Thursday, 30 April 2015

GoPro Revenues Surge

GoPro revenues boost after strong sales globally.
GoPro Inc., the action camera manufacture is expanding its portfolio thus for the same reason, the company has acquired a sci-fi video and virtual reality software that will give users a real time experience allowing users to feel there.
The company had initially a very saturated market but now GoPro has added a stable first quarter revenue in FY15 where a more than 50% increase has been observed due to rampant growth in international sales. The company’s global sales have increased substantially in Q1 which compound for half of the company’s sales overall.
Things that were a highlight of GPRO earnings were a 54 per cent gain in revenues on a year over year basis which compounds to $363.1 million. The analysts expected that the sales will compound revenues worth $341 million but the forecasts were beaten with a good margin by the company. The company has the honor of beating Wall Street expectations four times in a row which is massive win situation for the company.
It has been reported that GoPro stocks have increased by 52 per cent to $16.8 million or on average 13 cents for each share.  However, this itself is a far cry considering the $122 million in terms of profits which were posted in the previous quarter.  It needs to be considered here that this bombastic report was due to the holiday season where sales had been beyond exceptional for the company.
After the earnings were revealed the shares of the company increased by seven per cent in the afterhours. Moreover, a gain of 4 per cent was also observed during the day.
GoPro’s capture devices and Kolor’s software will combine to deliver exciting and highly accessible solutions for capturing, creating and sharing spherical content,” reported the chief executive officer of GoPro, Nick Woodman in a statement. He further added, “Investments in talent, technology, software, and innovative new products” regarding the growth of the company.
Hence in a nutshell, earlier many skeptics complained that GoPro was only limited to a limited earlier but the company now has worked really hard to make their footprints global. This actually proved to be of great benefit for the company since now their sales overseas have been tremendous and they have been ascertaining a substantial chunk of their revenues through these sales only which is a massive achievement for them. The company needs to evaluate the things that have proved to be fruitful for them and continue to beat Wall Street expectations in the quarters to come.

Tuesday, 28 April 2015

Twitter Showing Signs Of Rebound After A Very Tough Period Of Negative Market Sentiment

Multiple high valuations and current CEO’s performance hurted market fundamentals; shareholders witness record breaking fourth quarter performance.

Twitter, Inc. (NYSE:TWTR) is all set to announce its first quarter earnings for fiscal year 2015. Analysts forecast the company raking in more than $450 million in revenue, and EPS of around $0.04.
The social media giant has come under fire for its particularly lethargic performance for the past few years from multiple high valuation issues with the current management and on top of that, a negative market sentiment making it a very easy target for short sellers to sell off their stakes. Now, it is the most ‘loved’ and ‘sought after’ company.
Previously at its analyst meeting in November, the company pointed to at least more than 500 million unique page views per month, mostly from logged-out visitors (those who check out news feed, but are not registered Twitter users). This represents a good opportunity for the company to bring those logged-out visitors into its fold to generate more revenues, but that may not be so simple to try to convince them.
Twitter is also reporting heavy traffic, with over 125 million people visiting the website but not logged in every month. The company witnesses untapped potential in terms of its unlogged users. In response to this, it announced that, instead of asking users to sign up, it would ask them to engage with the latest trends and happenings by clicking on the ‘hashtag’ symbol that they come across in Google search engine, with whom Twitter has entered into an agreement.
In addition, the company has revamped its homepage by simplifying its welcoming address as "See what's happening right now. Find community, conversation and inspiration about the things you love.” instead of a few awkward questions being asked. It is part of Twitter’s new mission goal to "connect everyone to their world”, and not just connecting with friends.
The result was that the company announced a strong fourth quarter earnings, though it is not entirely clear if it had to do with the initiatives taken as described above. Nevertheless, if this quarter’s earnings prove to be an even bigger hit than the previous quarter, then it will be a sure sign that the restructuring of the company’s image, message, and vision statement has paid dividends. If that happens, Twitter would have retraced almost the entire sell-off and placed near the ‘highs’ that were printed last October. The microblogging site is speculated to have embarked on a journey of restructuring.
Twitter stock price ended the day last Friday on $50.82. Investors stock quotes expect that to shoot up around less than $55.

Monday, 27 April 2015

Delta Airlines Manage Solid But Not Exceptional Performance Despite Fuel Hedge Losses

Despite the results, the airline continues to face 'headwinds' offsetting low oil prices. 
Delta Airlines Inc. (NYSE:DAL) has reported Q1 profits that have slightly edged past analysts’ expectations. The airline’s revenue increased 5% to clock in at $9.4 billion, against the $8.9 billion reported last year. Operating margin increased to 8.8%, but the one setback is the hedge fuel losses that are calculated at 17.8%. Margins would have been a lot higher if it had not been for the fuel hedge losses.
Another sign of a red flag in its financials is that the company is reporting currency ‘headwinds’, which has served as a thorn for its revenues whilst keeping costs at bay. Delta Airlines operates in Europe, the Middle East, Japan, India, and Brazil, and all their currencies have weakened against the dollar, making travel expensive there. To this end, Delta plans on capacity cuts to increase margins during the winter months.
For the year ahead, the Delta airline forecasts a free cash flow of around $5 billion, a billion dollars more than the last year. It also forecasts continuous reduction in its interest expense. Delta saw its interest expense dropped down from $7.5 billion to less than $5 billion this year, giving it more leeway to increase its debt to investment grade till the end of the year.

A combination of fuel expenses and debt payments will continue to improve the fundamentals of Delta Airlines, with the continued risk of currency headwinds, which is a situational factor beyond control for the company. With fuel prices now starting to show a moderate upward trend (Brent crude and WTI prices are now trading in the range of 60’s), this is another upside risk that could feed into the company’s financials for the next quarter, if not for the whole year.
On the external, if not political fronted ongoing feud with Gulf Airlines over subsidies has reached a critical stage in which the Obama administration has solicited comments from the public in general till next month, investors need to keep an eye out for this development. However, many pundits do not expect any radical change in the Open Skies Agreement, except for some little tweaks here and there, to adjust to the current operating environment.

Delta stock price ended the day yesterday at $46.66, a gain of 0.50%. For now, investors are cheering on the company’s stellar performance, and rightly so, but as mentioned above, the performance is dubbed by analysts as only solid, not exceptional. Therefore, it will be a good idea for investors to temper that celebration, a little bit, just so they can introspect and understand the bigger picture, especially with the risk mentioned above.

Thursday, 23 April 2015

Goldman Sachs Trails In The Trading Debut

Stocks of Goldman Sachs BDC were 2.2% down during market hours.

Goldman Sachs BDC Inc. (NYSE:GSBD), the first incorporated company by an investment bank in the U.S., saw its stocks plunge in the trading debut, after selling stocks to the general public at a lower rate in its initial public offering (IPO) .
Stocks of the company, under the ticker GSBD, were trailing by 2.2% at $19.57 on the New York Stock Exchange last month, dragging down the market capitalization to roughly $690 million.
“We invest primarily in U.S. middle-market companies, which we believe have been underserved in recent years by traditional providers of capital such as banks and the public debt markets,” Goldman Sachs BDC said in a regulatory filing.
Goldman Sachs BDC is a business development company established by Goldman Sachs Group Inc. (NYSE:GS), which has issued loans worth $1 billion since 2012 to middle-large U.S. companies. Goldman Sachs Group had 20% stakes in the company in 2014.
Business Development companies are known to provide 90% of the net earnings as dividend to the shareholders, as they receive tax exemptions from the government for investing in small to middle companies in the U.S.
Goldman Sachs BDC, which is management by the asset management division of Goldman Sachs Group, provides financial services to its customers, including apparel retailer Avenue Stores LLC, Extraction Oil & Gas Holding LLC, aircraft engineer Heligear Acquisitions Co. and marketing agency Infinity Sales Group.  
The commercial lending venture had assets and liabilities worth $967.5 million and $392.9 million, respectively, at 2014-yearend. It earned $73.3 million from investments in FY14, which boosted the net assets from operations by $36.9 million.
Goldman Sachs DBC raised around $120 million for 6 million shares at price of $20-21 per share on March 17. The shareholders of the newly formed company are promised to receive dividend per share of $0.45 on March 31.The business development company wants to use the proceeds from shares issue to settle its debts.
Credit Suisse Group AG is also considering form a business development company “Credit Suisse Park View BDC” this year, striving to raise about $500 million.
U.S. Business Development Companies Price Index – benchmark index for tracking the most liquid and largest BDC over the world – has climbed 1% in 2015, after plunging 15$ in 2014.

Wednesday, 22 April 2015

Procter and Gamble Earnings Preview for 1QFY15

The multinational company is expected to report earnings that are much lower as compared to the last year.

Procter and Gamble has positioned itself to announce the third quarter earnings for the current financial year on Thursday, April 23 prior to the start of the market activities of the day. Analysts have decidedly come to the conclusion that this time around, the company might be reporting weaker earnings as compared to the same quarter of the previous year. A drop of 0.06% might be seen by the firm in the earnings call on Thursday.
Previously, analysts at FactSet were making expectations on P&G to end up making earnings more than that of what it made the year before but with the passage of time, the numbers decreased. The adjusted earnings that the equity firm has decided to put forward are 92 cents per share which is lower than the previous year’s earnings which were $1.04 a share. The dip in the earnings that is currently being predicted by analysts is due to the earnings of the 2nd quarter which came out to be surprisingly lower than expected in January 2015. At first the estimates were standing at $1.07 but after the shares started experiencing a dip, analysts were observed to have decreased the adjusted earnings to be 96 cents.
Analysts at FactSet have made their predictions for the revenue of the P&G to turn out to be $18.4 billion for the quarter. As for the previous year’s same quarter, the revenue has reportedly reached $20.6 billion. According to the past data on records, it has been reported by equity firms that this is the firm time since 2010 that the company is expected to report earnings less than $20 billion.
The shares of the company have not touched their all- time high of $93 since the sluggish 2nd quarter results.
If the present situation of the Procter and Gamble is taken into consideration, it will be seen that the company is trading an all-time low share price at $83, which is the lower than the averages of 50 day and 200 day moving that have been made by the analysts. The company has a current market value fixed at $223.79 billion.

Tuesday, 21 April 2015

eBay Inc. first quarter fiscal year 2015 Earnings Preview by Cantor Fitzgerald

Cantor Fitzgerald expects eBay Inc. to report in-line first-quarter results, while reiterating a Buy rating on the stock.

On Monday in a research note, Cantor Fitzgerald restates its rating of Buy on the stock of eBay with a price target of $60. The sell side company supposes the company to post its first quarter financial results as per the Street’s estimation. The e-commerce giant is all set to report its 1QFY15 earnings on Wednesday APRIL 22nd after market close.
Youssef Squali an analyst at Cantor Fitzgerald mentioned we expect 1Q:15 results to come in line with muted Street expectations given the maturing auction business.” He thinks that the exchange rate volatility will put substantial pressure on the quarter earnings, and the currency impact is likely to continue towards the next quarter as well.
Cantor Fitzgerald expects the company to post around $4.39 billion of revenue somewhat less than the $4.43 consensus estimate in the first quarter. The research firm believes company’s earnings per share to be in line with consensus estimate of 70 cents. The sell-side firm said, “We expect revenue growth to dip ~560 bps Q/Q to 3% Y/Y, largely reflecting F/X headwinds and continued underperformance of Marketplaces.”
Mr. Squali decreased his EPS estimate for fiscal year 2015 to $3.09 from $3.26 less than consensus forecast of $3.10, mainly due to currency headwinds. He believes that eBay will report $3.41 EPS in FY2016 more than consensus projection of $3.39.
Furthermore, Cantor is optimistic that the spinoff of its payments unit PayPal will unlock great value for the e commerce company. The firm supposes eBay to release robust 2nd quarter guidance, and update the whole year future guidance including the spinoff of PayPal. EBay is all set to finish the spinoff later this year.

The management of EBay Inc. expects 1QFY15 revenue to be in the range of $4.35 to $4.45 billion down by 10.6% from previous quarter slightly less than $4.61 billion of Zacks estimate.
As per the analysts polled by Bloomberg, 23 assigned a rating of Buy with 21 hold ratings, however only four have rated the stock of eBay as Sell. The twelve month consensus price target on the company stock is $54.64 which reflects 6.9% of upward potential compared to current stock price.
EBay stock is up by 0.50% and trading at $56.07. The e-commerce has market capitalization of $67.65 billion.

Thursday, 16 April 2015

Netflix Inc. first quarter FY15 earnings release


Netflix Inc. reported its first quarter earnings on April 15, with net addition of 4.9 million new subscribers.
The January to March 2015 quarter was good for Netflix in terms of subscription. International, domestic and entire streaming accounts reached 40 million, 20 million and 60 million, respectively.
Netflix Inc. in the first quarter 2015, added almost 4.9 million more members to its streaming network compared to previous quarter, the company now have around 62.27 million members. However, the company was targeting 4.1 million new subscribers but it was able to cross the target.
It’s the consistent fourth quarter in which the streaming giant was able to add more international subscribers than domestic. The stateside still contains 70% of revenue.
Revenue of the company rose by 24% since the previous year quarter to reach $1.57 billion, which is according to the estimate by Wall Street’s top line forecast, but reported outcomes were held back due to falling foreign currency. Company’s net profit of $0.38 per share was much less than analysts’ estimate of $0.69 and its previous quarter net profit of $0.86 per share , but the reason for this miss was mainly because of exchange rate volatility. The company would have pocketed a $0.77 per share profit for foreign exchange volatility.
The better than expected addition of subscription did not come as a surprise, as last week Netflix tweeted “Netflix members watched 10 billion hours last quarter. That’s about 905,892,833 seasons of @HouseofCards
Things for Netflix are moving into the right direction. The Online Streaming company is seeking to extend its streaming base by almost 2.5 million in the next quarter. That number does not look attractive after adding almost twice of this in the first quarter, the reason is past results shows that the 2nd quarter is usually sleepy for the company. It added only 1.7 million users in the prior year second quarter.
After the announcement of first quarter result, Netflix stock went down in the first 45 minutes on Wednesday. The stock was 3.25% down to $475.46. However, during after hour trading it went up by almost $59.
Netflix stock closed at $475.46 after falling by 0.68 on Wednesday. The Los Gatos based company has 52 week low and high of $471.55 and $480.93, respectively.

Wednesday, 8 April 2015

Involvement of Braskem in the Petrobras corruption scandal

Braskem’s name has come up in the corruption probe surrounding Petrobras. Braskem is accused of bribing Petrobras officials to secure construction contracts between 2006 to 2012
Bloomberg reported, Braskem SA –the biggest petrochemical company because of revenues is the new victim of the corruption scandal that has surrounded Petroleo Brasileiro Petrobras.
The petrochemical giant got stuck in the corruption scandal after a witness claimed that the company made under the table payments to Brazilian oil company in order to get contracts. As per the evidence given by Paul Roberto Costa –former executive of the company and confessions by Alberto Youssef who were involved in money laundering Braskem used to make a payment of $5 million between the year 2006 and 2012. These bribes were given to acquire crude oil prices derivatives like naphtha and propylene at lesser price. The evidence was made public on the website of Brazilian Supreme Court earlier in March.
Naphtha is the main element for making petrochemicals, and contains almost 50% of the whole production cost. Moreover, around 70% of naphtha demand for naphtha is provided by Petrobras.
The appeal by Mr. Youssef and Mr. Costa does not allow their lawyers to say any anything related to the bribery and corruption scandal that happened in one of the biggest energy company of the world.
Braskem rejected the claims, its $750 million worth of bonds carrying a 7% coupon rate with a time period of 5 years dropped by 9.6% and traded at $0.97 last week.
After the fragile performance of bonds, the petrochemical giant informed their bond holders via Bloomberg that the company still has around $1.8 billion worth of cash available beside other facility of credit line, which is enough to safeguard its debt commitments for nearly 2 years.
The company disclosed that its growth is linked with dollar, which is strengthening against the home currency.
The entitlement against Braskem shows the penetration level due to the scandal. The interrogation took place has knotted the rig makers, Brazilian builders and officials of government. Moreover, it has also caused 1 million protestors to come out against Dilma Rousseff’s way of handling the issue.
These kinds of claims can seriously hurt the petrochemical company’s stock price, as shareholders might prefer to sell their ownership instead of holding it due to the ongoing investigation. In such situation, shareholders overlook the sufficient financial position of the company.
While talking about the current development Petroleo Brasileiro Petrobras said, “All the payments and contracts between Braskem and Petrobras followed the legal requirements and were approved in a transparent manner in accordance with the governance rules of both companies