From Briefing.com: 4:07 pm Advanced Energy beats by $0.02, beats on revs; guides Q4 EPS above consensus, revs above consensus (AEIS) :
Reports Q3 (Sep) earnings of $0.77 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.75; revenues rose 6.6% year/year to $126.55 mln vs the $118.92 mln Capital IQ Consensus.
Co issues upside guidance for Q4, sees EPS of $0.75-0.85, excluding non-recurring items, vs. $0.71 Capital IQ Consensus Estimate; sees Q4 revs of $124-134 mln vs. $118.51 mln Capital IQ Consensus Estimate.
4:06 pm Amkor beats by $0.04, beats on revs; guides Q4 EPS in-line, revs in-line (AMKR) :
Reports Q3 (Sep) earnings of $0.25 per share, $0.04 better than the Capital IQ Consensus of $0.21; revenues rose 48.0% year/year to $1.09 bln vs the $1.06 bln two analyst estimate.
Gross margins were 19.7% vs. 17.2% a year ago
Co issues in-line guidance for Q4, sees EPS of $0.19-0.34 vs. $0.25 two analyst estimate; sees Q4 revs of $900 mln-$1.07 bln vs. $1.02 bln two analyst estimate; sees gross margins of 19% to 23%
4:05 pm Monolithic Power beats by $0.01, reports revs in-line; guides Q4 revs in-line (MPWR) :
Reports Q3 (Sep) earnings of $0.66 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.65; revenues rose 16.7% year/year to $106.46 mln vs the $105.98 mln Capital IQ Consensus.
Non-GAAP gross margin was 55.3% vs 55.1% in the prior year period.
Co issues in-line guidance for Q4, sees Q4 revs of $101-105 mln vs. $101.58 mln Capital IQ Consensus Estimate. Sees Q4 non-GAAP gross margin between 54.8% and 55.8%.
4:04 pm Integrated Device beats by $0.01, reports revs in-line (IDTI) :
Reports Q2 (Sep) earnings of $0.34 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.33; revenues rose 8.6% year/year to $184.05 mln vs the $184.25 mln Capital IQ Consensus.
Co will guide in its conference call scheduled for 4:30pm ET
4:15 pm : The major averages finished the month on a flat note, settling with monthly losses across the board. Participants preferred a cautious approach at the beginning of the week as a glut of earnings reports and economic data remained in sight. The Nasdaq Composite was little changed, ending October down 2.3%. Meanwhile, the S&P 500 also settled flat, finishing the month lower by 1.9%.
Equity indices briefly rose at the start of the session as a recent wave of M&A chatter culminated in some weekend deals. CenturyLink (CTL 26.58, -3.81, -12.5%) agreed to acquire Level 3 (LVLT 56.15, +2.10, +3.9%), offering $66.50 per share, or approximately $25 billion. Meanwhile, General Electric (GE 29.10, -0.12, -0.4%) reached a deal to combine its oil and gas business with Baker Hughes (BHI 55.40, -3.72, -6.3%).
The upbeat start proved to be short-lived, however, as an extended downturn in crude oil futures drove the broader market back to its flat line. The energy component was under pressure after members of OPEC failed to solidify a proposed supply freeze agreement. The oil collective held a technical meeting over the weekend, but could not cement individual production cut allocations. WTI crude settled lower by 3.9% ($46.84/bbl; -$1.88), finishing October down 2.6%.
The broader market attempted to shrug off the move in crude oil as a pullback in bond yields and largely in-line economic data offered support.
The latest inflation reading fell largely in-line with expectations as personal income rose 0.3% (Briefing.com consensus +0.4%) in September while personal spending increased 0.5% (Briefing.com consensus +0.5%). The Core PCE Price Index ticked higher by 0.1% (Briefing.com consensus +0.1%), pushing year-over-year growth to 1.7%. This is the last inflation reading ahead of the Fed's November policy meeting this Wednesday.
Fed funds futures were little changed by the data with the December meeting still commanding an outsized number of rate hike bets. According to the CME's FedWatch Tool, the implied probability of a December hike is 77.8%.
Nine sectors ended in positive territory with utilities (+2.0%), real estate (+1.4%), and industrials (+0.2%) outperforming. Conversely, energy (-1.2%) and health care (-0.6%) finished in the red.
In the energy sector (-1.2%), Dow component Exxon Mobil (XOM 83.32, -1.46) ended lower by 1.7% after being removed from the "Conviction Buy List" at Goldman. However, fellow Dow component Chevron (CVX 104.75, +0.93) gained 0.9% after Goldman upgraded it to "Buy" from "Neutral" and added it to its "Conviction Buy List." The broader sector finished the month down 3.0%, ending behind the benchmark index.
Biotechnology extended its recent loss as the iShares Nasdaq Biotechnology ETF (IBB 256.68, -3.81, -1.5%) ended the month lower by 11.3%. This compares to a decline of 6.6% in the broader health care sector (-0.6%). The sub-industry was under pressure as participants weighed the regulatory implications of this election cycle. On that note, McKesson (MCK 127.17, +3.06) rebounded 2.5% after falling 22.7% in the prior session.
In the industrial sector (+0.2%), Roper (ROP 173.31, +5.40) outperformed after beating bottom-line estimates for the quarter. The stock rallied 3.2% as a bottom-line beat overshadowed some cautious guidance. Dow component General Electric (GE 29.10, -0.12) ended lower by 0.4% after gaining 0.5% at the start of the session.
The Treasury complex settled on a higher note with yields pulling back across the curve. The yield on the 2-yr note slipped one basis point to 0.85% while the yield on the benchmark 10-yr note ended down two basis points (1.83%). The yield on the 10-yr note increased 23 basis points in October.
Today's trading volume was above the average of 850 million as more than one billion shares changed hands at the NYSE floor.
Economic data included Personal Income, Personal Spending, Core PCE Prices, and Chicago PMI for October:
Personal income increased 0.3% (Briefing.com consensus +0.4%), personal spending increased 0.5% (Briefing.com consensus +0.5%), and the core PCE Price Index was up 0.1% (Briefing.com consensus +0.1%).
The Personal Income and Spending report for September was mostly in-line with expectations.
The MNI Chicago Business Barometer checked in at 50.6 for October (Briefing.com consensus 54.0), down from 54.2 in September and the lowest reading since May.
Tomorrow's economic data will include the 10:00 ET release of the ISM Index for October (Briefing.com consensus 51.9) and Construction Spending for September (Briefing.com consensus 0.5%). Separately, Auto and Truck Sales for October will be released throughout the day.
Russell 2000: +4.9% YTD
Dow Jones: +4.1% YTD
S&P 500: +4.0% YTD
Nasdaq Composite: +3.6% YTD
DJ30 -18.49 NASDAQ -0.97 SP500 -0.22 NASDAQ Adv/Vol/Dec 1482/1.521 bln/1479 NYSE Adv/Vol/Dec 1514/1.029 bln/1447
3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, were -1.2% around the 84.90 level
Crude oil plummets to a 1-month low following the conclusion of the weekend's 2-day informal technical OPEC meeting
December crude oil futures fell $1.88 (-3.9%) to $46.84/barrel
Contributing factors affecting the price of oil include:
On Friday, a meeting with OPEC representatives & a second meeting the following morning with non-OPEC oil producers including Russia, Kazakhstan, Mexico, Oman, Azerbaijan, Brazil, & Bolivia essentially yielded no concrete results. Non-producers expressed potential interest in cooperating on a coordinated production cut, but would not give specific numbers until OPEC came out with its own individual production cut allocations for its members.
In addition, Iraq has held firm on its previously announced stance to be exempt from the OPEC production cut, expressing they need the excess revenue to fund the fight against ISIS. It is worth noting that Iran, Nigeria, & Lybia are already exempt from the Algiers Accord.
Russia also reiterated its position that it will not cut production & has the capacity to increase production if demand permits. However, Russia also stated they would be part of a potential production freeze if OPEC can successfully assign specific numbers to the proposed production cut for each member.
Progress was made on a standardized methodology to evaluate and track OPEC production, but no actual concrete numbers were specified at either of the two meetings held this weekend.
Another informal meeting is scheduled to be held sometime in November ahead of the official OPEC meeting on Nov 30 to further hammer out the details. Details of the Algiers Accord are expected to be announced at the next official OPEC meeting.
Natural gas erased all of Friday's gains, closed at fresh session lows around the $3.00/MMBtu support zone
December natural gas closed $0.09 lower (-2.9%) at $3.02/MMBtu
In precious metals, gold ended lower while silver traded nearly flat as the dollar index gave up its initial morning gains
December gold ended today's session down $3.70 (-0.3%) to $1273.30/oz
December silver closed today's session $0.01 higher (+0.1%) at $17.81/oz
Base metal copper nearly doubled Friday's gains
December copper closed $0.02 higher (+0.9%) at $2.21/lb
Stocks closed out October with losses as a last minute sell-off took all three into the red. Leading the decline, the Dow Jones Industrial Average shed 18.77 points (-0.10%) to 18142.42. The Nasdaq Composite was lower by less than a point (-0.02%) to 5189.13, and the S&P 500 also lost less than a point (-0.01%) to 2126.15.
Economic data today included the personal income reading which increased 0.3%, personal spending increased 0.5%, and the core PCE Price Index was up 0.1%. Also, the MNI Chicago Business Barometer checked in at 50.6 for October, down from 54.2 in September and the lowest reading since May.
Ending on the positive side of flat lines, the Technology (XLK 47.42, -0.02 -0.04%) sector closed out October modestly below flat lines as the session came to a close. Component Level 3 (LVLT 56.15, +2.11 +3.90%) ended the day higher following a deal that was announced this morning by which CenturyLink (CTL 26.58, -3.81 -12.54%) would acquire LVLT for $66.50 per share in cash and stock. Other sectors as measured by the S&P closed the month XLU +2.00%, XLRE +1.38%, XLP +0.25%, XLI +0.12%, XLY +0.08%, XLB +0.02%, XLFS -0.13%, XLF -0.15%, IYZ -0.51%, XLV -0.62%, XLE -1.17% as Utilities edged out all others to gain the most.
In the S&P 500 Information Technology (800.64, -0.02 -0.00%) sector, trading lost less the a point as a sell-off into the close took the sector below flat lines. Component HP (HPQ 14.49, +0.40 +2.84%) was the best performer in the space today with no notable news on the wires backing the move. Other names in the space which closed higher today included QRVO +2.71%, FFIV +2.61%, SWKS +1.61%, AMAT +1.47%, HPE +1.35%, XLNX +1.21%, ADI +0.90%, NVDA +0.85%, TEL +0.82%.
Other notable news items among sector components:
According to the NY Post, Goldman Sachs (GS 178.24, +1.10 +0.62%) may be pushing Apple (AAPL 113.54, -0.18 -0.16%) to make a bid for Time Warner (TWX 88.99, +1.52 +1.74%).
Cognizant (CTSH 51.35, -0.22 -0.43%) was selected by Centrica (CPYYY 10.48, +0.12 +1.16%) as a strategic partner to deliver end-to-end digital assurance as-a-service across Centrica's technology landscape and enhance the efficiency, reliability and user experience of Centrica's web and digital applications and smart devices.
Harris (HRS 89.21, -0.18 -0.20%) entered into a $700 million contract with the State of Florida to provide a state-wide communications network that will connect public safety, law enforcement, public schools and other state and local government agencies. The contract has a seven-year base and seven one-year options.
According to the Nikkei Asian Review, Foxconn (FXCNY 6.97, flat) may be testing wireless charging capabilities for the next iteration of the iPhone (AAPL).
According to Bloomberg, Brocade (BRCD 10.60, +1.91 +21.98%) is in talks with possible suitors, including Broadcom (AVGO 170.28, +0.93 +0.55%).
Elsewhere in the tech space:
Broadsoft (BSFT 41.55, -2.70 -6.10%) acquired VoIP Logic. The company expects the deal to be $0.01 dilutive to its non-GAAP earnings.
Level 3 (LVLT) to be acquired by CenturyLink (CTL) for $66.50 per share in cash and stock. Under the terms of the agreement, LVLT shareholders will receive $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CTL stock for each LVLT share they own, which implies a purchase price of $66.50 per Level 3 share (based on a CenturyLink $28.00 per share reference price) and a premium of about 42% based on LVLT's unaffected closing share price of $46.92 on October 26, 2016, the last trading day prior to market speculation about a potential transaction.
21Vianet (VNET 7.31, flat) signed a strategic investment agreement with private equity firm Warburg Pincus to form a joint venture and establish a digital real estate platform in China.
MKS Instruments (MKSI 50.45, +0.80 +1.61%) announced the promotion of Dr. John Lee to the position of SVP and COO effective November 1, 2016.
Violin Memory (VMEM 0.18, -0.07 -28.00%) confirmed its common stock began trading on the OTCQX market on October 28, 2016 under 'VMEM' following NYSE delisting. The company also stated it will consider options, including its option to pursue a review, in responding to the NYSE notification.
Momo's (MOMO 24.08, -1.46 -5.72%) Chief Technology Officer Zhiwei Li announced his resignation, for personal reasons, effective November 1.
Demand Media (DMD 5.80, +0.10 +1.75%) received board approval to change its name to Leaf Group Ltd. The company will officially change its name at the start of business on Wednesday, November 9, 2016, and its common stock will begin trading that day on the New York Stock Exchange under LFGR.
NCI (NCIT 11.75, -0.20 -1.67%) appointed Paul Dillahay as president and CEO, effective immediately. Mr. Dillahay replaces Brian Clark, who resigned as president and CEO and a director of NCI, to pursue other opportunities.
TiVo (TIVO 19.85, -0.35 -1.73%) that Rovi Corporation, a TiVo Company, renewed its product and intellectual property (IP) licenses with Panasonic (PCRFY 10.03, -0.25 -2.43%). Panasonic signed a multi-year extension of the company's products for the Japan market, including G-Guide, G-Guide HTML and G-Guide xD, enabling Panasonic to continue providing advanced entertainment discovery experiences across its TV, DVR and set-top box products. Additionally, Panasonic signed a multi-year worldwide license renewal to the entertainment discovery patent portfolio of Rovi.
In reaction to quarterly results:
CenturyLink (CTL) reported better than expected Q3 EPS of $0.56 on revenues of $4.38 billion. The company also sees Q4 EPS of $0.53-0.59 on revenues of $4.28-4.34 billion.
Level 3 (LVLT) reported worse than expected Q3 EPS and revenues of $0.40 and $2.03 billion, respectively. For FY16, the company sees EBITDA and free cash flow of 10-12% and $1.0-1.1 billion, respectively.
Check Point Software (CHKP 84.56, +3.58 +4.42%) reported better than expected Q3 EPS and revenues of $1.13 and $427.6 million, respectively.
Broadsoft (BSFT) reported better than expected Q3 EPS and revenues of $0.52 and $84.1 million, respectively. For Q4, the company sees in-line EPS and revenues of $0.65-0.83 and revenues of $94-102 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: AEIS, AMKR, CGNX, INST, IDTI, ININ, MPWR/ALLT, ANGI, AUDC, CRCM, DHX, EIGI, FIS, HRS, KEM, RDWR
Analyst actions:
VMW was upgraded to Outperform from Perform at Oppenheimer,
ULTI was upgraded to Outperform from Neutral at Wedbush,
TWX was upgraded to Outperform from Mkt Perform at FBR & Co.,
QCOM was upgraded to Buy from Neutral at Nomura,
HUBS was upgraded to Overweight from Neutral at JP Morgan,
AIRG was upgraded to Buy from Hold at Wunderlich,
ATEN was upgraded to Buy from Neutral at DA Davidson,
CMPR was upgraded to Hold from Sell at Axiom Capital,
ADTN was upgraded to Outperform from Market Perform at Northland Capital;
CSCO was downgraded to Mixed from Positive at OTR Global,
WEX was downgraded to Neutral from Outperform at Credit Suisse,
PERI was downgraded to Hold from Buy at The Benchmark Company,
SANM was downgraded to Hold from Buy at Cross Research;
COUP was initiated at Barclays, RBC Capital Mkts, JP Morgan, Morgan Stanley, and JMP Securities,
YY and MOMO were initiated with Buy ratings at HSBC,
ACIA was initiated with an Outperform at William Blair,
ZG was initiated with a Buy at BofA/Merrill,
ORBC was initiated with an Outperform at Macquarie,
CAMP was initiated with a Neutral at Macquarie,
