Category Archives: oud

Goldman Sachs Calls 5G Winners: Verizon, Cisco, Intel, Broadcom

Verizon Communications ( VZ ) and AT&T ( T ) could shake up the U.S. residential broadband market by 2020 by deploying 5G wireless services to homes, challenging cable TV firms Comcast ( CMCSA ) and Charter Communications ( CHTR ), says Goldman Sachs. While 5G is expected to provide much faster data speeds, another market opportunity for AT&T, Verizon and T-Mobile US ( TMUS ) will be applications that require always-on, low-data-rate connections, says Goldman Sachs in a new research report. The apps involve data-gathering from industrial sensors, home appliances and other devices often referred to as part of the Internet of Things. Simona Jankowski, a Goldman Sachs analyst, says that some chipmakers, network gear suppliers and software companies will see an upside in 5G deployment. Jankowski says that Broadcom ( AVGO ), Qualcomm ( QCOM ), Intel ( INTC ), Cisco Systems ( CSCO ), cell tower operator Crown Castle ( CCI ), and bandwidth service provider Zayo Group Holdings ( ZAYO ) could see upside from 5G deployment. “We expect pre-standard 5G commercial deployments to begin in the U.S. in 2017, when AT&T and Verizon plan to be first in the world to roll out fixed wireless 5G broadband to the home, followed by pre-standard 5G mobile networks in Korea in time for the 2018 Olympics,” wrote Jankowski in the report. U.S. regulators are focused on opening up high-frequency airwaves , also called millimeter wave spectrum, for 5G services. “Europe led the 3G transition, with industry giants such as Ericsson ( ERIC ) and Nokia ( NOK ) leading the way,” said Jankowski. “With 4G, the baton passed to the U.S., driven by a new group of industry leaders such as Qualcomm and Apple ( AAPL ). With China, Korea and Japan targeting 5G rollouts on par with or ahead of their Western counterparts, it bears watching whether the wireless industry’s center of gravity shifts once again (to Asia).” The Goldman Sachs analyst says that 5G also could have upside for Cisco, Intel, Zayo and Crown Castle. “We view Cisco’s market leading position in IoT as a strategic differentiator, given that 5G will likely be closely coupled with IoT,”  Jankowski added. “We expect Intel’s server and networking business to benefit from increased data traffic and greater demand for compute-intensive data analytics. “As the largest operator of small cell networks in the U.S. and one of the largest pure-play providers of dark fiber in large metros respectively, Crown Castle and Zayo look well positioned for this long-term investment cycle.”

J&J Earnings Beat Estimates; Guidance Raised As FX Headwinds Ease

Medical giant Johnson & Johnson ( JNJ ) beat Q1 estimates and raised guidance Tuesday morning, sending its stock to its fifth recent record high. J&J reported earnings of $1.68 a share, up 8% from the year-earlier quarter and beating analysts’ consensus by 3 cents, according to Thomson Reuters. Sales rose 0.6% to $17.48 billion, matching consensus. J&J said that the foreign-exchange impact knocked 6.6 percentage points off sales growth. Nonetheless, the forex headwinds finally seem to be abating. J&J cited the improved forex outlook as the reason it was raising full-year sales guidance by $400 million, to $71.2 billion to $71.9 billion. It also added 10 cents to EPS guidance, now $6.53 to $6.68. IBD’s Take: Johnson & Johnson rated No. 1 in its group, but CR is iffy . “Our Pharmaceuticals business continues to deliver impressive levels of growth, we have steady improvement in our Consumer business, and we are seeing momentum in our Medical Devices businesses, all of which are fueling our optimism for the full-year ahead,” J&J CEO Alex Gorsky said in a statement. J&J stock was up 2% in early trading on the stock market today , touching a record high of 113.60 intraday. The stock is up more than 10% for the year so far, and it is the first of three medical stocks that are hitting new highs  and are reporting this week, the others being Intuitive Surgical ( ISRG ) this evening and Stryker ( SYK ) late Wednesday. “This morning, J&J continued the growth momentum the company has seen in recent quarters, again delivering organic sales growth acceleration and its second consecutive quarter of double-digit EPS growth on an adjusted, operational basis,” wrote Leerink analyst Danielle Antalffy in a research note. She noted that, excluding the impact of foreign exchange, M&A activity and shrinking sales of hepatitis C drug Olysio — which was made obsolete when Gilead Sciences ( GILD ) released Harvoni in late 2014 — sales rose 6.9%. Operating EPS growth was just above 10%. Credit Suisse analyst Vamil Divan wrote that the pharma sales beat was driven by the immunology franchise — Remicade, Simponi and Stelara — as well as its stroke prevention treatment Xarelto. But another top seller, diabetes drug Invokana, missed consensus by 19%. Investors had been wondering if Invokana would take a hit from Eli Lilly ‘s ( LLY ) Jardiance, which last September proved that it could dramatically cut deaths from heart failure but didn’t get a sales bump from this in Q4.

Cable Firms Prepare To Fight Set-Top Rules That Help Google, Apple

Cable TV companies are readying a court challenge if the Federal Communications Commission approves new set-top box regulations that would let companies like Apple ( AAPL ), Alphabet ( GOOGL ), Amazon.com ( AMZN ) and others sell devices that provide access to cable programming. The National Cable & Telecommunications Association has hired Theodore Olson, an attorney at the noted law firm Gibson, Dunn & Crutcher, to battle the FCC’s set-top box proposal. Olson, a former solicitor general, represented George W. Bush in the contested 2000 election vs. Al Gore that ultimately was decided by the U.S. Supreme Court. Apple also recently hired Olson and Gibson, Dunn & Crutcher in its battle vs. the Federal Bureau of Investigation involving a court order to unlock an iPhone used by an assailant in the San Bernardino terror attack. President Obama last week stated his support for opening up the set-top box market for more competition. The proposal would require pay-TV and technology companies to jointly develop new standards for devices providing access to cable TV networks. The cable TV industry pays programmers billions of dollars for content rights, and it’s unclear how that business model would be impacted. Comcast ( CMCSA ) and phone company AT&T ( T ), also a pay-TV provider, have criticized the set-top box initiative. The FCC, with three Democratic members and two Republicans, is expected to vote on the plan after a public comment period closes. FCC Chairman Tom Wheeler says the plan will make it easier for consumers to switch from pay-TV companies’ set-top boxes leased monthly to new devices sold on a retail basis by consumer electronics or Internet companies. Gibson, Dunn ‘Most Certainly Preparing For Litigation’ “We are most certainly preparing for litigation in the event the FCC moves forward with its invasive and illegal plan to restructure the video programming market,” said a spokesperson for Gibson, Dunn & Crutcher. Brian Dietz, a NCTA spokesman said, “We are exploring all options.” The NCTA previously hired Gibson, Dunn & Crutcher to challenge the FCC’s Title II-based net neutrality rules that were enforced in mid-2015. The U.S. Court of Appeals for the District of Columbia Circuit is expected to rule soon on the net neutrality case. Pay-TV companies may have an uphill legal battle vs. the FCC’s set-top box rules, says Paul Gallant, an analyst at Guggenheim Partners. “Cable/telcos will almost certainly challenge any FCC final new set-top rules in court,” Gallant said in a February research report. “They will likely argue, among other things, that the FCC lacks authority to give app makers access to programming/guide information. “It’s far too early to predict the court outcome, but it’s important to note that the FCC is operating under a clear congressional mandate to make the set-top business competitive. That doesn’t necessarily mean the FCC will prevail, but the agency probably will feel good about its chances with that statutory starting point.” Under the proposed new set-top rules, the FCC says that only pay-TV subscribers will gain access to programming, and that copyright protections will be preserved. Google, critics say, aims to swap its own advertising for the local ads sold by cable TV companies.