Shares of Dell (DELL) are up 67 cents, or 4%, at $16.57 this morning, following better-than-expected fiscal Q1 results last night and a reaffirmation of its year outlook.

(I would note that Hewlett-Packard (HPQ) shares continue to trade down this morning, following a raft of downgrades yesterday. The stock is currently off 67 cents, almost 2%, at $36.24.)

No upgrades so far this morning, that I can see, but estimates and price targets are going up all around, but there is still a substantial caution about whether Dell can maintain its operating profit margin, given that it was margin that allowed the company to beat earnings last night even as it missed revenue estimates:

Kevin Hunt, Auriga: Reiterates a Buy rating, and a $25 price target. Hunt raised his full-year EPS estimate to $1.86 from $1.65, leaving essentially unchanged his EPS estimate of $64.7 billion. The question is margin, he suggests, and what to believe: “Dell increased its full year operating income guidance to a range of 12-18% y/y growth from a prior view of 6-12%. While that is impressive growth, it is far short of the 74% y/y growth just posted by Dell in the first quarter, and implies a significant deceleration in margins as the year progresses, with negative profit growth later in the year, at a time when revenue is being guided upward.” Probably just being conservative, says Hunt, but it’s also possible PC pricing gets more “aggressive” this year, or component pricing rises. “So some caution does appear prudent.”

Ben Reitzes, Barclays Capital: Reiterates an Equal Weight rating on the shares, while raising his price target to $17 from $15. “We continue to believe Dell margins may have peaked,” he writes. Problem is, a wind-down of the corporate PC refresh cycle means Dell “will need to adjust pricing a bit to provide more balance,” given that revenue underwhelming in each segment in the quarter, with desktop revenue down 8% and notebook revenue of $4.7 billion slightly less than expected. Server and networking revenue of $1.97 billion was also light, as was storage revenue and software and peripherals. Services was a bright spot and it “seems like that business is on solid footing.” Reitzes raised his year EPS estimate to $1.90 from $1.70.

Brian Marshall, Gleacher & Co.: Reiterates a Neutral rating, while raising his price target to $16 from $15, though he’s not convinced Dell can maintain its operating margin improvement. “Management’s FY12 operating income guidance is for growth of 12-18% Y/Y. This implies an operating margin outlook of 7.0% at the midpoint of guidance (i.e., a material decline over the next three quarters) […] There must be a decelerating operating margin trajectory (i.e., a 220bp decline from the most recent quarter).” Marshall raised his year EPS estimate to $1.74 from $1.65 previously, on revenue of $63.5 billion, up slightly.

Shaw Wu, Sterne Agee: Reiterates a Neutral rating and a $15 price target, while raising his fiscal year ESP estimate to $2 from a prior $1.70. However, his concerns are not allayed: “we remain concerned with the company’s longer-term fundamental position and believe the company needs to take more aggressive steps to reinvent itself. In our view, the company faces formidable competitors Apple (AAPL), HP, Acer, Toshiba, and Lenovo in its core PC business, and HP, IBM (IBM), Cisco Systems (CSCO), and Oracle (ORCL) in the enterprise business.”

Richard Kugele, Needham & Co.: Reiterates a Hold rating, while raising his year estimate for EPS to $1.88, leaving his revenue more or less unchanged at $64.9 billion. “We believe that to warrant further appreciation in the stock, the street would need to: 1) suspend its negative view on tablets, 2) assume a near-term recovery in the consumer PC market, and 3) believe Dell will be able to maintain or expand margins even in the pending less favorable component environment (all of which we see as unlikely at this time).”

Keith Bachman, BMO Capital Markets: Reiterates a Market Perform rating, while raising his price target to $19 from $18. “Given weak stock price performance by HPQ, and strong stock performance by IBM (IBM), we believe that investors will consider and indeed put some new money to work in Dell,” writes Bachmn, though he’s not convinced there’s enough upside to raise his rating on the shares.

Article courtesy of Tech Trader Daily

Break out the bubble wrap.

SAC Capital will be closing its Chicago office at the end of the year. The news isn’t much of a big deal, as the Illinois outpost only has about 10 employees working there, some of whom will be redistributed at other SAC locations. The hedge fund set up the Chicago presence just over two years ago, but apparently it didn’t quite take, with staff often traveling to the Stamford headquarters and things “never really taking off” out there.

Article courtesy of Dealbreaker

As I wrote earlier, Cisco Systems (CSCO) was the subject of two downgrades this morning as the Street mulls the difficult work the company has ahead of it to fix its business.

The stock is currently down 93 cents, or 5%, at $16.85.

But it’s not all glum: there are some upbeat notes out there as well. In particular, I would note that folks are raising their EPS estimates this morning on cost-cutting expectations even as they take down their revenue numbers for Cisco for this year and next.

Brent Bracelin, Pacific Crest: Reiterates an Outperform rating and lowers his price target to $22 from $25. “Simplifying and streamlining Cisco’s operating model are now under way […] If 30% to 50% of these savings fall to the bottom line, EPS could be $0.04 to $0.07 higher.” And he raised his EPS estimates for this fiscal year to $1.61 from $1.59, and for next year to $1.75 from $1.72.

Brian White, Ticonderoga Securities: Reiterates a Buy rating and a $28 price target. “The combination of axing unrealistic financial targets and taking full responsibility for Cisco’s challenges over the past year, while outlining actions to simplify the company […] was a refreshing tone that we believe is setting up the early stages of a turnaround at Cisco,” writes White. “Given the combination of these steps taken by Cisco and a bottoming out in the company’s sales cycle, we believe value investors should now begin buying the shares.” White raised his full-year EPS target to $1.61 from $1.55, and for 2012, he raised his estimate to $1.74 from $1.70.

John Marchetti, Cowen & Co.: Reiterates an Outperform rating, though he thinks the shares are likely to be merely in line with the market “near-term” because last night’s remarks from the company “do little to answer questions on growth and margins.” “investors are unlikely to view the stock as cheap until visibility on growth improves and the company can outline a path to more stable gross margins.” He raised his EPS estimate for this year to $1.60 from $1.59, and to $1.78 from $1.75 for next year.

Brian Marshall, Gleacher & Co.: Reiterates a Neutral rating on the stock. “The company is a tanker ship that will require multiple quarters to fix its long-term financial model. Cisco continues to face margin pressure from smaller competitors […] such as Juniper Networks (JNPR), Check Point Software Technologies (CHKP), Riverbed Networks (RVBD), F5 Networks (FFIV), Acme Packet (APKT), Aruba Networks (ARUN), Fortinet (FTNT), Brocade (BRCD), etc.” Marshall raised his 2011 EPS estimate to $1.60 from $1.58, but cut his 2012 estimate to $1.68 to $1.71. On the plus side, Marshall notes that Cisco has “some of the most attractive secular growth opportunities in the information technology industry” in front of it, and that its “penetration” of its potential addressable market of perhaps $150 billion is just 30% based on revenue of $42 billion a year. He thinks Cisco’s “ace in the hole” are “vblocks,” data center capacity delivered as a “utility” through an “IT-as-a-service” model.

Article courtesy of Tech Trader Daily

Here’s what Lee Ainslie, James Dinan, Izzy Englander had to say on the “hedge funds legends” panel at this year’s SALT conference in Vegas about the culture within their firms:

Ainslie: “It’s very important to identify what you values are; make sure everyone understands what you’re trying to achieve as a team. Our training week at the beginning of the year starts with an ethics section. We never keep an individuals’s P&L- only team P&L, so no one person gets credit or blame for an investment decision, which makes for a very collegial culture and makes people do recognize that they’re there to what’s in the best interest of our investors.

Dinan: “At the end of the day, we’ve tried to create a culture that’s egalitarian. Myself and the other partners sit on the same desk as everyone else on the firm. We’re open, we have no secrets, we discourage people from thinking about ‘their business’ rather than ‘the firm’s business.’ We promote from within- every partner started as analyst and worked their way up. We don’t throw people out when they don’t work out we help them find something else. It’s not a Darwinian culture. People take a chance to go for the gold because they know we recognize that they’re people and not a cog in the wheel.

Englander: “It’s very important that there’s a common sense for the discipline, a level of simpatico. Unlike Jamie and Lee, everyone does have their own P&L and they’re judged on their own. If people want to share their ideas, that’s fine, if they don’t, that’s fine. Though I will say we do about 20-25% in statistical arbitrage- try getting a quant to be collegial.”

Article courtesy of Dealbreaker

Charlie Wolf of Needham & Co., who last week cut his rating on Research in Motion (RIMM) to Hold for its failure to maintain competitive products, today initiated coverage of Motorola Mobility (MMI) with a Hold rating, writing that Moto’s strategy of riding Google’s (GOOG) “Android” coat-tails could become increasingly risky this year.

There are two risks, as he sees it: there will be a proliferation of smartphone licensees of Android (some would say there are already a plethora), and, closely tied to that, there is a risk that Moto won’t be able to sufficiently differentiate itself as Android devices become commodities.

Moreover, he sees the same risk to Moto’s efforts with Android tablets, despite the fact that its “Xoom” tablet has gotten positive reviews so far.

“Since Android phones run on the same operating system, the major risk facing Motorola and the other licensees is the Android platform could commoditize, sending margins into value-destroying territories.”

Because smartphone growth is exploding, and because the devices are sold through carriers, subsidies have kept Android from commoditizing — meaning, no one buys them on price alone, he implies. As smartphone growth slows, Wolf expects carriers to press Moto and other vendors for lower prices on a wholesale basis.

He notes, “Google has licensed Android to over 40 manufacturers; and the only option for many second-tier licensees, located in emerging markets, is to capture share through aggressive pricing rather than differentiating features and services.”

On the strength of 20% revenue growth, Motorola Mobility should earn $0.85 in 2011 as the company leverages the fixed components in its expense structure. We do not anticipate that Motorola Mobility will experience smartphone sales shortfalls or increasing margin pressures in 2011 because the Android platform itself is growing so rapidly. However, 2012 could be a different story. We expect Motorola Mobility’s revenue growth to slow to 15% in that year. We also expect that pricing and gross margin pressures will begin to emerge as growth in the Android platform slows. With little additional leverage available in its expense structure, Motorola Mobility’s 2012 earnings should rise modestly to $1.10 per share.

I would note Wolf’s estimate is higher than the 80 cents analysts are estimating this year, but the 2012 figure for $1.10 is well below the consensus $1.70.

Moto shares today are down 41 cents, or 1.6%, at $25.13.

Article courtesy of Tech Trader Daily

Shares of organic light-emitting diode (OLED) maker Universal Display (PANL) are down $8.57, almost 15%, at $48.06 after the company last night reported a larger-than-expected Q1 loss per share, in part due to a stock warranty liability charge.

Excluding special items, the comparison was an 8-cent-per-share loss for Universal versus 3 cents per share expected.

Despite the miss, even the bears this morning concede a bright outlook for the company’s growth:

Robert Stone, Cowen & Co.: Reiterates an Outperform rating and cut his year estimate to a loss of 19 cents from a loss of 4 cents on higher expenses for the company. He sees $9 million of revenue in the current quarter, lower than the $10 million average estimate on the Street. With several factories ramping up in the near future to produce Universal’s panels, he sees more smartphones shipping later this year with the company’s displays, including Samsung’s (SSNLF) “Galaxy S-II.” Stone raised his year revenue estimate to $42.6 million from $41.5 million.

Darice Liu, Brigantine Advisors: Reiterates a Hold rating, writing that he “missed the run-up,” and is waiting for a better entry point in the shares. Liu argues that the OLED industry “has finally achieved a sustainable and growing level of investments,” and that he expects “new customer relationships will materialize in the next six to 12 months” for Universal. While the revenue in Q1 was disappointing, Liu thinks the street “won’t dwell on it,” and he also sees a lift for the company from agreements to come with LED lighting companies.

James Ricchiuti, Needham & Co.: Reiterates a Hold rating, while cutting his year EPS estimate to a loss of 5 cents per share from a profit of 7 cents, on higher revenue of $46 million as opposed to $45.3 million previously. He also raised his 2012 revenue estimate to $90 million from $84 million previously. “PANL is well positioned for continued robust growth over the next several years, with the AMOLED market forecast to more than triple this year and grow nearly 80% in 2012. In short, OLED industry fundamentals have never been brighter.” Because the company has not signed a new licensing agreement with Samsung, he’s sticking with his Hold rating.

Article courtesy of Tech Trader Daily

Shares of JA Solar (JASO) are up 28 cents, or almost 5%, at $6.23 after the company this morning beat analysts’ Q1 revenue and profit estimates, reporting $556 million in revenue and 41 cents per share in profit, versus the consensus $552 million and 32 cents.

Q1 revenue in the quarter ended in March nearly doubled from the year-earlier quarter, with shipments up 66% to 451 megawatts from 272 megawatts in Q1 of last year. Revenue was down 5.5% from Q4′s level, the company said, as shipments slipped from the 463 megawatts achieved that quarter.

Gross margin of 17.3% was down from the year-earlier 23%.

Despite much higher revenue and shipments, JA was able to keep a lid on operating expenses, which, at $13 million, came in roughly at the same level as the year-earlier period.

JA said its module shipments would fall sequentially in the current quarter, to 400 megawatts, “Due to changes in the market environment as result of the recent solar policy changes in Italy.” However, similar to Trina Solar (TSL), which pre-announced cuts in its Q1 outlook this morning but kept its year view, JA reiterated an expectation that for the full year, it will ship 2.2 gigawatts.

Article courtesy of Tech Trader Daily

Shares of Activision-Blizzard (ATVI) are up 9 cents, or 0.8%, at $11.62 after the company easily beat Q1 revenue and earnings projections.

Activision raised its forecast the the year’s revenue and earnings outlook, though the revenue projection was below what analysts have been modeling.

Q1 revenue on a non-GAAP basis rose 6% to $755 million, beating the average $668 million estimate. EPS of 13 cents was ahead of the consensus 8-cent estimate.

Revenue from digital delivery of game titles was up 30%, year over year, accounting for more than half the quarter’s revenue, the company said.

CEO Bobby Kotick noted that the company’s “Call of Duty: Black Ops First Strike” broke records on Microsoft’s (MSFT) Xbox Live, with 1.4 million downloads, and was the best-selling game of all time in dollar terms on the Xbox 360 and Sony’s (SNE) PlayStation 3.

For the current quarter, the company sees $575 million in net revenue, again, on a non-GAAP basis, and 4 cents per share in earnings. That is below the $661 million and 8 cents per share in earnings the Street has been modeling.

For the full year, the company raised its forecast to $3.95 billion in revenue and 73 cents per share, from a prior estimate of $3.9 billion and 70 cents per share.

Analysts have been modeling $4 billion and 72 cents.

The company noted that its Blizzard division has not finalized plans for new game titles this year, and the full-year forecast does not reflect any new games that may be released by Blizzard this year.

Article courtesy of Tech Trader Daily

After delaying its IPO until the second half of this year, Skype is now said to be in deals talks with Facebook and Google.

Both companies are apparently trying to form joint ventures with the video-calling company, and Facebook CEO Mark Zuckerberg has also considered buying Skype outright, sources in the know tell Reuters.

But with dozens of reports about Google and other companies trying (and failing) to buy Skype over the past few years, it’s difficult to tell if things will be any different this time around.

A Skype deal could be valued between $3 billion and $4 billion, while the company expects to raise around $1 billion from its IPO, the sources say.

Last fall, Skype added the ability to log-in with Facebook Connect, which made it easier for users to call and video chat with their Facebook friends. A further deal with Skype could bring the service directly into Facebook so that users can call their contacts without leaving the web browser. That’s a feature already offered inside of Gmail with Google Talk, but it’s not difficult to imagine how Google could take advantage of Skype’s massive user base and brand recognition with a joint venture.

In the long run, Google may have more to gain from a relationship with Skype, especially as it’s attempting to take on the iPhone’s FaceTime video chat with Google Talk on Android phones. Skype also recently brought video chat to its iPhone app, while Skype video chat on Android phones is limited to only a few devices.

Skype filed for an IPO last August, but the company has reportedly delayed it until the second half of this year to let new CEO Tony Bates find his footing.

Tags: IPO, video chat

Companies: Facebook, Google, Skype

People: Mark Zuckerberg, Tony Bates

Article courtesy of VentureBeat » deals

Could this be the end of an era?

LinkedIn, one of the highest-profile tech initial public offerings this year, indicated today that it will list its shares on the New York Stock Exchange (NYSE) rather than the NASDAQ stock exchange, according to an updated version of its S-1 filing with the Securities and Exchange Commission.

The NYSE has dueled with the NASDAQ stock market to attract high-profile tech IPOs, but it’s traditionally been a losing battle as the NASDAQ stock market regularly plays host to the largest tech companies in the world like Google and Apple. But recent high-profile tech IPOs indicate that is changing. The NYSE nabbed Chinese social networking site Renren last month. Pandora, an online radio station and another high-profile tech IPO this year, also said it would list its shares on the NYSE.

LinkedIn’s announcement also comes at a time when NYSE Euronext, the company that runs the New York Stock Exchange, is in a high-profile fight with NASDAQ OMX, the company that runs the NASDAQ stock market. NYSE Euronext is fighting off a takeover bid by its tech-heavy rival stock market. NASDAQ OMX said it is committed to making a deal worth $11.1 billion for NYSE Euronext.

The business-savvy social network will list its shares under the ticker “LNKD.” The company filed to go public in January this year to raise up to $175 million. The latest filing with the SEC also indicates that LinkedIn now has 100 million members, up from the 90 million it indicated in its last S-1 filing.

The updated filing also included some new information about its financial performance. The company brought in $94 million in the first quarter this year, up 110 percent from $45 million in the first quarter last year. It earned $2.1 million off that revenue in the first quarter this year, up 15 percent from $1.8 million in the first quarter last year.

LinkedIn is a business network that’s designed to help professionals connect with other potential business contacts and get a “warm introduction” through people in their network. The company said it had 990 employees at the end of 2010.

Tags: NASDAQ, New York Stock Exchange, NYSE, stock market

Companies: linkedin, NASDAQ OMX, NYSE Euronext, Pandora, RenRen

Article courtesy of VentureBeat » deals