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Thursday, October 27, 2016 5:54:31 PM
From Briefing.com: 4:47 pm Applied Micro beats by $0.03, reports revs in-line (AMCC) :
Reports Q2 (Sep) earnings of $0.02 per share, $0.03 better than the Capital IQ Consensus of ($0.01); revenues rose 5.3% year/year to $41.8 mln vs the $41.58 mln Capital IQ Consensus.
Co states: "In 2Q17 we achieved our seventh consecutive quarter of revenue growth. Our Connectivity business once again drove the improvement in top line results, and higher gross margins combined with greater operating efficiencies led to a return to profitability on a non-GAAP basis. We continue to lead the optical market with our PAM4 single lambda 100/400G FinFET technology, which is now slated to become the industry standard for data center and enterprise connectivity."
4:44 pm Ingram Micro beats by $0.08, misses on revs (IM) :
Reports Q3 (Sep) earnings of $0.71 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.63; revenues fell 2.7% year/year to $10.23 bln vs the $10.34 bln Capital IQ Consensus.
"We see further stabilization in market demand across most of the globe and our teams continue to leverage our investments in productivity and services to deliver improved bottom line results and growth in a number of areas as we benefit from the broadest solutions portfolio and widest geographic reach in the industry.""We continue to make progress on our transaction to join the HNA Group and remain on track to close this year."
4:36 pm Nanometrics beats by $0.05, beats on revs; guides Q4 EPS in-line, revs in-line (NANO) :
Reports Q3 (Sep) earnings of $0.33 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.28; revenues rose 28.5% year/year to $58.71 mln vs the $57.53 mln Capital IQ Consensus.
Co issues in-line guidance for Q4, sees EPS of 0.22-0.31, excluding non-recurring items, vs. $0.29 Capital IQ Consensus Estimate; sees Q4 revs of $54-59 mln vs. $58.03 mln Capital IQ Consensus Estimate.
"We expect that continued investments in 3D-NAND, DRAM and Foundry by our key customers in Q4 will result in second-half revenues that are meaningfully stronger than the first half, and round out the remainder of 2016 to comprise another sequential year in which our revenue growth significantly outperforms overall spending on wafer fab equipment."
4:36 pm Cirrus Logic beats by $0.30, beats on revs; guides Q3 revs above consensus (CRUS) :
Reports Q2 (Sep) earnings of $1.35 per share, $0.30 better than the Capital IQ Consensus of $1.05; revenues rose 39.7% year/year to $428.62 mln vs the $396.9 mln Capital IQ Consensus.
GAAP and non-GAAP gross margin of 49.4 percent
Co issues upside guidance for Q3, sees Q3 revs of $475-515 mln vs. $440.80 mln Capital IQ Consensus Estimate; GAAP gross margin is expected to be between 47 percent and 49 percent
4:33 pm Cypress Semi beats by $0.01, reports revs in-line; guides Q4 EPS in-line, revs midpoint above consensus (CY) :
Reports Q3 (Sep) earnings of $0.15 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.14; non-GAAP rev +16% Q/Q to $530 mln vs. $525.7 mln consensus.
Co issues guidance for Q4, sees EPS of $0.12-0.16, excluding non-recurring items, vs. $0.13 Capital IQ Consensus Estimate; sees Q4 revs of $510-540 mln vs. $516.69 mln Capital IQ Consensus Estimate.
"Our gross margin improvement plan remains on track as we continue to focus on efficiency and execution. "We are moving quickly to streamline the Company to sharpen our focus on high-growth segments in the automotive, industrial and IoT markets," El-Khoury said. "As we projected last quarter, more than half of our Q3 revenue came from markets growing faster than the overall semiconductor industry. Automotive revenue accounted for 32% of our overall revenue in the quarter and increased 25% year-on-year. We have also integrated the wireless IoT business acquired from Broadcom and are seeing strong customer demand for our solutions in that space."
4:20 pm Mellanox Tech beats by $0.01, reports revs in-line; guides Q4 revs below consensus (MLNX) :
Reports Q3 (Sep) earnings of $0.93 per share, $0.01 better than the Capital IQ Consensus of $0.92; revenues rose 30.8% year/year to $224.2 mln vs the $224.11 mln Capital IQ Consensus.
Non-GAAP gross margins of 71.8%, compared to 71.4% in 2Q16.
$48.7 mln in cash was provided by operating activities, compared to $44.8 mln in 2Q16.
Co issues downside guidance for Q4, sees Q4 revs of $222-$228 mln vs. $233.78 mln Capital IQ Consensus Estimate. Sees Non-GAAP gross maring of 71-72%. Non-GAAP diluted share count of 49.8-50.3 mln shares.
4:18 pm Pixelworks beats by $0.02, beats on revs; guides Q4 revs in-line (PXLW) :
Reports Q3 (Sep) loss of $0.02 per share, $0.02 better than the Capital IQ Consensus of ($0.04); revenues fell 17.5% year/year to $13.7 mln vs the $13.52 mln Capital IQ Consensus. Co issues in-line guidance for Q4, sees Q4 revs of $15-16 mln vs. $14.31 mln Capital IQ Consensus Estimate.
Sees gross profit margin of approximately 50% to 52% on both a GAAP basis and non-GAAP basis; and operating expenses of $8 million to $9 million on a GAAP basis and $7 million to $8 million on a non-GAAP basis."Third quarter revenue and earnings per share were both at the high-end of our guidance, reflecting continued sequential improvement across our business. Our projector business benefited from increased traction throughout the quarter as order patterns from OEMs and distributors began to normalize following the channel disruptions experienced earlier this year. In our mobile business, we are now sampling our 3rd generation IRIS processor at key smartphone and tablet customers, which in addition to having a smaller footprint and improved power consumption also enables OEMs to differentiate their devices with a superior mobile viewing experience. I'm also pleased to announce the appointment of Ting Xiong as Pixelworks' senior VP of worldwide sales, who will be based in China and most recently headed the APAC sales organization at Qorvo's IDP group. Ting fills-out our sales footprint and combined with other additions to the team earlier in the year gives us broad sales coverage across all of the key mobile markets in Asia."
4:16 pm FormFactor beats by $0.01, reports revs in-line; guides Q4 EPS, revs in-line (FORM) :
Reports Q3 (Sep) earnings of $0.22 per share, $0.01 better than the Capital IQ Consensus of $0.21; revenues rose 87.2% year/year to $123.3 mln vs the $122.7 mln Capital IQ Consensus.
Co issues in-line guidance for Q4, sees EPS of $0.15-0.21 vs. $0.21 Capital IQ Consensus Estimate; sees Q4 revs of $116-124 mln vs. $122.19 mln Capital IQ Consensus Estimate. Within the business segments,
Probe Card revenues are forecasted to decline slightly as demand from FormFactor's significant microprocessor customer normalizes to double the 2015 level, and Systems segment demand is expected to remain steady and benefit from the recent strong order flow
4:09 pm Flex reports EPS in-line, revs in-line; guides DecQ EPS in-line, revs in-line (FLEX) :
Reports Q2 (Sep) earnings of $0.28 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.28 and vs prior guidance of $0.26-0.30; revenues fell 4.9% year/year to $6.01 bln vs the $6.00 bln Capital IQ Consensus and vs prior guidance of $5.80-6.20 mln.
Co issues in-line guidance for Q3 (Dec), sees EPS of $0.31-0.35, excluding non-recurring items, vs. $0.33 Capital IQ Consensus Estimate; sees Q3 revs of $6.00-6.40 bln vs. $6.28 bln Capital IQ Consensus Estimate.
"Our Sketch-to-Scale strategy remains firmly on track as reflected in our [SepQ] performance which is inline with guidance...We remain focused on value creating activities such as a structural mix shift to a higher margin business, generating sustainable free cash flow and consistently returning value to our shareholders."
4:04 pm Cohu beats by $0.02, beats on revs; guides Q4 revs in-line (COHU) :
Reports Q3 (Sep) earnings of $0.14 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.12; revenues rose 2.7% year/year to $69.3 mln vs the $67.95 mln Capital IQ Consensus.
"Third quarter results were better than anticipated," said President and Chief Executive Officer Luis Mller. "Demand for turret handlers was strong for testing high performance mixed signal and RF devices, and automotive orders continued to expand following market share gains earlier this year. We had a design-win at a Korean test subcontractor and repeat orders from a recently won Japanese turret customer and another for in-process strip testing of advanced memory."
Co issues in-line guidance for Q4, sees Q4 revs of approx. $65.0 mln vs. $65.47 mln Capital IQ Consensus Estimate.
Cohu's Board of Directors approved a quarterly cash dividend of $0.06 per share payable on January 2, 2017 to shareholders of record on November 18, 2016. Cohu has paid consecutive quarterly cash dividends since 1977.
4:15 pm : The stock market ended the Thursday affair on a lower note as rising long-term interest rates kept risk appetite in check ahead of quarterly reports from Alphabet (GOOG 795.35, -3.72, -0.5%) and Amazon (AMZN 818.36, -4.23 -0.5%). The Russell 2000 fell 1.3% while the Nasdaq Composite (-0.7%) and the S&P 500 (-0.3%) finished with narrower losses.
The major averages gapped higher at the start of the session as some news on the M&A front and better-than-expected corporate earnings stoked buying interest. Qualcomm (QCOM 70.09, +1.89, +2.8%) announced this morning that it finalized an agreement to acquire NXP Semiconductors (NXPI 99.08, +0.42, +0.4%) for $110 per share, or a total enterprise value of approximately $47 billion.
The upbeat start proved to be short-lived, however, as a downturn in bond prices had investors on their heels. The S&P 500 erased its initial 0.4% gain within the opening hour as long-term yields continued to rise. The yield on the benchmark 10-yr note notched a five-month high at 1.87% before eventually settling at 1.84% (+5 bps).
Interest rates were on the move after commentary from Bank of Japan Governor Haruhiko Kuroda and upbeat economic data called into question the future path of global monetary policy. The first post-Brexit vote advance GDP reading out of the UK came in better than expected (+0.5% quarter-over-quarter; expected 0.3%), diminishing hopes for further policy stimulus from the Bank of England. Meanwhile, BoJ Governor Kuroda said that the yield curve is moving in line with the central bank's expectations and that large-scale asset purchases may not be needed in the future.
In-line economic data out of the U.S. also contributed to selling pressure in the bond market. Weekly initial claims, September Durable Orders, and September New Home Sales did little to rattle the positive trend of recent economic data ahead of next week's FOMC policy meeting. The CME's FedWatch Tool implies only a slim 9.3% chance of a rate hike in November, but the likelihood of a rate hike at the December meeting has increased to 78.5%.
The U.S. Dollar Index (98.88, +0.25, +0.26%) also continued to flash some strength, gaining against the euro, pound, and yen. The index has gained 3.7% so far in October amid a solidifying rate hike outlook. Dollar-denominated commodities were able to shrug off the strength, however, as crude oil finished higher by 1.1% ($49.72/bbl; +$0.55).
The broader market carved out a session low in the final hour of trade as heavily-weighted consumer discretionary (-0.9%), industrials (-0.7%), and technology (-0.4%) extended their losses.
The S&P 500 settled near its worst level of the day with eight sectors ending beneath their flat lines.
In the consumer discretionary space (-0.9%), auto part retailers underperformed as they moved lower in sympathy with O'Reilly Automotive (ORLY 253.00, -24.16). The name plunged 8.7% after reporting a bottom-line miss and issuing cautious guidance for the remainder of the year. Meanwhile, media name Comcast (CMCSA 61.48, -1.08) fell 1.7% after the FCC imposed stricter privacy rules that will impact the broadband provider.
Aerospace and defense names displayed relative weakness in the industrial sector (-0.7%) as Raytheon (RTN 136.28, -5.00) declined 3.5%. Raytheon was unable to advance despite topping bottom-line estimates for the quarter and raising its full-year earnings guidance. UPS (UPS 108.08, -0.53) also fell 0.5% as an in-line quarter failed to garner buying interest.
The influential technology sector (-0.4%) moved lower as large cap names paced the retreat. Apple (AAPL 114.51, -1.08, -0.9%) extended its post-earnings loss to 3.2%. Shares of Facebook (FB 129.69, -1.35) finished lower by 1.0% as participants looked ahead to earnings results from other F.A.N.G. names. Separately, the PHLX Semiconductor Index erased an initial 1.3% gain, settling lower by 0.4%.
In the health care group (+0.9%), Alexion Pharmaceuticals (ALXN 131.37, +9.78, +8.0%), Bristol-Myers (BMY 51.96, +2.67, +5.4%), and Celgene (CELG 104.75, +6.34, +6.4%) rallied after beating quarterly estimates.
Today's trading volume was above the average of 853 million as 960 million shares changed hands at the NYSE floor.
Today's economic data included weekly initial claims, Durable Goods Orders for September, and Pending Home Sales for September:
Initial claims for the week ending October 22 were 258,000 (Briefing.com consensus 259,000), down 3,000 from the prior week's revised level of 261,000.
Continuing claims for the week ending October 15 decreased by 15,000 to 2.039 million.
Durable orders for September were down 0.1% (Briefing.com consensus 0.0%), pulled lower by a 0.8% decline in transportation equipment orders.
However, new orders in August were revised up to 0.3% from 0.0%.
Excluding transportation, durable orders increased 0.2% in September (Briefing.com consensus +0.3%) on top of an upwardly revised 0.1% increase (from -0.4%) in August.
Sales of new single-family houses jumped 3.1% in September to a seasonally adjusted annual rate of 593,000 from a revised August rate of 575,000 (prior 609,000).
The September reading was lower than the Briefing.com consensus estimate of 610,000. Absent the August revision, there would have not been any growth on a month-over-month basis.
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the advance estimate of Q3 GDP (Briefing.com consensus +2.5%) and Q3 Employment Cost Index (Briefing.com consensus 0.6%), which will cross the wires at 8:30 ET. Separately, the final reading of the University of Michigan Consumer Sentiment Survey for October (Briefing.com consensus 88.2) will be released at 10:00 ET.
Russell 2000: +4.7% YTD
S&P 500: +4.4% YTD
Dow Jones: +4.3% YTD
Nasdaq Composite: +4.2% YTD
DJ30 -29.65 NASDAQ -34.29 SP500 -6.40 NASDAQ Adv/Vol/Dec 979/1.756 bln/2028 NYSE Adv/Vol/Dec 821/960.5 mln/2135 3:30 pm :
The dollar index was +0.3% around the 98.88 level, not appearing to weigh on precious metals
Commodities, as measured by the Bloomberg Commodity Index, +0.8% around the 86.22 level
Crude oil futures rallied off of yesterday's 3-week lows following comments from Saudi Arabia's oil minister
December crude oil futures rose $0.55 (+1.1%) to $49.72/barrel.
Baker Hughes rig count data will be released tomorrow at 10:30 am ET.
The next OPEC meeting will be held in Vienna, Austria on November 30.
Natural gas snapped its 6-session streak of losses after EIA data reported an inventory build that was in-line with expectations.
December natural gas closed $0.03 higher (+1.0%) at $3.07/MMBtu
Color on recent price action in crude oil:
Crude oil futures rallied off of yesterday's 3-week after Energy ministers from Saudi Arabia and Gulf allies told Russian oil ministers this week they are willing to reduce peak oil output by up to 4%. It is worth noting that Saudi Arabia is the largest OPEC producer.
Non-OPEC producer Russia stated earlier that they would not cut output, but are considering a potential production freeze.
Reminder: Earlier this week crude oil took a hit when OPEC's second largest producer Iraq stated they would not participate in the proposed OPEC production cut along with Nigeria, Iran, & Libya, discussing that its market share would be much higher if not for the wars it has been fighting since the 1980's, including its ongoing conflict with ISIS. Iraq also added they could raise output slightly this month from Sept levels around 4.774 mln barrels/day.
OPEC members are scheduled to have a technical meeting on Friday & another meeting with officials from non-OPEC countries on Saturday.
The next official OPEC meeting will take place in Vienna, Austria on November 30, where details of the Sept 28 OPEC production cut are expected to be announced.
Another contributing factor aiding oil's gains is yesterday's EIA petroleum data, which showed notable inventory draws on all fronts.
EIA highlights:
Natural gas inventory showed a build of +73 bcf vs expectations for inventory to be a build of approximately +73 bcf.
Working gas in storage was 3,909 Bcf as of Friday, October 21, 2016, according to EIA estimates.
Stocks were 52 Bcf higher than last year at this time and 182 Bcf above the five-year average of 3,727 Bcf.
At 3,909 Bcf, total working gas is above the five-year historical range.
In precious metals, gold's gains outpaced the rally in silver despite notable gains in the dollar index earlier in the session.
December gold ended today's session up $2.60 (+0.2%) to $1269.40/oz
December silver closed today's session $0.02 higher (+0.1%) at $17.65/oz
Base metal copper extended this morning's rally to close near its high of the session, added on to Tuesday's notable +2.4% surge (closed flat yesterday).
December copper closed $0.02 higher (+0.9%) at $2.16/lb
Falling steadily off a strong start, the three major US indices all closed lower ahead of earnings reports from Alphabet (GOOG 795.35, -3.72 -0.47%) and Amazon (AMZN 818.36, -4.23 -0.51%). Action was led to the downside by the Nasdaq Composite which lost 34.29 points (-0.65%) today to end 5215.97. The S&P 500 was down 6.39 points (-0.30%) to 2133.04, and the Dow Jones Industrial Average shed 29.65 points (-0.16%) to 18169.68.
The upbeat start proved to be short-lived, however, as a downturn in bond prices had investors on their heels. The S&P 500 erased its initial 0.4% gain within the opening hour as long-term yields continued to rise. The yield on the benchmark 10-yr note notched a five-month high at 1.87% before eventually settling at 1.84% (+5 bps).
Interest rates were on the move after commentary from Bank of Japan Governor Haruhiko Kuroda and upbeat economic data called into question the future path of global monetary policy. The first post-Brexit vote advance GDP reading out of the UK came in better than expected (+0.5% quarter-over-quarter; expected 0.3%), diminishing hopes for further policy stimulus from the Bank of England. Meanwhile, BoJ Governor Kuroda said that the yield curve is moving in line with the central bank's expectations and that large-scale asset purchases may not be needed in the future.
The U.S. Dollar Index (98.88, +0.25, +0.26%) also continued to flash some strength, gaining against the euro, pound, and yen. The index has gained 3.7% so far in October amid a solidifying rate hike outlook. Dollar-denominated commodities were able to shrug off the strength, however, as crude oil finished higher by 1.1% ($49.72/bbl; +$0.55).
Market data today included the initial claims reading for the week ending October 22 which was 258,000, down 3,000 from the prior week's revised level of 261,000. Also, durable orders for September were down 0.1%, pulled lower by a 0.8% decline in transportation equipment orders. Lastly, sales of new single-family houses jumped 3.1% in September to a seasonally adjusted annual rate of 593,000 from a revised August rate of 575,000 (prior 609,000).
When Thursday came to a close, Technology (XLK 47.49, -0.06 -0.13%) was fell below flat lines despite positive action for most of the day. Component Fiserv (FISV 96.75, -3.24 -3.24%) was weak following a mixed Q3 report. Other sectors as measured by the S&P ended the day IYZ +1.66%, XLV +0.48%, XLFS +0.26%, XLF +0.25%, XLB -0.13%, XLE -0.37%, XLP -0.47%, XLU -0.60%, XLI -0.68%, XLY -0.84%, XLRE -2.37% as Telecoms and Healthcare led the positive bias.
As a subsector, iShares Semis (SOXX 111.43, -0.52 -0.46%) were split today following bellwether Qualcomm's (QCOM 70.09, +1.89 +2.77%) deal to acquire NXP Semi (NXPI 99.08, +0.42 +0.43%) for $110 per share in cash. The two were among the better performers in the space today, with others contributing to the positive action including TER +3.63%, MKSI +2.15%, MSCC +0.33%, ASML +0.19%, XLNX +0.06%, AMAT +0.03%.
In the S&P 500 Information Technology (800.95, -3.57 -0.44%) sector, trading managed to hold the $800-level despite strong selling action into the close. Component F5 Networks (FFIV 130.99, +11.45 +9.58%) was the best performer today in the sector following better than expected Q4 earnings and Q1 guidance. Other names in the space which closed lower with the sector today included TDC -8.08%, CSRA -2.73%, HRS -2.63%, NVDA -2.05%, QRVO -1.87%, STX -1.72%, TSS -1.71%, ATVI -1.62%, GPN -1.62%, PYPL -1.51%.
Other notable news items among sector components:
Qualcomm (QCOM) and NXP Semiconductors N.V. (NXPI) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which QCOM will acquire NXPI. Pursuant to the agreement, a subsidiary of QCOM will commence a tender offer to acquire all of the issued and outstanding common shares of NXP for $110.00 per share in cash, representing a total enterprise value of about $47 billion. The transaction is expected to close by the end of calendar 2017.
Accenture (ACN 115.46, +0.01 +0.01%) announced an expanded five-year agreement to provide
Schlumberger (SLB 79.60, -0.42 -0.52%) with transformational finance and accounting (F&A) business process outsourcing (BPO) services through 2021.
In an article last night after the close, according to Bloomberg, Apple (AAPL 114.51, -1.08 -0.93%) has delayed the shipment of AirPod wireless headphones. Also today, AAPL held its MacBook event and announced the latest iteration of its MacBook Pro.
Analog Devices (ADI 63.27, -0.17 -0.27%) announced the acquisition of Innovasic Inc. Terms of the deal were not disclosed.
CSRA (CSRA 24.61, -0.69 -2.73%) was named one of several awardees on the Human Capital and Training Solutions (HCaTS) program which will enable various government agencies to access industry-leading solutions in customized training and development, human capital strategy services, and customized organizational performance improvement services. The contract ceiling for all awardees is valued at up to $5.7 billion over a 10 year period.
IBM (IBM 153.35, +1.54 +1.01%) signed a definitive agreement to acquire Sanovi Technologies, a privately held company that provides hybrid cloud recovery, cloud migration and business continuity software for enterprise data centers and cloud infrastructure.
IBM also announced new behavioral biometric analysis capabilities in its digital banking fraud prevention technology, IBM Security Trusteer Pinpoint Detect, using patented analytics and machine learning for real-time cognitive fraud detection.
TSYS (TSS 50.09, -0.587 -1.71%) announced that Rabobank has renewed its payments agreement with TSYS to continue processing the bank's consumer card portfolio. TSYS will also provide additional services such as fraud and risk management, as well as customer service through TSYS Managed Services EMEA.
Global Payments (GPN 72.47, -1.19 -1.62%) announced it signed referral agreements with Better Business Bureaus serving Mainland British Columbia, Southern Alberta and East Kootenay, Central and Northern Alberta, Saskatchewan, Manitoba and Northwest Ontario, Western Ontario, Eastern and Northern Ontario and the Outaouais and the Atlantic Provinces.
Elsewhere in the tech space:
Intelsat (I 2.73, -0.01 -0.36%) and Global Eagle Entertainment (ENT 7.85, -0.14 -1.75%) entered into a new and expanded contract to deliver broadband connectivity across five continents and multiple vertical markets.
In addition to reporting quarterly results, Twitter (TWTR 17.40, +0.11 +0.64%) announced the reduction of 9% of its global workforce.
In addition to reporting quarterly results, ServiceNow (NOW 84.96, +6.06 +7.68%) announced Chairman Paul Barber has resigned. The company chose CEO Frank Slootman as his replacement.
Verizon (VZ 48.54, +0.91 +1.91%) signed an agreement to acquire the technology and software that underlies Vessel's online video subscription service, which provides early access to videos from online video stars, and to hire most of Vessel's employees.
In addition to reporting quarterly results, Nokia (NOK 4.73, -0.43 -8.33%) announced that CFO Timo Ihamuotila resigned from the company to join ABB (ABB 20.53, -1.55 -7.02%) in Switzerland as CFO. Ihamuotila will continue in his current role as Nokia CFO and as a member of the company's Group
Leadership Team until December 31, 2016, and will remain as an advisor to the company until February 28, 2017. Kristian Pullola, who currently is NOK's SVP, Corporate Controller, is appointed as CFO and member of the Group Leadership Team as of January 1, 2017.
ExlService (ELXS 44.72, -2.09 -4.46%) acquired Datasource Consulting. Financial terms of the deal were not disclosed.
WEX (WEX 112.79, +6.90 +6.52%) announced a ten-year extension of its North American fleet card contract with Exxon Mobil Corporation (XOM 86.92, -0.17 -0.20%) and Imperial Oil (IMO 33.50, +0.87 +2.67%). Financial details of the deal were not disclosed.
In addition to reporting quarterly results, Iridium Comms (IRDM 8.00, flat) announced an agreement with Komatsu Ltd. of Japan (KMTUY 22.04, -0.06 -0.27%) to provide global asset tracking and monitoring for its KOMTRAX system, a system with over 400,000 KOMTRAX-equipped vehicles in the field today.
According to the Wall Street Journal, CenturyLink (CTL 29.73, +1.48 +5.24%) is in merger talks with Level 3 (LVLT 51.87, +4.95 +10.55%).
In reaction to quarterly results:
Texas Instruments (TXN 70.73, -0.98 1.37%) reported better than expected Q3 GAAP EPS of $0.94 on revenues which also came in ahead of market expectations at $3.67 billion. The company also guided Q4 EPS and revenues in-line at GAAP EPS of $0.76-0.86 on revenues of $3.17-3.43 billion.
NXP Semi (NXPI) reported Q3 EPS of $0.26 on revenues of $2.47 billion. NXPI also guided Q4 revenues in-line at $2.39-2.49 billion.
VMware (VMW 75.77, +2.46 +3.36%) reported better than expected Q3 EPS of $1.14 on in-line revenues of $1.78 billion. On the conference call, management raised 2016 guidance due to better Q3 results and increased outlook for Q4. Sees Q4 EPS of $1.37-1.41 on Q4 revenues of $1.965-2.015 billion. For FY16, sees EPS of $4.34-4.38 on revenues of $7.025-7.075 billion.
Fiserv (FISV) reported better than expected Q3 EPS of $1.14 on revenues which came in worse than market expectations at $1.38 billion. For FY16, FISV sees EPS in-line at $4.43-4.46.
Western Digital (WDC 59.58, +3.06 +5.41%) reported better than expected Q1 EPS of $1.18 on better than expected Q1 revenues of $4.71 billion. On the conference call, guided revenues for December Quarter of flat vs September Quarter. Also, expects Q2 non-GAAP EPS of $1.85-1.95, above market expectations.
ServiceNow (NOW) reported better than expected Q3 EPS and revenues of $0.23 and $357.7 million, respectively. Also guided Q4 revenues in-line at $376-381 million.
F5 Networks (FFIV) reported better than expected Q4 EPS of $2.11 on in-line revenues of $525.3 million. The company also guided Q1 EPS ahead of expectations at $1.92-1.95 on in-line revenues of $510-520 million.
Tyler Tech (TYL 161.05, -5.18 -3.12%) reported better than expected Q3 EPS of $0.94 on revenues which rose 31.2% compared to last year to $197.8 million. For FY16, the company sees in-line EPS of $3.46-3.52 on better than expected revenues of $770-777 million.
Groupon (GRPN 4.10, -1.16 -22.05%) reported a better than expected Q3 loss per share of $0.01 on better than expected revenues of $720.5 million. GRPN also raised FY16 revenue guidance to $3.075-3.15 billion from $3.0-3.1 billion.
Infinera (INFN 7.93, -1.29 -14.03%) reported better than expected Q3 non-GAAP EPS of $0.05 on revenues of $185.45 million. For Q4, INFN sees EPS of ($0.14) 'plus or minus a couple of pennies.' And revenues for Q4 are expected in the range of $165-185 million.
Nokia (NOK) reported in-line Q3 EPS of EUR0.04 on revenues of EUR6 billion.
Twitter (TWTR) reported better than expected Q3 EPS and revenues of $0.13 and $616 million, respectively.
Companies scheduled to report tonight/tomorrow morning: ATEN IOTS GOOG AMZN AMCC AZPN TEAM BIDU CA CRUS COHU CY DGII ELLI EXPE FLEX FORM FTNT FTV GIMO GSIT IM NSIT LNKD LOGM MLNX MSTR MOBL NANO NATI NSR OSIS CNXN PCTI PDFS PXLW POWI SHOR SIMO SPSC SSNC SMCI SYNA VDSI VRSN/CTS MA MGI TYPE XRX
Analyst actions:
VMW was upgraded to Buy from Neutral at Citigroup,
WDC was upgraded to Neutral from Underperform at BofA/Merrill,
SFLY was upgraded to Buy from Hold at Axiom Capital,
GRUB was upgraded to Buy from Neutral at Roth Capital,
LOGI was upgraded to Neutral from Underweight at JP Morgan,
NOW was upgraded to Outperform from Market Perform at BMO Capital,
DLB was upgraded to Outperform from Mkt Perform at Barrington Research,
NTGR was upgraded to Buy from Neutral at Rosenblatt,
SLAB was upgraded to Buy from Neutral at MKM Partners,
AXE was upgraded to Outperform from In-Line at Imperial Capital,
ENTG was upgraded to Buy from Neutral at Dougherty,
FFIV was upgraded to Overweight from Neutral at Piper Jaffray;
AAPL was downgraded to Long-Term Buy from Buy at Hilliard Lyons,
FISV was downgraded to Market Perform from Outperform at William Blair,
TUBE was downgrade to Market Perform from Overweight at Albert Fried,
NXPI was downgraded to Hold from Buy at Jefferies and to Hold from Buy at Drexel Hamilton,
CHL was downgraded to Mkt Perform from Outperform at Bernstein
Reports Q2 (Sep) earnings of $0.02 per share, $0.03 better than the Capital IQ Consensus of ($0.01); revenues rose 5.3% year/year to $41.8 mln vs the $41.58 mln Capital IQ Consensus.
Co states: "In 2Q17 we achieved our seventh consecutive quarter of revenue growth. Our Connectivity business once again drove the improvement in top line results, and higher gross margins combined with greater operating efficiencies led to a return to profitability on a non-GAAP basis. We continue to lead the optical market with our PAM4 single lambda 100/400G FinFET technology, which is now slated to become the industry standard for data center and enterprise connectivity."
4:44 pm Ingram Micro beats by $0.08, misses on revs (IM) :
Reports Q3 (Sep) earnings of $0.71 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.63; revenues fell 2.7% year/year to $10.23 bln vs the $10.34 bln Capital IQ Consensus.
"We see further stabilization in market demand across most of the globe and our teams continue to leverage our investments in productivity and services to deliver improved bottom line results and growth in a number of areas as we benefit from the broadest solutions portfolio and widest geographic reach in the industry.""We continue to make progress on our transaction to join the HNA Group and remain on track to close this year."
4:36 pm Nanometrics beats by $0.05, beats on revs; guides Q4 EPS in-line, revs in-line (NANO) :
Reports Q3 (Sep) earnings of $0.33 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.28; revenues rose 28.5% year/year to $58.71 mln vs the $57.53 mln Capital IQ Consensus.
Co issues in-line guidance for Q4, sees EPS of 0.22-0.31, excluding non-recurring items, vs. $0.29 Capital IQ Consensus Estimate; sees Q4 revs of $54-59 mln vs. $58.03 mln Capital IQ Consensus Estimate.
"We expect that continued investments in 3D-NAND, DRAM and Foundry by our key customers in Q4 will result in second-half revenues that are meaningfully stronger than the first half, and round out the remainder of 2016 to comprise another sequential year in which our revenue growth significantly outperforms overall spending on wafer fab equipment."
4:36 pm Cirrus Logic beats by $0.30, beats on revs; guides Q3 revs above consensus (CRUS) :
Reports Q2 (Sep) earnings of $1.35 per share, $0.30 better than the Capital IQ Consensus of $1.05; revenues rose 39.7% year/year to $428.62 mln vs the $396.9 mln Capital IQ Consensus.
GAAP and non-GAAP gross margin of 49.4 percent
Co issues upside guidance for Q3, sees Q3 revs of $475-515 mln vs. $440.80 mln Capital IQ Consensus Estimate; GAAP gross margin is expected to be between 47 percent and 49 percent
4:33 pm Cypress Semi beats by $0.01, reports revs in-line; guides Q4 EPS in-line, revs midpoint above consensus (CY) :
Reports Q3 (Sep) earnings of $0.15 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.14; non-GAAP rev +16% Q/Q to $530 mln vs. $525.7 mln consensus.
Co issues guidance for Q4, sees EPS of $0.12-0.16, excluding non-recurring items, vs. $0.13 Capital IQ Consensus Estimate; sees Q4 revs of $510-540 mln vs. $516.69 mln Capital IQ Consensus Estimate.
"Our gross margin improvement plan remains on track as we continue to focus on efficiency and execution. "We are moving quickly to streamline the Company to sharpen our focus on high-growth segments in the automotive, industrial and IoT markets," El-Khoury said. "As we projected last quarter, more than half of our Q3 revenue came from markets growing faster than the overall semiconductor industry. Automotive revenue accounted for 32% of our overall revenue in the quarter and increased 25% year-on-year. We have also integrated the wireless IoT business acquired from Broadcom and are seeing strong customer demand for our solutions in that space."
4:20 pm Mellanox Tech beats by $0.01, reports revs in-line; guides Q4 revs below consensus (MLNX) :
Reports Q3 (Sep) earnings of $0.93 per share, $0.01 better than the Capital IQ Consensus of $0.92; revenues rose 30.8% year/year to $224.2 mln vs the $224.11 mln Capital IQ Consensus.
Non-GAAP gross margins of 71.8%, compared to 71.4% in 2Q16.
$48.7 mln in cash was provided by operating activities, compared to $44.8 mln in 2Q16.
Co issues downside guidance for Q4, sees Q4 revs of $222-$228 mln vs. $233.78 mln Capital IQ Consensus Estimate. Sees Non-GAAP gross maring of 71-72%. Non-GAAP diluted share count of 49.8-50.3 mln shares.
4:18 pm Pixelworks beats by $0.02, beats on revs; guides Q4 revs in-line (PXLW) :
Reports Q3 (Sep) loss of $0.02 per share, $0.02 better than the Capital IQ Consensus of ($0.04); revenues fell 17.5% year/year to $13.7 mln vs the $13.52 mln Capital IQ Consensus. Co issues in-line guidance for Q4, sees Q4 revs of $15-16 mln vs. $14.31 mln Capital IQ Consensus Estimate.
Sees gross profit margin of approximately 50% to 52% on both a GAAP basis and non-GAAP basis; and operating expenses of $8 million to $9 million on a GAAP basis and $7 million to $8 million on a non-GAAP basis."Third quarter revenue and earnings per share were both at the high-end of our guidance, reflecting continued sequential improvement across our business. Our projector business benefited from increased traction throughout the quarter as order patterns from OEMs and distributors began to normalize following the channel disruptions experienced earlier this year. In our mobile business, we are now sampling our 3rd generation IRIS processor at key smartphone and tablet customers, which in addition to having a smaller footprint and improved power consumption also enables OEMs to differentiate their devices with a superior mobile viewing experience. I'm also pleased to announce the appointment of Ting Xiong as Pixelworks' senior VP of worldwide sales, who will be based in China and most recently headed the APAC sales organization at Qorvo's IDP group. Ting fills-out our sales footprint and combined with other additions to the team earlier in the year gives us broad sales coverage across all of the key mobile markets in Asia."
4:16 pm FormFactor beats by $0.01, reports revs in-line; guides Q4 EPS, revs in-line (FORM) :
Reports Q3 (Sep) earnings of $0.22 per share, $0.01 better than the Capital IQ Consensus of $0.21; revenues rose 87.2% year/year to $123.3 mln vs the $122.7 mln Capital IQ Consensus.
Co issues in-line guidance for Q4, sees EPS of $0.15-0.21 vs. $0.21 Capital IQ Consensus Estimate; sees Q4 revs of $116-124 mln vs. $122.19 mln Capital IQ Consensus Estimate. Within the business segments,
Probe Card revenues are forecasted to decline slightly as demand from FormFactor's significant microprocessor customer normalizes to double the 2015 level, and Systems segment demand is expected to remain steady and benefit from the recent strong order flow
4:09 pm Flex reports EPS in-line, revs in-line; guides DecQ EPS in-line, revs in-line (FLEX) :
Reports Q2 (Sep) earnings of $0.28 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.28 and vs prior guidance of $0.26-0.30; revenues fell 4.9% year/year to $6.01 bln vs the $6.00 bln Capital IQ Consensus and vs prior guidance of $5.80-6.20 mln.
Co issues in-line guidance for Q3 (Dec), sees EPS of $0.31-0.35, excluding non-recurring items, vs. $0.33 Capital IQ Consensus Estimate; sees Q3 revs of $6.00-6.40 bln vs. $6.28 bln Capital IQ Consensus Estimate.
"Our Sketch-to-Scale strategy remains firmly on track as reflected in our [SepQ] performance which is inline with guidance...We remain focused on value creating activities such as a structural mix shift to a higher margin business, generating sustainable free cash flow and consistently returning value to our shareholders."
4:04 pm Cohu beats by $0.02, beats on revs; guides Q4 revs in-line (COHU) :
Reports Q3 (Sep) earnings of $0.14 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.12; revenues rose 2.7% year/year to $69.3 mln vs the $67.95 mln Capital IQ Consensus.
"Third quarter results were better than anticipated," said President and Chief Executive Officer Luis Mller. "Demand for turret handlers was strong for testing high performance mixed signal and RF devices, and automotive orders continued to expand following market share gains earlier this year. We had a design-win at a Korean test subcontractor and repeat orders from a recently won Japanese turret customer and another for in-process strip testing of advanced memory."
Co issues in-line guidance for Q4, sees Q4 revs of approx. $65.0 mln vs. $65.47 mln Capital IQ Consensus Estimate.
Cohu's Board of Directors approved a quarterly cash dividend of $0.06 per share payable on January 2, 2017 to shareholders of record on November 18, 2016. Cohu has paid consecutive quarterly cash dividends since 1977.
4:15 pm : The stock market ended the Thursday affair on a lower note as rising long-term interest rates kept risk appetite in check ahead of quarterly reports from Alphabet (GOOG 795.35, -3.72, -0.5%) and Amazon (AMZN 818.36, -4.23 -0.5%). The Russell 2000 fell 1.3% while the Nasdaq Composite (-0.7%) and the S&P 500 (-0.3%) finished with narrower losses.
The major averages gapped higher at the start of the session as some news on the M&A front and better-than-expected corporate earnings stoked buying interest. Qualcomm (QCOM 70.09, +1.89, +2.8%) announced this morning that it finalized an agreement to acquire NXP Semiconductors (NXPI 99.08, +0.42, +0.4%) for $110 per share, or a total enterprise value of approximately $47 billion.
The upbeat start proved to be short-lived, however, as a downturn in bond prices had investors on their heels. The S&P 500 erased its initial 0.4% gain within the opening hour as long-term yields continued to rise. The yield on the benchmark 10-yr note notched a five-month high at 1.87% before eventually settling at 1.84% (+5 bps).
Interest rates were on the move after commentary from Bank of Japan Governor Haruhiko Kuroda and upbeat economic data called into question the future path of global monetary policy. The first post-Brexit vote advance GDP reading out of the UK came in better than expected (+0.5% quarter-over-quarter; expected 0.3%), diminishing hopes for further policy stimulus from the Bank of England. Meanwhile, BoJ Governor Kuroda said that the yield curve is moving in line with the central bank's expectations and that large-scale asset purchases may not be needed in the future.
In-line economic data out of the U.S. also contributed to selling pressure in the bond market. Weekly initial claims, September Durable Orders, and September New Home Sales did little to rattle the positive trend of recent economic data ahead of next week's FOMC policy meeting. The CME's FedWatch Tool implies only a slim 9.3% chance of a rate hike in November, but the likelihood of a rate hike at the December meeting has increased to 78.5%.
The U.S. Dollar Index (98.88, +0.25, +0.26%) also continued to flash some strength, gaining against the euro, pound, and yen. The index has gained 3.7% so far in October amid a solidifying rate hike outlook. Dollar-denominated commodities were able to shrug off the strength, however, as crude oil finished higher by 1.1% ($49.72/bbl; +$0.55).
The broader market carved out a session low in the final hour of trade as heavily-weighted consumer discretionary (-0.9%), industrials (-0.7%), and technology (-0.4%) extended their losses.
The S&P 500 settled near its worst level of the day with eight sectors ending beneath their flat lines.
In the consumer discretionary space (-0.9%), auto part retailers underperformed as they moved lower in sympathy with O'Reilly Automotive (ORLY 253.00, -24.16). The name plunged 8.7% after reporting a bottom-line miss and issuing cautious guidance for the remainder of the year. Meanwhile, media name Comcast (CMCSA 61.48, -1.08) fell 1.7% after the FCC imposed stricter privacy rules that will impact the broadband provider.
Aerospace and defense names displayed relative weakness in the industrial sector (-0.7%) as Raytheon (RTN 136.28, -5.00) declined 3.5%. Raytheon was unable to advance despite topping bottom-line estimates for the quarter and raising its full-year earnings guidance. UPS (UPS 108.08, -0.53) also fell 0.5% as an in-line quarter failed to garner buying interest.
The influential technology sector (-0.4%) moved lower as large cap names paced the retreat. Apple (AAPL 114.51, -1.08, -0.9%) extended its post-earnings loss to 3.2%. Shares of Facebook (FB 129.69, -1.35) finished lower by 1.0% as participants looked ahead to earnings results from other F.A.N.G. names. Separately, the PHLX Semiconductor Index erased an initial 1.3% gain, settling lower by 0.4%.
In the health care group (+0.9%), Alexion Pharmaceuticals (ALXN 131.37, +9.78, +8.0%), Bristol-Myers (BMY 51.96, +2.67, +5.4%), and Celgene (CELG 104.75, +6.34, +6.4%) rallied after beating quarterly estimates.
Today's trading volume was above the average of 853 million as 960 million shares changed hands at the NYSE floor.
Today's economic data included weekly initial claims, Durable Goods Orders for September, and Pending Home Sales for September:
Initial claims for the week ending October 22 were 258,000 (Briefing.com consensus 259,000), down 3,000 from the prior week's revised level of 261,000.
Continuing claims for the week ending October 15 decreased by 15,000 to 2.039 million.
Durable orders for September were down 0.1% (Briefing.com consensus 0.0%), pulled lower by a 0.8% decline in transportation equipment orders.
However, new orders in August were revised up to 0.3% from 0.0%.
Excluding transportation, durable orders increased 0.2% in September (Briefing.com consensus +0.3%) on top of an upwardly revised 0.1% increase (from -0.4%) in August.
Sales of new single-family houses jumped 3.1% in September to a seasonally adjusted annual rate of 593,000 from a revised August rate of 575,000 (prior 609,000).
The September reading was lower than the Briefing.com consensus estimate of 610,000. Absent the August revision, there would have not been any growth on a month-over-month basis.
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the advance estimate of Q3 GDP (Briefing.com consensus +2.5%) and Q3 Employment Cost Index (Briefing.com consensus 0.6%), which will cross the wires at 8:30 ET. Separately, the final reading of the University of Michigan Consumer Sentiment Survey for October (Briefing.com consensus 88.2) will be released at 10:00 ET.
Russell 2000: +4.7% YTD
S&P 500: +4.4% YTD
Dow Jones: +4.3% YTD
Nasdaq Composite: +4.2% YTD
DJ30 -29.65 NASDAQ -34.29 SP500 -6.40 NASDAQ Adv/Vol/Dec 979/1.756 bln/2028 NYSE Adv/Vol/Dec 821/960.5 mln/2135 3:30 pm :
The dollar index was +0.3% around the 98.88 level, not appearing to weigh on precious metals
Commodities, as measured by the Bloomberg Commodity Index, +0.8% around the 86.22 level
Crude oil futures rallied off of yesterday's 3-week lows following comments from Saudi Arabia's oil minister
December crude oil futures rose $0.55 (+1.1%) to $49.72/barrel.
Baker Hughes rig count data will be released tomorrow at 10:30 am ET.
The next OPEC meeting will be held in Vienna, Austria on November 30.
Natural gas snapped its 6-session streak of losses after EIA data reported an inventory build that was in-line with expectations.
December natural gas closed $0.03 higher (+1.0%) at $3.07/MMBtu
Color on recent price action in crude oil:
Crude oil futures rallied off of yesterday's 3-week after Energy ministers from Saudi Arabia and Gulf allies told Russian oil ministers this week they are willing to reduce peak oil output by up to 4%. It is worth noting that Saudi Arabia is the largest OPEC producer.
Non-OPEC producer Russia stated earlier that they would not cut output, but are considering a potential production freeze.
Reminder: Earlier this week crude oil took a hit when OPEC's second largest producer Iraq stated they would not participate in the proposed OPEC production cut along with Nigeria, Iran, & Libya, discussing that its market share would be much higher if not for the wars it has been fighting since the 1980's, including its ongoing conflict with ISIS. Iraq also added they could raise output slightly this month from Sept levels around 4.774 mln barrels/day.
OPEC members are scheduled to have a technical meeting on Friday & another meeting with officials from non-OPEC countries on Saturday.
The next official OPEC meeting will take place in Vienna, Austria on November 30, where details of the Sept 28 OPEC production cut are expected to be announced.
Another contributing factor aiding oil's gains is yesterday's EIA petroleum data, which showed notable inventory draws on all fronts.
EIA highlights:
Natural gas inventory showed a build of +73 bcf vs expectations for inventory to be a build of approximately +73 bcf.
Working gas in storage was 3,909 Bcf as of Friday, October 21, 2016, according to EIA estimates.
Stocks were 52 Bcf higher than last year at this time and 182 Bcf above the five-year average of 3,727 Bcf.
At 3,909 Bcf, total working gas is above the five-year historical range.
In precious metals, gold's gains outpaced the rally in silver despite notable gains in the dollar index earlier in the session.
December gold ended today's session up $2.60 (+0.2%) to $1269.40/oz
December silver closed today's session $0.02 higher (+0.1%) at $17.65/oz
Base metal copper extended this morning's rally to close near its high of the session, added on to Tuesday's notable +2.4% surge (closed flat yesterday).
December copper closed $0.02 higher (+0.9%) at $2.16/lb
Falling steadily off a strong start, the three major US indices all closed lower ahead of earnings reports from Alphabet (GOOG 795.35, -3.72 -0.47%) and Amazon (AMZN 818.36, -4.23 -0.51%). Action was led to the downside by the Nasdaq Composite which lost 34.29 points (-0.65%) today to end 5215.97. The S&P 500 was down 6.39 points (-0.30%) to 2133.04, and the Dow Jones Industrial Average shed 29.65 points (-0.16%) to 18169.68.
The upbeat start proved to be short-lived, however, as a downturn in bond prices had investors on their heels. The S&P 500 erased its initial 0.4% gain within the opening hour as long-term yields continued to rise. The yield on the benchmark 10-yr note notched a five-month high at 1.87% before eventually settling at 1.84% (+5 bps).
Interest rates were on the move after commentary from Bank of Japan Governor Haruhiko Kuroda and upbeat economic data called into question the future path of global monetary policy. The first post-Brexit vote advance GDP reading out of the UK came in better than expected (+0.5% quarter-over-quarter; expected 0.3%), diminishing hopes for further policy stimulus from the Bank of England. Meanwhile, BoJ Governor Kuroda said that the yield curve is moving in line with the central bank's expectations and that large-scale asset purchases may not be needed in the future.
The U.S. Dollar Index (98.88, +0.25, +0.26%) also continued to flash some strength, gaining against the euro, pound, and yen. The index has gained 3.7% so far in October amid a solidifying rate hike outlook. Dollar-denominated commodities were able to shrug off the strength, however, as crude oil finished higher by 1.1% ($49.72/bbl; +$0.55).
Market data today included the initial claims reading for the week ending October 22 which was 258,000, down 3,000 from the prior week's revised level of 261,000. Also, durable orders for September were down 0.1%, pulled lower by a 0.8% decline in transportation equipment orders. Lastly, sales of new single-family houses jumped 3.1% in September to a seasonally adjusted annual rate of 593,000 from a revised August rate of 575,000 (prior 609,000).
When Thursday came to a close, Technology (XLK 47.49, -0.06 -0.13%) was fell below flat lines despite positive action for most of the day. Component Fiserv (FISV 96.75, -3.24 -3.24%) was weak following a mixed Q3 report. Other sectors as measured by the S&P ended the day IYZ +1.66%, XLV +0.48%, XLFS +0.26%, XLF +0.25%, XLB -0.13%, XLE -0.37%, XLP -0.47%, XLU -0.60%, XLI -0.68%, XLY -0.84%, XLRE -2.37% as Telecoms and Healthcare led the positive bias.
As a subsector, iShares Semis (SOXX 111.43, -0.52 -0.46%) were split today following bellwether Qualcomm's (QCOM 70.09, +1.89 +2.77%) deal to acquire NXP Semi (NXPI 99.08, +0.42 +0.43%) for $110 per share in cash. The two were among the better performers in the space today, with others contributing to the positive action including TER +3.63%, MKSI +2.15%, MSCC +0.33%, ASML +0.19%, XLNX +0.06%, AMAT +0.03%.
In the S&P 500 Information Technology (800.95, -3.57 -0.44%) sector, trading managed to hold the $800-level despite strong selling action into the close. Component F5 Networks (FFIV 130.99, +11.45 +9.58%) was the best performer today in the sector following better than expected Q4 earnings and Q1 guidance. Other names in the space which closed lower with the sector today included TDC -8.08%, CSRA -2.73%, HRS -2.63%, NVDA -2.05%, QRVO -1.87%, STX -1.72%, TSS -1.71%, ATVI -1.62%, GPN -1.62%, PYPL -1.51%.
Other notable news items among sector components:
Qualcomm (QCOM) and NXP Semiconductors N.V. (NXPI) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which QCOM will acquire NXPI. Pursuant to the agreement, a subsidiary of QCOM will commence a tender offer to acquire all of the issued and outstanding common shares of NXP for $110.00 per share in cash, representing a total enterprise value of about $47 billion. The transaction is expected to close by the end of calendar 2017.
Accenture (ACN 115.46, +0.01 +0.01%) announced an expanded five-year agreement to provide
Schlumberger (SLB 79.60, -0.42 -0.52%) with transformational finance and accounting (F&A) business process outsourcing (BPO) services through 2021.
In an article last night after the close, according to Bloomberg, Apple (AAPL 114.51, -1.08 -0.93%) has delayed the shipment of AirPod wireless headphones. Also today, AAPL held its MacBook event and announced the latest iteration of its MacBook Pro.
Analog Devices (ADI 63.27, -0.17 -0.27%) announced the acquisition of Innovasic Inc. Terms of the deal were not disclosed.
CSRA (CSRA 24.61, -0.69 -2.73%) was named one of several awardees on the Human Capital and Training Solutions (HCaTS) program which will enable various government agencies to access industry-leading solutions in customized training and development, human capital strategy services, and customized organizational performance improvement services. The contract ceiling for all awardees is valued at up to $5.7 billion over a 10 year period.
IBM (IBM 153.35, +1.54 +1.01%) signed a definitive agreement to acquire Sanovi Technologies, a privately held company that provides hybrid cloud recovery, cloud migration and business continuity software for enterprise data centers and cloud infrastructure.
IBM also announced new behavioral biometric analysis capabilities in its digital banking fraud prevention technology, IBM Security Trusteer Pinpoint Detect, using patented analytics and machine learning for real-time cognitive fraud detection.
TSYS (TSS 50.09, -0.587 -1.71%) announced that Rabobank has renewed its payments agreement with TSYS to continue processing the bank's consumer card portfolio. TSYS will also provide additional services such as fraud and risk management, as well as customer service through TSYS Managed Services EMEA.
Global Payments (GPN 72.47, -1.19 -1.62%) announced it signed referral agreements with Better Business Bureaus serving Mainland British Columbia, Southern Alberta and East Kootenay, Central and Northern Alberta, Saskatchewan, Manitoba and Northwest Ontario, Western Ontario, Eastern and Northern Ontario and the Outaouais and the Atlantic Provinces.
Elsewhere in the tech space:
Intelsat (I 2.73, -0.01 -0.36%) and Global Eagle Entertainment (ENT 7.85, -0.14 -1.75%) entered into a new and expanded contract to deliver broadband connectivity across five continents and multiple vertical markets.
In addition to reporting quarterly results, Twitter (TWTR 17.40, +0.11 +0.64%) announced the reduction of 9% of its global workforce.
In addition to reporting quarterly results, ServiceNow (NOW 84.96, +6.06 +7.68%) announced Chairman Paul Barber has resigned. The company chose CEO Frank Slootman as his replacement.
Verizon (VZ 48.54, +0.91 +1.91%) signed an agreement to acquire the technology and software that underlies Vessel's online video subscription service, which provides early access to videos from online video stars, and to hire most of Vessel's employees.
In addition to reporting quarterly results, Nokia (NOK 4.73, -0.43 -8.33%) announced that CFO Timo Ihamuotila resigned from the company to join ABB (ABB 20.53, -1.55 -7.02%) in Switzerland as CFO. Ihamuotila will continue in his current role as Nokia CFO and as a member of the company's Group
Leadership Team until December 31, 2016, and will remain as an advisor to the company until February 28, 2017. Kristian Pullola, who currently is NOK's SVP, Corporate Controller, is appointed as CFO and member of the Group Leadership Team as of January 1, 2017.
ExlService (ELXS 44.72, -2.09 -4.46%) acquired Datasource Consulting. Financial terms of the deal were not disclosed.
WEX (WEX 112.79, +6.90 +6.52%) announced a ten-year extension of its North American fleet card contract with Exxon Mobil Corporation (XOM 86.92, -0.17 -0.20%) and Imperial Oil (IMO 33.50, +0.87 +2.67%). Financial details of the deal were not disclosed.
In addition to reporting quarterly results, Iridium Comms (IRDM 8.00, flat) announced an agreement with Komatsu Ltd. of Japan (KMTUY 22.04, -0.06 -0.27%) to provide global asset tracking and monitoring for its KOMTRAX system, a system with over 400,000 KOMTRAX-equipped vehicles in the field today.
According to the Wall Street Journal, CenturyLink (CTL 29.73, +1.48 +5.24%) is in merger talks with Level 3 (LVLT 51.87, +4.95 +10.55%).
In reaction to quarterly results:
Texas Instruments (TXN 70.73, -0.98 1.37%) reported better than expected Q3 GAAP EPS of $0.94 on revenues which also came in ahead of market expectations at $3.67 billion. The company also guided Q4 EPS and revenues in-line at GAAP EPS of $0.76-0.86 on revenues of $3.17-3.43 billion.
NXP Semi (NXPI) reported Q3 EPS of $0.26 on revenues of $2.47 billion. NXPI also guided Q4 revenues in-line at $2.39-2.49 billion.
VMware (VMW 75.77, +2.46 +3.36%) reported better than expected Q3 EPS of $1.14 on in-line revenues of $1.78 billion. On the conference call, management raised 2016 guidance due to better Q3 results and increased outlook for Q4. Sees Q4 EPS of $1.37-1.41 on Q4 revenues of $1.965-2.015 billion. For FY16, sees EPS of $4.34-4.38 on revenues of $7.025-7.075 billion.
Fiserv (FISV) reported better than expected Q3 EPS of $1.14 on revenues which came in worse than market expectations at $1.38 billion. For FY16, FISV sees EPS in-line at $4.43-4.46.
Western Digital (WDC 59.58, +3.06 +5.41%) reported better than expected Q1 EPS of $1.18 on better than expected Q1 revenues of $4.71 billion. On the conference call, guided revenues for December Quarter of flat vs September Quarter. Also, expects Q2 non-GAAP EPS of $1.85-1.95, above market expectations.
ServiceNow (NOW) reported better than expected Q3 EPS and revenues of $0.23 and $357.7 million, respectively. Also guided Q4 revenues in-line at $376-381 million.
F5 Networks (FFIV) reported better than expected Q4 EPS of $2.11 on in-line revenues of $525.3 million. The company also guided Q1 EPS ahead of expectations at $1.92-1.95 on in-line revenues of $510-520 million.
Tyler Tech (TYL 161.05, -5.18 -3.12%) reported better than expected Q3 EPS of $0.94 on revenues which rose 31.2% compared to last year to $197.8 million. For FY16, the company sees in-line EPS of $3.46-3.52 on better than expected revenues of $770-777 million.
Groupon (GRPN 4.10, -1.16 -22.05%) reported a better than expected Q3 loss per share of $0.01 on better than expected revenues of $720.5 million. GRPN also raised FY16 revenue guidance to $3.075-3.15 billion from $3.0-3.1 billion.
Infinera (INFN 7.93, -1.29 -14.03%) reported better than expected Q3 non-GAAP EPS of $0.05 on revenues of $185.45 million. For Q4, INFN sees EPS of ($0.14) 'plus or minus a couple of pennies.' And revenues for Q4 are expected in the range of $165-185 million.
Nokia (NOK) reported in-line Q3 EPS of EUR0.04 on revenues of EUR6 billion.
Twitter (TWTR) reported better than expected Q3 EPS and revenues of $0.13 and $616 million, respectively.
Companies scheduled to report tonight/tomorrow morning: ATEN IOTS GOOG AMZN AMCC AZPN TEAM BIDU CA CRUS COHU CY DGII ELLI EXPE FLEX FORM FTNT FTV GIMO GSIT IM NSIT LNKD LOGM MLNX MSTR MOBL NANO NATI NSR OSIS CNXN PCTI PDFS PXLW POWI SHOR SIMO SPSC SSNC SMCI SYNA VDSI VRSN/CTS MA MGI TYPE XRX
Analyst actions:
VMW was upgraded to Buy from Neutral at Citigroup,
WDC was upgraded to Neutral from Underperform at BofA/Merrill,
SFLY was upgraded to Buy from Hold at Axiom Capital,
GRUB was upgraded to Buy from Neutral at Roth Capital,
LOGI was upgraded to Neutral from Underweight at JP Morgan,
NOW was upgraded to Outperform from Market Perform at BMO Capital,
DLB was upgraded to Outperform from Mkt Perform at Barrington Research,
NTGR was upgraded to Buy from Neutral at Rosenblatt,
SLAB was upgraded to Buy from Neutral at MKM Partners,
AXE was upgraded to Outperform from In-Line at Imperial Capital,
ENTG was upgraded to Buy from Neutral at Dougherty,
FFIV was upgraded to Overweight from Neutral at Piper Jaffray;
AAPL was downgraded to Long-Term Buy from Buy at Hilliard Lyons,
FISV was downgraded to Market Perform from Outperform at William Blair,
TUBE was downgrade to Market Perform from Overweight at Albert Fried,
NXPI was downgraded to Hold from Buy at Jefferies and to Hold from Buy at Drexel Hamilton,
CHL was downgraded to Mkt Perform from Outperform at Bernstein
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