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Tech Today: Micron's 'Storm Clouds,' Tech Data Soars, Uber IPO in '19


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Here are some things going on today in the world of tech :

Cutting Micron

Shares of memory-chip maker Micron Technology (MU) are down $3.52, or almost 6%, at $59.05, after Morgan Stanley's Joseph Moore  this morning cut his rating on the shares to Equal Weight from Overweight, warning of " storm clouds on the horizon " for the company. Moore thinks that prices of NAND flash are not going to recover in the second half of this year, based on his conversations with industry sources. He also thinks that strength in the DRAM business is already priced into the stock.

Ciena rising

Shares of fiber-optic networking equipment firm Ciena (CIEN) are down 6 cents at $24, after the company this morning reported  $730 million in revenue for its fiscal Q2 ended in April, beating the average $726 million but missing on the bottom line, delivering 23 cents a share, below the average 30-cent estimate.

However, on the conference call following, CEO Gary Smith  and his team projected revenue this quarter above consensus, at $775 million to $805 million, versus consensus for $769 million, and also raised Ciena's revenue growth outlook for this year to a range of 7% to 9% from a prior 4% to 6%.

In early analysis this morning, Alex Henderson  with Needham & Co., who is bullish on the stock, writes that the company's gross profit margins were lower because the company shipped more of the "chassis" of its systems, which have lower margins than "line cards" that get sold later on to add capability to the chassis.

Indeed, Ciena's gross profit margin dipped to 40.7% from 45.7% a year earlier. But this is not a bad thing, writes Henderson: "Ciena needs to build foot print to sell high margin line cards in the future," he writes, referring to chassis as the expansion of the company's "foot print."

"Building foot print is a significant positive for future business."

Box's AI will take time

Shares of cloud content management pioneer Box (BOX) are down $2.58, or 9%, at $25.20, compounding last night's after-hours losses, after the company yesterday afternoon reported fiscal Q1  revenue of $140.5 million and a net loss of 7 cents a share, squeaking past consensus for $139.7 million and an 8-cent loss.

The company's outlook for this quarter's, and for the full year's, revenue and profit was more or less in line with consensus.

During a phone call last night, Box CEOAaron Levie  told me he was enthusiastic about the company's serving as a "neutral" platform for artificial intelligence- a place in the cloud where companies can gather and "stage" their corporate data before then sending that data to cloud services such as Alphabet's (GOOGL) Google's cloud-computing facility.

However, the report has led to at least one downgrade this morning that I can see, from Rosenblatt's Marshall Senk, who cut his rating to Neutral from Buy, while maintaining a $25 price target, writing that the shares had a 70% gain from Q4, most of which "can be attributed to enthusiasm around the company's AI driven product cycle," but that AI stuff "will not begin to impact results until the fourth quarter of this year at the earliest."

Tech Data soars

Shares of tech distributor Tech Data (TECD) are surging, up $5.92, or 7%, at $88.33, after the company this morning reportedfiscal Q1  revenue of $8.54 billion, yielding EPS of $1.84, comfortably beating consensus for $8.13 billion and $1.47 per share.

The company's forecast for revenue this quarter is also higher at $8.6 billion to $8.9 billion, versus consensus of $8.58 billion.

This is the last quarter for CEO Robert M. "Bob" Dutkowsky, who is passing the baton next week to Richard T. "Rich" Hume  as Dutkoswky becomes executive chairman, as announced by Tech Data back on April 19.

Code conference doings

Lots of headlines coming from the " Code " conference of Kara Swisher  and the Recode team in Rancho Palos Verdes, Calif.

Facebook (FB) Chief Operating Officer Sheryl Sandberg defended the company following a fusillade of attacks by Apple  (AAPL) in recent weeks. Apple CEO Tim Cook has repeatedly criticized  Facebook as a business built on "trading away privacy."

Sandberg told Swisher, "It won't shock you to know that Mark and I strongly disagree with their characterization of our product.

"We have an ad supported business that allows people all around the world to use a product for free, and if you're trying to connect the whole world, that's pretty important. So we respectfully disagree."

And there were some nice tidbits from Uber Technologies CEO Dara Khosrowshahi, who told Swisher  the " UberEats " food delivery business is now seeing "bookings" at a $6 billion annual run rate and that the company's is trying to work  with Google's Waymo  self-driving car unit.

Khosrowshahi also told CNBC's Carl Quintanilla in an interview this morning  that the company is "on track" to have an  IPO in 2019. He said Uber had tried to get an investment from Warren Buffett, but was not able to close a deal. Khosrowshahi described himself  to Quintanilla as a "fanboy" of Buffett, and said one of his life's goals is to get an investment from Buffett.

Marvell, Workday earnings on tap

Get set for another parade of earnings reports this afternoon, after the closing bell. That includes Marvell Technology Group  (MRVL), VMware  (VMW), Workday  (WDAY), Yext  (YEXT), and Zuora  (ZUO).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Technology , Stocks
Referenced Symbols: MU , CIEN , BOX , GOOGL , TECD



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