Zinsner’s expectations for boosted dollar-content in the iPhone 7, Ing sees average sales prices for the second-generation 3D to fall 10% from $1.75. Consumer sales account for 10% of Analog Devices’ revenue and fell 27% vs. the year-earlier quarter in Q2. But Ing doesn’t expect much of a Q3 boost for Analog Devices’ bread-and-butter business-to-business segments, which account for the other 90% of sales. Those segments grew 9% sequentially in Q2 to $698.7 million, but fell 2% vs. the year-earlier quarter. Analog Devices guided to mid-to-high single-digit year-over-year growth for those segments in Q3. For Q4, the company expects greater operating leverage, a full quarter of portables shipments, higher factory utilizations and better automotive seasonality, Ing wrote. But lower factory utilizations in Q3 suggests “little visibility or confidence in the overall demand environment,” Ing wrote. Analog Devices guided down to 60%-range utilizations for Q3 vs. 70% in the year-earlier quarter. The goal is to cut down on inventory, the company says. “The macro environment for Analog Devices business-to-business segments remains mixed at best,” Ing wrote.

Cisco Jumps On Earnings, Outlook; Analysts Hail ‘Strong Execution’

Cisco Systems ( CSCO ) received several price-target hikes after its fiscal Q3 earnings late Wednesday beat on both the top and bottom lines, as did its earnings and revenue guidance. For its fiscal third quarter , Cisco said revenue rose 3% from the year-earlier period, to $12 billion, just beating the consensus estimate of $11.97 billion, as polled by Thomson Reuters. Cisco said earnings per share minus items rose 5.6% to 57 cents, edging the consensus of 55 cents. Cisco stock rose 4% in morning trade on the stock market today , near 28. FBN Securities analyst Shebly Seyrafi maintained an outperform rating on Cisco and raised his price target to 32 form 30. “We believe that management tone was more upbeat this time than three months ago,” he wrote in a research note. Drexel Hamilton analyst Brian White raised his price target to 36 from 34 and maintained his buy rating on Cisco stock. “Cisco’s strong execution in fiscal Q3 overpowered a challenging demand environment with upside in the quarter and a stronger than expected Q4 outlook,” White wrote in a research note. “Overall, we are very pleased with Cisco’s Q4 outlook, given the economic backdrop and soft IT spending environment.” RBC Capital Markets analyst Mitch Steves, who maintained an outperform rating, raised his price target to 33 from 31. “While we remain cautious on the legacy portfolio given the overall IT spending environment, we think Cisco is continuing to move in the right direction highlighted by solid margin performance and improving business mix,” he wrote. Pacific Crest Securities analyst Brent Bracelin maintained an overweight rating and a price target of 30. “We continue to be impressed by strong execution under the new leadership team,” Bracelin wrote. “Cisco continues to execute a multiyear shift to a software-centric, subscription-driven business model.” Analysts had lowered expectations ahead of Cisco earnings due to the growing number of companies outsourcing computing workloads to cloud computing service providers such as Amazon.com ( AMZN ) and its Amazon Web Services business. The move to cloud computing has lowered demand for Cisco’s networking gear. The lowered expectations also reflected trends toward lower spending on information technology overall. Well aware of the trends, Cisco is diversifying beyond its core switch and router business into newer, higher-growth segments such as software, data centers, security, wireless and the Internet of Things market.

Salesforce.com Nabs Bigger Deals, As Billings Growth A Bright Spot

Salesforce.com ‘s ( CRM ) growth in billing, a key sales metric, was a bright spot in Q1 earnings, analysts say. Salesforce.com late Wednesday reported Q1 earnings and revenue that topped expectations, while also raising its full-year revenue guidance. The business software provider’s stock was up 4.5% to 81.35 in early trading in the stock market today , blowing past a 77.92 point point and nearly hitting a record high. IBD’s Take: How healthy is Salesforce.com stock and how does it stack up vs. rivals? Find out at IBD Stock Checkup Billings rose at nearly twice the rate of the consensus estimate of 16% growth in Q1. “Billings grew to $1.63 billion, or 31% year over year, which was better than consensus of $1.45 billion and accelerated from 28% growth in Q4,” Brendan Barnicle, a Pacific Crest analyst, said in a research report. San Francisco-based Salesforce.com garners mainly subscription revenue from on-demand software delivered via the Internet and over the cloud. The company continues to move up-market, making bigger deals with bigger companies, says Jefferies analyst John DiFucci. “We believe something has changed on the margin for Salesforce — that is, the willingness of large enterprises to engage on a more strategic level with SaaS (software-as-a-service) solutions,” DiFucci wrote in a research note. Salesforce.com, the leading provider of customer relationship software, said Q1 profit jumped 50% to 24 cents per share minus items. Revenue in the three months ended April 30 rose 27% to $1.92 billion, the company said. Analysts polled by Thomson Reuters had modeled 23 cents and $1.89 billion. In the current quarter, Salesforce.com forecast earnings ex items of 24 cents to 25 cents per share, up from 19 cents in the year-earlier quarter, and revenue of $2.005 billion to $2.015 billion, up 23%. Analysts had estimated 25 cents and $1.98 billion, respectively. Salesforce.com increased its full-year revenue guidance to $8.2 billion from $8.16 billion. “Following a very strong fourth quarter, where the company signed a nine-figure transaction and saw its volume of seven-figure deals increase more than 60%, the company continued its momentum of large deal activity in the quarter — closing another nine-figure transaction and again increasing the volume and size of its large transactions as compared with the year-ago period,” Bhavan Suri, a William Blair analyst, said in a report. “Not only did this lead to another strong billings beat, but it also further supplements Salesforce’s position as the cloud platform of choice.”