Salesforce Billings In Focus Ahead of Q1, Buzz Over AWS Deal

Amid buzz over its deal with Amazon Web Services, Salesforce.com ( CRM ) reports fiscal Q1 earnings after the close Wednesday, with profit minus items expected to rise 46% to 23 cents per share and revenue growing 25% to $1.89 billion. Some analysts are cautious after Salesforce’s Q4 beat, thinking some deals might have closed a quarter earlier than expected, lifting Q4 but hurting Q1. “For Q1, we forecast a year-over-year billings increase of 13%,” said Barclay’s analyst Raimo Lenschow in a research report. “While optically low, Salesforce is seeing more renewals shift into Q4, where billings grew 28%, with some of that coming out of Q1.” Salesforce last week said it would offer a new “Internet of Things” service using AWS, the cloud computing business of Amazon.com ( AMZN ). Salesforce’s service, expected to launch this fall,  collects data from Web-connected devices. AWS is the No. 1 cloud services provider. Salesforce has an IBD Composite Rating of 95 out of a possible 99, putting it among the top 5% of all stocks in such key metrics as sales and revenue growth. But its Computer-Software Enterprise group ranks just No. 115 out of 197 groups tracked by IBD. Salesforce stock, up a fraction near 77 in early trading in the stock market today , is down 1.5% in 2016, but it’s up nearly 35% since touching a 19-month low in February, during the broad market sell-off. The growth trajectory of the software maker’s Marketing Cloud platform should be one topic on the earnings call. “After a monster Q4, first quarter fiscal 2017 optics will look worse,” said Citigroup analyst Walter Pritchard in a research report. Citigroup “inputs suggest strong business activity for Salesforce in Q1, but in context of (its) strong Q4, which likely pulled in some Q1 business,” wrote Pritchard. “We forecast billings +14% to $1.43 billion, at the high end of guidance.” For the June quarter, analysts polled by Thomson Reuters estimate EPS growth of 30% and sales to rise 21%.

Pfizer Acquiring Anacor For Potential Blockbuster Eczema Drug

Big pharma Pfizer ( PFE ) said Monday that it’s acquiring small biopharma Anacor Pharmaceuticals ( ANAC ) for $4.5 billion in cash, sending the latter’s stock up more than 50% in early Monday trading. Pfizer agreed to pay $99.26 a share for Anacor, a 55% premium over Friday’s closing price. The total transaction value is $5.2 billion, assuming the conversion of Anacor’s outstanding convertible notes, Pfizer said. Anacor’s sole commercial product is a toenail-fungus ointment called Kerydin, distributed by Novartis ( NVS ), but Pfizer’s press release on the merger played up Anacor’s eczema treatment crisaborole, which is under FDA review due for completion by Jan. 7. “We believe the acquisition of Anacor represents an attractive opportunity to address a significant unmet medical need for a large patient population with mild-to-moderate atopic dermatitis, which currently has few safe topical treatments available,” said Albert Bourla, head of Pfizer’s innovative businesses, in the release. Pfizer estimates crisaborole could reach peak annual sales of $2 billion. The buyout adds another asset to Pfizer’s innovate drug business, which it is widely expected to separate from its established-products business sometime in the next few years. Pfizer has said that it will make a decision on whether to split by year’s end. Pfizer already has a significant presence in inflammation and immunology, including blockbuster rheumatoid arthritis treatments Enbrel (sold in partnership with Amgen ( AMGN )) and Xeljanz.  Regeneron Pharmaceuticals ( REGN ) recently reported strong late-stage data for its injectable drug dupilumab in atopic dermatitis, so while the market is currently underserved, it may soon become more competitive. Anacor stock was up 54.7% in opens trades  on the stock market today , near 99. Pfizer stock was down a fraction, near 33. Regeneron stock was up almost 3%.

Will Buffett Stand In Verizon’s Way, Snatching Up Yahoo?

Will Warren Buffett stand in the way of  Verizon Communications ( VZ ) snatching up Web portal Yahoo ( YHOO )? That scenario looms amid reports that Berkshire Hathawa y ( BRKB ) Chairman Buffett is backing a consortium  vying for Yahoo’s Internet assets. Quicken Loans founder Dan Gilbert is said to be pursuing Yahoo, with Buffett providing financial backing. Some former Yahoo executives have been advising Gilbert’s group  on a bid, tech news website Re/Code reported. Buffett’s Berkshire Hathaway made its biggest-ever acquisition in 2015, buying Precision Castparts, a maker of aerospace components, for $37 billion. However, Buffett has not been a big investor in tech companies, with his large stake in IBM ( IBM ) a notable exception. Berkshire, however, just disclosed that it’s taken a nearly $900 million investment in Apple ( AAPL ) shares. “I’m an enormous admirer of Dan and what he has accomplished in Quicken Loans‎,” Buffett told CNBC . “Yahoo is not the type of thing I’d ever be an equity partner in. I don’t know the business and wouldn’t know how to evaluate it, but if Dan needed financing, with proper terms and protections, we would be a possible financing help.” Others in the hunt for Yahoo include big private equity firm TPG Capital and a group comprised of investment firms Bain Capital and Vista Equity Partners. Telecom and wireless services giant Verizon has been viewed as the front-runner for acquiring all or part of Yahoo. Verizon, which bought AOL in 2015 for $4.4 billion, aims to morph into a digital media company that garners more advertising revenue, as wireless data competition mounts. Yahoo recently added four new independent directors to its board under pressure by activist investor Starboard Value. While Yahoo CEO Marissa Mayer is in talks with possible buyers, a second round of bidding for Yahoo may not wind up until early June, according to various reports.