Tag Archives: request

Mobile Accessories Maker Zagg Disappoints With Q4 Earnings

Mobile device accessories maker Zagg ( ZAGG ) tumbled Wednesday after missing fourth-quarter sales and earnings targets. Zagg stock was down about 14%, near 9, in midday trading on the stock market today . The Salt Lake City-based company late Tuesday said it earned 18 cents a share on sales of $78.6 million in Q4. Analysts polled by Thomson Reuters were looking for 24 cents a share on sales of $82.94 million. On a year-over-year basis, EPS tumbled 58%, and sales fell 23%. Best known for making InvisibleShield screen protectors, Zagg also makes tablet keyboards, smartphone cases, portable power devices and audio products. On March 3, Zagg completed its $100 million purchase of Mophie, a maker of battery cases and external power products for mobile devices. Zagg executives, in their earnings conference call late Tuesday, focused on full-year results. In 2015, Zagg’s sales rose 3% to $269.3 million, and EPS rose 59% to 54 cents. For 2016, Zagg expects sales of $460 million to $500 million. It sees $285 million to $305 million in sales from the legacy Zagg business and $210 million to $230 million coming from Mophie. On the call, Zagg CEO Randy Hales said the company’s new-product pipeline is the best in the company’s history. Upcoming offerings include new screen protectors, keyboards and audio products, he said. Zagg, however, was dealt a setback in screen protectors when Apple ( AAPL ) forged a partnership with rival Belkin in the category. Starting Feb. 9, Apple Store employees began offering to apply Belkin screen protectors on iPhone 6 and 6S series phones, MacRumors reported . “Real kudos to Belkin for having put something in there that captured the attention of Apple, and doing a good job rolling that out,” Hales said on the call. “We actually like it, because it increases awareness to the category, that people really need to protect these devices they are purchasing.” RELATED: Zagg Zigs To Find New Mobile Accessories Business .

Chinese ZTE Sanctions Over Iran Sales Could Hurt Apple Chipmakers

A new U.S. export ban against Chinese mobile gear maker ZTE related to its under-the-table sales to Iran could hurt  Apple ( AAPL ) chip suppliers Qualcomm ( QCOM ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ), a Pacific Crest analyst wrote Wednesday. Regulators imposed the sanctions Tuesday, alleging that ZTE used four shell companies in China and Iran to “illicitly re-export controlled items to Iran in violation of U.S. export control laws.” The ban prohibits U.S. companies from selling to ZTE. Chinese foreign minister Wang Yi opposed the sanctions, saying that ZTE’s tech purchases support thousands of U.S. jobs, according to the AP. Chipmakers Cavium ( CAVM ), Integrated Device Technology ( IDTI ), Silicon Laboratories ( SLAB ) and Xilinx ( XLNX ) also sell to ZTE. “This approach will only hurt others without necessarily benefiting oneself,” Yi said at a new conference Tuesday. ZTE isn’t banned from selling products in the U.S. but cannot procure components from U.S. companies. U.S. firms can apply for an export license, but Pacific Crest analyst John Vinh sees the government unlikely to grant them. The development could shuffle the smartphone market. ZTE owns about 4% of the global smartphone market, Vinh wrote. Industry tracker IDC says that ZTE competes alongside Xiaomi and Huawei in the low-end to midrange smartphone market, vs. No. 1 smartphone vendor Samsung. Vinh expects short-term effects on chipmakers to be “negligible.” Longer term, he says that ZTE could lose share to Huawei, Ericsson ( ERIC ), Alcatel-Lucent ( ALU ), Nokia ( NOK ), Siemens ( SIEGY ), Xiaomi, Oppo and Lenovo. “Alternatively, ZTE could conform to the U.S. embargo list, which could result in sanctions being lifted,” he wrote. Xilinx is most at risk, with 3%-3.5% of total revenue stemming from sales to ZTE, Vinh estimates. Silicon Labs follows with 2%-2.5% of total revenue wrapped in ZTE sales. IDT, Qualcomm and Qorvo are each 2% tied to ZTE, Cavium 1%-2%, and about 1.5% of Skyworks’ sales stem from the Chinese smartphone maker. Wall Street largely yawned Wednesday, however. Midday on the stock market today , only Qualcomm stock was down, dipping a fraction. Cavium stock was up a fraction. Shares of Qorvo, Silicon Labs, Skyworks and Xilinx were all up more than 1%. Integrated Device Technology stock was up more than 2.5%.

Medicare Part B Changes Could Hit Big Biotech Drugs, Say Analysts

Drug stocks fell Wednesday as Wall Street sorted through the impact of proposed changes to Medicare Part B reimbursement designed to drive down the prices of some expensive hospital drugs. Late Tuesday, the Center for Medicare & Medicaid Services proposed a pilot program testing a new reimbursement scheme for Medicare Part B, which covers drugs administered in hospitals or doctors’ offices. Currently, CMS will pay back the price of the drug plus 6% for the health care provider, which critics say encourages doctors to prescribe more expensive drugs. Under the proposed rule, doctors would get just a 2.5% premium plus a flat fee of $16.80 per drug per day, which would somewhat reduce the disparity between different-priced drugs. CMS also proposed reducing or eliminating the portion that the patient has to pay for the drug, and tying the reimbursement level to the effectiveness of a drug for a given indication. Thus, if the same drug works well for one condition but only so-so for another, CMS would reimburse it at different levels for each condition. The agency also wants to create online “decision support tools” to help physicians determine the most effective drug to use in a given situation. Another test would let CMS enter voluntary risk-sharing agreements with drug makers linking price adjustments with patient outcomes. There will be a comment period on the CMS proposal until May 9. At that point, CMS plans to place providers into two different groups, one using the old reimbursement method and one the new one, and study the differences between the groups over the course of five years. It plans to start testing its other ideas starting January 2017. The reimbursement proposal drew the most attention from Wall Street. The covered drugs would be mostly infused or injected treatments for serious conditions, as opposed to pills that the patient can take on her or his own, and so, potentially affects some of the drug industry’s biggest cash cows. “For the big biotechs, the most notable drugs that would fall under this theoretical test would be drugs that include Amgen ( AMGN ) (U.S. Neupogen, Neulasta … also Kyprolis, Xgeva/Prolia, Vectibix, about 35%+ of total sales), Celgene ( CELG ) (U.S. Abraxane is 6% of revenue — the other notable drugs are orals),” wrote RBC Capital Markets analyst Michael Yee in a research note. Credit Suisse analyst Vamil Divan agreed about Amgen, adding that Regeneron Pharmaceuticals ( REGN ) and Biogen ( BIIB ) also depend on drugs under the Medicare Part B umbrella. The new immunotherapy drugs from Bristol-Myers Squibb ( BMY ) and Merck ( MRK ), such as Opdivo, Keytruda and Yervoy, also are covered by Part B, but Yee argued that they aren’t chosen for price reasons. “Consensus understands these drugs are chosen for high efficacy or where there aren’t equivalent drugs that aren’t also infused, not because of the 6% reimbursement,” Yee wrote. Amgen stock hit a five-month low and ended the day down 2.6%, at 140.90. Regeneron tumbled 5.1% to 374.75. Celgene fell 1.1% and Biogen was off 2.2%. Bristol-Myers stock fell 1.1%, while Merck slipped a fraction.