MSFT

Intel CEO Paul Otellini Will Step Down

by

This morning, Intel (click ticker for report: ) announced its current CEO, Paul Otellini, will retire in May. The company will focus on finding a new CEO during that time period, with Otellini and board chairman Andy Bryant leading the search. Given the recent weakness in the firm’s share price, many seem to suspect that Otellini’s hand was forced by the company’s inability to become the dominant mobile technology player. Though we view this criticism as valid, we doubt Otellini’s exit was anything more than a planned retirement. During his tenure, he oversaw several billions of dollars in earnings growth, helped grow the company’s data center business, made a savvy acquisition in McAfee, and returned billions of dollars to shareholders. … Read more

Windows Boss Steven Sinofsky Out at Microsoft

by

Late last night, news leaked that Microsoft (click ticker for report: ) veteran and Windows President Steven Sinofsky will leave the company. We’re shocked by this departure, especially considering Sinofsky’s list of accomplishments and that he was a potential successor to CEO Steve Ballmer. In addition to spearheading the revival at Windows in the wake of Vista, Sinofsky led Office for several years and was known as a “product guy.” Still, Microsoft’s shares look incredibly cheap at current levels, while providing investors with a fantastic dividend growth opportunity. We continue to hold the company in the portfolio of our Dividend Growth Newsletter. However, the wrap on Sinofsky is that he’s notoriously hard to work with, incredibly secretive, and he refused … Read more

Why Dividend Growth Investing Needs to be Forward Looking

by

Shares of Exelon (click ticker for report: ) have been tumbling lately due to the possibility of a dividend cut. The utility company needs rates to increase in order to keep up its current payout. That may not occur, and CEO Chris Crane noted that the firm may have to cut its dividend in order to keep its strong credit rating standing, which is fundamental to running Exelon’s business. In the aftermath of the announcement, both Jefferies and Argus cut the ratings on the stock, but we think both firms were a bit late to the party. Inside our Valuentum Dividend Report for Exelon, we can see what we thought about Exelon on October 30. The fact that Exelon’s dividend … Read more

Yahoo Beats Estimates; We Like Mayer’s Strategy

by

Web content firm Yahoo (click ticker for report: ) reported better than expected third quarter results Monday afternoon. Revenue grew 2% year-over-year to $1.09 billion, a touch better than consensus estimates. Operating income per share, which excludes the gain on sale of Alibaba, grew 66% year-over-year to $0.35, which was much better than the consensus expectation. Most of Yahoo’s profitability gains came from shrinking the workforce, which fell by 1,700 employees on a year-over-year basis, to 12,000. Sales and marketing expenses were cut 7% year-over-year to $269 million, while product development costs fell 5%. This focus on cost cutting allowed the company to generate adjusted operating cash flow of $496 million, up 39% compared to the third quarter of 2011. … Read more

Intel Maintains Margins While PC Business Stalls

by

Chip-maker Intel (click ticker for report: ) reported better than expected, though still weak, third quarter results Tuesday afternoon. The tech giant saw revenue fall 5% year-over-year to $13.5 billion, which was better than consensus expectations. Earnings per share fell 11% year-over-year to $0.58 per share, which was meaningfully better than the consensus estimate of $0.49 per share. Gross margins remained flat quarter-over-quarter at 63.3%, enabling the company to beat estimates and maintain profitability. Revenue in every region except Europe was down slightly from the previous quarter. Not surprisingly, most of Intel’s weakness came in the PC Client Group, where sales tumbled 8% year-over-year to $8.6 billion, as average selling prices fell 4% and volumes fell 4%. Production remains muted … Read more

Xbox Music Is a Nice Addition to the Surface Product Suite

by

Early Monday, Microsoft (click ticker for report: ) announced that it will add Xbox Music as a preloaded device to its Surface tablets. Much like Spotify, the service will allow users to compile their own on-demand music and playlists, but it will also be able to be used for downloading individual songs onto a cloud storage system. Though the new software will also be available on iOS (click ticker for report: ) and Android (click ticker for report: ) within the year, the service is a clear attempt to boost the attractiveness of the Surface tablet. The service will have the same selection of songs as the recently discontinued Zune Pass, and it revives the firm’s presence in music. It’s … Read more

Why We Continue to Like Apple and Microsoft

by

In yet another negative blow to the PC market, Gartner reports that PC shipments fell 13.8% year-over-year during the third quarter. The big losers, yet again, were the PC giants Dell (click ticker for report: ), HP (click ticker for report: ), and Toshiba. Of course, the shocking loser was Apple (click ticker for report: ), which saw shipments fall 6% (considerably lower than the 25%+ drops of competitors), though market share increased 110 basis points to 13.6%. With the entire industry slumping, who’s to blame? Not surprisingly, we’re labeling Apple as the major disrupter in the PC market. Since the inception of the iPhone and subsequent iPad releases, computing has shifted more and more toward mobile consumption, with the … Read more