Trefis Top 5 – May 11 Insights (NFLX, T, FSLR, LVS, RIMM)
Today we looked at what impact Skype could have on AT&T (NYSE:T) and other telecom operators by leading to faster migration away from fixed line services to VoIP given Microsoft’s (NASDAQ:MSFT) large customer base and Skype’s popular and trusted platform. First Solar (NASDAQ:FSLR) and its competitor Suntech Power (NYSE:STP) announced that European governments could cut solar subsidies that would crimp profitability. Macau continues to carry Las Vegas Sands‘ (NYSE:LVS) results vs. other less regionally diversified competitors. Netflix (NASDAQ:NFLX) is starting to see more cooperation from media companies that once viewed it as a threat, and we look at what Procter & Gamble (NYSE:PG) could look like down the road given its ambitious growth plans.
With Microsoft, Can Skype Accelerate the Shift to VoIP?
Microsoft (NASDAQ:MSFT) yesterday announced plans to buy Skype for around $8.5 billion. [1] While it is clear that Microsoft aims to make enterprise products more collaborative as well as support its gaming and mobile initiatives to better compete with its peers like Cisco (NASDAQ:CSCO), Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL) and others, have we thought of the potential impact on telecom companies like AT&T (NYSE:T) now that Skype’s VoIP from the Microsoft platform?
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- Will Netflix Stock Rally 40% To Return To Pre-Inflation Shock Highs?
- How Will The Password Sharing Crackdown Help Netflix Q3 Results?
- Will Netflix Stock Return To Pre-Inflation Shock Highs Of Over $650?
First Solar Finds its European Stronghold on Shaky Ground
First Solar (NASDAQ:FSLR) and its competitor Suntech Power (NYSE:STP), the two largest manufacturers of solar modules in the world, recently discussed the impact that potential cuts in solar subsidies by European governments would have on their profitability. [2] The companies predict a substantial decline in their sales figures in Germany, Italy and France – a situation which is expected to be further aggravated by an accompanying fall in prices of solar components in the region. First Solar’s other competitors include SunPower (NASDAQ:SPWRA) and Yingli Green Energy Holding Com (NYSE:YGE).
Macau Growth Bolsters LVS’ Top-Line
Las Vegas Sands (NYSE:LVS) reported impressive Q1 numbers driven by strong revenue growth and margin expansion in the Macau region. Adjusted property EBITDA margin expanded across the Sands China property portfolio to reach a market-leading 33.4%. Overall firm revenues increased from $1.3 billion in Q1 2010 to $2.1 billion in Q1 2011, representing an increase of approximately 60%. Through its operations in the U.S., Macau, and Singapore, LVS competes with other prominent gaming names like Wynn Resorts (NASDAQ:WYNN), MGM Resorts International (NYSE:MGM), SJM (HKG:0880), Galaxy (HKG:0027) and Harrah’s among others.
Netflix Riding a Positive Feedback Loop
It seems that media companies are opening up to Netflix (NASDAQ:NFLX) which was once seen as a threat. [3] How have things changed for Netflix? Below we take a quick look. Although Netflix’s business model is unique, it still competes with Apple’s (NASDAQ:AAPL) iTunes, Hulu, video on demand (VoD) services from pay-TV providers like Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC) and Google (NASDAQ:GOOG) which has announced plans to launch a paid streaming service via Youtube.
What P&G Could Look Like in 5 Years
Procter & Gamble (NYSE:PG) is the leader in personal and household care industry and competes with other leading players such as Unilever (NYSE:UL), Colgate-Palmolive (NYSE:CL) and Kimberly-Clark (NYSE:KMB). We value P&G with a $75.25 Trefis price estimate of its stock, at roughly 15% premium to its current market price.
RIM Continues to Lose Ground in Smartphones
According to a recent report from Comscore, Research in Motion’s (NASDAQ:RIMM) share in the U.S smartphone subscriber market declined from around 32% in December 2010 to 27% in March 2011. [4] Google’s (NASDAQ:GOOG) Android was the biggest beneficiary and increased its share to 35%, while Apple’s (NASDAQ:AAPL) market share slightly increased to around 26%. This is not good news for RIM, which was the leader in the U.S. smartphone market until December 2010. [1] The fall has been dramatic, and RIM is now in danger of losing its second place position to Apple in this market. Can RIM revive its lost glory?
Notes:- Microsoft to Acquire Skype, May 10th 2011 [↩] [↩]
- Suntech First Solar Warn Of Lower Prices & Greater Competition, NASDAQ Company News, May 9 2011 [↩]
- A Changed Tune on Netflix, The Wall Street journal, May 9 2011 [↩]
- Comscore U.S. smartphone subscriber report, May 6th 2011 [↩]