Author Archives: Scalper1

No Slouch, But Manhattan Associates’ EPS Growth May Have Eased To 15%

Investors are hoping fast-growing supply-chain software developer Manhattan Associates ( MANH ) will say something Tuesday to help re-accelerate growth. Not that Manhattan is any slouch, but the 15% improvement in first-quarter earnings that it’s expected to disclose after Tuesday’s market close would be its slowest year-to-year growth rate in 15 quarters. Six of those 15 quarters have topped 30% earnings growth, including Q3 and Q4 2015, and all but two of the last 15 topped 20%. While still 25% off a record high 77.75 set Dec. 7, Manhattan Associates stock was up more than 1.5% in afternoon trading in the stock market today , near 58 and 31% above its 44.27 nadir hit Feb. 8 during this year’s software slump. Most of its bigger enterprise-software rivals have been faring better, with the biggest, Oracle ( ORCL ) up fractionally, 9% off recent highs. Enterprise software maker SAP ( SAP ) was also up fractionally and just 2% off a recent high, while Salesforce.com ( CRM ) was up more than 1%, just 7% off its recent high. The entire IBD Computer Software-Enterprise industry group, which does not include Oracle as a member, is about 9% off its Nov. 9 high. Oracle is a member of IBD’s Computer Software-Database group, which is 22% off an August high. Among the re-accelerants that management might discuss Tuesday is just how much its new distribution management (DM) tools announced last week might contribute to revenue. Its new DM Mobile platform gives users “the ability to address any operational issues, including inventory issues, directly from the floor via their tablet devices, increasing mobility and driving productivity and efficiency,” the company announced at the MODEX supply-chain management show in Atlanta. On Feb. 3, just before Manhattan stock tanked more than 20% in three trading sessions, William Blair analyst Matthew Pfau said in a research note that “the 2016 EPS guidance that management provided is conservative, and through a combination of revenue growth, operating expense leverage and share repurchases we expect Manhattan to continue to increase its EPS in excess of 15% over the next several years. “We recommend shares to long-term investors looking for a midcap software company with a strong record of execution and sustainable earnings growth opportunity.” By consensus, Pfau and four other Wall Street analysts polled by Thomson Reuters expect Manhattan to deliver Q1 earnings up 15% to 39 cents per share minus items, on revenue up 8.9% to $145.5 million. That would be a record quarter in hard dollars, but the year-over-year rate would be only slightly better than Q4’s 8% growth to $141 million and only the third time in 15 quarters that its sales growth had slipped into single digits. Over the past five years, it’s averaged 14% sales growth annually and 15% earnings growth. Manhattan guided full 2016 non-GAAP EPS to a range of $1.69 to $1.72, the midpoint slightly below analysts’ $1.71 consensus, or up 12.5% from 2015. It guided 2016 sales to a range of $609 million to $615 million, its midpoint coinciding with analysts’ $612 million consensus, up 10% from 2015. “Although the retail environment remains challenging, Manhattan has not seen a material change in IT purchasing trends from retails and the pipeline is still strong,” Pfau said. “However, we believe that management’s guidance takes into account a cautious retail IT spending environment for 2016.” While Manhattan’s core software manages warehouse inventory, its visualization tools allow users to see everything from the manufacturer’s supplies to the consumer’s purchase at the checkout counter. Pfau noted that 70% of its total license revenue comes from its basic warehouse management systems (WMS) license revenue, so WMS is a “leading indicator for sales of Manhattan’s other solutions.” License revenue, however, amounts to only 14% of its total revenue. Most of its sales, 77%, come from services related to its software licenses. “We will continue to be a serial investor in innovation,” Manhattan CEO Eddie Capel said in February.  

Google Books Copyright Suit Ends As Supreme Court Rejects Challenge

The U.S. Supreme Court on Monday declined to take up a case focused on whether Alphabet ( GOOGL ) unit Google carried out copyright infringement when it scanned millions of books and made them searchable online for free, dealing a final blow to a group of book authors who had first sued the search giant more than a decade ago. In a brief written order, the justices said they won’t take up an appeal by the Authors Guild and individual writers who argued Google engaged in copyright infringement “on an epic scale,” the Wall Street Journal said on Monday. Lower courts had sided with the company, ruling that the search giant engaged in “fair use” of the writers’ works for its Google Books digital database, which allows individuals to search for specified terms in more than 20 million works and view excerpts of many of the books that appear in the search results. In the most recent court decision, the Second U.S. Circuit Court of Appeals in New York last October ruled Google’s actions were legal. Because the Supreme Court declined a review, those rulings are the final word in the matter, and it’s the end of the road for the authors’ legal push. The authors in their court petition  argued that the lower-court decisions represented “an unprecedented judicial expansion” of the concept of fair use and threatened copyright protections in the digital age. They said Google copied the books for profit and shouldn’t be excused “based upon the perceived social benefit” of its search product. Google said its books database gives readers a new way to find books and advances the interests of authors. “We’re pleased the court has confirmed that the project is fair use, acting like a card catalog for the digital age,” Google said in a statement to IBD in October, when the circuit court in New York rejected the infringement claims against Google, initially filed in 2005. The three-judge panel had affirmed a 2013 District Court judgment that the online-search service does not violate intellectual property law because it provides “several important educational purposes.” Google had said it could face billions of dollars in potential damages if the authors prevailed. The Authors Guild had said that Google makes 78% of the books, including those under copyright, available for display to its users for free, through the use of  “snippets” — short bits — of the books online. The Guild had asked for  “fair compensation for Google’s commercial use of their books and for Google’s distribution of their e-books to libraries.” The Google Books project began in 2004, when some of the world’s leading research libraries started to allow Google to scan books in their collections. The company gave the libraries digital copies of the books it scanned. Many of the books in the Google database are out of print. A sizable number of them are in the public domain, no longer eligible for copyright protection. But millions of other books are under copyright protection, and Google didn’t seek permission from the copyright holders for its scanning activity. The individual plaintiffs who filed the proposed class action against Google included, among others, former New York Yankees pitcher Jim Bouton, the author of the acclaimed memoir, “Ball Four.” Alphabet stock was up a fraction in midday trading in the stock market today , near 787.

Bad News, Butterfingers: Future iPhone Could Sport All-Glass Design

In what could be a boon for makers of protective smartphone cases, next year’s iPhone is rumored to feature an all-glass design. In a report, KGI Securities analyst Ming-Chi Kuo said Apple ( AAPL ) will switch from its aluminum casing to an all-glass enclosure with an AMOLED screen for the iPhone in 2017, 9to5Mac reported Sunday . Current iPhones use a liquid crystal display (LCD) screen. AMOLED, short for active-matrix organic light-emitting diode, allows for thinner, more power-efficient displays with richer colors. Kuo believes Apple is switching to the glass enclosure to give the iPhone a fresh new look. The upcoming iPhone 7, due out in September, reportedly will sport a look similar to the current iPhone 6S series. But the iPhone 7 will eliminate the home button and standard headphone jack in favor of newer technologies, according to media reports. Also, a high-end version of the iPhone 7 likely will come with a dual-camera system. Last week, Apple reportedly reached a $2.6 billion agreement with Samsung to supply OLED panels for iPhone displays starting in 2017. The pact calls for Samsung to supply 100 million 5.5-inch OLED displays, 9to5Mac said. Universal Display ( OLED ), a provider of OLED materials and technology, spiked to five-year high on Monday. Shares of the corporation, aka UDC, were up 6.5% in afternoon trading on the stock market today . In intraday trading, UDC hit 61.90. It reached an all-time high of 63.58 in April 2011.  Universal Display holds an IBD Composite Rating of 98 out of a possible 99. Apple was down 2.3% to above 107 in afternoon trading. IBD’s Take: How does Apple stock rate? Objective analysis at IBD Stock Checkup RELATED: Apple Slices Below 200-Day On iPhone Production Cuts Report How Much Will Apple Increase Its Dividend, Stock Buybacks? Apple iPhone Sales Could Fall For 3 Straight Quarters, Analyst Says