Author Archives: Scalper1

TiVo Jumps 21%: Rovi Merger Would Combine Intellectual Property In Pay TV

TiVo ( TIVO ) stock surged on reports the DVR pioneer is in talks to be acquired by Rovi ( ROVI ), a provider of interactive programming guides to pay-TV companies and smart-TV manufacturers. Shares in TiVo surged 21% in the stock market today  by midafternoon. Rovi stock fell 4%. Both TiVo and Rovi hold intellectual property for features built into pay-TV set-top boxes and garner licensing revenue. Rovi and TiVo face big changes among their customers as the pay-TV industry faces growing competition from Internet video providers, such as Netflix ( NFLX ), Alphabet -Google’s ( GOOGL ) YouTube as well as new TV hardware from Apple ( AAPL ) and Roku. Federal regulators aim to open up the set-top box TV market . TiVo shareholders would reportedly get cash and stock in the deal and own about 30% of the newly formed company. TiVo has expanded beyond hardware sales and patent licensing to online subscription services. TiVo’s customers include small and midsize pay-TV companies. Analysts have said TiVo aims to provide more cable firms with next-generation features, including its cloud platform and mobile apps, analysts say. Apple and Google have been among companies rumored to be interested in acquiring TiVo in the past. Rovi gets an IBD Composite Rating of 86 out of a possible 99, though today’s drop puts it below its key 50-day moving average. TiVo holds just a 26 Composite Rating. “Together, the combined TiVo and  Rovi entity would have more than 6,000 issued or pending patents,” said Mike McCormack, a Jefferies analyst, in a research report. “TiVo alone has generated around $1.6 billion of settlements to date from patent enforcement lawsuits vs. Dish Network ( DISH ), AT&T ( T ), Verizon ( VZ ), and Cisco-Motorola-Time Warner. There are 380 issued patents in TiVo’s portfolio, plus 340 pending patents, many of which expire beyond 2018.”

Game On! Virtual Reality Race Starts As Facebook Oculus Rift Ships

Virtual reality will get its close-up on Monday when Facebook ( FB ) starts shipping its hot Oculus Rift headsets. Facebook sees Oculus Rift as a big game changer that starts with games and later moves to virtual front-row seats at sports games, as users slap on the Rift goggles for deep-seated immersion. Preorders for the $599 Oculus Rift headsets began in January. Facebook has not said how many Rift orders it received but did say they span 20 countries. When it ships,  30 games will be available, with more than 100 games expected by the end of this year. Game prices range from $9.99 to $59.99. High-performance PCs will be needed to power the Rift system. Oculus-ready PCs and Rift bundles are available from Dell, Dell’s Alienware unit, and Asus, which start at around $1,499. They’re available through Amazon ( AMZN ), Best Buy ( BBY ) and the  Microsoft ( MSFT ) Store. Research firm CCS Insight estimates  that virtual reality devices, including the related augmented reality field, will exceed $4 billion in sales in three years. It projects 2.5 million virtual reality and augmented reality devices will sell this year, growing to 12 million devices next year, and more than 24 million in 2018. Later this year, Facebook will also ship its Oculus Touch controllers that allow people to interact more naturally in VR through hand movements and gestures. Facebook says it’s working with thousands of developers on entirely new VR experiences. Facebook acquired Oculus for $1.9 billion two years ago. Facebook CEO Mark Zuckerberg announced the Oculus acquisition with a Facebook post , saying the technology goes far beyond being a system for gaming. “After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court-side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face, just by putting on goggles in your home,” he wrote in the post. In a conference call when Facebook announced fourth-quarter earnings on Jan. 27, he said: “This Oculus launch is shaping up to be a big moment for the gaming community. Over the long-term, VR has the potential to change the way that we live, work and communicate as well.” As to the revenue contribution Oculus will make to Facebook’s bottom line, the company is downplaying that for now. “With Rift, it’s early in the evolution of VR,” Facebook CFO David Wehner said on the conference call. “It’s early to be talking about large volumes. So, at this point, I don’t think we’re giving a lot of color around supply chain and that sort of thing. It’s not going to be material to our financials this year.” The arrival of Rift could have a big benefit for chipmaker and computer game-card maker Nvidia ( NVDA ), as the demand for virtual reality accelerates. Nvidia provides the graphic processors needed in computers for Oculus Rift performance and that of other VR systems. The virtual reality field is expected to be intensely competitive, with a host of companies jumping into the game. Samsung has already shipped its Gear VR. Sony ( SNE ) is releasing a PlayStation VR system later this year, which will have a $400 price tag. Sony VR will have the benefit of leveraging its installed base of 30 million PlayStation 4 users. Also coming is the Vive VR system from Taiwan-based HTC, in joint development with U.S. game developer Valve. The HTC VR headset will begin shipping on April 5. Likewise, Microsoft is working on its “HoloLens” technology.

Accenture Rides Clients’ Disruption Avoidance; Stock Rides New High

Shares of Accenture, the tech outsourcing and consulting company, jumped to a record high Thursday after the company reported a 24% improvement in fiscal second-quarter earnings, well beyond what Wall Street expected. It also beat revenue estimates. The company also raised its earnings guidance for the fiscal year ending in August. The improvements are driven by the digital transformation of Accenture’s customers and their fear of disruption, according to the CEO. Accenture ( ACN ) stock was up 5.5% in afternoon trading in the stock market today , above 113 and up more than 20% from a seven-month low of  93.35 hit on Feb. 9, in the depths of the infamous Software Sag of 2016. Rivals  IBM ( IBM ) and  Cognizant Technology Solutions ( CTSH ) were each up more than 1.7% Thursday afternoon, and India tech outsourcer  Infosys ( INFY ) was up nearly 1%. Dublin-based Accenture said adjusted EPS reached $1.34 after removing income taxes and the gain on the sale of Navitaire, vs. $1.08 a year ago, on revenue up 6% to $7.9 billion. Analysts polled by Thomson Reuters expected EPS of $1.18 minus items for the quarter ended Feb. 29 on revenue of $7.72 billion. “We are benefiting from the focused investments we are making to rotate our business to new, high-growth areas where our capabilities are clearly resonating with the needs of our clients and differentiating us in the marketplace,” said Accenture CEO Pierre Nanterme in the earnings release. “At the same time, we continue to manage Accenture with discipline to further enhance our competitiveness. We remain very well-positioned to continue driving profitable growth and delivering value for our clients and shareholders.” Accenture CEO: Economic Environment Sluggish In the company’s earnings conference call with analysts, Nanterme, echoing his remarks in October,  said, “The overall economic environment is sluggish, to say the least … unstable, risky, extraordinarily complex.” He said he is “not noticing” much change in the sources of revenue from his customers, but “it’s all about digitalization. … All the leaders in all the industries are subject to disruption. That’s the new factor in town. It’s about not being disrupted … . I see this cycle is here for quite a while. They have to invest (into) rationalization of the operations, IT efficiency …  across the board … (which)  is driving our business.” The company guided the current Q3 revenue to $8.1 billion to $8.35 billion, up 7% to 10% in local currency after assuming a 2.5% foreign exchange impact, compared with $8.275 billion a year ago. The midpoint is slightly above analyst views. The company didn’t project Q3 earnings, but analysts expect EPS ex items of $1.42, up 9%. Accenture raised its fiscal year earnings guidance to $5.21 to $5.32 per share excluding the after-tax impact of the gain on the sale of Navitaire vs. its earlier guidance of $5.09 to $5.24. Analysts were modeling $5.22, up 8.3% from $4.82 in fiscal 2015. At the new $5.265 midpoint, the fresh guidance represents a 9.2% gain for adjusted EPS. Accenture said sales for its communications, media and technology unit rose 6% to $1.61 billion; financial services also rose 6%, to $1.59 billion; health and public services rose 12% to $1.48 billion; and products rose 8% to $1.85 billion. But resources, which include the struggling energy industry, fell 3% to $1.21 billion. North America sales rose 11% to $3.41 billion, while Europe rose 5% growth to $2.78 billion and growth markets slowed 4% to $1.37 billion. The company declared a semiannual cash dividend of $1.10 per share. In Q2 it repurchased or redeemed 8.1 million shares for $829 million, bringing the total spent  on repurchases to $1.49 billion for the year. With an IBD Composite Rating of 82, Accenture is one of the better performers in IBD’s Computer-Tech Services industry group, among the top 18% of all stocks on a variety of metrics, including earnings and sales growth and stock performance. The biggest company in the group, IBM, rates a 55 CR. Infosys has an 87 CR and Cognizant an 84. Image provided by Shutterstock .