Author Archives: Scalper1
Comcast, Like Dish, Mashing Web TV And Pay TV Subscribers In Results
How is Comcast ’s ( CMCSA ) $15-per-month Web-based TV service, called Stream, doing? Comcast, the nation’s biggest cable TV firm, launched Stream in Boston and Chicago last quarter. Comcast’s Stream service targets broadband-only homes, mainly millennials who have never subscribed to pay TV services. No set-top box is required, and Stream works with Apple ( AAPL ) TV, Roku and other devices. With Stream, Comcast got the jump on Apple, which has been delayed in launching its expected Web TV service. Comcast included Stream subscribers in its surprising 89,000 net video subscriber additions in Q4. But Comcast did not break out how many Stream subscribers it has. “Stream is in the numbers, but I don’t think it moves the needle a lot,” UBS analyst John Hodulik told IBD in an email. Comcast has stated plans to bring Stream to its entire cable TV territory in 2016. Comcast’s Stream service includes the major live broadcast networks — ABC, CBS, NBC and Fox — along with HBO and local TV channels. Comcast Cable CEO Neil Smit, on the company’s earnings conference call Wednesday, said “it’s probably too early to say what it (Stream) will be, what it will turn into over time. But we feel good about the usage and good about the product. It’s a good value proposition for the customer, and we’ll continue to roll it out to other markets.” Comcast May Face Net Neutrality ‘Issue’ The Federal Communications Commission is likely curious about how Stream is doing in hard numbers, given that the agency has been asking questions about the Web service related to its net neutrality rules. The problem, according to critics, is that Comcast does not count its own Stream service toward the monthly data caps of its broadband customers. Comcast says the Stream service is not a net neutrality issue because the service uses IP technology over its own network, not the public Internet, to reach households. A federal court is expected to rule on the FCC’s net neutrality rules in April. The agency’s clout could again be gutted — or not, which might lead to more enforcement of the new net neutrality rules. Comcast joins Dish Network ( DISH ) in mashing new Web streaming video subscribers along with traditional pay TV customers in earnings reports. In Dish’s case, new subscribers to its $20-per-month Sling Web TV service have helped offset its loss of satellite TV customers. Dish discussed Sling subscriber additions for the first time when reporting Q2 earnings in early August. Sling had 240,000 subscribers as of June 30. Dish Network did not update Sling’s subscriber total when reporting Q3 earnings. Goldman Sachs has forecast that Sling could hit 2 million by the end of 2016. For Comcast, Stream numbers might be more material by the time it reports Q1 earnings. Comcast’s 89,000 video subscriber additions in Q4 were way up from 6,000 in the year-earlier period. Aside from launching Stream, Comcast has also stepped up its promotion of lower-priced skinny bundles, with fewer TV channels and broadband-first promotions to college students. Analysts say its deployment of Internet-ready X1 set-top boxes and improved customer service have improved video subscriber results. On Comcast’s earnings call, Smit played down the impact of lower-revenue skinny bundles. He said 75% of video subscribers added in the December quarter had “higher-end packages.”
Symantec Will Be ‘Very Judicious’ With $5 Bil M&A War Chest: CEO
Symantec ( SYMC ) will have a $5 billion M&A war chest by 2018 — but it’s not burning a hole in CEO Mike Brown’s pocket. Brown told investors Thursday that the cybersecurity firm will be “very judicious” in finding the right acquisitions. Cybersecurity stocks were walloped early Friday, and IBD’s 26-company Computer Security-Software industry group plunged 7% after LinkedIn ( LNKD ) and Tableau Software ( DATA ) stocks crashed 40% and 47%, respectively, when both companies gave weak guidance late Thursday. But Symantec stock bucked the trend, giving in-line guidance late Thursday and posting fiscal Q3 earnings that topped Wall Street estimates. In midday trading on the stock market today , Symantec shares were up more than 4%, near 20, after rising as much as nearly 10% early. The company late Thursday also announced a $500 million investment from private equity firm Silver Lake Partners , bumping its capital return program to $5.5 billion — a development that Wall Street analysts called opportune as Symantec’s M&A appetite grows. Ken Hao, a Silver Lake managing partner, joined Symantec’s board. Symantec is undergoing a necessary transition as it attempts to become “leaner and more focused,” FBR analyst Daniel Ives wrote in a research report. Ives reiterated his market perform rating on Symantec stock. Symantec on Jan. 29 completed its sale of data storage unit Veritas to the Carlyle Group for a purchase price of $7.4 billion. Late Thursday, Brown also announced a restructuring effort that aims to cut $400 million from expenses over two years. “We believe the confluence of M&A, aggressive buybacks and a tighter operating model finally puts this company on the right path after a decade of pain,” Ives wrote. “This remains a work-in-progress name, but we are now starting to be more optimistic that better days could be ahead for a ‘leaner and more focused’ Symantec.” And it doesn’t hurt “to have (Silver Lake) in Symantec’s corner,” he added. Customer, Enterprise Sales Decline Fiscal Q3 sales of $909 million and 26 cents earnings per share ex items beat the consensus of 29 analysts polled by Thomson Reuters for $905.8 million and 24 cents. Customer revenue of $414 million and enterprise revenue of $495 million fell 10.2% and 2.8% year over year, respectively, Credit Suisse analyst Philip Winslow wrote in a report. But those measures topped his estimates for $411 million and $492 million, Winslow noted. Current-quarter guidance for $885 million to $915 million in sales and 24-27 cents EPS ex items were in line with Wall Street views for $901.7 million and 25 cents. Eventual acceleration within the customer segment is likely, Winslow wrote. But “the outlook for accelerating enterprise security growth is more uncertain given intense competition across the enterprise security landscape and the endpoint in particular.” Winslow maintained his neutral rating and 25 price target on Symantec stock. Symantec is positioning itself with 12 new product releases in 2016 to build “a strong reputation in the next-generation security market,” William Blair analyst Jonathan Ho wrote. Competitors within that segment include Palo Alto Networks ( PANW ), CyberArk Software ( CYBR ) and Check Point Software Technologies ( CHKP ). Ho reiterated his market perform rating on Symantec stock. Midday Friday, shares of Palo Alto Networks, CyberArk and Check Point were down 12%, 8% and 2%, respectively.