From Briefing.com: 4:22 pm Advanced Micro beats by $0.02, beats on revs; guides Q4 revs in-line (AMD) :
Reports Q3 (Sep) earnings of $0.03 per share, $0.02 better than the Capital IQ Consensus of $0.01; revenues rose 23.2% year/year to $1.31 bln vs the $1.21 bln Capital IQ Consensus.
Gross margin was 5 percent, down from 31 percent from the previous quarter due to a $340 million charge related to the 6th amendment to the Wafer Supply Agreement with GLOBALFOUNDRIES. Non-GAAP gross margin of 31 percent was flat quarter-over-quarter.
Co issues in-line guidance for Q4, sees Q4 revs of $1.03-1.11bln (Down 21-15%) vs. $1.06 bln Capital IQ Consensus Estimate; expects non-GAAP gross margin to be approximately 32%; expects inventory to decline to approximately $660 million
4:21 pm Celestica beats by $0.13, beats on revs; guides Q4 EPS in-line, revs in-line (CLS) :
Reports Q3 (Sep) earnings of $0.43 per share, excluding a net benefit of $0.11 per share related to income taxes, $0.13 better than the Capital IQ Consensus of $0.30; revenues rose 10.0% year/year to $1.55 bln vs the $1.52 bln Capital IQ Consensus.
Operating margin of 3.8%, above the previously provided mid-point of expectations of 3.6%, and consistent with the third quarter of 2015.Co issues in-line guidance for Q4, sees EPS of $0.29-0.35, excluding non-recurring items, vs. $0.32 Capital IQ Consensus Estimate; sees Q4 revs of $1.5-1.6 bln vs. $1.55 bln Capital IQ Consensus Estimate.Co expects a negative $0.09 to $0.14 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software) and restructuring charges.
4:17 pm KLA-Tencor beats by $0.12, beats on revs (KLAC) :
Reports Q1 (Sep) earnings of $1.16 per share, $0.12 better than the Capital IQ Consensus of $1.04; revenues rose 16.8% year/year to $751 mln vs the $734.59 mln Capital IQ Consensus.Co will guide shortly.
4:16 pm Microsoft flirting with all time/late 1999 highs at the 60 level in the after hours after convincingly beating Q1 estimates (MSFT) : QQQ
4:12 pm Microsoft beats by $0.08, beats on revs; co will guide on the call (MSFT) :
Reports Q1 (Sep) earnings of $0.76 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.68; adj. revenues rose 3.1% year/year to $22.33 bln vs the $21.69 bln Capital IQ Consensus. Revenue in Productivity and Business Processes grew 6% (up 8% in constant currency) to $6.7 bln vs. $6.4-6.6 bln guidance, with the following business highlights: Office commercial products and cloud services revenue grew 5% (up 8% in constant currency) driven by Office 365 commercial revenue growth of 51% (up 54% in constant currency) Office consumer products and cloud services revenue grew 8% (up 8% in constant currency) and Office 365 consumer subscribers increased to 24.0 mln Dynamics products and cloud services revenue grew 11% (up 13% in constant currency) driven by Dynamics online revenue growth Revenue in Intelligent Cloud grew 8% (up 10% in constant currency) to $6.4 bln vs. $6.1-6.3 bln guidance, with the following business highlights: Server products and cloud services revenue increased 11% (up 13% in constant currency) driven by double-digit annuity revenue growth Azure revenue grew 116% (up 121% in constant currency) with Azure compute usage more than doubling year-over-year
Enterprise Services revenue increased 1% (up 2% in constant currency) with growth in Premier Support Services and consulting offset by declines in custom support agreements
Revenue in More Personal Computing declined 2% (down 1% in constant currency) to $9.3 bln vs. $8.7-9.0 bln guidance, with the following business highlights: Windows OEM revenue was flat year-over-year (flat in constant currency), slightly ahead of the PC market
Windows commercial products and cloud services revenue was flat year-over-year (up 2% in constant currency) driven by annuity revenue
Phone revenue declined 72% (down 71% in constant currency)
Gaming revenue declined 5% (down 4% in constant currency) driven by lower Xbox console revenue offset by higher Xbox software and services revenue
Search advertising revenue excluding traffic acquisition costs grew 9% (up 10% in constant currency) driven by increased revenue per search and search volume
During the quarter, the company announced an 8% increase in its quarterly dividend to $0.39 per share, a new share repurchase program authorizing up to $40 bln in share repurchases, and reaffirmed it is on track to complete its current $40 bln share repurchase program by December 31, 2016.
Microsoft expects to close the acquisition of LinkedIn (LNKD) and the sale of our entry-level feature phone business in the second quarter of fiscal year 2017, subject to regulatory approvals and other closing conditions. Co will guide on the call.
4:09 pm Violin Memory notified by the NYSE that it is below the NYSE's continued listing standard; plans to timely notify the NYSE that it intends to cure the $1.00 per share deficiency (VMEM) :
4:06 pm Maxim Integrated beats by $0.01, reports revs in-line; guides Q2 EPS in-line, revs in-line (MXIM) :
Reports Q1 (Sep) earnings of $0.48 per share, $0.01 better than the Capital IQ Consensus of $0.47; revenues fell 0.2% year/year to $561.4 mln vs the $560.39 mln Capital IQ Consensus.
Cash flow from operations was $123 mln.
The company's 90-day backlog at the beginning of the December 2016 quarter was $371 mln.
Co issues in-line guidance for Q2, sees EPS of $0.40-$0.46 vs. $0.45 Capital IQ Consensus Estimate; sees Q2 revs of $520-$560 mln vs. $540.65 mln Capital IQ Consensus Estimate. Sees gross margin of 63-65%.
4:15 pm : The stock market ended the Thursday affair on a flat note as the latest round of quarterly reports prompted mixed reactions from investors. Global monetary policy was also in focus as participants digested the October policy decision from the European Central Bank and some somewhat hawkish commentary from a Federal Reserve official. The Dow Jones Industrial Average (-0.2%) settled slightly behind the S&P 500 (-0.1%) and the Nasdaq Composite (-0.1%).
It was a busy day on the earning front as the third-quarter earnings reporting season continued hitting its stride. Influential names such as Verizon (VZ 49.14, -1.24), American Express (AXP 66.78, +5.53), Travelers (TRV 109.52, -6.71), Walgreens Boot Alliance (WBA 81.02, +3.84) and Union Pacific (UNP 90.64, -6.48) each reported their quarterly results, resulting in some varied assessments.
Equity indices struggled for direction at the start of the session as choppy trade in Europe increased volatility during the early portion of the U.S. session. The European Central Bank released its latest policy statement this morning, opting to maintain its key interest rates and its asset purchase levels. ECB President Mario Draghi followed up the policy inaction with noncommittal remarks. Mr. Draghi indicated that neither extending nor tapering the central bank's asset purchase program were discussed at this month's meeting, but that the board would conduct further policy review in December.
The decision took some steam out of the euro, which in turn, provided another tailwind to the greenback. The U.S. Dollar Index (98.30, +0.38, +0.39%) extended its recent winning streak as policy inaction from the ECB, an improving US rate hike picture, and largely positive economic data boosted the currency. Strengthening in the dollar weighed on the broader market as participants eyed headwinds for dollar-denominated commodities and earnings prospects of multinational companies.
The broader market overcame selling interest near midday, but the major averages were unable to make a meaningful move above their flat lines.
The S&P 500 finished off its best level of the day as ten sectors settled in the red. The lightly-weighted telecom services (-2.0%) sector finished at the bottom of the leaderboard with industrials (-0.5%) and consumer discretionary (-0.2%) also underperforming notably. On the flipside, heavily-weighted health care (+0.5%) finished in positive territory.
The PHLX Semiconductor Index finished higher by 0.8% after takeover rumors signaled that Qualcomm (QCOM 67.34, +1.55) is close to acquiring NXP Semi (NXPI 104.49, +3.46).
The health care sector (+0.5%) demonstrated relative strength as biotechnology and generic drug names outperformed. The iShares Nasdaq Biotechnology ETF (IBB 270.04, +2.56) finished higher by 1.0%, narrowing its month-to-date loss to 6.7%. In the ETF, Gilead Sciences (GILD 74.31, +0.97) jumped 1.3% after announcing top-line results from several drug studies.
In the financial sector (UNCH), Dow component American Express (AXP 66.78, +5.53) outperformed after beating bottom-line estimates for the quarter and issuing upbeat full-year earnings guidance. The name finished at the top of the price-weighted average. On the flip side, Travelers (TRV 109.52, -6.71) rounded out the index despite beating estimates. The stock fell 5.8%.
The industrial sector (-0.5%) underperformed after Union Pacific (UNP 90.64, -6.48) missed bottom-line estimates for the quarter. The stock was also downgraded to "Market Perform" from "Outperform" at Cowen.
Specialty retail names underperformed in the consumer discretionary sector (-0.1%) as eBay (EBAY 29.02, -3.50) plunged 10.8%. The company issued some disappointing guidance, which overshadowed a quarterly beat.
Treasuries finished on a mixed note as the short end of the curve underperformed. The yield on the 2-yr note settled higher by two basis points (0.82%) while the yield on the benchmark 10-yr note finished higher by one basis point at 1.75%.
Today's trading volume fell below the average of 853 million as 773 million shares changed hands at the NYSE floor.
Today's economic data included weekly initial claims, the Philadelphia Fed Survey, Existing Home Sales, and September Leading Indicators:
Initial jobless claims jumped 13,000 to 260,000 (Briefing.com consensus 249,000) for the week ending October 15.
Continuing claims for the week ending October 8 rose by 7,000 to 2.057 million.
The Philadelphia Fed Index dipped from 12.8 in September to 9.7 in October (Briefing.com consensus 5.5).
That reflects a slowing of activity, yet any number above 0.0 still points to an expansion in regional manufacturing activity.
Existing home sales increased 3.2% to a seasonally adjusted annual rate of 5.47 million in September from a downwardly revised 5.30 million (from 5.33 million) in August.
The uptick in September broke a string of monthly sales declines registered in July and August.
The Conference Board's Leading Economic Index (LEI) increased 0.2% in September, as expected, rebounding from an unrevised 0.2% decline in August.
There is no economic data of note scheduled to be released tomorrow.
Russell 2000: +7.4% YTD
S&P 500: +4.8% YTD
Nasdaq Composite: +4.7% YTD
Dow Jones: +4.2% YTD
DJ30 -40.27 NASDAQ -4.58 SP500 -2.95 NASDAQ Adv/Vol/Dec 1288/1.593 bln/1501 NYSE Adv/Vol/Dec 1224/773.0 mln/1671 3:30 pm :
The dollar index was +0.4% around the 98.31 level, hit 7-month highs earlier, weighed on commodities, especially precious metals
Commodities, as measured by the Bloomberg Commodity Index, were -1.0% around the 86.02 level
Crude oil retreated from yesterday's 15-month high ahead of tomorrow's rig count data
December crude oil futures fell $1.15 (-2.2%) to $50.65/barrel
The next OPEC meeting will take place in Vienna, Austria on November 30.
Baker Hughes rig count data will be released tomorrow at 1 pm ET.
The oil rig count has increased for the past 16 consecutive weeks.
Natural gas extended yesterday's losses after EIA data showed a larger-than-expected build compared to Consensus
November natural gas closed $0.03 lower (-1.0%) at $3.14/MMBtu
EIA highlights:
Natural gas inventory showed a build of +77 bcf vs expectations for inventory to be a build of approximately +73 bcf.
Working gas in storage was 3,836 Bcf as of Friday, October 14, 2016, according to EIA estimates.
Stocks were 46 Bcf higher than last year at this time and 185 Bcf above the five-year average of 3,651 Bcf.
At 3,836 Bcf, total working gas is above the five-year historical range.
In precious metals, gold's decline was outpaced by the losses in silver as the dollar index broke out to 7-month highs earlier in the session
December gold ended today's session down $2.40 (-0.2%) to $1267.70/oz
December silver closed today's session $0.10 lower (-0.6%) at $17.56/oz
The gold:silver ratio was at ~72.2%, compared to last Thursday's pit trading closing ratio of ~72.1.
The broader market erased yesterday's modest advance as the Dow Jones Industrial Average led all others lower, shedding 40.27 points (-0.22%) today to end 18162.35. The S&P 500 lost 2.95 points (-0.14%) to 2141.34, and the Nasdaq Composite was lower by 4.58 points (-0.09%) to 5241.83 when the session was over. Notable Nasdaq 100 components which resisted the broader market selling today included WBA +5.0%, NXPI +3.4%, QCOM +2.4%, ALXN +1.8% and BIIB +1.5%.
Equity indices began the day under modest pressure as participants pored over the latest policy statement from the ECB and remarks from President Draghi. The central bank voted to leave its monetary policy stance unchanged, holding its key interest rates steady and maintaining its bond purchase levels at EUR80 billion per month. Mr. Draghi also noted that the board did not discuss either extending or tapering its asset purchase program at this meeting. However, he did signal that the ECB would review policy further in December and also voiced some optimism regarding the potential for an improved inflation trend.
The commentary exacerbated strength in the U.S. Dollar Index (98.31, +0.46 +0.47%) as the euro extended its losing streak against the greenback. An improved US rate hike picture and some positive economic data also contributed to strength in the dollar.
The major averages pulled back amid firming in the buck as participants assessed headwinds on dollar-denominated commodities and the earnings prospects of multinational companies.
Market data that crossed desks today included the initial jobless claims reading which jumped 13,000 to 260,000 for the week ending October 15. Also, the Philadelphia Fed Index dipped from 12.8 in September to 9.7 in October. Further, existing home sales increased 3.2% to a seasonally adjusted annual rate of 5.47 million in September from a downwardly revised 5.30 million (from 5.33 million) in August. Lastly, the Conference Board's Leading Economic Index (LEI) increased 0.2% in September, as expected, rebounding from an unrevised 0.2% decline in August.
Among S&P sectors in negative territory today, the Technology (XLK 47.40, -0.22 -0.46%) sector could not rebound off morning weakness, erasing yesterday's modest gains. Component eBay (EBAY 29.02, -3.50 -10.76%) was the worst performing stock in the sector today despite a better than expected Q3 print. Other sectors as measured by the S&P closed Thursday XLV +0.47%, XLFS +0.16%, XLP -0.06%, XLU -0.06%, XLB -0.06%, XLF -0.10%, XLE -0.11%, XLY -0.16%, XLRE -0.35%, XLI -0.54%, IYZ -1.23% as Healthcare and Financial Services were the lone out-performers.
In the S&P 500 Information Technology (797.35, -1.86 -0.23%) sector, trading could not manage to climb out of the red. Component Alliance Data (ADS 204.77, -10.01 4.66%) was a drag on the space after the company reported a mostly better than expected Q3, but guided FY17 worse than market expectations. Other names in the space which were lower today included FIS -1.35%, TDC -1.33%, GPN -1.05%, XRX -0.93%, RHT -0.88%, JNPR -0.87%, YHOO -0.82%, TSS -0.77%, ORCL -0.68%.
Other notable news items among sector components:
IBM (IBM 151.52, +0.26 +0.17%) announced that TPV Technology Ltd., the manufacturer of Philips-branded televisions, has adopted IBM Cloud and IoT services to more quickly and easily build new smart features and apps, such as video-on-demand and instant playback, directly into its TVs.
Reportedly, Tesla (TSLA 199.10, -4.46 -2.19%) will use NVIDIA's (NVDA 67.73, +1.26 +1.90%) Titan GPU (over MBLY) to give cars produced by TSLA autonomous driving options.
CSRA (CSRA 26.20, -0.13 -0.49%) won a task order through the Department of Defense Joint Service Provider program. The $114 million task order was awarded under the CIO-SP3 contract vehicle, and has a period of performance over four and a half years.
Analog Devices (ADI 63.47, +1.56 +2.52%) and Linear Tech (LLTC 60.15, +0.84 +1.42%) announced that on October 19, 2016 the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for the proposed combination of Analog Devices and Linear Technology expired. As a result, the transaction has been cleared for U.S. antitrust purposes. In addition, Analog Devices and Linear Technology received clearance for the transaction from the German Federal Cartel Office on October 11, 2016.
Intel (INTC 35.43, -0.08 -0.23%) won support from an European Union Court of Justice for its appeal of the EU's previously announced anti-trust fine.
Alliance Data (ADS) declared an initial quarterly dividend of $0.52 per share.
Elsewhere in the tech space:
Nintendo (NTDOY 32.36, +0.77 +2.45%) unveiled its newest gaming console, the Nintendo Switch. The console is expected to be available March 2017.
DragonWave (DRWI 4.29, +2.08 +94.12%) announced Sprint (S 6.72, -0.16 -2.33%) selected its microwave backhaul equipment for network deployment as part of the company's densification and optimization strategy.
Actua (ACTA 11.55, +0.20 +1.76%) announced the consummation of the sale of GovDelivery to an investor group led by Vista Equity Partners for $153 million in cash, subject to adjustment for working capital, cash, debt and other items. Actua will realize about $133 million in cash in connection with the transaction.
xG Technology (XGTI 0.43, +0.02 +5.12%) to acquire Vislink Communication Systems for $16 million.
InterCloud Systems (ICLD 0.06, +0.00 +0.44%) was recently awarded more than $2.1 million in new contracts. A majority of the work is expected to begin immediately.
HealthEquity (HQY 35.90, -0.84 -2.29%) announced and priced a 2.5 million common stock offering at $35.85 per share.
Wipro (WIT 9.92, -0.14 -1.39%) confirmed a deal to acquire Appirio for $500 million.
In reaction to quarterly results:
Verizon (VZ 49.14, -1.24 -2.46%) reported better than expected Q3 EPS of $1.01 on revenues which fell 6.7% compared to last year to $30.94 billion. VZ also reaffirmed certain guidance.
eBay (EBAY) reported better than expected Q3 EPS of $0.45 on better than expected revenues of $2.22 billion. Also, gross merchandise volume was up 3% to $20.1 billion.
Lam Research (LRCX 96.94, -2.78 -2.79%) reported better than expected Q1 EPS of $1.81 on revenues of $1.63 billion. Gross margins were 45.2% and deferred revenues were $704 million compared to $566 last quarter. LRCX also guided Q2 EPS of $2.08-2.28 on revenues of $1.765-1.915 billion.
Citrix Systems (CTXS 86.34, +0.04 +0.05%) reported better than expected Q3 EPS and revenues of $1.32 and $841 million, respectively. CTXS also guided FY16 EPS and revenues above expectations at $5.18-5.20 and $3.40-3.41 billion, respectively.
Xilinx (XLNX 50.09, +0.48 +0.97%) reported better than expected Q2 EPS of $0.61 on revenues of $579 million. XLNX also gave guidance for Q3 revenues of flat sequentially from $579 million.
Alliance Data (ADS) reported better than expected Q3 EPS and revenues of $4.74 and $1.81 billion, respectively. For FY16, ADS raised its EPS guidance to $16.90 from $16.85 and now sees revenues for FY16 of $7.2 billion from $7.15 billion. Additionally, the company guided FY17 lower than expected at EPS growth of about 10% to about $18.60 on revenue growth of about 10% to about $7.92 billion.
Companies scheduled to report tonight/tomorrow morning: AMD, BHE, CLS, ETFC, KLAC, MXIM, MSFT, PYPL, PFPT/ERIC, EEFT, MWW, SAP, WIT
Analyst actions:
EXPE was upgraded to Overweight from Sector Weight at Pacific Crest,
EPAM was upgraded to Buy from Neutral at Monness Crespi & Hardt,
RST was upgraded to Outperform from Market Perform at Barrington Research,
DRWI was upgraded to Hold from Sell at Desjardins;
CNSL was downgraded to Underweight at a boutique firm;
TEF was initiated with an Underperform at RBC Capital Mkts,
EMKR was initiated with a Buy at Dougherty,
EXPE and PCLN were initiated with a Positive at Susquehanna,
ADI was initiated with an Outperform at CLSA,
NTNX was initiated with a Neutral at BTIG Research,
TRIP was initiated with a Neutral at Susquehanna
