Posts by Aaron Pressman
Aaron Pressman at Yahoo Finance 2 days ago
Google (GOOGL) has been struggling to win favor with investors lately, as the stock severely underperformed the market last year.
So when headlines hit Thursday night showing the search giant’s fourth quarter revenue and profits came in below Wall Street forecasts, the share price took another hit, immediately dropping over 4% in after-hours trading.
But as Google execs got on the phone with analysts, the share price reversed course, a trend that held through early trading on Friday, where Google was up 4%. How did CFO Patrick Pichette explain away the shortfalls and change investor perceptions to the tune of some $25 billion of market value?
Among the more positive nuggets Google fed the crowd were a doubling of mobile revenue from YouTube and a doubling of ad buying activity via DoubleClick Brand Manager. The total amount of time people spent watching YouTube videos rose 50%, Kordestani said.
Sometimes, it pays to go beyond the headlines.
Aaron Pressman at Yahoo Finance 3 days ago
Books, movies and TV shows have long relied on a so-called windowing strategy to maximize profits on new releases. First-run movie tickets and hardcover books grab the big dollars from the biggest fans, before cable runs and paperbacks reach secondary audiences at lower prices.
Jason Kilar, who built Hulu into a leading TV and movie subscription service, thinks windowing could also bolster the profits of short, online video makers. His new service, Vessel, which opened to beta testers last week, will charge subscribers $3 a month for three days of exclusive access to the kinds of clips that have typically appeared on YouTube for free (with ads). “Watch your favorites here first,” is Vessel’s tagline.
Kilar says the goal isn’t to overthrow free sites like YouTube but to improve the economics for video makers to entice more and better content online. "Vessel was created to serve as a critical, missing piece of the puzzle for content creators, with Vessel playing one part among many that collectively help creators achieve their dreams,” he wrote in a blog post last month.
Aaron Pressman at Yahoo Finance 4 days ago
Yahoo (YHOO) had one mission in its fourth-quarter earnings report and the actual earnings didn't have much to do with it. Instead, investors wanted to see the company's plan for a tax-free spin-off of Alibaba (BABA) shares -- and they got it.
Yahoo shares jumped over 7% to $51.49 in after-hours trading.
In a transaction that will create an additional publicly-traded company, Yahoo said it would transfer its remaining 15% stake in Alibaba, 384 million shares, plus what it called "legacy, ancillary businesses" into a new unit dubbed "SpinCo" in the press release. Shares of the new unit will be distributed to current Yahoo shareholders.
"We believe it maximizes value for our shareholders and optimizes transaction efficiency and certainty," CEO Marissa Mayer told analysts. "This is a structure that we can pursue and affect independently, capturing value exclusively for our shareholders."
The spin-off move could save $16 billion in taxes on the $40 billion stake.
Investors would surely agree.
Aaron Pressman at Yahoo Finance 5 days ago
Investors were expecting a huge holiday quarter from Apple (AAPL) and the company did even better. Apple shares, just about unchanged so far this year, jumped more than 5% in after-hours trading.
Apple said it collected $74.6 billion in sales, up 30% from last year, and net income of $18 billion, up 37%, in the final three months of 2014, its fiscal first quarter. Earnings per share hit $3.06.
Analysts were expecting only $67.5 billion of revenue, including $43.1 billion from iPhone sales, to go along with earnings per share of $2.62, according to FactSet Research Systems.
Customers snapped up a record 74.5 million iPhones, up 46% from last year, at an average selling price of $687, up $50 from last year. Analysts were expecting 67 million to 70 million, so Apple easily beat even the high end of investor expectations.
CEO Tim Cook also told analysts that the company's highly-anticipated smart watch will ship in April. "Development for Apple Watch is right on schedule and we expect to begin shipping in April," he told analysts.
Aaron Pressman at Yahoo Finance 5 days ago
Microsoft's (MSFT) stock tumbled Tuesday, as Wall Street finally started to realize that the whole PC-to-cloud transition was going to be a lot more difficult than they’d anticipated.
The software giant reported its holiday quarter results after the close on Monday and even an East Coast blizzard couldn’t obscure the problems. Revenue and profit for the quarter were mostly as expected, though sales of Windows and Office licenses fell short, but guidance for the beginning of 2015 shocked analysts. CFO Amy Hood said Microsoft expects sales of $20.6 billion to $21.4 billion for the fiscal third quarter versus a Street consensus of $24 billion.
Microsoft’s stock price dropped 8.5% in afternoon trading on Tuesday to $43.01, erasing almost six months of gains. Already, at least four Wall Street firms have downgraded the stock and more are likely to follow, as the bad news sinks in. Some of the shortfall is due to the stronger dollar depressing revenues from abroad, but larger issues loom.
Aaron Pressman at Yahoo Finance 6 days ago
The huge snowstorm barreling up the Eastern seaboard has already had at least one impact on online behavior. Bunches of lonely singles have started posting looking for companionship.
“I'm seeking a single 20- or 30-something female who shares my excitement for snow days and wants to create the semi-romantic, mildly productive yet equally fun adult version,” wrote one such poster, as captured by Business Insider.
But on a more serious note, wintry weather has been credited with boosting ecommerce over shopping in the real world, as consumers stay home and click through the virtual aisles instead of braving the cold and hitting the mall.
“This story crops up now almost every year when we have winter weather coming up and the effects get overstated,” says Andrew Lipsman, vice president at comScore.
People do spend a lot more time online during bad weather incidents, but they’re doing more window shopping than actual shopping, he says.
Aaron Pressman at Yahoo Finance 6 days ago
Apple (AAPL) reports the results of its all-important holiday quarter on Jan. 27 and the risks are rising for shareholders. Expectations for the company have risen sharply —along with the company’s stock price — since last spring, when few investors showed much enthusiasm. Since then, Apple’s share price has gained more than 50%, topping $112 last week. Wall Street analysts’ average price target for the stock has hit almost $123, from the mid-$80s back in April, and three-quarters of analysts have a buy rating on the stock. According to FactSet, Wall Street is looking for Apple to report earnings per share of $2.59, a 25% increase from a year ago, and revenue of $67.3 billion, which would be a gain of 17%, the biggest quarterly revenue jump in revenue in two years. Estimates have risen sharply as analysts have been raising their forecast of iPhone sales. A year ago, analysts forecast EPS for this quarter of only $2.17 and revenue of $59.6 billion. But the most important number is probably iPhone sales. It’s hard to pin down Wall Street’s exact average forecast. Some cite a Bloomberg analyst survey of 65.5 million. Fortune Magazine's quarterly survey, which includes pro and amateur Apple analysts, also came in at 66.5 million, but there are a number of analysts clustered around a forecast of about 70 million. That would be a record and a huge 37% gain over last year’s holiday quarter iPhones sales. Many analysts expect the average selling price also rose from last year, thanks to the iPhone 6 Plus.
Aaron Pressman at Yahoo Finance 10 days ago
“We want to move from people needing Windows to choosing Windows to loving Windows. That is our bold goal with Windows.” So spoke Microsoft (MSFT) CEO Satya Nadella at the outset of his brief speech at the Windows 10 coming out party on Wednesday. And while the software looks sharp and includes a bunch of useful, new features, Nadella’s emotional pitch sounded a lot more like his wrong-way predecessor, Steve Ballmer, than the savvy newcomer who took over last year. And it wasn’t just seeking the love – Nadella also sounded like he was reviving Ballmer’s strategy to focus on improving and protecting Windows as the top priority, even as the world has moved on to more mobile and Internet cloud-based platforms. “Simply put, Windows is the best place, it’s the home for the very best Microsoft experiences,” he declared. “There’s nothing subtle about this strategy. It’s a practical approach, which is customer first. We want to give ourselves the best opportunity to serve our customers everywhere and give ourselves the best chance of helping customers find Windows as their home. That’s what we plan to do.” Ballmer’s big mistake was focusing too much love and attention on Windows. Microsoft was years ahead of Apple (AAPL) in the smartphone and tablet computing markets, but with poorly conceived products that relied heavily on the same old Windows interface. Software and services, even the world-dominating Office suite, were made first and foremost for Windows. Ballmer was also known for his deep, perhaps even excessive, devotion to Windows and Microsoft, whether getting worked up on stage, shouting at developers, criticizing competitors or forbidding his kids from owning iPods. [Get the Latest Market Data and News with the Yahoo Finance App] Nadella seemed to mark a sharp break from Ballmer’s Windows obsession. Last March, at his first-ever product unveiling, Nadella started off the demonstration not with a Windows laptop or Surface tablet but with an Apple iPad. Here, finally, years late, was Office for the iPad.
Aaron Pressman at Yahoo Finance 11 days ago
Like a phoenix rising from the ashes, the idea that we’ve entered a “post-PC era" is about to make a huge comeback in 2015.
The signs are everywhere already, whether it's Microsoft’s (MSFT) Windows 10 introduction, IBM (IBM) highlighting its Apple (AAPL) iPad app efforts or Hewlett-Packard (HPQ) unveiling a new tablet line. Once Apple’s smart watch and rumored larger iPad arrive, the revival will be in full swing.
As the leading proponent of the post-PC mantra, Apple should also be one of the top beneficiaries. Sales of iPhones are already flying on the latest upgrade cycle but iPad sales have been a sore spot and likely declined for the first time last year. So CEO Tim Cook is expected to go bigger, with a more work-oriented tablet, and smaller, with a handy wrist communicator, this year.
Aaron Pressman at Yahoo Finance 17 days ago
The “Big 5” book publishers are feeling good and riding high. Unlike shrinking movie box office receipts and plummeting music sales, 2014 book sales were up a healthy 4% to 5% all year -- though the true final numbers aren't in yet. Publishers also defeated their top frenemy, Amazon (AMZN), at least somewhat last year, by winning back control over ebook pricing in new multiyear sales deals stuck by French-based Hachette and CBS (CBS) unit Simon & Schuster. At the same time, the portion of the market sold in ebook form, where Amazon has been most dominant, seemed to stabilize at around 25% to 30%. At the Digital Book World Conference in New York this week, the mood was, if not quite giddy, at least more upbeat than in some prior years. The book market will continue to evolve, most agreed, but perhaps without the threat of total disruption publishers once feared. "It looks to many people, including me, like things are calming down in the book market," says longtime publishing industry consultant Mike Shatzkin. Challenges from subscription services But lurking ahead, there are several possible challenges that could upset the current balance. Subscription book-rental services are small, but growing fast.