Samsung issued pre-earnings guidance on Friday indicating it will beat profit estimates set by the Street for the third quarter thanks to strong demand for its smartphones. The South Korea-based company said its operating profit for the three month period ending this September will total roughly 4.2 trillion won ($3.6 billion), which bested estimates from a group of 28 analysts who collectively thought Samsung’s profit slide in at 3.7 trillion won. The company still took a big hit compared to the same quarter last year however, when Samsung reported operating profit of 4.86 trillion won. “It seems like there was a big surprise on the smartphone side,” Shinyoung Securities analyst Lee Seung Woo told Bloomberg. “I’m quite amazed.” Lee estimates Samsung has already shipped 30 million smartphones this quarter, half the figure it hopes to sell for the entire year. Samsung’s Galaxy S II handset has been its fastest selling smartphone ever, and models of the device are launching in the United States on AT&T, Sprint and T-Mobile. More →
Clearwire is in discussions to sell sell some of its wireless network capacity to Verizon Wireless and AT&T, Bloomberg reported recently. “All those discussions are under way,” Clearwire CEO Erik Prusch told Bloomberg. “I’m confident we’ll bring in new wholesale partners. Our message to the industry is that we’ve got the capacity to handle their needs.” However, it is more likely Clearwire is approaching the carriers in an effort to raise cash for its 4G LTE network plans. On August 3rd, Clearwire announced its intentions to build out a nationwide 4G LTE network but said those plans were “subject to additional funding.” Clearwire needs $600 billion to build its 4G LTE network. “We want to be the Switzerland of mobile broadband,” Prusch said, noting that his company is talking to, and willing to work with, anyone who needs network capacity.” In mid-August reports surfaced that Sprint was in talks to buy Clearwire outright in order to build its own LTE network. We expect we could hear more on Sprint and its Clearwire plans during a “Strategy Update” event on October 7th in New York City, where BGR will be reporting live. More →
AT&T has approached several U.S. wireless carriers offering to sell assets, spectrum and wireless subscribers in an effort to win the government’s blessing for its planned acquisition of T-Mobile USA, Bloomberg reported on Monday. MetroPCS, Leap Wireless, CenturyLink, Dish Network and Sprint were among the the companies approached in the private talks. AT&T’s move is no doubt a response to recent lawsuits that were filed by the Department of Justice and Sprint. The Department of Justice filed a lawsuit on August 31st in an attempt to block the merger, which it said would “remove a significant competitive force from the market.” Seven U.S. states also joined the DOJ’s suit last week. Sprint sued on September 6th and said the merger would “stifle innovation” in the U.S. wireless market. AT&T’s discussions to sell assets may not be enough to sway the Department of Justice in AT&T’s favor and the talks are still preliminary, Bloomberg said. More →
AT&T is prepared to make sacrifices in an effort to sway the U.S. Department of Justice and the Federal Communications Commission in favor of its planned $39 billion acquisition of T-Mobile, Reuters reported on Friday. On August 31st, the U.S. Department of Justice filed a lawsuit against AT&T in attempt to block the merger, a move that is said to have caught both AT&T and T-Mobile USA’s owner, Deutsche Telekom, off-guard. “AT&T is pretty determined that they can find a solution, and they are pretty confident,” one source told Reuters, which noted AT&T’s “two-track” plan that includes possibly selling off as much as 25% of T-Mobile, including customers and spectrum, if the deal is approved. It is still unclear who could be a potential customer for the assets, however, as the government could investigate Sprint or Verizon Wireless if either carrier chose to purchase those assets. Reuters said U.S. District Judge Ellen Segal Huvelle will preside over the case and said Huvelle is known for moving swiftly. AT&T has asked for an expedited hearing and the case could be heard within the next two months. More →
It remains to be seen whether Hewlett-Packard’s upcoming overhaul will pay off in the long run, but one things seems clear: the manner in which HP revealed its plans was ill-conceived at best. HP’s announcements sent its stock tumbling, and analysts continue to lose faith in the company as unrest builds. In a note to investors on Thursday, RBC Capital Markets analyst Amit Daryanani cut his rating on HP stock to Sector Perform from Outperform, and he lowered his price target $5 to $30. Daryanani says HP’s announcement that it may spin off or sell its PC business “will accelerate the deterioration of HP’s brand and asset value,” and he thinks competitors will gain market share as a result. The analyst also believes HP’s decision to kill off its webOS device business could devalue the company’s PC division if it opts for a sale. He thinks a quick sale would be a good move for HP, though he writes that a cut in company forecast or increased buybacks are also options. More →
Dell delivered second-quarter earnings on Wednesday that beat the Street’s estimates, reporting net profits of $890 million, or $0.05 per share above analysts’ consensus. The world’s No.2 PC vendor missed revenue estimates however, and it slashed guidance for the remainder of 2011. In a note to investors on Friday, Ticonderoga Securities analyst Brian White told clients to head for the hills and “exit this highway to Dell” before trends get worse. “Despite the transformation of Dell’s portfolio that we believe will ultimately have a long-term positive impact on the company, we cannot overlook Dell’s high exposure to the public and consumer markets in a period of growing austerity programs and weakening consumer demand,” White wrote. “At the same time, we have concerns regarding Dell’s surging operating expenses as the company invests in new businesses that we believe will result in incrementally higher operating leverage in a tough environment and could cut more deeply into profits versus the last downturn.” White dropped his rating on Dell stock to Sell, setting a new 12-month price target of $9.25. More thoughts from White follow below. More →
In a note to investors on Tuesday, BTIG Research analyst Walter Piecyk raised his rating on Sprint stock from Sell to Neutral without indicating a new price target. Piecyk had previously set his price target at $3.13, but noted that the stock now trades under five times BTIG’s 2012 earnings estimate, which is below consensus. The firm notes that it is not moving to a Buy rating because Sprint’s stock may fall further still, due to uncertain earnings, high debt leverage, lack of free cash flow and a worrisome 4G strategy. Piecyk believes that Sprint “needs to develop a clear 4G strategy including financing or taking control of Clearwire.” While BTIG did revise its estimates downward based on lower potential margins due to increased roaming costs, increased Network Vision expenses and the potential need for increased handset subsidies, it notes that upcoming events such as the resolution of Sprint’s Clearwire relationship and the potential launch of Apple’s iPhone 5 could have a positive impact on Sprint’s performance.
On April 20th, a Verizon Wireless spokesperson was quoted as saying the company was “still evaluating” whether it would carry Research In Motion’s BlackBerry PlayBook tablet in its retail stores. Eleven days later, it looks like that evaluation is over. The company has the PlayBook listed in its 2011 winter consumer guide with a “coming soon” tag. RIM had initially indicated that Verizon would be carrying its QNX-based tablet, making the evaluation comment worrisome to some pundits and industry insiders. The above image all but confirms that the tablet will be showing up fashionably late in Verizon retail outlets. More →
Reuters is reporting that Verizon Wireless is still debating whether or not to distribute Research In Motion’s new tablet, the BlackBerry PlayBook, via its sales channels. “We’re still evaluating the BlackBerry Playbook and have not made a determination as to whether we’re going to distribute it,” said a Verizon Wireless spokesperson speaking to the publication. The new tablet, which runs RIM’s QNX-based software, launched in U.S. and Canadian markets yesterday. The Waterloo mobile devices company had originally indicated that Verizon would be a distribution partner. More →
A new rumor suggests HP may have considered selling its PC business, with Samsung lined up as the most likely buyer. The report comes from DigiTimes and is sourced from an article in the Chinese financial paper Commercial Times. DigiTimes claims that rumors to this effect have been circulating in Taiwan since last year, however, and suggests that a sale is no longer on the table. Citing sources from upstream component makers, the report claims “the deal was called off due to an unknown reason, and there has not been any follow up since then.” The original report also noted that Lenovo was a possible buyer and even suggests Foxconn might have shown interest in the business. HP has aggressive plans to include webOS on every PC it sells beginning next year. With such an incredible in-road to users, it would seem odd for HP to even briefly consider selling off its PC business.
UPDATE: HP issued the following statement on Thursday regarding the Commercial Times report: “Irresponsible reporting by Taiwan’s Commercial Times, suggesting that HP might sell its PC business, should be dismissed as market rumor and speculation. HP runs the world’s largest PC business and it is core to HP’s strategy for the connected world.”
Piper Jaffray analyst and Apple aficionado Gene Munster has weighed in with his iPad 2 launch prognostications. Munster is predicting that the tablet, which will be available nationwide this Friday, will see sales of 5.5 million units in its opening quarter. By comparison, the iPhone 4 sold roughly 8.4 million units during its opening quarter and the original iPad sold around 3.27 million units. “Generally, the length of the lines at Apple retail stores on launch day have been a helpful early indication of demand,” quips the analyst. “However, factors like online pre-orders, simultaneous international launches, weather, timing in the day and the day of the week can all impact a consumer’s willingness to go stand in line, but may not necessarily be indicative of immediate purchase intentions.” For these reasons, Munster believes that lines at retail locations selling the iPad 2 will not be as long as those from previous Apple device launches. Friday is the day, who’s buying an iPad Deuce? More →
Those of you clinging on to AT&T, waiting for a serious Android handset, rejoice. Today, February 22nd, is the day that you can officially purchase yourself a dual-core, laptop-docking, 1GB of RAM having, Motorola ATRIX 4G from your local wireless retailer. AT&T will be selling the set for $199.99, RadioShack will be pricing the unit at $149.99, and we’ve heard select Walmart stores will be offering the ATRIX for a very reasonable $129.99. If you’ve already taken pre-order of, or are going out to pickup an ATRIX today, make sure to drop us a comment and let us know what you think of your new device. More →
Here’s a head scratcher. During a speech today in New York City, Deutsche Telecom CEO, Rene Obermann, told investors that T-Mobile USA would consider “selling nonstrategic assets such as its broadcast cellular towers in order to raise additional funds for capital spending.” We were under the distinct impression that cellular towers were, in fact, capital assets (especially for a wireless provider). It is also a little disconcerting that the towers were referred to as “nonstrategic.”
“We’re definitely not in a rush,” said Olbermann, “the financials [would have to] work out.”
T-Mobile USA’s CEO, Phillip Humm, promised investors $3 billion in revenue growth over the next few years; T-Mobile’s revenues have been, for the most part, flat over the past two years. More →