CalAmp Plummets 9%: But Not All Bad for IoT Co., Says William Blair

Internet of Things company CalAmp (CAMP), which this year bought legendary car-theft alarm system LoJack, today closed down $1.42, or 9%, at $14.31, after the company yesterday missed fiscal Q3 expectations and forecast this quarter’s results more or less in-line.

William Blair’s Jonathan Ho, who has a Market Perform rating on the shares, today writes that some deals in the company’s “telematics” business “slipped” from last quarter into this quarter.

But Ho thinks the “results were decent, when taking into account the unexpected late orders and legal expenses that affected both the top and bottom lines.”

Western Digital, Chip Equipment Outlook Boosted by Micron Comments

With shares of memory-chip maker Micron Technology (MU) soaring today, after upbeat results yesterday and an upbeat outlook, some on the Street are taking positive cues for the rest of the hardware industry, including competitor Western Digital (INTC).

Wells Fargo’s Maynard Um sees encouraging signs for Western Digital in Micron’s comments on the “bit growth” of NAND flash chips, which Western makes as well:

Micron Soars 13%: Partying Like Never Before in Memory Chips, Says Street

Shares of DRAM and NAND flash memory-chip maker Micron Technology (MU) are up $2.67, or 13%, at $23.25, adding to last night’s after-hours gains, after the company beat fiscal Q1 expectations and forecast this quarter’s results well above consensus.

The stock is heading to its highest closing price since June 25th of 2015. And today’s price increase is the biggest jump since this date in 2011, when it soared 16%, according to Dow Jones data experts.

In a telephone call following the report, CEO Mark Durcan talked with me at length about what he sees in the years to come, including an eventual escape from the “commodity” status of memory chips, but only after many years of work.

There are at least two upgrades of the stock today, from Needham & Co. and Cross Research, and plenty of price-target increases.

Needham’s Rajvindra Gill, raising his rating to Buy from Underperform, with a $33 price target, concedes that he is “late to the party.”

Red Hat Sinks 13%: CFO Exit, Q3 Miss Raises New Cloud Questions

Shares of Linux and open-source software distributor Red Hat (RHT) are down $10.16, or almost 13%, at $69.63, outpacing the broader market’s decline, after the company yesterday said its CFO is stepping down to become head of another company, and after reporting fiscal Q3 revenue that missed expectations, and offering a disappointing fiscal Q4 forecast.

Both developments raise new questions about the impact of cloud computing on Red Hat, notwithstanding excuses provided by the company.

Following the report, management had a conference call with analysts to explain why “billings” and cash flow both disappointed, in the report and the outlook.

Following that, CEO Jim Whitehurst spoke with me by phone, saying “Look, I think what we tried to convey is that all our leading metrics look really, really strong, whether size of deals, renewals, cross-selling, etc.”

The ostensible problem in the report was $20 million of government deals that slipped, in the wake of Donald Trump’s upset victory in the U.S. presidential election in November. That was compounded by “some really massive deals” that didn’t close on time.

Whitehurst told me that as more and more deals creep into the seven- and eight-figure range, it’s to be expected that futures quarters will be “back-end-loaded” in this way, as customers “wait to get a better deal,” by holding off on signing as long as possible.

Those explanations are not satisfying the Street today. There have been at least two downgrades, that I’ve seen, and a number of price-target cuts.

Some views from the Street:

Microsoft: Cloud, LinkedIn Thrill Piper, Morgan Stanley

Shares of Microsoft (MSFT) are trading down by 2 cents, at $63.51, with the overall sag in the market, despite multiple positive mentions this morning from sell-side analysts.

Piper Jaffray‘s Alex Zukin initiated coverage of the stock with an Overweight rating, and an $80 target, writing that the company is “in the driver’s seat” in what he deems “a generational shift to cloud computing.”

Microsoft has thus far merely become “relevant” in cloud, but Zukin thinks the company is poised to become “strategic.”

He sees cloud becoming a bigger and bigger chunk of Microsoft’s total revenue, even as margins expand for that business:

I Am Become Cloud, Destroyer of Earnings Estimates. The central tenet of our investment thesis and $80 price target is the belief that Microsoft’s fast-growing Cloud businesses will lead to accelerated revenue and gross profit growth through FY19. We model a Cloud revenue CAGR of 33% through FY19 (which we define as revenue from Azure, Office 365 (commercial + consumer), LinkedIn and a portion of the Dynamics franchise) with Cloud going from 11.5% to 30.6% of Total Revenue while at the same time Cloud Revenue gross margins expand from 42% to 60%.

Apple March Quarter iPhone Estimates a Tad Too High, Says Brean

If it’s Thursday, which it is, it must be time for another check into how Apple‘s (AAPL) iPhone supply and demand are doing.

Today’s check comes over the transom from Brean Capital‘s Ananda Baruah, who reiterates a Buy rating on Apple stock, and a $135 price target, writing that estimates for Apple’s March-ending fiscal Q2 are just slightly too high and will have to be reduced.

“What we see materializing is perhaps a confluence of circumstance where Street numbers (while not poorly set for CY17) perhaps need to come in just a tad more to start the year to give AAPL an opportunity to exceed estimates even in the context of ‘moving’ visibility.)”

So far, writes Baruah, the December quarter looks like it will be pretty much as he’s expecting, with perhaps 77 million to 78 million iPhone shipments. That may produce $77 billion in revenue and EPS of $3.11, he thinks, not far from consensus for $77 billion and $3.23. 

Tech Today: Micron Soars, Red Hat Plunges, MSFT lauded, Apple Sued

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

Shares of memory chip maker Micron Technology (MU) are up $2.87, or 14%, at $23.45, after the company yesterday afternoon beat expectations for its fiscal Q1 and forecast this quarter’s results well above consensus.rr

The stock gets at least two upgrades today, from Needham & Co. and Cross Research.

Needham’s Rajvindra Gill, raising his rating to Buy from Underperform, with a $33 price target, writes that he is “late to the party,” but that this “cycle might be better than 2014′s.”

“Are we returning back to the 2014 cycle where GMs peaked at 35.8% and the stock hit $36.50?” asks Gill. “We think so. Unlike in ’14, DRAM products are targeting more than just PCs.”

Shares of Linux and open-source software distributor Red Hat (RHT) are down $9.91, or 12.4%, at $69.88, after the company announced yesterday afternoon its CFO is departing and reported revenue that missed expectations and forecast this quarter’s results well below consensus.

Micron Surges 10%: CEO Durcan Sees a Path Out of Commodity Status

Shares of Micron Technology (MU) are up $1.93, or over 9%, at $22.51, in late trading, after the company this afternoon easily beat fiscal Q1 expectations, and forecast revenue and profit this quarter that crushed consensus.

Following the company’s conference call with analysts this evening, CEO Mark Durcan was kind enough to spend a few minutes talking to me by phone.

His summary of the quarter:

I think obviously we had a very strong quarter, and we’ve still got some very good tailwinds behind us, with our technology migrations and a lot of new value-add products, including lots of success in graphics, in automotive, and others. We’ve done a lot of hard work over the last 18 months, plowing the fields for the success we are having now, and we’re pleased with the strong customer traction we’re having. I think in summary, we feel good about our market position, like what’s going on with end markets, and we’re happy with our manufacturing and tech initiatives. 

Micron Surges 9%: FYQ2 Outlook Crushes Consensus

Shares of Micron Technology (MU) are up $1.93, or over 9%, at $22.51, maintaining earlier gains, after the company this afternoon easily beat fiscal Q1 expectations, as its conference call with analysts proceeds.

On the call, the company forecast revenue this quarter of $4.35 billion to $4.7 billion, gross profit of 31% to 34%, up from 26% last quarter, on a non-GAAP basis, and EPS of 58 cents to 68 cents, also on a non-GAAP basis.

Analysts have been modeling $3.98 billion and 40 cents per share.

Further detail is provided in a deck of slides for the call that is posted on the company’s investor relations site.

Red Hat Plunges 14%: CFO Calderoni Departs for CEO Role; FYQ3 Rev Misses

Linux and open-source distributor Red Hat (RHT) this afternoon announced its chief financial officer, Frank Calderoni, is stepping down, to become CEO of another company, sending the shares down almost 14% in late trading.

In a letter from Calderoni, posted by Red Hat with the SEC, Calderoni said the new role of CEO at another company “has been a personal goal of mine for some time now.” He said he left the company “with disappointment that I will not continue to help lead at Red Hat.”

Calderoni pledged to help work with the company for a “smooth transition.”

CEO Jim Whitehurst thankedCalderoni in the company’s earnings release  “for his contributions to Red Hat and for helping prepare Red Hat for the rich business opportunity we have before us.”

The company said it will appoint Eric Shander, VP of finance and accounting, and the principal accounting officer, “to act as the CFO of Red Hat, pending a decision on a permanent replacement.”

Red Hat also reported fiscal Q3 revenue that missed analysts’ expectations, but beat on the bottom line, and forecast this quarter’s revenue well below consensus.

Revenue in the three months ended in November rose 18%, year over year, to $615 million, yielding EPS of 61 cents, excluding some costs.

Analysts had been modeling $619 million and 58 cents per share.

The company offered the following detail on its subscription revenue:

Subscription revenue from Infrastructure-related offerings for the quarter was $431 million, an increase of 16% in U.S. dollars year-over-year and 14% measured in constant currency. Subscription revenue from Application development-related and other emerging technologies offerings for the quarter was $112 million, an increase of 33% in U.S. dollars year-over-year and 32% measured in constant currency.

For the current quarter, the company sees revenue of $614 million to $622 million, and EPS of 61 cents. That compares to consensus for $638 million and 61 cents.

The stock is down $10.79, or almost 14%, at $69, in late trading.