The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1420 ET - Cloudflare's revenue outlook was a bit softer than expected, which it attributed to ongoing mixed macroeconomic data and heightened geopolitical uncertainty. The guidance prompted questions from analysts on an investor call, with one asking whether this warning was similar to one from two years ago when the company talked about seeing signs of a slowdown. CEO Matthew Prince notes that two years ago there was a clear signal the economy was slowing, but there's not as clear of a signal today. "I would say that there is certainly an uptick in uncertainty and sort of potential downside this quarter over last quarter. But I would not characterize it as the same concerns that I had in... 2022, where we saw what we thought was much, much clearer," adds Prince. Shares dive 17% to $74.06. (denny.jacob@wsj.com; @pennedbyden)
1212 ET - Unlike for some other tech companies, Apple's largest shareholders aren't going to make millions more when it raises its dividend. Chair Arthur Levinson, who holds about 4.43 million shares, will get about $44,000 more in dividend payments per quarter after the raise. CEO Tim Cook, the second-largest insider holder with 3.28 million shares, will receive about $32,000 more with every dividend payment. For comparison, Meta's largest individual shareholder, CEO and founder Mark Zuckerberg, would net about $7 million more per payout with the same percentage dividend raise. (ben.glickman@wsj.com; @benglickman)
1059 ET - Trimble gives a breakdown of its new reporting segment, Field Systems. CEO Robert Painter says the industrial technology company is moving towards hybrid model in the business where it's increasingly monetizing aspects as recurring revenue. "Thus, the segment revenue splits approximately 50/50 as hardware and software," Painter says. Trimble falls 6% on weaker-than-expected guidance. (denny.jacob@wsj.com; @pennedbyden)
0935 ET - Retail sales of orange juice in gallons touch a new low, according to the latest data from Nielsen. For the 4-week period ended April 20, sales of orange juice totaled 23.74 million gallons. That's the lowest sales volume dating back to 2001. Average retail price eased back slightly from a record high reached in the previous report, with Nielsen saying the average price per gallon of orange juice was at $9.57 per gallon for the period. Orange juice futures have eased back from a record high of $4.26 a pound reached in November, but have stayed rangebound in recent months as the Florida orange crop has slowly bounced back from hurricane and disease damage that sent production to its lowest since the 1940's. (kirk.maltais@wsj.com; @kirkmaltais)
0322 ET - Universal Music Group's first-quarter results seem encouraging overall, with revenue and adjusted earnings ahead of expectations, and some wrinkles shouldn't take attention away from the big picture, Citi analysts say in a research note. There are concerns about growth in subscriptions and streaming at the world's largest music company in the second quarter given the fading effect of last year's price increases at Apple and Amazon's music services, Citi says. However, the main takeaway from the results is that flexibility and innovation on slicing and dicing product tiers at music-streaming platforms will result in higher volumes and more value for Universal, either directly or indirectly, Citi says. Shares trade 1.7% higher. (adria.calatayud@wsj.com)
0253 ET - The Frankfurt trading floor was in a good mood following Apple's news on Thursday, but skepticism is warranted, CMC Markets analysts say in a research note. After-hours, the technology conglomerate traded 7% higher on the German stock index DAX but this shouldn't obscure the fact that its iPhone business is still only doing moderately, the analysts say. "Apple won't be able to buy its way out of this problem every quarter with such a large share buyback," CMC says. Investors shouldn't expect high growth rates from the company in future as it transforms from a growth to a value company, they say. The implementation of artificial intelligence in the iPhone 16--expected in three months--should help it stay a value company, they add. (nina.kienle@wsj.com)
0236 ET - Meituan's reported expansion of its food-delivery service to Saudi Arabia would likely be an effort to offset pressures at home, but one that is unlikely to bear fruit, Morningstar analyst Kai Wang says in a note. "We believe Meituan will not enjoy the advantage it has in China, which has helped it to grow its platform to 700 million users currently," Wang says. Meituan used exclusive contracts to gain market share in China, but has been under increasing pressure after such contracts were barred in 2022. Given this, it would make sense for the company to look abroad. But given uncertainty around its market positioning in Saudi Arabia, the venture would likely result in losses near term, Wang says. (sherry.qin@wsj.com)
2253 ET - Xero's success in developing partner channels in Australia should mitigate the risk that its price rises will increase customer churn rates, Macquarie analysts say in a note. They point out that Australia's regulatory and compliance environment means that about 70% of the cloud-accounting provider's business in the country comes through accountants and bookkeepers, who make the purchasing decision. They then pass on the cost to their customers. Macquarie lifts the stock's target price 1.3% to A$154.60 and keeps its outperform rating. Shares are up 1.9% at A$126.03. (stuart.condie@wsj.com)
2152 ET - Though the financial contribution of Baidu's reported collaboration with Tesla is still unknown, the partnership suggests positive recognition of Baidu's technology, Citi analyst Alicia Yap says in a research note. Baidu hasn't disclosed the pricing of its high-definition maps, but if it is able to charge CNY700-CNY800 per vehicle each year, it could translate to CNY1.28 billion per year given there are around 1.7 million Tesla cars in China, the analyst says. That would represent 6.2% and 1.2% of Baidu's estimated 2024 cloud and total core revenues, respectively, she says. Citi maintains a buy call on Baidu's ADR and keeps its target at $176.00. Shares last closed at $111.75. (sherry.qin@wsj.com)
1859 ET - GoDaddy is the latest company to announce layoffs this year. The company says with 1Q earnings that it restructured during the period to cut expenses and improve cash flow, with about 180 people affected. As of Dec. 31, 2023, the company employed 6,159 people, meaning the layoffs affected about 3% of GoDaddy's global workforce. So far this year, 274 tech companies have laid off about 79,852 employees, according to tracker Layoffs.fyi. Peloton and Tesla have also announced cuts this week. GoDaddy shares slip 1% to $123 after-hours. (ben.glickman@wsj.com; @benglickman)
1801 ET - Expedias website revamp for Vrbo is weighing down results longer than expected. The online travel-booking company says that Vrbo's recovery after being shifted to a new platform was lagging. The company expects that slower acceleration in bookings to weigh on results for the rest of the year. The company has been looking to consolidate its tech presence for its three main power brands in order to boost efficiency, and finished migrating Vrbo to the new platform in the fourth quarter. Expedia has said that the migrations caused conversion rates, or turning site visits into sales, to drop for Vrbo. Gross bookings rise 3% and miss Wall Street estimates. Shares fall 8.3% after-hours. (ben.glickman@wsj.com; @benglickman)
(END) Dow Jones Newswires
May 03, 2024 16:50 ET (20:50 GMT)
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