Sunday, 31 January 2016

Alphabet changes results format to separate Google, other bets

Hoping to provide greater clarity into the performance of its many holdings, Alphabet Inc  said it would report financial results under two segments, Google and "Other Bets," when it releases fourth-quarter earnings on Monday.
Under Google, Alphabet will report the results of its main Internet and related businesses such as search, ads, maps, YouTube, Android, Chrome and Google Play, and hardware products such as Chromecast, Chromebooks and Nexus, as well as its virtual reality offerings. 
"Other Bets" will detail Alphabet's other businesses including Access/Google Fiber, Calico, Nest, Verily (formerly known as Google Life Sciences), GV (once known as Google Ventures), Google Capital and X, better known as Google X.
Alphabet said there would be no changes to its consolidated financial reporting but some changes would be made to how it breaks out revenue.
Investors and analysts had praised the move to the Alphabet structure as a shift towards greater transparency and fiscal discipline when it was announced in August.
It will provide investors their first detailed peek into the finances of the parts of Google outside its highly profitable search engine.
In a blog post announcing the changes, Alphabet's chief executive, Larry Page, said the change allows the company to take the "long-term view" of its holdings and invest "at the scale of the opportunities and resources we see."
"Fundamentally we believe this (structure) allows us more management scale, as we can run things independently that aren't very related."

Since the Aug. 10 announcement, Alphabet's stock price has climbed almost 13 percent, closing at $748.30 on Thursday. In addition, the company is close to displacing Apple Inc as the most valuable U.S. tech company.

Amazon shorts make money with deft timing on Thursday's wild ride Inc  shares' unusual roller-coaster move before and after the world's No. 1 online retailer reported quarterly results on Thursday helped some traders make money shorting the stock.
From Wednesday's close of trading to Friday afternoon, Amazon shares are only about 1 percent lower, trading at $579.50. In between, the stock was all over the place, hitting a Thursday high of $638.06 and falling to a low of $540 in the action after Thursday's close.
The stock rallied 9 percent on Thursday before results were released. It was bolstered by solid earnings Wednesday from social media giant Facebook, and traders hoped for big gains for Amazon post-earnings, as the previous four quarterly releases had been celebrated by investors.
Thursday's rally, the largest on the day of results over the last two years, invited shorts to capitalize on the spike, and they reaped gains when the shares slumped after the close.
"I am a big fan of Amazon the company," said Kathryn Venator, a Annapolis, Maryland-based independent trader who runs Katwerks Ventures, a consulting business. "(But the) rally was out of control."
Venator expected profit-taking at the day's end. She shorted 60 shares of Amazon for $628.33 apiece at around 3 p.m. EST (2000 GMT). But the trade did not work as expected. Shares kept rallying into the close, and Venator tried to close her short, to no avail.
"I immediately began planning how I would exit on Friday with a loss," she said.
Fortunately for her, Amazon shares plunged in after-hours action. The company posted its most profitable quarter ever but its per-share profit of $1.00 fell short of analysts' average forecast of $1.56.
Shares dropped 15 percent, hitting a low of $540 in trading after the bell. Venator was able to cover her short position on Friday. Ali Banai, 20, a New York-based trader, says he largely depended on technical signals to put on his trade.
"If you draw a trendline you see a bearish trend after it reached the $630 mark. That's when I started to do a short," he said.
On Wednesday and Thursday, Banai shorted Amazon shares for an average price of $625. Banai, who is in the process of getting a license for his own investment firm, said his position was between 100 and 500 shares.
He said the average post-earnings jump of 10 percent for the shares over the last four quarters meant the shares were overvalued.

"There always has to be a pullback."

Nokia-Samsung patent verdict expected within days

Nokia (NOKIA.HE) and Samsung (005930.KS) are expected to settle their two-year patent dispute within days, with analysts forecasting a one-time payment of hundreds of millions of euros for the Finnish company.
Nokia entered into a binding arbitration with South Korea's Samsung in 2013 to settle additional compensations for a five-year period starting from early 2014.
The International Chamber of Commerce's arbitration court is due to make its ruling on the issue imminently.
Nordea analyst Sami Sarkamies, one of few analysts to give a precise estimate, said the verdict could boost Nokia's operating profit by about 700 million euros ($758 mln) this year, forecasting the court will stipulate an annual patent fee of 300 million euros.
"Samsung has been paying Nokia probably 100 million per year, and the rate could now come up to around 300 million euros (per year). The settled rate will also be paid retrospectively for the last two years," Sarkamies said.
"But they have already booked perhaps 100 million a year from Samsung to their income statement, so the EBIT impact for this year could be around 700 million euros."
Sarkamies has a "hold" rating on Nokia shares, which have fallen 9 percent since last April when it announced a 15.6 billion euro takeover of French network gear rival Alcatel-Lucent (ALUA.PA), due to be completed this quarter.
Investors have worried about the integration process and special terms negotiated by the French government, but the share price could get a boost if the settlement with Samsung is much bigger than analysts forecasts.
Last month, Sweden's Ericsson (ERICb.ST) said that a patent license deal with Apple Inc (AAPL.O) would help lift its intellectual property rights revenue by up to 40 percent in 2015, sending its shares up sharply.
Nokia, which once dominated the global mobile phones market, is now focused on telecom network equipment but still holds on to a portfolio of phone patents.
It said last month that the International Chamber of Commerce had advised that the settlement with Samsung is expected by the end of January.
A Nokia spokesman declined to comment on Saturday, saying the company had nothing to add beyond the previous statement.

($1 = 0.9233 euros)

Saturday, 30 January 2016

HSBC UK Internet banking back up after cyber attack

HSBC said its British personal banking websites were back up and running on Saturday after a cyber attack forced them to close for most of the previous day.
Europe's largest lender said it had "successfully defended" its systems against a distributed denial of service (DDoS) attack but was not able to fully restore services immediately as it continued to experience threats.
But customers were able to log-on again from 2100 GMT on Friday, the bank said, after an outage which had started that morning.

"HSBC Internet and mobile banking are now fully recovered. Thanks for your patience and again we apologise for the disruption," the bank told customers via social media.

Microsoft's secret weapon for growth in the cloud: email

In reporting better-than-expected fiscal second-quarter earnings on Thursday, Microsoft Corp (MSFT.O) CEO Satya Nadella touted his company's success in the cloud.
"Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas," he said.
What he didn't mention was the role that one of the company's much older products played in the success of this new technology: Microsoft Exchange Server, which many of the world's largest companies rely on for email services.
When companies begin moving data to the cloud, typically a network of servers managed by an outside company, a common first step is to move email, often with other office software tools but sometimes on its own.
For companies already relying on Microsoft Exchange and Outlook for sending and receiving email, information technology managers say, turning to the same company to handle that data in the cloud seems like a logical move.
That's what happened at the University of Wisconsin, Madison.
The school was looking to streamline its technology by moving to the cloud, starting with email, because it is "a pain to operate," said Bob Plankers, a virtualization architect at the university. "Aside from email servers, you need to worry about spam and virus scanning," he added.
For the transition, Plankers said he chose Microsoft's cloud-based Office 365 product because the university already used Outlook.
"It's just a really natural thing," said Matt McIllwain, an investor at Madrona Venture Group, about companies starting their cloud transition with email and other widely used office software from Microsoft. "It's easier and can be more cost effective to run it on the cloud, and let Microsoft worry about your Exchange servers."
Such thinking helps explain how Microsoft has become the second largest provider of cloud infrastructure, services and software, well ahead of Salesforce (CRM.N), Oracle (ORCL.N) and Google (GOOG.O), according to a Goldman Sachs analysis.
The company announced Thursday that it was on track to generate $9.4 billion in annual cloud-based revenue, up from $5.5 billion a year ago.
Microsoft remains far behind market leader Amazon (AMZN.O), but it has become the fastest-growing major cloud provider. Its key Azure business has more than doubled year on year, well above the 65 percent growth rate of market leader Amazon, according to Goldman.
Microsoft has worked hard to exploit the advantage its mail software provides. "Maybe one of the first steps is you want to move your email. That's fine," says Takeshi Numoto, corporate vice president for cloud and enterprise marketing. "That gets us more opportunity to engage with customers."
Investor McIllwain called that strategy smart, because customers who move their Outlook email to Microsoft's cloud typically use a Microsoft directory service that controls access to that email. It then becomes simple to use that same directory to provide designated employees access to other data and services that are later moved to Microsoft's cloud.
The strategy isn't foolproof, however. Over seven months last year, Clif Bar, an Oakland, Calif.-based snack provider, moved all its Outlook email, along with other applications like document management and workflow, to Azure.
The company nevertheless moved its enterprise resource management to the cloud services of another longtime partner: Oracle.
As cloud services rapidly expand, Microsoft will have to demonstrate that its products are equal to, or better than, those of its competitors in both quality and price.

Currently, many companies favour Microsoft because it offers more flexibility in terms of moving software around, say from a company's own data centre to the one it has outsourced to Azure, said Frank Gillett, an analyst at Forrester Research. But Amazon's AWS offers more types of tools, and has a longer track record selling cloud services, he said.

Friday, 29 January 2016

Sony says bracing for smartphone slowdown after sensor sales dip

Sony Corp, widely regarded as a key supplier of image sensors for Apple Inc's iPhones, said on Friday it was bracing for a slowdown in the premium smartphone market after sales of its sensors fell in the third quarter.
Videogame sales and cost cuts in Sony's flagging mobile unit pushed October-December operating profit up 11 percent, beating analyst estimates, but the firm confirmed a much-feared hit to a segment that in recent quarters helped it shake off years of losses.
"Demand for image sensors from certain customers has slowed since November due to a slowdown in the high-end smartphone market," Chief Financial Officer Kenichiro Yoshida told reporters at a briefing, without naming the clients.
Worries about weaker iPhone sales and a slowdown in China's smartphone market - the world's biggest - have weighed on Sony shares in recent weeks. The stock closed up 6.1 percent ahead of earnings, still down around 16 percent since the start of 2016.
Yoshida said Sony was planning its budget for the next year assuming a fall in global demand for high-end smartphones.
Sony also said October-December sales of devices, including image sensors, fell 13 percent from a year earlier. The segment, also hit by weak battery sales, booked a loss of 11.7 billion yen compared with a 53.8 billion yen profit in the year prior.
In addition to image sensors, Sony has depended on cost cuts and strong sales of PlayStation 4 games to improve its bottom line over the past year.
The two factors helped its fiscal third-quarter operating profit rise 11 percent from a year earlier to 202.1 billion yen ($1.68 billion), beating the average 175 billion yen forecast of 8 analysts according to Thomson Reuters data.
It said quarterly sales of its game and network services division rose 11 percent, helped by strong holiday sales of PlayStation 4 videogames. It raised its full-year forecast for the division to an operating profit of 85 billion yen from an October forecast of 80 billion.
In mobile, sales fell 15 percent in a division struggling to compete with Apple and Samsung Electronics Co Ltd, as well as low-cost Asian rivals. But operating income more than doubled to 24 billion yen as Sony cut spending on marketing and development and gave up its pursuit of market share.
The company maintained its outlook for full-year operating profit to grow to 320 billion yen from 68.5 billion in the previous year.

($1 = 120.5500 yen)

Apple building secret team to work on virtual reality: FT

Apple Inc has assembled a large team of experts in virtual and augmented reality and built prototypes of headsets that could one day rival Facebook's Oculus Rift or Microsoft's Hololens, the Financial Times reported.
A secret research unit, housing hundreds of staff assembled from acquisitions or poached from other companies, is working on next-generation headset technologies, the FT reported, citing people familiar with the initiative. (

The newspaper had previously reported the hiring of leading virtual reality researcher Doug Bowman by the iPhone maker. (