Tag Archives: technology

Facebook, LinkedIn, Twitter Earnings Put Light On Social Networks

Social networking, a top tech trend the past decade, will get the spotlight with earnings reports next week, starting with Twitter ( TWTR ) on Tuesday and followed by Facebook ( FB ) on Wednesday and LinkedIn ( LNKD ) on Thursday, all after the market close. Twitter reports during a tumultuous period for the company. Revenue growth has decelerated for the past six quarters as user growth has slowed for four consecutive quarters . The slowdown continues despite a series of new features Twitter has rolled out in the past year, including video tool Periscope and Moments. The company has overhauled management, starting with the return of co-founder Jack Dorsey as CEO in October. Dorsey is also the founder and CEO of payment processing firm Square ( SQ ), thus is juggling two heavy clubs. Since Twitter reported Q1 2015 earnings that revealed trouble ahead, the stock has plunged to 17 from 51. Twitter stock fell 1.6% in the stock market today , closing at 17.23. The consensus estimate of analysts polled by Thomson Reuters is for Twitter to report Q1 revenue of $607.8 million, up 39% year over year, with earnings per share minus items rising 43%, to 10 cents. Facebook Hopes To Keep Q4 Momentum Facebook Q1 earnings will come after the close Wednesday. The company soundly beat Q4 earnings expectations on booming mobile ad revenue, with the stock up 16% since then, though shares fell 2.5% Friday, to 110.56. Facebook CEO Mark Zuckerberg announced a 10-year strategy for Facebook at its annual F8 Developer Conference last week. He emphasized pushing its Messenger chat platform deeper into the business world with chatbots, enhancing Live video with virtual reality and expanding the social network to remote regions of the world. Analysts say the monetization strategy of Messenger will closely follow that of Instagram, with both platforms seen becoming multibillion-dollar businesses . The consensus on Facebook revenue is $5.25 billion, up 48%. Analysts expect EPS ex items of 62 cents, also up 48%. In what could be a long-term nightmare scenario for Facebook, users are feeling weary about posting personal reflections and updates on their daily lives. LinkedIn, the business networking site for professionals, saw its stock bomb 44% to a three-year low after the company posted Q4 earnings on Feb. 5, as its Q1 guidance widely missed estimates. LinkedIn acknowledged that a reshuffling of product strategy will impact short-term revenue growth in favor of the long term. LinkedIn stock has recovered about 10% since that 44% drop. It fell a fraction Friday, to 119.45. The consensus on revenue is $829.5 million, up 39%. EPS is figured at 60 cents, up 5%.

Valeant’s Latest Acquisition Target: Perrigo’s CEO?

Shares of Valeant Pharmaceuticals International ( VRX ) rose sharply and fellow specialty drugmaker Perrigo ’s ( PRGO ) fell Friday on reports that the former is about to hire away the latter’s CEO. Late Thursday, the Wall Street Journal quoted anonymous sources saying that Valeant is hiring Joseph Papa if it can get Perrigo’s board to void a noncompete clause in his contract. On Friday morning, Perrigo issued a brief statement saying that it would not comment on “speculation,” which is the only official word from either company so far. Valeant has been hunting for a new CEO since March 21, when activist investor William Ackman moved to the board and tried to order the company’s growing chaos. The stock lost more than 80% of its value since a scandal related to a pharmacy partner broke last September, forcing Valeant to strike a new distribution deal with Walgreen Boots Alliance ( WBA ) that was accompanied by across-the-board price cuts. A disastrous Q4 report and guidance cut, along with an internal investigation that accused former CFO and current board member Howard Schiller of misconduct, eventually turned even bullish analysts against Valeant’s management. Papa, meanwhile, has run Perrigo for 10 years and has a largely successful track record. Under his watch, the company’s revenue has more than tripled, the stock has climbed eightfold, an inversion deal moved headquarters to low-tax Dublin, and Mylan ( MYL ) attempted a hostile takeover that Perrigo successfully fought off. IBD Take: Perrigo was once a hot stock, but not lately. Learn why in IBD Stock Checkup Perrigo’s once-steady profit growth has gotten uneven in the last couple of years, however, and the stock has declined more than 40% since its Mylan-induced high last April. It currently holds a mediocre IBD Composite Rating of 40. This change has led some analysts to worry about the implications of Papa’s departure for Perrigo. “Papa has become the face of Perrigo during his long tenure as CEO,” wrote Jefferies analyst David Steinberg in a research note. “However, with the exception of CFO Judy Brown, the company’s other executives — including John Hendrickson, who was appointed President in Oct. 2015 — are largely unfamiliar to the investment community. “Further, the timing couldn’t have been more inopportune. Mr. Papa is potentially departing prior to the announcement of Q1 results, and this follows a string of difficult quarterly financials — particularly in the company’s flagship consumer business.” Guggenheim analyst Louise Chen agreed, noting that Perrigo is widely expected to miss Q1 estimates and lower its guidance. “There has been debate about senior management change at Perrigo, but we don’t think the Street was thinking that it would actually happen or be this soon,” Chen wrote. Perrigo stock was down 5.8% in late-afternoon trading on the stock market today , near 121, after hitting its lowest level intraday since August 2013. Valeant stock was up 7.7%, near 36.