Technology Stock Roundup: ATVI, EA, PCLN, LNKD, AMZN, GOOGL

Technology earnings are winding down, so just a few big companies like ActiVision, Electronic Arts (NASDAQ:EA), Priceline (NASDAQ:PCLN) and LinkedIn (NYSE:LNKD) reported numbers last week. But there were other interesting stories, like Wal-Mart (NYSE:WMT) buying Jet.com, Amazon (NASDAQ:AMZN) launching Prime Air and Alphabet’s (NASDAQ:GOOGL) Verily teaming up with GlaxoSmithKline to develop bioelectronics products.

Here are the top stories-

Earnings Highlights

ActiVision: ActiVision’s second-quarter earnings were driven by three factors: Overwatch, which garnered more than 15 million users since its release on May 24; King Digital, which started contributing to revenue; and the Call of Duty franchise that continued to shine. Behind that excitement was the steady increase in subscription revenue that continued to offset the decline in product sales. Gaming companies will however be changing the way they report revenue deferrals, so the revenue number could start looking a bit different going forward. For further details read: Activision Q2 Earnings Top, "Overwatch" Outshines

Electronic Arts: In Electronic Arts’, it was more about FIFA Ultimate Team, as well as mobile games like Star Wars: Galaxy of Heroes and NBA Live. And similar to ActiVision, the company saw digital revenue growth that was partially offset by continued declines in packaged goods sales. The changing accounting system applies here too. For further details read: Electronic Arts Incurs Lower-than-Expected Loss in Q1

Priceline: The online travel agent with huge exposure to Europe came out unscathed from Brexit, the British pound devaluation, currency headwinds and ADR pressure to report results that were better than guided and ahead of the Zacks Consensus Estimate. While acquisitions did contribute to results, it’s management’s habit of conservatism that allowed the company to post another earnings beat. For further details read: Priceline Earnings Beat As Usual, Shares Up

LinkedIn: The social networking company that will soon become a part of Microsoft (NASDAQ:MSFT) , reported a solid quarter, surpassing the Zacks Consensus Estimate on both revenue and earnings. The results were helped by ongoing investments in mobile, global expansion of content and jobs, and the acquisitions of lynda.com and Connectifier. Management believes that being acquired by Microsoft will help the company to scale and deliver value to the global workforce. For further details read: LinkedIn's (LNKD) Q2 Earnings & Revenues Tops Estimates

Walmart-Jet.com To Take On Amazon

It’s being rumored by “people close to the matter” that discount etailer Jet.com will be acquired by discount retailer Wal-Mart for around $3 billion. This is nearly double Jet’s valuation at its last funding round late last year and it’s probably warranted because the company said it sold $90 million worth merchandise on its platform in May 2016, which is nearly triple the $33 million worth it sold last December.

Jet charges $50 a year for the guaranteed cheapest price for any item being sold, which is attractive enough for cost conscious consumers, nearly 3.6 million of which have become customers. To get this done, it partners with 1,600 sellers.

Cash infusion would help Jet a lot to scale its efforts and take on Amazon directly as it has always promised to do. On the other hand, Wal-Mart’s online efforts have been less than desirable with sales reportedly decelerating even as Amazon grows in leaps and bounds. The company has promised to add millions of items to broaden its range of offerings, but the technology to do more (Jet uses an algorithmic approach to determine discounts based on order size, shipping distance, marketing e-mail sign-ups and a customer's willingness to forego the right to return an item) can’t hurt.

Amazon Prime Air

Amazon is officially taking over some of its own package delivery. The company is showcasing the first of 40 jets it leased from Atlas Air Worldwide Holdings and Air Transport Services Group at the Seafair Air Show. The Amazon One as it is called is a Boeing (NYSE:BA) 767-300, which has Prime Air emblazoned on its side, a huge branding exercise for its Prime membership program. The planes will supplement logistics and delivery services it already uses from UPS and FedEx (NYSE:FDX). Amazon has had issues with third party delivery services in the past as it grapples to deliver on its one-day and two-day free shipping promise to Prime members. The aircraft are expected to help the process, especially during the busy holiday season. Amazon also expects to add 18 fulfillment centers this quarter so it can service the huge demand in the seasonally strong fourth quarter. While the company may not stop using independent carriers just yet because of the high demand, it obviously stands to generate cost savings if it takes these operations in-house.

Alphabet-Glaxo Partnership

GlaxoSmithKline plc has signed an agreement with Alphabet subsidiary Verily Life Sciences to form a JV called Galvani Bioelectronics. The goal is to invest £540 million ($714 million) over seven years to create devices that can replace faulty nerve signals responsible for diseases like diabetes, asthma and arthritis. Glaxo will bring its knowledge of drug discovery and development to the table with Verily supplying the necessary expertise in miniaturizing low-power electronics, data analytics and building software to come up with clinical applications. The companies expect to have effective bioelectronics therapies for regulatory approval by 2023.

Computer and Technology Sector Price Index

Computer and Technology Sector Price Index

Other stories you might have missed-

Corporate

Apple Energy Sales: Apple (NASDAQ:AAPL) subsidiary Apple Energy got the necessary regulatory approval from the Federal Energy Regulatory Commission to start selling excess solar power it produces at its three installations as well as the new campus in Cupertino (better known as the Spaceship). Other than its own installations, Apple has agreements to buy clean energy from a couple of in Nevada and one in Monterey County. Apple Energy applied for approval in June.

Facebook Hardware Lab: The leading social networking company now has a hardware lab a third of the size of a football field located inside its main campus. Facebook (NASDAQ:FB) is most unlikely to get into hardware manufacturing itself, but the computerized lathes, industrial mills and tools suggest that it will dapple with the kinds of hardware that use its software to better understand what works and what doesn’t. This isn’t the first time we’ve heard of hardware form Facebook: the company recently launched Oculus Rift, it has designed a 360-degree camera, it tests dronesin Somerset (England), it has built an R&D team called Building 8 and has scooped up Regina Dugan, who was then responsible for new tech gadgets at Google after serving as director of the Pentagon's Defense Advanced Research Projects Agency, or DARPA.

Facebook Olympics Features: Facebook has added a few features to bring the Olympics closer to people. Profile frames, as the first one is called, adds a frame around your picture with the flag of the country you’re cheering for below. Second, if you share photos or live-broadcast video using the MSQRD app during the games, the flag will appear over your face like a mask. Third, from August 1-5, Facebook will serve up an Olympics-related greeting in your News Feed with the option to click through to a page of “dynamic Olympic content” curated by Facebook tailored just for you.

Intel has New CIO: Intel (NASDAQ:INTC) has appointed Paula Tolliver as corporate VP and CIO, replacing Kim Stevenson who will take on the role of COO of Intel’s Client and Internet of Things Businesses and Systems Architecture (CISA) Group reporting to group President Dr. Venkata “Murthy” Renduchintala. Tolliver previously has been a Dow Chemicals executive for 20 years.

Microsoft Bond Sale: Microsoft announced the pricing of its $19.75 billion aggregate principal amount of senior unsecured notes in what Bloomberg says was the third-largest U.S. corporate bond sale of 2016. The cash will be used for general corporate purposes which includes acquisitions, funding for working capital, capital expenditures, repurchases of its capital stock and repayment of its existing debt. The offer closes on August 8.

Alphabet Bonds: Similar to other technology giants, Google is also refinancing $2 billion of its debt rather than bringing its offshore cash home. The tax laws require companies to pay the 35% of the cash repatriated, which makes these multinationals with huge international businesses hold their cash offshore. In Alphabet’s case, it also has a large number of other projects on hand, so there’s plenty of use for the roughly 40% of the balance sheet cash it holds in the U.S. It also generates significant cash on a quarterly basis. So raising fresh debt (Moody’s rating AA2) to retire old obligations makes perfect sense.

Target Will Sell Amazon Gadgets Again: Bloomberg reports that Target will carry Amazon devices like its Kindles again. The devices were banned in 2012 (with Wal-Mart also following suit soon thereafter) as it was thought at the time that selling Amazon devices would drive sales away from the traditional retailers to Amazon. But it’s now estimated that the online retailer already has a Prime member in half of U.S. households, so stealing customers may not be a factor now. More important is probably the ability to broaden selection so consumers are more satisfied with traditional retail. This is a big win for Amazon because its devices will become even more accessible now that they will be selling at 1,800-odd Target stores.

Twitter Plans For The Olympics: Twitter is creating a dedicated section in Moments that will feature content and stories as they happen during the Games that users can react to with more than 200 hashtag-triggered Twitter emojis that it has also launched. The company is promising users inside access, commentary, highlights and conversation through its Twitter, Vine and Periscope platforms. It is also featuring live Olympic Moments in Australia, Brazil, Canada, Mexico, Japan, UK and the U.S.

Legal/Regulatory

DoJ Royalty Decision On Music Streaming: Much to the chagrin of music publishers (Sony/ATV owned by Sony and the estate of Michael Jackson and Universal owned by Vivendi (PA:VIV) are the largest music publishers right now), artists and their organizations like American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), the DoJ has again ruled in a way that favors music streamers. Judge Denise Cote has ruled that no changes were warranted at this time to the laws governing consent decrees for payments through ASCAP and BMI. Judge Cote said that Pandora could therefore keep paying 1.87% of annual income rather than the escalating structure requested by ASCAP that would require it to pay 3% in 2014 and 2015. Earlier, she allowed Pandora the right to obtain a blanket license to all ASCAP music.

Apple On Patenting Device Design: Apple has roped in some designers to file an amicus curiae with the Supreme Court to uphold the decision of a lower court granting it $548 million. As things stand now, Samsung (KS:005930) is required to pay Apple the amount but is appealing to get it down to $399 million on grounds that the fine is excessive. Apple’s supporters are Calvin Klein, Paul Smith and Alexander Wang in this fight. Samsung also has many supporters it acquired through an amicus curiae filed earlier that mainly comprises tech firms that fear the upholding of an archaic law and includes organizations like the EFF.

Google Can Test Delivery Drones: Google, which has been testing its drones over NASA property, has now been granted broader permission by the Federal Aviation Administration. Google’s test sites are in Alaska, Nevada, Texas, New York, Virginia, and North Dakota, so presumably the testing will take place there. The search giant intends to use its drone service for high-speed low-pollution package delivery by 2017, around the same time that Amazon’s drones are also ready. The FAA may now be playing catch-up to the industry as Amazon recently announced it would by testing its drones in the UK.

Alibaba (NYSE:BABA) Gets Favorable Ruling: Alibaba continues to battle big brands suing it for profiting from the sale of counterfeit goods on its online marketplaces. However, in one aspect of a case filed by Paris-based Kering (PA:PRTP), the company has received a favorable ruling from a U.S. district court. The point seems to be nothing more than a technicality and Alibaba is unlikely to get away from other charges. In this case, the court said that Kering “failed to allege the existence of a conspiracy” between Alibaba and its merchants. He didn’t say that a conspiracy did not exist.

New Technology/Products

New Samsung Phablet: Samsung unveiled its Galaxy Note 7, a smartphone with a 5.7-inch AMOLED display, wireless charging, expandable memory, a penlike stylus, an iris-scanning camera to unlock the phone and water resistance. The specs are better than the latest iPhone in some respects and it’s not yet known if they will outshine the soon-to-be-launched iPhone 7. But the battle seems certainly to be heating up as Apple continues to compete with Samsung in phones while using some smartphone components it makes.

Intel Recalls Basis Bands: Intel’s Peak Basis bands or smart watches can monitor your heart beat all through the day. But these might cause minor burns due to overheating, as the chipmaker admitted back in June. At the time Intel asked users to stop wearing the bands while it worked on a software remedy. It is now saying that such a workaround wouldn’t be possible without significantly impairing the user experience. It is therefore recalling the bands. Intel has said that 0.02% of the Basis bands were impacted.

Google Mobile Page Loading: Google is now expanding its Accelerated Mobile Pages (AMP) to all its search results, so publishers can use the open-source format to create web pages that load faster. While Google hasn’t said that having AMP pages will improve the ranks of those pages on the search engine results page, the company does have the policy of allotting better ranks to mobile pages that load faster. Publishers that are already using AMP include eBay, Disney, Food Network, the NFL and TripAdvisor.

Google Addition To Open Compute Project: Google has announced the OpenRack 2.0 standard built in collaboration with Facebook. The standard enables hardware makers to cram more servers into a smaller area thereby making data center storage that much more efficient in power and space consumption. The standard will be presented for approval to the OCP this week.

Uber Maps: Uber intend to use $500 million of the money it recently raised from a Saufi Arabian wealth fund to build some mapping technology of its own. Uber’s moving away from Google Maps has less to do about the accuracy and popularity of Google Maps and more to do with creating a customized system that is more applicable to a pickup service. As the company’s current maps expert and former Googler says, “Existing maps are a good starting point, but some information isn’t that relevant to Uber, like ocean topography. There are other things we need to know a lot more about, like traffic patterns and precise pickup and dropoff locations. Moreover, we need to be able to provide a seamless experience in parts of the world where there aren’t detailed maps—or street signs.”

M&A and Collaborations

NBC Olympics Chooses Microsoft Azure: Microsoft’s Azure Media Services, a Platform as a Service (PaaS), will now compile, process and stream NBCUniversal and NBCOlympics.com’s 4,500 hours of online content across Android, iOS, Roku and Amazon devices, Windows 10 tablets, Xboxes, Windows Phones, PCs and Macs.

World Bank Gets Serious About Cloud: The World Bank is revamping its IT infrastructure, cutting 12-15% of its work force and reducing the number of data centers from five to two. This has been possible because of its moving workloads to Microsoft’s Azure and Amazon’s AWS. The bank is using Office 365 and SharePoint on Azure and taking most of the rest to AWS. More confidential stuff will remain on-premises for now.

Some Numbers

Some Other Companies That Reported Last Week: Symantec (NASDAQ:SYMC), Dun & Bradstreet (NYSE:DNB), Insperity, Fiserv (NASDAQ:FISV), Teradata (NYSE:TDC), Iron Mountain (NYSE:IRM), Harman, Zynga, Cognizant, Seagate, Paycom Software, Equinix (NASDAQ:EQIX), FireEye

Some Companies To Report This Week: Alibaba, Applied Materials (NASDAQ:AMAT), NVIDIA (NASDAQ:NVDA), Yelp, Paylocity