Technology Roundup – Western Digital rises 7.4% after earnings; MicroStrategy climbs 18% after Q4 earnings

科技精选--西部数码股价在发布财报后上涨7.4%;MicroStrategy股价上涨
Published on: January 29, 2021
Author: Amy Liu

Western Digital rises 7.4% after earnings, as analysts note likely bottom in memory market

Western Digital (NASDAQ:WDC) is up 7.4% today following its fiscal second-quarter earnings beat.

“A bottom is a bottom is a bottom,” Evercore ISI says, and it believes NAND memory has “clearly bottomed.” It’s upgrading WDC to Outperform from In-Line, saying that improving supply/demand trends should give a “meaningful uplift” to earnings, and that the company is primed for a multi-quarter recovery.

It’s raised its price taget to $80 from $52, well over the median target of $60, and that implies 41% further upside.

Benchmark focused on improving margins heading into 2022 as the company benefits from improving macro conditions as well as new products and growth in 5G; it has a price target raised to $66 from $56.

And boosting targets to $65 are Mizuho and Cowen. Mizuho agrees the outlook for NAND is improving, a key factor in 2021 setting up stronger for Western Digital.

Cowen weighs in saying “the memory and storage markets are showing signs of bottoming.”

MicroStrategy climbs 18% after Q4 earnings

MicroStrategy (MSTR +17.9%) reports Q4 total revenues of $131.3M, a 1.7% decrease Y/Y.

Product licenses and subscription services revenues were $38.6M, a 3.3% increase Y/Y.

Gross profit was $110.5M, representing an 84.2% gross margin vs. of 81.6% prior.

Income from operations was $0.4M versus income from operations of $9.6M.

Net income was $2.7M, or GAAP EPS of $0.27, Non-GAAP EPS of $2.07.

The carrying value of MicroStrategy’s digital assets was $1.05B as of December 31, which reflects cumulative impairment charges of $70.7M since acquisition.

Cash and cash equivalents and short-term investments of $59.7M as of December 31.

Company purchased a total of ~32,220 bitcoins at an aggregate purchase price of $700M in Q4 2020 for an average purchase price of approximately $21,726 per bitcoin.

“2020 was a transformational year for MicroStrategy. In our enterprise intelligence business, we continue to embrace the virtual wave. We are successfully shifting our prospects and customers to our enterprise cloud platform, and also launched our new SaaS offering, Hyper.now. We also dramatically improved the efficiency and profitability of our business,” said Michael J. Saylor, CEO.

Ericsson rises 8.5% as networking, higher margins drive strong Q4

Ericsson (NASDAQ:ERIC) is up 8.5% after topping expectations with its fourth-quarter earnings, riding momentum from 5G networking contracts amid a ban on Chinese rival Huawei in several countries.

Revenues jumped 13% to 69.6B Swedish kronor. Perhaps more important, gross margin improved by nearly four percentage points, to 40.6% from a year-ago 36.8%.

Operating margin jumped to 15.8% from 9.2%. For the full year, “our operating margin of 12.5% exceeded our 2020 target and reached the 2022 Group target range two years early,” says CEO Börje Ekholm.

Operating income jumped 80%, to 11B kronor from 6.1B kronor. And net income rose to 7.2B kronor from a year-ago 4.5B kronor, about a 60% gain.

Sales by segment: Networks, 49.4B kronor (up 11%); Digital Services, 12.7B kronor (down 4%); Managed Services, 5.8B kronor (down 17%); Emerging Busines and other, 1.7B kronor (flat).

Cash flow from operations was 13.9B kronor, up from a year-ago 0.5B. Free cash flow before M&A was 12.8B kronor; adding in that impact, free cash flow was 3.5B kronor vs. a year-ago -3.2B. (The prior year saw impact from payments of 10.1B kronor related to resolving U.S. SEC and DOJ investigations.)

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