Monthly Archives: April 2010

Ba Ba Ba Baidu!

Posted on April 29, 2010 | Leave a comment

Baidu.com beats estimates by $0.52, beats on revenues; guides Q2 revenue above consensus and 10:1 ADS split announcement

Reports Q1 (Mar) earnings of $2.02 per share, $0.52 better than the Thomson Reuters consensus of $1.50; revenues rose 59.9% year/year to $189.6 mln vs the $180.1 mln consensus. Co issues upside guidance for Q2, sees Q2 revs of $268.1-274.0 mln vs. $240.07 mln Thomson Reuters consensus. Online marketing revenues for the first quarter of 2010 were RMB1.293 billion ($189.5 million), representing a 59.6% increase from the corresponding period in 2009. Baidu had around 221,000 active online marketing customers in the first quarter of 2010, representing a 19.5% increase from the corresponding period in 2009 and a 0.9% decrease from the previous quarter. Revenue per online marketing customer for the first quarter was approximately RMB5,900 ($864), a 34.1% increase from the corresponding period in 2009 and a 3.5% increase from the previous quarter. Traffic acquisition costs (TAC) as a component of cost of revenues were RMB171.3 million ($25.1 million), representing 13.2% of total revenues, as compared to 15.3% in the corresponding period in 2009 and 16.0% in the fourth quarter of 2009. The decrease in TAC as a percentage of total revenues reflects initiatives to drive quality improvements on Baidu Union traffic.

Right now Baidu owns the Chinese internet space and Google should be credited with an assist. Short term Baidu may continue to go higher even though it’s up $90 after hours.

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Hot Apple

Posted on April 21, 2010 | Leave a comment

Apple iPhone 4

Reports Q2 (Mar) earnings of $3.33 per share, $0.88 better than the Thomson Reuters consensus of $2.45; revenues rose 48.7% year/year to $13.5 bln vs the $12.04 bln consensus. Co reports Q2 gross margins of 41.7% vs Street est of 40.1%, up from 39.9% in the year-ago quarter. Co reports 10.89 mln iPods sold in Q2 vs Street est of ~9.7 mln, 8.75 mln iPhones sold in Q2 vs Street est of ~7.3 mln, and 2.94 mln Macs sold in Q2 vs Street est of ~2.9 mln. Co issues mixed guidance for Q3, sees EPS of $2.28-2.39 vs. $2.70 Thomson Reuters consensus; sees Q3 revs of $13.0-13.4 bln vs. $12.97 bln Thomson Reuters consensus.

International sales accounted for 58% of the quarter’s revenue. “We’re thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent,” said Steve Jobs, Apple’s CEO. “We’ve launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year.”

Apple sales reps have it easy. Apple products sell themselves.

Apple is on a roll and in excellent position to benefit from the mobile communication revolution.

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Google’s beat not enough

Posted on April 16, 2010 | Leave a comment

Google

Reports Q1 (Mar) earnings of $6.76 per share, $0.16 better than the Thomson Reuters consensus of $6.60; revenues ex-TAC rose 24% year/year to $5.06 bln vs the $4.95 bln consensus. Google-owned sites generated revenues of $4.44 billion, or 66% of total revenues, in the first quarter of 2010. This represents a 20% increase over first quarter 2009 revenues of $3.69 billion. Google’s partner sites generated revenues, through AdSense programs, of $2.04 billion, or 30% of total revenues, in the first quarter of 2010. This represents a 24% increase from first quarter 2009 network revenues of $1.64 billion. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the first quarter of 2009 and increased approximately 5% over the fourth quarter of 2009. Operating expenses, other than cost of revenues, were $1.84 billion in the first quarter of 2010, or 27% of revenues, compared to $1.52 billion in the first quarter of 2009, or 28% of revenues. Non-GAAP operating income in the first quarter of 2010 was $2.78 billion, or 41% of revenues. This compares to non-GAAP operating income of $2.16 billion, or 39% of revenues, in the first quarter of 2009. Net cash provided by operating activities in the first quarter of 2010 totaled $2.58 billion, compared to $2.25 billion in the first quarter of 2009.

Bizarre day for Google.. Eric Schmidt will no longer be part of earnings conference calls. Google stock is down after hours.

I’m very skeptical of Google as a long term investment right now because of uncertainty of what’s going on and multiple competitive issues going forward. It’s still in the cat bird’s seat but for how long.

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Intuitive Surgical earnings (ISRG)

Posted on April 15, 2010 | Leave a comment

da Vinci S HD Surgical System

Reports Q1 (Mar) earnings of $2.12 per share, $0.44 better than the Thomson Reuters consensus of $1.68; revenues rose 75.0% year/year to $329 mln vs the $294.8 mln consensus. First quarter of 2010 revenue growth was driven by continued robotic procedure adoption and higher da Vinci Surgical System sales.

ISRG notes:

2010 rev growth of 27-30% vs. 25% previously

Guidance equates to rev of ~$1.34 bln-1.37 bln vs. $1.37 bln

Expect gross margins of 72% for the year

Operating expense growth of 27 to 29% in 2010 compared with 25% growth previously

The stock was initially up after earnings were released but has now taken a nosedive after forward looking guidance was provided.

It’s made a nice run to new highs and will probably not be the end for ISRG longer term.

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Intel Earnings – Wow!

Posted on April 14, 2010 | Leave a comment

Logo - Intel

Reports Q1 (Mar) earnings of $0.43 per share, $0.05 better than the Thomson Reuters consensus of $0.38; revenues rose 44.2% year/year to $10.3 bln vs the $9.83 bln consensus. Intel reports Q1 gross margins of 63% vs 61.3%. The average selling price (ASP) for microprocessors was slightly up. Co issues upside guidance for Q2, sees Q2 revs of $9.8-10.6 bln vs. $9.69 bln Thomson Reuters consensus. Co guides Q2 gross margins of 64%, plus or minus a couple percentage points, vs 60.4% consensus. Co guides FY10 gross margins to 64%, plus or minus a couple percentage pts, vs 61.6% consensus, up from 61%, plus or minus 3% pts… Spending (R&D plus MG&A) was $12.4 billion, plus or minus $100 million. The company’s prior expectation was $11.8 billion, plus or minus $100 million. R&D spending was approximately $6.4 billion. Tax rate was approximately 31% for the second, third and fourth quarters. Depreciation was approximately $4.4 billion, plus or minus $100 million. Capital spending is expected to be $4.8 billion, plus or minus $100 million. “The investments we’re making in leading edge technology are delivering the most compelling product line-up in our history… These leadership products combined with growing worldwide demand and continued outstanding execution resulted in Intel’s best first quarter ever. Looking forward, we’re optimistic about our business as Intel products are designed into a variety of new and exciting segments.”

An upbeat report that looks positive moving forward. Will this be the spark that ignites a tech rally? Google reports on Thursday after the close and I expect Google to have a monster quarter with positive forward looking guidance.

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April Fools

Posted on April 1, 2010 | Leave a comment

New Highs For Dow/S&P Amid Sloppy Trade

The market opened on a firmly bullish note Thursday despite the late day backtracking the previous session. A strong performance overseas amid upbeat data set the stage for the early push along with in line Initial Claims (439 K vs. consensus 440 K). Fresh upticks in the wake of the ISM Index (59.6 best since 2004 vs. consensus 57.0) and further Dollar Index downticks (underpins Energy/Commodity) helped the Dow/S&P establish minor new 52-wk intraday highs. The Nasdaq Comp was unable to accomplish the same feat with this non-confirmation/tech underperformance and non-confirmation from some sectors (Semi SMH, Finance XLF, Retail XRT, Housing XHB) contributed to the slip off the highs. A break below midday ranges and perhaps caution/position adjustment ahead of the jobs data Friday led to additional intraday pressure and a Nasdaq slide into the red before a final hour rebound and new 52-wk closing highs for the Dow/S&P. Sectors posting the largest percentage gains were led by: Gold Miners GDX +4.4%, Shipping SEA +2.9%, Coal KOL +2.8%, Oil Service OIH +2.5%, Steel SLX +2.4%, Crude Oil USO +2.3%, Silver SLV +2.3%, Natural Gas +2%, Energy XLE +1.8%, Materials XLB +1.7%, Healthcare +1.6%, Airline +1.4%, Tobacco +1.3%, Telecom IYZ +1.3%, Auto Parts +1.3%, Retail XRT +1.2%, Gold GLD +1.2%, Drillers, Refiners. Sectors in red included: Internet HHH -1.4%, Trucking -0.5%, Software -0.3%, Technology XLK -0.2%. Sizeable price swings intraday with new yearly highs for the Dow/S&P and an outside day for the Nasdaq (exceeded entire previous range for the week) but the end result was essentially an extension of the established trade range. The non-confirmation from Nasdaq (and sectors) along with an outperformance of the Dow vs. the S&P over the last two weeks is a reflection of some increased caution but this could be quickly resolved (get confirmation) after the jobs data. Initial resistance above the recent highs/range top (1180/1181) is in the 1185/1187 area followed by an extension target near 1195. Support under congestion and the low (1172/1170) is in the 1166/1165 area.

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