From Briefing.com: 4:49 pm SolarCity (being acquired by Tesla) beats by $0.19, beats on revs; guides Q3 below consensus; lowers FY16 installation guidance (SCTY) : Reports Q2 (Jun) loss of $2.32 per share, excluding non-recurring items, $0.19 better than the Capital IQ Consensus of ($2.51); revenues rose 80.7% year/year to $185.8 mln vs the $147.31 mln Capital IQ Consensus.Preannounced 201 MW installed vs. 185 MW guidance.
Co issues downside guidance for Q3, sees EPS of ($2.55-2.65), excluding non-recurring items, vs. ($2.34) Capital IQ Consensus Estimate; sees Q3 revs of $155-168 mln vs. $173.77 mln Capital IQ
Consensus Estimate. For Q3 2016 we expect to install 170 MW, as the softer Q1 2016 bookings feed their way into installation throughput. Driven by the pick-up in bookings we have seen in Q2 and July as well as C&I's seasonally strongest period, we expect to install between 315 and 415 MW in Q4 2016 (C&I experiencing a significant uptick in MW Deployed including some projects already under construction C&I).
Expect total 2016 MW Installed of 900-1,000 MW (down from 1.0-1.1 GW), with the mid-to-high end of the range assuming an improvement in residential sales productivity. As our infrastructure had been built to handle ~1.25 GW of annual capacity, we will be reducing our cost structure to accommodate our current forecasted volume run rate and positioning ourselves to report one of the lowest Cost per Watt in our history in the fourth quarter of 2016. Cash balance expected to increase by the end of Q3 2016 (as compared to the end of Q2 2016) and to further increase by the end of Q4 2016 (as compared to the projected closing balance as of the end of Q3 2016)Being acquired by TSLA for
0.11 TSLA shares per SCTY share.4:31 pm Rambus signs an agreement with Idaho Scientific, LLC to license its Differential Power Analysis for use in Idaho Scientific's security IP Cores for FPGAs and defense ASICs (RMBS) :
4:23 pm SunPower reports Q2 (Jun) results, beats on revs; Lowers guidance, announces restructuring due to industry conditions (SPWR) :
Reports Q2 (Jun) loss of $0.22 per share, may not be comparable to the Capital IQ Consensus of ($0.24); revenues rose 6.7% year/year to $401.8 mln vs the $347.7 mln Capital IQ Consensus.
Industry Warnings
"However, while the long-term fundamentals for solar power remain strong, we see a number of near-term industry challenges, primarily in our power plant segment, that we expect to impact our business and financial performance in the second half of 2016. The extension of the Investment Tax Credit, as well as the bonus depreciation credit, while beneficial to the long-term health of the industry, has reduced the urgency to complete new solar projects by the end of 2016, with many customers adopting a longer-term timeline for project completion. Additionally, near-term economic returns have deteriorated due to aggressive PPA pricing by new market entrants, including a number of large, global independent power companies.
We are also seeing customer project IRRs rising in the near term as buyers have increased their hurdle rates due to industry conditions. Finally, the continued market disruption in the YieldCo environment has impacted our assumptions related to monetizing deferred profits. "As a result, we have proactively decided to streamline our power plant development segment while shifting investment to our distributed generation (DG) segments".
Impact from Realignment
As a result of the announced realignment, the company expects the following:
Workforce reduction of approximately 15 percent or 1,200 employees, primarily related to its Philippine facility closure
Restructuring charges totaling $30-$45 million
Substantial portion of charges to be incurred in the third quarter of 2016 with more than 50 percent of the total charges to be cash
Annual operating expense reductions of approximately 10 percent
Co issues downside guidance for Q3, sees Q3 revs of $750-850 mln, may not be comparable to $1.12 bln Capital IQ Consensus Estimate.
Gross margin of 16.5 percent to 18.5 percent
EBITDA of $115 million to $140 million
MWs deployed in the range of 380 MW to 420 MW.
Co issues downside guidance for FY16, sees FY16 revs of $3.0-3.2 bln, may not be comparable to $3.28 bln Capital IQ Consensus Estimate.
Gross margin of 10.5 percent to 12.5 percent
EBITDA of $275 million to $325 million
Capital expenditures of $225 million to $245 million
GW deployed in the range of 1.45 GW to 1.65 GW.
4:10 pm Diodes reports EPS in-line, revs in-line; guides Q3 revs in-line (DIOD) :
Reports Q2 (Jun) earnings of $0.20 per share, in-line with the Capital IQ Consensus of $0.20; revenues rose 7.8% year/year to $236.6 mln vs the $235.37 mln Capital IQ Consensus.Gross profit margin was 31.6%, compared to 28.8% in 1Q16 and 31.6% in 2Q15.Achieved $16.4 mln of cash flow from operations, and $0.9 mln of free cash flow, including $15.5 mln of capital expenditures. Net cash flow was ($44.5) mln, which includes the pay down of $40 mln of long-term debt.
Co issues in-line guidance for Q3, sees Q3 revs of $242-$258 mln vs. $248.95 mln Capital IQ Consensus Estimate. Co expects GAAP and non-GAAP gross margin to be 32.5%, plus or minus 1%. Non-GAAP operating expenses are expected to be approximately 24% of revenue, plus or minus 1%.
4:09 pm Harmonic beats by $0.04, beats on revs; guides Q3 EPS in-line, revs in-line; guides FY16 EPS below consensus, revs above consensus (HLIT) :
Reports Q2 (Jun) net of breakeven, ex-items, $0.04 better than the Capital IQ Consensus of ($0.04) and vs prior guidance of $(0.05)-(0.02); GAAP revenues rose 5.5% year/year to $108.76 mln vs the $104.48 mln Capital IQ Consensus and vs prior guidance of $102-107 mln. Co issues in-line guidance for Q3, sees EPS of $0.01-0.03, excluding non-recurring items, vs. $0.03 Capital IQ Consensus Estimate; sees Q3 GAAP revs of $104.5-109.5 mln vs. $105.3 mln Capital IQ Consensus Estimate.
Co issues mixed guidance for FY16, sees EPS of $0.01-0.06, excluding non-recurring items, vs. $0.11 Capital IQ Consensus Estimate; sees FY16 GAAP revs of $408-418 mln vs. $406.9 mln Capital IQ Consensus Estimate.
4:02 pm Lattice Semi misses by $0.01, reports revs in-line; guides Q3 revs below consensus (LSCC)
Reports Q2 (Jun) net of breakeven, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.01; revenues fell 6.9% year/year to $99.2 mln vs the $100.07 mln Capital IQ Consensus. Gross margin for the second quarter of 2016 was 59.1% on a non-GAAP basis vs. 55-59% guidance, as compared to 60.0% for the first quarter of 2016 and 56.9% for the second quarter of 2015Co issues downside guidance for Q3, sees Q3 revs of $110-116 mln vs. $124.34 mln Capital IQ Consensus; gross margin 50-54%.
4:15 pm : The stock market ended the Tuesday affair on a flat note as the Nasdaq (+0.2%) settled ahead of the S&P 500 (UNCH) and the Dow Jones Industrial Average (UNCH). The major averages ended relatively unchanged as a downturn in crude oil and weakness in the consumer discretionary space (-0.3%) prevented the market from vaulting higher. Other contributing factors impacting today's trade included softening in the dollar and sector leadership from heavily-weighted technology (+0.2%) and health care (+0.2%).
The major averages began the day on a higher note as investors responded to a positive bias in global markets and a mixed set of economic data. The preliminary reading of the second quarter productivity report missed expectations as unit labor costs (+2.0%; Briefing.com consensus +1.7%) and productivity (-0.5%; Briefing.com consensus +0.5%) each disappointed. Conversely, wholesale inventories for June (+0.3%; Briefing.com consensus +0.2%) beat estimates while the May reading featured a positive revision (to 0.2%; from 0.1%).
Equity indices rose through midday as the tech-heavy Nasdaq (+0.2%) and the benchmark index (UNCH) each carved out new all-time intraday highs. However, the major averages slipped from these levels after the S&P 500 (UNCH) was unable to clear technical resistance near the 2184/2186 price level. The leg lower in the broader market also corresponded with increased selling in oil. WTI crude ended its session lower by 0.8% ($42.74/bbl; -$0.33) as investors look ahead to the Department of Energy's latest stockpile data. The EIA will release its weekly inventory report tomorrow at 10:30 ET.
The S&P 500 (UNCH) finished modestly higher, maintaining footing near its flat line. Four sectors ended in the red with materials (-0.3%), consumer discretionary (-0.3%), and energy (-0.5%) underperforming. Conversely, technology (+0.2%), health care (+0.2%), and consumer staples (+0.2%) lead the pack.
The countercyclical health care sector (+0.2%) displayed relative strength, gaining alongside pharmaceutical names. Heavyweight component Bristol-Myers (BMY 61.61, +1.31) ended higher by 2.2%, trimming its weekly loss to 2.6%. Elsewhere, Valeant Pharmaceuticals (VRX 28.16, +5.71) surged 25.4% after announcing plans to amend its debt covenants and improvements to its dermatology business. However, the company did miss analysts' estimates for the quarter. Elsewhere, Mylan Labs (MYL 79.92, +1.39) outperformed ahead of this evening's quarterly report.
Influential technology (+0.2%) outperformed as large cap components Alphabet (GOOG 784.26, +2.50) and Apple (AAPL 108.81,+ 0.44) gained 0.3% and 0.4%, respectively. The high-beta chipmakers finished ahead of the broader sector as Microchip (MCHP 60.63, +4.00) topped the PHLX Semiconductor Index (+0.8%). The company reported top- and bottom-line beats and also raised its third-quarter guidance. The price-weighted index extended its August gain to 1.6%, which compares to an uptick of 0.4% in the benchmark index.
Retail names underperformed in the consumer discretionary space (-0.2%) as quarterly results from the likes of Coach (COH 40.52, -0.93) and Wayfair (W 38.80, -9.45) weighed. Wayfair plunged 19.6% after reporting below-consensus results and lowering its full-year guidance below consensus. Elsewhere, Gap (GPS 24.01,- 1.61) declined by 6.3% after reporting disappointing July same-store sales.
The Dow Jones Transportation Average (-0.4%) ended behind the broader market as Avis Budget (CAR 38.34, -0.44) underperformed. The name was under pressure, moving lower in sympathy with Hertz Global (HTZ 44.96,- 2.35). Hertz reported below-consensus bottom-line results last evening. Separately, rail names underperformed as Union Pacific (UNP 93.07, -0.79) declined by 0.8%.
The U.S. Dollar Index (96.14, -0.26) settled off its session low as commodity currencies, the euro, and the yen gained against the buck. The dollar lost 0.3% against the commodity-sensitive Canadian dollar (1.3119) while the single currency gained 0.2% against the buck (1.1113). The dollar finished lower 0.5% against the safe-haven yen (101.91).
Treasuries enjoyed a healthy bid throughout today's session as yields slid throughout the complex. The yield on the 10-yr note ended lower by five basis points at 1.54%.
Today's participation was below the recent average as fewer than 731 million shares changed hands at the NYSE floor.
Today's economic data included the preliminary estimates of second quarter Productivity/Unit Labor Costs and Wholesale Inventories for June:
The preliminary second quarter productivity report showed productivity declining 0.5% (Briefing.com consensus +0.5%) after decreasing an unrevised 0.6% in the first quarter.
The second quarter decline was the result of output increasing 1.2% and hours worked increasing 1.8%.
Unit labor costs were up 2.0% (Briefing.com consensus +1.7%) on the heels of a downwardly revised 0.2% decline (from +4.5%) in the first quarter.
The uptick in the second quarter reflected a 1.5% increase in hourly compensation and a 0.5% decline in productivity.
On a year-over-year basis, second quarter productivity was down 0.4% while unit labor costs were up 2.1%.
This report included benchmark revisions, but even more importantly, it included a clear message that productivity in the U.S. is really weak.
That's a key economic point because rising productivity is the key to a rising standard of living.
Wholesale inventories increased 0.3% in June (Briefing.com consensus +0.2%) after increasing an upwardly revised 0.2% (from 0.1%) in May.
Wholesale inventories are just one component of total business inventories.
Manufacturing and retail inventories make up the rest of total business inventories.
The market doesn't typically pay much attention to this release since the full business inventories release comes a few days later.
The increase in wholesale inventories in June was driven by a 1.1% increase in nondurable inventories, which offset a 0.3% decline in durable inventories.
Notably, the majority of nondurable businesses saw a decline in inventories in June, yet a 4.9% increase in inventories of drugs and a 4.0% increase in inventories of farm products led to the overall increase.
In the same vein, just about every durable business saw a drop in June inventories, highlighted by a 0.1% decline in both manufacturing and automotive inventories.
The only durable areas to see an uptick inventories were lumber (+1.8%) and hardware (+1.0%).
Wholesale sales increased 1.9% in June following an upwardly revised 0.7% increase (from +0.5%) in May.
The wholesale inventories-to-sales ratio fell to 1.33 from 1.35 in May, and remains slightly above the 1.33 ratio seen in June 2015.
On a year-over-year basis, wholesale sales are down 0.6% while wholesale inventories are up 0.2%.
Tomorrow's economic data will include the weekly MBA Mortgage Index, which will be released at 7:00 ET. Separately, the Job Openings and Labor Turnover Survey for June and the Treasury Budget for July will cross the wires at 10:00 ET and 14:00 ET, respectively.
Russell 2000 +8.4% YTD
S&P 500 +6.7% YTD
Dow Jones +6.4% YTD
Nasdaq Composite +4.4% YTD
DJ30 +3.76 NASDAQ +12.34 SP500 +0.85 NASDAQ Adv/Vol/Dec 1642/1.526 bln/1261 NYSE Adv/Vol/Dec 1563/730.4 mln/1375 3:30 pm :
The dollar index extended its morning losses, -0.3% around the 96.15 level
Commodities, as measured by the Bloomberg Commodity Index, were down -0.7% around the 83.75 level
Crude oil reversed initial morning gains in the afternoon to close near lows of the day ahead of API data
September crude oil futures fell $0.33 (-0.8%) to $42.74/barrel
API data will be released today after the bell
Rig count data will be released on Friday at 1 pm ET
Weekly EIA inventory data will be released tomorrow at 10:30 am ET
Monthly IEA data will be released on Aug 11
Natural gas ended lower for the fourth consecutive session after the release of the EIA short-term energy outlook report
September natural gas closed $0.13 lower (-4.7%) at $2.62/MMBtu
EIA natural gas inventory data will be released Thursday at 10:30 am ET
In precious metals, gold & silver traded higher as the dollar index fell
December gold ended today's session up $5.50 (+0.4%) to $1346.70/oz
September silver closed today's session $0.03 higher (+0.2%) at $19.85/oz
Base metal copper inched lower in afternoon pit trading
September copper closed $0.01 lower (-0.5%) at $2.15/lb
The major averages gained at the start of the session as investors shrugged off some mixed domestic economic data. The preliminary reading of the second quarter productivity report disappointed as unit labor costs (+2.0%) and productivity (-0.5%) each missed their mark. Separately, wholesale inventories increased 0.3% in June on the heels of an upwardly revised May report (to 0.2%; from 0.1%).
Trading ended the Tuesday session higher, rebounding off yesterday's modestly lower affair. The markets were led by the Nasdaq Composite which added 12.34 points (+0.24%) to 5225.48. Helping the sector higher, Nasdaq 100 components CTRP +2.9%, MYL +2.9%, TSLA +1.3%, SBAC +1.3%, KHC +1.2% and AAL +0.7% all finished in the green. The S&P 500 was up less than a point (+0.04%) when the day was finished to 2181.74, and the Dow Jones Industrial Average gained 3.76 points (+0.02%) to 18533.05. On the way to the higher finish, both the Nasdaq and the S&P 500 notched new all-time highs.
Among positive sectors, Technology (XLK 47.14, +0.10 +0.21%) turned in a day modestly above flat lines as strength persisted throughout the entire session. Component Microchip (MCHP 60.63, +4.00 +7.06%) performed the best in the sector today following the company's better than expected Q1 EPS and revenues and solid guidance. Other sectors as measured by the S&P closed trading XLP +0.31%, XLV +0.24%, IYZ +0.12%, XLF +0.08%, XLU -0.02%, XLI -0.03%, XLY -0.30%, XLB -0.31%, XLE -0.53% led by the Consumer Staples and Healthcare sectors, and lagged by Energy -- ahead of tonight's API data.
In the S&P 500 Information Technology (782.57, +1.48 +0.19%) sector, action was also higher, rebounding off yesterday's barely negative session. Component Skyworks (SWKS 67.00, +1.06 +1.61%) was in the green today following a premarket upgrade at CLSA to an Outperform rating. Other notable components which traded in the green today included AVGO +1.68%, ADSK +1.63%, ATVI +1.58%, XLNX +1.46%, GPN +1.28%, HRS +0.92%, NTAP +0.84%, QCOM +0.67%, PAYX +0.63%.
Other notable news items among sector components:
In addition to reporting quarterly results, Microchip (MCHP) increased its quarterly dividend to $0.36 per share from $0.3595 per share.
IBM (IBM 161.77, -0.27 -0.17%) and Vodafone (VOD 30.87, -0.05 -0.16%) India announced a multi-million dollar five year agreement for IBM to manage IT services support for Vodafone India's IT infrastructure and applications environment.
Seagate (STX 32.49, -0.12 -0.37%) announced two flash units including a 60 terabyte (TB) Serial Attached SCSI (SAS) solid-state-drive (SSD) - the largest SSD ever demonstrated - and the 8TB Nytro XP7200 NVMe SSD.Elsewhere in the tech space:
Randstad (RANJY 21.42, flat) and Monster Worldwide (MWW 3.50, +0.73 +26.35%) announced an agreement under which Randstad will acquire Monster for $3.40 per share in cash, or a total purchase price of about $429 million (enterprise value).Giga-tronics (GIGA 1.03, -0.03 -2.83%) received a $1.9 million order for non-recurring engineering services associated with its Microsource business unit from an aerospace company.In addition to reporting quarterly results, FORM Holdings (FH 2.06, -0.04 -1.90%) to acquire 100% of XpresSpa. The transaction will be funded with common and preferred equity and warrants in FORM Holdings. In addition, XpresSpa's indebtedness will remain outstanding following the closing of the transaction. Mistral Equity Partners, the majority shareholder of XpresSpa, and other existing XpresSpa holders, will participate in a private placement into FORM Holdings common stock of $1.73 million, at $2.31 per share, which FORM Holdings will then invest in XpresSpa. XpresSpa equity holders will receive 2.5 million shares of common stock in FORM Holdings, five-year warrants to purchase 2.5 million shares of FORM Holdings common stock, at an exercise price equal to $3.00 per share, and $23.75 million of FH's newly issued convertible preferred stock. The FORM Preferred Stock shall be initially convertible into an aggregate of 3.95 million shares of FH Common Stock, which equals a $6.00 per share conversion price, and each holder of FORM Preferred Stock shall be entitled to vote on an as converted basis.
In addition to reporting quarterly results, Rapid7 (RPD 15.65, +1.69 +12.11%) announced CFO Steven Gatoff will transition out of the company for personal family reasons effective January 2017. The company has already initiated a search to identify a successor and Mr. Gatoff has committed to supporting a thorough and orderly transition.
EarthLink (ELNK 6.26, -0.65 -9.41%) announced a partnership with VeloCloud. The partnership is part of EarthLink's strategy to help clients transform their business by deploying solutions that deliver more personalized customer experiences, reduce cost, and increase sales. EarthLink's full-service SD-WAN offering will launch to market in fall 2016.
In reaction to quarterly results:
Microchip (MCHP) reported better than expected Q1 EPS of $0.84 on better than expected revenues of $844 million. Q2 guidance for EPS was better than expected at $0.83-0.91 and revenue guidance was also better than market expectations at $844-877.8 million. Management also gave commentary to FY17 EPS guidance, stating the company is tracking well ahead of their guidance for non-GAAP EPS for fiscal 2017.Broadridge Financial (BR 68.63, +0.14 +0.20%) reported in-line EPS for Q4 of $1.45 and worse than expected revenues of $974.5 million. For FY17 EPS, the company is below market expectations at growth of 9-14% to about $2.98-3.11 and better than expected revenue guidance at growth of about 43-45% to about $4.142-4.2 billion. Computer Sciences (CSC 47.76, -0.26 -0.54%) reported better than expected Q1 EPS of $0.53 on better than expected revenue which rose 7.0% compared to last year to $1.93 billion. The company also reaffirmed FY17 EPS guidance of $2.75-3.00. Nuance Communications (NUAN 14.62, -1.68 -10.31%) reported better than expected Q3 EPS of $0.38 on in-line revenues of $484.9 million. For Q4, the company sees EPS and revenues worse than market expectations at $0.37-0.41 and $498-512 million, respectively.
Rackspace (RAX 30.66, +2.05 +7.17%) reported better than expected Q2 EPS of $0.28 on in-line revenues of $523.6 million. Also, the company guided Q3 and FY16 revenues ahead of market expectations at $534-539 million and $2.13-2.15 billion, respectively.
WebMD Health (WBMD 54.47, -4.97 -8.36%) reported in-line Q2 EPS of $0.39 and better than expected revenues of $167.58 million. The company also guided Q3 revenues in-line at $168-171 million. For FY16, the company sees EPS of $1.78-1.90 and revenues of $695-708 million. MaxLinear (MXL 17.30, -4.60 -21.00%) reported better than expected Q2 EPS of $0.50 on in-line revenues of $101.7 million. For Q3, the company sees revenues of $94-98 million. Companies scheduled to report quarterly results tonight/tomorrow morning: CYBR APPS DIOD EPIQ EVRI FLTX HCKT HLIT KEYW LSCC LITE CALL MCHX PCTY PDVW FENG QNST RBCN SCTY SEDG SPWR TTGT VRNS VEC VSAT YELP YRD YUME/AVT CYRN MGICAnalyst actions:
SWKS was upgraded to Outperform from Underperform at CLSA, WNS was upgraded to Buy from Neutral at SunTrust; CNXR was downgraded to Equal Weight from Overweight at Morgan Stanley and to Mkt Perform at Raymond James, FEYE was downgraded to In-Line from Outperform at Imperial Capital, MODN and TUBE were downgraded to Mkt Perform from Mkt Outperform at JMP Securities, INFY was downgraded to Hold at HSBC, WIT was downgraded to Reduce at HSBC, FLTX was downgraded to Neutral from Buy at Citigroup; MELI was initiated with a Neutral at Goldman
