Tag Archives: technology

Can Struggling BlackBerry Show Improvements With Q4 Earnings?

Deep in a turnaround that aims to reverse a long deceleration in revenue, BlackBerry ( BBRY ) is set to report earnings before the market open Friday. The smartphone maker that once dominated the field prior to the Apple ( AAPL ) iPhone and Alphabet ’s ( GOOGL ) Android is pivoting to other areas. BlackBerry has made several acquisitions in the last two years, among them its $425 million purchase of software company Good Technology. The deal widely expanded BlackBerry’s security software platform to other smartphones and operating systems. BlackBerry will report fiscal fourth quarter earnings for the period that ended Feb. 29. The consensus estimate on revenue is $563.2 million — down 15% year over year but an improvement over the 31% drop in the prior quarter. Analysts polled by Thomson Reuters expect BlackBerry to report a loss of 10 cents per share. “While the company may currently be showing possible signs of a recovery, we note that much of this strength can be attributed to IP licensing sales of $53 million last quarter,” wrote Credit Suisse analyst Kulbinder Garcha. He has an underperform rating on BlackBerry and a price target of 6. BlackBerry stock closed at 8.09 Thursday, up 1%. Since hitting a low of 6.39 on Feb. 11, the stock is up 26%. “We believe the company is still faced with a challenging transition ahead,” Garcha wrote. “Despite strong software revenue last quarter of $162 million, we doubt the sustainability of the software business, as the IP licensing revenue seems unpredictable.”

Yahoo Preps Legal ‘Nuclear Weapon’: Report; Proxy Battle Looms

Yahoo ( YHOO ) is implementing “proxy access” — an increasingly used strategy making it easier for longtime shareholders to nominate a board member — as the company girds for what’s being called an epic proxy battle. “It is the nuclear weapon that is a measure of last resort,” Bess Joffe, head of corporate governance at major asset manager TIAA-CREF,  told the Wall Street Journal in January about why more companies are adopting the “proxy access” measure. Yahoo said that it had amended its bylaws to allow a stockholder or group of as many as 20 investors that hold at least 3% of its shares continuously for three years to nominate directors, according to a report in the Wall Street Journal. The move goes into effect after Yahoo’s 2016 annual meeting, which is expected in June or July. Activist hedge fund investor Starboard Value has nominated its full slate of directors under Yahoo’s existing bylaws. The newly announced proxy-access change wouldn’t have affected Starboard’s ability to replace the directors even if proxy access had been in place for the upcoming meeting, Patrick McGurn, special counsel for proxy advisory firm Institutional Shareholder Services, told the WSJ. About 21% of S&P 500 companies have adopted proxy access, up from about 1% in 2014, according to ISS. Apple ( AAPL ) amended its company bylaws in December to make it easier for shareholders to make board nominations.  General Electric ( GE ) and AT&T ( T ) are among other companies that have instituted proxy access, said the WSJ, with 117 U.S. companies embracing the change last year. At the annual meeting, Yahoo shareholders will vote on whether to replace all nine board members with a slate nominated by Starboard, which wants to see change. Starboard  said last week that since Yahoo CEO Marissa Mayer and others in the company’s leadership “have repeatedly failed shareholders,” the hedge fund wants to sweep out all of the ailing Web company’s directors and replace them with its own slate. Yahoo advisors have contacted potential buyers, including Verizon Communications ( VZ ), IAC/InterActivecorp ( IAC ) and Time ( TIME ), as well as private-equity firms TPG and KKR ( KKR ). Yahoo stock rose a fraction in the stock market today , to 36.81.

Will Apple Supplier Skyworks Kick Off 2016 Chip M&A With Maxim Buy?

Apple ( AAPL ) supplier Skyworks Solutions ( SWKS ) ought to acquire Maxim Integrated Products ( MXIM ) to diversify from the slowing smartphone and radio-frequency market, Pacific Crest analyst Michael McConnell suggested Thursday. Maxim has long been takeover bait with sharks Analog Devices ( ADI ) and Texas Instruments ( TXN ) reportedly eyeing the $10.5 billion-market-cap chipmaker in October. But sources told Bloomberg that Maxim might not sell without a high premium. Skyworks could provide that premium, McConnell wrote in a research report. Maxim stock rose a fraction Thursday, to 36.78. Skyworks was flat. An offer of $44 per share would be a 20% premium to Maxim stock, McConnell points out. Acquiring Maxim would help Skyworks diversify beyond its 80% exposure to the struggling mobile market, McConnell wrote. Maxim has ties to the data center and automotive markets. Though Maxim makes the most sense — McConnell rates both a buy — Skyworks could also diversify by acquiring Macom Technology Solutions ( MTSI ) or Silicon Laboratories ( SLAB ), McConnell wrote. Is The RF Market Maturing? RF, Skyworks’ bread and butter, is slated for a compound annual growth rate of 11% over the next several years vs. historical 18% growth, McConnell wrote. Skyworks competes in the RF ring with Broadcom ( AVGO ) and Qorvo ( QRVO ), both Apple suppliers. The number of bands — a spectrum of RF — rocketed between 2005 and 2015, Brent Dietz, Qorvo director of corporate communications, told IBD. In 2005, there were two bands. By 2015, there were 43. McConnell sees little opportunity for continued band acceleration. And Dietz offered a similar growth view for the RF market — a $10 billion market opportunity with a 10%-15% growth rate. But Dietz notes that the RF content in smartphones has gapped up this century. Less complex 2G phones had about 80 cents worth of RF content. Today, most smartphones have about $16 worth of RF. To that point, Broadcom’s mobile RF content grows in excess of 20% every year, CEO Hock Tan said during the company’s Q1 earnings conference call. He expects 2016 to be no different. This year, Qorvo and Skyworks offered similar views of growing dollar content in marquee smartphones. Recent teardowns show that Samsung completely replaced three Skyworks chips in its Galaxy S7 and that Qorvo twice replaced Broadcom.