Tag Archives: earnings

Does Analog Devices’ Soft Q3 Guidance Prove Apple’s iPhone 7 Cut?

Apple ‘s ( AAPL ) iPhone 7 expectations might have dug into guidance provided Wednesday by  Analog Devices ( ADI ), as the 3D Touch supplier topped Q2 expectations but guided to current-quarter sales that would dip 5% year over year. In early trading on the stock market today , Analog Devices shares were up a fraction, near 55.50. Fellow Apple suppliers Broadcom ( AVGO ), NXP Semiconductors ( NXPI ),  Skyworks Solutions ( SWKS ) and  Qorvo ( QRVO ) were up all by close to 2% or more. For its fiscal Q2 ended April 30, Analog Devices reported $779 million in sales and 64 cents earnings per share ex items, down a respective 5% and 12% vs. the year-earlier quarter. It was the first quarter in nine that Analog Devices’ sales have fallen and the second period of declining EPS. But both metrics beat the consensus of 29 analysts polled by Thomson Reuters for $777.6 million and 62 cents, as well as Analog Devices’ own guidance issued three months ago. Consumer sales toppled 27% year over year, leading a 3% fall in communications sales, Analog Devices said. Industrial and automotive sales — Analog Devices’ bread-and-butter segments — fell 1% apiece. For fiscal Q3, Analog Devices CEO Vincent Roche sees a return to consumer market growth and mid- to high-single-digit growth in the company’s business-to-business segments. But the high point of ADI’s Q3 sales and EPS guidance lagged Wall Street consensus. Analog Devices guided to $800 million to $840 million in sales and 66-74 cents, down a respective 5% and 9% vs. the year-earlier quarter, missing analysts’ model for $846.6 million and 75 cents. On average, Analog Devices’ Q3 sales have grown 13.5% year over year, trailing 20% growth in Q4. But recent reports indicate Apple might have cut its component orders for the iPhone 7, expected to be released in September.

Alibaba Rival Tencent’s Profit Jumps 33% On Mobile Games, Entertainment

Tencent Holdings’ investment in NBA broadcasts, mobile games and entertainment content is paying off, driving first-quarter earnings at Asia’s biggest instant messaging company to a record. Net income climbed 33 percent to 9.18 billion yuan ($1.4 billion), the Shenzhen-based company said on Wednesday. That compares with the 8.71 billion-yuan average of estimates compiled by Bloomberg. After converting WeChat and QQ from message services into social network giants, with more a billion combined users, Tencent ( TCEHY ) added streaming content such as National Basketball Association games to attract big-budget advertisers. That spurred a 73 percent surge in online ad revenue during the quarter, even as the Chinese economy slows. “Advertising is rising at a much faster pace than the rest of the company,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “It has a huge advantage in attracting advertisers with its huge traffic volume via instant messaging, its portals and video sites.” Sales jumped 43 percent to 32 billion yuan in the quarter, beating estimates for 30.3 billion yuan. Revenue from the Value Added Services unit, which includes online games and messaging, rose 34 percent to 25 billion yuan. Adding titles such as Wind Saga and Kungfu Frontier not only helps make money from existing users, it attracts even more customers to the platforms. The company is buying up the rights for anime, comics and novels to convert them into content and boost its slice of a China mobile gaming market expected to reach 68.8 billion yuan by 2018. WeChat had 762.4 million monthly active users and the mobile version of QQ had 658 million users at the end of the quarter. Adding online payments and facilitating e-commerce are part of Chairman Ma Huateng’s efforts to make money from China’s 688 million Internet users. Shares of Tencent fell 1.1 percent to HK$161.10 in Hong Kong before earnings were announced. The stock has gained 5.6 percent this year, compared with a 2.4 percent drop for New York-listed Alibaba Group Holding ( BABA ). To strengthen its dominance in instant messaging, it created a service called Enterprise Weixin for the office that enables chat and company notices. Ma has identified online health care, education and the anime industry as potential areas of growth for this year. In a proposal to China’s National People’s Congress this year, Ma suggested that the government allow doctors to freelance, build online personal medical files, and relax digital content policies to help China’s Internet sector to prosper. The company is in the process of raising as much as $4 billion in a syndicated loan to fund its expansions, people familiar with the matter said in May. Tencent announced 40 deals worth $19.6 billion of acquisitions and investments in the past 12 months, according to data compiled by Bloomberg.

Akorn Rebounds Further As Q1 Meets Views, Big Investor Ups Stake

Specialty drugmaker Akorn ( AKRX ) was up in early trading Tuesday after its belated Q1 earning report met Wall Street’s expectations and a major investor tripled its stake in the firm. Late Monday, Akorn reported its first-quarter results just a week after it announcing  Q4 and 2015 results , along with restated 2014 earnings, after a year-long repair of its accounting system. It also affirmed the 2016 guidance it issued last month, calling for at least 80% earnings growth over the previous year, with revenue up 8% to 10%. “Akorn’s guidance continues to exclude new approvals, and to us the growth outlook here is going to be about two things: (i) converting the current pipeline of 86 ANDAs (generic-drug applications) in an environment where we are seeing accelerating FDA approval activity, and (ii) pursuing a strategy of targeting bolt-on deal opportunities,” RBC Capital Markets analyst Randall Stanicky wrote in a research note. Akorn said that adjusted net income rose 20% over the year-earlier quarter to 54 cents a share, in line with analysts’ consensus. Revenue rose 18% to $268 million, also in line. The financial uncertainty cut Akorn’s stock price by two-thirds between its April 2015 high and its March 18 low, but since then it’s climbed nearly 70%. In the stock market today , Akorn stock rose 7.6% in heavy volume, to 29.91, and hit a four-month high. Bloomberg also reported that investment management firm Paulson & Co. has become Akorn’s second-largest shareholder , with $219 million in holdings. The report said Paulson also bought into Endo International ( ENDP ), another specialty pharma that fell out of favor with Wall Street after issuing guidance this month that  disastrously missed  estimates, with a Paulson spokeswoman saying many specialty pharma stocks have been oversold.