From Briefing.com: 4:10 pm HP beats by $0.03, beats on revs; guides Q4 EPS below consensus (HPQ) : Reports Q3 (Jul) earnings of $0.48 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.45; revenues fell 3.8% year/year to $11.89 bln vs the $11.49 bln Capital IQ Consensus.
Personal Systems net revenue was flat year over year (up 2% in constant currency) with a 4.4% operating margin. Commercial net revenue decreased 3% and Consumer net revenue increased 8%. Total units were up 4% with Notebooks units up 12% and Desktops units down 6%.
Printing net revenue was down 14% year over year (down 10% in constant currency) with a 20.4% operating margin. Total hardware units were down 10% with Commercial hardware units down 2% and Consumer hardware units down 14%. Supplies revenue was down 18% (down 13% in constant currency).
Co issues downside guidance for Q4, sees EPS of $0.34-0.37, excluding non-recurring items, vs. $0.40 Capital IQ Consensus Estimate.Lowers FY16 EPS to $1.59-1.62 from $1.59-1.65 vs. $1.61 consensus."
Although the markets remain challenged, we have the innovation and executional rigor needed to continue to take profitable share and invest in the right opportunities to drive long-term success for the company."
The major averages slipped at the beginning of the session as investors responded to a downturn in crude oil and a weaker-than-expected Existing Home Sales Report for July. Crude oil futures were under pressure overnight after the American Petroleum Institute reported a larger-than-expected build in crude oil stockpiles. Separately, existing home sales for July came in at an annualized rate of 5.39 million units (Briefing.com consensus 5.54 million), declining 3.2% from June's unrevised 5.57 million units.
Crude oil extended its loss after the Department of Energy confirmed API's disappointing inventory data. The EIA disclosed that crude oil stockpiles rose by 2.50 million barrels (consensus: -0.45 million) while gasoline inventories increased by 0.03 million barrels (consensus: -1.66 million). As a result, WTI crude ended its day lower by 2.9% ($46.76/bbl; -$1.39), extending its week-to-date loss to 4.7%.
The benchmark index extended its loss near midday as a downturn in the biotechnology sub-group pressured the heavily-weighted health care (-1.6%) sector. The S&P 500 (-0.5%) violated its 20-day simple moving average (2177.84) in the final hour, finding support near the 2170 price level. Nine sectors ended in the red with materials (-1.2%) and health care (-1.6%) acting as noticeable laggards. Conversely, the utilities (UNCH) sector finished the day flat.
Biotechnology weighed on the health care space (-1.6%), evidenced by the 3.4% decline in the iShares Nasdaq Biotechnology ETF (IBB 286.23, -9.95). In the ETF, Mylan Labs (MYL 43.15, -2.47) led to the downside after a White House spokesperson and the American Medical Association each voiced concerns regarding the company's drug pricing practices. Several U.S. lawmakers have criticized Mylan for excessive costs associated with the company's EpiPen device. The stock has declined 11.3% this week, which compares to a loss of 1.4% in the broader sector.
In the technology sector (-0.5%), large cap components Facebook (FB 123.48, -0.89) and Apple (AAPL 108.03, -0.82) underperformed, losing 0.7% and 0.8%, respectively. Top-weighted Apple was under pressure after reports indicated that co-founder Steve Wozniak is cautious about the notion of removing a headphone jack from the upcoming model of the iPhone. Intuit (INTU 109.85, -3.99) declined 3.5% as cautious first-quarter guidance overshadowed above-consensus fourth-quarter results.
The consumer discretionary space (-0.5%) displayed relative weakness as retail names pressured the sector. The SPDR S&P Retail ETF (XRT 45.62, -0.54) ended lower by 1.2% as quarterly results from La-Z-Boy (LZB 24.24, -3.96) and Express (EXPR 11.94, -4.09) weighed on the sub-group.
The U.S. Dollar Index (94.76, +0.22, +0.24%) ended higher as the yen and euro lost ground to the greenback. The dollar gained 0.2% against the safe-haven yen (100.47) while the single currency slipped 0.4% against the buck (1.1266).
Treasuries ended on a mixed note as the long end of the curve displayed relative weakness. The yield on the benchmark 10-yr note finished higher by one basis point at 1.56%.
Today's participation was below the recent average as fewer than 737 million shares changed hands at the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index, the FHFA Housing Price Index for June, and the Existing Home Sales Report for July:
The MBA Mortgage Index showed that mortgage applications fell 2.1% in the week ending August 20 after a 4.0% decline in the prior week.
The FHFA Housing Price Index for June rose 0.2%, which followed an increase of 0.2% in May.
Existing home sales in July declined 3.2% to a seasonally adjusted annual rate of 5.39 million (Briefing.com consensus 5.54 million) from June's unrevised sales pace of 5.57 million
June's sales pace was the highest since February 2007.
Existing home sales are being crimped due to limited inventory and high prices, both of which are leading to reduced buyer traffic in general and the tepid involvement of first-time buyers specifically.
For further details on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include weekly initial claims (Briefing.com consensus 265k) and Durable Goods Orders for July (Briefing.com consensus 3.5%), which will each cross the wires at 8:30 ET.
Russell 2000 +8.9% YTD
S&P 500 +6.4% YTD
Dow Jones +6.1% YTD
Nasdaq Composite +4.2% YTD
DJ30 -65.82 NASDAQ -42.38 SP500 -11.46 NASDAQ Adv/Vol/Dec 969/1.570 bln/1921 NYSE Adv/Vol/Dec 870/736.2 mln/2091 3:30 pm :
The dollar index was +0.3% around the 94.77 level, weighing on commodities
Commodities, as measured by the Bloomberg Commodity Index, -1.2% around the 85.07 level
Crude oil extended initial post-API losses after EIA data showed inventory builds on all fronts
October crude oil futures fell $1.39 (-2.9%) to $46.76/barrel
The next OPEC meeting will take place in Algeria from Sept 26-28
API data showed a build of 4.46 mln barrels of oil, compared to last week's draw of 1.0 mln barrels
EIA petroleum inventory data:
Crude oil inventories had a build of +2.502 mln (consensus called for a draw of -0.47 mln barrels)
Gasoline inventories had a build of +36k (consensus called for a draw of ~1.17 mln barrels)
Distillate inventories had a build of 122k
Natural gas rallied for the third consecutive session ahead of tomorrow's inventory number
September natural gas closed $0.04 higher (+1.5%) at $2.8/MMBtu
EIA natural gas inventory data will be released tomorrow at 10:30 am ET
In precious metals, gold & silver see a notable drop as the dollar index trades higher
December gold ended today's session down $16.10 (-1.2%) to $1329.90/oz
September silver closed today's session $0.37 lower (-2.0%) at $18.55/oz
Base metal copper traded notably lower in afternoon pit trading
September copper closed $0.04 lower (-1.9%) at $2.08/lb
Today's session began on a choppy note in the wake of another low-volume affair overseas. Foreign and domestic markets have been thinly-traded in recent days as participants favor caution ahead of Friday's seminal remarks from Jackson Hole, Wyoming. Ms. Yellen is expected to offer insight into whether or not a fed funds rate hike is in the cards before the end of the year. The fed funds futures market has ticked higher in recent days, reflecting the odds of a September rate hike at 24.0%. The implied probability of a September rate hike at the end of last week registered at 18.0%.The major averages inched lower following a below-consensus reading of existing home sales for July and as crude oil futures extended their losses. Existing home sales for July came in at an annualized rate of 5.39 million units, declining 3.2% from June's unrevised reading of 5.57 million units. Crude oil futures extended overnight losses following the release of the Department of Energy's weekly inventory data. The EIA reported that crude oil stockpiles increased by 2.501 million barrels while gasoline inventories rose by 0.036 million barrels. To that end, October crude oil futures fell $1.39 (-2.9%) to $46.76/barrel
Market data today included the MBA Mortgage Index reading which showed that mortgage applications fell 2.1% in the week ending August 20 after a 4.0% decline in the prior week. Also, the FHFA Housing Price Index for June rose 0.2%, which followed an increase of 0.2% in May.
Wednesday took back all of yesterday's gains and then some. The three major indices were trading with modest losses until about two hours left in the session when losses steepened. The downside was led by the Nasdaq Composite which shed 42.38 points (-0.81%) to 5217.69. The S&P 500 was down 11.46 points (-0.52%) to 2175.44, and the Dow Jones Industrial Average lost 65.82 points (-0.35%) to 18481.48.
Among the worst performing sectors today, Technology (XLK 46.97,-0.23-0.49%) ended just off lows as action took a small leg higher in the final moments. Component Intuit (INTU 109.85, -3.99 -3.50%) was an under-performer today following some better than expected Q4 results, but tepid Q1 guidance. Other sectors as measured by the S&P closed XLV -1.57%, XLB -1.16%, XLY -0.48%, XLE -0.40%, XLI -0.30%, XLP -0.16%, IYZ -0.06%, XLF -0.04%, XLU -0.04%.
In the S&P 500 Information Technology (781.55, -4.21 -0.54%) sector, trading was lower for most of the day, but bounced off its bottom in the final minutes. Component HP Inc. (HPQ 14.40, -0.17 -1.17%) made new post-split highs, and new YTD highs during the session and ahead of its quarterly print. Other names in the space which under-performed today included MU -4.14%, WDC -2.34%, STX -1.70%, ADS -1.64%, YHOO -1.62%, NVDA -1.54%, FISV -1.34%, TDC -1.31%, KLAC -1.29%, LRCX -1.27%, VRSN -1.26%.
News of note among sector components:
CSRA (CSRA 25.76, -0.30 -1.15%) received an indefinite-delivery, indefinite quantity (IDIQ) contract to provide logistics integration and weapon systems logistics network support for the U.S. Air Force. The single award IDIQ contract has an $88 million ceiling over a five-year period.
Amazon.co.uk (AMZN 757.25, -5.20 -0.68%) announced the launch of an Unlimited Storage plan in the UK for a flat fee of GBP55 per year.
TripAdvisor (TRIP 61.93, -0.71 -1.13%) acquired New York-based social mapping platform, Citymaps. Financial terms of the deal were not disclosed.
FXCM (FXCM 8.97, -0.40 -4.27%) and certain officers were named defendants in a securities class action lawsuit filed in the United States District Court for the Southern District of New York on May 8, 2015. On August 18, 2016, the District Court granted the company's motion to dismiss all the claims asserted in the complaint against defendants. The Plaintiffs were given thirty days to file an amended complaint, should they choose to do so.
CommScope (COMM 29.95, +0.76 +2.60%) has announced the increase in the size of the previously announced sale of shares of its common stock on an underwritten basis by an affiliate of The Carlyle
Group (CG 16.08, -0.12 -0.74%) from 7 million shares to 10 million shares. In addition, the underwriter will have an option to purchase up to 1,500,000 additional shares from Carlyle. CommScope will not receive any of the proceeds from the offering of shares by Carlyle.
ARRIS' (ARRS 26.66, -0.33 -1.22%) Board has appointed Bruce McClelland as CEO effective September 1, 2016. McClelland also was appointed to serve on the Board of Directors effective the same date. Outgoing CEO Bob Stanzione will become ARRIS Executive Chairman in addition to continuing to serve as Chairman of the Board of the Company.
INTL FCStone (INTL 35.48, -0.66 -1.83%) authorized for fiscal year 2017 the repurchase of up to 1 million shares of its outstanding common stock from time to time in open market purchases and private transactions, commencing on October 1, 2016 and ending on September 30, 2017, subject to the discretion of the senior management team to implement the company's stock repurchase plan, and subject to market conditions and as permitted by securities laws and other legal, regulatory and contractual requirements and covenants.
Fitbit (FIT 14.81, -0.07 -0.47%) confirmed the ITC determination in favor of the company. The ruling held that FIT did not misappropriate Jawbone trade secrets.
Interlink Electronics (LINK 11.00, flat) announced that David Burnett has joined the company as CFO.
In reaction to quarterly results:
ReneSola (SOL 1.23, -0.04 -3.15%) reported better than expected Q2 adjusted EPS of $0.05 per ADS on revenues which were worse than expected and fell 6.9% compared to a year ago to $250 million. For Q3, the company sees revenues of $200 million and for FY16 SOL now sees $900 million-$1.1 billion (from $1-1.2 billion), both of which were worse than market expectations.
Nimble Storage (NMBL 8.77, -0.05 -0.57%) reported a better than expected Q2 loss per share of $0.19 on better than expected revenues of $97.1 million. For Q3, NMBL sees in-line EPS and revenues of ($0.17)-($0.19) and $100-103 million, respectively.
Intuit (INTU) reported better than expected Q4 EPS and revenues of $0.08 and $735.35 million. For Q1, INTU expects EPS of $0.01-0.03 and revenues of $740-760 million, both of which are worse than market expectations. For FY17, the company sees EPS of $4.30-4.40 on revenues of $5.0-5.1 billion, both of which came in in-line with expectations.
Companies scheduled to report quarterly results tonight/tomorrow morning: HPQ, WDAY/JKS, LEJU, TECD
Analyst actions:
LVLT was upgraded to Buy from Neutral at MoffettNathanson,
NTAP was upgraded to Neutral from Sell at Goldman,
ON was upgraded to Buy from Neutral at Longbow;
CSIQ was downgraded to Equal Weight from Overweight at Barclays,
SEAC was downgraded to Hold from Buy at Lake Street;
CHKP was initiated with a Neutral at Robert W. Baird,
CMTL was initiated with a Neutral wat Citigroup,
LN was initiated with a Neutral wat JP Morgan
