Investors are craving burgers and crinkle-cut fries.
Shares of Shake Shack Inc. have more than doubled minutes after they debuted on the stock market debut Friday.
The New York-based burger chain raised $105 million, selling 5 million shares at $21 per share, more than had been expected.
Its shares, trading under the ticker symbol "SHAK" on the New York Stock Exchange, rose $29.20 to $50.20 in morning trading.
Shake Shack cooks its burgers to order and promotes its use of natural ingredients. The chain has 63 restaurants in nine countries. It plans to use some of the money raised to open new locations, including one in Austin, Texas.
Friday, January 30, 2015
ManPower Delivers Big Time On Earnings
ManpowerGroup (NYSE: MAN) today reported net earnings of $1.47 per diluted share for the three months ended December 31, 2014 compared to $1.25 per diluted share in the prior year period. The net earnings in the quarter were $117.2 million compared to $101.2 million a year earlier. Revenues for the fourth quarter totaled $5.1 billion, a decrease of 2 percent in U.S. dollars from the year earlier period and an increase of 5 percent in constant currency.
http://photos.prnewswire.com/prnvar/20110330/CG73938LOGO-a
Included in the prior year fourth quarter results is a restructuring charge related to our simplification and cost recalibration plan of $26.5 million ($19.4 million after tax or 24 cents per diluted share). There were no restructuring charges in the current year quarter. Fourth quarter results were unfavorably impacted by 13 cents per diluted share as foreign currencies were relatively weaker compared to the prior year.
Jonas Prising, ManpowerGroup CEO, said: "We are pleased with our results in the 4th quarter, capping off a year of very good financial performance and margin expansion, continued progress on our strategic initiatives and leadership in workforce solutions. We enter into 2015 with a determination to drive profitable growth, while delivering on our long term ambitions and strategic objectives. We have the market opportunity, we have a strong plan and with our team of talented people across our great company, we will pursue our objectives with discipline, focus and passion for the business.
"We are anticipating diluted earnings per share in the first quarter of 2015 to be in the range of 73 to 81 cents which includes an estimated unfavorable currency impact of 15 cents," Prising stated.
Net earnings per diluted share for the year ended December 31, 2014 was $5.30 compared to $3.62 per diluted share in 2013. Net earnings were $427.6 million compared to $288.0 million in the prior year. Revenues for the year were $20.8 billion, an increase of 3 percent in U.S. dollars from the prior year and 4 percent in constant currency.
Included in the 2013 full year results are restructuring costs of 82 cents per diluted share. There were no restructuring charges in 2014. 2014 results were unfavorably impacted by 10 cents per diluted share due to changes in foreign currencies compared to the prior year.
Buy rating
http://photos.prnewswire.com/prnvar/20110330/CG73938LOGO-a
Included in the prior year fourth quarter results is a restructuring charge related to our simplification and cost recalibration plan of $26.5 million ($19.4 million after tax or 24 cents per diluted share). There were no restructuring charges in the current year quarter. Fourth quarter results were unfavorably impacted by 13 cents per diluted share as foreign currencies were relatively weaker compared to the prior year.
Jonas Prising, ManpowerGroup CEO, said: "We are pleased with our results in the 4th quarter, capping off a year of very good financial performance and margin expansion, continued progress on our strategic initiatives and leadership in workforce solutions. We enter into 2015 with a determination to drive profitable growth, while delivering on our long term ambitions and strategic objectives. We have the market opportunity, we have a strong plan and with our team of talented people across our great company, we will pursue our objectives with discipline, focus and passion for the business.
"We are anticipating diluted earnings per share in the first quarter of 2015 to be in the range of 73 to 81 cents which includes an estimated unfavorable currency impact of 15 cents," Prising stated.
Net earnings per diluted share for the year ended December 31, 2014 was $5.30 compared to $3.62 per diluted share in 2013. Net earnings were $427.6 million compared to $288.0 million in the prior year. Revenues for the year were $20.8 billion, an increase of 3 percent in U.S. dollars from the prior year and 4 percent in constant currency.
Included in the 2013 full year results are restructuring costs of 82 cents per diluted share. There were no restructuring charges in 2014. 2014 results were unfavorably impacted by 10 cents per diluted share due to changes in foreign currencies compared to the prior year.
Buy rating
Response files a New 8-K/A that amends terms
Entry into a Material Definitive Agreement, Creation of a Direct Financia
Item 1.01. Entry into a Material Definitive Agreement.
On July 30, 2014 (the "Closing Date"), Response Genetics, Inc. (the "Company") entered into a credit agreement (the "Credit Agreement") with SWK Funding LLC, as the agent (the "Agent"), and the lenders (including SWK Funding LLC) party thereto from time to time (the "Lenders"). The Credit Agreement provides for a multi-draw term loan to the Company (the "Loan") for up to a maximum amount of $12,000,000 (the "Loan Commitment Amount"). On the Closing Date, the Lenders advanced the Company an amount equal to $8,500,000 which is due and payable on July 30, 2020 (the "Term Loan Maturity Date") or such earlier date on which the Loan Commitment Amount is terminated pursuant to the terms of the Credit Agreement.
The outstanding principal balance under the Credit Agreement will bear interest at a rate per annum equal to the LIBOR Rate (subject to a minimum amount of one percent (1.0%) plus twelve and half percent (12.5%), and will be due and payable in arrears (i) on the forty-fifth (45th) day following the last calendar day of each of the months of September, December, March, and June, commencing with November 15, 2014, (ii) upon a prepayment of the Loan and (iii) at maturity in cash. Upon the earlier of (a) the Term Loan Maturity Date or (b) full repayment of the Loan, the Company is required to pay an exit fee.
In addition, on the Closing Date, the Company issued the Agent a warrant (the "Initial Warrant") to purchase 681,090 shares of the Company's common stock, par value $0.01 per share (the "Common Stock"). The Initial Warrant is exercisable up to and including July 30, 2020 at an exercise price of $0.936 per share, subject to adjustment. The Agent may exercise the Initial Warrant on a cashless basis at any time. In the event the Agent exercises the Initial Warrant on a cashless basis the Company will not receive any proceeds. The exercise price of the Initial Warrant is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.
The remaining $3,500,000 of the Loan Commitment Amount (the "Subsequent Term Loan") may be advanced to the Company upon written request to the Agent during the period beginning on the Closing Date and ending February 28, 2016 provided that (i) no default or event of default has occurred or is continuing under the Credit Agreement, (ii) the aggregate revenue recognized by the Company and any of its subsidiaries during any period of four (4) consecutive fiscal quarters ending prior to December 31, 2015, exceeds a certain dollar amount threshold and
(iii) the Agent has received an executed warrant (the "Subsequent Term Loan Warrant") to purchase a number of shares of Common Stock equal to the number obtained when the amount of the Subsequent Term Loan is multiplied by 7.5% and the product is divided by the exercise price of such warrant. The exercise price of the Subsequent Term Loan Warrant will be equal to 1.2 times the lower of (a) the average closing price of the Common Stock on the previous 20 trading days before the closing date of the Subsequent Term Loan, or (b) the closing price of the Common Stock on the last trading day prior to such Subsequent Term Loan's closing date. The Subsequent Term Loan Warrant will be exercisable for a period of six years from the closing date of the Subsequent Term Loan, subject to adjustment. Upon issuance, the Agent may exercise the Subsequent Term Loan Warrant on a cashless basis at any time. In the event the Lender exercises the Subsequent Term Loan Warrant on a cashless basis we will not receive any proceeds. The exercise price of the Subsequent Term Loan Warrant is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.
The Company may prepay the Loan, in whole or in part, upon five business days written notice provided that a prepayment premium is paid to the Lenders as set forth in the Credit Agreement. The Company is required to prepay the Loan with any net cash proceeds received from certain types of dispositions of assets described in the Credit Agreement. The Company is also required to make certain revenue based payments on the Company's quarterly revenues applied in the following priority: (i) first to the payment of all fees, costs, expenses and indemnities due and owing to the Agent under the Credit Agreement, (ii) second, to the payment of all fees, costs, expenses and indemnities due and owing to the Lenders under the Credit Agreement, (iii) third, to the payment of all accrued but unpaid interest until paid in full; (iv) fourth, for each revenue based payment date after August 2016, to the payment of all principal of the Loan up to an aggregate amount of US$750,000 on any such payment date; and (v) fifth, all remaining amounts to the Company.
The Credit Agreement contains customary affirmative and negative covenants for credit facilities of its type, including, limiting the Company's ability to pay dividends or redeem outstanding equity interests, incur additional indebtedness, grant additional liens, engage in any other type of business, make investments, merge, consolidate or sell all or substantially all of its assets and enter into transactions with related parties. The Credit Agreement also contains certain financial covenants, including, certain minimum aggregate revenues requirements.
The Credit Agreement includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, default under certain other indebtedness, certain insolvency or bankruptcy events, the occurrence of certain material judgments the institution of any proceeding by a government agency or a change of control of the Company that it is not otherwise permitted under the Credit Agreement.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement attached hereto as Exhibit 10.1. Readers should review such agreement for a complete understanding of the terms and conditions associated with this transaction.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is incorporated by this reference into this Item 2.03.
Item 8.01 Other Events.
On August 5, 2014, the Company issued a press release announcing the matters set forth in Item 1.01 of this Current Report on Form 8-K. A copy of the Company's press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report:
Exhibit # Description
10.1 Credit Agreement, dated July 30, 2014, by and between the Company,
SWK Funding LLC and the Lenders party there to from time to time.**
99.1 Press Release, dated August 5, 2014 (Previously filed).
** Confidential treatment is requested for certain confidential
portions of this exhibit pursuant to Rule 24b-2 under the Exchange
Act. In accordance with Rule 24b-2, these confidential portions have
been omitted from this exhibit and filed separately with the
Securities and Exchange Commission.
Item 1.01. Entry into a Material Definitive Agreement.
On July 30, 2014 (the "Closing Date"), Response Genetics, Inc. (the "Company") entered into a credit agreement (the "Credit Agreement") with SWK Funding LLC, as the agent (the "Agent"), and the lenders (including SWK Funding LLC) party thereto from time to time (the "Lenders"). The Credit Agreement provides for a multi-draw term loan to the Company (the "Loan") for up to a maximum amount of $12,000,000 (the "Loan Commitment Amount"). On the Closing Date, the Lenders advanced the Company an amount equal to $8,500,000 which is due and payable on July 30, 2020 (the "Term Loan Maturity Date") or such earlier date on which the Loan Commitment Amount is terminated pursuant to the terms of the Credit Agreement.
The outstanding principal balance under the Credit Agreement will bear interest at a rate per annum equal to the LIBOR Rate (subject to a minimum amount of one percent (1.0%) plus twelve and half percent (12.5%), and will be due and payable in arrears (i) on the forty-fifth (45th) day following the last calendar day of each of the months of September, December, March, and June, commencing with November 15, 2014, (ii) upon a prepayment of the Loan and (iii) at maturity in cash. Upon the earlier of (a) the Term Loan Maturity Date or (b) full repayment of the Loan, the Company is required to pay an exit fee.
In addition, on the Closing Date, the Company issued the Agent a warrant (the "Initial Warrant") to purchase 681,090 shares of the Company's common stock, par value $0.01 per share (the "Common Stock"). The Initial Warrant is exercisable up to and including July 30, 2020 at an exercise price of $0.936 per share, subject to adjustment. The Agent may exercise the Initial Warrant on a cashless basis at any time. In the event the Agent exercises the Initial Warrant on a cashless basis the Company will not receive any proceeds. The exercise price of the Initial Warrant is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.
The remaining $3,500,000 of the Loan Commitment Amount (the "Subsequent Term Loan") may be advanced to the Company upon written request to the Agent during the period beginning on the Closing Date and ending February 28, 2016 provided that (i) no default or event of default has occurred or is continuing under the Credit Agreement, (ii) the aggregate revenue recognized by the Company and any of its subsidiaries during any period of four (4) consecutive fiscal quarters ending prior to December 31, 2015, exceeds a certain dollar amount threshold and
(iii) the Agent has received an executed warrant (the "Subsequent Term Loan Warrant") to purchase a number of shares of Common Stock equal to the number obtained when the amount of the Subsequent Term Loan is multiplied by 7.5% and the product is divided by the exercise price of such warrant. The exercise price of the Subsequent Term Loan Warrant will be equal to 1.2 times the lower of (a) the average closing price of the Common Stock on the previous 20 trading days before the closing date of the Subsequent Term Loan, or (b) the closing price of the Common Stock on the last trading day prior to such Subsequent Term Loan's closing date. The Subsequent Term Loan Warrant will be exercisable for a period of six years from the closing date of the Subsequent Term Loan, subject to adjustment. Upon issuance, the Agent may exercise the Subsequent Term Loan Warrant on a cashless basis at any time. In the event the Lender exercises the Subsequent Term Loan Warrant on a cashless basis we will not receive any proceeds. The exercise price of the Subsequent Term Loan Warrant is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.
The Company may prepay the Loan, in whole or in part, upon five business days written notice provided that a prepayment premium is paid to the Lenders as set forth in the Credit Agreement. The Company is required to prepay the Loan with any net cash proceeds received from certain types of dispositions of assets described in the Credit Agreement. The Company is also required to make certain revenue based payments on the Company's quarterly revenues applied in the following priority: (i) first to the payment of all fees, costs, expenses and indemnities due and owing to the Agent under the Credit Agreement, (ii) second, to the payment of all fees, costs, expenses and indemnities due and owing to the Lenders under the Credit Agreement, (iii) third, to the payment of all accrued but unpaid interest until paid in full; (iv) fourth, for each revenue based payment date after August 2016, to the payment of all principal of the Loan up to an aggregate amount of US$750,000 on any such payment date; and (v) fifth, all remaining amounts to the Company.
The Credit Agreement contains customary affirmative and negative covenants for credit facilities of its type, including, limiting the Company's ability to pay dividends or redeem outstanding equity interests, incur additional indebtedness, grant additional liens, engage in any other type of business, make investments, merge, consolidate or sell all or substantially all of its assets and enter into transactions with related parties. The Credit Agreement also contains certain financial covenants, including, certain minimum aggregate revenues requirements.
The Credit Agreement includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, default under certain other indebtedness, certain insolvency or bankruptcy events, the occurrence of certain material judgments the institution of any proceeding by a government agency or a change of control of the Company that it is not otherwise permitted under the Credit Agreement.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement attached hereto as Exhibit 10.1. Readers should review such agreement for a complete understanding of the terms and conditions associated with this transaction.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is incorporated by this reference into this Item 2.03.
Item 8.01 Other Events.
On August 5, 2014, the Company issued a press release announcing the matters set forth in Item 1.01 of this Current Report on Form 8-K. A copy of the Company's press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this report:
Exhibit # Description
10.1 Credit Agreement, dated July 30, 2014, by and between the Company,
SWK Funding LLC and the Lenders party there to from time to time.**
99.1 Press Release, dated August 5, 2014 (Previously filed).
** Confidential treatment is requested for certain confidential
portions of this exhibit pursuant to Rule 24b-2 under the Exchange
Act. In accordance with Rule 24b-2, these confidential portions have
been omitted from this exhibit and filed separately with the
Securities and Exchange Commission.
Thursday, January 29, 2015
Amazon killed it
Amazon.com, Inc. (AMZN) today announced financial results for its fourth quarter ended December 31, 2014.
Operating cash flow increased 25% to $6.84 billion for the trailing twelve months, compared with $5.47 billion for the trailing twelve months ended December 31, 2013. Free cash flow decreased to $1.95 billion for the trailing twelve months, compared with $2.03 billion for the trailing twelve months ended December 31, 2013.
Common shares outstanding plus shares underlying stock-based awards totaled 483 million on December 31, 2014, compared with 476 million one year ago.
Fourth Quarter 2014
Net sales increased 15% to $29.33 billion in the fourth quarter, compared with $25.59 billion in fourth quarter 2013. Excluding the $895 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 18% compared to fourth quarter 2013.
Operating income was $591 million in the fourth quarter, compared with operating income of $510 million in fourth quarter 2013.
Net income was $214 million in the fourth quarter, or $0.45 per diluted share, compared with net income of $239 million, or $0.51 per diluted share, in fourth quarter 2013.
Full Year 2014
Net sales increased 20% to $88.99 billion, compared with $74.45 billion in 2013. Excluding the $636 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 20% compared with 2013.
Operating income was $178 million, compared with operating income of $745 million in 2013.
Net loss was $241 million, or $0.52 per diluted share, compared with net income of $274 million, or $0.59 per diluted share, in 2013.
Operating cash flow increased 25% to $6.84 billion for the trailing twelve months, compared with $5.47 billion for the trailing twelve months ended December 31, 2013. Free cash flow decreased to $1.95 billion for the trailing twelve months, compared with $2.03 billion for the trailing twelve months ended December 31, 2013.
Common shares outstanding plus shares underlying stock-based awards totaled 483 million on December 31, 2014, compared with 476 million one year ago.
Fourth Quarter 2014
Net sales increased 15% to $29.33 billion in the fourth quarter, compared with $25.59 billion in fourth quarter 2013. Excluding the $895 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 18% compared to fourth quarter 2013.
Operating income was $591 million in the fourth quarter, compared with operating income of $510 million in fourth quarter 2013.
Net income was $214 million in the fourth quarter, or $0.45 per diluted share, compared with net income of $239 million, or $0.51 per diluted share, in fourth quarter 2013.
Full Year 2014
Net sales increased 20% to $88.99 billion, compared with $74.45 billion in 2013. Excluding the $636 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 20% compared with 2013.
Operating income was $178 million, compared with operating income of $745 million in 2013.
Net loss was $241 million, or $0.52 per diluted share, compared with net income of $274 million, or $0.59 per diluted share, in 2013.
Why GENE is up 200% today
GENE reported that up to 6 new breast diagnosis/treatment centres are expected to begin offering BREVAGenplus to their at-risk patients in a systematic broad fashion in the January to March timeframe, with a growing number of additional new breast and imaging centre customers expected to follow later in calendar year 2015. As a result, the Company expects sales growth to accelerate in the second half 2015 and beyond.
A lot riding on Apple's iWatch
Here is why the iWatch must be a success
1. There is too much riding on the iPhone
Apple's revenue during the holiday quarter may have soared 30%, but back out the iPhone and sales actually slipped 7%. The iPhone is hot -- and that's awesome -- but it's also 68.6% of the revenue mix at Apple.
Apple needs to earn its innovator wings again. With iPad sales plummeting and the iPod no longer even worthy of being its own line item in Apple's quarterly summary data table it's time for something new to take the weight off of the iPhone.
2. The iOS newbies are ripe for the picking
The only thing better than Apple selling a record 74.5 million iPhones is that a record number of them are also new to the tech giant's mobile platform.
"We had the highest number of customers new to iPhone last quarter than in any prior launch," CEO Tim Cook boasted on Tuesday night. "The current iPhone lineup experienced the highest Android switcher rate in any of the last three launches."
In other words, there are a lot of people making their initial investments in Apple products. The long overdue move to introduce larger screens to keep up with the competition is predictably paying off by eliminating their objections to going Apple. This leaves them ripe to to absorb other Apple products, and it's not iPads or iPods. Mac sales should benefit, but the no-brainer is an accessory that works in cahoots with the phone itself. Yes, we're talking about the smart watch.
3. Let's bring back the halo effect
It's not a coincidence that the Mac experienced a resurgence shortly after the 2001 introduction of the iPod. The media player worked with Macs and PCs, but it made Apple desktops and laptops cool again. Don't be surprised if we see this happen with the Apple Watch.
Ultimately the purchase of an Apple Watch is a commitment to iOS. It's unlikely to work with Android or other devices, cementing an iPhone user in place. Wireless carriers make it brutally easy to switch sides every two years, but someone buying an Apple Watch is that much more invested to sticking to the iPhone at the next upgrade cycle.
4. Show Google how wearable computing is done
It's not a surprise to see Google (GOOG) backpedalling from Google Glass. The search giant suspended sales of its high-tech specs to developers. They cost too much. They were too creepy. They weren't fashionable enough.
However, this also opens the door for Apple to make a splash by showing how wearable computing can be fashionable and useful. Skeptics will argue that rival smart watches have failed, but that hasn't deterred Apple in the past. There's always time to get it right.
5. Apple can use a new winner
The only two product lines posting improving sales this holiday season were iPhones and Macs. We're talking about the smartphone that it introduced nearly eight years ago and its legacy computer business that's obviously even older.
The iPad has been shrinking for a year, joining the iPod that's been diminishing in popularity for years. Apple TV seems to be holding its own, but it's not substantial enough to merit being singled out as a category. It's lumped together with the iPod in the "other products" catchall that posted an overall decline.
Apple can use another winner. The Apple Watch won't lend itself to the same upgrade cycle as the iPhone. There won't be too many people buying a new one every two years. However, if it succeeds it will give Apple a more recent product introduction to brag about.
1. There is too much riding on the iPhone
Apple's revenue during the holiday quarter may have soared 30%, but back out the iPhone and sales actually slipped 7%. The iPhone is hot -- and that's awesome -- but it's also 68.6% of the revenue mix at Apple.
Apple needs to earn its innovator wings again. With iPad sales plummeting and the iPod no longer even worthy of being its own line item in Apple's quarterly summary data table it's time for something new to take the weight off of the iPhone.
2. The iOS newbies are ripe for the picking
The only thing better than Apple selling a record 74.5 million iPhones is that a record number of them are also new to the tech giant's mobile platform.
"We had the highest number of customers new to iPhone last quarter than in any prior launch," CEO Tim Cook boasted on Tuesday night. "The current iPhone lineup experienced the highest Android switcher rate in any of the last three launches."
In other words, there are a lot of people making their initial investments in Apple products. The long overdue move to introduce larger screens to keep up with the competition is predictably paying off by eliminating their objections to going Apple. This leaves them ripe to to absorb other Apple products, and it's not iPads or iPods. Mac sales should benefit, but the no-brainer is an accessory that works in cahoots with the phone itself. Yes, we're talking about the smart watch.
3. Let's bring back the halo effect
It's not a coincidence that the Mac experienced a resurgence shortly after the 2001 introduction of the iPod. The media player worked with Macs and PCs, but it made Apple desktops and laptops cool again. Don't be surprised if we see this happen with the Apple Watch.
Ultimately the purchase of an Apple Watch is a commitment to iOS. It's unlikely to work with Android or other devices, cementing an iPhone user in place. Wireless carriers make it brutally easy to switch sides every two years, but someone buying an Apple Watch is that much more invested to sticking to the iPhone at the next upgrade cycle.
4. Show Google how wearable computing is done
It's not a surprise to see Google (GOOG) backpedalling from Google Glass. The search giant suspended sales of its high-tech specs to developers. They cost too much. They were too creepy. They weren't fashionable enough.
However, this also opens the door for Apple to make a splash by showing how wearable computing can be fashionable and useful. Skeptics will argue that rival smart watches have failed, but that hasn't deterred Apple in the past. There's always time to get it right.
5. Apple can use a new winner
The only two product lines posting improving sales this holiday season were iPhones and Macs. We're talking about the smartphone that it introduced nearly eight years ago and its legacy computer business that's obviously even older.
The iPad has been shrinking for a year, joining the iPod that's been diminishing in popularity for years. Apple TV seems to be holding its own, but it's not substantial enough to merit being singled out as a category. It's lumped together with the iPod in the "other products" catchall that posted an overall decline.
Apple can use another winner. The Apple Watch won't lend itself to the same upgrade cycle as the iPhone. There won't be too many people buying a new one every two years. However, if it succeeds it will give Apple a more recent product introduction to brag about.
Wednesday, January 28, 2015
New Price Target on Apple and highlights of its quarter
Ok well we all know Apple has reported. I have included the details below. I am amending my price target to $135. I think it will get there by delivering a solid Q1, which is historically a slow period. iPhone 6s could be a huge hit too. Times are exciting for this stock. Although, it would be nice to see a broader pullback to draw more cash in, but I don't see that happening. There's no downside catalyst.
Highlights:
The Company posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarters revenue.
The results were fueled by all-time record revenue from iPhone® and Mac® sales as well as record performance of the App Store . iPhone unit sales of 74.5 million also set a new record.
Revenue grew 30 percent over last year to $74.6 billion
Apple is providing the following guidance for its fiscal 2015 second quarter:
" revenue between $52 billion and $55 billion
" gross margin between 38.5 percent and 39.5 percent
" operating expenses between $5.4 billion and $5.5 billion
" other income/(expense) of $350 million
" tax rate of 26.3 percent
Apples board of directors has declared a cash dividend of $.47 per share of the Companys common stock. The dividend is payable on February 12, 2015, to shareholders of record as of the close of business on February 9, 2015.
Highlights:
The Company posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarters revenue.
The results were fueled by all-time record revenue from iPhone® and Mac® sales as well as record performance of the App Store . iPhone unit sales of 74.5 million also set a new record.
Revenue grew 30 percent over last year to $74.6 billion
Apple is providing the following guidance for its fiscal 2015 second quarter:
" revenue between $52 billion and $55 billion
" gross margin between 38.5 percent and 39.5 percent
" operating expenses between $5.4 billion and $5.5 billion
" other income/(expense) of $350 million
" tax rate of 26.3 percent
Apples board of directors has declared a cash dividend of $.47 per share of the Companys common stock. The dividend is payable on February 12, 2015, to shareholders of record as of the close of business on February 9, 2015.
Tuesday, January 27, 2015
What options are telling us about Apple and earnings
Options traders are pricing in a bigger move than normal from Apple Inc. (AAPL) when it reports after the bell Today.
Options pricing implies a move of 6.6% in either direction through Friday, based on a strategy called a straddle, according to options-data provider Trade Alert. The strategy involves buying a put option and call option at the same strike price near the stock’s current price, in order to hedge out the direction of the move. The more expensive the cost of the put and the call, the bigger the expected move.
A put option grants the right to sell shares of the underlying stock at a specific price by a certain time. Call options confer the right to buy shares.
Most of that 6.6% move is likely to come the day after Apple reports earnings, which tends to be a big catalyst for stock swings. A move of that magnitude would be the biggest since Apple reported earnings in April 2014, when shares rose 8.2%. The average post-earnings move from Apple is 5.2%, according to Trade Alert.
Apple options are heavily traded among retail and institutional investors.
Options pricing implies a move of 6.6% in either direction through Friday, based on a strategy called a straddle, according to options-data provider Trade Alert. The strategy involves buying a put option and call option at the same strike price near the stock’s current price, in order to hedge out the direction of the move. The more expensive the cost of the put and the call, the bigger the expected move.
A put option grants the right to sell shares of the underlying stock at a specific price by a certain time. Call options confer the right to buy shares.
Most of that 6.6% move is likely to come the day after Apple reports earnings, which tends to be a big catalyst for stock swings. A move of that magnitude would be the biggest since Apple reported earnings in April 2014, when shares rose 8.2%. The average post-earnings move from Apple is 5.2%, according to Trade Alert.
Apple options are heavily traded among retail and institutional investors.
Whats up DOW?
Caterpillar (CAT) is today's Dog of the Dow (^DJI) dropping more than 7%. The company not only came up short on estimates but also warned that slowing global growth would lead to a weaker than hoped 2015. CAT’s a cyclical company and always has been. Nothing odd about fluctuations in demand. What is strange is management highlighted $4.2B in stock repurchases as a good thing for shareholders. Not only did earnings per share decline anyway but the average price of CAT shares over the last year was about $100. Today you can buy all the Caterpillar stock you want for less than $80. Repurchased shares are retired but if the company was a fund they would be down about $850 million on those repurchases. Might be best to stick to earth moving equipment, gang. It's a tough enough job already.
Microsoft (MSFT) is face planting by 10% today. The tech giant reported more or less in line results for its fiscal second quarter but took down full year estimates on both earnings and revenues. It's all part of the transition from a Windows monopoly to... well... to something different. Deutsche Bank (DB) and Credit Suisse (CS) helpfully cut estimates after the fact. Adding insult to injury influential Nomura analyst Rick Sherlund downgraded shares to neutral from buy. That thud you hear is Microsoft CEO Satya Nadella's 1 year honeymoon ending with a bang, not a whimper. Apple (AAPL) is hurting as well
Finally, they can't all be downers. Corning (GLW) shares are inching higher in a grim tape after the company reported better than expected earnings. It's all about demand for larger screen TVs driving revenue for that division higher by 69%. Slightly smaller but equally sexy gains were also seen in fiber optics and so-called Gorilla glass products. In the conference call this morning CFO Jim Flaws said "we feel very good about the glass market in 2015," adding "retail TV demand is strong". It ain't much but on a day such as this we'll take it
Microsoft (MSFT) is face planting by 10% today. The tech giant reported more or less in line results for its fiscal second quarter but took down full year estimates on both earnings and revenues. It's all part of the transition from a Windows monopoly to... well... to something different. Deutsche Bank (DB) and Credit Suisse (CS) helpfully cut estimates after the fact. Adding insult to injury influential Nomura analyst Rick Sherlund downgraded shares to neutral from buy. That thud you hear is Microsoft CEO Satya Nadella's 1 year honeymoon ending with a bang, not a whimper. Apple (AAPL) is hurting as well
Finally, they can't all be downers. Corning (GLW) shares are inching higher in a grim tape after the company reported better than expected earnings. It's all about demand for larger screen TVs driving revenue for that division higher by 69%. Slightly smaller but equally sexy gains were also seen in fiber optics and so-called Gorilla glass products. In the conference call this morning CFO Jim Flaws said "we feel very good about the glass market in 2015," adding "retail TV demand is strong". It ain't much but on a day such as this we'll take it
Monday, January 26, 2015
Seagate not looking great
In addition to slightly missing FQ2 revenue estimates (while posting in-line EPS), Seagate (NASDAQ:STX) has guided on its CC for FQ3 revenue of "at least $3.45 billion," unfavorable to a $3.59B consensus.
FQ2 gross margin was 28.2%, +10 bps Q/Q but -40 bps Y/Y, and below (per Needham) a consensus of 28.6%. Seagate forecasts an FQ3 GM of 28.5%.
Seagate estimates the addressable market (NYSE:TAM) for hard drives was 144M-145M in FQ2, down from 147M in FQ1 and up from 142M a year earlier. The company pegs its share at 40%. Hard drive ASP fell by $1 Y/Y to $61.
Two weak spots in FQ2: Consumer electronics hard drive shipments fell 9% to 6.1M, and branded drive shipments (high-margin) fell 3% to 6M. PC drive shipments rose 4% Y/Y to 36.6M, with notebook growth offsetting a desktop decline, and enterprise shipments (high-margin) rose 17% to 9.1M.
FQ2 gross margin was 28.2%, +10 bps Q/Q but -40 bps Y/Y, and below (per Needham) a consensus of 28.6%. Seagate forecasts an FQ3 GM of 28.5%.
Seagate estimates the addressable market (NYSE:TAM) for hard drives was 144M-145M in FQ2, down from 147M in FQ1 and up from 142M a year earlier. The company pegs its share at 40%. Hard drive ASP fell by $1 Y/Y to $61.
Two weak spots in FQ2: Consumer electronics hard drive shipments fell 9% to 6.1M, and branded drive shipments (high-margin) fell 3% to 6M. PC drive shipments rose 4% Y/Y to 36.6M, with notebook growth offsetting a desktop decline, and enterprise shipments (high-margin) rose 17% to 9.1M.
THANK YOU ALL--Celebrating my 500th Article!!!!!!!!!!!!!!!!
Hi everyone,
You know, you win some and you lose some. These past few years of writing and opining have made me a much stronger analyst and that has translated to better recommendations and better stock performance of those picks. While investors have made a lot of money on my top recommendations, there have been some bad losers in there as well. The key is to stay on top of the names I recommend and that is why I have undertaken a huge focus on providing Update articles. Sometimes the story changes. Sometimes things go wrong. But at the end of the day, those who are on top of things will gain the most and lose the least. I wanted to say thank you all for reading my work and I wish you the best success here in 2015!
Cheers,
Chris
You know, you win some and you lose some. These past few years of writing and opining have made me a much stronger analyst and that has translated to better recommendations and better stock performance of those picks. While investors have made a lot of money on my top recommendations, there have been some bad losers in there as well. The key is to stay on top of the names I recommend and that is why I have undertaken a huge focus on providing Update articles. Sometimes the story changes. Sometimes things go wrong. But at the end of the day, those who are on top of things will gain the most and lose the least. I wanted to say thank you all for reading my work and I wish you the best success here in 2015!
Cheers,
Chris
Uranium prices could boost UEC
Buying opportunity in GE?
General Electric has underperformed the S&P 500 YTD, and Argus analysts think the recent weakness has created a buying opportunity based on current valuation.
The analysts see the higher-margin backlog, solid execution in the industrial businesses, and a healthier GE Capital as strong positives, and believes improving power generation activity has fueled demand for turbines and other oil and gas equipment, and an upswing in the commercial aviation market is flowing through to GE Aviation's order book.
On the other hand, J.P. Morgan is not feeling so optimistic about GE's prospects, seeing further negative fundamental catalysts on oil and gas and earnings revisions.
The analysts see the higher-margin backlog, solid execution in the industrial businesses, and a healthier GE Capital as strong positives, and believes improving power generation activity has fueled demand for turbines and other oil and gas equipment, and an upswing in the commercial aviation market is flowing through to GE Aviation's order book.
On the other hand, J.P. Morgan is not feeling so optimistic about GE's prospects, seeing further negative fundamental catalysts on oil and gas and earnings revisions.
Thursday, January 22, 2015
You should buy Goldcorp under this price
In my article calling for investors to begin accumulating Goldcorp shares, I covered some production targets. I discussed that the company could come in at the low end of guidance due to issues in Mexico. Reduced production was easily attributed to the closure of El Sauzal in Mexico and the divestiture of Marigold mine. Even with the losses, Mexican output alone was expected to be over 1 million ounces for 2014, surpassing total production of many smaller miners' annual production as a whole. Further, the company had first production from Eleonore mine in late summer, helping bump up the production tallies.
All in all, I was looking for production of 2.9 million gold ounces or more in 2014, which was slightly beyond the lower end of the company's guidance. Further, I expected all-in sustaining costs to decline because the company expected them to be around $950 to $1,000 per gold ounce, which was much less than 2013's costs.
So how did.....READ MORE
All in all, I was looking for production of 2.9 million gold ounces or more in 2014, which was slightly beyond the lower end of the company's guidance. Further, I expected all-in sustaining costs to decline because the company expected them to be around $950 to $1,000 per gold ounce, which was much less than 2013's costs.
So how did.....READ MORE
My thoughts on Plug Power's latest deal
Plug Power (NASDAQ:PLUG) has announced it has signed another pivotal deal that impacts my thesis, which you need to be aware of. The company has now signed a multi-year contract with SouthernLINC Wireless, a wholly-owned subsidiary of Southern Company (NYSE:SO), for its ReliOn integrated fuel cell solution and GenFuel hydrogen services. Plug Power will provide ReliOn integrated backup power fuel cell solutions to SouthernLINC Wireless for use in its wireless network, which supports Southern Company's communication needs and provides a wireless communications network for customers. This is just the latest in a series of deals for the company. SouthernLINC reaches about 4.4 million customers in the southeastern United States. Just how many are we talking about? Well, SouthernLINC anticipates deploying as many as 500 new LTE sites utilizing the Plug Power ReliOn integrated solution. This will, of course, include fuel cell systems and bulk refillable hydrogen storage, as well as DC plant rectifiers and distribution, battery technology and space for radio equipment. The actual value of the contract...READ MORE
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