From Briefing.com: 4:51 pm Coherent beats by $0.13, beats on revs (COHR) :
Reports Q4 (Sep) earnings of $1.65 per share, $0.13 better than the Capital IQ Consensus of $1.52; revenues rose 18.5% year/year to $248.46 mln vs the $240.78 mln Capital IQ Consensus.
Ending backlog expected to ship in the next 12 months was $605.3 million at October 1, 2016, compared to a backlog of $564.5 million at July 2, 2016 and a backlog of $309.5 million at October 3, 2015.
4:36 pm Marvell announces restructuring actions, including the elimination of approx. 900 positions, that it expects will lower annual operating expenses from a current annualized run rate of $1.08 billion to the $820-840 million range (MRVL) :
Matt Murphy, Marvell's President and Chief Executive Officer, explained, "The single biggest factor limiting the potential of the Cloud and utilization of billions of connected devices is the bandwidth of today's technology. By focusing on our strengths in storing, moving, and accessing data at high speeds, Marvell is well-positioned to enable the technology of tomorrow."
Marvell is pursuing two initiatives to achieve this focus:
Discontinuing specific R&D programs, streamlining engineering processes, and consolidating R&D sites for greater efficiency, which will eliminate approximately 900 positions worldwide. The Company also expects a significant reduction in legal and accounting costs. Altogether, these changes are expected to lower annual operating expenses by $180-200 million.
In addition, the Company plans to divest non-strategic businesses with approximately $60 million in operating expenses and $100 million in revenue, based on a first half of fiscal 2017 annualized run rate.
As a result of these actions, the Company expects to incur charges of $90-110 million over the next four quarters, including cash charges of $35-50 million. Restructuring and restructuring-related charges include an estimate of severance, asset impairment, lease termination fees, and other costs.
4:18 pm First Solar beats by $0.56, misses on revs; guides FY16 EPS in-line, revs below consensus (FSLR) :
Reports Q3 (Sep) earnings of $1.22 per share, excluding non-recurring items, $0.56 better than the Capital IQ Consensus of $0.66; revenues fell 45.9% year/year to $688 mln vs the $985.39 mln Capital IQ Consensus.
Co issues guidance for FY16, sees EPS of $4.30-4.50. vs. $4.33 Capital IQ Consensus Estimate; sees FY16 revs of $2.8-2.9 bln (Prior $3.8-4.0 bln), excluding non-recurring items, vs. $3.86 bln Capital IQ Consensus Estimate; Revenue guidance lowered for revised project sale timing.
FY16 Guidance
Gross Margin 25.5-25.6% (Prior 18.5-19.0%)
Operating Expense $375-385 mln (Prior $380-400 mln)
Operating Income $340-370 mln (Prior $310-370 mln)
Net Cash Balance $12.4-1.5 bln (Prior $1.9-2.2 bln)
Operating Cash Flow- ($100 mln)-$0 mln (Prior $500-600 mln)
CapEx- $225-275 mln (Prior $275-325 mln)
Shipments 2.8-2.9 GW (Prior 2.9-3.0 GW)
4:17 pm Axcelis Tech beats by $0.02, misses on revs; guides Q4 below consensus (ACLS) :
Reports Q3 (Sep) earnings of $0.07 per share, $0.02 better than the Capital IQ Consensus of $0.05; revenues fell 17.2% year/year to $65.65 mln vs the $67.75 mln Capital IQ Consensus.
Co issues downside guidance for Q4, sees EPS of $0.04-0.08 vs. $0.15 Capital IQ Consensus Estimate; sees Q4 revs of $65-70 million vs. $75.14 mln Capital IQ Consensus Estimate.
Also, gross margin in the fourth quarter is expected to be in the 36-38% range.
4:10 pm Qualcomm beats by $0.15, beats on revs; guides Q1 (QCOM) :
Reports Q4 (Sep) earnings of $1.28 per share, $0.15 better than the Capital IQ Consensus of $1.13; revenues rose 68.2% year/year to $9.17 bln vs the $5.86 bln Capital IQ Consensus.
Co issues in-line guidance for Q1, sees EPS of $1.12-1.22 vs. $1.22 Capital IQ Consensus Estimate; sees Q1 revs of $5.7-6.5 bln vs. $6.14 bln Capital IQ Consensus Estimate.
Sees Q1 MSM chip shipments 205M - 225M, Total reported device sales approx. $58.0B - $66.0
"We are forecasting continued growth of global 3G/4G device shipments in calendar year 2017, led by growing demand in emerging regions. We are well positioned to extend our mobile technology leadership and footprint into attractive growth opportunities, accelerated by our recently announced agreement to acquire NXP."
4:10 pm Facebook beats by $0.12, beats on revs (FB) :
Reports Q3 (Sep) earnings of $1.09 per share, $0.12 better than the Capital IQ Consensus of $0.97; revenues rose 55.8% year/year to $7.01 bln vs the $6.92 bln Capital IQ Consensus.
Daily active users (DAUs)- 1.18 bln, up 17% y/y; Expectations approx 1.16 bln which would represent approx 15% growth. Q2 DAUs were 1.13 billion on average for June 2016, an increase of 17% y/y; Q1 +16%, Q4 +17%; Mobile DAUs- 1.09 bln, +22% y/y; Q2 was 22% y/y; Q1 was +24%, Q4 was +25%; Monthly active users (MAUs)- 1.79 bln, +16% y/y; , expectations are for this to be approx 1.76 bln which would represent growth of approx 13%; Mobile MAUs were 1.66 bln; Q2 was 1.57 bln +20% y/y; Q1 and Q4 was 21% Mobile advertising revenue- 84% of revenue; Q3 is expected to come in at 85%. Q2 Mobile advertising revenue represented approximately 84%.
Capital expenditures -- Capital expenditures for the third quarter of 2016 were $1.10 billion.
4:15 pm : The stock market ended the midweek affair on a lower note as US election jitters overshadowed a largely in-line policy directive from the Federal Reserve. The Nasdaq Composite (-0.9%) finished behind the S&P 500 (-0.7%) and the Dow Jones Industrial Average (-0.4%).
The broader market began the day on a lower note as a downturn in crude oil and a negative bias in global bourses kept risk appetite in check. Participants also opted to move to the sidelines as the US presidential race tightened, according to recent polls.
A joint poll conducted by ABC News and the Washington Post had investors on the defensive yesterday as Republican nominee Donald Trump took a slight edge over Democratic nominee Hillary Clinton. The poll unnerved the broader market as participants had all but priced in a Clinton presidency. Today's read offered little solace as ABC News and the Washington Post indicated that the two candidates were neck-and-neck heading into the final week. Furthermore, an L.A. Times poll added to uncertainty, giving an edge to Mr. Trump. The CBOE Volatility Index (19.10, +0.54, +3.0%) is up roughly three points from last Friday's settlement, showing that volatility expectations are on the rise.
Safe haven bonds, gold, and currencies gained on the developments as participants attempted to mitigate the impact of any surprise results from next Tuesday's election. The Treasury complex gained across the curve, exerting continued pressure on yields from multi-month highs. The yield on the benchmark 10-yr note declined three basis points to 1.80% while the yield on the 2-yr note slipped two basis points (0.82%).
The pullback in yields failed to offer a reprieve for high-yielding sectors as real estate (-1.5%), utilities (-1.3%), and telecom services (-1.2%) continued their recent losing streaks.
Crude oil also extended early losses after the EIA confirmed a larger-than-expected build in crude oil inventories. The Department of Energy reported that crude oil inventories rose by 14.42 million barrels (consensus: +1.01 million) while gasoline stockpiles fell by 2.20 million barrels (consensus: -1.89 million). The energy component settled lower by 2.9% ($45.31/bbl; -$1.37).
The major averages saw some movement after the latest policy statement from the FOMC, but the S&P 500 ended near levels seen right before the release of the statement. The FOMC opted to leave the target range for the fed funds rate unchanged at 0.25% to 0.50% while stating that the case for moving rates higher had strengthened. Interestingly enough, only two FOMC members dissented at this meeting as Boston Fed President Eric Rosengren rejoined the majority.
The benchmark index finished near its worst level of the day, slipping below the psychological 2100 price level. All eleven sectors finished in the red with energy (-1.0%) and financials (-0.8%) representing notable laggards.
The commodity-sensitive energy space (-1.0%) weighed as refining names underperformed Marathon Petroleum (MPC 41.00, -1.34) finished lower by 3.2%. On the other hand, Anadarko Petroleum (APC 60.14, +0.19) outperformed after being upgraded to "Outperform" from "Neutral" at Credit Suisse.
In the financial sector (-0.8%), banking names underperformed as falling interest rates and declining oil prices weighed. Wells Fargo (WFC 45.24,- 0.36) finished lower by 0.9%. The in-line policy statement from the Fed failed to upset the rate hike picture for the remainder of the year. Per the CME's FedWatch Tool, the implied probability of an interest rate hike at the December meeting rose to 71.5% from 68.4% in the prior session.
The heavily-weighted technology sector (-0.7%) paced the retreat in the broader market as Facebook (FB 127.17, -2.33) and Alphabet (GOOG 768.70, -14.91) fell 1.8% and 1.9%, respectively. Facebook is scheduled to report its quarterly results this evening.
Biotechnology names weighed on the health care space (-0.5%) as Allergan (AGN 197.89, -10.76) and Gilead Sciences (GILD 72.51, -1.56) fell a respective 5.2% and 2.1%. Both names missed bottom-line estimates for the quarter. Conversely, Anthem (ANTM 122.99, +5.57) gained 4.7% as reaffirmed full-year guidance overshadowed below-consensus earnings.
Today's trading volume was above the average of 865 million as more than 970 million shares changed hands at the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index and the ADP Employment Report for October:
The MBA Mortgage Index indicated that mortgage applications fell 1.2% in the week ending October 29. This followed a 4.1% decline in the prior week.
The ADP Employment Change report for October showed an estimated 147,000 positions were added to private sector payrolls in October versus the Briefing.com consensus estimate of 165,000.
The mitigating factor with the headline disappointment for October was the upward revision for September to 202,000 from an originally reported 154,000 increase.
For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the 7:30 ET release of October Challenger Job Cuts. Meanwhile, weekly initial claims (Briefing.com consensus 256k) and the preliminary estimate of third quarter Productivity (Briefing.com consensus 1.8%) and Unit Labor Costs (Briefing.com consensus 1.2%) will cross the wires at 8:30 ET. The day's data will be capped off with Factory Orders for September (Briefing.com consensus +0.2%) and ISM Services for October (Briefing.com consensus 55.8), which will be released at 10:00 ET.
Dow Jones: +3.1% YTD
S&P 500: +2.6% YTD
Russell 2000: +2.5% YTD
Nasdaq: +2.0% YTD
DJ30 -77.46 NASDAQ -48.01 SP500 -13.78 NASDAQ Adv/Vol/Dec 796/1.925 bln/2340 NYSE Adv/Vol/Dec 702/970.1 mln/2253
3:30 pm :
The dollar index extended yesterday's losses, boosting precious metals, was -0.3% around the 97.44 level
Commodities, as measured by the Bloomberg Commodity Index, were -0.7% around the 83.89 level
Crude oil ended at 1-month lows for the fourth consecutive session after EIA reported the largest crude inventory build in 30 years
December crude oil futures fell $1.37 (-2.9%) to $45.31/barrel
Rig count data will be released Friday at 1 pm ET
Monthly IEA data will be released on November 10
EIA highlights:
Crude oil inventories had a build of +14.42 mln (consensus called for a build of about +1.013 mln barrels)
Gasoline inventories had a draw of -2.207 mln (consensus called for a draw of about -1.124 mln barrels).
Distillate inventories had a draw of -1.828 mln.
Natural gas extended yesterday's losses to close near session lows ahead of tomorrow's inventory number
December natural gas closed $0.11 lower (-3.8%) at $2.79/MMBtu
Weekly EIA natural gas data will be released tomorrow at 10:30 am ET.
In precious metals, gold & silver traded in tandem, finishing near session highs on continued dollar weakness ahead of the Nov 8 election
December gold ended today's session up $20.60 (+1.6%) to $1308.00/oz
December silver closed today's session $0.28 higher (+1.5%) at $18.69/oz
Broader market action ended Wednesday all lower, as the Nasdaq Composite shed 48.01 points (-0.93%) to 5105.57. The S&P 500 was also weaker, losing 13.78 points today (-0.65%) to 2097.94, and the Dow Jones Industrial Average was lower by 77.46 points (-0.43%) to 17959.64.
The broader market began the day on a lower note as a downturn in crude oil and a negative bias in global bourses kept risk appetite in check. Participants also opted to move to the sidelines as the US presidential race tightened, according to recent polls.
A joint poll conducted by ABC News and the Washington Post had investors on the defensive yesterday as Republican nominee Donald Trump took a slight edge over Democratic nominee Hillary Clinton. The poll unnerved the broader market as participants had all but priced in a Clinton presidency. Today's read offered little solace as ABC News and the Washington Post indicated that the two candidates were neck-and-neck heading into the final week. Furthermore, an L.A. Times poll added to uncertainty, giving an edge to Mr. Trump. The CBOE Volatility Index (19.10, +0.54, +3.0%) is up roughly three points from last Friday's settlement, showing that volatility expectations are on the rise.
Safe haven bonds, gold, and currencies gained on the developments as participants attempted to mitigate the impact of any surprise results from next Tuesday's election. The Treasury complex gained across the curve, exerting continued pressure on yields from multi-month highs. The yield on the benchmark 10-yr note declined three basis points to 1.80% while the yield on the 2-yr note slipped two basis points (0.82%).
Crude oil also extended early losses after the EIA confirmed a larger-than-expected build in crude oil inventories. The Department of Energy reported that crude oil inventories rose by 14.42 million barrels while gasoline stockpiles fell by 2.20 million barrels. The energy component settled lower by 2.9% ($45.31/bbl; -$1.37).
The major averages saw some movement after the latest policy statement from the FOMC, but the S&P 500 ended near levels seen right before the release of the statement. The FOMC opted to leave the target range for the fed funds rate unchanged at 0.25% to 0.50% while stating that the case for moving rates higher had strengthened. Interestingly enough, only two FOMC members dissented at this meeting as Boston Fed President Eric Rosengren rejoined the majority.
The econ data from today included the MBA Mortgage Index which showed that mortgage applications fell 1.2% in the week ending October 29. This followed a 4.1% decline in the prior week. Also, the ADP Employment Change report for October showed an estimated 147,000 positions were added to private sector payrolls in October.
Today, the Technology (XLK 46.71, -0.30 -0.64%) sector ended just off lows of the day. Component Automatic Data (ADP 89.98, +3.06 +3.52%) was able to resist the negative action today following the company's better than expected Q1 report and the sale of a business unit. All 11 S&P sectors ended in the red today, with the IYZ -3.52%, XLRE -1.55%, XLU -1.26%, XLE -1.21%, XLFS -0.68%, XLF -0.66%, XLY -0.61%, XLB -0.54%, XLV -0.46%, XLI -0.37%, XLP -0.25% US Telecoms nealry doubling up the next worst losses.
To that end, the Telecom space was pressured lower by Frontier Communications (FTR 3.39, -0.54 -13.74%), which posted worse than expected Q3 results. Other components of the IYZ ended WIN -8.18%, NIHD -7.84%, CBB -6.74%, SHEN -5.12%, CNSL -4.17%, VG -4.13%, IRDM -3.73%, S -3.57%, CTL -3.16%.
In the S&P 500 Information Technology (788.71, -5.37 -0.68%) sector, trading distanced itself from the $800-level even more today. Component Broadcom (AVGO 172.56, +3.76 +2.23%) ended modestly higher today on the back of a confirmed deal with Brocade (BRCD 12.32, +1.08 +9.61%) to buy the company for $12.75 per share in cash. Other names in the space which ended lower with the sector included WDC -3.56%, STX -3.14%, VRSN -2.72%, JNPR -2.71%, RHT -2.47%, FIS -2.34%, GOOGL -2.12%, ADSK -2.03%, NTAP -2.02%, GOOG -1.87%, QCOM -1.83%, FB -1.80%.
Other notable news items among sector components:
Brocade (BRCD) confirmed it will be acquired by Broadcom (AVGO) for $12.75 per share in an all-cash transaction valued at about $5.5 billion.
WageWorks (WAGE 62.80, +5.30 +9.22%) to acquire Automatic Data Processing's (ADP) Consumer Health Spending Account and Consolidated Omnibus Reconciliation Act businesses. Financial terms of the deal were not disclosed.
Accenture (ACN 118.61, +2.47 +2.13%) has completed the acquisition of Kurt Salmon, a leading global strategy consulting firm focused on the retail industry and a subsidiary of Management Consulting Group. The acquisition was first announced on September 22, 2016.
eBay (EBAY 28.26, -0.12 -0.42%) and Terapeak, Inc. have renewed their data partnership, which dates back to 2004. The new agreement enables Terapeak to continue to partner with eBay to provide a powerful research tool for analyzing e-commerce activity, enabling online sellers to understand product supply and demand within the eBay marketplace. The Terapeak research product is used by thousands of sellers to find product trends, make sourcing decisions, and to price effectively to maximize conversions and profits.
Elsewhere in the tech space:
Alaska Comms (ALSK 1.63, +0.13 +8.67%) announced that the FCC will provide about $19.7 million per year for 10 years to assist the company with the deployment of broadband in Alaska.
Fleetmatics (FLTX 59.90, -0.05 -0.08%) announced the acquisition of TrackEasy Oy. Financial terms were not disclosed.
Digi Intl (DGII 9.20, -0.55 -5.64%) acquired IoT cold chain provider FreshTemp. Financial terms of the deal were not disclosed.
Tessera Tech (TSRA 37.60, +1.00 +2.73%) acquired the technology assets and substantial patent portfolio of Pelican Imaging Corporation. Financial terms of the deal were not disclosed.
Inphi (IPHI 40.89, +3.04 +8.03%) to acquire ClariPhy Communications for $275 million in cash as well as the assumption of certain liabilities at the close. The deal is expected to close in December of 2016.
Rogers Comms (RCI 39.66, -0.50 -1.25%) priced $500 million underwritten public offering of 2.90% senior notes due 2026 with net proceeds of $487 million.
In addition to reporting quarterly results, West Corp (WSTC 21.56, +1.55 +7.75%) announced the entry into a process to explore financial and strategic alternatives.
Science Applications (SAIC 67.85, -0.57 -0.83%) received a contract from the Naval Sea Systems Command; total contract value will be more than $383 mln if all options exercised.
iPass (IPAS 1.78, -0.01 -0.56%) extended its partnership with Gogo (GOGO 9.67, -0.14 -1.43%). The partnership enabled IPAD to offer Gogo inflight connectivity to its users. The company also announced a partnership with Voyaxes to bring global Wi-Fi to Voyager WiFi customers.
In reaction to quarterly results:
Automatic Data (ADP) reported better than expected Q1 EPS of $0.86 on in-line revenues which rose 7.5% compared to last year to $2.92 billion. For FY17, the company reaffirmed revenues guidance for growth of about 4-5% year-over-year to $12.52-12.75 billion.
Electronic Arts (EA 79.12, +1.28 +1.64%) reported an in-line GAAP loss of $0.13 per share on revenues which rose 10.2% compared to a year ago to $898 million. For FY17, EA raised EPS and revenues guidance to $2.69 from $2.56 and to $4.775 billion from $4.75 billion, respectively.
TE Connectivity (TEL 62.92, -0.37 -0.58%) reported better than expected Q4 EPS of $1.22 on in-line revenues of $3.33 billion. For Q1, the company sees in-line EPS and revenues of $0.98-1.02 and $2.95-3.05 billion, respectively. For FY16, the company guided EPS and revenues ahead of market expectations at $4.19-4.49 and $12.3-12.9 billion, respectively.
SBA Comm (SBAC 107.51, -3.37 -3.04%) reported better than expected Q3 funds from operations of $1.53 on revenues which were mostly flat at $411.32 million. For Q4, SBAC sees revenues in-line at $412-422 million.
Trimble (TRMB 25.68, -1.30 -4.82%) reported better than expected Q3 EPS of $0.33 on worse than expected revenues of $584.1 million. For Q4, the company sees EPS in-line at $0.27-0.32 on worse than expected revenues of $562-592 million.
Booz Allen Hamilton (BAH 31.19, +1.15 +3.83%) reported better than expected Q2 EPS of $0.46 on in-line revenues of $1.39 billion. For FY17, the company sees in-line EPS of $1.68-1.75.
Frontier Communications (FTR) reported a Q3 loss of $0.04 per share on worse than expected revenues of $2.52 billion. For 2016, FTR sees adj FCF of $920-950 million on CapEx of between $1.25-1.275 billion with cash tax refunds of $100-110 million.
Paycom Software (PAYC 43.70, -8.30 -15.96%) reported better than expected Q3 EPS of $0.15 on in-line revenues of $77.3 million. For FY16, PAYC sees revenues ahead of market expectations at $326.5-328.5 million, up from $325-327 million.
Tableau Software (DATA 43.51 -6.00 -12.12%) reported better than expected Q3 EPS of $0.16 on revenues which missed expectations at $206.1 million. For Q4 and FY16, DATA guided EPS and revenues worse than expected at $225-235 million and $0.09-0.16, and $801-811 million and $0.23-0.30, respectively.
Yelp (YELP 35.71, +3.23 +9.94%) reported better than expected Q3 EPS and revenues of $0.22 and $186.2 million, respectively. For Q4, YELP sees in-line revenues of $191-195 million, and for FY16, the company sees better than expected revenues of $709-713 million.
West Corp (WSTC) reported in-line Q3 EPS and revenues of $0.76 and $571.4 million, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: HIVE ALSK ACLS BKFS EPAY BCOV CSLT COHR CSGS DMRC EQIX EXAR FB FSLR FIT G GDDY HUBS INOV IL ITRI IXYS KTOS MANT MCHX NOVT NTNX PEGA QTWO QCOM QUIK ROG RUBI TTWO WSTL XOXO ZNGA/ACIW ACTA ANSS ARW BCE CCOI COMM CNSL CYBR IT GOGO IQNT LDOS LFUS MITK MITL PRFT TVPT WILN
Analyst actions:
SQ was upgraded to Outperform from Neutral at Credit Suisse,
ENPH was upgraded to Outperform at Oppenheimer and to Mkt Outperform from Mkt Perform at Avondale, BRCD was upgraded to Neutral from Underperform at Robert W. Baird,
TWX was upgraded to Buy from Hold at Pivotal Research,
CALX was upgraded to Buy at Craig Hallum,
TLND was upgraded to Overweight from Equal Weight at Barclays;
DATA was downgraded to Market Perform from Outperform at William Blair and to Hold from Buy at Drexel Hamilton,
CSOD and PAYC were downgraded to Neutral from Overweight at JP Morgan,
PLT was downgraded to Neutral from Overweight at JP Morgan,
FTR was downgraded to Market Perform from Outperform at Wells Fargo and to Hold from Buy at Deutsche Bank,
WBMD was downgraded to Neutral from Buy at Mizuho,
RDWR was downgraded to Neutral from Buy at DA Davidson,
BRCD was downgraded to Hold from Buy at Argus,
ATTU was downgraded to Hold from Buy at Craig Hallum;
NVDA was initiated with a Buy at Citigroup,
MRAM was initiated at Needham, Craig Hallum, Canaccord Genuity, and Stifel
