The two biggest social media growth stories continue to evolve in 2013 similar to how they did in 2012. Facebook (NASDAQ:FB) is still searching for the right way to monetize users while LinkedIn (NASDAQ:LNKD) continues to improve monetization while searching for more ways to integrate LinkedIn itself into the daily life of its users.
Amazon (NASDAQ:$AMZN) recently released its quarterly results in which its sales increased by 22% to $21.3 billion – approximately $12 billion in North America and $9 billion overseas – but it missed analysts’ estimate by $900 million and the market’s reaction was brutal; causing its shares to drop by 6% in the trading day. The company’s net income dropped by 45.2% to $97 million, an EPS of $0.21 which was 7 cents below analysts’ estimates. But the numbers are nearly meaningless because Amazon’s business model continues to confound valuation metrics.
The technology equipment manufacturing behemoth, the maker of Apple’s ($AAPL) iPhones, and one of the most controversial firms in this sector, Hon Hai Precision ($HNHAF), otherwise known as Foxconn Technology, is currently investigating claims that some of its employees have accepted bribes from its “supply chain partners.” The company is based in Taiwan but does almost all of its manufacturing in China. The firm is known for its high quality of products but its reputation has been hit by the poor working conditions at its facilities that have created labor unrest, including more than a dozen suicides. In spite of these difficulties Foxconn is looking to expand its production base into a new market, itself struggling with labor difficulties, Indonesia.
Akamai Technologies (NASDAQ:AKAM) has gone into a channel partnership with AT&T (NYSE:T), now that AT&T has finally given up on being a CDN.In other words if you can’t beat them, join them. This is an extremely significant turn of events as AT&T could have turned to one of Akamai’s competitors, like Limelight Networks (NASDAQ:LLNW), for this deal. In essence, the two companies will combine their expertise –Akamai’s content delivery services and AT&T’s IP network — to provide a one stop solution for their clients.
EPS in its latest quarter was $0.54 per share topping analysts’ estimates of $0.50 per share and 20% higher year over year on increasing net margins.However top line revenue was a disappointment to relatively weaker online activity. However, CDN services to media and entertainment is where the growth was with an increase of 15% to $158 million thanks to rapidly expanding online video viewership. The deal with AT&T will accelerate this growth over the next few years.
The world’s biggest business software developer SAP AG (NYSE:$SAP) reported its fourth quarter results in which revenues increased by 12% from Q4-2011 to $6.69 billion but the new share based compensation plan coupled with the increased spending on acquisitions has brought the operating profit down by 5% to $2.11 billion. Excluding extraordinary items, the operating profit registered a 10% increase to $2.60 billion which, according to data compiled by Bloomberg, hasn’t met analysts’ expectations of $2.66 billion.Shares fell on unreasonable growth expectations and typical momentum-driven speculation.
Peter Pham is an author, international fund manager, and a registered financial director by the Cayman Monetary Authority (CIMA). In 2013 he published his first book entitled, The Big Trade: Simple Strategies for Maximum Market Returns. He currently manages the portfolio of a global hedge fund and runs an asset management company, Phoenix Capital. (read more)
The Big Trade: Simple Strategies for Maximum Market Returns
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