Intel Up In One Measure, Down In Another

Earnings, IPOs, and the like

from the turning-silicon-green dept

On Wall Street, there’s a constant battle between growth and margins. Ideally, a company can show good growth and healthy margins, but often one gets sacrificed for the other. Last night, Intel came out with quarterly earnings that were up by 44% over the year-ago period — perfectly respectable, particularly considering the headwinds facing the industry. But in order to keep sales high and keep AMD at bay, the company had to fall on its sword with respect to pricing, which proved a disappointment to investors. The company says it foresees continued growth, but it’s hard to imagine that it could keep up this clip at the same time everyone else in the industry is suffering. Still, the fact that it managed to grow while remaining quite profitable is a further indication of how badly the company is drubbing AMD right now.

Filed Under: semiconductors
Companies: amd, intel

Yahoo's Earnings Weakness Starting To Get Old

Earnings, IPOs, and the like

from the yahoo? dept

It’s no secret that Yahoo’s performance has been pretty shabby of late, as it cost CEO Terry Semel his job. The company has tried to argue that its new Panama advertising platform would turn its performance around, but so there seems to be nothing doing. This evening, the company released its earnings, which look to be more of the same. Profits aren’t growing and there’s no sign that they’ll grow anytime soon. To be fair to Jerry Yang, he does deserve some time to right the ship, but as one analyst put it, “This is growing old.”

Filed Under: search
Companies: yahoo

Infosys Still Humming, Despite Pressures

Earnings, IPOs, and the like

from the pushing-on dept

There have been a lot of questions raised about the business prospects for Indian IT outsourcing firms, particularly due to wage pressure, the strength of the rupee against the dollar and a shortage of talented workers. One of the big ones in this group, Infosys, has reported earnings that should help allay people’s fears, at least to some extent. While the Rupee is predicted to be a drag going forward, the core business, as measured in dollars, remains quite healthy. In other words, labor and currency concerns aren’t stopping the company from profitably carrying out its business, at least not yet. The fact that Infosys continues to thrive in spite of theheadwinds is likely a reflection of its recognition that it’s not just an “Indian” outsourcing firm, as they’re typically perceived as, but a global firm, with a range of value-added offerings that happens to have a large base in India.

Filed Under: earnings, outsourcing
Companies: infosys

NetSuite Decides To Go Dutch For Date With Public Market

Earnings, IPOs, and the like

from the suite-deal dept

The concept of Dutch auction IPOs has been around for some time, but despite its promise of being fairer to investors, the concept hasn’t really gained much traction on Wall Street. Without a doubt, Google’s IPO is the most prominent company to have gone public this way, but it could be argued that the offering wasn’t particularly successful. Considering the rapid run up in the company’s shares following the initial sale, it would seem that Google left a lot of money on the table, which is one of the main pitfalls that these auctions are meant to avoid. Today, on-demand software firm NetSuite announced that it has filed to go public, a move that’s been foreseen for quite some time. The company says it will use the Dutch auction model and that it has hired WR Hambrecht (one of major advocates of this model) and Credit Suisse to manage the sale. This is a good opportunity for the advocates of Dutch auctions to show that it can work since NetSuite has a lot going for it. It’s in a very hot industry that investors are enamored with, as evidenced by soaring Salesforce.com shares, while the market will remember the big gains afforded to Google shareholders that bought in early. It’s hard to imagine a better set of conditions for this model to work, so a failure would be a signal that the concept doesn’t have much of a future.

Stock Spam Getting Too Crowded: Latest Trick Is Advertising Your Stock In Respected Financial Publications

Earnings, IPOs, and the like

from the competition-is-getting-tough dept

Stock spam has become even more popular over the last year or so, as there’s increasing evidence that it works for the spammers as an easy way to get money. However, with so much spam, it appears that some need to figure out other ways to pump up their stock — and may be using ads in respected financial publications to do so. Davis Freeberg writes "Normally, if I received a piece of stock spam, I’d just delete the message and move on, but last week I got a piece of stock spam in my mailbox instead of my inbox. The company in the letter was named Ghuangzhou Global Telecom. They recently went public in a reverse merger. Through the use of complex financial engineering, the company’s founder, has gone from an initial $100 investment to $7.6 million, based upon Friday’s closing price. What makes this story so surreal is how Ghuangzhou is getting their publicity. Instead of sending out mass email spams, they are targeting financial people with mailers and have been advertising in Business Week, Forbes and Investor Business Daily. Kiplinger’s appears to be the only major publication to reject the ads, and has already spoken out about the ads — but the rest of the mainstream media seems to content to ignore the issue, as long as they are getting ad revenue from the promoters." Freeberg also takes a closer look at the company. It does seem problematic that respected financial publications seem to be giving the tacit okay to a questionable stock. Also, not mentioned in the article, but it certainly sounds like these ads may violate SEC rules for promoting a stock.

Money-Bleeding Blinkx IPOs On Market Known For Losers

Earnings, IPOs, and the like

from the across-the-sea dept

Video search engine Blinkx has gone public with an IPO that raised $50 million for the company. Blinkx hits on all the right buzzwords these days, like search, video and advertising, but because the company is nowhere near profitability, it’s got some people worried that its IPO is a sign of a bubble. The bubble question is one that a lot of people are wrestling with at the moment. So far, while the IPO market has been quite hot, public market investors don’t appear to have lost their heads. The thing about the Blinkx IPO is that the company went public in London on the Alternative Investment Market (AIM). During the early years of Sarbanes-Oxley, going public on this market made sense as a way to raise money while avoiding onerous regulations. But the fact of the matter is that this market is where the dregs go that can’t make it on more established exchanges. Over the years, performance has been downright horrible on this exchange, a reflection of the companies that go public there. So perhaps we shouldn’t read a whole lot into the fact that a company with shakey financials managed to go public on an exchange that’s known as a haven for poor performers.

In China, IPO Mania In Full Force

Earnings, IPOs, and the like

from the spike-it dept

Although the IPO market in the US has come strongly back to life, there’s still no sign that things are wildly overheated like they were during the bubble. Although profit-less companies are managing to go public, investors seem to be discerning between quality and junk once the shares begin trading. But, if you’re looking for a wild IPO market, check out what’s going on in China these days. New offerings in Shanghai are routinely seeing massive first-day spikes, just like dot come stocks 7 years ago. Of course a rash of these deals signifies an inefficient market, as the newly public companies leave a lot of money on the table. On the other hand, public market investors go crazy over these spikes, because they look like instant wealth creation. And in China, going crazy they are, as the stock market has become a national obsession, with people taking on massive personal leverage in order to invest. So while things may look okay here, from a global perspective, there are signs of madness once again.

Just Being In A Hot Industry Isn't Enough For Public Market Success

Earnings, IPOs, and the like

from the heads-on-straight dept

There’s been a lot of debate about how today’s IPO market compares to that of the last boom. This year’s first quarter has seen a resurgence not only in total deal volume, but in highly speculative deals from companies that are in the red. The latter part is what has people worried, although there’s no rule that says a company must be profitable before it goes public. One good sign is that while the deals are getting done, investors seem to be realistic about the prospects of some of these companies. Clearwire, which faces significant hurdles, has certainly not been a star performer on the market. Last week, Ocean Power Technologies, a company that turns ocean waves into energy, came public, hoping to capitalize on the hot green tech sector. But despite it being well-situated industry-wise, the company’s off to a poor start, as investors recognize how weak the company is. This is definitely not how the market would’ve reacted seven years ago, when any company deemed to be in a hot space raced higher. In fact, the last bubble did have a green tech component, as several companies trying to capitalize on fuel cells saw their stocks explode. All in all, there’s little suggest that speculative mania has returned to the market. Yes, investors seem optimistic, as both the spate of IPOs and the record market highs indicate, but they’re not so much so that they’re ignoring obvious problems with a company’s fundamentals.

Does Resurgent IPO Market Take The Heat Off Of Sarbanes-Oxley?

Earnings, IPOs, and the like

from the may-i-be-excused? dept

In the recently concluded first quarter, both the NYSE and the NASDAQ saw more IPOs than in any other quarter since the last bubble. All told, 64 companies, including many that are far from profitability, raised $12.1 billion during the period. This stands in stark contrast to the stock market a year ago, which saw relatively few IPOs, despite the fact that there was plenty of activity in terms of startups and young companies. At the time, one of the popular reasons given for the lack of IPOs was the Sarbanes-Oxley “tax”, which was seen as an undue burden on small companies. This view, a popular one among venture capitalists, was bolstered by the fact that a number of companies, which in the past would have probably listed on the NASDAQ, were opting to go public in London, where they could escape Sarbanes-Oxley. Also, the rise of private equity and management-led buyouts gave credence to the idea that Sarbanes-Oxley made it not worthwhile to be public. So, then, does the resurgent IPO market discredit the Sarbanes-Oxley complaints at all? Certainly, Sarbanes-Oxley still represents a significant cost for small companies, and there’s almost no other explanation for why American companies would list in London rather than their home market. But, seeing as the IPO comeback coincides with record highs for the stock market, it would appear that economic cycles must be playing a pretty significant factor. This doesn’t dismiss the Sarbanes-Oxley explanation, but it does suggest that it’s just one of a number of factors, rather than the dominant one.

IBM Earnings Report Reflects Soft Corporate Spending

Earnings, IPOs, and the like

from the ruh-roh dept

The tech earnings picture continues to look decidedly mixed. Last week, chip maker AMD came out with awful results, while its rival Intel managed to report decent earnings, even as it acknowledged that a price war was causing it some pain. Last night, one of the ultimate tech bellwethers, IBM, released its quarterly results, and while the initial numbers looked good, some see cause for concern. Because IBM is so diversified across multiple business lines and has such a broad customer base, its results are a pretty good proxy for tech spending as a whole. Although the company’s earnings gained, it said that its US business actually shrank amidst an overall slowdown in tech spending by enterprise customers. This is a pretty ominous sign for a number of companies that are dependent on corporate spending for most of their revenue, so it’ll be interesting to see whether this softness continues to be reflected in more of their earnings.