Tag Archives: apple

Baidu Stock Soars After Hours As Q4 Revenue Beats

China search leader Baidu ( BIDU ) reported Q4 revenue late Thursday that beat Wall Street’s expectations, sending Baidu’s stock up by double digits in after-hours action. Riding along with volatile China stocks feeling the impact of a slowing economy at home, Baidu’s U.S. stock is up 58% since late August but down 23% in the past 12 months, after closing Thursday’s regular session at 158.22, down 2.8%. After hours, shares of China Internet giant Alibaba ( BABA ) were up more than 1.5% and shares of China e-commerce giant JD.com ( JD )were up more than 1%. For Q4, Baidu saw revenue rise 33% year over year in local currency to $2.88 billion, or RMB 18.69 billion. Analysts polled by Thomson Reuters had expected RMB 18.54 billion, up 32% in local currency. Baidu posted Q4 EPS excluding the net gain recognized from Baidu’s Oct. 26 exchange of Qunar ( QUNR ) shares with fellow China online travel firm Ctrip ( CTRP ) of RMB 7.61, or $1.18. Analysts polled by Thomson Reuters had expected EPS of RMB 6.62. The company guided Q1 revenue of RMB 15.41 billion to RMB 15.97 billion ($2.379 billion to $2.465 billion). On an apples-to-apples basis, excluding Qunar from Baidu’s financials, the guidance represents a 27.8% to 32.5% year-over-year revenue increase, the company said. But that still missed the analyst consensus estimate for RMB 16.32 billion Baidu-backed Qunar announced its share swap with Ctrip.com, another leading Chinese online travel agency, in October. In the company’s earnings release, Baidu CEO Robin Li called 2015 “a touchstone year for Baidu: We made significant progress in broadening our online marketing platform and further extending our reach into transactions services. Even as China’s overall growth slows, services and domestic consumption are growing.” Company executives were slated to hold a conference call with analysts late Thursday. Baidu’s top revenue vertical markets — retail/e-commerce, local services, financial services, health care and education — “reflect Baidu’s vital role in connecting users with merchants in these growing sectors,” Li said in his statement. For Q1, Baidu is guiding revenue in an amount ranging from RMB 15.41 billion ($2.37 billion) to RMB 15.97 billion ($2.46 billion). That’s up 21.1% to 25.5% year-over-year in RMB. On an apples-to-apples basis, excluding Qunar from Baidu’s financials, the Q1 guidance represents a 27.8% to 32.5% year-over-year increase, Baidu said. As a result of Baidu’s exchange of Qunar shares with Ctrip, Baidu deconsolidated Qunar’s financials after Oct. 26. Online-To-Offline A Baidu Focus In June 2015, Baidu announced it would invest $3.2 billion during the next three years to bolster its lineup of online-to-offline, or O2O, offerings by fortifying group-buying website Nuomi, which Baidu acquired for $160 million in 2014. Baidu has emphasized that big up-front spending to establish its O20 business will pay off because its vast abilities in search will eventually translate to revenue from business commissions. The O2O business model aims to attract customers online and then direct them offline to make purchases at physical stores and to services including health care and food delivery. Earlier this month, Baidu announced that the company has received a nonbinding proposal from two Baidu executives to acquire the company’s fast-growing Qiyi video wing for $2.8 billion. The nonbinding proposal came from CEO Li and from Qiyi CEO Yu Gong, Baidu said. The pair have proposed acquiring all of the outstanding shares of Qiyi owned by Baidu based on an enterprise valuation of U.S. $2.8 billion. Should the deal be approved by a special committee formed by Baidu to review the offer, Qiyi will remain a strategic partner, although it will be independent. Baidu currently owns 80.5% of Qiyi’s total outstanding shares.

Apple Seeks Reversal Of Judge’s Order In iPhone Encryption Case

Apple ( AAPL ) on Thursday asked a federal judge to reverse her order that the company work with the FBI to hack a password-protected iPhone used by one of the shooters in the San Bernardino, Calif., terrorist attack. In a court filing, Apple argued that the government has overstepped its bounds. “The government’s request here creates an unprecedented burden on Apple and violates Apple’s First Amendment rights against compelled speech,” it said. To fulfill the government’s demands, Apple would have to write special software that would create a “backdoor” to bypass the iPhone’s privacy and security protections. Apple CEO Tim Cook has said that complying with the court order would set a “dangerous precedent” that threatens the personal data of all iPhone users. If Apple creates the software that the government wants, it would make iPhones vulnerable to hackers, criminals, and foreign and domestic spies, he said. “This is not a case about one isolated iPhone,” Apple’s legal team wrote. “Rather, this case is about the Department of Justice and the FBI seeking through the courts a dangerous power that Congress and the American people have withheld: the ability to force companies like Apple to undermine the basic security and privacy interests of hundreds of millions of individuals around the globe.” Apple’s motion to vacate says the court order would open the floodgates to other law enforcement and government requests to hack iPhone security. Apple said the Justice Department and FBI are trying to do an end run around Congress and use the courts to set a legal precedent by invoking “terrorism.” Earlier Thursday, FBI Director James Comey told a congressional panel that court approval of the FBI’s request was “unlikely to be a trailblazer” in other cases. While the case “will be instructive for other courts,” larger policy questions about reasonable law enforcement access to encrypted data will need to be resolved by Congress and others, Comey said, according to Reuters . Microsoft ( MSFT ) President and Chief Legal Officer Brad Smith said his company “wholeheartedly” sides with Apple in its fight with the FBI over unlocking a terrorist’s iPhone, the Seattle Times reported . “We at Microsoft support Apple and will be filing an amicus brief next week,” Smith said Thursday during a congressional hearing on laws governing data transfers across borders. An Amazon.com ( AMZN ) spokesperson said that company is looking to file a brief supporting Apple’s position, BuzzFeed reported , and Alphabet ‘s ( GOOGL ) Google is also in support. On Feb. 16, U.S. Magistrate Sheri Pym ordered Apple to provide “reasonable technical assistance” to the FBI to unlock an iPhone belonging to Syed Farook, one of the killers in the San Bernardino shootings. The order calls for Apple to create software that can get around or disable the security option that erases data from an iPhone after 10 unsuccessful attempts to unlock it. Farook and his wife, Tashfeen Malik, shot and killed 14 people on Dec. 2. The radicalized Muslim couple, described in press reports as supporters of terror group ISIS, later died in a gun battle with police. RELATED: Poll Shows Solid Support For Apple In iPhone Encryption Case .

Can Apple Supplier Broadcom Afford Another Shopping Spree?

Apple ( AAPL ) supplier Broadcom ( AVGO ) could follow its $37 billion Avago Technologies merger by shedding $1 billion in assets to launch another M&A charge, says MKM analyst Ian Ing. Ing reiterated his buy rating on Broadcom stock, but cut his price target to 160 from 163, citing wireless seasonality. Broadcom stock rose 1.7% Wednesday and was up a fraction in afternoon trading in the stock market today , near 131. The companies completed their merger on Feb. 1, taking the Broadcom name but keeping the Avago stock ticker. When announced last March, it kicked off a record-busting $100 billion in 2015 chip sector M&A deals. Analysts say the frenzy shows no sign of slowing as organic growth decelerates and costs rise. But the chip sector has been quiet on the M&A front this year. Broadcom will likely sell $500 million in assets to de-lever from its Q1-completed merger, Ing wrote in a research report. “For Broadcom, data center/networking product cycles have become more meaningful,” he wrote. “And the story increasingly revolves around a quick deleverage and return to semiconductor consolidation via accretive deals.” A number of small chipmakers — $2 billion and less market caps — are eyeing Broadcom’s design team and business units, Ing wrote. Although $1 billion would be a fast deleverage, half that is more likely. “We do not expect as significant monetization of Broadcom units as occurred with LSI,” Ing wrote. Avago acquired LSI in May 2014 for $6.6 billion, then sold LSI’s flash unit to Seagate Technology ( STX ) for $450 million and LSI’s networking business to Intel ( INTC ) for $650 million. Post-merger, Broadcom is less exposed to Apple, which is experiencing slowing iPhone sales. In January, a Credit Suisse analyst estimated 24% of the former Avago’s sales stemmed from Apple. The former Broadcom was 14% tied to Apple in 2014. Joined, Broadcom-Avago gets about 8%-9% of its sales from Apple, Ing estimated. Broadcom is slated to report fiscal Q1 earnings after the close March 3.