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Press Release
-EPS -10c (-19c est.), revenue $1.3 billion (1.27B est.)
-DRAM sales up 28% q/q, 19% increase in volume and 8% increase in ASPs
-NAND up 10% q/q, 23% increase in volume and 11% decrease in ASPs
-memory gross margin improved to 12% from 11% last quarter. Ex-items 8% gross margin vs. -12% laster quarter
-imaging unit sales 30% higher vs. last quarter. gross margin 20% vs. 2% last quarter
-cash $1.485B, debt $3.1B

Conference call
-first time DRAM prices increased in 11 quarters
-Q1 SG&A 80-85M, R&D 130-135M
-FY2010 $750-850M cap ex
-see strong demand in first month and many products are “on allocation”

Q&A
-rest of industry doesn’t have access to capital. equipment leasing financing is “closed”
-inventory in channel is “pretty tight”
-current supply output looks tight for rest of CY2009
-some customers asking 2X of their forecast 60 days ago
-server/networking business dramatically up from july/August forecasts
-PC OEMs want more output
-Q1 bit growth up mid 20s for DRAM, up mid to high teens for NAND

Net-net
-Networking business demand “up dramatically” from July/August bodes well for CSCO
-Big upside wasn’t there as PC OEMs pay lower prices than spot

Previous Quarter
-Guiding Q2 to $3.45-3.7B revenue, 3.8-4.1M net adds, EPS 94c-1.03
-Q2 gross margin 43-44%

Press Release
-Revenue $3.53B (3.62B est.), +37% y/y. 8.3M units shipped (8.5M est.), Adjusted EPS 1.03 (1.00 est.), gross margin 44.1%
-3.8 million net adds, 32 million subscribers
-$4.35 net cash/share

Guidance
-Q3 revenue $3.6-3.85B (3.92B est.), EPS 1.00-1.08 (1.05 est.)
-Gross margin 43%, net adds 4.0-4.3M

Conference Call
-over 500 carriers, 170 countries
-net adds lower as higher % went for upgrades
-low levels of channel inventory
-80% of new customers from non-enterprise: consumer and small business
-$320 ASP for Q3 as high-end product will launch later in the quarter
-7.9M new activations
-4 weeks of channel inventory
-$345 ASP for Q2
-DSO 61 days vs. 59 days last quarter
-guiding Q3 9.2-9.9 million units

Q&A
-very strong unit demand and efficient component cost savings which they are passing through (IE lower ASPs)
-This is a “land grab”
-We are going much more mainstream (sounds like they are willing to give up margin to get more volume)
-”you really don’t know” what will happen (not sounding confident to say the least)

Net-net
-Net adds weaker than expected as units sold increasingly to upgraders
-Q3 guidance for ASPs and gross margin weak. ASP goes from $345 to $320 and gross margin goes from 44.1% to 43%
-At $73.48 after-hours it’s trading at 14Xs CY10 EPS of 4.92 ex-cash
-Tone sounds like the carriers are really hammering them in negotiations

Previous Quarter
-1.6% comp sales

Press Release
-0.6% comp sales, revenue $1.9B +3.3% y/y ($1.9B est.), EPS 52c (48c est.)
1056 stores, 943 Bed Bath Beyond, 52 Christmas Tree Shops, 19 buybuy Baby, 41 Harmon
$1.236B cash, no debt, $4.75 net cash/share

Conference call
“outlook for overall retail environment remains challenging”
opened 9 BBBY, 3 buybuy Baby stores
32.5 million square feet at August 29th
FY2009 anticipate opening 58 new stores (27 opened already, 35 BBBY, 7 Christmas Tree, 12 buybuy Baby, 4 Harmon)
400 additional store opportunity in U.S. and Canada
Cap ex $68M 1H-FY09

Guidance
Comp sales flat to positive in Q3/Q4, slight negative-flat for FY
Net sales mid single digit Q3/Q4, low to mid single for FY
Expect some improvement operating margin, but SG&A improvement will moderate due to tougher comps
Tax rate high 30s, cap ex $250M, depreciation $180M
EPS 38c Q3, 1.79 for FY09 “now appear reasonable”

Net-net
Comps slowly improving. Quarter and guidance were fine

-Radeon HD5850 dual-slot DirectX11 $299
-needs 2 PCIe power plugs, 725mhz core, 1000mhz GDDR5 memory, Dirt 2 coupon
-wholesale price $233, but $199 to partners

-Radeon HD5870 dual-slot DirectX11 $399
-850mhz core, 1200mhz GDDR5 memory, Dirt 2 coupon
-wholesale price $333

-cards available tomorrow Source

SCEA Meeting Aug 5th Notes
Aug 6 2009 – DRAFT FOR COMMENTS

Objectives of Meeting
-Dyer agreed to regular quarterly meetings with SOA

Sony PS3
-SCEA reiterated plans to sell 13 million PS3s this year
-Big announcement back half of year they can’t talk about (potentially price cut of PS3 to reach hardware goals)
-SCEA commented on indexing between PS3 and 360 SKUs, should be around 2:1 to garner most favorable treatment.

Motion Controller
-Spring 2010 launch (March in JP)
-No bundle/pricing details yet, should come Sept 1
-Plan on selling 4-5MM units WW
-SCEA agreed to provide a list of Sega IP that would work well with the motion controller, Virtua Tennis was an example
-Motion Controller support allows easy way to differentiate PS3 SKU
-Other differentiation opportunities include PSP/PS3 interoperability – think of features that would make users want to buy both PS3 and PSP SKUs.

Alpha Protocol
-Michael Foster, product evaluator, said AP felt barely RPG. Initial level too challenging for players. “Mass Effect felt more RPG.”
-Review notes sent to John Merlino a few weeks prior. After meeting Gerald mentioned AP is a high priority for his team.

Planet 51
-Sell in of PS3 SKU – SCEA noted that other movie titles on PS3 had underperformed as well (inc. Transformers) this cycle.
-Dyer suggests contacting Susan at Walmart and asking what she wants in the pack to sell this SKU (movie tix etc)
-Other possibilities are Hybrid movie disc (BD 25 or 50 with Game and Movie on same disc).

Bayonetta
-Collectors edition with Bayonetta Action Figure
-Novo recommended launching PSN demo around Xmas based off a Jan 5th Ship date with 2-3 week run out to launch.
-3-4 weeks is usually ideal demo timing with fresh content every week leading up to launch (trailers, insider video about PG heritage, video blogs).

Vancouver 2010
-HOME, Olympic destination would garner a lot of positive attention from SCEA
-Should be doing same with Bayonetta, Marvel etc. Easy to launch in all territories.
-HOME merchandizing opportunities (clothes etc).

Sonic Racing
-Open to DLC to differentiate PS3 SKU – not ratchet and clank but other characters
-maybe characters from Rare or Fable universes

Yakuza
-Could put Japanese games directly on PSN for download in a special Japanese Import section (pricing $9.99 to $39.99 for full game).
-Might need to localize menus at least with subtitles. SCEA interested in helping on MKTG side if they can have period of exclusivity.

AVP
-Another great HOME candidate
-AVP avatars
-Hybrid BD disc with movie

Iron Man 2
-Great candidate for HOME space – explore Tony Stark’s lab etc.
-Should have one for Marvel in general.

PSU2
-Could do bundle at GameStop with PSP 30-35K units on UMD, Go, or both.

Valkyria 1937
-Could bundle with PSP as well.

Vanquish and Aliens: CM
-Opportunity for PS3/PSP interoperability (see Eidos Batman, Army of Two, Assassin’s Creed for good examples).
-If we offer that SCEA would be really interested in having us at their booth next E3.

Thor
-SCEA would like a look at the code soon.

Sonic Anniversary
-Could put out collectors edition with all old sonic games on one BD disc.
-“Best of Sonic” for around $99.
-SCEA would love PSN exclusive power ups/different game modes (like Castlevania’s flip it over/backwards)

PS2 emulator for PS3 (confidential)
-SCEA wants to sell all PS2 titles on PSN (GTA Vice City/Sonic/etc)
-For co Marketing money show PS3 controller on TV ads – similar to EA Madden Spots, NCAA, etc…

London Olympics
-Perfect opportunity for Motion Controller integration.

DC Digital Titles
-If we provide a list of DC titles SCEA will let us know which ones they’re interested in having exclusively.
-If we give them a long period of exclusivity they’ll give us more marketing support.

PSP Titles
-For SKU differentiation it’s best to offer features that are slightly different from PS3 version.
-Titles that are coming up on PSP are Assassin’s Creed II, GTA China Wars, Resident Evil, Little Big Planet – all massive franchises.
-SCEA has a specific PSP deck which they can send up with their hardware director for a chat. Source

“Activision Publishing, Inc. (Nasdaq: ATVI) announced today that Blur(TM), the company’s highly anticipated foray into the racing genre, is now scheduled to ship in 2010. The company is moving Blur from 2009 to give the development team more time to enhance the game’s innovative and distinctive online multiplayer gameplay.

Separately, Activision Blizzard reaffirmed the calendar year 2009 outlook it provided on August 5, 2009 due to global demand for Modern Warfare 2(TM), which continues to exceed expectations, and strong attach rates for the recently launched Call of Duty(R): World at War(TM) map packs.

For 2009, the company continues to expect GAAP net revenues of $4.05 billion and GAAP earnings per diluted share of $0.26. On a non-GAAP basis, the company continues to expect net revenues of $4.5 billion and earnings per diluted share of $0.63. Nonetheless, because of the continuing uncertainty in the global economic climate and the difficult retail environment anticipated during the 2009 holiday season, Activision Blizzard urges investors to be cautious and prudent in evaluating the company’s forecasts and projections.” Source

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Oppenheimer analyst Paul Keung (9/21/09): NetEase.com (NTES) has announced on its official World of Warcraft site that it has started commercial operations at the same previous rate of 0.45 RMB an hour. The Ministry of Culture (MoC) will assume the regulatory role from General Administration of Press and Publication (GAPP). The company started charging on 9/19/09. They weren’t allowed to charge gamers from 7/30 to 9/18 and only existing accounts were allowed to play. Oppenheimer estimates there are 5 million registered users of World of Warcraft in China about 40% of 2008 total subscribers for Blizzard. They believe the game has not lost popularity during the delay

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“It’s been terrific,” said Philippe Dauman, chief executive of Viacom, which owns MTV Games and Rock Band developer Harmonix. “Sales have exceeded our internal projections and we’ve sold 25 per cent of our inventory in the first week,” he told a Goldman Sachs media conference in New York.

Dan Rosensweig, head of the Guitar Hero division at Activision, told the Financial Times it had seen no impact from the heavily-marketed Beatles game. “It did not affect our sales”. He added that Guitar Hero outsold Rock Band by four to one in the US and nine to one in other markets.” Source

Previous Quarter
-Revenue $19.5M, EPS 25c. Wholesale +79.9%, franchise -11.9%, retail +54.3%

Press Release
-Revenue $20.1M, +57% y/y. Keurig K-Cup +75% y/y. EPS 29c
-Divested Gloria Jean’s franchise operations for $3.1 million
-Initiated expansion to be completed by the fall to increase K-cup capacity by >40%
-$3.57M cash, $7.9M debt

Guidance
-June FY2010 $90-95 million, +44-55%. EPS 90c-$1.00. Expects Q1 to be weakest and Q2/Q3 to be strongest

Conference Call
-2nd largest K-cup roaster out of the 4 licensed (non-exclusive) in current system
-Invested $3.1M for 6th K-cup production line and upgrades (40% output capacity increase). 440 million cups on annual basis (3 shifts 5 days a week 6 production lines)

Q&A
-3 shifts 5 days a week on K-cup production line
-50 count box on Amazon 3-4 times higher than they expected
-15% of reseller channel is Amazon
-90-95% of sales are K-cups
-Grocery channel is limited in FY2010
-coffee prices contracted out to November/December. About 6 months for most of their coffees. Some availability issues
-tax rate FY2010 guidance will use NOLs to shield the income
-wouldn’t give out numbers for cap ex and depreciation
-wouldn’t give out K-cup unit numbers for FY2009
-NOL $12M at end of FY2009
-fully diluted un-taxed Q4 10c continuing ops
-Green Mountain said K-cup 65-70% growth, they wouldn’t comment if they can match that
-44% wholesale revenue from Keurig (8.7/19.8 total), 21% year ago (2.65/12.6 total) (329% growth in revenue from Keurig)
-Bed Bath and Beyond and Keurig.com great channel for GMCR
-Rest is office coffee distributor system (much lower growth)

Net-net
-K-cups are hot. Their direct revenue from GMCR is smoking
-Stock closed at $24.33. EPS guidance for next year is around 95c un-taxed. Not a low multiple if you pro-rate taxes

AMD $100 Quad-core Chip
“As part of the new desktop platform designed for mainstream consumers, AMD (NYSE: AMD – News) today announced the first ever quad-core processor for less than $100 Suggested System Builder Price (SSBP)…

Our goal is to deliver a great computing experience and maximize value for our customers,” said John Cook, vice president of marketing, global PC business, HP. “The new AMD quad-core processors offer the right balance between excellent performance and price, and allow HP to continue to be a best-in-class provider of consumer technology.” Source

AMD rescinding January 2009 pay-cuts – 9/18/09
“Advanced Micro Devices Inc. told workers this week that it will restore pay rates in December that were reduced early this year in the face of the economic downturn. CEO Dirk Meyer told workers in an e-mail message this week that the pay reinstatement is coming. AMD announced in January that it was cutting jobs and temporarily reducing pay for workers.

The pay cuts ranged from 5 percent for hourly workers to as high as 20 percent for a few top executives, including Meyer. With promising new products being introduced and the economy gaining strength, Meyer said the company remains “optimistic (about) ending the year on a profitable note.” But Meyer told workers that AMD will continue to keep a close eye on costs for the time being.

“Neither the economy nor our business has made a full recovery,” Meyer’s note said. “We ask you to continue your tight rein on controllable spending, such as travel, catering and outside services.” Source

Sales Data-point
“Our sources are telling us that Lynnfield isn’t selling as well as expected, it’s not a flop, but definitely selling under expectations. The reason? Price. Apparently the vendors (and their customers) were hoping for a sub-$200 Core i5 750. Remember that the majority of quad-core sales happen under the $200 mark. Fortunately for AMD, there aren’t any cheaper quad-core Lynnfields on the roadmaps for Intel through Q3 of next year; the Core i5 750 will be the cheapest quad-core Nehalem for the foreseeable future.” Source

Michael Hara, Senior VP of Investor Relations

-quarter very linear, no strange behavior
-30 days of inventory in the channel
-have a little bit of backlog
-Europe picked up after vacation. Asia is the strongest
-”back to school” order rate has been very steady, pricing is very stable
-AMD chose path to be “efficient” in graphics and scheduling, while Nvidia going for more graphics capability
-Hand-held computing competitors to Tegra from Intel and Qualcomm. There are 4 major OSes: Android, Microsoft, iPhone, Symbian. OS doesn’t matter

Net-net: Current business trends are solid, but the big question is what will happen when AMD releases their next generation 5000 series graphics cards in a few weeks and when will the GT300 be released?

It seems Microsoft’s Zune HD (Nvidia makes the Tegra for it) is off to a good start with sell-outs at major retailers

Press Release
-non-GAAP Revenue $360.7 million (297.7M est.), gross margin 27.9%, EPS -10c (-24c est.)
-$211.8 million in cash, 45.1 million used in the quarter, $393 million debt
-guiding Q2 $240-$270 million (344.4M est.), FY 2010 $1.6-1.8 billion (1.57B est.)
-smartphone units 823K, +134% q/q -30% y/y. sell-through 810K
-16 million share secondary. Elevation Partners will buy $35 million

Conference call
-Pre is now $149.99 after rebates
-Bell Mobility in Canada, Telefonic in Europe
-Only WebOS devices going forward
-under contract with additional carriers to ship later this FY
-Treo Pro legacy device will ship for a few more quarters
-Margins will be lower next quarter due to lower volume
-Pre had a strong launch, now steady state sales

Net-net
-Pre had stronger launch than analysts expected, but it’s obvious sales slowed-down rapidly after the first month with the $149 price-cut and meager guidance
-Secondary helps liquidity, but when will the company ever make money vs. raising new funds repeatedly?