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 →
Pasedena, California-based investment management firm Primecap Management Co. recently doubled its investment in BlackBerry vendor Research In Motion. According to a recent regulatory filing, Primecap now owns 26.4 million shares of RIM stock valued at about $577 million as of Monday’s close, and the stake represents approximately 5% of RIM’s total outstanding shares. According to Bloomberg, Primecap’s stake at the end of the second quarter of this year was approximately 2.5%. As numerous analysts continue to cut their price targets on RIM stock, Primecap’s continued investment could represent a vote of confidence in RIM’s new BlackBerry 7 phones and its future QNX phones as well, which are due to begin launching in the first quarter of 2012. More →
Apple will release its fiscal third quarter earnings on Tuesday afternoon and analysts have boosted the stock price target in anticipation of a solid quarterly report. The iPhone maker’s shares hit a record high of $373.80 at the close of the day on Monday. BGC analyst Collin Gillis has boosted the price target of Apple’s stock from $390 to $430. “We are more positive on the outlook for share acceleration in the second half as it is reasonable to expect multiple hardware refreshes combined with the back-to-school and holiday shopping quarter,” Gillis told Reuters. A group of analysts recently predicted that Apple will report that it sold between 15 and 20 million iPhones during the quarter, with the average estimate falling at 16.9 million iPhones sold. Apple is expected to “report earnings of $5.84 per share on revenue of $24.9 billion,” Reuters said, citing Thomson Reuters I/B/E/S. More →
Shares of HTC’s stock closed down 3.9% at T$871 on Monday, just three days after the the U.S. International Trade Commission announced that the Taiwanese company was guilty of infringing on two of Apple’s patents. The patents were related to a “system and method for performing an action on a structure in computer-generated data,” and a “real-time signal processing system for serially transmitted data,” but the judge’s ruling is still awaiting the review of a 6-member Commission. “We are highly confident we have a strong case for the ITC appeals process and are fully prepared to defend ourselves using all means possible,” HTC’s general council Grace Lei said on Friday “We strongly believe we have alternate solutions in place for the issues raised by Apple. We look forward to resolving this case, so we can continue creating the most innovative mobile experiences for consumers.” HTC also has an ongoing patent lawsuit against Apple. The Financial Times attributed the sell-off to “investor fears that the legal battle could have wider implications for the competitive balance between Apple and Google Android-based phonemakers like HTC, Samsung, and Motorola.” More →
Zynga, the popular gaming company behind hits such as Farmville — and the owner of other smash titles such as Words with Friends on Android and iPhone — has filed for an initial public offering (IPO), The New York Times reported on Friday. It currently has a $20 billion valuation and has plans to offer 10% of its shares; Morgan Stanley will work on the deal. Mark Pincus, the company’s CEO, expects that Zynga can earn $1 billion through the IPO. Unlike some other recent tech IPOs, which have caused many to claim the industry is in the midst of a “tech bubble,” Zynga has had solid earnings through its business model, which typically relies on in-app purchases for in-game currency. The firm reportedly recorded a profit of $90.6 million in 2011 on revenues of nearly $600 million. Zynga currently remains the top-dog when it comes to gaming on Facebook — it has 272.5 million active users across its biggest titles such as Cityville and Farmville. More →
Facing stiff competition from Samsung, LG, and Apple, Motorola Mobility has seen a slump in its share price and market share following a recent downgrade from analyst firm BMO. According to Dow Jones News Wires, Motorola Mobility’s share of the Android market took off like a rocket when it introduced the highly sought-after Motorola DROID on Verizon in 2009. However, its Android share fell from 33% last year to just 14% in the first quarter as other manufacturers began pumping out competing Android devices, some at lower price points. Reportedly, BMO has cut Motorola Mobility’s earnings per share target for the year and has dropped its price target from $26 to $19. Motorola Mobility last closed at $22, down from its 52-week high of $36.54.
It looks like we may finally see Apple unveil its mid-2011 MacBook Air models some time this week. Best Buy has stopped shipping all MacBook Air notebooks as of this past weekend. The online retailer is still taking orders, however, which indicates that Apple will likely not adjust pricing when it issues its refreshed models. Of note, unless Apple introduced an entirely new model at a much lower price point, this puts earlier rumored sales targets of 8 million units well out of reach. Several sellers on the Amazon.com website are showing low inventory or stockouts as well, further supporting the notion that Apple has stopped refreshing distributor inventory as it prepares to begin shipping updated MacBook Air models. Apple’s mid-2011 MacBook Airs are expected to feature Intel’s new Sandy Bridge processors and Thunderbolt I/O ports, among other changes. More →
Shares of RIM stock have taken a beating since the company announced devastating first-quarter earnings last Thursday. The Waterloo, Ontario-based BlackBerry maker missed Wall Street’s first-quarter consensus, it lowered its full-year guidance, it announced workforce reductions, it confirmed product delays and investors went running for the door as did a top executive. Since the earnings release last week, RIM’s stock has fallen more than 25%. This is bad news for every RIM investor, but two in particular must be especially upset. RIM Co-CEOs Mike Lazaridis and Jim Balsillie collectively own more than 10% of the company, a stake that helped each man achieve billionaire status. Last year, Lazaridis was ranked the world’s 651st richest man by Forbes with a net worth of $1.9 billion, and Balsillie was No. 692 on the list with a net worth of $1.8 billion. Fast forward to today, and neither man can call himself a billionaire any longer. The cheifs’ stake in the company is still worth more than $1 billion combined, but separately, their net worths are now just roughly $800 million a piece. We doubt the employees set to be laid off in the coming weeks and months will shed any tears for the Co-CEOs’ loss, but it’s just another piece of a puzzle that continues to fall apart. Some analysts believe RIM is hardly out for the count, however, and we agree that the company has a bit of fight left in it. If Balsillie and Lazaridis hope to rejoin the billionaire club, it’s time to put those gloves on and start swinging. More →
In the world of computing, no two companies have more history than Microsoft and Apple. In fact, the companys’ history is 10,124 pixels tall. From modest beginnings to IPOs, and later to global domination, Microsoft and Apple are largely responsible for computers as we know them today. Microsoft concentrated on software early and now owns the lion’s share of the global PC market, and more recently, Apple looked to mobile computing to revitalize its business and its market cap. Of course from an investor’s perspective, the stock chart at the bottom says it all, but as is remarkably evident in looking over the meandering paths these two tech titans have taken, no one knows what the future might hold. The full, extremely large infographic can be found after the break.
This infographic has been updated by its creator and the updated version is now found below. More →
Following RIM’s first-quarter earnings release on Thursday, the company’s sixth-biggest investor confirmed that it is giving up on the Waterloo, Ontario-based BlackBerry maker. “They are resting on their laurels,” said Stephen Jarislowsky, chairman of Jarislowsky Fraser Ltd., on Friday in an interview with Bloomberg. “Steve Jobs is a much better marketer than RIM,” Jarislowsky added. “We are on the way out. The stake has been reduced by more than 50% or even more.” As of the end of the first quarter, Jarislowsky Fraser Ltd. owned 10.2 million shares of RIM stock. Earlier on Friday, RBC Capital Markets said RIM still has some fight left in it. Sadly for RIM in this instance, it looks like not everyone agrees. More →
According to CNBC, Facebook may go public during the first quarter of next year, and sources expect the company could be valued at more than $100 billion. Facebook could find an IPO more attractive once it surpasses a total of 500 investors, because after that milestone it will be required to file financial information with the SEC each quarter — otherwise known as the “500 rule” of the 1934 Securities and Exchange Act. CNBC said that Sheryl Sandberg, Facebook’s Chief Operating Officer, recently said that an IPO would be “the next thing that happens” and that such a move is “inevitable.” More →
In a note to investors on Thursday, Citigroup analyst Jim Suva cut his rating on shares of RIM stock from Buy to Hold, dropping his price target from $80 to $45. Suva had upgraded his rating on RIM shares from Sell to Buy back in February on the assumption that the Waterloo, Ontario-based company would take advantage of Nokia’s plummeting market share. “We believe RIMM is letting this opportunity slip,” the analyst said on Thursday. Suva continued, ”Thus far our supply chain checks show that RIMM’s new models have not yet been certified by major wireless carriers and are not in mass production, which concerns us as typically 30-40 days prior to launch new product should be in mass production.” Earlier this month, BGR exclusively reported that RIM’s BlackBerry Bold 9900 smartphone will not launch until September, despite its unveiling at BlackBerry World this past May. More →
“We no longer anticipate Research in Motion recovering to participate in the mainstream of smartphone industry growth.” Those are the words of Matthew Robison, an analyst with Wunderlich Securities, which recently downgraded RIM’s stock. Robison argues that RIM is going to lose the consumer interest that it has built over the last few years. “Our long-term forecast anticipates a role supplying business-oriented devices, both mid-range and high end, as well as cloud-based services via the BlackBerry Network.,” Robison said. “We expect the consumer mix gained over the past two years to churn off, and that earnings will decline after 2013 and eventually grow again on demand that is largely associated with business users.” Robison said the PlayBook is selling well relative to other tablets, “other than the iPad,” but that “there’s little indication that the PlayBook has registered with consumers outside the loyal BlackBerry installed base.” We’ve leaked and had hands-on time with most of RIM’s 2011 lineup, and while there’s a definite spec boost across the board, the phones lack the appealing features of more robust iOS and Android devices. Worse yet, the company only revealed one new device during its annual BlackBerry World 2011 conference, and even that offered very little in the way of innovation that might attract the consumer market. More →