Activision, Amazon Rise; Expedia Plummets

Activision Blizzard (ATVI) announced today that it will buy back 429 million shares of their stock from Vivendi, a French mass media company, for $5.83 billion. Once this transaction is completed, Vivendi will no longer be the majority shareholder. The company will be independent, with most of its shares owned by the public. ATVI will be led by CEO Bobby Kotick and Co-Chairman Brian Kelly. The stock jumped at this announcement, rising by more than two dollars, or fifteen percent.

Yesterday, Amazon(AMZN) reported a surprise loss of $7 million even though revenue grew 20% to $15.7 billion. This caused investors to worry about the future profitability of Amazon due to its low profit margin and growing operating costs. When the report was released after hours, the stock shed 3%. However, investors still remain optimistic about future growth prospects for the company, causing share to rise 3% by the closing bell.

Expedia(EXPE), the online travel giant, reported earnings that fell short of analyst estimates by $0.17 per share! Revenue rose 16% this quarter to $1.21 billion, which was over $50 million off the projected $1.26 billion. Earnings fell over 30% from the same quarter last year to a dismal $71.5 million. The company's earnings drop was largely due to rising expenses from its sales, marketing, and technology divisions. This indicates that the company's profit margin is shrinking rapidly, and may force management to take cost-cutting measures. Over eight analysts downgraded the company, prompting shares to drop nearly 30% and making it one of the largest movers on the Nasdaq. Expedia still maintains a healthy $800 million in cash, which might not last if the company continues to face growth in operating expenses.
     

Sources:
The Wall Street Journal
Yahoo! Finance

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Zynga and Amazon Post Losses, Shares Plunge

July 25, 2012
        Amazon(AMZN) shocked investors Thursday night, reporting a net loss even though revenue increased. During the same quarter last year, the company reported earnings of $7 million. This quarter, the company lost $7 million. Overall, revenue rose over 20% to $15.7 billion, which just missed average expectations by $30 million. Amazon has generally had a low profit margin, with the number often dropping into negative territory. This was not helped by the fact that the company’s operating expenses rose 23%, mirroring its revenue growth to an astounding $15.63 billion. The weak earnings may have been due to rising costs in technology and online streaming.

        Due to the fact that Amazon often reinvests revenue into company growth, these numbers can’t always be used to assess future growth. With nearly $4 billion in cash after the calculation of debt, investors have nothing to worry about yet. Amazon’s expectations for revenue for the next quarter lie in the $15-17 billion range, indicating that the company should be able to keep up its growth rate. The fact that it has not been profitable scared off loyal investors, sending shares down $7, or nearly 3%. AMZN is up 40% this year.

        Zynga(ZNGA) reported a loss of $0.01 per share, much less than the $0.04 analysts expected it to lose. Its quarterly revenue came in at $231 million. This is over 30% less than the amount it pulled in during the same quarter last year. Similarly, its number of monthly users decreased by nearly 20 million as users are quickly transferring over to apps and mobile gaming. Many smaller developers have come up with more addicting games, such as Candy Crush(which boasts an impressive 35 million players daily). Zynga has also had a change of management this month, recruiting Microsoft Xbox manager Don Mattrick as CEO in hopes of a turnaround. Zynga also decided to exit the online gambling industry, therefore forfeiting huge potential profits. The company shot up over 10% during market hours, following Facebook's lead, but quickly dropped after hours once its earnings report was released. CEO Marttick has stated that the next few quarters for Zynga may be shaky, sending shares down 14%.

Sources:

Associated Press
Reuters

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Facebook, Boston Scientific, Zynga, Qualcomm Rise; Crocs Plummets

July 25, 2013
        Facebook (FB) leaped upwards by more than eight dollars, or 31%. This was due to an extremely positive earnings report, which showed massive growth in advertising revenue. New types of advertisements that are placed into users' feeds have caused the number of clicks to skyrocket. The company's advertising revenue went up by 61 percent versus a year ago, reaching $1.6 billion. Mobile ads are becoming an increasingly important part of Facebook, with 41 percent of advertising revenue coming from this sector. While investors had concerns when FB botched their IPO, starting at $38 and dropping to the twenties, it is making a huge comeback. Today was a busy day for the stock, with a trading volume of over 350 million - almost ten times the three month average and making it the most traded on US markets.

        Zynga(ZNGA) is currently up $0.26, or 8% on hopes that it will be able to benefit from Facebook's earnings report. The billion-dollar company has faced steep revenue decline in recent quarters and has recently had a change of management. Since it has a strategic partnership with Facebook, strong reports from the world's largest social network may bring revenue increases for Zynga. The company is set to release its quarterly earnings report after the market closes, and are sending shares up on high hopes.

        Boston Scientific(BSX) is also one of the volume leaders today, with over 50 million shares exchanging hands. The company reported earnings that topped the Wall Street consensus EPS by about $0.03. In addition, management upped its forward guidance for the company, suggesting a possible turnaround for the multibillion dollar company that has struggled in recent quarters. Its revenue has been falling for quite some time, but this time was much less than expected. Boston Scientific engages in the development of medical devices targeted at a variety of diseases.

        Chipmaker Qualcomm (QCOM) rose by two dollars, or three percent, after reporting strong third quarter earnings. The company, which makes chips for mobile devices such as the iPhone, has benefited from increased demand for smartphones across the world. Third quarter revenue jumped 35% to $6.24 billion, which beat the Street's estimate of $6.24 billion. As the demand for smartphones increases, Qualcomm is positioned to grow as well.

        It wasn't all gains for the stock market, however. Iconic shoemaker Crocs (CROX) dropped by three dollars, or twenty percent. The company reported quarterly earning that were well below analysts' predictions. Earnings fell by 43%, with a revenue growth of just 10%. Weak sales of the company's foam shoes have been attributed to cool temperatures, but investors are concerned that the shoes are losing popularity. CROX gave a revenue forecast of 300 to 310 billion for the third quarter, below analysts' estimate of $325.3 billion. EPS is projected to be $0.20 to $0.23, far below the estimate of $0.36. CROX has been trying to diversify for a long time, but their dominant source of income is still their shoes. With diversification attempts failing and their core product falling out of style, the future of CROX is uncertain.

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Facebook Climbs 17% After Earnings Report

July 24, 2013

        Facebook(FB) reported its quarterly earnings report after hours today, with revenue rising over 50%! Its quarterly revenue came in at $1.813 billion, topping the Wall Street average estimate by $195 million. The company earned over $300 million this quarter, as opposed to the same period last year where the company faced a net loss. These numbers were surprising due to the fact that rivals Google and Yahoo recently reported disappointing revenue and outlooks this week. FB rallied nearly 20% after hours, rising from its close of $26.5 to $31. Mobile ad revenue grew strongly this quarter, rising to equal over 40% of the company’s ad revenue. This is up 10% from the previous quarter. Even though the company has faced rapid growth in mobile ads, Google still dominates with approximately a 50% market share of the nearly $9 billion market.

        Facebook has experienced a surge in usage, with nearly 700 million people using the website on a regular basis. This is a sharp rise from last year, when there were only 666.5 million regular users. As Facebook's user-base increases, so does its revenue from ads. Even with competition from startups, Facebook managed to increase mobile advertising revenue by 76 percent. The company has worked on increasing the number and types of advertisements, while maintaining the CPC value (cost-per-click). New ads that are present within users' feeds are being noticed, which has led to increasing clicking and more profit for Facebook. Users have complained to CEO Mark Zuckerberg about the presence of these ads, and he has stated that his company will strive to improve their quality so that they are more aesthetically pleasing.

        Facebook still faces stiff competition from smaller rivals and start-ups that are quickly gaining ground in the mobile advertising market. WhatsApp is a company that operates a "cross-platform mobile messaging app" that is available on Windows, Android, IOS, and Blackberry. It has shot up to be the #1 downloaded app on many of these platforms, gaining millions of users. Though this poses no immediate threat to Facebook, it shows the potential of smaller rivals to quickly gain market share in an online world. Blackberry has also released news that it plans on expanding the presence of Blackberry Messenger, or BBM, so that it is available on all platforms. BBM currently has tens of millions of active users daily, and opening the option to IOS and Android users would help it grow exponentially. This could very well put a dent into Facebook's revenue once it is released.

Sources:

http://finance.yahoo.com/

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Apple, Ford, VMware Surge; Broadcom Plummets - Google Announces New Product

July 24, 2013

        Apple (AAPL) closed up $22.81 (5.44%) due to Q3 earnings that were better than expected, narrowly beating analysts' estimates by 2.33% in terms of earnings-per-share. Additionally, investors are excited for a potential new product in Q4. The iWatch, a new smartwatch that had the potential to revolutionize the field of "wearable technology", has investors excited as well. These two facts have caused APPL to jump in price.
        Shares of Ford(F) were up over 3% in early trading as the company reported revenue growth of 13%, greatly exceeding analyst estimates. The company has been facing growing sales in the US, and losses in Europe and Asia have narrowed. Ford has recently stated it will begin developing its own hybrid car systems after finishing a partnership with Toyota. In addition, the company plans on hiring over 800 new workers to keep up with the rising demand for its vehicles. With all this in place, the company recently raised its guidance for the next few quarters.
        VMware, a virtualization and cloud computing company jumped nearly 17%. or almost $12, after their Q3 earnings beat expectations and the stock received two upgrades from analysts. The company has shown remarkable growth this quarter, and their "vSphere" virtualization software is starting to show an increase in usage.
         Broadcom(BRCM) became one of the largest movers on the Nasdaq today, sinking a staggering 15%. The company reported earnings that were slightly below estimates yesterday, and lowered its revenue expectations for its third quarter. Seven analysts downgraded the stock today, sending it down to multi-year lows. BRCM dropped nearly $5 on a volume of 66 million, over eight times its daily average.
        Google(GOOG) announced a new device called the Chromecast. The Chromecast is a USB-like device that connects into the HDMI port of your TV. When connected to the Internet, it allows for the user to use YouTube, Pandora, Netflix, and basically all types of media accessible through Google Chrome. Unlike competing devices, such as the Apple TV, the Chromecast is designed to use a phone, tablet, or laptop as a remote control. Priced at $35, it poses a big threat to competing devices. Google also announced that it will soon be releasing its next generation of Nexus Tablets that will yield sharper screens and slimmer bodies. Its stock has been fairly volatile today, starting the day up a couple percent and then gradually dropping into negative territory.

Sources:
www.barrons.com
http://finance.yahoo.com/

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Apple Releases Earnings

Apple released their 3rd Quarter earnings today, in a conference call conducted after the market closed. The company slightly beat analysts' estimates in terms of revenue, but did not show major growth. Revenue was $35.3 billion, versus $35 billion from last year. This increase is the smallest in six years, raising oncerns that Apple may be losing its talent for innovations that have boosted the stock to stratospheric prices. Since the release of the iPad in 2010, Apple has been unable to release a revolutionary product, instead releasing new generations and versions of old devices/software. The company's rate of growth has been slowing down considerably for the past few years, and is now almost zero.

Apple's report also showed a fundamental change in the source of earnings. iPhones showed huge growth this quarter. However, the growth was in older generation devices, and the average price of units purchased decreased from $608 to $581. This decrease in gross margin could potentially represent a problem later on.

While iPhones have shown growth, other sectors within Apple have not fared so well. iPads in particular have shown a decline in sales- down 14 percent from last year. iPods and Macs have remained relatively stable, with slight declines over the past few years. As Apple's profits become increasingly dominated by low-cost, older iPhones, the company could destabilize and run into trouble as competitors gain a larger hold on the market.

Apple is an amazing company, with a plethora of groundbreaking consumer products that have established the company as a tech giant. Its 3rd Quarter earnings show a solid performance, with continued dominance in the mobile market. Investors, however, should be wary of this stock. While the stock used to be extremely volatile, 3rd Quarter earnings indicate a steady stabilization of the company. This may prevent large growth in the future, at least until Apple releases a new groundbreaking product.

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.

Lockheed Martin Advances Deal With Pentagon; Apple Drops Before Earnings

July 23, 2013
        Wendy's(WEN) topped estimates this morning, sending the stock up a staggering 10%. The company hasn't been doing so well in recent quarters due to stiff competition from larger rivals like McDonald's, who recently reported disappointing fast-food data yesterday. Wendy's plans to decrease expenses and up profit margins through the sale of approximately 400 more of its restaurants to private owners. This would decrease the number of restaurants owned by the company to 15%, but could significantly improve quarterly reports. WEN is up 50% this year.

        Starbucks(SBUX) announced today that it would enter into a strategic partnership with Dannon to sell yogurt through its coffee stores. This partnership allows for Starbucks to expand its product line and helps Dannon gain access to a new demographic. Starbucks is currently moving its way into healthier foods and drinks, and this new effort allows for the company to increase its presence in other areas of the food industry. SBUX dropped 2% as investors take profits before the company's next earnings date.

        Apple(AAPL) dropped 1.4% today ahead of its earnings to be released after the market closes. The company has been performing extremely well in the past few years, but has recently faced a series of revenue decreases, stock downgrading, and short sales. Investors are cautiously waiting for the report, which is unpredictable as companies like Samsung gain foothold in the global mobile market. Investors are expecting to hear news on the company's future prospects and the eagerly awaited iWatch.

        Cisco(CSCO) will buy SourceFire for $2.7 billion, representing a near 30% premium on its stock price as of Monday's close. This acquisition will help it improve its marketable security which has caused worries this year. With Snowden's release of government data collected through technology giants such as Google and Microsoft, personal security has become a rapidly growing industry. This acquisition may give Cisco an advantage over larger rivals as they compete to recapture user confidence.

        Lockheed Martin(LMT) reported profit rises of 10%, sending the stock up nearly 2%. The company has reported that it has progressed its discussions with the government on its line of F-35 fighter jets. If it is able to close this deal with the pentagon, it may represent an increased  revenue of nearly $5 billion. In addition, the growing drone industry has propelled the stock up 33% this year.

Sources:

http://finance.yahoo.com/blogs/

http://wallstcheatsheet.com/

Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.