Apple & Facebook Help Fusion-io Beat Competition

Apple & Facebook Help Fusion-io Beat Competition

Sterne Agee’s analysis by Alex Kurtz  and Amelia Harris, discusses Fusion-IO, Inc. (NYSE:FIO), and how the risk will continue to decline for the software company in wake of strong visibility of its top customers; Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL). Fusion-IO, Inc. (NYSE:FIO) outperformed on all of Sterne Agee earnings expectations in the FY2012. The earnings call took place on Aug 9th 2012. The stock price went up over 20% on the earnings news.

Play Quizzes 4

Apple & Facebook Help Fusion-io Beat Competition

Q4 earnings were 9 cents per share or $106.6 million, which were far above Sterne Agee’s forecast of 4 cents per share or $96 million. The net income for the corresponding quarter of 2011 was $71.7 million. Sales were up 82%, to $359.3 million. Sales from strategics accounted for 53 percent of the revenue, which was down by two points from the last quarter. The business grew 19 percent on a quarter to quarter basis. A total of 40 customers bought greater than $1 million of goods over the last nine months, and in the reports, the analysts point out that competitors like, EMC Corporation (NYSE:EMC)’s are only receiving  small purchases, while FIO is going for the big guns in the PC market.

How Value Investors Can Win With Tech And “Fallen” Growth Stocks

Valuation Present ValueMany value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More

53 percent of FIO’s revenues in this quarter came from Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL). This number is expected to rise even further in 2013. FIO will gain  revenue from Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL) in the coming year, but companies like Cisco Systems, Inc. (NASDAQ:CSCO) and NetApp Inc. (NASDAQ:NTAP) will have minimal contribution in sales, especially in the first six months of 2013. The analysis also expects FIO to benefit from the lag in the release of EMC (NYSE: EMC)’s new version of VFCache.

Fusion’s major standing has been in flash memory technology, where it provided servers and workstations for hosting content of big IT consumers, like  Facebook Inc (NASDAQ:FB), Cisco Systems, Inc. (NASDAQ:CSCO) Apple, etc. Sterne Agee expects FIO to grow in the non-Flash industry in the coming year, as well as benefit from the SDK kit, a new product, and the ION software, a component for shared storage platforms.  The analysts’ forecast of revenue for FY2013 is $521 million with an EPS of 36 cents, while for FY2014 , Sterne Agee predicts revenue of $656 million with an EPS of 46 cents. This refreshed forecast  is up from the previous predictions of $478 million and EPS of 26 cents for FY2013, and $623 million and EPS of 38 cents for FY2014.

The analysis rates the Fusion-IO, Inc. (NASDAQ:FIO) stock as ‘Buy’, while target price is $31 per share. Sterne Agee  is a 100 year old firm that provides brokerage services, investment advisory, trust services, asset managements, and various other financial services.


Updated on

No posts to display