Tag Archives: amzn

TV Auction View: AT&T, VZ Top Bidders; Comcast In; Google, AMZN Out

JPMorgan is bullish on the upcoming “Broadcast Incentive Auction,” which will free up prime, low-frequency airwaves owned by local TV broadcasters for wireless data services. Naysayers continue to contend that the Federal Communications Commission faces many challenges in pulling off a successful auction, which for now is scheduled to start late next month. One risk is that broadcasters might drop out of the auction if they determine that bidding prices are disappointing. The auction is key for T-Mobile US ( TMUS ), which needs spectrum.  AT&T ( T ) and Verizon Communications ( VZ ) own most of the available low-frequency spectrum, in which waves travel longer distances, among other advantages over higher-frequency spectrum. JPMorgan expects at least 70 MHz of airwaves, and possibly more, to be auctioned. The key is that broadcasters that own two local TV stations will sell off airwaves from one and keep spectrum from the other, says JPMorgan. “We estimate that 70-100 MHz will be auctioned, for $25 billion to $35 billion,” said JPMorgan in a research report. Twenty-First Century Fox ( FOXA ) and  CBS ( CBS ) are expected to sell airwaves in some markets. While Comcast ’s ( CMCSA ) cable company is a potential bidder , it also owns media firm NBCUniversal, a likely seller of airwaves. Smaller local TV station owners include  Sinclair Broadcast Group ( SBGI ) and  Gray Television ( GTNA ). “We view FOX and CBS as best positioned to monetize duopoly affiliates in large markets, followed by Comcast and Sinclair,” said JPMorgan. Walt Disney ( DIS ), which owns ABC, is not expected to sell airwaves. Private investment firms such as Columbia Capital are eyeing the auction, says a Washington Post report . JPMorgan predicts cable TV firms will show up, but it doubts that Internet giants will bid. “We expect that AT&T, Verizon, and T-Mobile will be the biggest bidders ($21 billion-$30 billion cumulative spend), that Sprint ( S )/ SoftBank ( SFTBY ) will not register, and Dish Network ( DISH ) will at most be an opportunistic buyer,” said the JPMorgan report. “We estimate Comcast, potentially in partnership with other cable companies, could spend $3 billion-$5 billion, and private equity funds in aggregate could spend $1 billion-$2 billion. “We do not expect digital economy players like Alphabet -Google ( GOOGL ) or Amazon.com ( AMZN ) to bid, though they can never be ruled out.”

Akamai Stock Jumps On Q1 Beat, Despite Apple, Facebook Trend

Akamai Technologies ( AKAM ) stock jumped Wednesday after the CDN services provider late Tuesday reported Q1 earnings and revenue that topped analysts’  lowered expectations and gave in-line current-quarter profit  guidance. Shares of Cambridge-based Akamai were up 23% in midday trading in the stock market today , near 49. Akamai is the biggest provider of content-delivery network (CDN) services to media and entertainment companies. Akamai said it earned 72 cents per share in Q4, up 3% from the year-earlier period, with revenue rising 8% to $579.2 million. Analysts had modeled EPS of 62 cents and revenue of $569 million. The beat included a 6-cent tax benefit. Akamai bought back $100 million in its own stock, lowering share count and boosting EPS. Even with Wednesday’s gain, Akamai stock is down 7% in 2016. The stock had plunged 47% through Tuesday’s market close since Oct. 27, when the company  gave disappointing December-quarter guidance. For the current quarter, Akamai forecasts revenue of $562 million at the midpoint of its range, with adjusted EPS of 61 cents to 64 cents, vs. consensus estimates of $568 million and 63 cents. Full-year 2015 revenue rose 12% to $2.2 billion. On the company’s earnings conference call, management backed off of its 2020 revenue goal of $5 billion, said Colby Synesael, an analyst at Cowen & Co., in a research note.   Akamai’s technology speeds up video streaming to mobile devices, e-commerce transactions and business software downloads. Akamai has expanded into higher-margin cloud-infrastructure services and security, aiming to offset price cuts in the CDN business that average 15% to 20% a year. “The security segment, now at a $300 million (annual revenue) run rate, provided the (Q4) upside,” said UBS analyst Steven Milunovich in a report. Akamai’s stock has been pressured as some big customers shift to their own internal CDNs. Apple ( AAPL ), believed to be Akamai’s biggest customer, and Facebook ( FB ) have been moving data traffic to their own CDNs. Akamai has renegotiated contracts and lowered prices in some cases, says Tim Horan, an analyst at Oppenheimer. “The top two customers (likely Apple/Facebook) represented an average of 13% of revenue and likely closer to 11% in Q4, but that should decrease to 6% by mid-2016,” wrote Horan in a report. “The next two (likely Microsoft ( MSFT )/Google) likely represent 5% and have likely re-priced. This should result in less revenue volatility in the second half of 2016, with upside if overall traffic volumes pick up.” Google is the main business of Alphabet ( GOOGL ).   He says Akamai could gain from video streaming tied to the Olympics this summer, the presidential election and National Football League games. Aside from longtime rivals Level 3 Communications ( LVLT ) and Limelight Networks ( LLNW ), Akamai is facing increased competition from Amazon Web Services, part of Amazon.com ( AMZN ), as well as Verizon Communications ( VZ ).

Why Facebook, Google, Amazon Are Best Positioned For Mobile

Loading the player… With the proliferation of smartphones has come the abundance of smartphone apps. A new report from Mizuho Securities says that Facebook ( FB ), Alphabet ( GOOGL )-owned Google and Amazon ( AMZN ) are in the best mobile positions. Among Android apps, Mizuho says that Facebook continues to lead in terms of usage, with its family of apps dominating in nearly every major continent. Following the Facebook app in usage are Google’s Chrome browser, Google Search and YouTube. And the analyst also notes that Amazon is gaining share in mobile app installations. Facebook dropped below the key 50-day line in big volume Monday as the market sold off. Shares rallied off session lows Tuesday and briefly turned higher, but closed down 0.2%. Alphabet breached its 50-day line last week. Shares reversed off of a three-and-a-half month low on Monday. After an up and down session, Alphabet stock dipped 0.45% Tuesday on higher volume. Amazon lost support at the critical 200-day line last week and is now below the 500 price level. The stock is hitting its lowest level in five and a half months in fast turnover, closing down 1.2% Tuesday. Meanwhile, the other FANG (Facebook, Amazon, Netflix, Google) stock, Netflix ( NFLX ), rose 3.4%, gaining for a second session in heavy volume. Netflix shares broke below the 200-day line last month. Image provided by Shutterstock .