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Nokia Earnings Disappoint, Windows Phones Fall Short

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By 24/7 Wall St.

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Nokia Corp. (NYSE: NOK) had another rough quarter. The numbers show the company still cannot make progress against powerful competition from Apple Inc. (NASDAQ: AAPL) and Samsung.

The new Windows phones from Nokia and Microsoft Corp. (NASDAQ: MSFT) have not sold well, which is a blow to the fortunes of both companies. Microsoft’s success in the PC sector has begun to disappear, leaving mobile as one of the few industries in which it can grow.

According to the Nokia earnings announcement:

Nokia Group non-IFRS EPS in Q1 2013 was EUR -0.02; reported EPS was EUR -0.07.
– Nokia Group achieved underlying operating profitability for the third consecutive quarter, with a Q1 non-IFRS operating margin of 3.1%.
– Devices & Services achieved underlying profitability for the second consecutive quarter, with a Q1 non-IFRS operating margin of 0.1%. Devices & Services benefitted from a strong focus on cost as well as the reversal of approximately EUR 50 million of previously recognized inventory related allowances in Q1.
– Nokia Siemens Networks achieved underlying profitability for the fourth consecutive quarter, with a Q1 non-IFRS operating margin of 7.0%. Nokia Siemens Networks benefitted from strong gross margin performance in Q1.

Nokia Group net sales in Q1 2013 were EUR 5.9 billion
– Devices & Services Q1 net sales decreased 25% quarter-on-quarter to EUR 2.9 billion.
– Lumia Q1 volumes increased 27% quarter-on-quarter to 5.6 million units, reflecting increasing momentum.
– Mobile Phones Q1 volumes decreased 30% quarter-on-quarter to 55.8 million units, reflecting competitive industry dynamics and an estimated higher than normal seasonal decline in the market addressable by Mobile Phones.
– Nokia Siemens Networks net sales decreased 30% quarter-on-quarter to EUR 2.8 billion, reflecting industry seasonality

Those numbers were below expectations.

Filed under: 24/7 Wall St. Wire, PC Companies, Technology Companies, Wireless Tagged: AAPL, MSFT, NOK

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From: http://www.dailyfinance.com/2013/04/18/nokia-earnings-disappoint-windows-phones-fall-short/

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Apple on the Defensive About New Samsung "iPhone Killer"

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By 24/7 Wall St.

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Today is the day. Samsung will release its so-called iPhone killer, the Galaxy S IV. Many experts believe that the product’s new features will make it a challenge to Apple Inc. (NASDAQ: AAPL). Some even believe it could outsell the iPhone this year.

Oddly, one of Apple’s top executives decided the day of the launch was a good time to deride Samsung. In an interview with The Wall Street Journal:

Apple marketing chief Phil Schiller on Wednesday played down the expected competition from the device. He also discussed how he believes products that run Google Inc.’s Android software, such as Samsung’s phone, are inferior to Apple’s iPhone.

Mr. Schiller shared data on the iPhone’s popularity and said Apple’s own research shows that four times as many iPhone users switched from an Android phone than to an Android phone in the fourth quarter.

To show some guts, Schiller should have held his fire until the release of the next generation iPhone.

Filed under: 24/7 Wall St. Wire, Consumer Electronics, Technology Companies, Wireless Tagged: AAPL

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Price Cut for Kindle Fire Tied to European, Japanese Launch

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By 24/7 Wall St.

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Thanks to today’s launch of the Kindle Fire HD 8.9-inch tablet from Amazon.com Inc. (NASDAQ: AMZN) in five European countries and Japan, Amazon claims that now “it is able to lower the price” of the devices in the U.S. At least that’s the story according to Amazon.

And while Amazon tries to link the launch of the tablet into new markets to the U.S. price drop, the full story is likely to be that full-size tablets are not selling well if recent survey data is any guide.

One of every two tablets sold in the fourth quarter of 2012 had a screen size smaller than 8-inches. The big reason: cost. Consumers like tablets, but small beats big and cheap beats expensive. Even market leader Apple Inc. (NASDAQ: AAPL) has experienced heavier demand for its iPad mini that for the larger iPad. Samsung Electronics and Google Inc. (NASDAQ: GOOG) have also had more sales for the smaller, cheaper tablets.

The WiFi version of the Kindle Fire HD tablet has now dropped in the U.S. from $299 to $269 and the 4G version has dropped in price from $499 to $399. That points to another feature of customer demand. Tablets with WiFi-only sell better than the pricier 4G-enabled devices, which also require expensive data packages.

Amazon’s 7-inch version of the Kindle Fire was already available in Europe. And because Amazon does not reveal sales figures for its devices, we’ll never know for sure the impact of the launch in European and Japanese markets nor its impact on U.S. sales.

Filed under: 24/7 Wall St. Wire, Consumer Electronics, Hardware, PC Companies, Retail, Technology Companies, Telecom & Wireless Tagged: AAPL, AMZN, GOOG

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BlackBerry Staring Down Samsung's Barrel

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By 24/7 Wall St.

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The wait is almost, nearly finally over for the U.S. launch of the latest smartphone from BlackBerry (NASDAQ: BBRY), the touchscreen Z10. AT&T Inc. (NYSE: T) said today that the phone would be shipping to customers on March 22, and for those who can’t wait, pre-ordering begins tomorrow.

Samsung Electronics hasn’t been resting on its laurels, though, and the Korean firm will introduce its latest mobile phone on Thursday. Every expects the new Samsung phone to be called the Galaxy S IV (or S4 depending on where you look). Samsung may have scheduled its announcement to cast a shadow over the BlackBerry launch, and if the new Samsung device can delay purchases of the Z10 then Thursday’s launch will have done its work.

Samsung shipped more phones with the Android operating system from Google Inc. (NASDAQ: GOOG) than any other device maker last year, although it still trails the iPhone from Apple Inc. (NASDAQ: AAPL) by about 17% in the market share sweepstakes. Samsung has already poached half of BlackBerry’s market share and anything it can do to keep the Canadian firm from gaining share back is worth a try.

Investors like what’s going on with BlackBerry, though. Shares are up about 12% at $14.59 in a 52-week range of $6.22 to $18.32.

Filed under: 24/7 Wall St. Wire, Consumer Electronics, Technology Companies, Telecom & Wireless Tagged: AAPL, BBRY, GOOG, T

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Apple, Google Still Top Smartphone Market

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By 24/7 Wall St.

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In a refrain we’ve all heard more than once already, research firm comScore Inc. (NASDAQ: SCOR) reported today that the U.S. market share leader among smartphone manufacturers is Apple Inc. (NASDAQ: AAPL) and the leader in operating system platform market share is Google Inc. (NASDAQ: GOOG). No big surprises there.

On a rolling average basis for the months of November, December, and January, Apple claims 37.8% of the handset market, up 3.5% from its October 2012 average of 34.3%. Samsung Electronics finished second, up 1.9% in January, from 19.5% to 21.4%. HTC Corp., Motorola (now part of Google), and LG Electronics rounded out the top five, with only LG posting a small (0.3%) share gain.

On the platform side, Google’s Android operating system took the top spot with a 52.3% share, down from 53.6% in October. Apple’s iOS platform picked up 3.5% in market share, to move from a 34.3% share to a 37.8% share. Apple took share from each of the top five platform providers: Google, BlackBerry (NASDAQ: BBRY), Microsoft Corp. (NASDAQ: MSFT), and Symbian. Only Apple and Google posted double-digit market shares.

The U.S. release of BlackBerry’s new operating system and touchscreen handset is set for next week, but any impact won’t show up until the March report which is due in April. The news is not so good for Microsoft, which had high hopes for its Windows Phone 8 platform.

Filed under: 24/7 Wall St. Wire, Consumer Electronics, PC Companies, Research, Technology Companies, Telecom Tagged: AAPL, BBRY, GOOG, MSFT, SCOR

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Chip and Infratructure Winners Steal Thunder at 2013 Mobile World Congress (SNE, INTC, BRCM, AMD, MRVL, FBRC)

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By 24/7 Wall St.

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Typically the Mobile World Congress exposition focuses on the smartphone and handset part of the industry, and at this years recently completed show in Barcelona that was once again the case. While there were not a tremendous number of new device launches, new smartphones from LG, HTC and Sony Corp. (NYSE: SNE) made a splash. But in a note today from FBR & Co. (NASDAQ: FBRC), it was less about handsets, and more about infrastructure.

The research team at FBR Capital Markets notes that, surprisingly, the most meaningful announcements at Mobile World Congress 2013 were not handset-driven but rather emphasized the changes in data centers, delivery and infrastructure needed to enable next-generation handset service. The most significant takeaways from the meeting reinforce the idea that they are on the brink of a large-scale shift in data center architecture, and while not yet fully defined, this holds significant implications for chip companies.

The mobile ecosystem is expanding at lightning speed, with endless innovation and new applications of mobile technology. From contactless payments and augmented reality to embedded devices and connected cities, mobile technology is changing the landscape. The impact mobile will have on the world is limitless. The explosive growth of at-your-fingertips data has driven the need for data centers to change some of their basic infrastructure. According to the FBR team, this can have big implications for semiconductor companies.

Their report lists four semiconductor companies that may benefit from the change in data center architecture as companies strive to have the processing power to accommodate huge advances in technology.

Intel Corp. (NASDAQ: INTC), the leader in personal computing and laptop processors, is working to add new products that target the smartphone and tablet industry. The Thomson/First Call consensus price target for Intel is $23.

Troubled industry laggard Advanced Micro Devices Inc. (NYSE: AMD) has promising new low-power, low-cost semiconductors that may prove competitive. The stock has taken a beating over the years and trades at just $2.41 today. The Wall St. consensus estimate is $3.

Broadcom Corp. (NASDAQ: BRCM), which specializes in semiconductor solutions for wired and wireless communications, may have the most potential upside. The company operates in three segments: Broadband Communications, Mobile and Wireless, and Infrastructure and Networking. Its ability to offer solution for multiple segments of the industry may help sustain its heady growth prospects. The consensus price target is $40.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is a big favorite of hedge fund manager David Einhorn, who has almost 6% of his total portfolio in the name. The company also may benefit from data center growth. The consensus price target is $15, which would represent almost a 50% move from today’s price of $10.12.

The inevitable growth of the wireless industry means that semiconductor companies will have to keep up their research and development expenditures to compete in a challenging and changing environment. The companies with the deepest pockets for R&D may prove to be the biggest winners.

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Source: FULL ARTICLE at DailyFinance

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Zynga and the Online Gambling Gold Rush

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By 24/7 Wall St.

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Zynga Inc. (NASDAQ: ZNGA) has enjoyed one hefty and substantial bounce now that online gambling is being approved and expanded in Nevada. Perhaps that should say “legal online gambling.” The question is whether Zynga will get the lion’s share of the opportunity or whether others in the mix will take the revenues.

With Nevada legalizing online gambling, other states certainly will be forced to follow suit. The Internet is not very good at keeping citizens of one state from participating in activities that are approved in other states. It is not really as if there is a money changer who has to play a role here. Then there are the billions, not millions, in revenue that can be taxed. Many states and cities do not want huge casinos being built and opened in certain areas, which is easy to see on a crime and moral level, yet hard to see from a tax revenue basis. What about allowing someone to play online poker, roulette, blackjack and other games for real money on their computer or tablet? That may get around the stigma of the full giant casino properties yet still allow for all sorts of tax.

Zynga shares are up more than 12% at $3.57 in very active trading Monday, against a prior 52-week trading range of $2.09 to $15.91. While the stock has bounced handily off of the lows it remains in the doghouse. Investors should know that Zynga’s market cap is right at $2.75 billion as of now.

Filed under: 24/7 Wall St. Wire, Entertainment, Internet, Technology, Technology Companies, Video Games Tagged: ZNGA

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H-P Earnings and Guidance Still Sells Investors on the Value Case

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By 24/7 Wall St.

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Hewlett-Packard Co. (NYSE: HPQ) is out with its anticipated earnings report. The PC-maker and IT-services provider was up going into the close on hopes of a breakup or a buyout in the works. After Dell Inc. (NASDAQ: DELL) has become the subject of a management led buyout by founding CEO Michael Dell, there has been hope that perhaps H-P would revisit its previous breakup or would move to unlock value.

Earnings were reported at $0.82 per share on a comparable basis, which is down 11% from the prior year but is still above its previously provided outlook of $0.68 to $0.71 per share. Its first quarter net revenue fell 6% down to $28.4 billion, but this would be down 4% when adjusted for the effects of currency. Thomson Reuters had estimates of $0.71 EPS and $27.8 billion in revenue. H-P’s cash flow from operations was $2.6 billion, but its non-GAAP operating margin fell to 7.9% from 8.6% a year ago.

For the second quarter of fiscal 2013, HP sees $0.80 to $0.82 in non-GAAP earnings per share excluding after-tax costs of approximately $0.42 per share. The Thomson Reuters consensus is $0.77 per share.

For the full year fiscal 2013, it sees non-GAAP earnings of $3.40 to $3.60 per share excluding after-tax costs of approximately $1.10 per share. The consensus is $3.32.

H-P shares closed up 2.4% at $17.10 on the day and shares are now up about 4.2% at $17.87 after the close. If you take a straight-line to its earnings forecast and maintain it indefinitely after this coming year based upon the closing bell price, HP trades at a mere 4.9-times forward earnings.

H-P shares have not traded above $18 since last September. The argument remains ongoing whether HP is a true value stock or a real value trap.

Filed under: 24/7 Wall St. Wire, Earnings, PC Companies, Technology, Technology Companies, Value Investing Tagged: DELL, HPQ

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Source: FULL ARTICLE at DailyFinance

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Using Black Swan and Antifragile Analysis for Tech Stocks (UBS, VMW, CRM, AAPL, FB, LNKD, HPQ, NTAP, FIO, IBM, EMC)

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By 24/7 Wall St.

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Nassim Taleb is well known for his work as a trader and professor, as well as the author of the book ” Black Swan.” He often concentrates his work on market volatility and the likelihood of extreme situations or occurrences that can radically move stock prices. The 9-11 attacks on the World Trade Center were a black swan event, devastating and totally unpredicted. His new book “Antifragile” focuses on things that gain from disorder. Are there tech stocks that can gain from disorder as well?

The tech analysts at UBS A.G. (NYSE: UBS) decided it would be interesting to apply some of the principles of Taleb’s book to tech stocks they cover. They point out in their report released today that Taleb advises using optionality to your advantage in finding situations with limited downside but undetermined upside. What matters is not the frequency of being right but the magnitude when you are correct. Also, to favor a barbell approach, both in specific companies that avoid the mushy middle of markets and in your portfolio by mixing low and high-risk assets.

Fragile things hate volatility and uncertainty, while the antifragile thrives on it. The UBS team believes that technology stocks, especially large caps, are inherently fragile, given that the industry structure changes every 15 years or so. They looked for companies riding emerging trends, and point to VMware Inc. (NYSE: VMW) and Salesforce.com Inc. (NYSE: CRM) as examples.

Vendors creating new product categories also scored high as antifragile. This category included names like tech giant Apple Inc. (NASDAQ: AAPL), social media leader Facebook Inc. (NASDAQ: FB) and business networking site operator LinkedIn Corp. (NYSE: LNKD).

One area that the spectrum of fragility did not favor as well was information technology (IT). The UBS analysts pointed out that computing as a service may present more risk than upside for many of the names that they cover. In their coverage universe, they consider Hewlett-Packard Co. (NYSE: HPQ) particularly fragile, given its size and share losses. They also see NetApp Inc. (NASDAQ: NTAP) as caught in the middle as it remains concerned about Fusion-io Inc.’s (NYSE: FIO) niche status. However, International Business Machines Corp. (NYSE: IBM) and EMC Corp. (NYSE: EMC) scored much better and are well-positioned large vendors.

At the end of the day, technology in always changing and evolving. Companies that look to past successes and not to future growth often can find themselves in the stock graveyard. Antifragile tech stocks might be the way to protect a portfolio from rapid technology and consumer shifts.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Technology, Technology Companies, Telecom & Wireless Tagged: AAPL, CRM, EMC, FB, FIO, HPQ, IBM, LNKD, NTAP, UBS, VMW

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Former RIM Co-CEO Sells All RIM/BlackBerry Shares

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By 24/7 Wall St.

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BlackBerry (NASDAQ: BBRY) has gone through quite a lot of changes, including a name change from Research In Motion. What is interesting is that its former co-CEO Jim Balsillie is no longer a shareholder. A Schedule 13G filing with the SEC on Thursday morning shows that Balsillie has eliminated his entire stake.

Balsillie was formerly one of the largest shareholders, with more than 26 million shares. The date is very delayed, as well as the as-of date, which turns out to be Dec. 31, 2012. Balsillie’s opportunity costs might have been huge. We do not know at what date the sales started, but RIM shares closed out 2012 at $11.87 and peaked above $14.00 earlier in December. Before that, all you have to do is to go back as recently as November 21 to see RIM shares back under $10.00. The lowest price of the fourth-quarter was listed as $7.27, and that was on October 1.

We would note that Michael Lazaridis shows in the same sort of filing that he held some 29,904,297 shares as of December 31, 2012.

What is interesting is that BlackBerry shares are up 3% at $14.40, even after the Balsillie filing was made known. BlackBerry shares have traded in a 52-week trading range of $6.22 to $18.32.

Filed under: 24/7 Wall St. Wire, Consumer Electronics, Corporate Governance, Insider Activity, Technology, Technology Companies, Telecom & Wireless Tagged: BBRY

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Intel Goes After Set-top Box Market

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One of the worst-kept secrets in the technology world was finally confirmed today. Intel Corp. (NASDAQ: INTC) is building an Internet TV set-top box that it says will launch by the end of this year. Intel has big plans for its Internet TV — but then which company doesn’t.

Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) both have Internet TV boxes out there already, as do smaller makers like Roku, Boxee, as well as Sony Corp. (NYSE: SNE) and Vizio, both of which use Google’s technology. Hardware and software are not the problem.

The problem is content. Intel and all the others face reluctant entertainment and pay TV industries that either do not want to license new streaming content except at very high fees (studios) or do not want to offer a la carte programming to subscribers (pay TV). The vice-president of Intel’s new Intel Media group told conference audience today, ” We’re working with the entire industry to figure out how we get live TV to consumers over the Internet.”

The TV and movie studios do not want to give away the farm the way the music business did to Apple iTunes. Whether or not Intel and its deep pockets can make a substantial difference here remains to be seen. Rather than keep their movies and programming locked in a vault, the production companies should be trying to forge partnerships with the techie crowd and make their content available at reasonable prices to consumers.

And the pay TV cable and satellite providers are not going to hide behind their bundling practices forever either. But Intel is going to have to break through to these guys as well

If any of this were easy, someone would already be doing it. And one has to wonder about Intel’s vice-president who wants to get “live TV to consumers over the Internet.” The reason to make programming available on the Internet is not so people get to choose their transmission scheme. Who cares?

People want to watch their favorite shows and movies when it’s convenient for them, not the pay TV channels or the broadcast networks. About the only things people want to watch live are sports and award shows. The next episode of “Downton Abbey” or “CSI” can be watched anytime.

Intel probably has no better chance at getting all the various players to agree on an Internet TV scheme than does Apple or Google or anyone else. Still, it’s nice to think they might be able to do it.

Filed under: 24/7 Wall St. Wire, Entertainment, Internet, Technology Companies, TV Tagged: AAPL, GOOG, INTC, SNE

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Analyst Shows Caution Right After Blackberry 10 Launch

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rim_logo_blackResearch in Motion Ltd. (NASDAQ: RIMM) has now debuted its very late release of the Blackberry 10 operating system. While we have already seen releases that Verizon, Sprint, and AT&T will carry the new devices, we wanted to know what Wall Street thinks of the launch. Its stock price indicates “not very much” but we still wanted to see what analysts are saying.

Yesterday we had some caution from UBS and Oppenheimer ahead of the Blackberry 10 release. Now we have Shaw Wu of Stern Agee voicing some concerns. We maintains a Neutral rating and has no price targets on RIM.

On changing the name to BlackBerry, Wu said, “We believe changing the company name to BlackBerry from Research in Motion (RIM) makes sense in that it simplifies its brand name. This is a move that many have asked for some time and interesting to see that the company has finally agreed.”

Wu thinks that the new phones are coming to the market too late and that the prices may be too high. He said, “While the Z10 will be available in the U.K., Canada, and the U.A.E. soon, the later launch in the U.S. in March could be disappointing to some. In addition, the Q10 won’t be available until April. So far, price points at $149.99 and $199.99 don’t seem competitive as many Android smartphones are available for $99, $49, or free. We believe RIMM and/or carriers may need to price more aggressively to generate interest.”

Wu concluded, “We maintain our Neutral rating as we continue to be concerned with RIMM‘s fundamentals where competitive pressures from Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: AAPL) are unlikely to subside and the company faces a major product transition with BB10.”

After 2:30, shares are down 6.5% at $14.64 versus a 52-week trading range of $6.22 to $18.32. More important than anything is that RIM has traded a whopping 180 million shares against an average daily volume of almost 50 million shares. This is unheard-of trading volume.

Better late than never.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Consumer Electronics, Technology, Technology Companies, Telecom & Wireless Tagged: AAPL, GOOG, RIMM

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Source: FULL ARTICLE at DailyFinance