From Briefing.com: 4:21 pm Microchip beats by $0.07, beats on revs; guides Q3 EPS above consensus, revs in-line (MCHP) :
Reports Q2 (Sep) earnings of $0.94 per share, $0.07 better than the Capital IQ Consensus of $0.87; revenues rose 56.2% year/year to $873.8 mln vs the $861.4 mln Capital IQ Consensus.
Microchip announced that its Board of Directors has declared a quarterly cash dividend on its common stock of 36.05 cents per share (Prior 36.00 cents per share)
Co issues guidance for Q3, sees EPS of $0.85-0.95 vs. $0.84 Capital IQ Consensus Estimate; sees Q3 revs of $821.4-873.8 mln vs. $844.71 mln Capital IQ Consensus Estimate.
4:14 pm Cray misses by $0.15, misses on revs; lowers FY16 revs mid point below consensus (CRAY) :
Reports Q3 (Sep) loss of $0.49 per share, excluding non-recurring items, $0.15 worse than the Capital IQ Consensus of ($0.34); revenues fell 59.5% year/year to $77.5 mln vs the $79.53 mln Capital IQ Consensus.
Co issues lowered guidance for FY16, sees FY16 revs of $620-650 mln from $650 mln prior guidance vs. $649.36 mln Capital IQ Consensus Estimate.
Outlook Details: For 2016, a wide range of results remains possible. Assuming the Company is able to successfully complete the acceptances of five large systems associated with two new processors that total roughly $185 million, the Company expects revenue to be in the range of $620 million to $650 million.
The Company is still working through technical issues with these systems and the delays in third-party components outlined previously have compressed the timelines available to work through these issues. Significant risks remain to achieve these acceptances before year-end. To the extent that one or more of these system acceptances is not completed by the end of the year, the Company expects that those acceptances would be completed in early 2017. GAAP and Non-GAAP gross margin for the year is expected to be in the range of 34%.
4:11 pm Rudolph Tech reports EPS in-line, revs in-line; guides Q4 EPS below consensus, revs below consensus (RTEC) :
Reports Q3 (Sep) earnings of $0.29 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.29; revenues rose 5.1% year/year to $61.6 mln vs the $61.38 mln Capital IQ Consensus.
Co issues downside guidance for Q4, sees EPS of $0.18-0.22, excluding non-recurring items, vs. $0.25 Capital IQ Consensus Estimate; sees Q4 revs of $52-56 mln vs. $58.57 mln Capital IQ Consensus Estimate.
"In addition, we added a new customer from the top five RF filter manufacturers this third quarter with an inspection tool for advanced BAW filter research and development. We continue to expand our applications in the RF market where our suite of technologies combines to provide customers a comprehensive solution for identifying and isolating faults to improve yield."
4:15 pm : The stock market began the week on a broadly higher note as diminished political uncertainty boosted risk appetite ahead of tomorrow's US presidential race. The Nasdaq Composite (+2.4%) finished slightly ahead of both the S&P 500 (+2.2%) and the Dow Jones Industrial Average (+2.1%).
The benchmark index avoided a tenth consecutive decline after FBI Director James Comey confirmed that he will not recommend that criminal charges be brought against Democratic presidential nominee Hillary Clinton. Recall that Mr. Comey made waves on October 28 by re-opening the probe into Mrs. Clinton's emails. The move followed the discovery of new emails from the former Secretary of State in an unrelated investigation.
The "October Surprise" fueled a flight from risk assets, feeding into a nine-session losing streak for the S&P 500. This also corresponded with a six-point move in the CBOE Volatility Index (18.73, -3.78, -16.9%) by last Friday's settlement. However, the decline in the broader market remained rather orderly, amounting to only a 1.9% loss over the entire nine session stretch.
Today's buying interest also appeared somewhat methodical as heavily-weighted financials (+2.6%), industrials (+2.5%), health care (+2.4%), and technology (+2.3%) paced the advance. The controlled action likely came with the understanding that the presidential race remains fairly tight. A number of presidential polls indicate that neither candidate holds a meaningful lead beyond the margin of error. Furthermore, congressional contests also bear their own risk for headline volatility as the market appears to favor a divided government outcome.
The S&P 500 (+2.2%) retraced all of its loss going back to October 28. All 11 sectors settled in the green with financials (+2.6%) and industrials (+2.5%) ahead of the pack.
The economically-sensitive financial sector (+2.6%) outperformed amid steepening in the yield curve, a rebound in crude oil futures, and positive quarterly results from European banking names. HSBC (HSBC 38.49, +1.46, +3.9%) issued some upbeat quarterly results ahead of today's session. Meanwhile, Dow component Goldman Sachs (GS 181.48, +5.56, +3.2%) finished ahead of the price-weighted average.
In the industrial sector (+2.5%), Rockwell Automation (ROK 124.24, +6.68) gained 5.7% after beating consensus estimates for the quarter and guiding full-year revenue estimates above consensus. Trucking names also led as Cummins (CMI 130.34, +6.03) rose 4.9% after being upgraded to "Buy" from "Hold" at Evercore ISI.
Biotechnology outperformed in the health care sector (+2.4%), evidenced by the 3.8% gain in the iShares Nasdaq Biotechnology ETF (IBB 261.17, +9.47). The ETF jumped as it recovered from last week's 3.4% decline. In the group, Biogen (BIIB 295.62, +18.62) spiked 6.7% after being upgraded to "Overweight" from "Neutral" at Piper Jaffray. Meanwhile, Humana (HUM 174.97, +7.49, +4.5%) led managed care names after last week's earning beat.
In the technology sector (+2.3%), Dow components Intel (INTC 34.68, +1.07) and Microsoft (MSFT 60.44, +1.73) gained 3.2% and 3.0%, respectively. Intel finished at the top of the price-weighted average.
Treasuries finished on a lower note as the long end of the curve underperformed. The yield on the 2-yr note finished higher by three basis points (0.82%) while the yield on the 10-yr note ended up five basis points (1.83%).
Today's trading volume was above the average of 861 million as more than 889 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Consumer Credit report for September:
Total outstanding consumer credit increased by $19.3 billion in September (Briefing.com consensus $17.5 billion) after increasing an upwardly revised $26.8 billion (from $25.9 billion) in August.
Tomorrow's economic data will be limited to the Job Openings and Labor Turnover Survey for September, which will be released at 10:00 ET.
Russell 2000: +5.0% YTD
Dow Jones: +4.8% YTD
S&P 500: +4.3% YTD
Nasdaq Composite: +3.2% YTD
DJ30 +371.32 NASDAQ +119.80 SP500 +46.34 NASDAQ Adv/Vol/Dec 2557/1.746 bln/568 NYSE Adv/Vol/Dec 2454/889.7 mln/521
3:30 pm :
The dollar index was +0.7% around the 97.72 level, weighing on precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.6% around the 83.82 level
Crude oil rallied off of 6-week lows hit on Friday, snapped its 6-session loss streak, saw a boost ahead of tomorrow's Presidential election
December crude oil futures rose $0.74 (+1.7%) to $44.82/barrel
The next official OPEC meeting will take place on November 30.
API data will be released tomorrow after the bell.
Weekly EIA storage data will be released Wed at 10:30 am ET.
Monthly IEA data will be released on November 10.
Color on price action in oil:
Oil is seeing a notable boost after clocking in its biggest weekly decline (-10%) since January 2016 last week. Over the weekend, OPEC secretary general Barkindo stated that OPEC is collectively committed to the Algiers Accord.
Another contributing factor boosting oil is tomorrow's presidential election, as polls are forecasting a win for Hilary Clinton. Hilary Clinton is a proponent of clean energy, and a presidential victory for her likely means blns in oil subsidies will be lost, making it less profitable for oil & gas companies to keep pumping (a possible source of relief for the already-oversupplied oil market).
Another factor possibly providing support for oil prices was last night's 5.0 earthquake in Cushing, Oklahoma. The Oklahoma Corp Commission was assessing the pipeline network around the storage complex, reporting no damage for now.
Natural gas ended at session highs ahead of Thursday's scheduled natural gas data
December natural gas closed $0.05 higher (+1.8%) at $2.82/MMBtu
In precious metals, gold & silver ended at session lows on renewed strength in the dollar index
December gold ended today's session down $24.60 (-1.9%) to $1279.90/oz
December silver closed today's session $0.21 lower (-1.1%) at $18.16/oz
Base metal copper inched notably higher, extended Friday's rally, marked the 7th consecutive session of gains (excluding last Tuesday)
December copper closed $0.04 higher (+1.8%) at $2.31/lb
On the eve of the Presidential Election, the markets ended with the three major US indices all near highs, each gaining better than 2%, led by the Nasdaq Composite which gained 119.80 points (+2.37%) to 5166.17. The S&P 500 added 46.34 points (+2.22%) to 2131.52, and the Dow Jones Industrial Average was up 371.32 points (+2.08%) to 18259.60.
Index futures rallied overnight, lifted by news that FBI Director James Comey did not recommend criminal charges against Democratic presidential nominee Hillary Clinton in the recently re-opened email probe. Recall that Mr. Comey caught participants offside on October 28 when he announced that new e-mails from the former Secretary of State surfaced in an unrelated investigation.
Global markets also received a boost overnight from the subsiding angst. However, it is worth noting that US polls continue to forecast a fairly tight presidential race with headline volatility remaining possible. Congressional contests will also be in focus as down ballot results begin to pour in tomorrow evening.
The lone tidbit of economic data out today was the total outstanding consumer credit reading, which increased by $19.3 billion in September after increasing an upwardly revised $26.8 billion (from $25.9 billion) in August.
All 11 S&P sectors were higher today, with the Technology (XLK 47.18, +1.00 +2.17%) sector ending at highs of the day. Component Cognizant Tech (CTSH 54.75, +2.67 +5.13%) was the best performing name today following a strong Q3 result. Other sectors as measured by the S&P closed XLV +2.56%, XLF +2.51%, XLI +2.46%, XLFS +2.34%, XLY +2.31%, XLE +2.21%, XLRE +1.84%, XLU +1.75%, XLP +1.69%, XLB +1.53%, IYZ +0.88% led by the Healthcare and Financial sectors.
Monday ended with the S&P 500 Information Technology (795.85, +18.14 +2.33%) sector posted a strong Monday, but didn't recoup the $800-level after last week's sell-off. Component NVIDIA (NVDA 71.26, +3.69 +5.46%) was the best performer today following some bullish analyst commentary, putting a stop to four straight sessions of losses. Other names in the space which ended higher included STX +5.00%, HPE +4.85%, WDC +4.82%, MU +4.17%, FSLR +3.94%, AMAT +3.93%, SYMC +3.87%, WU +3.72%, ADSK +3.70%.
Other notable news items among sector components:
FLIR Systems (FLIR 32.19, +0.26 +0.81%) completed the acquisition of Point Grey Research. The company anticipates the business and related transaction costs will be about $0.01 dilutive to 2016 EPS and accretive for 2017.
Total System (TSS 49.38, +0.40 +0.82%) disclosed FTC discussions update in 10-Q.
Oracle (ORCL 39.09, +0.81 +2.12%) announced that a majority of the unaffiliated shares of NetSuite (N) were validly tendered and the other conditions to the tender offer have been satisfied. The acquisition of NetSuite will be consummated by Oracle on Monday, November 7, 2016.
CSRA (CSRA 26.34, +0.57 +2.21%) will advise U.S. Customs and Border Protection (CBP) about effective equipment options and efficient deployment methods needed to detect and prevent unlawful travel and trade through a new, single-award contract valued at $45 million over a three-year period.
CA Tech (CA 31.52, +0.84 +2.75%) appointed Kieran McGrath as CFO effective immediately.
Elsewhere in the tech space:
EarthLink (ELNK 5.60, -0.62 -9.97%) and Windstream (WIN 7.23, -0.01 -0.14%) to merge in an all-stock transaction valued at about $1.1 billion.
Live Ventures (LIVN 44.44, -0.35 -0.78%) acquired Vintage Stock in a cash and debt transaction valued at approximately $60 million. The company expects 'significant' accretion from the deal.
Wesco Aircraft (WAIR 13.05, +0.40 +3.16%) announced a multi-year agreement to provide chemical management services with Science Applications (SAIC 70.66, +2.08 +3.03%).
Dialog Semi (DLGNF 38.75, flat) agreed to make a $10 million investment in Energous (WATT 14.65, +1.67 +12.87%) and will become the exclusive component supplier of the WattUp technology.
Cooper (COO 180.22, +4.40 +2.50%) acquired IVF segment of Smiths Medical for $168 million. The company expects the deal to be $0.10 accretive to FY17 earnings.
Datalink (DTLK 11.14, +1.71 +18.13%) to be acquired by Insight Enterprises (NSIT 28.68, +0.52 +1.85%) for $11.25 per share.
Wi-LAN (WILN 1.41, +0.06 +4.44%) acquired portfolio of patents from Panasonic Corporation (PCRFY 9.56, +0.12 +1.27%). Financial details were not disclosed.
China Digital TV (STV 1.17, +0.01 +0.86%) to sell all of its equity interest in Super TV to ChangxingBao LiRuiXin Technology for consideration of RMB 610 million in cash.
Trimble (TRMB 26.79, +0.92 +3.56%) acquired privately-held Building Data based in Rocklin CA. Financial details were not disclosed.
In reaction to quarterly results:
Cognizant Tech (CTSH) reported better than expected Q3 EPS of $0.86 on in-line revenues which rose 8.4% compared to last year to $3.45 billion. For Q4, the company sees in-line EPS of $0.85-0.86 on worse than expected revenues of $3.45-3.51 billion.
First Data (FDC 14.46, 1.23 +9.30%) reported in-line Q3 EPS of $0.34 on worse than expected revenues of $2.94 billion.
Windstream (WIN 7.23, -0.01 -0.14%) reported a worse than expected Q3 loss per share of $0.72 on in-line revenues which fell 10.2% compared to a year ago to $1.35 billion. The company also reaffirmed their expectations for 2016 of total service revenue of $5.275-5.425 billion and adjusted OIBDAR of $1.90-1.95 billion. Adjusted capital expenditures are expected to be between $800-850 million.
ON Semiconductor (ON 11.46, -0.11 -0.95%) reported in-line Q3 EPS and revenues of $0.24 and $950.9 million, respectively. For Q4, the company sees in-line revenues of $1.19-1.24 billion.
Vishay (VSH 14.00, +0.15 +1.08%) reported better than expected Q3 EPS of $0.25 on in-line revenues of $592 million. For Q4, the company sees in-line Q4 revenues of $560-600 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: ACXM CNXR CRAY DTLK DMD DTSI FN FICO HCKT SAAS JKHY LSCC MXL MCHP MODN NEWR PCLN RNET RST RTEC SCSC SNCR TCX/SATS IMN LIOX PERI VPG
Analyst actions:
CYBR was upgraded to Outperform from In-Line at Imperial Capital,
HRS was upgraded to Outperform from Market Perform at Cowen,
LITE was upgraded to Strong Buy from Outperform at Raymond James,
CGNX was upgraded to Outperform at CLSA;
GPRO was downgraded to Underperform from Neutral at BofA/Merrill,
XRX was downgraded to Underweight from Equal Weight at Morgan Stanley;
HRS was initiated with a Buy at Seaport Global Securities,
VIP was initiated with an Outperform at Credit Suisse
