Connect with us

BenzingaEditorial

Dell Misses Revenue Estimates But Profitability Remains Strong

Published

on

Dell News

Dell Technologies (NYSE:DELL) posted its third quarter earnings on Tuesday after the bell. Expectations were strong considering that Dell has beaten EPS estimates 100% throughout the last year and even revenue estimates 75% of the time. But it seems that the 16-month US-China trade war hampered Dell’s success quite a bit as the company struggled with increased costs and weaker demand in its quarter ended November 1.

Third quarter FY 2020

Total revenue of $22.84 billion was close to Refinitiv estimates of $23.04 billion. Net income was $552 million is surely better than the loss of $895 million from a comparable quarter last year. Excluding items, the company earned $1.75 per share topping analysts’ estimates of $1.62 per share. Dell’s revenue growth is helped by its majority interest in software maker VMware Inc (NYSE: VMW) but it is the company’s personal computers and storage hardware products that fire up its profit.

But this time, the 11.4% rise in sales in its software maker VMware was completely overshadowed with dropped revenue from its server and networking unit that decreased 16.1% to $4.24 billion. Dell has warned that trouble in the servers’ segment will continue throughout the other half of the fiscal year.

Over the last three months, the company revised up its EPS estimates as many as 12 times, with only one downward revision. As for revenue there is almost a tie situation, with 5 upward and one extra for downward corrections.

Competitors

IBM Corporation (NYSE:IBM), often referred to as “Big Blue” is struggling with growing its revenues over the past few years. Actually, it’s been more than five years now. But in October last year, the company acquired the leading provider of hybrid cloud solution, a very rapidly growing sector of the cloud industry. This $34 billion acquisition is IBM’s largest acquisition in its 108-year history. And its strategy is showing signs of accelerating Red Hat’s revenue which grew 20% year-over-year on a constant currency basis. But, since it accounts for only about 6% of IBM, it isn’t big enough to move the entire IBM kingdom, just yet. But new clients were signed, relationships started growing and expanding and the long-term potential is nothing shorter of exciting. Although the company added $32.6 billion in net debt with this acquisition, it may just be worth the gamble in the end and generate substantial benefits for IBM’s investors.

Apple Inc (NASDAQ:AAPL) is pushing its services segment as it transitions to becoming a ‘services’ company with Apple Music, Apple TV+, and Apple Arcade, possibly indicating a service bundle on the horizon. Apple is for the most part doing ok building its ‘services’ image, besides its Apple News that is definitely struggling to enter the conversation.

Hewlett Packard Enterprise Company (NYSE:HPE) has rejected Xerox Corp’s (NYSE:XRX) offer saying it undervalues the company. But at the same time, it left the door open for negotiation. HP, being the much larger entity with a market cap exceeding $29 billion, while Xerox’s market cap is just under $8.5 billion, was very clear that HP is not in need of a saviour or in other words, in a desperate need of a buyer. And it minds Xerox’s aggressive approach, implying that maybe Xeros is the one in need of help as its financial position is raising certain concerns.
As for Lenovo Group Ltd. (OTC:LNVGY), the Chinese tech giant posted US$13.5 billion in revenue in the quarter ended in September, with company’s pre-tax income growing 45% compared to the comparable quarter last year with a 20% year-on-year increase in net income. The company’s profitability improved significantly and was driven by its personal computer business.
So, things are certainly not boring competition-wise!

Outlook

Despite weakening macroeconomic headwinds, Dell has set a clear path toward value creation. Its leadership and management are strong. And profitability remained strong as Dell again exceeded EPS estimates. It is in line with industry growth but it maintains its leadership position in its core areas, with the company aggressively expanding into new ones as well. And looking at the stock, it has gained 2% in extended trading after quarter results were announced. The stock managed to increase 16% in the past three months and 8.8% this year despite heavy headwinds like the trade war who is benefiting no one. There are challenges ahead, and let’s not forget the most trending one: how to balance invention with a more sustainable environmental impact! But Michael Dell is equally focused on building both his company’s product portfolio as well as this social value.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

IAM Newswire
Latest posts by IAM Newswire (see all)

BenzingaEditorial

Five IPO Week Ahead

Published

on

This week’s schedule consists of five IPOs and one direct listing.

E-commerce

South Korea’s answer to Amazon (NASDAQ: AMZN), the giant Coupang (NYSE: CPNG) plans to raise $3.4 billion at a $51.0 billion market cap. A leading player in its market nearly doubled revenue in 2020 and has expanded its margins, but it is unprofitable. Also, significant investments in fulfillment will weigh on cash flow in the near term. Its public debut has been overshadowed by series of injuries and deaths of its workers as eight employees have reportedly died over the past year due to overwork. Although South Korea has strong labor laws for full-time workers, including a maximum 52-hour work week, compulsory one-hour breaks during an eight-hour shift, and mandatory medical insurance for work-related injuries, these laws do not apply to temporary workers without contracts, and unions say there are many loopholes that companies such as Coupang are exploiting. Moreover, Financial Times reported its warehouse workers claim that the workload is much heavier compared to the company’s rivals.

Online gaming

Online gaming platform Roblox (NYSE: RBLX) will be 2021’s first direct listing. With an estimated market value at listing exceeding $29 billion, the company is still unprofitable with strong free cash flow. Its growth has been accelerated by the pandemic, although all of its revenues depend only on 1% of players. The platform for user-generated games is a universe of interconnected worlds created by CEO Dave Baszucki and the late Erik Cassel who played around with physics in a virtual world. They ended up coded a platform where kids and adults could interact in 3D simulated virtual environments that resembles virtual Legos. Some of its games have been played billions of times.

Pool equipment

Pool equipment supplier Hayward Holdings (NYSE: HAYW) plans to raise $725 million at its New York public debut at a $4.4 billion market cap. The company is a global industry-leader with a broad portfolio that holds an estimated 30% share of the North American residential pool market with its largest customer accounting for 30% of its 2020 sales, and its top five customers making 43% of its sales.

Craft

Fabric and crafts retailer JOANN (NASDAQ: JOAN) plans to raise $175 million but Barrons estimates it could raise as much as $186 million. The company operates a nationwide network of 855 sewing, fabrics, and arts and crafts retail stores, leveraged by an online digital platform as it sells fabric, sewing supplies, and paints and brushes, many of which became more needed than ever for mask-making. It is the nation’s leader in sewing as it controls approximately one-third of the market. The company is expected to make its NASDAQ debut on March 11th.

From after-school tutoring to an education group

The largest operator of private high schools in Western China and the third largest operator in China by student enrollment as of December 31, 2019, First High-School Education Group (NYSE: FHS) plans to raise $75 million at a $289 million market cap. Although it was originally established to provide after-school tutoring services, the company now owns 19 schools in its developing network.

Meat steak technology

Israeli tech company that develops cultured meat tech products, MeaTech 3D (NASDAQ: MITC) plans to raise $25 million at a $175 million market cap. This is a technology company focused on developing and out-licensing its proprietary 3D printing technology, biotechnology processes and customizable manufacturing processes to food companies that manufacture proteins without animal slaughter. In the third quarter of fiscal 2020, the company successfully printed meat tissue from stem cells as it delivered a thin, slaughter-free steak, but it has not generated any revenues and this will continue being the case in the near future.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

IAM Newswire
Latest posts by IAM Newswire (see all)
Continue Reading

BenzingaEditorial

Weekly Earnings Preview

Published

on

Here are a few spotlights on this week’s earnings front.

Personalized clothing is still trending.

On Monday after market close, Wall Street expects Stitch Fix Inc (NASDAQ: SFIX) to lose 22 cents per share and show revenue of $512.22 million as top line is expected to gain from continued growth in the company’s active client base. Valuation concerns have emerged, but the online clothing personalization specialist is investing heavily to expand the total addressable market and speed up purchase decisions. With a group of 145 data scientists, it is building an algorithmically-driven engine to showcase personalized apparel options so clients don’ need to search and browse to find desired clothing. But what investors want to see revenue growth acceleration and improved profit margins. What Stitch Fix did show is that even in times of a recession, consumers are willing to spend on clothing, as long as they’re given a helping hand which is exactly what its tech-powered team of stylists did.

Leaving the drama on the stage, or more precisely, the screen.

On Wednesday, Wall Street expects AMC Entertainment Holdings Inc (NYSE: AMC) to lose $3.21 per share on revenue of $156.3 million. There has been tons of drama outside the movie theaters, along with comedy and suspense with the Reddit-related noise. In 2020, movie ticket revenues plunged 82% YoY to $2.1 billion but the combination of vaccines and eased social distancing restrictions, AMC’s prospects should improve. Additionally,  AMC’s has enacted several capital raises which has greatly reduced the risk of near-term bankruptcy. Nevertheless, AMC needs to show it has what it takes to stay strong, particularly as streaming giants begin to release movies directly from their platforms.

Oracle is aiming for the clouds.

Also on Wednesday, after market close, Wall Street expects Oracle Corporation (NYSE: ORCL) to earn $1.11 per share on revenue of $10.07 billion. The market appears willing to assign multiple expansion to Oracle shares as the company transforms its business into a cloud subscription-based model, something that resembles what Microsoft (NASDAQ: MSFT) did a decade ago. But it remains to be seen if Oracle can compete with Salesforce (NYSE: CRM), Workday Inc (NASDAQ: WDAY) and Amazon (NASDAQ: AMZN). The company must demonstrate how it plans to gain a larger share of the market as the cloud market continues to accelerate.

DocuSign needs to show its digital framework is sustainable beyond the pandemic.

On Thursday, Wall Street expects DocuSign Inc (NASDAQ: DOCU) to earn 22 cents per share on revenue of $407.65 million. The selloff in tech stock have seemingly strengthened the pressure on its stock. DocuSign’s success is owed to enabling individuals and businesses to digitize an agreement process which was incredibly handy during the global pandemic as enterprises were forced to operate remotely. However, vaccines have made the market question DocuSign’s ability to sustain its growth rate. The company needs to show it can diversify its revenue stream with other products such as its contract lifecycle management platform which is seen as a strong growth candidate along with outlining its path towards profitability.

Although this might not be a very busy earnings week with five scheduled IPOs, we’re still in for some interesting insights as the world is building a new kind of post-pandemic normalcy.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

IAM Newswire
Latest posts by IAM Newswire (see all)
Continue Reading

BenzingaEditorial

Healthcare Industry- A Diamond In the Rough

Published

on

When looking for growth stocks, the healthcare industry probably isn’t the first place you’d think to look. Yet, what we realized last year is that an invisible enemy that weighs less than 1g can not only threaten our lives but actually stop the world – and healthcare ended up being the only superhero that we could turn to. Over the past decade, healthcare companies working behind the scenes have produced market-crushing gains. But US healthcare, which has dealt poorly with the pandemic, is worth almost $4 trillion a year.

Three years ago, Jeff Bezos, Warren Buffett and Jamie Dimon unveiled a joint initiative to fix the already troubled US healthcare system. But, the Haven venture will dissolve in February. Even the bosses of Amazon (NASDAQ: AMZN), Berkshire Hathaway Inc (NYSE: BRK-B) and JPMorgan (NYSE: JPM) were no match for this complex industry. The trio had a good plan as this is just the kind of legacy set-up tech should be able to skewer. They wanted to use their combined workforce that exceeds 1 million in a non-profit, tech-driven venture, to show what could be achieved without intermediaries.

But disruption alone cannot finish the job as hiring renowned surgeon Dr Atul Gawande as chief executive, someone better known for writing about healthcare than running a business, suggests the project prioritized talking over doing. Perhaps this is what got us in the trouble with the global pandemic in the first place. Fortunately, vaccine makers such as Pfizer (NYSE: PFE), BioNTech (NASDAQ: BNTX) and Moderna (NASDAQ: MRNA) delivered on their promises and we can see the light at the end of the pandemic tunnel thanks to their candidates. But, even though three of the world most successful businessmen didn’t succeed, does not mean that massive potential is not there.

Healthcare’s where the money goes

In 2019, U.S. healthcare spending grew to $3.8 trillion, which was 4.6% more than 2018. We can be sure this figure will keep rising because the pandemic has amplified how vulnerable human health is. The beauty of the industry is that health encompasses so many different segments such as clinical services, manufacturing of drugs and medical equipment, and healthcare-related support services, including medical insurance. These companies play a key role in the diagnosis, treatment, nursing, and management of illness, disease, and injury. They are essential for the health of the population which can easily be considered as the most important task on the planet.

Electronic health records still didn’t bring any benefits

Over the past decade, the federal government has spent about $36 billion to ditch paper records and switch to electronic health records. But accessing that data and actually using it to make better decisions for patients is still more challenging than it should be. If you want to know what your doctor looks like when he or she is angry and frustrated, try asking them about their experience with EHR providers.

In a nutshell, the hired providers focused primarily on facilitating complex billing systems that don’t have a lot to do with the main service. In simple words, the software hospitals bought was not made with healthcare in mind and the goal to help physicians make better treatment decisions and therefore it was set for failure from the very beginning. Healthcare is a noble profession that is much more about qualitative than quantitative figures. But, this does not mean it cannot benefit from software, on the contrary. Technology can do a great job in taking control of automated processes away from so doctors and nurses can devote their energy to what no machine can do – restore a patient’s health and save a life. We can take a medicine for a symptom or boost our immune system, but only a human being can find a way to identify what went wrong and make a roadmap to get us on a path to health, sometimes with their own hands. Have no doubt, what medical staff does is nothing short of magic. In order to serve them, the people behind the technology need to be aware of what these magnificent people do before creating the software.

Achieving scale and speed

The healthcare industry spends more than $600 billion per year on administration costs, which makes about 30% of all healthcare costs. Healthcare Business Resources, Inc. is one of the rare companies focused on providing technology solutions to make healthcare organizations more efficient. They are able to provide modern management, marketing, and technology solutions and refresh the antiquated healthcare business model because its officers, directors and advisors have a healthcare background. They are an SEC reporting issuer but not yet publicly traded.  They cumulatively acquired companies with a combined value exceeding  $20 billion who run billion dollar healthcare systems. They plan to grow primarily through strategic acquisitions to benefit from the power of synergy in which one plus one is not only greater than two but can also be greater than 11 – because when the right people come together, magic happens.

Healthcare is the place to be

The last drop that contributed to Haven’s collapse may have been the Amazon-ifying of healthcare as the ecommerce giant has launched online prescription service Amazon Pharmacy and a virtual primary care facility for employees. Even Jeff Bezos knew that if he wants to shake some of the criticism, US healthcare is always a good place to start. If 2020 taught us anything is that without healthcare, the world collapses and so do we. The potential is there, all that it needs is someone who is not afraid of a challenge and who will let action speak for itself.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

IAM Newswire
Latest posts by IAM Newswire (see all)
Continue Reading
Advertisement

TRENDING

Advertisement

Submit an Article

Send us your details and the subject of your article and an IAM editor will be in touch with you shortly

Trending