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Akamai Stock Jumps On Q1 Beat, Despite Apple, Facebook Trend

Akamai Technologies ( AKAM ) stock jumped Wednesday after the CDN services provider late Tuesday reported Q1 earnings and revenue that topped analysts’  lowered expectations and gave in-line current-quarter profit  guidance. Shares of Cambridge-based Akamai were up 23% in midday trading in the stock market today , near 49. Akamai is the biggest provider of content-delivery network (CDN) services to media and entertainment companies. Akamai said it earned 72 cents per share in Q4, up 3% from the year-earlier period, with revenue rising 8% to $579.2 million. Analysts had modeled EPS of 62 cents and revenue of $569 million. The beat included a 6-cent tax benefit. Akamai bought back $100 million in its own stock, lowering share count and boosting EPS. Even with Wednesday’s gain, Akamai stock is down 7% in 2016. The stock had plunged 47% through Tuesday’s market close since Oct. 27, when the company  gave disappointing December-quarter guidance. For the current quarter, Akamai forecasts revenue of $562 million at the midpoint of its range, with adjusted EPS of 61 cents to 64 cents, vs. consensus estimates of $568 million and 63 cents. Full-year 2015 revenue rose 12% to $2.2 billion. On the company’s earnings conference call, management backed off of its 2020 revenue goal of $5 billion, said Colby Synesael, an analyst at Cowen & Co., in a research note.   Akamai’s technology speeds up video streaming to mobile devices, e-commerce transactions and business software downloads. Akamai has expanded into higher-margin cloud-infrastructure services and security, aiming to offset price cuts in the CDN business that average 15% to 20% a year. “The security segment, now at a $300 million (annual revenue) run rate, provided the (Q4) upside,” said UBS analyst Steven Milunovich in a report. Akamai’s stock has been pressured as some big customers shift to their own internal CDNs. Apple ( AAPL ), believed to be Akamai’s biggest customer, and Facebook ( FB ) have been moving data traffic to their own CDNs. Akamai has renegotiated contracts and lowered prices in some cases, says Tim Horan, an analyst at Oppenheimer. “The top two customers (likely Apple/Facebook) represented an average of 13% of revenue and likely closer to 11% in Q4, but that should decrease to 6% by mid-2016,” wrote Horan in a report. “The next two (likely Microsoft ( MSFT )/Google) likely represent 5% and have likely re-priced. This should result in less revenue volatility in the second half of 2016, with upside if overall traffic volumes pick up.” Google is the main business of Alphabet ( GOOGL ).   He says Akamai could gain from video streaming tied to the Olympics this summer, the presidential election and National Football League games. Aside from longtime rivals Level 3 Communications ( LVLT ) and Limelight Networks ( LLNW ), Akamai is facing increased competition from Amazon Web Services, part of Amazon.com ( AMZN ), as well as Verizon Communications ( VZ ).

Self-Driving Cars On Ramp As Feds Tax Oil In New Obama Budget

Autonomous cars, self-driving cars, robot cars — not only are they far along in development, now they can read dollar signs. A $98.1 billion federal transportation budget proposal came out Tuesday as the White House announced President Barrack Obama’s final $4.1 trillion budget proposal, which would slap a $10.25-a-barrel tax on oil. The transportation budget plan allocates $3.9 billion over 10 years for “large-scale deployment pilots” to develop a framework for how connected cars and autonomous vehicles will inter-operate across states. Regulators had penciled in the autonomy figure in an announcement at last month’s Detroit auto show, after President Obama alluded to plans for a “21st century transportation system” in his State of the Union speech. The president’s overall budget proposal is sure to fire up controversy and roadblocks when considered by the Republican-controlled Congress. “To speed our transition to an affordable, reliable, clean energy system, my budget funds Mission Innovation, our landmark commitment to double clean energy research and development funding,” Obama said in his budget message . “It also calls for a 21st Century Clean Transportation initiative ,” he said, “that would help to put hundreds of thousands of Americans to work modernizing our infrastructure to ease congestion and make it easier for businesses to bring goods to market through new technologies such as autonomous vehicles and high-speed rail, funded through a fee paid by oil companies.” The Department of Transportation plans to test autonomous cars in “corridors throughout the country” to accelerate development and adoption of “safe vehicle automation through real-world pilot projects.” “We are on the cusp of a new era in automotive technology with enormous potential to save lives, reduce greenhouse gas emissions and transform mobility for the American people,” DOT Secretary Anthony Foxx said in the auto show announcement, speaking alongside executives from General Motors ( GM ), Tesla Motors ( TSLA ), Alphabet ( GOOGL )-unit Google, Ford Motor ( F ) and others. “Today’s actions and those we will pursue in the coming months will provide the foundation and the path forward for manufacturers, state officials, and consumers to use new technologies and achieve their full safety potential.” Electric car maker Tesla and several mainstream automakers have been developing autonomous vehicles. So have Alphabet’s Google and, reportedly, Apple ( AAPL ). Monday, Tesla expounded in a blog post on the safety aspects of the new Summon feature , in its Autopilot software, that lets the Model S and Model X come pick up their owners in a driveway and park themselves in a garage at night. “Summon lays important groundwork for an increasingly autonomous world. One where the convenience and safety of transport vastly exceed what we are used to today,” Tesla said in summing up Summon. It added that semi-autonomous features like Summon can reduce the occurrence of accidents relative to conventional driving. From @POTUS , @WhiteHouse a #budget that moves #transportation forward https://t.co/MOlt0ZPK8D pic.twitter.com/kY09OE1nww — Anthony Foxx (@SecretaryFoxx) February 9, 2016 The overall budget proposal unveiled by Foxx on Tuesday, for fiscal year 2017, outlines the department’s 30-year vision for how automation and other changes can better cope with traffic as the U.S. population grows by an expected 70 million people. It covers everything from autonomous vehicles to unmanned aircraft systems, or drones. It prioritizes “clean, 21st Century surface transportation options”; public-private sector collaboration to accelerate low-carbon technologies and intelligent transportation systems; transportation safety enhancements; and what it calls 21st Century government and project delivery — meaning things like modernized permitting. It also allocates $15 million toward cybersecurity. In a December presentation, Foxx announced a “smart city” transportation contest with a $50 million prize, saying the DOT is “imagining connected and autonomous vehicles that can practically eliminate crashes and interact with wired infrastructure to eliminate traffic jams.” Loading the player… RELATED: Obama Will Speed Self-Driving Car As Google Partners Tesla Adds ‘Summon’ Self-Driving To Cars: A Big Deal?  

Why Facebook, Google, Amazon Are Best Positioned For Mobile

Loading the player… With the proliferation of smartphones has come the abundance of smartphone apps. A new report from Mizuho Securities says that Facebook ( FB ), Alphabet ( GOOGL )-owned Google and Amazon ( AMZN ) are in the best mobile positions. Among Android apps, Mizuho says that Facebook continues to lead in terms of usage, with its family of apps dominating in nearly every major continent. Following the Facebook app in usage are Google’s Chrome browser, Google Search and YouTube. And the analyst also notes that Amazon is gaining share in mobile app installations. Facebook dropped below the key 50-day line in big volume Monday as the market sold off. Shares rallied off session lows Tuesday and briefly turned higher, but closed down 0.2%. Alphabet breached its 50-day line last week. Shares reversed off of a three-and-a-half month low on Monday. After an up and down session, Alphabet stock dipped 0.45% Tuesday on higher volume. Amazon lost support at the critical 200-day line last week and is now below the 500 price level. The stock is hitting its lowest level in five and a half months in fast turnover, closing down 1.2% Tuesday. Meanwhile, the other FANG (Facebook, Amazon, Netflix, Google) stock, Netflix ( NFLX ), rose 3.4%, gaining for a second session in heavy volume. Netflix shares broke below the 200-day line last month. Image provided by Shutterstock .