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CSCO | Fortinet FTNT Catches Eye Stock Jumps 8 9 | Fortinet Inc NASDAQ FTNT was a big mover last session as the company saw its shares rise nearly 9 on the day The move came on solid volume too with far more shares changing hands than in a normal session This stock which remained volatile and traded within the range of 78 55 87 61 in the past one month time frame witnessed a sharp increase on Friday The company has seen no changes when it comes to estimate revision over the past few weeks while the Zacks Consensus Estimate for the current quarter has also remained unchanged The recent price action is encouraging though so make sure to keep a close watch on this firm in the near future Fortinet currently has a Zacks Rank 3 Hold while its is positive Fortinet Inc Price Investors interested in the Computer and Technology sector may consider a better ranked stock like Cisco Systems Inc NASDAQ CSCO which carries a Zacks Rank 2 Buy You can see Is FTNT going up Or down Predict to see what others think Up or DownToday s Best Stocks from ZacksWould you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
CSCO | Pure Storage names new CEO shares up 12 7 | Pure Storage NYSE PSTG announces Charles Giancarlo as the new CEO and member of the Board of Directors effective immediately Giancarlo replaces Scott Dietzen who steps down into a role as Chairman of the Board Giancarlo has served in senior executive roles at Cisco Systems NASDAQ CSCO and Silver Lake Partners Press release Pure Storage shares are up 12 7 following yesterday s aftermarket earnings report Previously Pure Storage shares 4 7 after Q2 beats upped FY18 guidance Aug 24 Now read |
CSCO | Exclusive BroadSoft explores options including potential sale sources | By Liana B Baker and Michael Flaherty Reuters BroadSoft Inc a U S provider of software that helps companies offer cloud based communications services is exploring its options including the potential sale of the company according to people familiar with the matter The move comes as BroadSoft faces increasing competition from larger technology companies such as Cisco Systems Inc NASDAQ CSCO Ericsson BS ERICAs and Nokia Oyj HE NOKIA as well as newer market entrants such as 8x8 Inc BroadSoft is working with investment bank Jefferies LLC as it pursues a possible sale to another company or a private equity firm the sources said this week There is no certainty of any deal the sources added The sources asked not to be identified because the deliberations are confidential BroadSoft and Jefferies declined to comment BroadSoft shares ended up 11 5 percent at 48 00 on the news giving the company a market capitalization of 1 5 billion Based in Gaithersburg Maryland BroadSoft provides software and services that enable mobile fixed line and cable service providers to offer unified communications over their internet protocol networks BroadSoft has historically sold its products to large telecommunications companies which then resell the software to their business customers BroadSoft has recently tried to revamp its business model to sell directly to these customers a move that risks its relationships with its telecommunications partners according to a Barclays LON BARC Plc research report published last month BroadSoft competitor Mitel Networks Corp announced a deal to buy rival ShortTel Inc last month for 430 million Reuters in February reported that BroadSoft competitor 8x8 Inc had been exploring a sale New York based hedge fund P2 Capital Partners LLC owned a 4 6 percent stake in BroadSoft as of the end of June according to Thomson Reuters data P2 has often behaved as an activist shareholder and has even offered to buy companies in which it has invested For example P2 pressured Epiq Systems in 2014 to seek a sale eventually placing its own 1 1 billion bid for the software company The bid was rejected and Epiq was sold two years later to OMERS Private Equity and buyout firm Harvest Partners LP Another BroadSoft shareholder with a history of acquisitions is buyout firm KKR Co LP which is Broadsoft s 13th largest shareholder according to Thomson Reuters data For the second quarter ending June 30 Broadsoft s revenue rose to 88 8 million up 9 percent from 81 7 million a year earlier Its net loss was 3 million compared with a loss of 2 9 million a year earlier |
VZ | Is Verizon Ready Ror Yahoo Merger | Verizon Communications NYSE VZ has come a long way from its humble origins in the Bell breakup It has grown from a small eastern seaboard phone company into one of the largest digital communications networks in the country
Most recently Verizon has dominated tech and finance industry news with its bid to buy Yahoo NASDAQ YHOO The ailing internet services provider could use a facelift And Verizon is prepared to take on that challenge
But mergers of this size are not orderly events And as we recently covered they often don t receive approval Sure Yahoo has stumbled in recent years but it s still worth 40 billion An acquisition like this will be a serious strain on Verizon s resources
Is Verizon stock prepared for it It s hard to say Shares are up for the year but not by a ton
This deal with Yahoo could make or break Verizon It could be the beginning of a new phase for both companies Or it could mark the end of Verizon s stability in the telecom space With that in mind Investment U readers want to know What should you do with Verizon stock
To find out we ran it through the Investment U Fundamental Factor Test As a reminder our checklist looks at six key metrics to diagnose the financial health of a stock
Earnings per Share EPS Growth Verizon doesn t give us a promising start with regard to earnings Its earnings per share have shrunk in the last year with a growth rate of 10 10 Other telecoms are down too but not as badly The industry average is 3 28
Price to Earnings P E The company redeems itself a bit with its price to earnings ratio It s just 12 23 a little more than a third of the industry average which is 34 72 That indicates that the market is excessively bearish on Verizon stock relative to its competitors
Debt to Equity Telecom is an expensive business and many of Verizon s peers are highly leveraged The average debt to equity ratio is 125 37 But Verizon has even more debt than that Its ratio of 484 88 is worryingly above average
Free Cash Flow per Share Growth This is a very bad omen for Verizon While other telecoms have respectable cash flows of 24 95 per share Verizon has seen free cash flow per share drop 86 89 That is not the number we were hoping for here
Profit Margins Verizon returns to above average here Its profit margin of 11 70 is a decent bit higher than the industry average of 8 87 which is already quite good
Return on Equity The company ends on a very good note with its return Verizon equity has earned 83 48 in the last year compared to average returns of 18 11 among competitors
In sum Verizon is doing OK Its profit margins and return on equity are strong And the market isn t giving it the credit it deserves But the company s predicament is a bit weaker than we d like to see from a company that s about to spend a few billion
Verizon s earnings debt burden and cash flows are all causes for concern And in the short term its merger with Yahoo could make matters worse Hopefully the acquisition will give Verizon momentum and opportunities for growth in the long term Only time will tell For these reasons Verizon stock has earned a grade of C
Fundamental Factor Test Score
C Hold Meets just three key metrics |
VZ | Telephone And Data Systems TDS Arm Takes Over InterLinx | Telephone and Data Systems Inc s NYSE T subsidiary TDS Broadband Service LLC recently inked a purchase agreement for Internet service provider InterLinx Communications LLC and its unit Tonaquint Networks LLC based in Southern Utah U S The deal adds more than 170 route miles of fiber optic transport of InterLinx to TDS Broadband Services TDS Broadband Services is basically operated by TDS Telecommunications Corporation TDS Telecom which is a wholly owned subsidiary of Telephone and Data Systems and is the 7th largest local exchange telephone company in the U S and a growing force in the cable industry The terms of the transaction have not yet been disclosed and are subject to regulatory approvals by federal and local bodies Details on InterLinx Interlinx founded in 2003 is basically a supplier of fiber broadband internet services and has coverage in 6 cities and towns within the state of Utah Fiber optic Internet from Interlinx Communications is currently available to approximately 95 000 people thus positioning itself as the 82nd largest provider of fiber broadband in the U S in terms of coverage area InterLinx provides wholesale fiber connections to businesses local Internet service providers and large carriers Tonaquint Networks provides residential and business services using both fiber to the premises and wireless Internet technologies Tonaquint Networks also offers broadband wireless services Buyout ProspectsTelephone Data Systems is quite optimistic about the latest merger deal The company is focused on working with the existing local employees of Utah in order to better serve the customers of InterLinx and Tonaquint Networks Telephone Data Systems also has plans to offer positions to all its current employees in the acquired company and thus help in the network expansion throughout Utah Employees at Tonaquint Networks InterLinx and Telephone Data Systemsmay also have to operate out of the current InterLinx office space in St George as per the work requirements CompetitionThe company s wireless subsidiary United States Cellular Corp NYSE USM operates in an intensely competitive wireless market and remains significantly challenged by the launch of lower cost mobile service plans by peers On a regional level the company competes with AT T Inc NYSE T owned Leap Wireless Also U S Cellular remains highly susceptible to aggressive pricing by larger rivals like Verizon Communications Inc NYSE VZ and T Mobile US Inc NYSE T TELEPHONE DATA Price
Telephone Data Systems currently carries a Zacks Rank 3 Hold You can see The Best Place to Start Your Stock SearchToday you are invited to download the full list of 220 Zacks Rank 1 Strong Buy stocks absolutely free of charge Since 1988 Zacks Rank 1 stocks have nearly tripled the market with average gains of 26 per year Plus you can access the list of portfolio killing Zacks Rank 5 Strong Sells and other private research |
VZ | Nokia NOK Outlines Key Financial And Strategic Targets | Nokia HE NOKIA Corporation NYSE NOK issued its financial and strategic outlook for the coming days at the Capital Markets Day presentation on Nov 14 Going forward the company plans to substantially increase its dividend as well as focus on reducing costs
Business Opportunities
Nokia insisted that it will seek to streamline its cost of sales Notably the company has raised its cost savings guidance from EUR 1 2 billion to EUR 1 7 billion It has also stated that it will look forward to invest in cable access markets as well as its enterprise businesses
Nokia has been witnessing significant synergies from its recent purchase of Alcatel Lucent PA ALUA The core focus areas for the combined entity is likely to be next generation 5G wireless technology IP and software defined networking cloud based solutions big data analytics and sensors and imaging
Also the merged entity can effectively leverage the emerging Internet of Things IoT platform and will be able to deliver competent triple play voice video and data solutions globally Also Nokia will be able to benefit from Alcatel Lucent s strong foothold in China as well as its veritable client list which includes Verizon Communications Inc NYSE VZ and AT T Inc NYSE T
However Nokia expects its Networks business to decline in line with the primary addressable market in 2017 The company also expects operating margin to be in the range of 8 10 Intense competition from the likes of Cisco Systems NASDAQ CSCO and drab market conditions are some of the major factors that are likely to hurt revenues However revenues from Digital Health and Digital Media are expected to increase year over year in full year 2017 primarily supported by increased adoption of Digital Health and Digital Media products
Higher Dividends
Nokia also stated that it wants to raise its dividend payout by 40 70 For the current year the company aims for a dividend per share of EUR 0 17 subject to shareholder approval NOKIA CP ADR A Price
Nokia has a Zacks Rank 3 Hold You can see
Confidential from Zacks
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VZ | Cable MSOs Maintain Lead In High Speed Broadband Market | Per a recent report by Leichtman Research Group Inc LRG the cable multi service operators MSOs in the U S have successfully maintained their lead over telecom operators in the high speed broadband Internet market This comes as a respite especially at a time when the cable TV operators have been losing their foothold in the core video market to fiber based telecom operators and online video streaming service providers
The second quarter of 2014 marked the first year in the 66 year long history of the cable TV Industry where cable MSOs outpaced telecom operators in the high speed broadband market Since then cable MSOs has been rapidly gaining foothold in the space
According to data compiled by LRG 14 large cable TV and telecom operators jointly had approximately 92 5 million high speed Internet subscribers at the end of the third quarter of 2016 representing about 95 of the nation s total broadband market Of the count cited cable MSOs commanded nearly 57 8 million subscribers 62 5 while the remaining 34 7 million customers 37 5 were serviced by telecom operators
In the third quarter seven major cable TV operators added a net of 774 956 high speed Internet subscribers while seven major telecom operators lost 149 593 net subscribers resulting in a total net subscriber addition of 625 563 for the broadband industry In the first nine months of 2016 the cable TV operators have gained around 2 44 million subscribers in contrast to a loss of about 475 000 subscribers on the part of the telecom operators
In the third quarter top two cable MSOs in the U S namely Comcast Corp NASDAQ CMCSA and Charter Communications Inc NYSE T added 329 000 and 387 000 high speed broadband subscribers respectively On the other hand telecom behemoth AT T Inc NYSE T lost 23 000 subscribers while Verizon Communications Inc NYSE VZ gained 24 000 subscribers All four stocks currently carry a Zacks Rank 3 Hold You can see
Over the last ten years the internal dynamics of the pay TV market have been gradually shifting from cable TV offerings toward fiber based video services of large telecom operators Moreover the strong presence of online video streaming providers is posing a significant threat to the existing pay TV business model Video offering which represented the core business function of cable TV operators seems to be fast slipping out of their hands
Nevertheless of late with the deployment of the next generation DOCSIS 3 0 technology cable TV operators have extensively penetrated into the high speed Internet market In an attempt to capitalize on this technology leading cable TV operators are increasingly emphasizing on the broadband market At this juncture a strong momentum in the high speed data Internet market bodes well for cable MSOs
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VZ | Strike to pressure Verizon earnings Q1 net income meets estimates | By Malathi Nayak and Sai Sachin R Reuters Verizon Communications Inc NYSE VZ said an ongoing strike by its wireline workers was expected to hurt earnings in the current quarter even as it reported first quarter net income that met analyst expectations amid strong tablet sales Shares of Verizon the No 1 U S wireless carrier fell 3 4 percent to 49 99 at midday on Thursday If the strike now in its second week continues for an extended period of time it could pressure full year earnings Chief Financial Officer Fran Shammo said in an interview We d like to settle this sooner than later Shammo said About 40 000 employees of Verizon s wireline business which includes its Fios Internet telephone and TV services went on strike after reaching an impasse in talks over a new labor contract Issues include healthcare offshoring of call center jobs temporary job relocations and pensions In the wireline business consumer revenue of 4 billion was little changed from a year ago Net income attributable to the company rose to 4 31 billion or 1 06 per share in the first quarter meeting analysts expectations The company stood by its full year profit forecast Verizon has been scaling back its Fios TV and Internet business which represented about 29 percent of its 2015 revenue Rather than investing in good jobs here at home Verizon refuses to make Fios available to thousands of people throughout the East Coast and is embarking on a questionable path to acquire troubled Yahoo NASDAQ YHOO and other companies Brooklyn based Verizon field technician Anthony Finocchio said in a statement on Thursday To tap new revenue the company has shifted its focus to the advertising supported Internet business and acquired AOL last June for 4 4 billion It is seen as the front runner in bidding for Yahoo Inc s core Internet business The company known for its high quality network is locked in a battle for subscribers with competitors in the saturated U S wireless market Smaller rival Sprint Corp has been offering half off discounts and T Mobile US Inc has launched free music and video streaming plans Verizon reported strong subscriber net additions for the first quarter ended March 31 adding 640 000 wireless retail postpaid subscribers helped by tablet promotions during a seasonally slow period for phone upgrades That surpassed analysts average estimate of 480 000 according to market research firm FactSet StreetAccount Customer defections or churn in Verizon s wireless postpaid business dropped to 0 96 percent from 1 03 percent a year earlier
Total operating revenue rose 0 6 percent to 32 17 billion falling slightly short of analysts average estimate of 32 46 billion according to Thomson Reuters I B E S |
VZ | Oil falls on oversupply concern euro slips | By Caroline Valetkevitch NEW YORK Reuters Oil prices slipped on Thursday on further evidence of oversupply and a stronger dollar while the euro eased against the U S dollar after European Central Bank President Mario Draghi pledged to keep monetary policy loose U S stocks fell in afternoon trading in New York after mixed earnings from companies including Verizon Communications NYSE VZ which fell 3 7 percent after it said a strike by its wireline workers was expected to hurt earnings in the current quarter The euro fell as traders looked past a meeting of the European Central Bank and weighed the potential for a more hawkish Federal Reserve next week while the yen gained There s a risk that the Fed could signal a stronger chance of a June rate rise than markets currently expect said Joe Manimbo senior market analyst at Western Union Business Solutions in Washington CME Fed funds futures contracts on Thursday suggested traders were pricing in just a 21 percent chance of a Fed interest rate hike in June according to CME Group s FedWatch program The euro was last down 0 03 percent against the U S dollar 1 1296 AS LONG AS NEEDED European Central Bank President Mario Draghi brushed off German criticism of his ultra loose monetary policy and vowed to use all the tools at his disposal for as long as needed The U S dollar index which measures the greenback against a basket of six other major currencies was last up 0 20 percent at 94 682 Crude oil prices were lower after market data vendor Genscape reported a build of more than 840 000 barrels in U S crude in the four days to April 19 at the Cushing Oklahoma delivery point traders who saw the data said O R U S crude oil prices slid 1 4 percent to 43 47 a barrel In London Brent crude was down 1 9 percent at 44 89 a barrel Despite Thursday s slide crude oil prices are up about 40 percent from multi year lows hit seen in January U S stocks were down Thursday afternoon after a raft of mixed quarterly earnings kept investors on the sidelines The Dow Jones industrial average was down 89 48 points or 0 49 percent to 18 006 79 the S P 500 had lost 9 1 points or 0 43 percent to 2 093 3 and the Nasdaq Composite had added 0 48 points or 0 01 percent to 4 948 61 RESULTS Expectations for first quarter U S earnings were low with S P 500 index companies expected to post a 7 2 percent fall in profit on average and a 1 4 percent decline in revenue according to Thomson Reuters The market has a singular focus to retake the old highs set back in May last year said Sam Stovall U S equity strategist at S P Global Market Intelligence in New York Right now it s probably just taking a little breather because it has come so far so fast but I still see the market moving up and attempting to get back to breakeven The MSCI world stock index hit its highest level in almost five months early Thursday before trading down 0 2 percent while European shares closed down 0 3 percent U S Treasury yields rose to more than three week highs as oil prices held firm and investors focused on supply of government and corporate debt and next week s Fed policy meeting Heavy corporate debt supply and the scheduled 16 billion sale of five year Treasury Inflation Protected Securities TIPS on Thursday added to pressure on the government bond market There s still some uncertainty for the fixed income markets and given the FOMC meeting next week and the TIPS supply I think you ve seen people get a bit more cautious said Gary Pollack head of fixed income trading at Deutsche Bank DE DBKGn Private Wealth Management in New York
Ten year notes fell 5 32 in price to yield 1 87 percent up from 1 85 percent on Wednesday |
VZ | T Mobile swings to a profit driven by customer gains | By Malathi Nayak and Sai Sachin R Reuters T Mobile US Inc O TMUS on Tuesday swung to a profit and raised its 2016 forecast for customer additions as competitively priced plans and free video streaming options helped it add over 1 million new monthly subscribers for the seventh consecutive quarter Shares in T Mobile were last down 2 percent at 40 32 reversing earlier gains T Mobile has rolled out data only plans new family price offers and free music and video streaming services in recent months Chief Executive John Legere led the rollout of a series of consumer friendly offers such as the free video streaming option Binge On data rollover plans and social media campaigns in the past three years These have helped T Mobile gain market share as it is locked in a price war in an oversaturated wireless market with rivals Verizon Communications Inc N VZ and AT T Inc N T and smaller competitor Sprint Corp N S T Mobile controlled by Deutsche Telekom DE DTEGn said it added 2 2 million customers on a net basis in the first quarter ended March 31 surpassing the average analyst estimate of 1 72 million according to research firm FactSet StreetAccount The Bellevue Washington based company said it now expects to add 3 2 million to 3 6 million postpaid customers on a net basis in 2016 compared with its previous forecast of 2 4 million to 3 4 million Postpaid customers are those who pay monthly bills for the service Churn or the rate at which subscribers defect to other networks for postpaid users was 1 33 percent in the quarter up slightly from 1 3 percent a year ago Churn ticked up slightly likely on the heels of more aggressive competition from Sprint New Street Research analyst Jonathan Chaplin said in a research note In terms of free cash flow for 2016 investors are looking for 1 5 billion to 2 billion and we are at 1 9 billion Chaplin said T Mobile said revenue jumped 10 6 percent to 8 6 billion Analysts on average had expected revenue of 8 43 billion according to Thomson Reuters I B E S It reported net income of 479 million or 56 cents per share for the first quarter compared with a loss of 63 million or 9 cents per share a year earlier This blew past analysts expectations of 10 cents per share To enhance its network capacity T Mobile has filed to participate in the U S government s auction of low frequency spectrum or airwaves that kicked off in March It has said it plans to spend about 10 billion in the auction
T Mobile expects a successful outcome in the auction and is investing in adding new retail locations Legere said on an earnings call |
VZ | AT T loses TV subscribers profit beats expectations | By Malathi Nayak and Kshitiz Goliya Reuters AT T Inc N T said on Tuesday the No 2 U S wireless carrier lost television subscribers and signed up fewer than expected monthly wireless customers in the first quarter even as it beat profit estimates Shares of AT T which had gained 10 7 percent so far this year fell almost 2 percent in extended trading AT T has been seeking new revenue sources in an oversaturated wireless market and has acquired satellite TV provider DirecTV to offer bundles of cellular broadband TV and fixed line phone services AT T is in the early stages of implementing this plan after completing the 48 5 billion merger in July which created the country s largest pay TV company AT T s strategy is to bundle wireless services with entertainment and broadband and so far that has shown mixed results MoffettNathanson LLC analyst Craig Moffett said in a phone interview AT T said it added 328 000 DirecTV subscribers in the quarter ended March 31 But it lost 382 000 U verse TV customers as the company started to phase out that service AT T which is battling wireless providers like Verizon Communications Inc N VZ and T Mobile US Inc O TMUS for subscribers added 129 000 postpaid customers in the quarter Postpaid customers who pay bills monthly tend to spend more than prepaid customers The increase fell short of analysts average estimate of 287 000 postpaid net additions according to market research firm FactSet StreetAccount AT T signed up more than 3 million wireless customers after it reintroduced unlimited wireless data to AT T wireless subscribers who had DirecTV and U verse TV Chief Financial Officer John Stephens said on a conference call after the company released earnings Our new unlimited wireless with video offer started fast and continues at a solid pace he added Net income attributable to AT T rose to 3 80 billion from 3 26 billion in the year ago quarter On a per share basis net income fell to 61 cents from 63 cents Excluding items the Dallas based company earned 72 cents per share beating the average analyst estimate of 69 cents according to Thomson Reuters I B E S Total operating revenue rose 24 4 percent to 40 53 billion beating the average analyst estimate of 40 47 billion |
VZ | Verizon striking unions at impasse as health benefits to expire | By Malathi Nayak NEW YORK Reuters A strike by nearly 40 000 Verizon Communications Inc NYSE VZ workers is in its third week with unions and the company still far apart on contract talks even as employee healthcare benefits are set to expire on Saturday Workers from network technicians to customer service representatives in Verizon s Fios Internet telephone and TV services walked off the job on April 13 in one of the largest U S strikes in recent years after contract talks hit an impasse A resolution on various issues including temporary job relocations pensions and moving call center jobs offshore has yet to be reached representatives of Verizon and the Communications Workers of America union said on Wednesday Verizon which said last week that a long drawn labor dispute would pressure its earnings remains committed to reaching a fair deal spokesman Rich Young said in a phone interview A meeting between Verizon and union representatives is scheduled for Thursday afternoon he said HEALTHCARE OPTIONS Verizon has notified striking workers that under federal law their health care coverage was set to expire on April 30 Young said Verizon has said it spent over 3 2 billion on healthcare for employees last year The company offers insurance coverage to those employees who are actively working Young said Striking employees have the option of seeking coverage under the U S government s Consolidated Omnibus Budget Reconciliation Act COBRA health insurance plan to get temporary healthcare coverage They think that this is going to be used as a wedge to break this strike I assure you it will not said Ed Mooney vice president of CWA District 2 13 said in a phone interview The CWA also has funds collected through contributions from affiliated union members and other donors to help cover healthcare costs of members when needed Mooney said It s horrible Most of us are parents I have a daughter and the prospect of losing our children s healthcare is actually quite disturbing Fitz Boyce 45 a field technician at Verizon for over two decades said in an interview at the picket line in front of the company s Times Square NYSE SQ store in New York The strike affects Fios Internet telephone and TV services across several U S East Coast states including New York and Virginia Verizon has trained thousands of non union employees over the past year to ensure no service disruption The company has fielded over 60 000 requests since the strike began Young said
The unions have said that replacement workers do not have the necessary expertise especially in highly technical jobs such as equipment installations |
CSCO | Why Cisco CSCO Is Poised To Beat Earnings Estimates Again | If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report you should consider Cisco Systems NASDAQ CSCO This company which is in the Zacks Computer Networking industry shows potential for another earnings beat
When looking at the last two reports this seller of routers switches software and services has recorded a strong streak of surpassing earnings estimates The company has topped estimates by 1 34 on average in the last two quarters
For the most recent quarter Cisco was expected to post earnings of 0 77 per share but it reported 0 78 per share instead representing a surprise of 1 30 For the previous quarter the consensus estimate was 0 72 per share while it actually produced 0 73 per share a surprise of 1 39
Price and EPS Surprise
Thanks in part to this history there has been a favorable change in earnings estimates for Cisco lately In fact the Zacks Earnings ESP Expected Surprise Prediction for the stock is positive which is a great indicator of an earnings beat particularly when combined with its solid Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Cisco has an Earnings ESP of 1 53 at the moment suggesting that analysts have grown bullish on its near term earnings potential When you combine this positive Earnings ESP with the stock s Zacks Rank 2 Buy it shows that another beat is possibly around the corner The company s next earnings report is expected to be released on August 14 2019
Investors should note however that a negative Earnings ESP reading is not indicative of an earnings miss but a negative value does reduce the predictive power of this metric
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
CSCO | MKS Instruments MKSI Q2 Earnings Beat Revenues Miss | MKS Instruments NASDAQ MKSI reported second quarter 2019 adjusted earnings of 1 09 per share which beat the Zacks Consensus Estimate by a penny but decreased 53 2 year over year Revenues of 474 1 million lagged the consensus mark of 487 million and declined 17 3 year over year Products revenues 84 6 of total revenues were 401 3 million down 21 3 from the year ago quarter Services revenues 15 4 increased 15 3 year over year to 72 8 million Shares declined 4 4 to close at 85 13 on Jul 31 following the sluggish results MKS Instruments has returned 31 7 year to date compared with the s growth of 35 8 Year to date PerformanceQuarter DetailsRevenues from semiconductor customers 45 1 of total revenue decreased 36 4 year over year to 214 million Revenues from advanced markets 54 9 of total revenue were 260 1 million up 9 9 from the year ago quarter The company s Vacuum and Analysis segment 49 7 of total revenue reported revenues of 235 7 million down 36 year over year primarily due to a slowdown in semiconductor capital equipment spending Light and Motion division revenues 38 5 of total revenue were 182 6 million down 10 9 year over year Equipment solutions segment revenues were 55 9 million Operating DetailsIn the second quarter MKS Instruments adjusted gross margin contracted 290 basis points bps on a year over year basis to 45 Adjusted EBITDA decreased 41 7 to 103 4 million Adjusted EBITDA margin was 21 8 significantly down from 30 9 reported in the year ago quarter Research development and sales general administrative expenses as a percentage of revenues expanded 250 bps and 430 bps respectively The company reported non GAAP operating income of 88 4 million down 45 5 from the year ago quarter Adjusted operating margin was 18 6 significantly down from 28 3 reported in the year ago quarter Balance SheetAs of Jun 30 2019 MKS Instruments had cash and cash equivalents of 460 million Term loan debt outstanding is 947 million after a payment of 50 million made during the second quarter of 2019 MKS Instruments also paid a dividend of 10 9 million or 20 cents per diluted share during the reported quarter GuidanceFor the third quarter of 2019 MKS Instruments anticipates revenues between 415 million and 465 million Non GAAP earnings are expected between 69 cents and 1 02 per share Zacks Rank Stocks to ConsiderCurrently MKS Instruments carries a Zacks Rank 5 Strong Sell Some better ranked stocks in the broader technology sector include Digital Turbine NASDAQ APPS CACI International NYSE CACI and Cisco Systems NASDAQ CSCO All three stocks have a Zacks Rank 2 Buy You can see While Digital Turbine is set to release quarterly results on Aug 5 both CACI International and Cisco Systems are scheduled to report on Aug 14 Looking for Stocks with Skyrocketing Upside Zacks has just released a Special Report on the booming investment opportunities of legal marijuana Ignited by new referendums and legislation this industry is expected to blast from an already robust 6 7 billion to 20 2 billion in 2021 Early investors stand to make a killing but you have to be ready to act and know just where to look |
CSCO | J2 Global JCOM To Report Q2 Earnings What s In Store | j2 Global NASDAQ JCOM is set to report second quarter 2019 results on Aug 6 Notably the company s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters the average positive surprise being 4 4 In first quarter 2019 adjusted earnings of 1 40 per share comfortably beat the Zacks Consensus Estimate by 8 cents and increased 14 8 year over year Revenues inched up 1 8 year over year to 304 5 million handily outpacing the consensus mark of 296 million The Zacks Consensus Estimate for second quarter 2019 earnings has stayed flat at 1 52 over the past 30 days The figure indicates growth of 1 3 from the year ago quarter s reported figure The consensus mark for revenues which is pegged at 318 5 million indicates growth of 10 6 from the year ago quarter s reported figure j2 Global Inc Price and EPS Surprise
Let s see how things are shaping up for this announcement Factors to ConsiderCloud services subscriber revenues are expected to grow rapidly driven by organic as well as benefits from acquisitions Strategic acquisitions have been strengthening the company s footprint in services like VPN and security The increasing user awareness of surveillance in digital lives is spurring demand for tools that protect privacy The buyouts of IPVanish and Encrypt me assets have helped j2 Global in protecting users on unsecured Wi Fi as well as shield their Internet browsing activities This must have expanded its user base thereby driving top line growth in the to be reported quarter In the second quarter j2 Global bought certain assets of Idea First Technologies The company also strengthened its VPN portfolio by acquiring Highwinds Capital and Cloak Holdings Further the company s growing footprint among small and medium sized business is a key catalyst However sluggishness in the data backup business is expected to hurt the company s top line growth Moreover margins are likely to remain under pressure as revenue contribution from the lower margin Digital Media segment increases in the top line mix Ongoing investments in cybersecurity are also likely to dent profitability in the June end quarter What Our Model SaysAccording to the Zacks model a company with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold has a good chance of beating estimates if it also has a positive Zacks Rank 4 Sell or 5 Strong Sell stocks are best avoided j2 Global currently carries a Zacks Rank 3 and has an Earnings ESP of 0 00 You can uncover the best stocks to buy or sell before they re reported with our Stocks to ConsiderHere are some companies which per our model have the right combination of elements to post an earnings beat this quarter CACI International NYSE CACI has an Earnings ESP of 4 02 and a Zacks Rank 2 You can see Cisco Systems NASDAQ CSCO has an Earnings ESP of 1 53 and a Zacks Rank 2 BrightView Holdings NYSE BV has an Earnings ESP of 0 86 and a Zacks Rank 2
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CSCO | Cisco to buy Springpath for 320M plus | Cisco NASDAQ CSCO will acquire Springpath an existing strategic partner who builds hyperconvergence software for 320M in cash and assumed equity awards along with retention incentives
Since early last year the two have worked together on HyperFlex what Cisco calls the first fully integrated hyperconverged infrastructure system
Cisco expects to close the deal in its fiscal first quarter
Springpath has made a distributed file system for hyperconvergence that enables server based storage systems
Premarket CSCO 0 2
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CSCO | Cisco Systems shares climb following latest acquisition | Investing com Shares of Cisco Systems Inc NASDAQ CSCO s were holding steady on Tuesday with investors reacting to the company s agreement to acquire Springpath for 320 million in cash and additional retention incentive awards
Springpath has developed hyper converged software that enables enterprises to more easily manage their compute resources in cloud like environments
Cisco has been working with Springpath since early 2016 The acquisition is expected to close in the first quarter of Cisco s 2018 fiscal year which runs until Oct 28
Cisco s shares were up 2 in afternoon trade |
VZ | AMC Entertainment AMC Q3 Earnings A Beat In The Cards | Leisure and recreation services company AMC Entertainment Holdings Inc NYSE AMC is slated to report third quarter 2016 results on Nov 7 after market close Last quarter the company posted a negative earnings surprise of 17 24 Moreover the company s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters with an average miss of 2 65 Let s see how things are shaping up for this announcement
Why a Likely Positive Surprise Our proven model shows that AMC Entertainment is likely to beat estimates because it has the right combination of two key elements Zacks ESP AMC Entertainment has an of 3 57 This is because the Most Accurate estimate stands at 29 cents while the Zacks Consensus Estimate is pegged lower at 28 cents This is a meaningful and leading indicator of a likely positive earnings surprise Please check our that enables you to find stocks that are expected to come out with earnings surprises Zacks Rank AMC Entertainment has a Zacks Rank 3 Hold Note that stocks with a Zacks Rank 1 Strong Buy 2 Buy or 3 have a significantly higher chance of beating estimates Conversely Sell rated stocks Zacks Rank 4 or 5 should never be considered going into an earnings announcement The combination of AMC Entertainment s Zacks Rank 3 and 3 57 ESP makes us confident of an earnings beat at the company You can see
What is Driving the Better than Expected Earnings AMC Entertainment operates as a theatrical exhibition company primarily in the U S and also internationally It owns or has interests in theatres and screens worldwide The company actively invests in renovation and refurbishing of multiplexes through enhancements like reclining seats improved food and beverages dine in theaters and advanced sound and digital equipment AMC Theatres and Dolby Laboratories Inc NYSE DLB announced their strategic tie up to expand the presence of Dolby Cinema to 100 at AMC operational sites by the end of 2017 The original agreement signed in 2015 was for 100 auditoriums over a 10 year deployment Moreover AMC and Dolby are collaborating on expansion plans to increase the number of Dolby Cinema theaters at AMC locations beyond the initial 100 Currently 22 Dolby Cinemas are operating at AMC locations all around U S Meanwhile being part of the entertainment industry exposes the company to macro economic fluctuations AMC ENTERTAINMT Price and EPS Surprise
Other Key PicksHere are some other companies that have the right combination of elements to post an earnings beat this quarter Verizon Communications Inc NYSE VZ with an Earnings ESP of 1 11 and a Zacks Rank 3 The company s earnings beat the Zacks Consensus Estimate in three of the previous four quarters Sprint Corp NYSE S with an Earnings ESP of 14 29 and a Zacks Rank 3 The company s earnings beat the Zacks Consensus Estimate in three of the previous four quarters Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Verizon servicing current customers delays new installations in strike | NEW YORK Reuters A one day old strike by nearly 40 000 Verizon Communications Inc N VZ employees is causing equipment installation delays for new Internet and TV customers a Verizon executive acknowledged on Thursday Workers of Verizon s Fios Internet telephone and TV services from network technicians to customer service representatives walked off the job on Wednesday in one of the largest U S strikes in recent years after contract talks between unions representing them and the company hit an impasse The company which is focusing on repairs and service for its existing customers said networks were running well We do have a bit of a delay said Tami Erwin Verizon s Group President Consumer and Mass Business Sales and Service said We re working hard with customers to prioritize repair above activations and provisioning because we owe that to our existing customers In a week or two the company should be able to do new installations she said It normally has about 30 000 to 35 000 of them each week with over 30 percent of customers opting to do a self installation The strike affects service across several U S East Coast states including New York Massachusetts and Virginia but does not extend to the company s wireless operation Union representatives and Verizon said on Thursday no talks were scheduled so far Verizon has said it had trained thousands of non union employees over the past year to ensure no disruption in services The unions however say that replacement workers do not have the necessary expertise especially in highly technical jobs such as equipment installations The company has deployed about 20 000 non union workers to fill in for union workers said Bob Mudge president of Verizon s wireline network operations We ll continue to ramp from that Mudge added We re going to work seven days a week Verizon and the unions have been in contract talks since last June the sticking points include healthcare temporary job relocations pensions and offshoring call center jobs
A day after the strike started there were a handful of customer complaints on Verizon s customer service website related to Internet outages and a no show after a scheduled installation appointment |
VZ | Sprint extends its fastest network to NY 190 markets | By Malathi Nayak NEW YORK Reuters Sprint Corp N S said on Friday it has extended LTE Plus a network improvement that offers customers its fastest network and higher data speeds to New York City and 190 other markets Overland Park Kansas based Sprint has been giving customers half off discounts to switch to its service and cutting costs to the tune of 2 5 billion by slashing jobs and expenses in an attempt to reverse years of customer defections and losses Moreover the company has been making network upgrades to better compete with bigger rivals and draw customers to its service LTE Plus gives customers more capacity so they get a much better experience chief technology officer John Saw said in an interview If they have the latest phones compatible with Sprint s technology they get much higher speeds as well Sprint s LTE Plus was already available in cities such as Houston Chicago and Las Vegas before the recent expansion New York was the largest of the 191 new markets to receive the service LTE Plus will be rolled out in more markets in coming months Saw said The company has been under pressure to cut costs because of concerns that it was spending too much to acquire and retain customers Sprint currently has a debt load of about 34 billion The company has the fourth largest U S subscriber base but has a larger trove of spectrum than its rivals AT T Inc N T Verizon Communications Inc N VZ and T Mobile US Inc O TMUS Spectrum or wireless airwaves are a valuable resource as wireless providers work to increase their network capacity as consumers use data heavy apps and video on mobile devices To give customers faster speeds and connectivity in densely populated areas such as New York Sprint has been deploying its high frequency or 2 5 GHz airwaves and relaying signals from big wireless towers to small cells placed on lampposts and rooftops that transmit and deliver them to users mobile devices The company is also working on adding channels to its 2 5 GHz bands to accommodate more wireless signals and increase network capacity Using airwaves in this way prepares us for 5G Sprint s chief operating officer Gunther Ottendorfer said in an interview 5G the next generation of cellular technology is expected to offer 1 000 fold gains in capacity over existing networks and the potential to connect at least 100 billion devices from connected cars to machines and devices Sprint is not interested in selling its spectrum assets to raise funds Saw and Ottendorfer said
This version of the story corrects figure in 8th paragraph to 2 5 GHz from 2 4 |
VZ | Yahoo results edge past estimates in good sign for sale of business | By Deborah M Todd San Francisco Reuters Yahoo NASDAQ YHOO Inc s first quarter results beat Wall Street estimates by a hair on Tuesday in what was taken as a good sign for the web pioneer s plan to auction its core business Under pressure from activist shareholder Starboard Value LP and others Yahoo has ramped up a sale of its media email and other web businesses Yahoo s overall fortunes have failed to revive under Chief Executive Marissa Mayer although she points to good results in key areas including social media Mayer in a call with analysts drilled the message that she was focused on the sale and was meeting with investors and potential bidders a contrast with the previous quarter when she also discussed plans to spin off the company s core business from Yahoo Japan and its stake in Chinese e commerce giant Alibaba NYSE BABA Group Holding Inc The first round of bids closed on Monday Verizon Communications Inc NYSE VZ has put in an offer and is set to make a short list according to sources Private equity firms Apax Partners LLP TPG Capital LP Bain Capital LLC Apollo Global Management LLC and Warburg Pincus LLC have also submitted first round bids Yahoo aims to close the sale in June sources said That would be before the annual meeting where Starboard wants shareholders to replace the board Yahoo shares rose nearly 1 percent to 36 66 in light volume in extended trading on Tuesday The numbers are providing some comfort things aren t falling off a cliff said Ronald Josey of JMP Securities If you re bidding for this company it s nice to see them doing what they said they would do Revenue fell 11 3 percent to 1 09 billion in the first quarter the first decline after four straight quarters of growth The result squeaked by analyst estimates of 1 08 billion according to Thomson Reuters I B E S Yahoo reported a net loss of 99 million or 10 cents per share compared with a profit of 21 million or 2 cents per share a year ago On an adjusted basis Yahoo earned 8 cents per share topping Wall Street s target of 7 cents The results should build a little bit of confidence for investors that the sale is going to be completed said Murali Sankar an analyst at Boenning Scattergood Inc Mayer told analysts a spinoff was still possible but she said that only in response to a direct question on the call That showed she was focused on the sale said Axiom Capital analyst Victor Anthony
Yahoo said it sees second quarter GAAP revenue of 1 05 billion to 1 09 billion below analysts view of 1 10 billion |
VZ | Exclusive Verizon set to make Yahoo s bidder short list sources | By Greg Roumeliotis and Liana B Baker Reuters Verizon Communications Inc N VZ was set on Tuesday to advance to the second stage of bidding for Yahoo Inc s O YHOO core assets as the U S internet company went through offers to put together a short list people familiar with the matter said Verizon submitted its offer with advice from investment banks Guggenheim Partners LLC LionTree LLC and Allen Company the people said on Tuesday The U S telecommunications company will face competition in the second round from other companies and private equity firms the people added On Tuesday evening Yahoo s advisers were still reviewing the preliminary offers received on Monday The auction attracted interest from a diverse array of companies ranging from Japanese online retailer Rakuten Inc T 4755 to Yellow Pages owner YP LLC which is backed by AT T Corp N T the people said Rakuten ended up not making an offer a spokesman for the company said Apax Partners LLP TPG Capital LP Bain Capital LLC Apollo Global Management LLC N APO and Warburg Pincus LLC were among the private equity firms that submitted first round bids the people said Yahoo may decide to allow buyout firms to team up in the second round the people added The field had whittled down ahead of Monday s first round bid deadline as several companies that were mulling an offer including Comcast Corp O CMCSA and Time Inc N TIME decided to opt out the people said No two offers submitted were identical and Yahoo is deciding which proposed structures and assets to be divested offer the best potential value the people said The company hopes the auction can conclude by June but the timing could sleep the people said Softbank Group Corp T 9984 which owns 43 percent of Yahoo Japan Corp and Alibaba Group Holding Ltd N BABA in which Yahoo holds a 15 5 percent stake have not participated in the auction but may engage with the U S company once the future of its core internet assets becomes clear the people said The sources asked not to be identified because the details of the sale process are confidential Representatives of Yahoo Verizon YP Comcast Time and the private equity firms declined to comment Softbank Alibaba Guggenheim LionTree and Allen Company did not immediately respond to requests for comment Yahoo under pressure from shareholders including activist hedge fund Starboard Value LP launched an auction of its core business in February after it shelved plans to spin off its stake in Chinese e commerce company Alibaba Analysts see Verizon which bought AOL last year for 4 4 billion as being a more likely candidate to prevail in the auction for Yahoo s web business On Yahoo s first quarter earnings call on Tuesday Chief Executive Marissa Mayer said Yahoo management had been running a quality process designed to keep interested parties engaged
Over the past two months Chief Financial Officer Ken Goldman and I and the rest of the management team have spent time in person and on the phone with interested participants including some of the most well known respected names in the industry Mayer said |
VZ | Daily Mail says may partner to bid for Yahoo | By Esha Vaish and Rishika S Reuters The parent of Britain s Daily Mail said on Wednesday it had not submitted it s own bid to buy Yahoo NASDAQ YHOO Inc s core Internet business but was still in talks to partner with other suitors of the U S company Yahoo which has been struggling with falling ad revenue for years has sped up the process to sell its media email and other web businesses bowing to pressure from activist shareholder Starboard Value LP and others Shares of Yahoo rose as much as 5 percent on Wednesday as investors digested the company s slightly better than expected quarterly results late on Tuesday and CEO Marissa Mayer s reassurances that she was focused on the sale Yahoo s advisers are working through offers to put together a short list and Verizon Communications Inc NYSE VZ was set to advance to the second stage of bidding for the internet company s core assets Reuters reported citing sources Daily Mail General Trust Plc said last week it was in talks with potential partners to mount a joint bid for Yahoo s internet assets Buying Yahoo s core assets which include a search engine and email news and sports services would boost Daily Mail s online reach and digital ad revenue from its globally popular websites and partly offset shrinking print revenue Private equity firms Apax Partners LLP TPG Capital LP Bain Capital LLC Apollo Global Management LLC and Warburg Pincus LLC have also submitted first round bids according to sources As well the auction has attracted interest from Japanese online retailer Rakuten Inc and Yellow Pages owner YP LLC which is backed by AT T NYSE T Corp While investors seemed pacified by Yahoo s results and the progress on the sale analysts said the company management s failure to address key questions about the bidding process had added a level of uncertainty We were hoping that Mayer would provide more color on what was for sale and timing around the process Neil Doshi an analyst at Mizuho Securities USA said in a note Too little too late was how Barclays LON BARC analyst Paul Vogel characterized Yahoo s renewed focus on mobile and video search initiatives However Barclays Mizuho and at least 9 other brokerages raised their price targets on Yahoo s stock mostly based on the change in the value of Yahoo s Asian assets
Oppenheimer was the most bullish raising its target to 49 from 40 The median price target on the stock is 40 |
CSCO | 6 Tech Stocks To Buy Pre Q2 Earnings On Trade Talk Prospects | Wall Street is continuing its dream run in 2019 despite a sudden collapse of trade negotiations between the United States and China What is more important is that the primary driving force of the market s bull run is the technology sector which was likely to be affected the most by lingering tariff related conflicts The technology sector is likely to benefit as U S China trade talk is likely to resume although an amicable deal is nowhere to be seen However both sides have decided to come down from their rigid positions and offer some concessions to each other Technology Sector Soaring in 2019 The technology sector carries the highest weightage 20 1 within the 11 sectors of the broad market S P 500 Index Technology stocks suffered a severe setback in 2018 and Technology Select Sector SPDR XLK declined 2 9 The tech laden Nasdaq Composite had plunged 3 9 last year However in 2019 XLK is the best performer of the S P 500 gaining a massive 31 7 well above the benchmark index s gain of 19 9 Notably on Jul 23 the XLK touched its all time high level of 82 15 before finishing at 82 07 The XLK has gained 4 6 so far in July Moreover the tech heavy Nasdaq Composite is also up 24 4 year to date Within the technology sector the performance of semiconductors is worth mentioning as the industry had a rough 2018 The Philadelphia Semiconductor Index SOX was down 2 6 last year However the SOX has advanced an astonishing 35 2 year to date and 7 2 so far in July U S China Trade Negotiations to RestartAfter the abrupt breakdown of U S China trade talk in May the two sides have decided to renegotiate from July Following the successful conclusion of initial telephonic conversations between the two countries a high level U S trade delegation headed by Trade Representative Robert Lighthizer will visit China later this week Meanwhile the U S government has decided to relax some restrictions imposed on the Chinese tech behemoth Huawei Technologies Several U S tech companies will be given licenses to sell products to Huawei Notably in May the Trump administration blacklisted Huawei and refrained it from doing any sort of business with U S corporates on national security concerns On the other hand China has decided to significantly increase imports of U S agricultural products especially soya bean Why Trade Solution is Important for Tech SectorChina is the largest trading partner of the United States A trade spat with the United States resulted in significant slowdown of the Chinese economy However a strong Chinese economy will give U S technology companies a solid boost as China is the largest market for high tech products On the other hand China also plays the role of a low cost supplier of intermediary products and other inputs to high tech U S industries In 2018 the Trump administration levied tariffs on Chinses imports worth 300 billion in two phases Most of these products are from the high tech industrial sectors U S companies that rely on Chinese imports are unhappy about the move as it raised prices of high tech equipment and several electronics products At this juncture an amicable solution to the U S China trade war is likely to restore Chinese and global economic growth which in turn will create demand for high tech U S products Likewise repeal of tariffs on Chinese intermediary goods will raise the profit margin of U S tech giants Our Top PicksAt this stage it will be prudent to invest in technology stocks with a favorable Zacks Rank We have narrowed down our search to six such tech stocks that have popped in the past three months despite facing trade induced market volatility Each of these stocks carries a Zacks Rank 2 Buy and has a positive You can see Our research shows that for stocks with the combination of a Zacks Rank 3 or better and a positive Earnings ESP the chance of an earnings beat is as high as 70 These stocks are expected to jump on their earnings release irrespective of already solid gains year to date PayPal Holdings Inc NASDAQ PYPL is a technology platform company offering online payment solution that allows customers to pay and get paid withdraw funds to their bank accounts and hold balances in their PayPal accounts in various currencies PayPal Holdings has an Earnings ESP of 11 19 for the current quarter The company has an expected earnings growth rate of 29 3 and 25 2 for the current quarter and year respectively The Zacks Consensus Estimate for the current quarter and year improved 8 7 and 1 7 respectively over the last 60 days The company delivered positive earnings surprise in the last four quarters with an average beat of 7 6 The stock has climbed 9 1 in the past three months PayPal Holdings is expected to release earnings results on Jul 24 after the closing bell CGI Inc NYSE GIB provides information technology IT and business process services in Canada Northern Europe France the United States the United Kingdom Europe and the Asia Pacific Its services include management of IT and business outsourcing systems integration and consulting and software solutions selling CGI has an Earnings ESP of 1 27 for the current quarter The company has an expected earnings growth rate of 9 5 and 10 9 for the current quarter and year respectively The Zacks Consensus Estimate for the current year improved 0 6 over the last 60 days The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 0 3 The stock has climbed 11 2 in the past three months CGI is expected to release earnings results on Jul 31 before the opening bell Zendesk Inc NYSE ZEN is a global software development company It provides a software as a service SaaS customer service platform It offers applications that allow clients to manage incoming support requests from end customers from any Internet connected computer Zendesk has an Earnings ESP of 7 84 for the current quarter The company has an expected earnings growth rate of 66 7 and 27 3 for the current quarter and year respectively The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 141 7 The stock has advanced 8 4 in the past three months Zendesk is expected to release earnings results on Jul 30 after the closing bell Vonage Holdings Corp NYSE VG provides consumers and small businesses worldwide an affordable alternative to traditional telephone service through cloud communications It operates through two segments Business and Consumer Vonage Holdings has an Earnings ESP of 47 37 for the current quarter The company delivered positive earnings surprise in three out of the last four quarters with an average beat of 41 7 The stock has jumped 29 8 in the past three months Vonage Holdings is expected to release earnings results on Aug 6 before the opening bell Asure Software Inc NASDAQ ASUR provides cloud based human capital management and workspace management solutions worldwide It offers Web based workforce management solutions that enable organizations to manage their office environment as well as their human resource and payroll processes Asure Software has an Earnings ESP of 8 11 for the current quarter The company has an expected earnings growth rate of 5 5 for the current year It delivered positive earnings surprise in three out of the last four quarters with an average beat of 29 5 The stock has jumped 32 9 in the past three months Asure Software is expected to release earnings results on Aug 14 Cisco Systems Inc NASDAQ CSCO designs manufactures and sells Internet Protocol based networking and other products related to the communications and information technology industry worldwide It offers switching products routing products that interconnect public and private wireline and mobile networks data center products and wireless access points for use in voice video and data applications Cisco Systems has an Earnings ESP of 1 53 for the current quarter The company has an expected earnings growth rate of 17 1 and 18 5 for the current quarter and year respectively The company delivered positive earnings surprise in the last four quarters with an average beat of 2 1 The stock has gained 2 5 in the past three months PayPal Holdings is expected to release earnings on Aug 14 before the opening bell The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
CSCO | Cisco Systems experiences drop in revenue earnings in line | Investing com Shares of Cisco Systems Inc NASDAQ CSCO were falling in after hours trading action Wednesday following the company s release of fiscal Q4 results which showed the company s revenue declined year over year but still topped expectations Earnings came in just in line with forecasts
Cisco reported fourth quarter revenue of 12 1 billion net income on a generally accepted accounting principles GAAP basis of 2 4 billion or 0 48 per share and non GAAP net income of 3 1 billion or 0 61 per share
Shares were recently down 1 |
CSCO | Cisco s security business revenue misses estimates shares drop | By Laharee Chatterjee and Salvador Rodriguez Reuters Cisco Systems Inc s O CSCO quarterly revenue in its closely watched security business missed analysts estimates raising concerns about the world s largest networking gear maker s efforts to transform into a software focused company The company s shares fell about 2 5 percent in after hours trading on Wednesday With its traditional business of making switches and routers struggling Cisco like other legacy technology firms has been focusing on high growth areas such as security the Internet of Things and cloud computing The security business which offers firewall protection and breach detection systems has been Cisco s fastest growing until the last two quarter Revenue growth at the business slowed to 3 percent in the latest fiscal fourth quarter from 16 percent a year earlier period and 9 percent in the previous quarter The business was affected due to orders in Q3 in the UK being slowed due to the strength of the U S dollar compared to the pound Chief Financial Officer Kelly Kramer told Reuters in an interview Chief Executive Chuck Robbins the architect of Cisco s transition said he had zero concerns about the security business while Kramer forecast an uptick in revenue in the upcoming quarter Analyst Patrick Moorhead of Moor Insights Strategy said the next two quarters would indicate the health of the security business I m not concerned yet with Cisco s security numbers as many of their security innovations are linked to other businesses like switching he said Cisco s switches and routers businesses easily its two biggest have been struggling due to sluggish demand from telecom carriers and enterprise customers Revenue in each of the two businesses fell 9 percent in the quarter missing analysts expectations according to financial and data analytics firm FactSet While security business revenue of 558 million fell short of analysts estimates of 580 5 million according to FactSet Cisco s overall revenue was supported by its data center business and wireless business which is now its fastest growing Cisco s overall revenue fell for the seventh straight quarter but the near 4 percent decline to 12 13 billion was in line analysts estimates of 12 1 billion according to Thomson Reuters I B E S Excluding one time items the company earned 61 cents per share matching analysts estimates Cisco expects revenue to fall 1 percent to 3 percent in the current fiscal first quarter That was in line with Wall Street s expectations as was Cisco s adjusted earnings forecast
Up to Wednesday s close Cisco s shares had risen nearly 7 percent this year |
VZ | AT T T Earnings Meet Revenues Miss Estimates In Q3 | U S telecom major AT T Inc NYSE T reported mixed financial results in the third quarter of 2016 While the top line failed to meet the Zacks Consensus Estimate the bottom line was in line with the same In the reported quarter the company s total international video customers declined by 47 000 AT T lost 326 000 U verse customers but gained 323 000 satellite TV customers On a GAAP basis AT T reported net income of 3 328 million or 54 cents per share in comparison with 2 994 million or 50 cents respectively in the year ago quarter Quarterly adjusted earnings per share were 74 cents in line with the Zacks Consensus Estimate Quarterly total revenue increased 4 60 year over year to 40 890 million but fell below the Zacks Consensus Estimate of 41 095 million Total operating expenses in the reported quarter were 34 482 million up 3 96 year over year Operating income was 6 408 million compared with 5 923 million in the year ago quarter Cash Flow LiquidityIn the third quarter of 2016 AT T generated 29 202 million of cash from operations compared with 26 695 million in the year ago quarter Free cash flow in the reported quarter was 5 182 million compared with 5 542 million a year ago At the end of the first nine months of 2016 AT T had 5 895 million of cash and cash equivalents and 117 239 million of total debt outstanding compared with 5 121 million and 118 515 million respectively at the end of 2015 The debt to capitalization ratio was 0 29 at the end of the third quarter of 2016 which was in line with that at the end of 2015 Business Solutions SegmentTotal revenue at the segment was 17 767 million up 0 42 year over year Of this Wireless service revenues totaled 8 049 million up 4 1 year over year Fixed strategic services revenues reached 2 888 million up 9 14 Legacy voice and data services contributed 4 046 million down 12 3 Other service equipment generated 908 million up 2 6 while Wireless Equipment revenues totaled 1 876 million up 3 47 Operating income was 4 303 million up 0 14 Operating margin was 24 2 flat y y As of Sep 30 2016 the Business Solutions wireless subscriber base was 79 427 000 up 10 9 Within this Postpaid wireless subscriber count totaled 50 014 000 and Connected Devices were 29 355 000 In the reported quarter this segment gained a net of 191 000 Postpaid wireless customers and 1 290 000 Connected Devices Business wireless postpaid churn rate was 0 97 versus 1 05 in the year ago quarter Entertainment and Internet Services Segment Total revenue at the segment grossed 12 720 million up 17 1 year over year post the DIRECTV acquisition Of the total Video entertainment revenues were 9 026 million up 26 03 High Speed Internet revenues were 1 892 million up 12 3 Legacy voice and data services contributed 1 168 million down 17 7 Equipment and Other service generated 634 million down 7 09 Operating income was 1 488 million in the reported quarter versus 1 019 million in the prior year quarter Operating margin was 11 7 compared with 9 38 in the year earlier quarter As of Sep 30 2016 total video connections at this segment were 25 292 000 down a 0 52 Of the total Satellite connections tallied 20 777 000 and U verse connections were 4 515 000 In the reported quarter AT T lost 326 000 U verse customers but gained 323 000 satellite TV customers Total broadband connections at this segment were 14 176 000 down 1 02 Total wireline voice connections were 11 533 000 down 10 5 Consumer Mobility Segment Total revenue at the segment was 8 267 million down 5 9 year over year Of the total Service revenues were 6 914 million down 6 1 Equipment revenues generated 1 353 million down 4 8 Operating income was 2 572 million down 6 2 Operating margin was 31 1 compared with 31 2 in the prior year quarter As of Sep 30 2016 the Consumer Mobility wireless subscriber base was 53 911 000 down 1 7 Of this Postpaid wireless subscribers totaled 27 374 000 and Prepaid wireless customers were 13 035 000 Reseller wireless subscriber base totalled 12 566 000 and Connected Devices count was 936 000 In the reported quarter this segment gained a net of 21 000 postpaid wireless customers 304 000 prepaid customers and 41 000 connected devices but lost a net of 316 000 resellers Consumer Mobility postpaid churn rate was 1 19 compared with 1 33 in the year ago quarter Total churn rate for the segment was 2 11 up from 1 90 in the year ago quarter International Segment Total revenue at the segment was 1 879 million Within the total Video entertainment revenues were 1 297 million Wireless service revenues were 484 million Wireless Equipment revenues were 98 million Operating loss was 54 million while operating margin was a negative 2 87 As of Sep 30 2016 the International wireless subscriber base was 10 698 000 In the reported quarter this segment gained a net of 743 000 wireless customers Total churn rate was 6 16 The International video subscriber base touched 12 476 000 The company lost 47 000 International video customers in the reported quarter Dividend HikeRecently the board of directors of AT T decided to reward their stockholders with a quarterly dividend of 0 49 per share on the company s common shares This is a 2 1 increase from the previous dividend of 0 48 per share The dividend will be paid on February 1 2017 to stockholders of record at the closure of business on January 10 2017 The annual yield on the dividend is 5 2 percent Recent Developments
In a major thrust to the ongoing consolidation trend between the telecom and media sectors AT has agreed to acquire media giant Time Warner Inc NYSE TWX in a 85 4 billion cash and stock deal If the proposed merger finally goes through the combined entity will become a major player in the consolidated telecom media space In the telecom media space cable TV giant Comcast Corp NASDAQ CMCSA became a media mogul after acquiring NBC Universal in 2011 The company is set to enter the wireless field in mid 2017 Verizon Communications Inc NYSE VZ took over AOL to target the lucrative online advertising market and its impending acquisition of Yahoo NASDAQ YHOO Inc may provide the company access to world class online content Therefore we believe AT T s decision to acquire Time Warner will place it to remain competitive in the changed market condition
AT T currently carries a Zacks Rank 3 Hold You can see AT T INC Price Consensus and EPS Surprise
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | T Mobile US TMUS Tops Q3 Earnings Estimates Lifts View | T Mobile US Inc NYSE T reported mixed financial results in the third quarter of 2016 with both the top and the bottom line surpassing the Zacks Consensus Estimate T MobileUScontinues to gain postpaid wireless customers which has encouraged management to raise the subscriber gain outlook for 2016 Notably this Zacks Rank 3 Hold company competes with the likes of Verizon Communications Inc NYSE VZ AT T Inc NYSE T and Sprint Corp NYSE S in the highly price sensitive U S wireless market You can see GAAP net income in the reported quarter was 366 million or 42 cents per share compared with net income of 138 million or 15 cents in the year ago quarter Quarterly adjusted earnings per share came in at 27 cents above the Zacks Consensus Estimate of 22 cents Total revenue increased 17 8 year over year to 9 246 million in the third quarter below the Zacks Consensus Estimate of 9 441 million Segment wise Service revenues were up 13 2 year over year to 7 133 million Sales from Equipment totaled 1 948 million up 37 6 year over year while Other revenues were 165 million up 25 9 year over year Quarterly operating income was 989 million compared with 513 million in the year ago quarter Operating margin in the reported quarter was 10 7 against a mere 6 5 in the prior year quarter Adjusted EBITDA was 2 630 million up 37 8 year over year Adjusted EBITDA margin was 28 4 compared with 24 3 in the year ago quarter Cash FlowIn the third quarter of 2016 T Mobile US generated 1740 million of cash from operations compared with 1 531 million in the prior year quarter Adjusted free cash flow in the reported quarter was 581 million compared with the 487 million in the year ago quarter LiquidityAt the end of the third quarter of 2016 T Mobile US had 5 352 million of cash and cash equivalents and short term securities and 27 425 million of debt outstanding compared with 4 582 million and 26 061 million respectively at the end of 2015 The debt to capitalization ratio at third quarter end was 42 6 compared with the end of 2015 ratio of 42 4 Subscriber Statistics and Other MetricsAs of Sep 30 2016 the total customer base of T Mobile US was 69 354 million up 13 3 year over year Branded postpaid phone customers totaled 30 364 million up 6 8 Branded postpaid mobile broadband customer count was 2 866 million up a massive 45 8 Branded prepaid customer count was 19 272 million up 12 3 Wholesale customers tallied 16 852 million up 23 4 In the reported quarter T Mobile US added net 0 851 branded postpaid phone customers 0 118 branded postpaid mobile broadband customers 0 684 branded prepaid customers and 0 317 wholesale customers Total net customer addition was 1 970 million signifying the 14th successive quarter of over one million net customer additions Out of this net prepaid customer addition was 0 684 million highlighting the 11th straight quarter of industry leading net prepaid customer addition Quarterly branded postpaid churn was 1 32 compared with 1 46 in the year ago quarter Branded prepaid churn was 3 82 versus 4 09 in the prior year quarter Quarterly branded postpaid phone average revenue per user ARPU was 48 15 compared with 47 99 in the prior year quarter Branded prepaid ARPU was 38 01 compared with 37 46 in the prior year quarter Branded postpaid average billing per user ABPU was 63 38 compared with 62 96 in the year ago quarter T MOBILE US INC Price Consensus and EPS Surprise
GuidanceFor 2016 the company raised its adjusted EBITDA guidance to the range of 10 2 billion to 10 4 billion from the previous 9 8 billion to 10 1 billion Branded postpaid net customer addition in 2016 has been revised higher to 3 7 million to 3 9 million from the previous range of 3 4 million to 3 8 million However capital expenditure guidance for 2016 was narrowed to the range of 4 5 4 7 billion from the previous 4 5 4 8 billion Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Sprint S Q2 Loss Narrower Than Expected 16 View Raised | Sprint Corp NYSE S reported impressive financial results for the second quarter of fiscal 2016 The company reported a year over year decline in loss which was also narrower than the Zacks Consensus Estimate Meanwhile revenues beat the Zacks Consensus Estimate This Zacks Rank 3 Hold stock faces fierce competition in the U S wireless market from the likes of Verizon Communications Inc NYSE VZ AT T Inc NYSE T and T Mobile US Inc NYSE T You can see Quarterly net loss was 142 million or 4 cents per share much narrower than a net loss of 585 million or 15 cents per share in the year ago quarter Also second quarter adjusted net loss per share of 4 cents was narrower than the Zacks Consensus Estimate of a loss of 7 cents Quarterly total revenue came in at 8 247 million up 3 4 year over year but ahead of the Zacks Consensus Estimate of 7 986 million Service revenues were 6 413 million down 1 6 while Equipment revenues totaled 1 834 million up a substantial 67 5 Operating expenses were 7 625 million down 4 4 year over year Operating income was 622 million as against an operating loss of 2 million in the year ago quarter Adjusted EBITDA improved 16 9 year over year to 2 347 million Adjusted EBITDA margin was 36 6 compared with 29 2 in the year ago quarter Cash FlowIn the second quarter of fiscal 2016 Sprint generated 2 250 million of cash from operations compared with 1 797 million in the prior year quarter Quarterly adjusted free cash flow was 707 million as against a negative 100 million in the prior year quarter LiquidityAt the end of the quarter under review Sprint had 4 006 million of cash and marketable securities compared with 2 641 million at the end of fiscal 2015 Total long term debt outstanding at the end of the reported quarter was 47 285 million compared with 45 233 million at the end of fiscal 2015 At first quarter end the debt to capitalization ratio was 58 5 versus 57 3 at the end of fiscal 2015 Wireless SegmentTotal segment revenue was 6 017 million down 5 year over year Postpaid revenues totaled 4 720 million down 3 5 Prepaid revenues were 1 129 million down 10 3 Wholesale revenues were 168 million down 9 2 Equipment revenues were 1 834 million up 67 5 year over year Wireline SegmentTotal segment revenue was 521 million down 14 4 year over year Voice revenues totaled 172 million down 18 9 Data revenues were 43 million flat year over year Internet revenues were 288 million down 10 8 Other revenues were 18 million down 42 year over year Subscriber StatisticsIn the reported quarter Sprint gained 344 000 postpaid subscribers and 823 000 wholesale customers but lost 427 000 prepaid customers As of Sep 30 2016 Sprint had 60 193 million wireless customers up 4 year over year This includes 31 289 million postpaid 13 547 million prepaid and 15 357 million wholesale customers Quarterly total retail postpaid churn rate was 1 52 compared with 1 54 in the year ago quarter Total retail prepaid churn rate was 5 63 up from 5 06 in the prior year quarter Total retail postpaid ARPU average revenue per user was 50 54 down 6 4 year over year Total retail prepaid ARPU was 27 31 down 1 3 year over year SPRINT CORP Price Consensus and EPS Surprise
OutlookSprint raised its fiscal 2016 outlook The company now expects fiscal 2016 operating income of 1 2 billion to 1 7 billion above the previous range of 1 billion to 1 7 billion Capital expenditures are expected to be less than the initial estimate of 3 billion Adjusted free cash flow is projected at around a breakeven Adjusted EBITDA projection is maintained in the range of 9 5 billion to 10 billion Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Comcast CMCSA Q3 Earnings In Line Revenues Beat | Comcast Corp NASDAQ CMCSA reported mixed financial results in the third quarter of 2016 While the top line outpaced the Zacks Consensus Estimate the bottom line was in line with the same Importantly the company witnessed impressive subscriber gains in the video segment besides continuance of the strong performance in the high speed Internet segment GAAP net income in the third quarter of 2016 came in at 2 237 million or 92 cents per share compared with 1 996 million or 80 cents in the prior year quarter Quarterly earnings per share of 92 cents were in line with the Zacks Consensus Estimate Quarterly total revenue was 21 319 million up 14 2 year over year and ahead of the Zacks Consensus Estimate of 21 178 million Operating costs and expenses totaled 14 484 million surging 16 year over year Operating income came in at 4 440 million up 11 year over year Operating margin dropped to 20 8 compared with 21 4 in the year ago quarter During the third quarter Comcast repurchased 20 8 million common shares for 1 400 million and paid dividends of 663 million In the third quarter of 2016 Comcast generated 4 114 million of cash from operations compared with 4 979 million in the year ago quarter Free cash flow was 1 371 million compared with 2 663 million in the prior year quarter Cash and marketable securities at third quarter 2016 end were 6 664 million up from 5 519 million at the end of 2015 Total debt at third quarter 2016 end was 60 428 million compared with 52 621 million at the end of 2015 The debt to capitalization ratio at third quarter end was 0 51 compared with 0 48 at 2015 end Cable Communications SegmentQuarterly total revenue of 12 557 million reflected a 6 9 year over year rise Operating cash flow was 4 986 million surging 5 5 year over year Within this segment Video revenues were 5 591 million up 4 5 from the prior year quarter High Speed Internet revenues totaled 3 405 million up 8 8 year over year Voice revenues were 878 million slipped 2 4 year over year Advertising revenues totaled 634 million up 7 7 from the year ago quarter Business Services revenues were 1 399 million rising 15 5 year over year Other revenues were 650 million up 13 from the prior year quarter As of Sep 30 2016 Comcast had 24 316 million up 6 3 year over year high speed Internet customers 11 643 million up 2 7 year over year voice customers and 22 428 million up 0 8 year over year video customers The company added a net of 330 000 high speed Internet customers 32 000 video customers and 2 000 voice customers in the reported quarter Comcast gained 4 000 triple play subscribers 141 000 double play subscribers and 72 000 single play subscribers in the reported quarter NBC Universal SegmentQuarterly total revenue of 9 178 million displayed a whopping 28 3 year over year increase Operating cash flow was 2 146 million indicating a rise of a substantial 31 5 year over year Within this segment Cable Networks revenues were 2 942 million surging 22 year over year Broadcast TV revenues came in at 3 087 million soaring 56 6 year over year Filmed Entertainment revenues were 1 792 million dropping 7 9 from the year ago quarter Theme Parks revenues were 1 440 million up a whopping 60 6 year over year Latest DevelopmentsComcast is taking part in the ongoing 600 MHz low band wireless spectrum auction which is popularly known as Incentive Auction by the FCC Notably the company has already entered into an MVNO mobile virtual network operator agreement with Verizon Communications Inc NYSE VZ Verizon is also a participant in the Incentive Auction besides AT T Inc NYSE T and T Mobile US Inc NYSE T Comcast currently carries a Zacks Rank 3 Hold You can see COMCAST CORP A Price Consensus and EPS Surprise
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VZ | Level 3 Communications LVLT Q3 Earnings Lag Estimates | Level 3 Communications Inc NYSE T reported weak financial results in the third quarter of 2016 wherein both the top and the bottom line missed the Zacks Consensus Estimate Level 3 Communications operates in a highly competitive enterprise communications market In North America the company competes with telecom giants like Verizon Communications Inc NYSE VZ and AT T Inc NYSE T and with Telefonica MC TEF Orange and BT Group plc NYSE T in Europe and Latin America On a GAAP basis net income in the reported quarter was 143 million or 40 cents per share versus 1 million in the third quarter of 2015 Moreover quarterly adjusted earnings per share of 39 cents lagged the Zacks Consensus Estimate of 44 cents Third quarter total revenue was 2 033 million down 1 4 year over year and also below the Zacks Consensus Estimate of 2 074 million Segment wise Core Network Services CNS revenues came in at 1 930 million down 0 77 year over year Wholesale Voice Services and Other revenues totaled 103 million down 11 96 year over year
Geographically North America generated 1 572 million in CNS revenues up 1 35 year over year Europe the Middle East and Africa accounted for 182 million of revenues at CNS down 13 74 while Latin America contributed 176 million down 3 83 Total operating expenses in the reported quarter were 1 679 million down 3 23 year over year Operating income came in at 354 million up 8 26 Adjusted EBITDA earnings before interest tax depreciation and amortization was up 8 98 to 716 million Adjusted EBITDA margin expanded to 35 2 from 31 9 in the prior year quarter In the third quarter of 2016 Level 3 Communications generated 645 million of cash from operations compared with 575 million in the year ago quarter Free cash flow in the reported quarter was 281 million compared with 247 million in the prior year quarter At the end of the third quarter of 2016 the company had 1 569 million of cash and cash equivalents and 10 882 million of outstanding debt compared with 691 million and 10 886 million respectively at the third quarter end of 2015 Meanwhile the debt to capitalization ratio was 0 44 compared with 0 52 at the third quarter end of 2015
GuidanceFor 2016 Level 3 Communications expects adjusted EBITDA growth of 10 to 12 on a year over year basis Free cash flow is estimated in the range of 1 billion to 1 1 billion LEVEL 3 COMM Price Consensus and EPS Surprise
Level 3 Communications has a Zacks Rank 3 Hold You can see
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VZ | FCC proposes reforming business data services market | By David Shepardson
WASHINGTON Reuters The chairman of the U S Federal Communications Commission on Friday proposed reforming the estimated 25 billion a year market for high capacity data and voice connections known as special access lines to businesses
FCC chairman Tom Wheeler said he was recommending a new regulatory framework barring some contractual practices by circuit based systems that make it harder for businesses to switch to other data carriers adding he wants a new technology neutral approach
If we want to maximize the benefits of business data services for U S consumers and businesses we need a fresh start Wheeler said in a blog post on Friday noting that despite cable companies entering the market competitive carriers reach less than 45 percent of locations where there is demand
Many businesses rely on the little special access lines to transmit large amounts of data quickly for instance connecting banks to ATM machines or gas pump credit card readers
The lines are used by offices retailers banks manufacturers schools hospitals and universities to move large amounts of data Mobile networks also rely on the lines for the backhaul of mobile traffic
The services are profitable for large carriers such as Verizon Communications Inc NYSE VZ and AT T Inc NYSE T Smaller carriers such as Sprint Corp have argued the special access market is uncompetitive
One issue is many businesses signed long term contracts that impose high penalties for opting out of using the services FCC officials said making it difficult to switch to another service
Verizon said in a statement it is encouraged that Wheeler has proposed a path toward a balanced framework that would put all providers on equal footing under the same set of rules It would also rely on competition rather than regulation whenever possible
A coalition of groups including Sprint praised Wheeler saying the forward looking rules will ensure that competition governs the health and sustainability of this critical input
The FCC said special access lines are worth about 25 billion of the 40 billion annual market for business data services The proposal also looks at whether other types of business data services like cable or Internet services could face further regulatory scrutiny in non competitive markets
The FCC will vote on the proposal on April 28 and will take public comments before it aims to finalize the rules later this year A separate order proposed by Wheeler to be voted on this month would bar some existing contract requirements by special access providers |
VZ | Unions endorse Sanders Clinton for president as NY race nears | By Megan Cassella WASHINGTON Reuters Democratic presidential candidate Bernie Sanders won his first endorsement from a fellow U S senator on Wednesday and he and rival Hillary Clinton both announced backing from New York City labor unions as they battled to win next week s state primary The Transport Workers Union Local 100 representing 42 000 workers in the New York region backed Sanders as he struggled to dent Clinton s lead in a state each has called home Deriding fierce attacks against unions over the last several decades Sanders called organized labor the last line of defense against corporate greed in America We ve got to stand together take on the big money interests and make it clear that our government works for all of us not just the 1 percent the U S senator from Vermont said Following his endorsement announcement Sanders joined a picket line of Verizon Communications Inc N VZ workers who went on strike on Wednesday after contract talks hit an impasse He thanked the workers for fighting corporate greed and told them Today you are standing up not just for justice for Verizon workers You re standing up for millions of Americans Clinton a former two term senator from New York scored her own union endorsement from Local 3 International Brotherhood of Electrical Workers representing more than 27 000 area workers Sanders trails Clinton in the number of delegates won in primaries and caucuses The former U S secretary of state has 1 758 delegates to Sanders 1 069 according to the Associated Press A candidate needs 2 383 delegates to win the nomination to be the party s candidate in the Nov 8 election Clinton on Wednesday also won backing from New York s Daily News which called her a superprepared warrior realist who understands the economic toll the country has faced while labeling Sanders utterly unprepared with politically impossible goals The newspaper s editorial board interview with Clinton s Brooklyn born rival this month prompted criticism of Sanders as lacking detailed understanding of some of his main policy initiatives U S Senator Jeff Merkley an Oregon Democrat announced his endorsement of Sanders in a New York Times column saying he supports Sanders for his work battling economic inequality opposing trade deals and fighting for the middle class It is time to recommit ourselves to that vision of a country that measures our nation s success not at the boardroom table but at kitchen tables across America wrote Merkley the junior U S senator from Oregon
Merkley s announcement precedes Oregon s May 17 primary |
VZ | About 40 000 unionized Verizon workers walk off the job | By Malathi Nayak NEW YORK Reuters Nearly 40 000 Verizon workers walked off the job on Wednesday in one of the largest U S strikes in recent years after contract talks hit an impasse and got a boost as U S Democratic presidential hopeful Bernie Sanders joined them at a Brooklyn rally ahead of the New York primary next week Front runner Hillary Clinton who will face Sanders in the primary on April 19 also voiced support for the strikers and urged Verizon to go back to the bargaining table The strike was called by the Communications Workers of America CWA and the International Brotherhood of Electrical Workers that jointly represent employees with such jobs as customer services representatives and network technicians in Verizon Communications Inc s N VZ traditional wireline phone operations The strike could affect service in Verizon s Fios Internet telephone and TV services businesses across several U S East Coast states including New York Massachusetts and Virginia The walkout does not extend to the wireless operation Verizon said it had trained thousands of non union employees over the past year to ensure no disruption in services There s no way that these 10 000 people can make up for 40 000 people who have decades of experience in highly technical jobs CWA representative Bob Master said The wireline unit which represents Verizon s legacy business generated about 29 percent of company revenue in 2015 down about 60 percent since 2000 and less than 7 percent of operating income Verizon has been scaling back its Fios TV and Internet service and stopped expanding its landline phone network In recent years Verizon the No 1 U S wireless company has shifted focus to the bread and butter wireless business and new efforts in mobile video and advertising To that end Verizon bought AOL for 4 4 billion last year betting that a push into mobile video and targeted advertising can help it find new growth avenues DESTROYING LIVES Sanders spoke to a crowd of cheering Verizon workers at a mid day rally in Brooklyn This is just another major American corporation trying to destroy the lives of working Americans he said In urging a resumption of talks Clinton said in a statement We rely on these men and women as part of the communications infrastructure that keeps businesses and our economy moving Verizon didn t appear to be swayed Big companies are an easy target for candidates looking for convenient villains for the economic distress felt by many of our citizens Verizon Chief Executive Officer Lowell McAdam said in a blog post Contrary to Sen Sanders contention our proposals do not call for mass layoffs or shipping jobs overseas McAdam said Hundreds of Verizon workers protested outside Verizon stores along the East Coast on Wednesday In New York strikers chanted We re disgusted union busted and held placards reading Against Verizon s corporate greed They even want us to move to different states and that s unfair How do we take care of our families said Anita Long a 59 year old telecommunications technician assistant How do you make a billion dollars in one month and tell me you can t give me a decent wage said Long who has worked at Verizon for 37 years picketing in Brooklyn Verizon and the unions have been talking since last June over the company s plans to cut healthcare and pension related benefits over a three year period The workers have been without a contract since its agreement expired in August Issues include healthcare offshoring call center jobs temporary job relocations and pensions The last contract negotiations in 2011 also led to a strike A new contract was reached after two weeks On Tuesday Verizon said it was approached by the Federal Mediation and Conciliation Service In the last round the FMCS mediated their contract dispute The question of federal mediation is a diversionary tactic CWA s Master said adding it has not contacted the FMCS We don t want to go to Washington what is needed is for the company to sit down and address our concerns
Verizon s shares fell 1 3 percent to close at 51 29 |
VZ | T Mobile US TMUS Faces FCC Fine For Deceiving Customers | T Mobile US Inc NYSE T has been fined by the Federal Communications Commission for providing inadequate information to customers related to its unlimited data plans The FCC stated that the carrier used to throttle Internet speeds of customers after they exceeded a monthly data limit This data capping policy wasn t disclosed to subscribers Notably similar charges have been leveled against AT T Inc NYSE T by the FCC last year SettlementWhile AT T is still voicing protest against the FCC fine T Mobile is said to have reached a settlement worth 48 million This includes 7 5 million of a fine and 35 5 million worth of discounted data or other services to customers Transparency IssuesThe 2010 Open Internet transparency rules require Internet providers to issue accurate and sufficient information to customers or prospective customers relating to their services However lack of transparency in the wireless industry is not new Notably Verizon Communications Inc NYSE VZ was fined in May for unethically tracking data of customers using supercookies Similarly in 2015 Sprint Corp NYSE S faced FCC charges for its fraudulent billing practices The Bottom LineT MobileUS is currently the third largest wireless carrier in the U S which has been gaining a large number of customers of late courtesy of reasonably priced data and other promotional plans However manipulating customer policies can result in reputation loss which will eventually affect T Mobile US position in the market T MobileUScurrently carries a Zacks Rank 3 Hold You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Verizon VZ Posts Mixed Q3 Earnings Beat Revenues Lag | Verizon Communications Inc NYSE VZ reported mixed financial numbers in the third quarter of 2016 While the top line missed the Zacks Consensus Estimate the bottom line managed to beat the same Adjusted earnings per share came in at 1 01 in the reported quarter beating the Zacks Consensus Estimate of 99 cents Quarterly GAAP net income was 3 747 million compared with 4 171 million in the year ago quarter Quarterly total revenue decreased 6 7 year over year to 30 937 million The Zacks Consensus Estimate for the same was pegged at 31 141 million Total operating expenses in the third quarter of 2016 were 24 397 million down 4 8 year over year Operating income came in at 6 540 million compared with 7 535 million in the year ago quarter Adjusted EBITDA was 11 279 million against 11 079 million in the prior year quarter Cash Flow LiquidityIn the third quarter of 2016 Verizon generated 4 800 million of cash from operating activities Free cash flow in the reported quarter was 674 million At the end of the third quarter of 2016 Verizon had 6 441 million in cash and 102 739 million in long term debt compared with 4 470 million and 103 240 million respectively at the end of fiscal 2015 The debt to equity ratio was 4 67 at the end of third quarter of 2016 compared with 5 78 at the end of 2015 Wireless SegmentTotal revenue was 22 101 million down 3 9 year over year Service revenues were down 5 2 to 16 684 million Equipment revenues decreased 3 9 to 4 124 million Other revenues totaled 1 293million up 16 Operating expenses decreased 5 8 to 14 454 million Operating income declined 0 3 to 7 647 million Quarterly operating income margin was 34 6 in comparison with 33 3 in the year ago comparable period Segment EBITDA increased 0 1 to 9 934 million EBITDA margin was 44 9 compared with 43 2 in the prior year quarter At the end of the third quarter of 2016 Verizon had 113 676 million retail subscribers up 2 6 year over year Out of the total retail postpaid subscriber count was 107 780 million up 3 9 and retail prepaid user count was 5 456 million down 4 9 During the reported quarter the company added 0 442 million postpaid customers down 65 7 year over year while prepaid customer count increased by 0 8 million Quarterly retail postpaid churn rate was 1 04 compared with 0 93 in the year ago quarter whereas total retail churn rate was 1 28 versus 1 21 in the year ago quarter Of the total activated phones smartphones accounted for 93 1 compared with 91 3 in the prior year quarter Wireline SegmentTotal revenue at the segment was 7 787 million down 2 3 year over year Consumer retail revenues were up 0 2 to 3 174 million Small business revenues grossed 411 million down 5 3 Global Enterprise revenues contracted 3 4 to 2 886 million Global wholesale revenues dropped 3 9 to 1 239 million and Other revenues decreased 12 5 to 77 million Operating expenses decreased 5 5 to 7 631 million Quarterly operating income stood at 156 million Quarterly operating margin came in at 2 against a loss margin of 1 4 in the year ago quarter Segment EBITDA was down 10 1 to 1 654 million EBITDA margin was 21 2 compared with 18 9 in the year ago quarter At the end of the third quarter of 2016 FiOS video subscriber base was 4 673 million up 1 3 year over year FiOS Internet subscriber count was 5 585 million up 4 7 and FiOS digital voice residence connections totaled 3 382 million up 1 4 During the quarter Verizon gained 36 000 FiOS video subscribers 90 000 FiOS Internet customers and 3 000 FiOS digital voice residential connections High speed Internet connection tally dropped 16 2 year over year to 1 453 million while total broadband connection number stood at 7 038 million Primary residence switched access connections decreased 15 to 3 359 million and Primary residence connections fell 22 4 to 7 241 million Total retail residence voice connections declined 7 3 to 7 482 million and total voice connections contracted 7 4 to 14 194 million Recent DevelopmentsVerizon is facing intense competitive pressure from rivals like AT T Inc NYSE T In order to counter this the company has been focusing on generating revenues from video streaming services and digital advertising Keeping with this strategy it acquired AOL and Millennium Media But in a bid to strengthen its presence in this space the company has entered into an agreement to acquire Yahoo Inc s NASDAQ YHOO core assets for 4 8 billion If Verizon can effectively assimilate the strategic assets with that of AOL and Millennium Media we believe it will gain an edge over bigwigs like Facebook Inc NASDAQ FB in this segment VERIZON COMM Price Consensus and EPS Surprise
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VZ | Verizon says security breach leads to customer data leak | Reuters Verizon Communications Inc N VZ said an attacker had exploited a security vulnerability on its enterprise client portal to steal contact information of a number of customers The company said the attacker however did not gain access to Customer Proprietary Network Information CPNI or other data CPNI is the information that telephone companies collect including the time date duration and destination number of each call and the type of network a consumer subscribes to Krebs On Security which first broke the news of the breach said a member of a underground cybercrime forum had posted a new thread advertising the sale of a database containing the contact information on some 1 5 million customers of Verizon Enterprise The seller priced the entire package at 100 000 but offered to sell it off in parts of 100 000 records for 10 000 apiece Krebs added The vulnerability which was investigated and fixed did not leak any data on consumer customers Verizon said in a statement on Thursday The company is currently notifying customers impacted by the breach |
VZ | Yahoo sets April 11 deadline for preliminary bids WSJ | Reuters Yahoo Inc O YHOO has set an April 11 deadline to submit preliminary bids for its web business and Asian assets The Wall Street Journal reported on Monday citing sources Yahoo asked bidders details regarding financing conditions or approvals that would have to be met on their end and what key assumptions they would be making by deciding to move forward with a deal the Journal said citing a letter sent to possible bidders A deadline for preliminary bids in April could mean that Yahoo could close a deal by June or July the Journal said Yahoo could not be immediately reached for a comment outside regular business hours The faded Internet pioneer launched an auction of its core business in February after it shelved plans to spin off its stake in Chinese e commerce giant Alibaba Group Holding Ltd N BABA Activist hedge fund Starboard Value LP which owns about 1 7 percent of Yahoo launched a proxy fight last week in an attempt to overthrow the entire board of Yahoo Telecommunications company Verizon Communications Inc N VZ and publisher Time Inc N TIME are among companies expected to bid for Yahoo s core business while some private equity firms are expected to team up to make offers |
VZ | Verizon to buy 24 5 percent stake in AwesomenessTV | Reuters Verizon Communications Inc N VZ said it agreed to buy a 24 5 percent stake in AwesomenessTV whose YouTube channels are among the most popular on the video site for about 160 million AwesomenessTV which has more than 3 6 million subscribers on YouTube offers videos on everything from beauty tips to life advice aimed at pre teens and young adults The deal values AwesomenessTV in which DreamWorks Animation SKG Inc O DWA owns a 51 percent stake at about 650 million Privately held Hearst Corp which owns magazines such as Harper s Bazaar and Esquire as well as TV networks like A E Networks will own the remaining stake The deal includes the creation of a new mobile video service which will be funded by Verizon and will launch as a part of Verizon s go90 mobile video app The service will be exclusive to Verizon customers in the United States and AwesomenessTV will retain the right to sell content in the rest of the world Most Americans own a mobile phone and a saturated U S wireless market has Verizon and its rivals turning to new businesses Verizon is making a big bet on mobile video aiming to unlock revenue from advertising and data usage Verizon launched the go90 app in October and has announced content partners such as the National Football League the National Basketball Association the Food Network and Vice Media
Verizon already has a programming deal with DreamWorks Animation and AwesomenessTV |
CSCO | Cisco CSCO To Buy Acacia To Boost Optical Based Networking | Cisco Systems NASDAQ CSCO recently expressed its intention to acquire Acacia Communications NASDAQ ACIA an optical networking technology company for 2 6 billion in cash and marketable securities Consequently Acacia shareholders will obtain 70 per share in cash approximately a premium of 46 over the 64 91 price on Jul 8 2019 Cisco anticipates the acquisition to close in the second half of next year subject to customary closing conditions Post the deal closure Acacia will join Cisco s Optical Systems and Optics group networking and security business Massachusetts based Acacia designs develops manufactures and markets communication equipments The company offers coherent optical interconnect products for cloud infrastructure operators and content and communication service providers It operates primarily in the Americas Europe the Middle East Africa and the Asia Pacific region According to Cisco s executive vice president of its networking and security business David Goeckeler The acquisition of Acacia will allow us to build on the strength of our switching routing and optical networking portfolio to address our customers most demanding requirements Shares of the company have gained 30 in a year s time outperforming the s rally of 28 4 Synergies from BuyoutThe integration of Acacia s optical technology with Cisco s network and cloud security platforms is likely to enhance security features further This will help Cisco make more differentiated products thereby mitigating phishing incidents on devices This acquisition will aid Cisco to deliver on its commitment of safeguarding customer data while focusing on people centric secure enterprise IT approach Further the deal will help the company add more fundamental technology to its open source software in order to build networking machinery With this buyout Cisco s customers will be able to experience greater flexibility in operations enhanced multi level security increased awareness and greater administrative control Acacia is currently an existing supplier to Cisco The former helps the latter to design and develop high speed optical interconnect technologies that cater to the ever increasing consumer demand for data We believe that the acquisition will allow both the companies to better integrate technologies Further Acacia acquisition will also help Cisco bolster optical system portfolio and allow it to better compete against competitors The company stated that it will continue to serve Acacia s customers while also integrating Acacia s technology with its own in order to better serve customers and expand customer base What Investor s Needs to KnowThe growing clout of optics to address emerging network infrastructure demands of power and density deserves a special mention With Acacia buyout the company aims to expand optical transceiver portfolio to support higher bandwidth primarily for its data center customers Increasing internet penetration worldwide is causing higher internet traffic which in turn is fueling demand for higher bandwidth In fact per latest data from Cisco s VNI forecast worldwide internet traffic is expected to more than triple to 13 2 exabytes per day in 2022 up from 4 1 exabytes per day in 2017 Cisco s Infrastructure Platforms comprise Switching NGN routing Wireless and Data Center solutions which accounted 58 5 of total third quarter fiscal 2019 revenues Revenues grew 5 from the year ago quarter to 7 55 billion Per a MarketsandMarkets report digital transformation market is envisioned to witness a CAGR of 19 1 to 493 39 billion by 2022 from 205 99 billion in 2017 Per ResearchAndMarkets data global 5G market is expected to reach 251 billion by 2025 at a CAGR of around 97 from 2020 The aforementioned reports reinforce our belief that this acquisition holds promise To ConcludeOver the past few years strategic acquisitions have played an important role in shaping Cisco s growth trajectory The company recently concluded the deal to buy Luxtera The company intends to deploy Luxtera s integrated optics technology capabilities across its robust network portfolio featuring capacities ranging from 100GbE Gigabit Ethernet to 400GbE This will enable Cisco to provide ultra high data heavy bandwidth services to CSPs and network service providers The company had also announced that it has successfully closed the buyout of privately held Duo Security This buyout will aid Cisco to deliver on its commitment of safeguarding customer data while focusing on people centric secure enterprise IT approach Continuous strategic acquisitions should support Cisco in expanding product offerings strengthening footprint in the security markets and building customer base Further these buyouts reveal the company s intention to improve its software and service capabilities in order to diversify revenue streams toward sources of a more recurring nature It is taking this initiative in a bid to mitigate the cyclicality associated with hardware sales However these acquisitions are likely to keep Cisco s operating margins under pressure as it requires significant amount of new investments Zacks Rank and Other Stocks to ConsiderCisco carries a Zacks Rank 2 Buy Some other top ranked stocks in the broader technology sector are Dropbox Inc NASDAQ DBX and Lattice Semiconductor Corporation NASDAQ LSCC both sporting a Zacks Rank 1 Strong Buy You can see Dropbox and Lattice Semiconductor have a long term earnings growth rate of 14 2 and 12 5 respectively Breakout Biotech Stocks with Triple Digit Profit PotentialThe biotech sector is projected to surge beyond 775 billion by 2024 as scientists develop treatments for thousands of diseases They re also finding ways to edit the human genome to literally erase our vulnerability to these diseases Zacks has just released Century of Biology 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance Our recent biotech recommendations have produced gains of 98 119 and 164 in as little as 1 month The stocks in this report could perform even better |
CSCO | ETFs In Focus On Cisco s Acacia Buyout Deal | Another M A deal is on the horizon with network gear maker Cisco Systems NASDAQ CSCO agreeing to buy optical component maker Acacia Communications Inc NASDAQ ACIA for 2 84 billion or 70 per share in cash The per share price represents about 46 premium to Acacia s closing price on Jul 8 The deal pending regulatory approvals is expected to close during the second half of Cisco s fiscal 2020 Acacia designs and manufactures high speed optical interconnect technologies while Cisco provides a variety of products vital to computer networking The combination will bolster Cisco s optical system portfolio and offer it a competitive edge The acquisition will also allow Cisco to build on the strength of its switching routing and optical networking portfolio to address customers most demanding requirements read Following the merger announcement shares of Acacia surged 35 1 to new highs crushing its average volume as nearly 13 2 million shares moved hands compared with 803 000 shares on average Meanwhile shares of CSCO gained 0 3 ETFs in FocusThe news has put the spotlight on a number of ETFs mostly with high exposure to Cisco which could be the best ways for investors to tap the opportunity Investors should keep a close eye on the movement of these ETFs over the coming weeks Below we highlight five ETFs having the largest allocation to this network giant iShares U S Telecommunications ETF This fund follows the Dow Jones U S Select Telecommunications Index and offers exposure to 42 American companies that provide telephone and Internet products services and technologies Cisco occupies the second position with 22 2 of the assets The ETF has AUM of 449 2 million and trades in average daily volumes of 474 000 shares It charges 43 bps in annual fees and has a Zacks ETF Rank 2 Buy with a Medium risk outlook read iShares North American Tech Multimedia Networking ETF ASX IGN This ETF provides concentrated exposure to domestic multimedia networking securities by tracking the S P North American Technology Multimedia Networking Index Holding 22 securities in its basket Cisco takes the third spot with 8 4 allocation The product has accumulated 117 5 million in its asset base while seeing a lower volume of around 49 000 shares a day Expense ratio comes in at 0 47 The fund sports a Zacks ETF Rank 1 Strong Buy with a High risk outlook First Trust NASDAQ Technology Dividend Index Fund This fund provides exposure to dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index The product has amassed about 981 4 million in its asset base and trades in moderate volume of about 109 000 shares per day The ETF charges 50 bps in annual fees and holds about 93 securities in its basket Of these firms CSCO occupies the fourth position making up roughly 8 of the assets read First Trust Nasdaq Cybersecurity ETF This ETF follows the Nasdaq CTA Cybersecurity Index which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors It has accumulated 939 million in its asset base The fund charges 60 bps in annual fees and trades in average daily volume of about 173 000 shares In total the product holds 44 stocks in its basket with Cisco taking the top spot at 6 3 Invesco Dynamic Networking ETF This fund follows the Dynamic Networking Intellidex Index holding 30 securities in its basket Of these Cisco is the seventh firm accounting for 4 9 share The fund is relatively unpopular and illiquid in the broad technology space with AUM of 68 4 million and average daily volume of about 14 000 shares It charges 63 bps in annual fees and has a Zacks ETF Rank 2 with a High risk outlook Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
CSCO | China Could Be A Roadblock In Cisco s Acacia Acquisition | Cisco NASDAQ CSCO has announced its agreement to buy Maynard Massachusetts based Acacia Communications NASDAQ ACIA for 70 a share or 2 6 billion net of cash and marketable securities That s a 46 premium to Acacia s closing price on Monday
The all cash deal if it goes through will be the biggest acquisition since AppDynamics which was taken for 3 7 billion Over the past year Cisco also added Duo Security for 2 35 billion in cash and stock and Luxtera for 660 million in cash and assumed equity
Cisco has for several years been diversifying beyond its hardware business as a more software centric approach to solving network issues have started to make more sense and as competitors mushroomed to eat into its revenues
Acacia has coherent optics technology which facilitates faster data throughput in optical networks and is therefore of great strategic importance in the industry s move to take on transport speeds of 100 Gbps or more The company s optics digital signal processing technology transceivers and other gear primarily cater to data center operators and telecom companies that are always pressed to offer faster data transfer even as the volume of network data continues to increase
This therefore makes the portfolio a perfect fit with Cisco s cloud service provider and enterprise customers Since Acacia has quite a concentrated customer base with 74 of revenue coming from its top 5 customers there s great scope for cross selling to Cisco customers
In fact Cisco will be able to use Acacia products throughout its network for enhanced throughput for its customers It will also help customers looking to simplify operations and reduce network complexities to transition from chassis based systems to pluggable technology The company will of course also support Acacia s current customers
The acquisition will close in the second half of Cisco s fiscal 2020 ending in June provided that it gets the necessary regulatory approvals That s where things could get tricky because Acacia s largest customer is China s ZTE HK 0763 and the company generates 29 of its revenues from China Thailand accounts for another 20 with Germany U S and other countries contributing 17 each according to Bloomberg
So Cisco may require Xi s blessings and that may not be forthcoming given trade tensions with the U S and the fact that ZTE products were even banned in the U S between May 15 and July 13 of 2018
Cisco has a Zacks Rank 2 Buy while Acacia is ranked 3 Hold Ericsson NASDAQ ERIC Dropbox NASDAQ DBX and Alteryx NYSE AYX are other options You can also see the complete list of today s Zacks 1 Rank Strong Buy stocks here
Breakout Biotech Stocks with Triple Digit Profit Potential
The biotech sector is projected to surge beyond 775 billion by 2024 as scientists develop treatments for thousands of diseases They re also finding ways to edit the human genome to literally erase our vulnerability to these diseases
Zacks has just released Century of Biology 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance Our recent biotech recommendations have produced gains of 98 119 and 164 in as little as 1 month The stocks in this report could perform even better |
CSCO | Arista loses bid to lift import ban in Cisco battle | By Jan Wolfe Reuters The U S government on Thursday dealt Arista Networks Inc a loss in its technology dispute with Cisco Systems Inc NASDAQ CSCO and refused to set aside an order blocking importation of some of Arista s network switches The U S International Trade Commission refused to rescind its May 4 ruling that found Arista s switches infringed two Cisco patents and banned Arista from importing the infringing products into the United States After the ITC released that decision a different agency the U S Patent and Trademark Office said the two Cisco patents are invalid Arista urged the ITC to rescind its import ban saying it would be unfair because the Patent Office invalidated Cisco s patents But the ITC said in Thursday s decision that the Patent Office rulings do not constitute a changed circumstance such that the remedial orders should be rescinded Marc Taxay senior vice president and general counsel of Santa Clara California based Arista said in a statement on Thursday that the company was deeply disappointed in the ruling which he called a departure from established law Taxay said Arista will appeal the ruling and will also be releasing modified products to maintain the supply of its products in compliance with the ITC s decision Cisco said in a statement on Thursday that the ITC sent a strong message that Arista s corporate culture of copying as it said the ITC described it must stop San Jose California based Cisco and Arista are fierce competitors in the multibillion dollar market for ethernet switches that connect computers and servers Cisco brought multiple lawsuits against Arista in 2014 alleging it brazenly copied Cisco s intellectual property Arista which was formed by former Cisco employees has denied the allegations and accused Cisco of a smear campaign and trying to stifle competition
The ITC ruled last year in a separate lawsuit that Arista infringed Cisco patents relating to managing and securing communications networks Arista redesigned its switches and U S Customs and Border Protection said in April that the company could resume importing its redesigned products |
CSCO | Arista Networks 2 3 will appeal ITC decision build workarounds | Arista Networks NYSE ANET is down 2 3 today after a setback at the ITC which maintained an import ban on products involved in a patent dispute with Cisco Systems NASDAQ CSCO That s despite rulings by the Patent Trial and Appeal Board that invalidated a pair of Cisco s related patents Those actions aren t a final step the ITC noted In a statement Arista said it was deeply disappointed in the decision which represented an unfortunate departure from precedent and from the core premise of the America Invents Act and its inter partes review proceedings It s appealing the decision and working on modified products in case the ITC decision is sustained The move brings near term execution risk for Arista that could affect the Q3 outlook says Wells Fargo NYSE WFC s Jess Lubert Meanwhile J P Morgan s Rod Hall imagines Arista is ready with workarounds In the end of the day this is disappointing for Arista and likely sustains margin pressure from US production However we believe the positive PTAB ruling was a surprise and that Arista is likely well prepared to continue to operate given this outcome Now read |
VZ | Is Sprint S Preparing To Mortgage Airwaves To Raise Cash | According to a recent report by The Wall Street Journal Sprint Corp NYSE S the fourth largest national telecom operator in the U S is preparing to sale and leaseback a little over 10 of its total airwaves wireless spectrum holdings Most of these spectrums will be from 2 5 GHz frequency bands and some will be from 1 9 GHz frequency bands Per Sprint s own estimate its portfolio of airwaves is valued at more than 14 billion However the company aims to raise around 3 5 billion by issuing investment grade bonds that will mortgage its spectrums of the abovementioned frequency bands At present Sprint is suffering from liquidity crisis The company desperately needs to raise cash in order to fund its business At the end of fiscal 2015 ended Mar 31 2016 Sprint had nearly 37 billion of total debt outstanding and a negative cash flow of 3 17 billion The company needs to repay 4 billion of total debt by Mar 2017 Management aims to slash costs by more than 2 billion in fiscal 2016 In Nov 2015 the telecom carrier raised 1 2 billion by selling and leasing back handsets In Apr 2016 Sprint used network assets as collateral to raise 2 2 billion At present Sprint is lagging way behind its larger peers like Verizon Communications Inc NYSE VZ and AT T Inc NYSE T In fact T Mobile US Inc NYSE T has also surpassed Sprint with respect to net wireless customer addition Sprint was unable to take part in the AWS 3 spectrum auction conducted by the FCC in 2015 and is not participating in the ongoing Incentive Auction for low band spectrums due to severe financial crunch Sprint expects fiscal 2016 adjusted EBITDA of 9 5 billion to 10 billion and operating income of 1billion to 1 5 billion Capital expenditures will be approximately 3 billion Adjusted free cash flow will be around breakeven The company currently carries a Zacks Rank 3 Hold You can see SPRINT CORP Price
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | The Zacks Analyst Blog Highlights AT T Comcast Verizon Communications And T Mobile US | For Immediate Release
Chicago IL October 12 2016 Zacks com announces the list of stocks featured in the Analyst Blog Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets Stocks recently featured in the blog include AT T Inc NYSE T NYSE Comcast Corporation NASDAQ CMCSA NASDAQ Verizon Communications Inc NYSE VZ NYSE andT Mobile US Inc NASDAQ
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Tuesday s Analyst Blog
Is AT T Planning on Entering the Media Entertainment Space
As per a recent report by Bloomberg leading wireless and pay TV company AT T Inc NYSE is looking to foray into the media and entertainment industry Notably the telecom giant intends to expand through the acquisition of a number of media and programming content producing companies over the next few years Notably AT T s pay TV rival and cable giant Comcast Corporation NASDAQ has also adopted the same strategy to diversifying its business
Focus on Video Programming
As prospects in the wireless industry are dim due to a saturated market telecom players are looking to boost revenues through the adoption of different strategies Although business services solutions have been gaining momentum some cash rich telecom companies are looking for further diversification AT T s wireless rivals Verizon Communications Inc NYSE and T Mobile US Inc NASDAQ have been active in the mobile advertisement space AT T on the other hand has been focusing on the pay TV industry and is the largest pay TV operator in the U S post its acquisition of satellite TV provider DIRECTV However the pay TV industry faces cord cutting and regular escalation in programming content costs affecting margins to a large extent Thus a move into content production space will help AT T reduce programming costs
The Bottom Line
As AT T operates as a pay TV operator as well investing in media and content programming will allow it to achieve backward integrated synergies mostly reduction of cost to deliver content to subscribers However such a move will not be easy as the company doesn t have the required cash to expand a newly created media division Thus it has to raise more debt for foraying into the media space However with a net debt at the end of second quarter of 2016 piling up further debt may spook investors
Confidential from Zacks
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Today Zacks is promoting its Buy stock recommendations
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VZ | FTC Appeals Court Ruling On AT T s Data Throttling Case | According to a recent report by Bloomberg the Federal Trade Commission FTC recently filed an appeal in the U S Court of Appeals for the Ninth Circuit in San Francisco to review the previous ruling regarding a data throttling charge issued by the FTC against the U S telecom behemoth AT T Inc NYSE T Data throttling basically means data traffic blocking and slowing any data traffic once customers hit certain usage thresholds in a month In Oct 2014 the FTC disputed that using the data throttling technique the telecom carrier had deceived its unlimited plan customers In its latest filing the regulatory agency stated that the Appeal Court s previous ruling would permit any technology company that also offer phone or broadband services either launching their own service or merging with an existing carrier to sidestep enforcement of consumer protection laws On Aug 29 the Ninth Circuit Court of Appeals in California reversed a lower court s denial of AT T s motion to dismiss the throttling lawsuit The appeals court identified AT T as a common carrier Due to this the service provider could not be held liable for the violations of rules that the FTC brought in its case Notably the Federal Communications Commission FCC slapped a fine of 100 million on AT T for a similar reason in Jun 2015 The company has filed a response which is still under review by the FCC It is worth mentioning here that the FCC had adopted the Net Neutrality rules in Feb 2015 The new laws has classified high speed broadband Internet as a public utility under Title II of the 1934 Communications Act instead of section 706 of the 1996 Telecom Act Net neutrality implies an open Internet atmosphere which will prohibit ISPs Internet service Providers especially the telecom and cable TV operators from discriminating against applications The enforcement of the new law has banned common ISP practices such as data traffic blocking slowing any data traffic and paid prioritization The FCC will closely monitor and put a check on all such deals in the future For the FTC case AT T hasn t denied that it had throttled some users However the company defended itself citing that an exception is in place for common carriers In Oct 2014 AT T was a common carrier for landline phone and mobile voice service but not for mobile Internet access The FCC reclassified mobile Internet as a common carrier service only after adopting the Net Neutrality Rules These arguments by AT T most likely compelled the federal court to dismiss the FTC case The U S telecom industry is becoming immensely competitive with cut throat pricing Recently T Mobile US Inc NYSE T and Sprint Corp NYSE S escalated the pricing war with new unlimited data plans Verizon Communications Inc NYSE VZ announced that it completed a major upgrade of its 4G LTE networks to LTE Advanced technology covering 461 cities in the U S The LTE Advanced network will raise the data packet transmission speed by more than 50 At this juncture a favorable court ruling related to the FTC case will be a major relief for AT T AT T currently carries a Zacks Rank 3 Hold You can see AT T INC Price
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Verizon Wireless to pay 1 35 million fine to settle U S privacy probe | By David Shepardson WASHINGTON Reuters Verizon Communications Inc NYSE VZ will pay a 1 35 million fine and agreed to a three year consent decree after the Federal Communications Commission said on Monday it found the company s wireless unit violated the privacy of its users Verizon Wireless agreed to get consumer consent before sending data about supercookies from its more than 100 million users under a settlement The largest U S mobile company inserted unique tracking codes in its users traffic for advertising purposes Supercookies are unique undeletable identifiers inserted into web traffic to identify customers in order to deliver targeted ads from Verizon and others The FCC said Verizon Wireless failed to disclose the practice from late 2012 until 2014 violating a 2010 FCC regulation on Internet transparency The FCC also said the supercookies overrode consumers privacy practices they had set on web browsers which led some advocates to call it a zombie cookie Under the agreement consumers must opt in to allow their information to be shared outside Verizon Wireless and have the right to opt out of sharing information with Verizon Until March 2015 Verizon Wireless consumers could not opt out of the supercookies but after several U S senators raised concerns about the practice the company agreed to allow an opt out Consumers care about privacy and should have a say in how their personal information is used especially when it comes to who knows what they re doing online said FCC Enforcement Bureau Chief Travis LeBlanc U S Senator Bill Nelson a Florida Democrat said the settlement was a win for consumers that will hopefully make companies think twice before engaging in practices that violate consumer privacy The FCC plans to unveil new proposed privacy protections for broadband as soon as later this month In November FCC Chairman Tom Wheeler said he expected the commission would address privacy practices in the next several months for companies that provide network services
Wheeler said the FCC questions if consumers know what information is being collected Do I have a voice in whether or not that s going to be used one way or another Those are two very important baseline rights that individuals ought to have |
CSCO | Arista Networks up 1 8 after initial ITC ruling in its favor | Arista Networks NYSE ANET is seeing a move up 1 8 after noting that an initial determination in its International Trade Commission case against Cisco Systems CSCO 0 5 has landed in Arista s favor The administrative law judge has found that the sale of redesigned switch products doesn t violate a cease and desist order issued by the ITC with respect to the 537 patent That follows rulings at Customers and Border Protection of noninfringement on the 537 145 and 592 patents This is an important step in bringing the 944 Investigation to conclusion and we look forward to the Commission s Final Determination which is currently scheduled to issue no later than Sept 20 says Arista General Counsel Marc Taxay Now read |
VZ | Verizon Looking To Cut 1 Billion Off Its Yahoo Bid | On Friday it was reported that telecommunications giant Verizon NYSE VZ is looking to cut 1 billion off its 4 8 billion offer for Yahoo s NASDAQ YHOO core business The New York Post the story
This is most likely an after effect of bad news for the web stalwart over the past few weeks Yahoo recently revealed that in 2014 it had been hacked and 500 million accounts including usernames and passwords were stolen
And earlier this week reports surfaced that claimed Yahoo scanned users incoming emails for terrorist signatures for roughly a year on classified orders from a secret Foreign Intelligence Surveillance Court
According to unnamed sources The discount is being pushed because Verizon feels Yahoo s value has been diminished writes the Post However Yahoo s team is pushing for the deal to close sooner rather than later as well as fighting efforts to negotiate the deal price down in any way
As a result YHOO stock is sliding down just over 1 in midday trading VZ stock is also down about 0 50 today to 50 02 per share
Interested in the other top stories of the week Listen to Zacks Friday Finish Line to catch up on the week s financial and investment news
Stocks that Aren t in the News Yet
You are invited to download the full up to the minute list of 220 Zacks Rank 1 Strong Buys free of charge Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of 26 per year |
VZ | Can Dycom Scale Higher On Wireline Investment Drive | Specialty contracting services provider Dycom Industries Inc NYSE DY has been experiencing a solid run on the bourse The company s growth has been primarily fuelled by rising demand for network bandwidth and mobile broadband It has also emerged as one of the biggest surprise winners last year and has more room to run which raise our optimism on the stock Let us discuss some of the strong growth drivers which are unlikely to fizzle out any time soon Robust CatalystsMost of the telecommunication companies are deploying fiber to the home and fiber to the node technologies to enable video offerings and 1 gigabit high speed connections This provides significant opportunities for Dycom The company s engineering design and aerial and underground construction services have been experiencing solid growth backed by the strength of 1 gigabit deployments Over the past few quarters extensive deployment of 1 Gigabyte wireline networks by major customers has been a major profit churner for the company Dycom is bullish as one of its major customers has plans to deploy speeds to 10 gigabits This in turn represents a huge array of lucrative opportunities for existing customers Additionally cable capital expenditure has been rising rapidly ascable operators continue to deploy fiber in small and medium businesses The company believes that unprecedented favorable industry trends impressive investment in wireline networks cable capacity projects and ongoing Connect America Fund II project will significantly drive growth in market share DYCOM INDS Price Moreover Dycom has a promising clientele that can provide it a competitive edge over its peers The company serves telecom and wireless equipment biggies such as AT T Inc NYSE T Comcast NASDAQ CMCSA CenturyLink Inc NYSE T and Verizon Communications Inc NYSE VZ who are constantly taking up major capital spending initiatives Dycom believes that it is experiencing a second wave of wireline networks investments since the first one in 90 s thus adding to the company s prospects Also the company registered healthy backlog level of 6 031 billion at the end of the fourth quarter out of which approximately 2 323 billion is expected to be completed within the next 12 months This apart the company s diligent acquisitions which has fortified its geographic footprint has significantly supplemented its top line growth During fourth quarter fiscal 2016 acquisitions contributed 44 8 million of revenue In this regard we believe that the recent investments in Goodman Networks and NextGen Telecom look promising Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Is AT T Planning To Enter The Media Entertainment Space | As per a recent report by Bloomberg leading wireless and pay TV company AT T Inc NYSE T is looking to foray into the media and entertainment industry Notably the telecom giant intends to expand through the acquisition of a number of media and programming content producing companies over the next few years Notably AT T s pay TV rival and cable giant Comcast Corporation NASDAQ CMCSA has also adopted the same strategy to diversifying its business Focus on Video ProgrammingAs prospects in the wireless industry are dim due to a saturated market telecom players are looking to boost revenues through the adoption of different strategies Although business services solutions have been gaining momentum some cash rich telecom companies are looking for further diversification AT T s wireless rivals Verizon Communications Inc NYSE VZ and T Mobile US Inc NYSE T have been active in the mobile advertisement space AT T on the other hand has been focusing on the pay TV industry and is the largest pay TV operator in the U S post its acquisition of satellite TV provider DIRECTV However the pay TV industry faces cord cutting and regular escalation in programming content costs affecting margins to a large extent Thus a move into content production space will help AT T reduce programming costs The Bottom LineAs AT T operates as a pay TV operator as well investing in media and content programming will allow it to achieve backward integrated synergies mostly reduction of cost to deliver content to subscribers However such a move will not be easy as the company doesn t have the required cash to expand a newly created media division Thus it has to raise more debt for foraying into the media space However with a net debt at the end of second quarter of 2016 piling up further debt may spook investors AT T INC Price and Consensus
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
CSCO | Computer Networking Industry Prospects Not So Bright | The Zacks industry includes providers of networking and Internet connected products such as wireless WiFi and LTE Ethernet and powerline with focus on reliability and ease of use Some of the companies provide business and mission critical IoT products and services to help customers create next generation connected products with high levels of security reliability and assured performance Enhanced focus on cloud computing and cloud storage has set the industry on a growth trajectory Here are the three major themes in the industry The industry is characterized by brisk technological change rapidly progressing products high speed connectivity low latency and evolving industry standards The advancement in areas like IoT AI ML and increased cloud applications are creating opportunity for industry players With IoT devices continuing to grow and enterprises increasingly adopting policies like bring your own device BYOD the number of network end points is increasing rapidly On the other side the concept of shared resources in the cloud to be accessed by these devices has greatly increased the need for adequate security at the core Consequently the growing need for security solutions and services in critical areas like defense intelligence and civilian agencies of the U S government bodes well for industry participants Nevertheless the ongoing trade war between the United States and China has created an uncertain environment that is not conducive for investments at least in the near term Notably the industry participants generate a significant portion of their revenues from China As the direct revenue sources are now under the purview of tariffs the concern over the prospects of the industry has increased in recent times Moreover rising U S protectionism is hurting growth prospects However a recent from President Trump suggesting trade negotiations between the United States and China is instilling optimism regarding a plausible truce Zacks Industry Rank Indicates Cloudy ProspectsThe Zacks Computer Networking industryis housed within the broader sector It carries a Zacks Industry Rank 166 which places it at the bottom 35 of 256 Zacks industries The group s which is basically the average of the Zacks Rank of all the member stocks indicates continued underperformance in the near term Our research shows that the top 50 of the Zacks ranked industries outperforms the bottom 50 by a factor of more than 2 to 1 Before we present a few stocks that you may want to consider for your portfolio let s take a look at the industry s recent stock market performance and valuation picture Industry Beats S P 500 and Sector on Shareholder ReturnsThe Zacks Computer Networking industry has outperformed its own sector and the Zacks S P 500 composite over the past 12 months The industry has gained 25 1 in the past 12 months as compared to the sector s increase of 4 3 and the Zacks S P 500 composite rise of 7 4 One Year Price PerformanceIndustry s Current ValuationOn the basis of the forward 12 month P E which is a commonly used multiple for valuing computer networking stocks we see that the industry is currently trading at 21 33X compared with the S P 500 s 18 22X It is also above the sector s forward 12 month P E of 20 97X Over the past five years the industry has traded as high as 21 87X as low as 11 89X and at the median of 15 18X as the chart below shows
Price to Earnings P E Ratio F1
Price to Earnings P E Ratio F1
Stocks in FocusIncreased focus on cloud computing big data and cloud storage will continue to aid revenue growth for the industry participants However sluggishness in global economic growth and shift in consumer buying patterns are likely to act as dampeners Notably none of the stocks in the industry currently holds a Zacks Rank 1 Strong Buy However we present one stock carrying a Zacks Rank 2 Buy that is well positioned to gain amid the prevailing challenges You can see Cisco Systems NASDAQ CSCO Inc CSCO The IP based networking company carries a Zacks Rank 2 It has a long term expected EPS growth rate of 7 Price and Consensus CSCOThere are also a few other stocks with a Zacks Rank 3 Hold that investors can hold on to Digi International Inc DGII This provider of business and mission critical IoT products and services carries a Zacks Rank 3 The company has a long term expected EPS growth rate of 14 5 Price and Consensus DGII Infinera Corporation INFN The company provides Digital Optical Networking systems to telecommunications carriers cable operators and other service providers worldwide It has a Zacks Rank 3 and a long term expected EPS growth rate of 8 8
Price and Consensus INFN
NETGEAR Inc NTGR This provider of networking storage and security solutions carries a Zacks Rank 3 Price and Consensus NTGR
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best performing stocks you ll find anywhere in the market Breaking news in this space frequently creates quick double and triple digit profit opportunities
These companies are changing the world and owning their stocks could transform your portfolio in 2019 and beyond Recent trades from this sector have generated 98 119 and 164 gains in as little as 1 month |
CSCO | Finisar EPS in line misses on revenue | Finisar NASDAQ FNSR Q4 EPS of 0 50 in line Revenue of 357 53M 12 2 Y Y misses by 1 66M Shares 6 Press ReleaseNow read |
VZ | Can Cincinnati Bell s CBB Initiatives Drive Growth | On Oct 3 we issued an updated research report on diversified telecommunications and technology services provider Cincinnati Bell Inc NYSE CBB Cincinnati Bell is focused on transforming itself into a fiber based communications entertainment and IT solutions company with growing revenues profitability and cash flow With a well designed marketing program popular brand value and strong reputation of offering high quality service the company expects to boost its Entertainment and Communications revenues In the Entertainment and Communications business the company s investments in Fioptics products which provide entertainment high speed Internet and traditional voice via fiber line to homes are on the rise Cincinnati Bell continues to deploy fiber network which is expected to provide high quality video and Internet service to its residential customers Also Cincinnati Bell is increasingly focusing on providing services to small and mid sized Businesses SMBs The company recently announced the creation of a new business division aimed at providing support services like voice data and technology integration for SMBs Also CBTS the wholly owned subsidiary of Cincinnati Bell partnered with Cisco Systems Inc NASDAQ CSCO to provide Enterprise Hosted Communications Solution EHCS EHCS is a cloud based solution aimed at increasing productivity for CBTS s business clients However Cincinnati Bell continues to experience erosion in high margin local access lines With Digital Subscriber Line DSL and cable modems gaining widespread acceptance customers are deactivating the extra phone lines that were used to access the Internet via dial up modem In addition the shift toward wireless services and aggressive rollout of VoIP and long distance services by Tier 1 competitors such as AT T Inc NYSE T and Verizon Communications Inc NYSE VZ in Cincinnati and Dayton has further contributed to access line erosion Also the company has been witnessing a slower pace of ARPU growth lately Cincinnati Bell currently carries a Zacks Rank 3 Hold You can see CINCINNATI BELL Price
Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | A Boon For Level 3 Communications Fitch Raises Rating | Level 3 Communications Inc NYSE T recently received a shot on its arm as credit rating agency Fitch Ratings has upgraded the Issuer Default Rating IDR assigned to it to BB from BB The rating agency has cited ongoing revenue growth of the company s enterprise division as the main reason for the rating upgrade
Level 3 Communications is gradually converting itself from a retail customer centric service provider to a predominantly enterprise focused entity Management has taken three strategic decisions in this regard These are increasing enterprise customer sales deployment of a sizeable metro fiber network and developing a strong IP based product portfolio
Ongoing growth in enterprise service revenues is helping to boost the company s core network services CNS revenue In the second quarter of 2016 Level 3 reported 1 95 billion in CNS revenues up 2 8 year over year Within the CNS unit IP Data and Transport Fiber were the dominant segments generating 915 million and 575 million in revenues respectively
Acquisition of tw telecom has positioned Level 3 Communications as the second largest metro Ethernet service provider after AT T Inc NYSE T In this regard the company is well ahead of large telecom operators like Verizon Communications Inc NYSE VZ and Comcast Corp NASDAQ CMCSA Level 3 Communications currently carries a Zacks Rank 4 Sell You can see
Level 3 Communications has a strong presence in several fields of enterprise networking including data networks content distribution managed services securities voice cloud and cloud connection The company stands to benefit from the ongoing trend of large enterprise customers shifting to IP and fiber based network architecture Level 3 Communications is now diversifying geographically in Latin America and Europe
With growing demand for bandwidth for implementing converged IP based networks Level 3 Communications growth prospects stand on solid ground Top line growth is likely to accelerate in the future as a result of encouraging demand for higher bandwidth transport to enterprise customers Continuous deployment of IP based bundled networks of voice data Internet and video solutions is expected to favorably impact the company s performance LEVEL 3 COMM Price
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Yahoo to say it is exploring strategic alternatives | By Liana B Baker Reuters Yahoo O YHOO Inc is expected to announce on Tuesday that it is exploring strategic alternatives for its struggling Internet business a person familiar with the matter said Yahoo which is also scheduled to report fourth quarter results after the markets close declined to comment The company s plans to turn around its struggling core business are set to dominate its earnings report with investors keen to see if CEO Marissa Mayer will push ahead with a proposed spin off or entertain calls for a complete sale The spin off of its main business which includes its search engine and digital advertising units was announced by Mayer in December after Yahoo abandoned efforts to sell its stake in Alibaba N BABA Group Holding Ltd But the company has provided little details since Yahoo s shares pared earlier losses after the Wall Street Journal first reported the news on the strategic alternatives The stock is currently trading down 1 3 percent at 29 20 Chief Executive Marissa Mayer is set to reveal cost cutting plans that include slashing 15 percent of the company s workforce or roughly 1 600 jobs and closing several business units the Wall Street Journal reported on Monday
Some activist investors are pushing Yahoo to ditch the spin off and instead sell the core business Verizon Communications Inc N VZ has expressed interest in the core and analysts say other potential buyers include media and private equity firms |
VZ | Verizon enlists AOL CEO to explore Yahoo deal Bloomberg | Reuters Verizon Communications Inc N VZ has given Tim Armstrong chief executive officer of its AOL unit a leading role in exploring a possible bid for Yahoo Inc s O YHOO assets Bloomberg reported citing a person with knowledge of the situation Verizon the largest U S wireless carrier hasn t hired bankers to conduct an offer and there have been no formal talks according to the report Yahoo said last week that it would consider strategic alternatives for its core Internet business even as it continues with its plan to revamp the business and spin it off Yahoo s core business which includes popular services like Yahoo Mail and its news and sports sites could attract private equity firms media and telecom companies or firms like Softbank Group Corp T 9984 analysts had said Verizon s Chief Financial Officer Fran Shammo said in December that the U S wireless carrier could look at buying Yahoo s core business if it was a good fit Earlier this year Verizon bought AOL Inc in a 4 4 billion deal to push into targeted advertising and mobile video Verizon and Yahoo couldn t immediately be reached for comments
Verizon s shares were down 1 1 percent while Yahoo s shares were down 4 percent in afternoon trading on Monday |
VZ | Cable phone industry urge FCC to limit Internet privacy protections | By David Shepardson
WASHINGTON Reuters A group of trade associations representing major cable and telephone companies on Thursday urged the U S Federal Communications Commission to limit protections in forthcoming broadband privacy rules
Broadband providers currently collect significant amounts of consumer data and some use data for targeted advertising drawing criticism from privacy advocates
The American Cable Association U S Telecom Association Consumer Technology Association National Cable Telecommunications Association and other groups wrote FCC Chairman Tom Wheeler urging him to propose limited broadband privacy protections consistent with the Federal Trade Commission s rules that bar unfair or deceptive practices
The letter comes after a coalition of groups including the American Civil Liberties Union Center for Digital Democracy and Electronic Frontier Foundation urged the FCC to write sweeping privacy protections for the nation s broadband users
The letter suggested the FCC could identify privacy or security goals and afford providers including smaller providers with limited resources flexibility in achieving those goals Rules dictating specific methods quickly become out of date and out of step with constantly changing technology and will only hamper innovation and harm consumers
Jeffrey Chester executive director of Center for Digital Democracy said the industry letter was an attempt by the phone and cable giants to stop the FCC from protecting the privacy of broadband consumers
Chester argued that when major Internet providers are aggressively expanding capabilities to monitor and monetize their customer data across all platforms including TV they want to ensure there s no consumer cop on the beat AT T Inc N T Comcast Corp O CMCSA and Verizon Communications Inc N VZ are among companies affected by new rules
The FCC has new authority to set privacy rules after it reclassified broadband providers last year as part of new net neutrality regulations A federal appeals court has not ruled on a court challenge to that decision
Wheeler told Reuters on Thursday he did not see the letter but reiterated he hoped the commission would move with dispatch on new privacy rules
Wheeler said previously broadband providers must make sure information they collect about consumers is secure that they are informed and have a choice about whether to participate |
CSCO | 4 Thrivent Mutual Funds To Add To Your Portfolio | Thrivent Mutual Funds is part of Thrivent Financial and had more than 134 billion worth of assets under management as of December 2018 It serves at least 2 million customers and has more than 100 investment professionals Moreover it has invested in 24 actively managed mutual funds across a wide range of categories including equity income plus asset allocation and fixed income funds Thrivent Mutual Funds aims to offer simple and smart investing and has a strong record of competitive performance Below we share with you four top ranked Thrivent mutual funds Each has earned a Strong Buy and is expected to outperform its peers in the future Investors can Thrivent Aggressive Allocation Fund Class S seeks appreciation of capital for the long run TAAIX invests at least three fourth of its assets in equity securities and up to one fourth of its assets in debt securities Thrivent Aggressive Allocation Fund Class S has three year annualized returns of 10 2 Darren Bagwell is one of the fund managers of TAAIX since 2016 Thrivent Large Cap Value Fund Class S seeks long term capital appreciation The fund invests most of its assets in equity securities of large companies The fund s advisor mostly focuses on equity securities of large companies that are based in the United States or outside with market capitalization similar to those included on the S P 500 Index the MSCI USA Large Cap Index or the large company market capitalization classifications published by Lipper Inc TLVIX has three year annualized returns of 9 As of March 2019 TLVIX held 67 issues with 6 02 of its assets invested in Cisco Systems Inc NASDAQ CSCO Thrivent Income Fund Class A aims for high current income while also opting for capital preservation The fund invests the majority of its assets in debt securities or preferred stocks that are rated investment grade by utilizing the middle rating of S P Fitch or Moody s Thrivent Income Fund may also invest in high yield high risk bonds notes debentures and other debt obligations or preferred stocks LUBIX has a three year annualized return of 3 8 LUBIX has an expense ratio of 0 77 compared with the category average of 0 85 Thrivent High Yield Fund Class A aims for high current income The fund invests most of its assets in high yield high risk bonds notes debentures and other debt obligations LBHYX has three year annualized returns of 5 6 As of March 2019 LBHYX held 286 issues with 1 19 of its assets invested in Sprint Corporation 7 62 To view the Zacks Rank and past performance of all diversified bond mutual funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
CSCO | Workday WDAY Up 0 7 Since Last Earnings Report Can It Continue | A month has gone by since the last earnings report for Workday WDAY Shares have added about 0 7 in that time frame underperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Workday due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts Workday Surpasses Q1 Earnings Revenues EstimatesWorkday delivered first quarter fiscal 2020 non GAAP earnings of 43 cents per share which beat the Zacks Consensus Estimate by couple of cents The figure also improved from 33 cents reported in the year ago quarter Strong growth can primarily be attributed to a rise of 33 4 in revenues which totaled 825 1 million The figure outpaced the Zacks Consensus Estimate for revenues of 814 million The upside was driven by solid growth in subscription and professional services revenues Quarter in DetailSubscription services revenues 84 9 of total revenues rallied 34 3 year over year to 701 million on the back of expanding customer base and robust net new ACV growth Further synergies from Adaptive Insights acquisition and strong product suite drove revenues in the reported quarter The figure surpassed management s guidance of 692 694 million Professional services revenues 15 1 of total revenues grew 29 from the year ago quarter s tally to 124 million and surpassed the guidance of 120 million Revenues outside the United States improved 42 to 197 million and contributed approximately 23 9 to total revenues During the reported quarter market research firm Gartner s May 2019 Magic Quadrant for Cloud Core Financial Management Suites for Midsize Large and Global Enterprises report put Workday in the Leaders quadrant which reflects the company s growing clout in the cloud market Notably Workday was recognized as a Leader for the third year in a row The company was ranked 1 on San Francisco Business Times list of the best place to work in Bay Area Additionally the company was ranked 1 on the list of the Best Large Workplaces in the U K by Great Place to Work Institute In the quarter the company unveiled Workday 32 with more than 500 latest features to aid resource managers support skills resources to projects and provide deeper integration between Workday and Adaptive Insights During the reported quarter Workday in partnership with government agencies and other companies released The Cybersecurity Talent Initiativeto focus on cybersecurity workforce for the future The company witnessed rapid deployment of HCM solution in the first quarter It was chosen by the likes of Carl Zeiss AG Cisco Systems NASDAQ CSCO Daimler Trucks North America Old Mutual Limited and Procter Gamble Management is also optimistic regarding the growing clout of Workday Prism Analytics and Adaptive Insights business planning cloud offerings The company generated non GAAP operating margin of 13 1 during the quarter almost flat on a year over year basis Balance SheetCash cash equivalents and marketable securities were 1 89 billion as of Apr 30 2019 compared with 1 78 billion in the previous quarter Workday generated operating cash flow of 209 2 million compared with previous quarter s figure of 250 5 million Current unearned revenues came in at 1 73 billion representing annual growth of 31 Total unearned revenues were around 1 83 billion up 29 from the year ago quarter s level GuidanceFor second quarter fiscal 2020 Workday expects subscription revenues in the range of 746 748 million up approximately 32 sequentially Professional services revenues are projected at 124 million Workday anticipates non GAAP operating margin of approximately 10 The company raised fiscal 2020 guidance for subscription services revenues It now expects subscription services revenues in the range of 3 045 3 06 billion previously 3 03 3 045 billion Professional services revenues are projected to be around 500 million The company expects non GAAP operating margin to be almost 12 3
How Have Estimates Been Moving Since Then
In the past month investors have witnessed a downward trend in fresh estimates The consensus estimate has shifted 8 55 due to these changes
VGM Scores
Currently Workday has a great Growth Score of A a grade with the same score on the momentum front However the stock was allocated a grade of F on the value side putting it in the fifth quintile for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift Notably Workday has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
CSCO | Arista recoups losses on word of win on second Cisco patent claim | Arista Networks NYSE ANET down as much as 2 1 has spiked back to near the flat line after reports that it s won an IPR final decision at the Patent and Trademark Office invalidating claims by Cisco CSCO 0 7 on the 7 224 668 patent That follows a win for Arista last week on the 6 377 577 patent one of the two that formed the basis of an import ban That 577 patent might have called for a hardware workaround much harder than a software fix Wells Fargo NYSE WFC had noted Now read |
CSCO | Arista wins round in Cisco patent fight over network technology | By Jan Wolfe Reuters Arista Networks Inc N ANET won a ruling on Thursday in its legal battle with Cisco Systems Inc O CSCO over networking device technology setting the stage for Arista to undo a U S agency s order blocking importation of some of its products Arista had asked the U S Patent and Trademark Office to review the validity of a patent it granted to Cisco relating to network device security The Patent Office sided with Arista on Thursday invalidating key claims in the patent A week earlier the Patent Office invalidated claims in a different Cisco patent on a way to improve processing in network devices San Jose California based Cisco and Arista are fierce competitors in the multibillion dollar market for ethernet switches that connect computers and servers Last month the U S International Trade Commission concluded that Arista s switches had infringed the Cisco patents and said it would issue an order banning Arista from importing the infringing products into the United States Arista general counsel Marc Taxay said on Thursday that the company will now seek complete suspension of the ITC s import ban which is slated to go into effect in July Cisco did not immediately return a request for comment Thursday s ruling is the latest development in a years long legal battle between Cisco and Arista Cisco brought multiple lawsuits against Arista in 2014 alleging it has a culture of copying Cisco s intellectual property Arista has denied the allegations and accused Cisco of a smear campaign The ITC ruled last year that Arista had infringed three other Cisco patents relating to managing and securing communications networks Arista redesigned its switches and U S Customs and Border Protection said in April that the company could resume importing its redesigned products Shares of Santa Clara California based Arista closed at 148 52 on Thursday up 0 7 percent after dropping below 145 a share earlier in the day Cisco shares ended the day 0 9 percent higher at 31 82 |
VZ | Yahoo Dragged To Court For Delaying Data Breach News | Yahoo Inc s NASDAQ YHOO streak of bad luck continues as the company has been sued for irresponsibility and negligence over a massive 2014 hacking incident Many analysts consider this to be yet another blow to CEO Marissa Mayer s efforts to cure the company s ailing fortunes Two class action specialist law firms Robbins Geller Rudman Dowd and Labaton Sucharow have jointly filed a class action against the company on behalf of Ronald Schwartz a New York resident and all other users in the U S whose personal information have been tampered with The AllegationIn a joint statement attorneys from the two law firms said Yahoo s failure to safeguard its users very personal sensitive information in direct violation of its promises is utterly unacceptable in this day and age The fact that a breach of this magnitude went undetected at a tech giant like Yahoo for two years is astounding The lawsuit was filed in the federal court in San Jose California just one day after Yahoo confirmed a massive breach of its security affecting about half a billion of its users The company confirmed that the stolen data included consumers names email addresses telephone numbers date of birth encrypted passwords and security questions and answers However sensitive information like unprotected passwords payment card data and bank account information were not compromised with Many Questions Still Unanswered The question that is bothering many is that did Yahoo not know about the situation until recently If yes then what took it so long to take stock of the situation Is the company really capable of securing users data Again on what basis should one believe Yahoo s claim of a state sponsored attack It s hard to believe that the company did not know about this massive breach of security Probably by suppressing the matter for some time it had tried to avoid additional troubles that could hamper its multi billion dollar deal with Verizon Communications Inc NYSE VZ YAHOO INC Price Will it Impact the Verizon Deal Verizon is in the midst of finalizing a 4 8 billion deal to acquire Yahoo s core assets We believe that the disclosure could have a significant impact if Verizon finds a material adverse change MAC in the period between signing and closing In response to the breach disclosure Verizon stated that We will evaluate as the investigation continues through the lens of overall Verizon interests including consumers customers shareholders and related communities Zacks Rank Currently Yahoo is a Zacks Rank 3 Hold stock some better ranked stocks in the in the broader technology sector include Facebook Inc NASDAQ FB and LinkedIn Corporation NYSE LNKD each sporting a Zacks Rank 1 Strong Buy You can see Facebook witnessed eight positive estimate revisions in the last 60 days LinkedIn saw three positive estimate revisions over the same timeframe Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Windstream WIN Plans To Finish Project Excel By 2016 | Leading exchange carrier in the U S Windstream Holdings Inc NASDAQ WIN recently announced that its Project Excel related works are in progress and is expected to finish by the end of 2016 This 250 million Project Excel program was launched by Windstream in 2015 to enhance its network provision by installing VDSL2 Very high bit rate digital subscriber line 2 network equipment targeting a larger portion of the rural areas with a speed of 100 Mbps Windstreams TakeWindstream claims that with the completion of the program it expects to serve its customers with the upgraded faster copper based broadband services in its wireline segment and thus observe additional customer gain As part of the project advancement Windstream will be upgrading its fiber fed DSLAM Digital Subscriber Line Access Multiplexer infrastructure to VDSL2 capable equipment to deliver higher speeds of 50 100 Mbps and a better durable backhaul network On completion the company aims to reach out to almost 1 million households and small businesses with its broadband speeds of up to 100 Mbps in its wireline territories The company hopes to attract more broadband customers in 2017 by offering its extended broadband services Reports suggest that they have already started market coverage by providing premium speeds and have also experienced almost 5 increase in its existing customer base But the main question is when will Windstream witness broadband growth from its Project Excel During the second quarter of 2016 the company lost a total of 14 500 subscribers ending the period with 1 095 million customers down from the 1 13 million subscribers it had in the same period a year ago In the reported quarter Windstream lost 4 of its high speed Internet customers and 8 of its digital television subscribers Although the main focus is on increasing its consumer broadband speed Windstream is looking forward to get potential benefits for its SMB small and medium sized business ILEC incumbent local exchange carrier customer base Project Excel seems to be more adaptable for the ILEC SMB business as the speed facilities being provided are also one of the demands of the customers of this segment Moreover with the less capital costs required to deploy VDSL2 over existing copper which is already present in its current businesses the company hopes to increase its market share CompetitionThe dynamics of the communication industry is significantly governed by technology innovation Hence leading national carriers aggressively continue to introduce new networking technologies and next generation product and service offerings Top tier carriers such as AT T Inc NYSE T Verizon Communications Inc NYSE VZ and Sprint Corp NYSE S have deployed 4G LTE networks across most of their coverage markets Availability of these new technologies may result in greater competition for Windstream s broadband Internet business To remain competitive the company needs to invest significantly in technology and network upgrades or experience greater subscriber churn to larger competitors Windstream can also utilize the higher speed copper based VDSL2 service to overcome tough competition from the cable multi service operators MSOs Comcast Corp NYSE S and Charter Communications NYSE T as the two continue to expand their small medium and large businesses WINDSTREAM HLDG Price
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | JetBlue warns of delays after power outage shuts website | By Jeffrey Dastin NEW YORK Reuters JetBlue Airways Corp warned of delays or cancellations Thursday after a power outage took down its main website and affected customers checking in for flights A maintenance operation disrupted power at a data center run by JetBlue s business partner Verizon Communications Inc N VZ the airline said in a statement adding that this was not a cyber security issue Power has been restored to Verizon s data center and we are working to fully restore our systems as soon as possible the New York based airline said Flights are still departing at this time but customers traveling may experience delays or cancellations JetBlue had 36 flight delays and four cancellations as of 1 45 PM ET 18 45 GMT according to flight tracking website FlightAware com The technical issue follows several high profile computer problems that U S airlines faced in 2015 from a router error at United Continental Holdings Inc to a malfunctioning iPad application used by pilots at American Airlines Group Inc
Industry consultants say the impact of computer disruptions will keep growing as airlines automate an increasing chunk of operations outfit their planes with Wifi and distribute boarding passes on smartphones |
VZ | Verizon up 1 after better than expected Q4 earnings revenue | Investing com Verizon Communications Inc N VZ the largest mobile network operator in the U S reported better than expected fourth quarter earnings ahead of Thursday s opening bell sending its shares higher in pre market trade
Verizon said adjusted earnings per share came in at 89 cents in the three months ended December 31 above expectations for earnings of 88 cents per share and compared with 71 cents per share in the same period a year earlier
Fourth quarter earnings included impacts related to the annual actuarial valuation of benefit plans and mark to market pension adjustments
The mobile network operator s fourth quarter revenue totaled 34 25 billion beating forecasts for revenue of 34 11 billion but up 3 2 from 33 18 billion a year earlier
The mobile network operator added 1 5 million net retail postpaid connections in the quarter
In 2015 Verizon delivered strong and balanced results in a dynamic competitive environment while returning more than 13 5 billion to shareholders said Chairman and CEO Lowell McAdam
At the same time Verizon built and acquired next generation network capabilities that position the company to be an innovator in the digital first mobile world in 2016 and beyond McAdam added
Immediately after the earnings announcement Verizon shares gained 45 cents or 1 01 in trading prior to the opening bell to hit 44 90 from a closing price of 44 45 on Wednesday
Meanwhile U S stock futures pointed to a lower open The Dow futures shed 96 points or 0 61 the S P 500 futures dipped 10 points or 0 55 while the Nasdaq 100 futures declined 23 points or 0 54 |
VZ | Verizon Q4 earnings results beat expectations | Investing com Verizon Communications N VZ reported better than expected quarterly revenue as heavy promotions helped it to check customer defections
The number one U S wireless service provider s shares rose 1 1 in premarket trading on Thursday
Customer defections also known as churn at Verizon s wireless postpaid business dipped to 0 96 from 1 14
The mobile network operator posted fourth quarter earnings per share of 0 89 compared to 0 71 a share a year earlier
Revenue for the quarter rose 3 2 to 34 25 billion from 33 19 billion in the final quarter of 2015 |
VZ | Verizon adds 1 5 million new monthly users revenue beats estimates | By Malathi Nayak and Kshitiz Goliya Reuters Verizon Communications Inc N VZ on Thursday reported higher than expected revenue for the fourth quarter as heavy promotions helped it counter aggressive offers and discounts from rivals and win new users Shares of the No 1 U S wireless phone service provider whose profit edged past analysts estimates rose 2 7 percent to 45 63 in morning trading Verizon added a net 1 5 million wireless retail postpaid or monthly subscriptions in the quarter below 2 million a year earlier but above the analysts average estimate of 1 42 million according to market research firm FactSet StreetAccount The company known for its high quality network withstood stiff competition from rivals in the saturated U S wireless market Smaller rival Sprint Corp offered 50 percent off to encourage users to switch to its network and T Mobile US Inc launched a free video streaming plan For its part Verizon rolled out holiday season offers such as a data giveaway on some plans 100 discounts on certain phones and a 300 credit to trade in some models Customer defections or churn in Verizon s postpaid business fell to 0 96 percent from 1 14 percent a year earlier Average revenue per account however fell 6 6 percent to 148 30 below the analysts forecast of 149 61 according to FactSet Jefferies analyst Mike McCormack said Verizon must curb such declines in this measure this year Like its rivals Verizon has switched from offering customers two year contracts to monthly installment plans that have lower service fees and can weigh on revenue To increase revenue Verizon is investing in its new go90 mobile video service and Internet of Things which connects everything from industrial machines to household devices to the Internet Chief Financial Officer Fran Shammo said in an interview that the company still expected full year earnings growth excluding special items to be on a flatter plateau in 2016 than 2015 as a result of those investments and the shift to the installment model Revenue from Internet of Things related offerings rose about 18 percent to 690 million in 2015 In the quarter sales at the company s FiOS high speed Internet TV and phone service rose 6 8 percent to 3 53 billion Net income attributable to Verizon was 5 39 billion or 1 32 per share compared with a year earlier loss of 2 23 billion or 54 cents per share Excluding special items such as pension adjustments Verizon earned 89 cents per share above the analysts average forecast of 88 cents according to Thomson Reuters I B E S
Operating revenue rose 3 2 percent to 34 25 billion Analysts had expected 34 10 billion |
CSCO | Why Is Cisco CSCO Up 0 4 Since Last Earnings Report | It has been about a month since the last earnings report for Cisco Systems NASDAQ CSCO Shares have added about 0 4 in that time frame underperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Cisco due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts Cisco Systems Tops Q3 Earnings Revenues stimatesCisco Systems delivered third quarter fiscal 2019 non GAAP earnings of 78 cents per share which beat the Zacks Consensus Estimate by a penny Further the figure rose 18 2 from the year ago quarter Revenues increased 6 year over year excluding Service Provider Video Software Solutions SPVSS to 12 958 billion and surpassed the Zacks Consensus Estimate of 12 875 billion Acquisitions contributed 40 bps to the top line in the reported quarter Strength witnessed in the company s Security and Applications segments drove year over year growth Order strength and improving traction of the subscription based model were other tailwinds Notably during the second quarter of fiscal 2019 the company completed the divestiture of its SPVSS business Top line DetailsProducts 75 of total revenues advanced 7 to 9 72 billion Services 25 increased 3 to 3 24 billion driven by growth in software and solutions services Revenues from subscriptions represent 65 of the company s software revenues up 9 points year over year Deferred product revenues were 6 2 billion down 22 9 from the year ago quarter Deferred service revenues were 11 3 billion up 3 1 from the year ago quarter Geographically Americas revenues were flat year over year while EMEA and APJC reported revenue growth of 9 and 5 on a year over year basis respectively While total emerging markets grew 5 the BRICs plus Mexico declined 2 In terms of customer segments enterprise increased 9 while service provider was down 13 Further commercial and public sector rose 5 and 10 respectively Total product orders increased 4 Cisco has realigned Product segments into four distinct categories infrastructure platform applications security and other Wireless Switching Aids GrowthInfrastructure Platforms 58 2 of third quarter revenues comprise Switching NGN routing Wireless and Data Center solutions Revenues grew 5 from the year ago quarter to 7 545 billion The year over year increase can primarily be attributed to robust growth across switching wireless and data center business Switching revenues witnessed robust growth across campus and data center Adoption of new campus switch Cat9K and Nexus 9K was impressive Routing witnessed robust growth primarily on account of SD WAN Further wireless revenues improved on the back of company s Wave 2 offerings and Meraki solution Robust demand for the HyperFlex data center solution drove data center s double digit growth Management stated that the subscription based Catalyst 9000 switching platform has been adopted by several customers which aided them in becoming more flexible Moreover results benefited from persistent customer shift from 100G to 400G architectures Additionally rapid adoption of multi cloud infrastructures was a key catalyst AppDynamics Drive GrowthApplications 11 of third quarter revenues consist of Collaboration portfolio of Unified Communications UC Conferencing and TelePresence IoT and application software businesses such as AppDynamics and Jasper Revenues increased 9 from the year ago quarter to 1 431 billion The company had integrated its Cisco Spark with Webex Platform which enhanced Webex Meeting and enabled it to introduce Webex Teams fortifying the company s collaboration portfolio further Collaboration revenues rose primarily driven by growth across AppDynamics UC infrastructure and TelePresence endpoints Cisco recently unveiled AIOps leveraging AI ML and automation to offer enhanced customer experiences and higher business performance Security Remains StrongSecurity 5 5 of revenues climbed 21 to 707 million Strong growth can be attributed to solid demand witnessed by web security unified threat network security and advanced threat solutions The company s AI driven Talos intelligence platform blocks billions of threats per day The company is striving to leverage machine learning to deploy security platforms in order to mitigate online risks on a real time basis Other ProductsOther Products segment contains service provider video cloud and system management and various emerging technology offerings Revenues grew 3 to 3 24 billion Acquisition A Key CatalystIn the quarter under review Cisco concluded the deal to buy Luxtera Cisco intends to deploy Luxtera s integrated optics technology capabilities across its robust network portfolio featuring capacities ranging from 100GbE Gigabit Ethernet to 400GbE This will enable Cisco to provide ultra high data heavy bandwidth services to CSPs and network service providers Further the deal will help Cisco add more vital technology to its open source software in order to build networking machinery The company had also announced that it has successfully closed the buyout of privately held Duo Security Further the integration of Duo s zero trust MFA technology with Cisco s network and cloud security platforms is likely to enhance security features and mitigate phishing incidents on devices This buyout will aid Cisco to deliver on its commitment of safeguarding customer data while focusing on people centric secure enterprise IT approach Operating DetailsNon GAAP gross margin expanded 10 bps from the year ago quarter to 64 1 On a non GAAP basis product gross margin and service gross margin came in at 63 7 and 67 3 compared with 63 7 and 67 1 reported in the year ago quarter respectively Non GAAP operating expenses came in at 4 2 billion during the reported quarter up 6 year over year As a percentage of revenues operating expenses contracted 10 bps to 32 4 Non GAAP operating margin were up 20 bps year over year and came in at 32 2 Balance Sheet and Cash FlowCisco exited the third quarter with cash cash equivalents and investments balance of almost 34 64 billion down from 40 38 billion in the prior year quarter Total debt short plus long came in at 23 69 billion compared with 25 63 billion reported in the previous quarter The company generated 4 3 billion cash flow from operations during the quarter under review In the third quarter Cisco returned 7 5 billion shares to shareholders in form of share repurchase and dividend Furthermore the company declared a quarterly dividend of 35 cents per share GuidanceFor fourth quarter fiscal 2019 revenues are expected to grow 4 5 6 5 on a year over year basis Non GAAP earnings are anticipated between 80 cents and 82 cents per share Non GAAP gross margin is expected in the range of 64 65 while operating margin is anticipated between 31 and 32 for the quarter
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates
VGM Scores
At this time Cisco has an average Growth Score of C however its Momentum Score is doing a bit better with a B Charting a somewhat similar path the stock was allocated a grade of C on the value side putting it in the middle 20 for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision looks promising It comes with little surprise Cisco has a Zacks Rank 2 Buy We expect an above average return from the stock in the next few months |
CSCO | Palo Alto Completes PureSec Buyout Boosts Prisma Strategy | Palo Alto Networks NYSE PANW recently concluded the acquisition of serverless security provider PureSec to better protect customers journey to multi cloud environments and extend its Prisma cloud security strategy The transaction was worth around 47 million in cash PureSec will be integrated into Palo Alto s Prisma cloud security platform enabling the latter to add end to end serverless application security to its capabilities Rationale Behind Prisma StrategyTransition of workloads to the cloud has several concerns the most important being security In such an environment complexities of using different security solutions are best avoided Customers are increasingly looking for comprehensive and end to end security solutions so that they are better able to focus on their business growth without worrying about the security gaps in the system Per Gartner 50 of enterprises will unknowingly directly expose some of their IaaS storage services network segments applications or APIs to public by 2021 up from 25 in 2018 This projection reflects the dire need of strong multi cloud security offerings which will cover all the security gaps The Prisma platform brings all of Palo Alto s cloud security solutions under one umbrella easing customers journey to the cloud How Acquisitions are Impacting Palo AltoSince 2017 Palo Alto has spent nearly 1 billion for buying several small companies specializing in a particular aspect of security In third quarter fiscal 2019 earnings call the company had announced its intention to buy PureSec and container security company TwistLock for about 457 million in total to kickstart Prisma We note that continued acquisitions are taking a toll on operating margins by increasing expenses In the last reported quarter non GAAP operating margin contracted 50 basis points to 20 9 due to net expenses of about 7 million associated with buyouts This apart the time and resources required to integrate the acquired assets into its business can also potentially affect profitability Nonetheless management is optimistic about growth through acquisitions The buyout of Redlock has raked it significant revenues since it was completed last October 2018 RedLock which forms the basis of Prisma public cloud crossed 100 million billings run rate in the fiscal third quarter Moreover the buyout of Demisto in March this year is expected to be profitable for Palo Alto The company s Cortex platform which is based on Demisto s capabilities is already witnessing strong demand Palo Alto Networks Inc Revenue TTM Competition Competitive EdgeThe Security market has immense prospects and thus competition is also intensifying Fortinet s NASDAQ FTNT Security Fabric architecture which is also a comprehensive suite of security solutions is gaining serious traction Strong global demand for Security Fabric offerings led by digital transformation across most industries is pushing it to expand the Security Fabric product suite Moreover Cisco s NASDAQ CSCO cloud security solutions are gaining significant momentum due to various efforts to boost business Notably in October last year Cisco acquired Duo Security to enhance its cloud security portfolio However Palo Alto s belief that its addressable market will be worth 24 billion by 2020 compared with 19 billion in 2017 is encouraging it to move forward in the cybersecurity market Its efforts are leading to consistent expansion of customer base and revenue growth Zacks Rank A Stock to ConsiderPalo Alto currently has a Zacks Rank 3 Hold A better ranked stock in the broader Computer and Technology sector is eGain Corporation NASDAQ EGAN sporting a Zacks Rank 1 Strong Buy You can see Long term earnings growth for eGain is forecast at 30 Will you retire a millionaire One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
VZ | Nokia Networks To Strengthen Enterprise Service Business | Nokia HE NOKIA Networks a division of Nokia Corp NYSE NOK has decided to overhaul its corporate strategy with a major emphasis on the enterprise service segment Last year the company acquired its rival company Alcatel Lucent PA ALUA for 17 4 billion The acquisition has positioned Nokia Networks as a formidable player in the enterprise segment Nokia s network infrastructure offering is mainly telecom operator centric The acquisition of the wireless business of Alcatel Lucent has significantly strengthened Nokia s foothold in North America Leading U S telecom operators namely Verizon Communications Inc NYSE VZ and AT T Inc NYSE T are prominent customers of Alcatel Lucent Additionally Alcatel Lucent has a strong presence in China while Nokia enjoys considerable dominance in Europe and Asia But more importantly Alcatel Lucent has lucrative assets to support the enterprise segment which Nokia is capitalizing on to get a strong foothold in the sector already dominated by large network infrastructure solution providers like Cisco Systems Inc NASDAQ CSCO and Huawei Technologies Co Ltd The merged entity can effectively capitalize on the emerging Internet of Things IoT platform and offer competent triple play voice video and data solutions across the world The core focus areas will be next generation 5G wireless technology IP and software defined networking cloud based solutions big data analytics and sensors and imaging The takeover of Alcatel Lucent by Nokia has created a network solutions behemoth in the industry with a significant global customer base and solid operational efficiencies Nokia boasts strong technical expertise in professional managed services and customer experience management apart from a rich portfolio of mobile broadband infrastructure and 4G LTE network On the other hand Alcatel Lucent enjoys relative advantage in IP based products optical networking cloud computing software defined networking fixed broadband network and professional services Nokia currently carries a Zacks Rank 3 Hold You can see Nokia Corp Price
Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | T Mobile US Sneak Peek Into Q3 Subscriber Growth High | U S national wireless carrier T Mobile US Inc NYSE T recently allowed us a peek into its third quarter 2016 earnings report which is scheduled to release this October The company claims to witness stronger subscriber addition in the upcoming quarter in compared to its consumer gain reported in the second quarter of 2016 Reports state that the company has added 753 000 branded postpaid phone customers since Jul 1 2016 compared to 646 000 customers in the second quarter of 2016 T MobileUShas also made to reach out to 650 000 prepaid net customers till date for the third quarter of 2016 T Mobile US further declared plans of issuing complete estimates for full year 2016 growth and financials during its third quarter 2016 report release
Reasons Driving Subscriber GrowthT Mobile US believes that its innovative network expansion methodologies have helped drive substantial consumer growth In order to lure customers from competitors T Mobile US has been launching several low priced service plans through varied promotional and advertising schemes for individual consumers as well as small business entities In relation to this T Mobile US announced a Stock Up plan as part of its Get Thanked program which involved the granting of a stock to postpaid customers In Aug 2016 T Mobile US came up with unlimited offerings T Mobile One plan for 70 a month replacing its prior 95 unlimited plan This closely follows Sprint Corp s NYSE S launch of Unlimited Freedom plan at 60 instead of 75 a month AT T Inc s NYSE T rate revision from 20 for 300 MB to 30 for 1 GB for the smallest data plan and Verizon Communications Inc s NYSE VZ rate hike by 5 to 10 per data plan Several analysts estimate that the company has managed to gain customers from rivals the other three major U S wireless carriers Figures indicate that more than 250 000 customers are from Verizon almost 400 000 from AT T and 300 000 from Sprint in the third quarter Recent DevelopmentsT Mobile US is also forging ahead with its 5G expansion plans wherein it has started higher speed tests with major equipment partners Ericsson NASDAQ ERIC and Nokia HE NOKIA Corporation NYSE NOK ConclusionAlthough the company has boosted its top line by adding customers T Mobile US is yet to go a long way to check its bottom line figures The costs incurred to gain customers and grow revenues has not rewarded its shareholders Instead reports state that the company s stock declined 2 6 to 44 74 ROGERS COMM CLB Price
T Mobile currently has a Zacks Rank 3 Hold You can see Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Is AT T s AirGig Technology The Next Big Thing In Telecom | U S telecom behemoth AT T Inc NYSE T has announced AirGig a project which aims at extending 4G LTE and 5G coverage through the existing power grid lines Although the project is at its nascent stage if successful AT T can deliver high speed Internet services to underserved parts of the country at a low cost Project AirGig in DetailsUnder AirGig AT T aims to deliver wireless data connectivity through a number of low priced plastic antennas over power grid lines The signal will be transmitted over license free spectrum and make the deployment of the technology way more feasible than over fiber optic lines AT T has already applied for patents related to this technology Benefits to AT TIn the U S people in the rural areas face connectivity issues and low Internet speeds Moreover fiber deployment in these underserved areas has been slow With power grids already existing in these areas the new AigGig technology shall be suitable for distribution of AT T s wireless network in these areas This will result in increased customer addition Additionally AT T s new technology will provide power companies a range of smart grid applications to manage power transmission in a better manner The Bottom LineAs per AT T early experiments conducted on this technology have been positive so far This included streaming of 4K video in its research labs The company is looking forward to conducting field trials for AirGig in the years to come Thus commercial deployment of the same is still far away Meanwhile the companies that are deploying fiber lines may complete the same before the deployment of the AigGig technology Moreover operational hindrance in case of power outages is a major concern However if AT T succeeds in implementing this new technology it will lend it a huge advantage over its wireless rivals like Verizon Communications Inc NYSE VZ T Mobile US Inc NYSE T and Sprint Corporation NYSE S in terms of network coverage and customer count AT T INC Price
AT T currently carries a Zacks Rank 3 Hold You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Wall Street s Next Ticking Time Bomb Pensions | Make no mistake the criminality and fraud of most if not all DC politicians that is being exposed now is also occurring in corporate America and at pension funds especially with regard to fraudulent financial reporting As an example Exxon NYSE XOM is now being investigated by the SEC over its asset valuation and accounting practices The same concept can be applied to pension funds public and private The Dallas Fireman and Police Pension fund is the postcard example of both
The pension time bomb has been activated for a long time but it s now in the final countdown Pensions are woefully underfunded even if we give them the benefit of the doubt on their current use of market to market Every pension fund under the sun in this country because rates are so low has monthly negative outflows of cash beneficiaries are being paid more money than is flowing into the fund
If the stock market declines more than 10 for an extended period of time nearly every pension fund in the country would blow up This is why the last two stock plunges which took the S P 500 down over 10 were met by heavy if not blatant Fed intervention which produced a steep V bounce in the stock market both times
Yesterday I spoke to a friend colleague who works at a public pension fund He said the latest fad in pension management land is to shift money out of hedge funds which are woefully underperforming the market and to put even more money into private equity funds This allows the pension funds to subject that capital to a quarterly mark to market test rather than an daily or monthly valuation accounting
The only problem private equity investments are highly illiquid and the valuation of the underlying investments is an art that is not at all based on actual market transactions This private equity investment mark to market Picasso leads to extreme over marking of private equity investment valuations at pension funds
This is also one of the primary reasons that the Fed can not raise interest rates even if it were true that the economy was improving and the labor market was tight both conditions of which we know are not even remotely close to accurate but everyone seems content to play along with the joke
Many pensions have now allocated as much as 20 of the fund to private equity This is because they can control to a degree where the investments are marked and as long as the stock market does not decline they never have to market them down But with the example of the Dallas pension fund above if the beneficiaries are allowed to withdraw all of their money the fund will have to unload its illiquid private equity investments to meet the outflow requests Good luck getting anything close to where those investments are marked in the fund The beneficiaries won t receive anything close to the current stated value of their pension account
If the status quo in the markets were to continue for the foreseeable future which it won t pensions funds will run out of cash to pay beneficiaries well in advance of the foreseeable future Without cutting benefits drastically or in the case of public pension funds raising taxes steeply to cover pension beneficiary outflows some public pensions will hit the wall within 12 24 months
Away from private equity investing which is just another of the many asset bubbles spawned by the Fed s near zero interest rate and money printing policy by the way the Fed unbeknownst to many is still printing money Wall Street has been busy stuffing a plethora of high fee generating asset backed investment securities into the market These securities exploit the need by pensions to generate much higher investment income When you hear the term reach for yield think pigs are greedy hogs get slaughtered These securities are hog food
The only problem is that interest rates are so low now that the risk embedded in the underlying asset pools are much greater than the interest rate compensating the investor for buying these securities Ratings agency fraud is also present again This is another instance of the current period of financial insanity rhyming with the Wall Street fueled insanity that led to the 2008 financial collapse
A perfect example is the latest brain child of Wall Street in which the payables from cell phone bills the mobile carrier s receivables are packed into pools and Verizon Communications Inc NYSE VZ is the first to do a deal like this It s receivables from cell phone bills were packaged into bonds received a triple A rating and were priced at 55 basis points over the benchmark triple A corporate index That means it was issued around a 2 67 yield
Think about this way would you lend money to a stranger to pay his cellphone bill in exchange for receiving the amount you loaned plus receive a 2 67 annualized rate of interest on the loan next month There s a reason the bonds were priced at 55 basis points over standard triple A bond If the implied reason were apparent to all the bonds would be yielding substantially more Eventually that reason will come to light and the bonds will tank in price
The Dallas police and firemen had the right instinct if you are eligible contact your pension administrator and demand to receive any pension money that can claw out of fund now Your alternative is to face substantial payment cuts at some point Eventually your fund will collapse and you will otherwise receive nothing more than an Oops Our Bad letter from your pension fund |
VZ | Verizon could explore Yahoo s Internet business CFO says | By Kshitiz Goliya and Malathi Nayak Reuters Verizon Communications Inc s N VZ chief financial officer Fran Shammo said the No 1 U S wireless carrier could look at buying Yahoo Inc s O YHOO core business which includes Mail its news and sports sites and advertising technology if it is a good fit If we see there is a strategic fit and it makes sense for our shareholders and we can return value I mean we ll look at it but at this point it s way too premature to talk about that one Shammo said Verizon s Shammo was speaking at the UBS annual global media and communications conference in New York on Monday Yahoo s board and investors have not decided what they re going to do with that asset Shammo said I think right now they are trying to figure out exactly what they are going to do Earlier this year Verizon bought AOL Inc in a 4 4 billion deal to push into targeted advertising and mobile video In October it launched an ad supported mobile video streaming service go90 targeted at millennials to tap new revenue Yahoo declined to comment
Yahoo s board met on Friday in the third and final day of meetings to consider various options for company including selling its struggling Internet business Yahoo s search and display ad businesses which account for the lion s share of its total revenue have been struggling and Chief Executive Marissa Mayer s efforts to revive the businesses have yielded little results Activist investor Starboard Value LP asked Yahoo last month to drop plans to spin off its stake in Alibaba Group Holding Ltd N BABA due to tax concerns and instead urged the company to sell its core business |
VZ | Yahoo will not spin off Alibaba stake weighs core business sale CNBC | SAN FRANCISCO BENGALURU Reuters Yahoo Inc O YHOO is weighing a sale of its core Internet business and will not sell its stake in Chinese e commerce firm Alibaba Group Holding Ltd N BABA CNBC reported with an announcement coming as soon Wednesday The moves represent a stark rejection of Chief Executive Officer Marissa Mayer s plan to sell the 30 billion Alibaba stake and to revive Yahoo s core Internet unit focusing on growing mobile video and social media ads Yahoo could not immediately be reached for comment Its shares rose more than 2 percent in after hours trading Alibaba s shares rose 1 3 percent Yahoo s core business consists of selling search and display ads on its popular news and sports sites email service and products like Tumblr Yahoo is also considering what to do with its stake in Yahoo Japan T 4689 according to the CNBC report Yahoo owns 35 percent of that company worth about 8 5 billion at current exchange rates The CNBC report on Tuesday which cited unnamed sources did not disclose a possible sale price for the core Internet unit Analysts and bankers have estimated it could fetch between 2 billion and 8 billion with many seeing 4 billion as the likely price but some regard its value as less than zero The CNBC report indicated the sale process could take a year or more But one analyst Robert Peck with SunTrust said he expected the company to expedite the process Three to six months is reasonable he said depending on who acquires it After such a sale all that would be left essentially would be the Alibaba and Yahoo Japan stakes This is absolutely a step in the right direction said Neil Doshi an analyst at Mizuho Securities USA We d much rather see Yahoo either spin off or potentially sell the core and have a tax liability on a smaller piece than have it on the larger Alibaba piece Private equity media and Internet firms are potential buyers On Monday the chief financial officer of Verizon Communications Inc N VZ said the No 1 U S wireless carrier could look at buying Yahoo s core business but made no mention of a price AN END TO TECH ROLE The latest report followed a three day meeting of Yahoo s board of directors last week which concluded on Friday Yahoo has faced pressure from activist investor Starboard Value LP to sell the core business rather than proceed with the planned spin off of its stake in Alibaba which could trigger large tax payments In January announcing the Alibaba plan Mayer said the deal would be tax free but the U S Internal Revenue Service has declined to verify that Taxes related to the spin off could leave Yahoo shareholders on the hook for 12 billion This was really a really good PR move by Starboard as the spinoff was highly unlikely anyway given the tax implications and they knew they could claim victory once Yahoo made the official announcement said Jim Osman of The Edge Consulting Group a research firm that advises activist hedge funds The sale of the company s core Internet business would effectively end Yahoo s role as a key U S tech company and be a recognition that Mayer s efforts to revive the businesses have yielded few results But Doshi of Mizuho Securities said that was not necessarily a defeat for Mayer
This is a potential win win for Marissa Doshi said She can sell the company and have a graceful exit or she can be part of a larger company or private equity team and still continue to run the business |
VZ | New York attorney general solicits help from the public in broadband probe | By Sarah N Lynch WASHINGTON Reuters New York Attorney General Eric Schneiderman invited the public on Sunday to test the speed of their Internet and submit the results online as part of an ongoing probe into whether large providers may be short changing customers with slower than advertised speeds The office launched an investigation into Verizon Communications Inc N VZ Cablevision Systems Corp N CVC and Time Warner Cable Inc N TWC in October over the issue Schneiderman s office sent the three companies letters asking for a variety of information including copies of any tests they have done on Internet speeds and copies of the disclosures they have made to their customers On Sunday Schneiderman said he wanted feedback from the public to assist with the investigation He announced his office has created a new online broadband test on a site called Internethealthtest org that will capture a customer s throughput or the speed at which customers actually access Internet content After the test is completed he said he wants customers to submit a screenshot of the results and fill out an online form New Yorkers should get the Internet speeds they pay for Too many of us may be paying for one thing and getting another Schneiderman said in a statement The ongoing investigation is particularly focused on so called interconnection arrangements or contractual deals that Internet service providers strike with other networks for the mutual exchange of data In the October letters Schneiderman s office said it was concerned that customers paying a premium for higher speeds may be experiencing a disruption in their service due to technical problems and business disputes over interconnection agreements All three companies have previously said they are confident in their Internet speeds and will work with the attorney general s office to provide the information requested and assist in the investigation |
VZ | Some Yahoo investors want to sell Internet business even if it triggers big tax bill | By Deborah M Todd and Michael Flaherty Reuters Several major Yahoo O YHOO Inc shareholders are so concerned the company s core Internet business could fall in value that they want it sold as soon as possible The shareholders said they would prefer that than wait for Yahoo to go through with its plan to seek a tax free spin off of the operation which includes Yahoo s sports and news sites as well as its popular email service Reuters reviewed a letter sent to the Yahoo board by one major shareholder and spoke to people with knowledge of the views of others with significant stakes The investors argue that it would be better to take an additional tax hit now rather than owning shares in a spin off that may have lost significant value later Yahoo s stock has fallen 36 percent over the last year making investors nervous about the risk of a further big decline Some are also concerned that the Internal Revenue Service may challenge the tax free status which could leave shareholders with a big tax bill anyway The IRS helped to kill off a previous Yahoo plan to spinoff its stake in Chinese ecommerce giant Alibaba N BABA Group Holding Ltd by declining to issue a ruling endorsing its tax free nature That would have left Yahoo vulnerable to an IRS challenge to the status at a later date WROTE TO BOARD TWICE The pressure on Yahoo s management and board has increased since November when Starboard Value LP which owned 0 75 percent of Yahoo as of Sept 30 making it the company s 23rd largest shareholder called for the sale of the company s main business instead of the Alibaba spinoff Yahoo in December abandoned plans to spin off the Alibaba stake and announced it would instead spinoff its other assets including its stake in Yahoo Japan into a new company Now that new strategy is also being questioned Canyon Capital Advisors the 30th largest shareholder wrote to the Yahoo board twice in December and demanded that it explore an immediate sale of the company according to a Dec 11 letter reviewed by Reuters Canyon with a 0 60 percent stake in the company as of Sept 30 said in one letter that a year is too long to wait for a spinoff Mason Capital Yahoo s seventh largest shareholder is also pushing for an immediate sale according to people familiar with the matter Some shareholders have expressed doubts for much of the past year about whether CEO Marissa Mayer has a robust plan to revive the struggling Internet media business I don t think the market s going to give any bump in value as long as the current management is in place said Eric Jackson managing director of SpringOwl Asset Management LLC SpringOwl which hasn t disclosed the size of its stake has pushed for Mayer s removal These investors criticize Mayer for what they say were a series of ineffective acquisitions and her inability to stem the continued decline in the value of the Internet media business as reasons to replace her But some analysts have said it is unclear if anyone could have done a better job under the circumstances Yahoo hasn t publicly responded to critics and declined to comment for this story A person familiar with the matter told Reuters that Mayer has the support of Yahoo s board and will be given time to carry out the spinoff When the spinoff was announced Mayer said the company was working on a plan to revitalize the core business that would be announced early this year The company has yet to provide details of the plan VERIZON INTEREST A person familiar with Starboard s thinking said the activist hedge fund estimates the main operation could be worth around 5 billion to a strategic buyer with a projected tax bill of around 1 billion a hit it views as the cost of obtaining maximum value from the division Another shareholder in the top 10 who did not want to be named had a slightly lower estimate of the tax hit of between 400 million and 800 million depending on the sale price SunTrust analyst Robert Peck said it would be possible to sell the business within three to six months Fran Shammo the chief financial officer of U S telecommunications company Verizon Communications Inc N VZ told a media conference in New York in early December that it could be interested and analysts say media and private equity firms may be as well Uncertainty about the tax status of a spinoff is weighing on the investors Investors are far from convinced by management s interpretation of the law and the advice they ve been given said Pivot Research analyst Brian Wieser In September the IRS said it will no longer issue so called private letter rulings to companies seeking guidance on the taxable nature of spinoffs before they happen which means Yahoo will not know if the spinoff meets the criteria to be tax free until after it occurs When asked specifically about Yahoo IRS spokesman Dean J Patterson said Federal law prohibits the IRS from discussing specific taxpayers The person familiar with Starboard s thinking says one disastrous scenario would see the value of the Internet business falling for a year while the company fails to get a clear tax ruling
Another worry the IRS challenges the spinoff Yahoo appeals and has to make financial disclosures in court that hurt the stock and a verdict isn t reached for at least another year said Don Williamson of American University s Kogod Tax Center |
CSCO | 5 Top Picks To Tap Momentum In Wireless Equipment Space | The United States is progressing well to lead the world in 5G the next generation of wireless connectivity which will enable faster speeds and low latency wireless broadband services Although 5G network is not likely to replace existing 4G standards on a large scale before 2020 several telecom behemoths are expected to launch 5G smartphones in 2019 As wireless service providers ramp up investments in 5G network wireless equipment makers are set to benefit significantly Consequently shares of wireless equipment manufacturers are also flourishing Year to date the wireless equipment industry has gained more than 19 surpassing the market s benchmark S P 500 Index s gain of 15 2 Trump s America Must Win Race BeginsOn Apr 12 President Donald Trump and the FCC unveiled several initiatives to accelerate 5G wireless network deployment in the United States Trump said The race to 5G is on and America must win Per Reuters the global 5G wireless market size will reach 1 271 billion by 2025 Per Reuters the market is forecast to grow more than 49 1 over the 2018 2025 period DELOITTE Global has predicted that 25 telecom operators will launch 5G in 2019 and 26 others will follow suit in 2020 About 20 vendors will launch 5G enabled smartphones in 2019 and over 1 million 5G handsets are likely to be shifted this year The FCC auctioned 1 550 MHz spectrum for commercial use of 5G wireless network Furthermore the regulator is going to auction a massive 3 400 MHz of new spectrum in the Upper 37 GHz 39 GHz and 47 GHz spectrum bands Additionally the FCC is set to create 20 4 billion Rural Digital Opportunity fund to provide high speed broadband connection to 4 million homes and business enterprises in rural areas National Security Concerns Dominate Telecom SpaceAlthough President Trump reiterated that 5G initiatives should be private sector led instead of a government developed shared network proposed earlier national security will be the key issue for the government On May 15 Trump issued an executive order declaring a national emergency preventing domestic corporates from using information and communications technology equipment from sources as this poses an unacceptable risk to the national security of the United States Accordingly the Department of Commerce banned Chinese telecom behemoth Huawei Technologies and its affiliates to do business with U S companies President Trump has given enough indication that his administration will take special interest in the functioning of the telecom industry U S companies that rely on low cost Chinese imports are unhappy about the move as it will raise prices of high tech equipment and several electronic products for the telecom sector However the ban on Chinese equipment will certainly help U S and European wireless equipment manufacturers Our Top PicksAgainst this backdrop we have narrowed down our search to five U S wireless equipment stocks each carrying either a Zacks Rank 1 Strong Buy or 2 Buy and having strong growth potential You can see The chart below shows price performance of our five picks year to date LM Ericsson BS ERICAs NASDAQ ERIC provides information and communications technology solutions for wireless service providers It operates through four segments Networks Digital Services Managed Services and Emerging Business and Other The company has expected earnings growth of 1 167 7 for the current year The Zacks Consensus Estimate for the current year has improved by 18 8 over the past 60 days The stock sports a Zacks Rank 1 ADTRAN Inc NASDAQ ADTN provides networking and communications equipment worldwide It operates through two segments Network Solutions and Services Support The company has expected earnings growth of 197 1 for the current year The Zacks Consensus Estimate for the current year has improved by 126 7 over the past 60 days The stock sports a Zacks Rank 1 PCTEL Inc NASDAQ PCTI designs and manufactures precision antennas which are used primarily in small cells enterprise Wi Fi access points fleet management and transit systems and in equipment and devices for the Industrial IoT The company has expected earnings growth of 675 for the current year The Zacks Consensus Estimate for the current year has improved by 187 5 over the past 60 days The stock flaunts a Zacks Rank 1 Cisco Systems Inc NASDAQ CSCO designs manufactures and sells Internet Protocol based networking and other products related to the communications and information technology industry worldwide The company has expected earnings growth of 18 5 for the current year The Zacks Consensus Estimate for the current year has improved by 0 7 over the past 60 days The stock carries a Zacks Rank 2 Ubiquiti Networks Inc NASDAQ UBNT develops networking technology for service providers enterprises and consumers It focuses on three principal technologies including high capacity distributed Internet access unified information technology and consumer electronics for home and personal use The company has expected earnings growth of 32 3 for the current year The Zacks Consensus Estimate for the current year has improved by 4 7 over the past 60 days The stock carries a Zacks Rank 2 Will you retire a millionaire One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
CSCO | Here s Why Cisco Systems CSCO Is A Great Momentum Stock To Buy | Momentum investing revolves around the idea of following a stock s recent trend in either direction In the long context investors will be essentially be buying high but hoping to sell even higher With this methodology taking advantage of trends in a stock s price is key once a stock establishes a course it is more than likely to continue moving that way The goal is that once a stock heads down a fixed path it will lead to timely and profitable trades
While many investors like to look for momentum in stocks this can be very tough to define There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance The Zacks Momentum Style Score part of the Zacks Style Scores helps address this issue for us
Below we take a look at Cisco Systems NASDAQ CSCO which currently has a Momentum Style Score of B We also discuss some of the main drivers of the Momentum Style Score like price change and earnings estimate revisions
It s also important to note that Style Scores work as a complement to the Zacks Rank our stock rating system that has an impressive track record of outperformance Cisco Systems currently has a Zacks Rank of 2 Buy Our research shows that stocks rated Zacks Rank 1 Strong Buy and 2 Buy and Style Scores of A or B outperform the market over the following one month period
You can see the current list of Zacks 1 Rank Stocks here
Set to Beat the Market
Let s discuss some of the components of the Momentum Style Score for CSCO that show why this seller of routers switches software and services shows promise as a solid momentum pick
A good momentum benchmark for a stock is to look at its short term price activity as this can reflect both current interest and if buyers or sellers currently have the upper hand It is also useful to compare a security to its industry as this can help investors pinpoint the top companies in a particular area
For CSCO shares are up 7 5 over the past week while the Zacks Computer Networking industry is flat over the same time period Shares are looking quite well from a longer time frame too as the monthly price change of 9 78 compares favorably with the industry s 1 59 performance as well
While any stock can see a spike in price it takes a real winner to consistently outperform the market Shares of Cisco Systems have increased 7 13 over the past quarter and have gained 29 97 in the last year In comparison the S P 500 has only moved 4 24 and 5 78 respectively
Investors should also take note of CSCO s average 20 day trading volume Volume is a useful item in many ways and the 20 day average establishes a good price to volume baseline a rising stock with above average volume is generally a bullish sign whereas a declining stock on above average volume is typically bearish Right now CSCO is averaging 21 262 252 shares for the last 20 days
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions in addition to price changes Please note that estimate revision trends remain at the core of Zacks Rank as well A nice path here can help show promise and we have recently been seeing that with CSCO
Over the past two months 12 earnings estimates moved higher compared to 1 lower for the full year These revisions helped boost CSCO s consensus estimate increasing from 3 06 to 3 08 in the past 60 days Looking at the next fiscal year 9 estimates have moved upwards while there have been 1 downward revision in the same time period
Bottom Line
Taking into account all of these elements it should come as no surprise that CSCO is a 2 Buy stock with a Momentum Score of B If you ve been searching for a fresh pick that s set to rise in the near term make sure to keep Cisco Systems on your short list |
CSCO | Global Equities Hold On To 2019 Gains As Headwinds Build | Economic and political risks appear to be rising but the global stock market remains resilient in terms of maintaining a strong year to date performance based on an exchange traded fund Within the major components of this global ETF proxy however lies a dramatic evolution of leaders and laggards in recent weeks
From a top down perspective the 2019 rally appears relatively steady and is holding on to nearly all of this year s gains via Vanguard Total World Stock NYSE VT which is up 14 1 year to date through yesterday s close June 11 Note that VT s increase this year eclipses all but two of the major equity regions only Eastern Europe Russia Central and Eastern Europe Fund NYSE CEE and US stocks via SPDR S P 500 NYSE SPY are posting higher gains Otherwise the remaining regions of the world are trailing VT a global benchmark this year Note CEE a closed end fund is currently the only US exchange listed portfolio targeting Eastern Europe and Russia
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Within the main components of the world stock market there s been a conspicuous rotation of leadership The formerly high flying Chinese market iShares MSCI China ETF NASDAQ MCHI has retreated over the past month plus ceding its year to date leadership to Central and Eastern Europe Fund CEE
The ongoing trade conflict between the US and China has taken a toll on China s stock market as defined by MCHI After a stellar rally in 2019 through the end of April the ETF began to hit turbulence amid rising concerns that Washington and Beijing were at loggerheads over resolving a trade dispute a dispute that appears no closer to resolution at the moment
The possibility of a meeting later this month with President Donald Trump and his Chinese counterpart Xi Jinping offers a ray of hope But as Reuters notes expectations are low for the talks between the two leaders at the upcoming G20 summit on June 28 29 in Japan The atmosphere is poisonous remarks a senior Beijing based Western diplomat
The US China trade battle is raising the risk of a worldwide economic slowdown say analysts and business leaders For example US multinational Cisco NASDAQ CSCO Systems Chuck Robbins earlier this week said My biggest fear is that what is going between the US and China may impact the global economy and desires that the US China get a reasonable resolution as soon as possible which will be good for customers and economy
If the impasse between the US and China rolls on weaker growth is a likely outcome warns Olaf Scholz the German finance minister We all hope there will be a way out of these trade tensions Because every one of us knows that our fundamental economic data are influenced by the insecurity of this situation As an indirect effect of these insecurities companies postpone their decisions to invest
A complicating factor that s come into play in recent days the Hong Kong protests which are directed against passing a bill that allows extraditions to mainland China The political unrest in the city a major financial center for the world economy is raising concerns about the future of this quasi independent city state The business and financial community is deeply concerned about what this may augur for Hong Kong says Fred Hu founder of the investment firm Primavera Capital Group
Meanwhile a momentum profile of the funds listed above continues to reflect a weaker trend generally via two sets of moving averages The first definition compares the 10 day moving with the 100 day average a measure of short term trending behavior red line in the chart below A second set of moving averages 50 and 200 days offers an intermediate measure of the trend blue line The indexes range from 0 all funds trending down to 1 0 all funds trending up Based on this data through yesterday s close the bullish climate from earlier in the year remains challenged with a softer trend But while several components of the global equity market are showing weakness the overall market via VT remains relatively resilient at least for now |
CSCO | Cisco down 5 5 on weaker outlook | Investing com Shares of Cisco Systems Inc NASDAQ CSCO fell more than 5 5 in after hours trade on Wednesday after the networking giant reported fiscal third quarter earnings that beat on both the top and bottom lines but forward guidance sagged
Cisco posted earnings of 0 60 per share on 11 94 billion in revenue against analysts expectations of earnings of 0 58 per share on 11 89 billion in revenue
The bullish earnings report was offset by a weaker than expected outlook as the networking giant said that revenue for the current quarter would decrease 4 to 6 year over year indicating total revenue of 11 9 billion to 12 1 billion below analysts forecasts of 12 5 billion
Despite the weaker forward guidance Cisco CEO Chuck Robbins said he was pleased with the progress that company is making on the multi year transformation of the business
Cisco traded at 31 96 down 5 5 in after hours trade |
VZ | T Mobile US TMUS Growth Gets A Boost From IPhone 7 Sales | On Sep 19 2016 we issued an updated research report on U S wireless carrier T Mobile US Inc NYSE T The company has been witnessing robust customer addition recently particularly in the branded postpaid segment T Mobile US wireless service business model relies on its Un Carrier value proposition and strategic marketing efforts Owing to the success of Un carrier initiatives and aggressive promotional activities the company continues to gain postpaid wireless customers Management has raised the subscriber expansion outlook for 2016 based on this performance Moreover persistent launch of low priced service plans should lure subscribers away T Mobile US competitors including Verizon Communications Inc NYSE VZ AT T Inc NYSE T and Sprint Corp NYSE S Further T Mobile US unveiled an attractive plan that allows owners of the iPhone 6 and 6s to exchange their devices for the new iPhone 7 under a new contract with no upfront fee This has resulted in massive iPhone 7 and iPhone 7 Plus sales along with the gain of new subscribers at the company RisksWhile the top line and subscriber growth remain solid T Mobile is yet to see an improvement in its bottom line numbers Notably costs incurred to gain customers and increase revenues have not rewarded shareholders yet Additionally the U S wireless market is highly competitive and almost saturated Such intense competition could limit the company s ability to attract and retain customers which in turn would adversely affect its results Also success in the wireless service business largely depends on technical superiority quality of services and scalability representing areas in which T Mobile US is yet to match with Verizon and AT T T MOBILE US INC Price
T Mobile US currently has a Zacks Rank 3 Hold You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Sprint revenue misses estimates | Investing com Sprint N S the fourth largest U S wireless carrier reported quarterly revenue well below estimates as more customers shift to monthly leasing plans from traditional two year contracts
The company in the middle of a turnaround plan also said it expected fiscal 2015 adjusted earnings at the lower end of its previously forecast range of 7 2 to 7 6 billion dollars
The shift to monthly leasing plans has resulted in increased cash burn as Sprint needs to pay upfront for mobile devices but gets paid only monthly by subscribers
Sprint said on Sunday it would cut additional jobs and costs as part of its plan to slash fiscal 2016 expenses by as much as two and a half billion dollars
The company is locked in a price war with rivals Verizon N VZ AT T N T and T Mobile US O TMUS which are going after each others subscribers with promotions that have hit profits in the industry |
VZ | Verizon signs content deal with NBA for video streaming app Go90 NYT | Reuters Verizon Communications Inc N VZ signed a deal with the National Basketball Association to bring daily league highlights to Verizon s new mobile video streaming app Go90 the New York Times reported on Wednesday The deal which is expected to be announced Wednesday morning will also bring new original series and give GO90 access to some live games the paper said With the agreement Verizon will now be the official wireless provider of the NBA the newspaper said Also the company will become the title partner of the NBA All Star Slam Dunk contest and a partner of the NBA Draft NYT said Verizon in October launched its mobile video app GO90 with more than 8 000 titles available to users as well as over 35 exclusive original series The U S wireless carrier also said the exclusive original series count on Go90 is likely to double by year end Verizon and NBA could not be reached immediately for comment outside regular business hours
Corrects to remove the word exclusive from paragraph 1 |
VZ | U S judge rules against NSA in phone spying case | By Dustin Volz WASHINGTON Reuters A U S federal judge on Monday for the first time ordered the National Security Agency to cease collecting the phone call records of a lawyer and his firm providing an unprecedented but narrow and largely symbolic victory to privacy advocates Opponents of mass surveillance cheered the ruling by U S District Court Judge Richard Leon who granted an injunction to bar the NSA from collecting the phone metadata of California attorney J J Little and his small legal practice Unlike previous rulings against the NSA s program to vacuum up Americans call data which was exposed publicly by former NSA contractor Edward Snowden in 2013 Leon s opinion does not grant a stay meaning it will take effect immediately The decision is of little practical consequence because it is so narrow in scope in covering only Little and his firm It also comes just weeks before the NSA is scheduled to end its controversial bulk collection program in favor of a more targeted system That new regime as mandated by Congress earlier this year will become active on Nov 29 But the ruling s language is forceful and represents a win for civil liberties groups concerned that NSA surveillance is too intrusive Leon wrote that the case may be the last court evaluation of the NSA s bulk metadata collection program It will not however be the last chapter in the ongoing struggle to balance privacy rights and national security interests under our Constitution in an age of evolving technological wizardry he wrote On Twitter N TWTR Snowden cheered the historic decision as one that concluded the NSA violated Americans privacy rights Leon a conservative judge appointed by former President George W Bush has long been among the most vocal judges critical of the NSA s spying practices Leon said he did not stay his Monday decision because it has been almost two years since I first found that the NSA s bulk telephony metadata program likely violates the Constitution Other plaintiffs in the case including conservative activist Larry Klayman who began the lawsuit were not included in the ruling due to issues concerning standing A higher court previously rejected Klayman s challenge saying he could not prove his phone was targeted by the NSA as Snowden s documents only revealed customers of Verizon Business Network Services which is a subsidiary of Verizon Communications N VZ such as Little were implicated Klayman added Little to his case to address the standing concern |
VZ | Verizon CFO says reports on enterprise assets sales speculative | NEW YORK Reuters Verizon Communications N VZ Inc s CFO Fran Shammo said on Tuesday that media reports saying that the wireless provider is looking to sell some assets from its enterprise business unit were speculative and that the company will continue supporting enterprise customers Such reports are conjecture Shammo said speaking at the 2015 Wells Fargo N WFC technology media and telecom conference in New York There s no foundation behind these comments Reuters reported on Friday that Verizon is exploring a sale of its enterprise assets which could be worth as much as 10 billion including the business formerly known as MCI which provides landline and Internet services for large business customers as well as Terremark its data center unit This is part of our portfolio and we will continue to support our enterprise customers Shammo said |
CSCO | Can Science Applications SAIC Deliver A Beat In Q1 Earnings | Science Applications International Corporation NYSE SAIC is set to report first quarter fiscal 2020 earnings on Jun 6 The company s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters the average being 18 99 In the last reported quarter the company delivered earnings of 1 17 per share which beat the Zacks Consensus Estimate of 89 cents but declined 15 year over year Revenues rose 6 from the year ago quarter to 1 19 billion and also outpaced the Zacks Consensus Estimate of 1 18 billion For the fiscal first quarter the Zacks Consensus Estimate for revenues is pegged at 1 61 billion indicating a 36 84 improvement from the year ago reported figure For earnings the consensus estimate stands at 1 18 suggesting a rise of 4 42 from the prior year reported number Let s see how things are shaping up prior to this announcement Factors to ConsiderScience Applications upcoming quarterly results are likely to benefit from higher orders in supply chain and continued contract wins The company s capability to sustain its existing contracts coupled with the newly awarded ones across the customer portfolio is likely to remain a tailwind During the quarter under review the company secured a 37 million and a 57 million task order as part of the Seaport e program Moreover NASA awarded the company the Safety and Mission Assurance Engineering Contract II worth up to 292 million Further Science Applications was awarded a position on the multiple award 535 million IT Services contract for the Defense Threat Reduction Agency The company s top line is also likely to be driven by the acquisition of Engility which yielded 98 million in the last reported quarter Science Applications International Corporation Price and EPS Surprise What the Model SaysThe quantitative Zacks model conclusively suggests that a company with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold has significant chances of beating estimates if it also has a positive Zacks Rank 4 Sell or 5 Strong Sell stocks are best avoided You can uncover the best stocks to buy or sell before they re reported with our Science Applications currently has a Zacks Rank 3 which increases the predictive power of ESP and an Earnings ESP of 2 82 in the combination shows that the company is likely to beat estimates this quarter to be reported Other Stocks to ConsiderHere are a few other stocks worth considering as our model shows that these too have the right combination of elements to beat on earnings in the upcoming releases Gogo Inc NASDAQ GOGO has an Earnings ESP of 2 37 and a Zacks Rank 2 You can see Cisco Systems Inc NASDAQ CSCO has an Earnings ESP of 0 26 and is a 2 Ranked stock EPAM Systems Inc NYSE EPAM has an Earnings ESP of 0 06 and a Zacks Rank of 2 Today s Best Stocks from Zacks Would you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
CSCO | Gigamon shares jump as activist investor Elliott takes stake | By Liana B Baker and Laharee Chatterjee Reuters Shares in network software company Gigamon Inc jumped as much as 20 percent on Monday after activist investor Elliott Management reported a 15 3 percent stake and said it would speak to management about undergoing a strategic review process Elliott said in a regulatory filing that Gigamon shares are significantly undervalued and it intends to encourage the company to explore options including a potential sale according to the filing Gigamon makes software installed in large data centers that helps the flow of traffic and prevents bottlenecks Some of its competitors have been acquired in recent months such as Ixia which Keysight Technologies Inc announced in January it would buy for 1 6 billion Gigamon based in Santa Clara California went public in 2013 Elliott Management a hedge fund led by Paul Singer now Gigamon s top shareholder said it may also suggest potential changes in the company s operations and management among other possible moves Paul Hooper has been Gigamon s chief executive since 2012 A smaller hedge fund called Foglamp Capital said in a statement provided to Reuters that the strategic review process that Elliott Management has recommended should unlock significant value Foglamp managing partner Wasif Khan said that Gigamon made up 15 percent of its fund Other test and measurement companies and networking switch companies such as Cisco Systems Inc NASDAQ CSCO could be potential buyers for Gigamon as well as private equity firms according to Stifel analyst Patrick Newton Private equity firms targeted Ixia when it was in sales talks Newton added in a research note Cisco could not immediately be reached for comment Gigamon is latest addition to a long list of enterprise technology companies that Elliott has pushed to explore a sale Many companies it has targeted such as Mentor Graphics Lifelock Inc and Qlik Technologies have ended up being acquired by strategic or private equity buyers Elliott s broad range of investments across the tech industry is overseen by portfolio manager Jesse Cohn who also leads its private equity investing arm Evergreen Two weeks ago Gigamon reported a loss of 2 23 million for the first quarter compared with profit of 2 97 million a year earlier Gigamon stock had fallen about 23 percent this year through last Friday On Monday shares jumped 6 20 or 17 7 percent to close at 41 20 |
CSCO | BMO rings the register on Cisco shares down 0 65 premarket | With Cisco NASDAQ CSCO nearing its 37 price target BMO downgrades to Market Perform from Outperform Shares are up nearly 14 this year and just shy of 30 Y Y They re lower by 0 65 premarket to 34 07 Now read |
CSCO | Wall St higher as oil surges | Investing com U S stocks were higher Monday led by commodity linked stocks as oil surged The DJI was up 0 34 at 10 30 ET The S P 500 added 0 48 The tech heavy Nasdaq composite added 0 33 Oil jumped after Saudi Russian backing for an extension of a deal to cut output by major producers The dollar index retreated as the odds of a Fed rate hike in June fell below 70 Investors were assessing the implications of massive cyber attacks NASDAQ Cisco was up 2 39 at 34 25 on perceived increased demand for cyber security services |
VZ | Telecom Carriers On Expansion Spree Don t Miss Out | Telecommunications is one of the few industries to have undergone rapid technological improvement even during the recession An era of digitization and technology has essentially been built on the very human need to remain connected It is in this context that telecommunications comes to the fore as a necessary utility The rising demand for technologically superior products has given a silver lining to the telecom industry in an otherwise tough environment
Geographical Expansion
Cutting across barriers has become common among telecom players The objective is to offer better service and customer convenience In Feb 2015 AT T Inc NYSE T T launched a service which allows its prepaid GoPhone customers on 60 data plans the benefit of unlimited calling from the U S to Mexico without any additional charge The company s postpaid customers on World Connect Value plans can also avail unlimited calls to Mexico with a 5 add on
Meanwhile T Mobile US Inc TMUS introduced an innovative Mobile Without Borders plan through which its subscribers will be able to make calls to Canada and Mexico without paying any roaming charges America Movil S A B AMX has also unveiled a pan North American roaming charge free calling facility covering Mexico and the U S which will be extended further to Canada
In Apr 2015 Sprint Corp s S prepaid service division Boost Mobile launched an unlimited voice call and text message service plan to enhance connectivity between U S citizens and their friends and family in Cuba
In Mar 2016 Verizon Partner Solutions a division of U S telecom behemoth Verizon Communications Inc NYSE VZ VZ entered into an agreement with Cuba s state run telecommunications company Empresa de Telecomunicaciones de Cuba ETECSA to offer direct roaming mobile interconnection services between the two countries Notably in Sep 2015 Verizon became the first U S telecom operator to offer roaming wireless services in Cuba
AT T recently entered into an agreement with Cuba s ETECSA to offer direct roaming mobile interconnection services between the two countries With this agreement AT T customers will soon be able to connect through talk text and data while in Cuba The date of commencement and pricing of these services will be declared later on
Strong Dividend Growth
Telecom companies offer one of the highest dividend yields in the U S economy The dividend yield measured as dividends paid by a company in the last 12 months relative to its share price is currently around 5 for the telecom sector compared with a mere 2 approximately for the benchmark S P 500 index
Unlike other industries U S telecom operators generate their revenues predominantly in the country This makes these stocks less susceptible to volatility in the foreign exchange rate as well as macro economic fluctuations plaguing the rest of the world We believe the strong dividend yield momentum will continue as the U S economy slowly stabilizes
OpportunitiesThe telecommunications industry as a whole offers a number of positives that are difficult to disregard from the standpoint of investors Immune to External Disturbances A major characteristic of the telecommunications industry is that it is immune to any international geo political disturbance even when it leads to economic fluctuations Thus the ongoing sovereign debt crisis in Europe the slowdown in China or other non U S economic volatility is not expected to have any immediate impact on the industry Barriers to Entry The lack of public airwaves spectrum in the telecommunications industry creates a high barrier to entry The U S telecom market is controlled by just four national players as regional low cost operators are not eligible to compete with large carriers Furthermore it is not easy for a new telecom carrier to establish itself in the market as it requires government approval to transmit voice data and video on public airwaves Spectrum licenses are limited and are therefore quite expensive Moreover the deployment of network infrastructure requires significant capital expenditure which very few entities can afford Thus this barrier protects the profits of incumbents in the telecom space Strong Demand A recovering economy speeds up the demand for real time voice data and video manifold The escalation in demand has encouraged telecom service providers to undertake large network extensions while upgrading plans Moreover the FCC projects mobile data demand to grow 25 50 folds over the next five years |
VZ | U S Telecom Pricing War Regulatory Control Major Concerns | Technological invention and innovation at a rapid pace have resulted in significant competition within the telecommunications industry Product life cycle and upgrade cycle have gone down drastically with several firms coming out with new versions of products and services back to back within a short span of time To combat competition firms are thus increasingly looking at consolidation This has resulted in an array of mergers and acquisitions in the telecom space
To add to that the Federal Communications Commission s FCC net neutrality laws have made matters worse for telecom operators Besides several ISPs Internet Service Providers are in a tight spot over the FCC s orders pertaining to increased upload and download speeds of Internet service termed broadband
Stiff Competition
In the meantime the U S telecom market continues to witness intense pricing competition The two industry behemoths namely Verizon Communications Inc NYSE VZ VZ and AT T Inc NYSE T T at present command around 68 of the U S wireless market whereas Sprint Corp S and T Mobile US Inc TMUS jointly control the remaining 32 These two relatively smaller firms are now bringing on board several low priced value added products to entice customers away from their larger peers In 2015 both Sprint and T Mobile US added a substantial number to its customer base
On the video services front the pay TV industry is facing severe competitive threats from low cost online video streaming service providers Cord cutting has become a regular phenomenon in the country with over the top video operators offering smaller packages of channels designed according to a customer s need at dirt cheap prices Established pay TV operators are now opting for the more customer friendly Internet TV service in order to counter the threat
Net Neutrality A Major Concern
Net neutrality implies an open Internet atmosphere which will prohibit ISPs especially telecom and cable TV operators from discriminating against applications In order to control the flow of bandwidth consuming applications such as video streaming the ISPs have been discriminating against several web based content and applications Content developers thus have to pay heavy sums to ISPs for accelerated data transfer
Notably the latest regulations will be applicable to both mobile and fixed broadband networks The enforcement of the new law will ban common ISP malpractices such as data traffic blocking slowing down data traffic and paid prioritization Notably paid prioritization is a method through which content developers strike deals with ISPs for quick and smooth transmission of their data traffic The FCC will closely monitor and put a check on all such deals in the future Moreover the FCC will also supervise interconnection deals in which content developers pay ISPs to connect to their networks
Notably on Jan 29 2015 the FCC increased the download and upload speeds of Internet services to be deemed as broadband high speed data In a majority voting the FCC raised the new threshold download speed to 25 Mbps from the existing 4 Mbps while the same for upload has been boosted to 3 Mbps from the current 1 Mbps
FCC to Control BDS Market Pricing
The Business Data Services BDS market where telecom and cable MSOs provide host of different network related services to business entities of different sizes have been a lucrative source of revenues in the recent years for telecoms and cable MSO s More significantly these service providers have been making handsome revenues from the small and medium businesses by often charging them high price
As per Consumer Federation of America such trend has led to overcharging of services to the tune of 75 billion in the past five years Consequently the FCC has proposed rules to regulate pricing in the market citing low competition However such proposals have been criticized by the industry players and several industry organizations
WeaknessesIn general telecommunications companies under pressure have high debt levels and large financial leverage ratios Moreover they are often unable to cope with recent market trends Other risks that pose threats are as follows Potential Business Slowdown Sales fluctuations of carriers are expected to continue to weigh on capital spending decisions a major problem faced by equipment vendors The companies are expected to retain focus on improving their balance sheets financial discipline and free cash flow generation Product Overlapping We may see more product sharing deals between telecom cable TV and satellite TV operators as each of these players are vying to grab a sizeable share in each other s territory Even pay TV services offerings to business enterprises mobile backhaul and metro Ethernet segments may observe more convergence Mobile phone makers are now progressively offering tablets and chipset manufacturers are providing chips for personal computers as well as mobile devices thus frequently interchanging their areas of operations Intensified Competition Technological upgrades and breakthroughs have resulted in cutthroat price competition Product life cycle and upgrade cycle have been reduced drastically as several firms are coming up with new products and services within a short span of time Increasing competition is compelling players to offer heterogeneous and bundled services to retain their position in the space |
VZ | Zacks Industry Outlook Highlights T Mobile US America Movil S A B Sprint And Verizon Communications | For Immediate Release
Chicago IL September 08 2016 Today Zacks Equity Research discusses Telecom part 2 including T Mobile US Inc America Movil S A B Sprint Corp and Verizon Communications Inc NYSE VZ
Industry Telecom part 2
Link
Telecommunications is one of the few industries to have undergone rapid technological improvement even during the recession An era of digitization and technology has essentially been built on the very human need to remain connected It is in this context that telecommunications comes to the fore as a necessary utility The rising demand for technologically superior products has given a silver lining to the telecom industry in an otherwise tough environment
Geographical Expansion
Cutting across barriers has become common among telecom players The objective is to offer better service and customer convenience In Feb 2015 AT T Inc NYSE T launched a service which allows its prepaid GoPhone customers on 60 data plans the benefit of unlimited calling from the U S to Mexico without any additional charge The company s postpaid customers on World Connect Value plans can also avail unlimited calls to Mexico with a 5 add on
Meanwhile T Mobile US Inc introduced an innovative Mobile Without Borders plan through which its subscribers will be able to make calls to Canada and Mexico without paying any roaming charges America Movil S A B has also unveiled a pan North American roaming charge free calling facility covering Mexico and the U S which will be extended further to Canada
In Apr 2015 Sprint Corp s prepaid service division Boost Mobile launched an unlimited voice call and text message service plan to enhance connectivity between U S citizens and their friends and family in Cuba
In Mar 2016 Verizon Partner Solutions a division of U S telecom behemoth Verizon Communications Inc entered into an agreement with Cuba s state run telecommunications company Empresa de Telecomunicaciones de Cuba ETECSA to offer direct roaming mobile interconnection services between the two countries Notably in Sep 2015 Verizon became the first U S telecom operator to offer roaming wireless services in Cuba
AT T recently entered into an agreement with Cuba s ETECSA to offer direct roaming mobile interconnection services between the two countries With this agreement AT T customers will soon be able to connect through talk text and data while in Cuba The date of commencement and pricing of these services will be declared later on
Strong Dividend Growth
Telecom companies offer one of the highest dividend yields in the U S economy The dividend yield measured as dividends paid by a company in the last 12 months relative to its share price is currently around 5 for the telecom sector compared with a mere 2 approximately for the benchmark S P 500 index
Unlike other industries U S telecom operators generate their revenues predominantly in the country This makes these stocks less susceptible to volatility in the foreign exchange rate as well as macro economic fluctuations plaguing the rest of the world We believe the strong dividend yield momentum will continue as the U S economy slowly stabilizes
Opportunities
The telecommunications industry as a whole offers a number of positives that are difficult to disregard from the standpoint of investors
Immune to External Disturbances A major characteristic of the telecommunications industry is that it is immune to any international geo political disturbance even when it leads to economic fluctuations Thus the ongoing sovereign debt crisis in Europe the slowdown in China or other non U S economic volatility is not expected to have any immediate impact on the industry
Barriers to Entry The lack of public airwaves spectrum in the telecommunications industry creates a high barrier to entry The U S telecom market is controlled by just four national players as regional low cost operators are not eligible to compete with large carriers Furthermore it is not easy for a new telecom carrier to establish itself in the market as it requires government approval to transmit voice data and video on public airwaves Spectrum licenses are limited and are therefore quite expensive Moreover the deployment of network infrastructure requires significant capital expenditure which very few entities can afford Thus this barrier protects the profits of incumbents in the telecom space
Strong Demand A recovering economy speeds up the demand for real time voice data and video manifold The escalation in demand has encouraged telecom service providers to undertake large network extensions while upgrading plans Moreover the FCC projects mobile data demand to grow 25 50 folds over the next five years
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VZ | Verizon VZ 5G LTE Plans On Track Competition Rife | On Sep 7 2016 we issued an updated research report on Verizon Communications Inc NYSE VZ The company raised its quarterly dividend by 1 25 cents per share to 57 57 taking its annual dividend yield to 4 4 Notably this is the 10th consecutive year of a dividend hike by Verizon Verizon is also actively investing to expand and enhance its network footprint With the company targeting to launch the super fast 5G wireless network in 2017 it has decided to acquire and install dark fiber based network throughout its footprint in order to strengthen the existing 4G LTE network and make the transition to 5G easier Additionally Verizon has entered into an agreement with Yahoo Inc NASDAQ YHOO to acquire the core businesses of the latter for 4 83 billion This will help the company gain traction in the mobile media and advertising space On the flip side the U S wireless is almost saturated Smaller companies like T Mobile US Inc NYSE S and Sprint Corp NYSE S are aggressively launching products increasing pricing competition to a great extent Moreover the company expects its earnings to be flat on a year over year basis in 2016 as it does not foresee enough variables for growth However it expects to return to growth in 2017 Meanwhile the price transformation drive in the industry is likely to deal a heavy blow to the company in the near term The Bottom LineVerizon provides a rare mix of steady income and capital gains which make it a safe bet for investors However tepid earnings projection and intensifying competition raise caution Verizon currently has a Zacks Rank 3 Hold You can see
Interested in IPOs Check out the special edition of Zacks Friday Finish Line below where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 see
Confidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
VZ | Sprint loses bid to dismiss 300 million N Y tax fraud lawsuit | By Daniel Wiessner Reuters Sprint Corp N S must face a 300 million fraud lawsuit by New York state claiming the company deliberately failed to bill customers for taxes on its wireless services over seven years the state s top court ruled on Tuesday The Court of Appeals in a 4 1 decision rejected Sprint s claims that a 2002 state law imposing sales taxes on interstate mobile phone services violated the U S Constitution The office of Attorney General Eric Schneiderman in a 2012 lawsuit based on whistleblower information said Sprint ignored the law and failed to collect more than 100 million in taxes from New York customers The prosecutor is seeking three times that amount in damages and penalties Schneiderman said Sprint s decision not to collect and pay taxes was part of a nationwide effort by the Kansas based company to lure customers from rivals such as AT T Inc N T and Verizon Wireless N VZ and saved Sprint customers in New York 4 6 million a month The case was suspended pending the outcome of Sprint s appeal A Sprint representative said the company was disappointed with the decision Schneiderman in a statement said that when companies dodge taxes they place honest competitors at a disadvantage There has to be one set of rules for everyone no matter how rich or how powerful and that includes the biggest corporations paying their fair share of taxes he said
The case is the People v Sprint Nextel Corp New York State Court of Appeals No 127 |
VZ | Altice s customer woes in Europe stoke concern ahead of its U S foray | By Malathi Nayak NEW YORK Reuters Cable and communications company Altice NV is battling subscriber losses and investor impatience on its home turf in Europe raising concerns it could have a lot on its plate as it gears up to acquire Cablevision Systems Corp N CVC and Suddenlink Communications Inc CQUELS UL in the United States On Wednesday Altice reported worse than expected third quarter results sending shares down 10 percent Executives said they have raised spending on marketing to acquire customers and will continue at that level in coming quarters Investors are worried that Altice s French telecom unit Numericable Sfr PA has been losing mobile customers as it aggressively trims costs Altice executives attribute defections to poor network quality which they inherited from the Numericable Sfr acquisition and say they are addressing Cost cuts are at the heart of Altice s plan in the United States where it will become the No 4 cable operator if regulators approve the Cablevision and Suddenlink deals One of the dangers is that they don t just cut the fat out but also the meat and bones and that has negative consequences said Roger Entner analyst at Recon Analytics That s part of what we see in Europe the savings came first immediately and now the churn or customer defection goes up Altice declined to comment Altice shares are down over 40 percent since it announced its plans to acquire Suddenlink in May Since Altice announced its U S plans it has said it will slow acquisitions to focus on operations and debt markets it relies on to fund deals have tightened Altice aims to wring 900 million in savings from the Cablevision deal and 215 million from Suddenlink saying it can take margins close to European levels MoffettNathanson analyst Craig Moffett said there was room to trim U S spending but that Altice was taking it to an extreme You re talking about huge cuts to customer service levels to installation and maintenance costs to marketing and promotions You can t expect to be able to make dramatic cuts without having an impact on the business Altice executives have said on analyst calls that they are confident about achieving U S cost cutting goals A source close to the company said concerns about U S cost cutting were unfounded since the U S cable business was different from the combined fixed and mobile business in Europe QUAD PLAY U S executives also are divided about Altice s longer term ambition of offering bundles of home Internet and phone mobile phone and TV a so called quad play In the United States it has said it aims to buy up more cable companies and perhaps a wireless provider to offer quad play bundles That may be some time Altice Chief Executive Officer Dexter Goei this week said the company was focusing on operations and integrating the U S business after a period of intense merger and acquisitions Still Time Warner Cable Inc N TWC CEO Robert Marcus said on a Thursday earnings call that he was not convinced about the potential for such bundles in the United States In Europe there is a complete overlap of footprints of wireless and wireline providers but not in the United States Marcus said Executives at wireless company AT T Inc N T which acquired satellite TV provider DirecTV in July have said quad play bundles are an area of growth And the No 1 U S cable operator Comcast Corp O CMCSA plans to test wireless services acting on a wireless plan agreement with telecom provider Verizon Communications Inc N VZ Verizon has been divesting fixed line assets and believes customers do not want larger bundles It is focusing on building its mobile offerings Americans simply aren t clamoring for bigger more complicated and intertwined television and communications services said Tami Erwin president of Verizon s FioS business that sells TV Internet and telephone services |
CSCO | China expresses concern at revelations in Wikileaks dump of hacked CIA data | BEIJING Reuters China expressed concern on Thursday over revelations in a trove of data released by Wikileaks purporting to show that the CIA can hack all manner of devices including those made by Chinese companies Dozens of firms rushed to contain the damage from possible security weak points following the anti secrecy organization s revelations although some said they needed more details of what the U S intelligence agency was up to Widely used routers from Silicon Valley based Cisco O CSCO were listed as targets as were those supplied by Chinese vendors Huawei HWT UL and ZTE 000063 SZ and Taiwan supplier Zyxel for their devices used in China and Pakistan Chinese Foreign Ministry spokesman Geng Shuang said China expressed concern about the reports and reiterated its opposition to all forms of hacking We urge the U S side to stop listening in monitoring stealing secrets and internet hacking against China and other countries Geng told a daily news briefing China is frequently accused by the United States and other countries of hacking attacks which it always denies
The Chinese government has its own sophisticated domestic surveillance program and keeps tight control of the internet at home saying such measures are needed to protect national security and maintain stability |
CSCO | A scramble at Cisco exposes uncomfortable truths about U S cyber defense | By Joseph Menn SAN FRANCISCO Reuters When WikiLeaks founder Julian Assange disclosed earlier this month that his anti secrecy group had obtained CIA tools for hacking into technology products made by U S companies security engineers at Cisco Systems O CSCO swung into action The Wikileaks documents described how the Central Intelligence Agency had learned more than a year ago how to exploit flaws in Cisco s widely used Internet switches which direct electronic traffic to enable eavesdropping Senior Cisco managers immediately reassigned staff from other projects to figure out how the CIA hacking tricks worked so they could help customers patch their systems and prevent criminal hackers or spies from using the same methods three employees told Reuters on condition of anonymity The Cisco engineers worked around the clock for days to analyze the means of attack create fixes and craft a stopgap warning about a security risk affecting more than 300 different products said the employees who had direct knowledge of the effort That a major U S company had to rely on WikiLeaks to learn about security problems well known to U S intelligence agencies underscores concerns expressed by dozens of current and former U S intelligence and security officials about the government s approach to cybersecurity That policy overwhelmingly emphasizes offensive cyber security capabilities over defensive measures these people told Reuters even as an increasing number of U S organizations have been hit by hacks attributed to foreign governments Larry Pfeiffer a former senior director of the White House Situation Room in the Obama administration said now that others were catching up to the United States in their cyber capabilities maybe it is time to take a pause and fully consider the ramifications of what we re doing U S intelligence agencies blamed Russia for the hack of the Democratic National Committee during the 2016 election Nation states are also believed to be behind the 2014 hack of Sony Pictures Entertainment and the 2015 breach of the U S Government s Office of Personnel Management CIA spokeswoman Heather Fritz Horniak declined to comment on the Cisco case but said it was the agency s job to be innovative cutting edge and the first line of defense in protecting this country from enemies abroad The Office of the Director of National Intelligence which oversees the CIA and NSA referred questions to the White House which declined to comment Across the federal government about 90 percent of all spending on cyber programs is dedicated to offensive efforts including penetrating the computer systems of adversaries listening to communications and developing the means to disable or degrade infrastructure senior intelligence officials told Reuters President Donald Trump s budget proposal would put about 1 5 billion into cyber security defense at the Department of Homeland Security DHS Private industry and the military also spend money to protect themselves But the secret part of the U S intelligence budget alone totaled about 50 billion annually as of 2013 documents leaked by NSA contractor Edward Snowden show Just 8 percent of that figure went toward enhanced cyber security while 72 percent was dedicated to collecting strategic intelligence and fighting violent extremism Departing NSA Deputy Director Rick Ledgett confirmed in an interview that 90 percent of government cyber spending was on offensive efforts and agreed it was lopsided It s actually something we re trying to address with more appropriations in the military budget Ledgett said As the cyber threat rises the need for more and better cyber defense and information assurance is increasing as well The long standing emphasis on offense stems in part from the mission of the NSA which has the most advanced cyber capabilities of any U S agency It is responsible for the collection of intelligence overseas and also for helping defend government systems It mainly aids U S companies indirectly by assisting other agencies I absolutely think we should be placing significantly more effort on the defense particularly in light of where we are with exponential growth in threats and capabilities and intentions said Debora Plunkett who headed the NSA s defensive mission from 2010 to 2014 GOVERNMENT ROLE How big a role the government should play in defending the private sector remains a matter of debate Former military and intelligence leaders such as ex NSA Director Keith Alexander and former Secretary of Defense Ashton Carter say that U S companies and other institutions cannot be solely responsible for defending themselves against the likes of Russia China North Korea and Iran For tech companies the government s approach is frustrating executives and engineers say Sophisticated hacking campaigns typically rely on flaws in computer products When the NSA or CIA find such flaws under current policies they often choose to keep them for offensive attacks rather than tell the companies In the case of Cisco the company said the CIA did not inform the company after the agency learned late last year that information about the hacking tools had been leaked Cisco remains steadfast in the position that we should be notified of all vulnerabilities if they are found so we can fix them and notify customers said company spokeswoman Yvonne Malmgren SIDE BY SIDE A recent reorganization at the NSA known as NSA21 eliminated the branch that was explicitly responsible for defense the Information Assurance Directorate IAD the largest cyber defense workforce in the government Its mission has now been combined with the dominant force in the agency signals intelligence in a broad operations division Top NSA officials including director Mike Rogers argue that it is better to have offensive and defensive specialists working side by side Other NSA and White House veterans contend that perfect defense is impossible and therefore more resources should be poured into penetrating enemy networks both to head off attacks and to determine their origin Curtis Dukes the last head of IAD said in an interview after retiring last month that he feared defense would get even less attention in a structure where it does not have a leader with a direct line to the NSA director
It s incumbent on the NSA to say This is an important mission Dukes said That has not occurred |
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