Tag Archives: apple

Netflix Seen Posting Worst Earnings In Over 3 Years

With Netflix ( NFLX ) investing heavily in its global expansion, Wall Street is expecting the Internet TV service to report its lowest earnings per share in over three years when it posts first-quarter results after the close Monday. Analysts polled by Thomson Reuters expect Netflix to earn 3 cents a share in Q1, down 40% from the year-earlier quarter. That would be the company’s lowest EPS total since the fourth quarter of 2012, when it reported 2 cents in earnings per share. Netflix sales are seen rising 25% to $1.965 billion in the March quarter when it completed its international expansion, excluding China. Analysts don’t see EPS growth returning at Netflix until the fourth quarter. For the next several quarters, the focus of investors will be on subscriber growth and whether Netflix can continue to add new customers at a quick pace. In the December quarter, Netflix added 5.59 million new streaming subscribers, bringing its total to 74.76 million subscribers worldwide. Netflix added 1.56 million U.S. streaming subscribers and 4.04 million international subscribers in Q4. For the March quarter, Netflix forecast 6.1 million new streaming subscribers for a global total of 80.86 million. The Los Gatos, Calif.-based company is targeting 1.75 million new U.S. streaming subscribers and 4.35 million new international subscribers. RBC Capital Markets analyst Mark Mahaney on Friday reiterated his outperform rating on Netflix stock with a price target of 140. “Based on intra-quarter data points, our proprietary survey work, and our model sensitivity work, we believe Street revenue/EPS estimates for Q1 are reasonable,” Mahaney said in a research report. “For the Q2 guide, we believe the Street’s outlook for roughly 600,000 domestic subscriber adds may be slightly aggressive, given uncertainty over pending price increases. But we view the Street’s international subscriber adds outlook of 2.9 million for Q2 as realistic.” Netflix stock tumbled to as low as 106.02 on the stock market today , briefly undercutting its 200-day moving average . Ahead of the closing bell shares were down more than 2% near 109. On Sunday, Amazon ( AMZN ) began offering Amazon Prime Video as a standalone service, for $8.99 a month, a dollar less than Netflix’s basic streaming offering. Amazon stock rose 1.5%, extending its recent breakout. Some Analysts Skeptical Of Netflix’s Prospects Other analysts are more cautious ahead of Netflix’s Q1 earnings release. In a report Friday, Mizuho Securities analyst Neil Doshi maintained his neutral rating on Netflix with price target of 120. While expectations are generally positive ahead of Netflix’s Q1 report, Doshi is concerned about the company’s continued free cash flow losses and whether it can successfully scale local original content in new international markets. FBR analyst Barton Crockett maintained his market perform rating and price target of 100. Netflix’s Q1 report “is likely to feature healthy but decelerating subscriber growth in the U.S. and a record level of growth internationally, powered by new country launches and very robust growth in Latin America,” Crockett said in a report Friday. However, Netflix’s growth appears to be plateauing in developed markets where Netflix has been available for some time, such as the U.S., U.K. and Canada, he said. “We suspect that similar maturity will arrive over the next couple of years in other developed country markets,” Crockett said. “We also believe that some investors may be overly optimistic about the degree of flow-through in second-half 2016 from U.S. price hikes.” RELATED: Netflix Stock Surges Ahead Of Q1 Earnings Report Next Week Netflix Rate Hike To Be Key Test Of Its Pricing Power

Alphabet Seen Riding Strong Mobile Ad Sales To ‘Stellar’ Q1

When Google parent firm Alphabet ( GOOGL ) reports Q1 earnings on Thursday, analysts are expecting the search giant to deliver what one of them terms “stellar” top-line results, riding strong mobile advertising sales. But Wall Street also wants to see that the sultan of search is serious about monetizing its various so-called “moonshot” initiatives. The diverse group that Alphabet calls its “Other Bets” range from self-driving cars to smart home device maker Nest to a life sciences division that developed a glucose-monitoring contact lens for diabetics. Capital expenditures for the “Other Bets” segment are expected to increase this year, although no details have been offered yet. When Alphabet released Q4 earnings in February , the tech giant revealed that it logged an operating loss of $3.6 billion on such moonshot projects in 2015. The company broke out its spending on its search core and “Other Bets” for the first time in Q4 2015. Far-out innovations aside, “it will be interesting to see if they can continue growing their business-oriented solutions, such as Google Drive and Google Docs, which also have correlation with their monetization capabilities,” Hannu Verkasalo, CEO of Verto Analytics, told IBD via email. For Q1, analysts polled by Thomson Reuters expect Alphabet to see total sales — including TAC (“traffic acquisition costs” or fees paid to bring traffic to its site) — rise 18% year over year to $20.36 billion. They are modeling EPS ex items of $7.97, compared with EPS ex items of $6.47 in Q1 2015. Subtracting out TAC, revenue will rise to $16.54 billion, up nearly 19% year over year, according to FactSet. Alphabet subsidiary Google saw a double-digit increase in ad spending on its site last year, led by mobile gains and new offerings that let shoppers buy directly by clicking ads, according to a research report from Cowen analyst John Blackledge in January. “Overall, Google’s core search business appears strong, with room for further innovation,” Blackledge wrote. Google, which dominates the global digital ad market, will see its net ad revenue rise 9% this year, while No. 2 Facebook ‘s ( FB ) net ad revenue will jump 31%, says eMarketer’s latest ad spending forecast , released in March. Google CEO Sundar Pichai said in February that seven of the company’s products, including YouTube and Gmail, each have more than 1 billion monthly active users around the globe. In March, 243.1 million users accessed one of Google’s online services in the U.S. at least once, which puts Google’s net reach in the U.S. at 98.2%, Verto Analytics said. The company is looking to make headway into the $27.4 billion cloud computing market with Google’s Cloud Platform, which now trails Amazon.com ( AMZN ) unit Amazon Web Services, with approximately 37% market share, and Microsoft ‘s ( MSFT ) Azure. But Google’s cloud service may get a boost from Apple ( AAPL ), which in March  signed a deal worth between $400 million and $600 million to use Google’s Cloud Platform for its iCloud service. The Google unit of Alphabet also sells high-speed Internet and TV services in four markets and has trumpeted expansion plans. Google Fiber bundles video and gigabit-per-second broadband service for $130 monthly and also sells stand-alone Internet for $70 monthly. “Foreign-exchange headwinds should continue to damper the company’s otherwise stellar top-line results, but to a lesser degree than in recent quarters,” said Pivotal Research analyst Brian Wieser in a pre-earnings research note on April 11. “Current-quarter results for Alphabet and core Google business trends should be positive overall.” Wieser said he estimates the company will show 16% revenue growth and 18% revenue ex-TAC growth year-over-year. “The company’s hegemonic position in digital advertising alongside Facebook is fundamentally unchanged, and we continue to expect Google to sustain double digit growth rates in advertising on an ongoing basis,” said Wieser. “The factors which were cited as supporting growth last quarter — including YouTube and programmatic display-related revenues associated with Google Display Network (collection of Google-run websites) will undoubtedly continue.” Alphabet stock was up 1%  in afternoon trading in the stock market today , near 787. Alphabet stock has risen 45% compared to this time last year. The company’s stock is trading 3% below its all-time high of 810.35, brushed on Feb. 2.

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