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Tech, Media & Telecom Roundup: Market Talk

30 Jul 2018 8:20 am

The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0734 GMT - Shares in BT Group are among the biggest fallers in early trading after it emerged that the U.K. telecom's TV sport business has lost the rights to show UFC mixed martial arts and NBA basketball. BT shares fall 1.2% after it said that it was being more disciplined in assessing the value it gets from the sports it televises, according to a Financial Times report. "It's hard to say exactly what's happening here," says Neil Wilson at Markets.com. "Until the new chief executive is installed, we can't read too much into the loss of these rights; it may be a strategic retrenchment or just a bit of extra discipline whilst the new boss is found." (philip.waller@wsj.com)

0709 GMT - A shortage of capacitors walloped shares of some Taiwan companies today. That includes Yageo falling the 10% maximum today but also multi-layer ceramic capacitors like Walsin, Holy Stone, Chilisin and Ta-I. Some analysts see the issue persisting for a while and say major clients like Apple may try to diversify their sources for parts to avoid becoming overdependent on any grouping. That as production capacity is increasing, which could turn around the capacitor shortage more quickly than expected. The group's stocks have also been hot, with Yageo up 185% this year and laggard Chilisin having risen just 36%. (john.wu@wsj.com)

0652 GMT - Changeyou's 2Q revenue fell a much-bigger-than-consensus 25% from a year earlier, but within the Chinese online-game developer's guidance, as earnings topped for firm's forecast. But the company's 3Q revenue predicting is some 25% what analysts anticipated. The firm is down a downcycle with monthly average active mobile accounts more than halved versus a year ago to 3.2 million and active mobile paying accounts plunging 72% to 700,000. Revenue at Changeyou parent Sohu barely clipped the low end of its guidance as it too gave a below-consensus forecast. Internet-search unit Sogou's 3Q topline guidance was well short as well. The 3 firms, all US-listed, have already slumped at least 10% this month. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0535 GMT - Taiwan's stock benchmark rebounded a bit into the day's close, giving it one of the region's smaller declines as the week starts meekly in much of Asia. The Taiex fell 0.4% to 11033.54, helped by giant Taiwan Semi rising 0.4% and Apple product assembler Hon Hai climbing 1.2%. But lensmaker Largan dropped 1.5% and smaller tech names slumped. Resistor firms Yageo, Ta-I and Walsin all fell the 10% daily limit today. But that's a mere haircut for the highfliers as their stocks have all more than doubled this year. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0409 GMT - As Apple continues its march toward being a $1 trillion company, one of the more-important numbers in that effort won't be in Tuesday's F3Q report--the latest share count. That will be reserved for the quarterly filing with the SEC within the following day or 2. Updates on that front typically aren't notable, but they are when you're repurchasing stock as heavily is Apple has been. Its share count as of April 20 was 3.1% less than 3 months earlier. When releasing results on May 1, Apple announced a record $100 billion stock-buyback plan and CFO Luca Maestri told WSJ then that the company planned to repurchase equity "at a fast pace." Having its share count fall nearly 160 million more would wipe $31 billion from its $939 billion market cap. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0305 GMT - Singapore's smallest wireless firm may be better equipped than bigger rival StarHub to face intensifying competition in the local market, says DBS. The investment bank contends that M1 has "strong support" from its mobile virtual-network-operator partner Circles.life that will help reduce revenue loss. The company is also less dependent than StarHub on bundling wireless services with pay-TV, DBS adds. M1 shares are up 1.9%, cutting the year's drop to 8.4%. (gaurav.raghuvanshi@wsj.com)

0127 GMT - Jefferies raises its price target on ZTE by 12.6% to HK$16.22 after 1Q earnings and the company's deal with the US lowers risk for the company. Meanwhile, concerns over a 5G capex cut from a possible China Telecom-Unicom merger are overdone with a 1 percentage point gain in market share enough to overcome a likely 15% capex drop, Jefferies says. It sees 2Q net loss at CNY1.6 billion-3.6 billion on only 3-4 weeks of revenue in the quarter with more provisions expected in 3Q on incentives offered to non-Chinese carriers. The stock closed at HK$13.74 on Friday. (kenan.machado@wsj.com)

0051 GMT - Morgan Stanley is betting data-center owner NextDC's shares will rise over the next month and a half, anticipating few negative surprises following a reiteration of guidance, May's A$377.4 million capital raise and a recently upsized A$300 million notes issue. "Positive read-throughs on data-center demand from global competitors and customers increases confidence" ahead of next month's corporate-earnings seasons, the investment bank says. U.S.-based Digital Realty recently lifted annual guidance, while QTS Realty Trust delivered a clear beat on bookings growth, Morgan Stanley says. The stock is down 0.3% ar A$7.32. (david.winning@wsj.com; @dwinningWSJ)

2357 GMT - ZTE's Friday-night restatement of 1Q results shouldn't affect shares if investors view things properly. The company reiterated its 1H guidance given 2 weeks ago of a net loss of CNY7-9 billion ($1.0-1.3 billion) amid the impacts from the company's latest settlement with the US. So what the Chinese telecom firm has done has moved much of the impacts from 2Q to 1Q. Hence going from a net profit of CNY1.69 billion to a loss of CNY5.3 billion in the opening 3 months of this year. Ahead of the disclosure, ZTE shares on Hong Kong pulled back 6.1% last week, ending a 4-week winning streak during which 20% of the plunge seen after mid-June's trading resumption was reversed. In Hong Kong, ZTE is down 53% for the year. (kevin.kingsbury@wsj.com; @kevinkingsbury)

[Dow Jones] Australian shares are poised to open lower Monday, as investor sentiment remains negative following a drop in U.S. markets on Friday that stemmed from a continued decline in tech stocks. Futures for the S&P/ASX-200 benchmark are down about 0.4%. In corporate news, Australian investors will be digesting senior management changes at telecom giant Telstra, while continuing to examine last week's proposed takeover of newspaper publisher Fairfax by television network Nine Entertainment. (mike.cherney@wsj.com; @Mike_Cherney)

(END) Dow Jones Newswires

July 30, 2018 04:20 ET (08:20 GMT)

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