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Apple Supplier NXP Semiconductors Earnings Top On Eve Of Apple Report

Apple ( AAPL ) supplier NXP Semiconductors ( NXPI ) late Monday reported first-quarter earnings that fell a little less than estimates, a day before Apple itself is expected to report declining profit and a sharp drop in iPhone sales. NXP Semi gave guidance that was in line to slightly above forecasts. Earnings per share fell nearly 16% to $1.14 a share excluding various items vs. $1.35 a year earlier. Revenue, fueled by acquisitions, climbed about 52% to $2.224 billion from $1.467 billion a year earlier. Economists had expected EPS of $1.09 and sales of $2.21 billion. Comparable revenue fell 11% vs. a year earlier, NXP said, citing “semiconductor industry weakness that accelerated throughout the second half of 2015.” For Q2, NXP Semiconductors sees revenue of $2.295 billion to $2.395 billion, with the midpoint at $2.345 billion. It expects EPS of $1.30-$1.40, with the midpoint at $1.35. Analysts expected EPS of $1.32 and revenue of $2.34 billion. For the full year, Wall Street had projected EPS of $5.64 and sales of $9.54 billion. NXP Semiconductors is a leading chip supplier for the Apple iPhone and Samsung smartphones. But it’s also a major supplier of chips for the auto industry, especially after its recent acquisition of Freescale Semiconductor. Auto-related sales hit $805 million, up 167% vs. a year earlier on a reported basis, or just 1% with Freescale’s year-earlier results included. NXP will hold its post-earnings conference call before the market open Tuesday. NXP released its results well after the market close, so investors will have to wait until Tuesday pre-market trading to get some indication of how the stock will react. Shares closed down 1.2% to 83.34 on the stock market today . NXP is not in the latest Apple Retina MacBook, according to an iFixit teardown , after having several chips in the 2015 model, while Broadcom ( AVGO ) and Texas Instruments ( TXN ) remain big chip suppliers. Texas Instruments reports earnings on Wednesday. Texas Instruments closed up 0.6% on Monday. Broadcom fell 0.8%. Apple retreated 0.6% to 105.08, approaching its  50-day moving average. Analysts expect Apple earnings to fall 14% to $2 a share and sales 10% to $51.97 billion, with iPhone unit sales down 21%.

Charter-Time Warner Cable Deal Gets Regulatory OK, Netflix A Winner

The Justice Department approved the Charter Communications ( CHTR ) takeover of Time Warner Cable ( TWC ) and Bright House Networks after the cable giants agreed to concessions that should benefit Netflix ( NFLX ) and other streaming media. Federal Communications Commission Chairman Tom Wheeler also backed the deal. The FCC will likely approve the combination soon. After that, California regulators would pose the final hurdle for the merger. They are expected to approve it in a vote next month. As part of the deal, Charter will expand the number of homes with broadband access by 2 million, including 1 million with another high-speed provider, Wheeler said. Netflix has endorsed the deal, based on Charter’s pledges. Charter agreed to not impose data caps or tie Internet rates to usage. Charter also won’t be allowed to sign deals with content providers to make it harder for Netflix and other streaming services to get content. Charter said last year it would have some 23.9 million cable and broadband customers in 41 states, with big gains in Los Angeles and New York. It would be the No. 2 broadband operator after Comcast ( CMSCA ). Charter Communications in May 2015 agreed to buy Time Warner Cable for $55.1 billion and Bright House for $10.4 billion. That followed the collapse of Comcast’s planned Time Warner Cable buy due to regulatory objections. Charter Communications stock rose 4.6% to 207.01 on the stock market today , with Time Warner Cable climbed 4.1% to 209.83. Netflix fell 2.4% as shares still reel from last week’s weak subscriber outlook. Comcast fell fractionally. Related: How Charter Broadband Conditions May Set Bar For Comcast

GoPro Finds Woe In High Action-Camera Inventories

Beleaguered GoPro ( GPRO ) saw its shares tank anew on Monday on a report that unsold Hero action cameras are piling up at retail. GoPro stock fell 8.3% to 12.82 on the stock market today . Key supplier Ambarella ( AMBA ), which makes image-processing chips, saw its shares slide 5.9% to 41.96. Pacific Crest Securities analyst Brad Erickson said his firm’s U.S. retail checks showed GoPro’s days of inventory nearing all-time highs. “Channel inventory is again too high,” Erickson said in a report Sunday. “Our checks detected days of inventory at roughly three weeks consistently over the past month, and we estimate aggregate sell-through in the United States was down nearly 40% year-over-year in Q1.” He predicted continued “action camera softness” and expressed doubts about whether GoPro’s planned Karma drone could turn things around for the company. He rates GoPro stock as sector weight, with a fair value of 9 to 10. GoPro’s Hero action cameras are “a compelling device for a small niche of buyers,” but the company needs to improve ease of use to expand the market, Erickson said. GoPro is expected to launch its flying camera drone toward the end of the second quarter. The device could double GoPro’s total addressable market, he said. “We believe the stock has gotten some recent lift anticipating Karma, which could persist depending on how it is initially perceived by investors,” Erickson said. There are many unknowns about Karma including price, functionality and how it will compare to competitors like DJI. Erickson estimates that 5 million to 6 million consumer, camera-enabled drones will ship this year worldwide, roughly equivalent to the action camera market. RELATED: GoPro Rockets After Hiring Key Apple Designer