This has been an interesting week for large and small technology companies alike with Google’s regulatory machinations coming to a resolution amid quarterly reports being released by penny-stock technology companies like Echelon Corp. and Sirius XM Holdings Inc.
Avoids Huge Fine
Google Inc. (NASD: GOOG) has avoided a $5 billion fine, which amounts to about 10% of its global annual revenue, by agreeing to let its European competitors rank higher in its search results.
Competitors of Google have complained for years that while placement in Google’s search engine results is supposed to go to the top bidder with the most relevant ad, they instead go to Google’s competing services. They further argue that because Google is the No.1 search engine, this is tantamount to it having a monopoly.
In a tentative agreement with European Commission regulators on Feb 5, the search-engine giant agreed to stop relegating lower spots in its search results for competitor European sites such as those that book hotel rooms.
Google recently made similar concessions opening up top search spots with rival online shopping networks to avoid formal anti-trust charges by the Federal Trade Commission. Under the agreement, Google admitted no wrongdoing.
Schmidt Award $106 Million
Meanwhile, on Feb. 4, Google regulatory filing revealed that it was awarding its former CEO Eric Schmidt $100 million in Google Inc.'s restricted stock for the second time in the three years since he relinquished the position to company co-founder Larry Page.
The stock award is in addition to a $6 million cash bonus for Schmidt's contributions to Google Inc. last year.
On Feb. 5, GOOG’s share price closed at $1,143.20, up $5.04 cents from its closing price of $1,138.16 the previous day on volume of 2,400,619 shares.
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Echelon Corp to Report Fourth-Quarter Earnings
The networking and computer devices company Echelon Corp. (NASDAQ: ELON) will announce results for the fourth quarter ended Dec. 31, 2013, today, Feb. 6, 2014, after market close.
Its third-quarter results ending Sept. 30, 2013 were somewhat disappointing:
Total revenues for the third quarter were $18.0 million, down from $29.1 million in the same period last year. Revenues from Echelon's systems sales, reflecting sales to utility customers, were $7.8 million for the third quarter, down from $17.8 million in the same period last year. Included in systems sales were $2.0 million of data concentrator sales to Enel. Revenues from Echelon's sub-systems, largely from commercial customers, were $10.3 million in the third quarter, down from $11.3 million a year ago. Included in sub-systems revenues were $499,000 of sales to Enel in the third quarter compared with $1.8 million in the same period last year.
Gross margin in the third quarter of 2013 was 58.0% compared with 40.9% in the third quarter of 2012. Higher gross margins were driven by the one-time software deal with Ericsson related to the Sweden Grid Modernization Program. Total operating expenses for the quarter declined to $13.2 million from $15.7 million in the same period last year reflecting the Company's strategy to prudently manage costs.
GAAP net loss for the third quarter was $3.5 million, or $0.08 per share, compared with a net loss of $4.3 million, or $0.10 per share, in the same period last year. Non-GAAP net loss for the third quarter was $2.6 million, or $0.06 per share, compared with a non-GAAP net loss of $2.5 million, or $0.06 per share for the third quarter of 2012.
Analysts’ Consensus
The two analysts that cover Echelon both recommend a “buy” rating.
On Feb. 5, ELON’s share price closed at $ 3.68, down 17 cents from its closing price of $ 3.85 the previous day on volume of 278,856 shares.
Find out what could be the best investor’s move when it comes to ELON by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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Solid Fourth-Quarter and 2013 Earnings
Meanwhile, satellite-radio provider Sirius XM Holdings Inc. (NASDAQ: SIRI) has come a long way from the time its share price bottomed at 5 cents in February of 2009.
Sirius recovery is evident in its fourth-quarter and full-year 2013 earnings reported on Feb. 4, 2014.
The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.
Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.
Potential Lawsuits Generated By Acquisition
Despite a myriad of law-firm investigations of Sirius XM for potential stockholder claims as a result of the satellite-radio company’s proposed acquisition by Liberty Media Corp., its stock price is holding its own.
On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.
Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.
That’s because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It’s done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company’s anchor. Moreover, having new cars equipped with XM receivers has also boosted the company’s popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.
On Feb. 5, SIRI’s share price closed at $ 3.43, down 9 cents from its closing price of $ 3.52 the previous day on volume of 118,952,176 shares.
Find out what could be the best investor’s move when it comes to SIRI by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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