Displaying items by tag: shares

Global ride-hailing firm Uber has projected a more measured valuation ahead of its IPO debut on the New York Stock Exchange later this week.

Published in Finance

US chipmaker Qualcomm has seen its shares prices soar on the New York Stock Exchange following the end to a long-running dispute between them and iPhone manufacturer Apple over patent license agreements.

The pair where set for another protracted legal battle in San Diego but managed to broker an agreement that satisfied both parties over royalty payments.

It has been reported that resolution deal between Apple and Qualcomm includes a six-year license agreement with the option to extend for two years, and a payment to Qualcomm from the US tech behemoth.

Qualcomm shares rocketed by 15.2% as news of the deal broke on Wall Street. Apple saw its share price rise by 0.7% although it was significantly less than that of Qualcomm. Dow member IBM saw its shares plummet by 4.6% after Q1 sales fell short of analyst projections.

The US economy has been under the microscope in recent weeks after some fiscal analysts had claimed it was slowing down. However, Wall Street stocks were mostly higher following better-than-expected Chinese economic data.  China's first-quarter growth came in at above expectations at 6.4 percent following government stimulus measures, a report that eases concerns about slowing global growth.

Published in Finance

ZTE’s share price nosedives as it resumes trading

Written on Thursday, 14 June 2018 08:26

Chinese telecommunications behemoth ZTE has seen its share price plummet by a whopping 39% following the resumption of its trading on the Hong Kong stock exchange. The Chinese vendor was able to resume trading after it reached a resolution agreement with the United States.

ZTE looked set to go out of business following the decision by the US Commerce Department to prohibit American companies from selling crucial hardware and software components to it for a period of seven years.

US officials implemented the ban after it claimed ZTE had failed to make the changes to its Board of Directors after being found guilty of trade violations with Iran and North Korea in 2016. However, following protracted negotiations between Beijing and Washington a settlement deal was finally reached which allowed ZTE to resume business in the United States.

The telecommunications colossus may have been saved but that didn’t stop its share price from nosediving by 39.22 to HK$15.56 during Hong Kong morning trade - while it also plunged by its 10 percent daily limit to 28.18 yuan in Shenzhen.

Fiscal analysts have predicted that whilst the nightmare for ZTE may be over with the US, the company will have to deal with the consequences of that saga for a significant period of time.

Analysts Edison Lee and Timothy Chau said, “While the nightmare is now over, ZTE will likely have to deal with many changes. We expect significant near-term selling pressure and a volatile stock price."

The ZTE crisis was a major issue during trade talks between the US and China, and the Trump administration were able to use that as leverage in the discussions. The ZTE settlement came just days after Beijing offered to increase purchases of US goods by $70bn in an effort to cut the yawning trade imbalance with the US.

It has been reported that Trump has demanded a $200 billion reduction in its trade deficit with China over two years.

“The US agreement with ZTE with fine and change of management, in other words, is a political deal," said analyst Dickie Wong at Kingston Securities. "If the US didn't 'free' ZTE in this way, US companies would find it very difficult in any moves in China, including decisions on mergers and acquisitions," Wong added.

Published in Telecom Vendors

Chinese telecommunications conglomerate ZTE has increased its market share in the US smartphone industry. Analysts have suggested that its success is down to a combination of aggressive marketing and its manufacturing of cheap and affordable devices.

Research from Counterpoint Technology has indicated that the Chinese firm has enjoyed a rise of 36% in the shipment of its smartphones to the US. ZTE sold 4.8 million units in the second quarter of this year. However, the launch of another big-screen, budget-friendly smartphone in the US is estimated to bring more success for the Chinese vendor.

ZTE is already the fourth largest smartphone vendor in the US, and is increasing the pressure on its rivals which include LG, Samsung and Apple. ZTE has formally announced that it will launch the Blade Z Max after it agreed to enter a partnership with Metro-PCS. It has been disclosed that the new device will retail at $129, which is the same price point as the ZTE Max XL.

ZTE strategy is quite clear, and it is also evident that it is proving to be a very successful one. CEO of ZTE’s mobile devices, Lixin Cheng said the firm’s latest device focuses on high-end specifications at an affordable price in order to make it available for the masses.

ZTE’s new device does boast a number of premium features, which include a six-inch full HD IPS LCD display with a scratch resistant screen. When compared with its much more expensive counterparts such as the iPhone 7 and the OnePlus 5, it has many of the same features and capabilities as those devices. The Blaze Z Max has dual rear cameras at 16 megapixels.

It has been announced that Metro-PCS will begin taking pre-orders for the Blade Z Max online, whilst it will also be available in some selected Metro-PCS stores from August 28th. In addition to being the fourth-largest smartphone vendor in the US, ZTE has also established itself as the second-largest vendor in the no-contract market sector.

The encouraging latest figures released show that ZTE’s US strategy is having the desired effect, and with this latest device launch, which is expected to be a massive success, the future looks bright for the Chinese conglomerate as its aims to accelerate its growth in the US market in 2018.

Published in Telecom Vendors

Telstra shares plunge after announcing dividend reduction

Written on Sunday, 27 August 2017 07:14

Telstra, Australia’s largest telecommunications company, saw its shares dive to a five-year low on August 17 after announcing it will reduce its dividend this financial year. The operator reported a 1 percent lift in its full year profits amidst tough competition, but attention quickly centered on the announced cut to its dividend from next year.

The company says the cut to its dividend will help it create a battle fund so it can better fight new competitors in the market. Telstra paid 31 cents a share for the year just ended, but now plans to pay a total dividend of 22 cents a share for the financial year to end next June, after reassessing its dividend policy.

The move saw Telstra’s shares drop in morning trade on August 17. Shares were down 8.3 percent, or 36 cents at $3.95, Herald Sun reported, which is the lowest it’s been since September 2012. Lack of confidence in the firm resulted in $4.4 billion being wiped from its market value.

Telstra now expects to pay around 70 to 90 percent of its earnings in dividends, a historical shift away from its usual practice of paying out almost all of its profits. The new ratio, it says, is “more in line with global peers and local large companies.”

The move was “about setting the business up for success” said Telstra CEO Andrew Penn.

Published in Finance

Social networking colossus Facebook has seen its shares soar to a record high after it disclosed the financial results of its second quarter, which revealed that its mobile advertising business has grown by a staggering 50%. The results reaffirm the view that Facebook is now the venue of choice for an ever-increasing amount of online advertisers.

Facebook owns four of the most popular mobile services in the world, and it has seen it shares rise by more than 4% to $173 following after-trading on the Wall Street Stock Exchange. However, overall Facebook’s stock price has climbed to almost 44% this year.

Facebook has been adding more and more advertising into its Facebook News Feed, but that has become condensed, whilst it has also added adverts to its photo-sharing app Instagram, which has more than 700 million users. Facebook currently has over 2 billion users worldwide.
Facebook CEO, Mark Zuckerberg has confirmed that he plans to monetize its two messaging services Messenger and WhatsApp, which combined have more than 1 billion users each. Zuckerberg has expressed his desire to see the company move faster on this aim, but claimed he is confident they will get it right in the long-term.

Facebook also continues to accelerate its push into video, the social networking giant has identified this as an opportunity to win advertising spend from the TV industry, as more and more people spend their time consuming news and video content on its platform. Facebook is expected to launch a new video service that will include scripted shows, which is a sharp change of strategy from an organization which is founded on user-generated content.

Zuckerberg has previously stated that he firmly believes that video represents the future of Facebook’s business over the next 2-3 years. Facebook has officially confirmed that its total revenue rose form 44.8% to $9.32 billion in the second quarter of the year, which beat the average forecast of the $9.20 billion predicted by financial analysts. Facebook enjoyed incredible growth in mobile advertising, which has increased to nearly $8 billion.

Facebook Chief Financial Officer, David Wehner, expressed his delight at the financial results, and claimed that he expected to see Facebook continue to grow its mobile advertising capacity. He said: “In mobile we're continuing to see great strengths. We're seeing more and more ad dollars getting allocated to mobile, and we think that trend will continue."

Published in Finance

Blow for Australian telecommunications firm as profits slump

Written on Thursday, 16 February 2017 07:30

Australia’s leading telecommunications company Telstra has reported a slump in first half profit - as the combination of increased competition in the market and a shift towards digital have had a significant impact. Its fixed-line and mobile businesses both took a big hit due to the aforementioned factors above, with net profit after tax for the first-half to December 31st also plummeting a sharp 14.4% to AUS$1.79 billion ($US1.38 billion) from the previous period twelve months ago.

The repercussions of this for Telstra has been felt on the stock exchange with the bleak financial report sending shares prices tumbling down to 4.43% AUS$4.96 in mid-table trade in Sydney. Chris Weston, IG Markets chief strategist attempted to dissect Telstra’s failings and stated it as a ‘weak’ result for the Australian colossus.

Weston said, “It’s a weak result, you’ve got revenue and underlying profit all missing (market expectations) by a decent chunk. The implied volatility in a stock like Telstra is so low that this is as big a miss as you are going to get.”

Revenue for services such as fixed-line and mobile fell 4.7% and 8.7% respectively for this period. Overall sales revenue also decreased by 3.4% to AUS$12.79 billion. Telstra also disclosed an interim dividend of 15.5 AUS cents. Despite the poor nature of the financial results reported by the organization, Telstra chief executive Andrew Penn attempted to portray a positive light on reports – declaring the telco had performed well in a highly competitive market.

Penn said, “Data volumes have increased and intense competition on pricing across fixed, bundles, mobile, data and IP has had an impact. Those are in parallel with the acceleration of the rollout of (the National Broadband Network) which, over the longer term, will have a negative impact on EBITDA (earnings before interest, taxes, depreciation and amortization) of AUS$2-3 billion."

The NBN, or national broadband network, aims to connect most Australian homes to superfast Internet over the next few years, replacing Telstra's existing copper network.

Published in Telecom Operators

British telecom and TV group BT saw its shares drop on Tuesday, 24 January, after accounting regularities were reported in Italy. BT shares sank 20.06 percent to 305.90 pence in late afternoon on London’s rising stock market. The accounting errors were first revealed in October, estimating BT would take a hit of £145 million. That figure was raised to £530 million on Tuesday.

An independent review of BT’s Italian business found accounting irregularities and a “complex set of improper sales, purchase, factoring and leasing transaction,” BT said in a statement. The net result was there has been an overstatement of earnings at BT's Italian business over a number of years, leading to the upwards revision in the value of the write-down.

BT chief executive Gavin Patterson said, “We are deeply disappointed with the improper practices which we have found. We have undertaken extensive investigations, and are committed to ensuring the highest standards across the whole of BT for the benefit of our customers, shareholders, employees and all other stakeholders.”

The company is reportedly trying to determine how the £530 million impact should be reflected in its financial statements for current and previous periods. According to reports, BT expects the fiasco to result in a reduction in its third-quarter adjusted revenue and adjusted earnings of around £120 million.

In a statement the company noted, “The improper behavior in our Italian business is an extremely serious matter, and we have taken immediate steps to strengthen the financial processes and controls in that business. We suspended a number of BT Italy’s senior management team who have now left the business.” The statement added, “We have also appointed a new chief executive of BT Italy who will take charge on 1 February 2017.”

BT in Italy is represented by BT Italia, which is the second largest business telecommunication operator in the Italian market, controlling an 11 percent share.

Published in Finance

India, a country with notoriously patchy mobile networks known for bad reception and irregular pricing, has been anticipating Reliance Industries’ long-awaited 4G mobile services, which is set to launch this month. The company is owned by India’s wealthiest citizen, Mukesh Ambani, who announced the launch on Thursday, September 1. The launch has not been received well by all, such as Reliance’s rival Bharti Airtel, which saw its shares plummet almost seven percent.

Mr. Ambani announced news of the 4G launch at the Mumbai-based company’s annual general meeting. He said the multi-billion-dollar telecommunications network, called Reliance Jio Infocomm, would be rolling out the network from September 5 following repeated delays, reports AFP.

The company’s chairman said it would cover 90 percent of India’s 1.25 billion population by March 2017. Bharti Airtel has already launched 4G, and now it will be competing against Reliance, which caused its stocks to slump 6.83 percent on the Bombay Stock Exchange in late morning after trading hours.

"We can transform India from a high price data market to one with the lowest data rates anywhere in the world," said Mr. Ambani, promising cheaper tariffs and free calls within India and no roaming charges.

His company has reportedly spent billions of dollars purchasing wireless spectrum at auction from the government in recent years, as it seeks to dominate India’s competitive mobile market, estimated at around 952 million users – more than twice the population of the United States.

Reliance delayed its 4G launch, after it was initially supposed to launch the service at the end of 2015. The company never explained the reason behind the delay, and it left Bharti Airtel free to snatch up millions of its customers. Now that Reliance is back in the game, Bharti Airtel reduced prices for mobile data services earlier this week ahead of Reilance’s launch, in a bid to prevent its users from switching to Jio in the coming months, AFP reports.

The reason why its shares are dropping nonetheless is because experts believe the estimated $15 billion Jio launch will be a game-changer for Reliance, which is attempting to diversify after deriving majority of its earnings from its massive energy operations.

Jio’s tariff plans would start from around 150 rupees a month ($2.24), according to Mr. Ambani, and would cost up to 5000 rupees for high-speed data services. Reliance investors appeared unimpressed by the announcement with shares slipping 0.90 percent, reports AFP.

Published in Telecom Operators

Mitel buys Polycom for nearly $2 billion

Written on Monday, 18 April 2016 13:18

Canadian telecommunications and cloud computing host Mitel is buying US videoconferencing giant Polycom for nearly US$2 billion in cash and stock, the companies announced Friday.

Polycom stockholders will receive US$3.12 in cash and 1.31 Mitel shares for each Polycom share, according to a statement.

The merged company will operate under the Mitel name and be headquartered in Ottawa, but will also maintain the well-established Polycom brand.

The deal, which still requires regulatory approval, is expected to close in the fall.

The combined company will boast 7,700 employees worldwide and revenues of about $2.5 billion.

Published in Finance