Week's Winners and Losers: Disney Up, Windows RT Out
Office Supply Retailers -- Winners
Living up to the recent buyout chatter, Staples (SPLS) got on bended knee and made it official, offering to buy Office Depot (ODP) in a $6.3 billion deal. This is a big deal. Office Depot hooked up with OfficeMax, and now Staples is swallowing up the combined retailer. We're talking about the country's three largest office supply chains under a single ownership group.
This may smell like a monopoly, but given the diminishing sales at traditional superstores as folks either flock online for purchases or merely get by with less in this digital age, it's likely to clear regulatory scrutiny. This won't necessarily be good for consumers, but it will be good for the industry.
Windows RT -- Loser
Microsoft (MSFT) made the cut in last week's list after posting problematic quarterly results, and now it makes a repeat appearance on the long overdue death of Windows RT. A Microsoft spokesperson is confirming to tech blog The Verge that the software giant is no longer making the Nokia Lumia 2520 tablet, the last gadget running Windows RT.
Windows RT was a doomed idea from the start. It was a limited mobile operating system introduced in Microsoft's original Surface tablet. It had limited developer support, and it didn't work with Windows software. Microsoft was smart enough to port a version of its Office suite of productivity software to Windows RT, but that wasn't enough to make it stand out in a world where Android and iOS are more widely supported.
Windows RT lasted a little more than two years, and that was still two years too long.
Disney (DIS) -- Winner
The family entertainment giant hit new all-time highs after posting blowout quarterly results. Revenue climbed 9 percent to $13.4 billion, and earnings per share soared 23 percent to $1.27. Analysts were only holding out for growth of 5 percent and 4 percent, respectively.
Disney's growth came with all five of its segments posting year-over-year gains in operating income. With "Frozen" merchandise flying off the shelves, advertisers flocking to ABC, and its domestic theme parks posting record attendance, it was a robust holiday quarter all around.
Keurig Green Mountain (GMCR) -- Loser
Shares of the leader in single-serve coffee were ground down like arabica beans after it missed Wall Street's profit targets for the first time in a year. It also posted flat sales relative to the prior year's holiday quarter. A 9 percent increase in K-Cups was offset by an 18 percent drop in brewers. The new Keurig 2.0 platform isn't selling well, leading Keurig Green Mountain to offer up uninspiring guidance.
It isn't a surprise to see the market avoiding Keurig 2.0. I pointed out the lousy initial reviews back in October, when buyers and potential buyers were turned off by the restrictive nature of the machine that would only work with newer Keurig K-Cup capsules. Keurig Green Mountain took a big gamble by trying to corner the market on its ecosystem, and like a lap full of scorching hot coffee, it got burned.
Under Armour (UA) -- Winner
It's true that Under Armour posted better-than-expected quarterly results on Wednesday, but the reason that the athletic apparel maker makes the cut this week is because of its shrewd acquisition of MyFitnessPal and Endomondo.
MyFitnessPal is the leading free fitness-tracking app with 80 million registered users. Endomondo is a social fitness network with 20 million users, primarily in Europe. The deals didn't come cheap, reportedly costing Under Armor a combined $560 million. However, it's a great way to stay close to the group of fitness-minded individuals that make up its target audience.
Some may argue that buying hot fitness apps and sites is risky given the fickle nature of the online trends. However, Under Armour will be able to market its products better and get an early read on fitness trends to make sure that it stays on top of consumer demand.
Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain and Walt Disney. The Motley Fool recommends Keurig Green Mountain, Under Armour and Walt Disney. The Motley Fool owns shares of Microsoft, Staples, Under Armour and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.