Author Archives: Scalper1

Qorvo Sees June ‘Up Significantly’ Despite Apple iPhone Albatross

Qorvo ( QRVO ) skirted Apple ‘s ( AAPL ) iPhone shortfall by regaining Samsung Galaxy S7 share and riding the Chinese carrier aggregation trend, Needham analyst Quinn Bolton said Thursday after the chipmaker’s blowout fiscal Q4. In morning trading on the stock market today , Qorvo stock was up 8%, trading near a three-week high above 48. But shares are down 12.5% year to date on Apple’s weakness. Qorvo’s largest customer — widely assumed to be Apple — accounts for a third of its total sales. Shares of rivals Broadcom ( AVGO ) and Skyworks Solutions ( SWKS ) were up a fraction Thursday morning, after Qorvo’s fiscal Q4 beat late Wednesday. Last week, Skyworks topped fiscal Q2 expectations, but its fiscal Q3 sales guidance lagged by about $50 million, helping send its shares down 6.9%. For Qorvo, the March quarter wrapped up with $608.1 million in sales and $1.04 earnings per share minus items, beating the consensus of 20 analysts polled by Thomson Reuters for $599.2 million and 92 cents. Year over year, sales and EPS fell 4% and 6%. Current-quarter guidance for $650 million in sales and $1.05 EPS ex items was also ahead of analysts’ views for $628.6 million and 96 cents, but that would be down 6% and 12% vs. the year-earlier quarter. On Thursday, at least four analysts boosted their price targets on Qorvo stock. Offsetting Apple’s 24% Fall Mobile sales declined 5% sequentially to $465 million, “driven by content gains on the Galaxy S7 platform that mostly offset a 24% quarter-over-quarter decline in sales to its largest customer,” Bolton wrote in a research report. Industrial and defense products rose 9% to $142 million in sales, also helping offset the hit from Apple, Bolton wrote. Bolton boosted his price target on Qorvo stock to 53 from 50 and reiterated his buy rating. Qorvo is “outperforming smartphone peers with content and share gains,” he said. Behind Apple, Samsung and Huawei are Qorvo’s largest mobile customers, Qorvo CFO Steven Buhaly said on the company’s earnings conference call late Wednesday. Qorvo “took the medicine” in December when Apple iPhone sales began slowing, he said. Outside Apple, mobile sales will be “up significantly” in the June quarter, Steven Creviston, Qorvo’s president of mobile products, said on the call. He credited growth in China and the carrier aggregation trend for the likely growth. In that segment, sales to Chinese ODMs (original design manufacturers) account for 40% of revenue. Carrier aggregation in China is driving demand for Qorvo’s radio-frequency chips, Qorvo CEO Robert Bruggeworth said on the call. Rosenblatt analyst Jun Zhang expects Qorvo to swipe Skyworks’ share on that trend. At Taiwanese MediaTek, Skyworks accounts for 80%-85% of all LTE chipsets, Cowen analyst Timothy Arcuri wrote in a report. He, too, expects Qorvo to aggressively gain share, boosting his price target to 55 from 50 but keeping his market perform rating.

AMC Networks Q1 Beats On Content Licensing, International Growth

AMC Networks ( AMCX ) stock jumped Thursday after the pay-TV and video streaming content provider reported Q1 revenue and EPS minus items that topped Wall Street views. AMC Networks sells on-demand TV shows to Netflix ( NFLX ) and Amazon.com ( AMZN ). Pay-TV companies such as Comcast ( CMCSA ), meanwhile, pay AMC programming fees for current season shows. AMC Networks stock was up 6% in morning trading in the stock market today , near 67.50. New York-based AMC Networks said Q1 earnings per share minus items rose 13% to $1.99, while revenue increased 5.7% to $707 million. Analysts had modeled $1.89 and $694 million. “AMC Networks beat revenue and EBITDA expectations, boosted by content licensing (likely Hulu) and improving trends internationally,” Stan Meyers, an analyst at Piper Jaffray, said in a research report. AMC Networks’ cable channels include AMC and IFC. Its shows include some big hits, such as “Mad Men,” “Breaking Bad” and “The Walking Dead.” “International revenue was ahead of expectations at $109 million vs. consensus estimate of $107 million,” said Benjamin Mogil, an analyst at Stifel, in a report. Even with Thursday’s gain, AMC Networks stock is still down 9% in 2016. AMC Networks has an IBD Composite Rating of only 37 out of a possible 99.

Tesla Analysts Hike Price Targets, But Production Ambitions Weigh

Shares of Tesla Motors ( TSLA ) were down at a seven-week low Thursday morning after the electric car maker’s late-Wednesday Q1 earnings report, despite getting at least two price-target hikes from analysts. Tesla reported in-line revenue and a slightly smaller loss than expected for Q1, but the main topic of discussion on the conference call with analysts was the upcoming launch of the Model 3 economy sedan and Tesla’s announcement that it’s moving its 500,000-vehicle production target up by two years, to 2018. The latter led to significant hikes in spending guidance for the back half of this year. Tesla, though, has had production issues with its main product, the Model S, and with its new Model X SUV. Tesla CEO Elon Musk, speaking on the company’s earnings conference call late Wednesday, said the target date for volume production of the Model 3 is July 1, but at the same time he admitted that it’s an “impossible date,” given how many components have to be lined up for production to start. IBD Take: What to make of Tesla’s up-and-down stock? IBD Stock Checkup can help. “Nonetheless, we need to, both internally and with suppliers, take that date seriously, and there need to be some penalties for anyone, internally or externally, who does not meet that time frame,” Musk said. Musk also admonished Wall Street not to compare production of the Model 3 to the troubled production of the Model X SUV, saying, “It’s always tempting for people to reason by analogy instead of first principles.” Goldman Sachs analyst Patrick Archambault, however, wrote in a research note that Model X production is still an overhang. “Although management disagrees, we think that the Model X will be viewed as a litmus test for Tesla’s manufacturing capability and that the back-end-loaded nature of the delivery guidance — requiring quarterly production of 25,000 units in Q3/Q4 (15,510 in Q1 2016) — does leave some near-term execution risk,” Archambault wrote. Nonetheless, Archambault added that “the disruptive case has unquestionably increased in likelihood — which recently led us to raise our upside case probability to 35% from 25%.” He raised his price target on Tesla stock to 250 from 245, while keeping a neutral rating. Robert W. Baird analyst Ben Kallo raised his price target to 338 from 330 and maintained an outperform rating. On the call, Musk also said that despite Wednesday’s news reports to the contrary, production chief Greg Reichow isn’t actually leaving the company. Tesla had said that Reichow is taking a “leave of absence,” though it didn’t specify a return date. Tesla stock was down more than 4% in morning trading on the stock market today, near 212.