Posts by Aaron Pressman
Aaron Pressman at Yahoo Finance 3 days ago
Apple (AAPL) CEO Tim Cook, an industrial engineering major in college, has worked in the computer industry for his entire career, including long stints at Compaq and IBM. But this week, Cook put on another hat, offering extensive economic commentary on the Chinese stock market and the fate of the country's growing middle class. To gauge how he did, we asked a handful of China experts to evaluate Cook's comments, which come as Apple is enjoying incredible growth in China.
Apple reported sales there of $13.2 billion last quarter, up 112% from a year ago, and operating profit of $5.1 billion, up 147% from a year ago. Fully 50% of all of Apple's revenue growth and 61% of the increase in operating income came from China in the company's current fiscal year, which started last October. And it's not just luck -- Cook has been adding stores in China at a furious pace while also adding features, such as gold-colored devices and larger-screened phones, that Chinese consumers crave.
What Cook missed
Aaron Pressman at Yahoo Finance 4 days ago
Update : On Friday morning, Amazon shares are trading up 22% to an all-time high of $588.
Amazon (AMZN) shares zoomed higher in extended trading on Thursday after the online retailer posted second-quarter results that widely beat Wall Street's expectations.
The acceleration of growth at Amazon comes just as competition is increasing. Wal-Mart has said it plans to spend billions of dollars to try and catch Amazon, Macy's (M) is bolstering rapid delivery service and upstart Jet.com opened for business this week with a $100 million marketing campaign.
Earnings reports have been a boon to Amazon shareholders this year. Amazon shares closed up 14% in January after it reported better than-expected-results for the fourth quarter of 2014 and captured another 14% gain in April after reporting surprisingly good first quarter results.
Apple (AAPL) posted fiscal third-quarter profits and sales that topped analysts' estimates, but the iPhone-maker's current-quarter revenue outlook disappointed investors. The world's biggest technology company said it earned $1.85 a share, beating estimates by four cents, for the three months ended June 27. Sales of $49.6 billion, up 33% from a year earlier, also topped views of $49.4 billion. However, Apple's current-quarter revenue outlook of $49 billion to $51 billion, came in on the low end of the FactSet Research Systems consensus of $50.9 billion. Apple said it sold 47.5 million iPhones during the quarter, essentially matching estimates. Meanwhile, Cupertino, Calif-based Apple disclosed iPad sales of 10.9 million units, and Mac sales of 4.8 million units, both coming in close to Wall Street forecasts.
Apple shares, which had gained 19% so far this year, tumbled some 7% in extended action.
The Internet offers personalized news, personalized playlists and, now, personalized prices. That's the promise of the new online shopping destination Jet.com, which opens to the public on Tuesday. Dreamed up by former Wall Streeter Marc Lore and backed by $225 million from investors, Jet offers millions of items for sale at its web site, from toilet paper to laptops, just like competitors Amazon (AMZN) and Walmart (WMT). But Lore promises Jet will sell its merchandise at prices 10% or more below those competitors to consumers who pay a $50 annual membership fee, bringing the warehouse club model online. While competitors focus on faster shipping, media offerings and better service, Jet is focusing on lower prices. "There are certainly people out there willing to pay a premium for higher service," Lore says. "The greater opportunity is for people wanting to save money." And shopping at Jet is nothing like shopping at any other e-commerce portal. At Jet, each choice a consumer makes instantly changes the prices of thousands of other items. Place one item in the Jet app's shopping cart -- say, a bottle of Tide detergent -- and the prices of all sorts of other items start tumbling in an animated display reminiscent of a Vegas slot machine. Jet's prices start low, Lore says, because the company is making all its profit from the annual membership fees, not from the usual mark-up on every item for sale. And the added savings in the real-time price cuts come from encouraging consumers to buy items that can be shipped together, a little bonus for improving the retailer's logistical efficiency. Customers can also save by choosing to pay with a debit card instead of a credit card or by agreeing to forgo the right to return -- both choices, again, lowering costs for the retailer. It's all enabled by software that's very different from the programs underlying other big retail sites. Written by former Wall Street and hedge fund programmers, Jet's site runs more like a vast stock exchange than a digital shopping mall. To reset prices on a customer-by-customer basis in real time can require processing billions of transactions at a time. The core programming engine can make billions of calculations per second "continually trying to find the best permutations of offers for the consumer," says chief technology officer Mike Hanrahan. It's analogous in some ways to programs that seek to match buy and sell orders among thousands of traders in bond and stock markets. The number of calculations would quickly overwhelm a standard e-commerce platform and generates even more volume than some of the most complex real-time trading systems on Wall Street, which deal with thousands of securities, not millions of items for sale, he says.
"The Three Amigos"? "The Good, the Bad and the Ugly"? What movie title will be the operative metaphor later today after Apple (AAPL), Microsoft (MSFT) and Yahoo (YHOO) report earnings? Ahead of the news, investors clearly view Apple on the upswing, Microsoft wavering between success and failure and Yahoo, which owns Yahoo Finance, still in a "prove you can dance" mode. That's largely a reflection of how well each company has made the transition to the increasingly mobile and cloud-based tech markets over the past few years. The three high-profile reports follow some fireworks in the tech sector last week. Shares of Netflix (NFLX) jumped 18% to an all-time high after the leading online video service added more than 3 million new subscribers in the second quarter. And Google (GOOGL) tacked on an astounding $65 billion in market value after it showed greater discipline around expenses and beat analyst expectations for both profit and sales.
Aaron Pressman at Yahoo Finance 7 days ago
IBM's (IBM) on-again, off-again recovery effort slipped into reverse after the company posted mixed second-quarter results. IBM's shares, previously up 8% this year, lost 5% in late trading. The Armonk, NY-based tech behemoth revealed adjusted profits of $3.84 a share, beating expectations of $3.79 a share. Revenues, meanwhile, came in at $20.8 billion, trailing estimates of $20.9 billion. That represented a 14% drop from last year, the 13th-consecutive quarterly decline for sales at IBM; though excluding divested business units and the weakening of the dollar, sales would have been down only 1%, IBM said. All of IBM's major units posted a decline in revenue. But IBM said cloud revenue, which has been touted as a major future line of business for the firm, jumped more than 70% adjusting for currency and divested businesses. Cloud revenue over the past 12 months totaled $8.7 billion, or about 10% of the company's total revenue over that period, CFO Martin Schroeter said on a call with analysts.
"We've said from the beginning that this will take some time," the CFO said.
Aaron Pressman at Yahoo Finance 10 days ago
Update on July 17 : Underwriters priced Rapid7's shares at $16, above the expected range of $13 to $15, on Thursday night. Trading opened on Friday at $26.75, a hefty 67% gain and setting the company's market valuation at over $1 billion (including unexercised options).
Aaron Pressman at Yahoo Finance 10 days ago
Some rare good news on the hacking front arrived Friday, courtesy of Internet security firm Symantec ( SYMC ). The firm tracks all different kinds of threats circulating online and issues monthly reports . And in June, less than half of all email -- 49.7% was spam. That's the lowest level of spam in 12 years. The dip likely reflects the fact that email just isn't as central as it used to be -- and hackers have realized that there aren't as many suckers out there checking their inboxes and falling for the plea from a Nigerian prince whose millions of dollars are trapped unless they immediately wire him $10,000. And for the bad news: While spam is declining, other dangerous forms of software are expanding and spreading, as hackers, the ultimate Darwinian warriors, grow more sophisticated and adopt new hacking methods. Just this week, Adobe patched three security holes in Flash that could allow hackers to take control of people's computers surreptitiously. Malware programs like those that exploited the Flash weakness are on the upswing, Symantec reports. There were 57.6 million separate new malware variants created in June, up from 44.5 million created in May and 29.2 ...
Aaron Pressman at Yahoo Finance 11 days ago
Google shares jumped in extended action Thursday to the highest level ever, after the search giant revealed better-than-expected second-quarter profits and adjusted revenues. The search giant logged adjusted per-share earnings of $6.99, handily topping expectations of $6.70. Meanwhile sales, excluding so-called traffic acquisition costs, came in at $14.35 billion, also topping views of $14.26 billion.
Profits were aided by a greater focus on expense discipline, a strategy reportedly championed by new Chief Financial Officer Ruth Porat, according to the Wall Street Journal. After struggling to justify its strategic choices to investors and Wall Street analysts over the past few years, and seeing its stock price stagnate, Google brought in Porat, the former CFO of Morgan Stanley (MS), in May to improve communications.
Porat sought to quell those concerns in a statement accompanying the second-quarter earnings release.
Aaron Pressman at Yahoo Finance 13 days ago
Apple (AAPL) rolled out its mobile payment plan to consumers in the United Kingdom on Tuesday, but without two of its biggest bank supporters. While customers of American Express (AXP), NatWest, Royal Bank of Scotland and Banco Santander (SAN) who own an iPhone 6, 6 Plus or Apple Watch could start tapping to pay with Apple Pay immediately, those who bank at Barclays (BCS) and HSBC (HSBC) were left out, at least initially. HSBC had been listed as participants when Apple officially announced the UK expansion on June 8 and Barclays supports the service in the United States. Both banks took to Twitter to defend their tardiness. "We are really excited about the launch of Apple Pay and will bring Barclays debit cards and Barclaycard credit cards to Apple Pay in future," Barclays tweeted from its official account. HSBC was more specific: "We haven't pulled out. We'll be launching Apple Pay later in July." A spokeswoman for HSBC said the bank "had always planned to go later in July" and declined to give any reason for the delay. Requests for comment to Barclays and Apple were not immediately returned. Analysts said the delays could be due to simple technical glitches or to ongoing negotiations over final terms. Apple's participation fee could be a particular bone of contention, Cherian Abraham, Mobile Commerce and Payments Lead at Experian Global Consulting, said. In the United States, participating banks such as Citibank (C) and Bank of America (BAC) agreed to pay Apple 0.15% of the value each transaction, which comes out of the fees they collect from retailers. Such fees can total 2% or more of every sale. But so-called exchange fees are much more highly regulated in the UK and could be holding up participation from the two lagging banks, Abraham said. "The 15 (basis point) fees seem like a good place to start as a reason for their grievance," he says. Also, since the U.S. debut of Apple Pay, the big credit-card networks have added more general support of contactless pay transactions and Google (GOOGL) announced its Android Pay competitor, as has Samsung. So it's no longer something that only Apple can support. And Barclays recently introduced its own line of "tap and pay" hardware, dubbed bPay, including a $50 wristband. The UK rollout marks only Apple's second market for Apple Pay, which launched in the U.S. last October. While hundreds of U.S. banks and retailers have signed on, only a few consumers are using the "tap and pay" system, which requires a recent iPhone or Apple Watch. About 8 million to 12 million U.S. households have signed up, according to a survey by Phoenix Marketing International. And a Gallup poll last year found only 6% of U.S. consumers planned to use Apple Pay in the next 12 months.