FT : Vodafone plans to move Silicon Valley innovation centre to London

Vodafone plans to move Silicon Valley innovation centre to London

Vodafone will move its product innovation and development team out of Silicon Valley to establish a centre in London, reversing the long-term migration of technology talent and ideas to the West Coast hub.
European politicians have warned about the damaging effects of losing skills and experience as technology companies either move to the Silicon Valley to benefit from more readily available pools of funding, or are acquired by larger US rivals.

However, Vodafone said that its so-called “xone” hub would benefit from the technology skills and talent in the UK and Europe and bring the research and development operations closer to customers in Europe, Africa and India.
The team will move from an existing base in Silicon Valley to London later this year. The office will be responsible for the development and incubation of emerging technologies and mobile apps, and will include about 20 engineers, technical architects and designers. Vodafone plans to expand the xone team in London.
British politicians will welcome the arrival of more jobs in a sector that they have long courted. Vodafone’s operations in the UK have been scrutinised in the past given the company pays little or no corporation tax in the country.
The British group sold its stake in Verizon Wireless earlier this year, although it still maintains a number of US offices including in the Silicon Valley.
Vodafone Ventures, Vodafone’s capital investment arm, will maintain its headquarters in California and will continue to work with early-stage start-ups. Vodafone Global Enterprise, which serves businesses throughout the US, will also maintain its presence in Silicon Valley.
Pratapa Bernard has been appointed as the head of Vodafone xone, reporting to Stefano Parisse, Vodafone’s consumer services director. Xone was set up two years ago.
Mr Parisse, Vodafone’s consumer services director, said: “Establishing a new hub for Vodafone xone in London will bring our product development team closer to the customers it serves.
“It will allow us to draw on a vast pool of technology talent in the UK and Europe and simplify our development process, enabling us to get the very latest technology into the hands of our customers as quickly as possible.”

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SWKS +5.5%, GIII +4.1%, SLP +2.2%, GWRE +1.6%, DG +0.6%.

M&A news: HSH +8.5% (confirms revised proposal to acquire Hillshire Brands At $55.00 per share in cash), AEC +0.7% (Land and Buildings sends letter to the Board of AEC; encourages sale of the company to maximize shareholder value), DFZ +0.6% (announces end of 'Go-Shop' period and designation of an excluded party).

Select mining stocks trading higher: IAG +2.3%, SVM +1.9%, PAAS +1.9%, GG +0.7%, SLW +0.6%.

Other news: PVCT +23.3% (PV-10 data presented at ASCO), IDCC +14.3% (announces patent license agreement with Samsung (SSNLF); issues guidance), SPEX +9.4% (confirmed it bolstered its balance sheet with $20 million equity financing), RNA +4.9% (announces regulatory path forward for drisapersen as a potential treatment for DMD), LOGI +3.9% (introduced the Logitech X300 Mobile Wireless Stereo Speaker), MPET +3.6% (announces plans for two UK wells in 2014), TFM +3.1% (insider buying), FBHS +2.5% (announced $250 mln share repurchase authorization), NVTL +2.4% (confirmed it received a favorable Supreme Court ruling in its patent infringement case), RFMD +2.4% (in sympathy with SWKS guidance), TQNT +2.2% (in sympathy with SWKS guidance),SUNE +1.1% (entered into a comprehensive agreement with Huantai Group, a Chinese solar PV co, to develop solar projects and supply key materials, technologies and services for the Chinese market), HLF +0.9% (commented on ruling by US Court of Appeals: 'Today's decision validates validates product consumption by participants as a legitimate measure of demand for multi-level marketing companies and rejects Bill Ackman's fundamental thesis').

Analyst comments: RAS +1.9% (initiated with a Buy at MLV & Co), PBFX +1.3% (initiated with an Overweight at Barclays, init Buy at Citi), MGAM +1.2% (initiated with a Buy at Stifel), LRCX +0.6% (initiated with a Buy at Jefferies), NBG +0.6% (upgraded to Buy from Reduce at Nomura), MCC +0.5% (initiated with a Buy at MLV & Co)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: ZQK -38.3%, KKD -10.9%, AMWD -5.6%, CMCM -1.2%, .

M&A news: NPSP -3.1% (co disclosed that it has not had any communications with Shire (SHPG) regarding a potential acquisition) .

Select EU names showing weakness: NOK -1.2%, DB -1.2%, ALU -1%, HSBC -0.9%, BCS -0.8%.

Select gaming stocks trading lower following soft May Macau gross gaming rev: MPEL -3.9%, LVS -2.5%, WYNN -1.8%, MGM -1.8%.

Select metal related names showing early weakness after wte China HSBC PMI: CLF -1.5%, RIO -1.3%, BHP -1.1%, MT -0.9%.

Other news: COMM -5.6% (filed for 15 mln share common stock offering by selling shareholders), BAGL -5.3% (in sympathy with KKD), WAIR -4.5% (announces 6 mln share offering of common stock by The Carlyle Group), GOOD -4.2% (announces common stock offering, size not disclosed), NLSN -1.5% (announces secondary offering of 20 mln shares of common stock by selling stockholder), GEVA -1.5% (light volume, presenting at The European Atherosclerosis Society Congress).

Analyst comments (may also be related to news): AEIS -11.3% (downgraded to Hold at Needham following announcement of CEO transition), CLVS -10.2% (downgraded to Neutral from Buy at Citigroup), CNC -2.4% (downgraded to Sell from Neutral at Citigroup)
.

>>> Skyworks (halted) raises Q3 EPS and rev guidance

Skyworks (halted) raises Q3 EPS and rev guidance

Co issues upside guidance for Q3 (Jun), raises EPS to $0.80, excluding non-recurring items, from $0.73 vs. $0.73 Capital IQ Consensus; raises Q3 (Jun) revs to $570 mln from $535 mln vs. $535.33 mln Capital IQ Consensus.

"As our upwardly revised outlook reflects, Skyworks is capitalizing on the growing opportunity within the Internet of Things as well as increasing analog complexity associated with higher data rate connectivity standards, both of which are enabling us to substantially outpace the growth of the broader semiconductor market. These macro trends continue to validate our investments in highly differentiated, custom solutions that are facilitating an expanding set of end markets. Based on our design win traction and order visibility, we anticipate continued strength beyond the June quarter as our products continue to gain momentum."

"We also expect our recently announced joint venture with Panasonic to further enrich our systems capabilities, broaden our technology portfolio and enhance our financial returns," said Donald W. Palette, executive vice president and chief financial officer of Skyworks. "In fact, we anticipate the Panasonic transaction will provide at least 100 basis points of gross margin accretion in fiscal 2015, paving the way for continued top- and bottom-line outperformance for the foreseeable future."

>>> Quicksilver shares plunge 36% following miss on earnings

Quicksilver shares plunge 36% following miss on earnings
  • Quiksilver (ZQK $3.66 -2.13) reported second quarter loss of $0.15 per share, which is worse than expected, while revenues fell 10.5% year/year to $408 million which is worse than expected.
  • "During the second quarter, we again reduced our expense structure, increased sales in our direct to consumer channels and emerging markets, and drove improvements in gross margins. These improvements were offset by decreased net revenues in our wholesale channel, especially in the developed markets in North America and Europe. Consequently, pro-forma adjusted EBITDA decreased versus the prior year." Americas net revenues decreased 18% to $186 million from $226 million, and were down 16% in constant currency. EMEA net revenues decreased 2% to $162 million from $165 million, and were down 5% in constant currency. APAC net revenues decreased 6% to $60 million from $64 million, but were up 3% in constant currency. Gross margin increased to 48.7% from 45.9%. The 280 basis point improvement in gross margin reflects the sales growth in our direct to consumer channels, reduced clearance activity in the wholesale channel of certain regions and benefits of licensing activities.
  • Guidance: The Company anticipates that the general sales trends of recent quarters compared to the same prior year period will continue into the second half of fiscal 2014 with continued net revenue declines in the North America and Europe wholesale channels being partially offset by net revenue growth in emerging markets and e-commerce. The Company also anticipates some continued year-over-year gross margin improvements in the second half of fiscal 2014, and that pro-forma adjusted EBITDA for fiscal 2014 will be below the $118 million achieved in fiscal 2013. The Company said that it has revised the timing for achieving its Profit Improvement Plan adjusted EBITDA target to the end of fiscal 2017.

>>> Krispy Kreme shares fall 11% following miss on revenues

Krispy Kreme shares fall 11% following miss on revenues
  • Krispy Kreme (KKD $16.88 -2.12) reported first quarter earnings of $0.23 per share, which is line with estimates, while revenues rose 0.8% year/year to $121.6 million which is lower than expected. Excluding the effects of refranchising three stores in Kansas and Missouri and three stores in Dallas in February and July of 2013, respectively, revenues rose 2.1%. "Today we reported our highest quarterly pretax earnings for a single quarter in over ten years, a remarkable achievement that reflects the collective efforts of our team members and franchise partners. We note, however, that severe winter weather adversely affected both on-premises and wholesale sales throughout our Company store base in the Southeast, and contributed to a 1.5% decline in same store sales at Company shops against a very tough 12.2% same store sales gain in the first quarter last year.
  • Our domestic franchisees, however, who were less affected by weather, posted a gain in same store sales of 4.5% on top of an 11.8% rise in the first quarter last year." The company issued guidance for the fiscal year 2015 with lowered EPS to $0.69-0.74 from $0.73-0.79 which is below estimates. This reflects, among other things, an increase in estimated costs related to implementation of new technology systems, higher compensation costs related to management succession, an unfavorable variance to expected results in the first quarter, partially offset by lower forecasted current income tax expense.