From Briefing.com: 4:11 pm Hewlett Packard Enterprise beats by $0.01, misses on revs; guides Q1 EPS mostly below consensus; reaffirms FY17 EPS (HPE) :
Reports Q4 (Oct) earnings of $0.61 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.60; revenues fell 7.2% year/year to $12.48 bln vs the $12.83 bln Capital IQ Consensus.
Enterprise Group revenue was $6.7 billion, down 9% Y/Y, down 3% when adjusted for divestitures and currency, with a 13.2% operating margin. Servers revenue was down 7%, down 6% when adjusted for divestitures and currency, Storage revenue was down 5%, down 3% when adjusted for divestitures and currency, Networking revenue was down 34%, flat when adjusted for divestitures and currency, and Technology Services revenue was down 4%, up 2% when adjusted for divestitures and currency.
Enterprise Services revenue was $4.7 billion, down 6% Y/Y, down 2% when adjusted for divestitures and currency, with a 10.7% operating margin. Infrastructure Technology Outsourcing revenue was down 7%, down 5% when adjusted for divestitures and currency, and Application and Business Services revenue was down 3%, up 4% when adjusted for divestitures and currency.
Software revenue was $903 million, down 6% Y/Y, flat when adjusted for divestitures and currency, with a 32.1% operating margin. License revenue was down 5%, down 1% when adjusted for divestitures and currency, support revenue was down 7%, up 1% when adjusted for divestitures and currency, professional services revenue was down 7%, down 4% adjusted for divestitures and currency, and software-as-a-service (SaaS) revenue was down 1%, up 11% adjusted for divestitures and currency.
Financial Services revenue was $814 million, up 2% Y/Y, net portfolio assets were up 4%, and financing volume was down 4%. The business delivered an operating margin of 10.2%.
Cash flow from operations +44% to $2.2 bln.
Co issues guidance for Q1, sees EPS of $0.42-0.46, excluding non-recurring items, vs. $0.46 Capital IQ Consensus Estimate.
Co reaffirms guidance for FY17, sees EPS of $2.00-2.10, excluding non-recurring items, vs. $2.02 Capital IQ Consensus Estimate.
4:10 pm HP reports EPS in-line, beats on revs; guides Q1 EPS below consensus; reaffirms FY17 EPS, in-line (HPQ) :
Reports Q4 (Oct) earnings of $0.36 per share, in-line with the Capital IQ Consensus of $0.36; revenues rose 5.2% year/year to $12.51 bln vs the $11.88 bln Capital IQ Consensus.
Personal Systems net revenue was up 4% year over year (up 5% in constant currency) with a 4.3% operating margin.
Commercial net revenue increased 3% and Consumer net revenue increased 7%.
Total units were up 5% with Notebooks units up 9% and Desktops units up 1%.
Printing net revenue was down 8% year over year (down 6% in constant currency) with a 14.0% operating margin.
Total hardware units were up 1% from the prior-year period, with Commercial hardware units up 10% and Consumer hardware units down 3%.
Supplies net revenue was down 12% (down 10% in constant currency).
Co issues downside guidance for Q1, sees EPS of $0.35-0.38 vs. $0.38 Capital IQ Consensus Estimate.
Co reaffirms guidance for FY17, sees EPS of $1.55-1.65 vs. $1.60 Capital IQ Consensus Estimate.
4:15 pm : The stock market ended the Tuesday affair on a modestly higher note with the Dow Jones Industrial Average (+0.4%), Nasdaq Composite (+0.3%), and S&P 500 (+0.2%) carving out fresh record highs. The domestically-oriented Russell 2000 (+0.9%) also notched a new all-time high, extending its November gain to 12.0%.
Equity indices jumped out of the gate as a positive tilt in global markets helped Wall Street build on yesterday's gain. However, the broader market pulled back after the opening hour, as crude oil extended its loss. The energy component was under pressure as participants continued assessing the likelihood of an OPEC supply cap agreement. Reports circulated this afternoon that Iran, Iraq, and Indonesia have expressed some misgivings about their participation in a proposed deal. The oil collective is scheduled to meet on November 30 to vote on potential supply control measures. WTI crude finished down 0.4% ($48.07/bbl; -$0.20).
The major averages were able to inch higher in the afternoon as the heavily-weighted consumer discretionary sector (+1.2%) and industrials (+0.5%) outperformed. Meanwhile, the economically-sensitive financial group (+0.1%) erased a slim loss despite modest flattening in the yield curve.
The S&P 500 (+0.2%) settled near its best level of the day, staying above the 2200 price level, which was revisited a few times during the session. Nine sectors ended in the green with telecom services (+2.1%), real estate (+1.7%), and consumer discretionary (+1.2%) outperforming. Conversely, health care (-1.4%) and energy (UNCH) ended with the only losses.
In the health care space (-1.4%), Medtronic (MDT 73.60, -6.98) tumbled 8.7% after the company reported some mixed quarterly results and provided below-consensus earnings guidance for fiscal year 2017. Meanwhile, biotechnology continued to give back some of its post-election gain as the iShares Nasdaq Biotechnology ETF (IBB 281.36, -5.35) fell 1.9%. The ETF rallied in the wake of the election as participants dialed back concerns about a possible introduction of price controls.
Retail names displayed relative strength in the consumer discretionary space (+1.2%) as the SPDR S&P Retail ETF (XRT 46.60, +1.06) gained 2.3%. Home improvement retailers outperformed on the heels of some better-than-expected housing data. Separately, discount retailer Dollar Tree (DLTR 88.68, +6.69) surged 8.2% after reporting mixed quarterly results and guiding fourth-quarter revenue near the high end of consensus estimates.
The high-beta chipmakers outperformed in the technology sector (+0.1%), evidenced by the 1.1% gain in the PHLX Semiconductor Index. Analog Devices (ADI 72.89, +3.07, +4.4%) led the index after the company beat analysts' estimates for the fourth quarter and issued upbeat revenue guidance for the first quarter.
In the financial sector (+0.1%), banking names led as the SPDR S&P Bank ETF (KBE 40.73, +0.23) finished higher by 0.6%. Separately, credit service names finished on a lower note with Visa (V 79.93, -1.76) falling 2.2%. The stock was under pressure after the company agreed to remedial actions related to the EMV transition in the United States.
Treasuries were little changed with the yield on the 2-yr note finishing flat at 1.08% while the yield on the benchmark 10-yr note slipped one basis point to 2.31%.
Today's trading volume was below the recent average of one billion as fewer than 893 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Existing Home Sales Report for October:
Existing home sales increased 2.0% to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million (from 5.47 million) in September.
The October uptick represented the second consecutive monthly increase, following declines in July and August.
Tomorrow's data will include the 7:00 ET release of the weekly MBA Mortgage Index while weekly Initial Claims (Briefing.com consensus 243k) and Durable Orders for October (Briefing.com consensus 1.1%) will each be released at 8:30 ET. The FHFA Housing Price Index for September will cross the wires at 9:00 ET. Separately, the New Home Sales Report for October (Briefing.com consensus 587k) and the final reading of the University of Michigan Consumer Sentiment Survey for November (Briefing.com consensus 91.6) are each slated to be released at 10:00 ET. The day's data will be capped off with the FOMC Minutes from the November 2 meeting, which will cross the wires at 14:00 ET.
Russell 2000: +17.3% YTD
Dow Jones: +9.2% YTD
S&P 500: +7.8% YTD
Nasdaq Composite: +7.6% YTD
DJ30 +67.18 NASDAQ +17.49 SP500 +4.76 NASDAQ Adv/Vol/Dec 1802/1.708 bln/1095 NYSE Adv/Vol/Dec 2097/892.5 mln/880
3:30 pm :
Crude oil retreated from this morning's initial 1-month high (for the second session in a row) following OPEC comments ahead of the Nov 30 meeting
January 2017 crude oil futures fell $0.20 (-0.4%) to $48.07/barrel
Contributing factors affecting the price of oil/OPEC commentary:
Crude oil futures for Jan 2017 delivery retreated from an initial 1-month high hit earlier in the session to levels as low as -2% following comments from today's technical OPEC meeting.
The 2-day technical OPEC meeting in Vienna ahead of the official Nov 30 meeting concluded today with little changed in the way of a concrete & specific production freeze agreement.
Experts in attendance recommended a 4-4.5% output reduction per each OPEC member participating in the cut, excluding Libya & Nigeria.
Iran, Iraq, and Indonesia then proceeded to express reservations about their level of participation in the proposed deal.
After these allocations were discussed, OPEC then stated they will differ the issue of Iran & Iraq supply cuts until the upcoming official meeting after both countries expressed reluctance to agree to the 4-4.5% proposal.
A representative from Nigeria in attendance at today's technical meeting discussed that disagreements remain between OPEC members regarding how to monitor independent data on production, individual member output disclosure, & Iran's previous plans to continue raising production.
Today's recent crude oil slide comes ahead of tonight's API & tomorrow's EIA inventory data release.
The dollar index was trading nearly flat, -0.04% around the 101.01 level
Commodities, as measured by the Bloomberg Commodity Index, were +0.3% around the 85.14 level
Natural gas ended higher for the third consecutive session, closed at a fresh 3-week high ahead of Thursday's inventory number
December natural gas closed $0.03 higher (+1.0%) at $2.98/MMBtu
The weekly EIA natural gas data will be released Thursday at 10:30 am ET.
In precious metals, gold extended yesterday's gains while the dollar index traded nearly flat
December gold ended today's session up $1.80 (+0.2%) to $1211.40/oz
December silver closed today's session $0.12 higher (+0.7%) at $16.63/oz
Base metal copper inched higher to close at its highest level of the session for the second day in a row
December copper closed $0.02 higher (+0.8%) at $2.54/lb
The broader market turned in another day of all-time highs, with the Dow Jones Industrial Average both eclipsing and closing above the 19,000 level for the first time in history. It led all others higher today, up 67.18 points (+0.35%) to 19023.87. The Nasdaq Composite added 17.49 points (+0.33%) to 5386.35, and the S&P 500 was higher by 4.76 points (+0.22%) to 2202.94.
Equity indices jumped out of the gate as a positive tilt in global markets helped Wall Street build on yesterday's gain. However, the broader market pulled back after the opening hour, as crude oil extended its loss. The energy component was under pressure as participants continued assessing the likelihood of an OPEC supply cap agreement. Reports circulated this afternoon that Iran, Iraq, and Indonesia have expressed some misgivings about their participation in a proposed deal. The oil collective is scheduled to meet on November 30 to vote on potential supply control measures. WTI crude finished down 0.4% ($48.07/bbl; -$0.20).
The lone piece of economic data today included the existing home sales reading which was up 2.0% to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million (from 5.47 million) in September.
Finishing the session just above flat lines, the Technology (XLK 47.99, +0.15 +0.31%) space closed out Tuesday on mostly average volume. Component Analog Devices (ADI 72.89, +3.07 +4.40%) was the best performer today after the company's better than expected Q4 print from this morning. Other sectors as measured by the S&P closed the day XLFS +2.19%, XLRE +1.72%, IYZ +1.32%, XLY +1.19%, XLB +0.61%, XLP +0.51%, XLI +0.45%, XLU +0.38%, XLF +0.04%, XLE -0.05%, XLV -1.46% with Energy and Healthcare modestly lower.
In the S&P 500 Information Technology (805.78, +0.97 +0.12%) sector, trading compounded yesterday's strong session with further gains. Component Hewlett Packard Enterprise (HPE 22.87, -0.25 -1.08%) by contrast had a mild day ahead of its Q4 earnings tonight. Other names in the space which closed modestly higher today included AVGO +2.57%, KLAC +2.57%, SYMC +2.41%, ADS +1.95%, QCOM +1.80%, INTC +1.43%, CSRA +1.41%, LLTC +1.32%, AMAT +1.31%, MU +1.28%, WU +1.05%.
Other notable news items among sector components:
Salesforce.com (CRM 75.57, -0.58 -0.76%) filed for an offering of 4,708,785 shares on behalf of selling stockholders.
Alphabet's (GOOG 768.27, -0.93 -0.12%) Google acquired Qwiklabs. Financial terms of the deal were not disclosed.
IBM (IBM 162.67, -0.10 -0.06%) announced that it is adding four new cloud data centers infused with cognitive intelligence in the UK, to keep pace with growing client demand. The investment in the new facilities underscores IBM's long-standing commitment to providing innovative solutions to the UK market and triples its cloud center capacity in the UK.
According to the WSJ, Microsoft (MSFT 61.12, +0.26 +0.43%) has offered the EU concessions regarding Outlook to secure approval for its LinkedIn (LNKD 193.72, +0.18 +0.09%) deal.
Elsewhere in the tech space:
ON Semiconductor (ON 11.88, +0.41 +3.57$) Chairman J. Daniel McCranie to retire from the Board in 2017.
AT&T (T 38.55, +0.81 +2.15%), DISH Network L.L.C., a wholly-owned subsidiary of DISH Network Corporation, and WPP (WPPGY 106.08, +0.11 +0.10%) announced plans to acquire INVIDI Technologies. Financial terms of the deal were not disclosed.
Luxoft Holding (LXFT 55.45, +1.00 +1.84%) signed a three-year agreement with UBS (UBS 15.78, +0.03 +0.19%).
Engility (EGL 36.42, +1.42 +4.06%) and Booz Allen Hamilton (BAH 36.51, +0.91 +2.56%) were named to a $240 million Washington Headquarters Services contract.
LivePerson (LPSN 8.50, flat) extended its share repurchase program through the addition of $10 million to the existing $64 million authorization .
According to Bloomberg, AT&T's (T) online streaming service will start without CBS (CBS 60.93, +0.64 +1.06%) programming.
In reaction to quarterly results:
Analog Devices (ADI) reported better than expected Q4 EPS and revenues of $1.05 and $1 billion, respectively. For Q1, the company sees EPS of $0.68-0.78 on revenues of $840-900 million.
Palo Alto Networks (PANW 139.73, -21.33 -13.24%) reported better than expected Q1 EPS of $0.55 on revenues which rose 34.0% compared to last year to $398.1 million. For Q2, the company sees EPS of $0.61-0.63 on revenues of $426-432 million.
SINA (SINA 74.05, +6.76 +10.05%) reported better than expected Q3 EPS of $0.56 on better than expected revenues which rose 21.5% compared to last year to $274.9 million.
Brocade (BRCD 12.40, +0.03 +0.24%) reported better than expected Q4 EPS and revenues of $0.33 and $657.3 million, respectively.
Companies scheduled to report tonight/tomorrow morning: HPE, HPQ, MENT, NMBL, QADA, VEEV/TSL
Analyst actions:
JBL was upgraded to Buy from Hold at Standpoint Research,
ANET was upgraded to Neutral from Underperform at BofA/Merrill,
GDDY was upgraded to Buy from Neutral at B. Riley & Co.,
AMX was upgraded to Buy from Neutral at BofA/Merrill,
RUN was upgraded to Overweight from Equal Weight at Barclays;
CSIQ was downgraded to Mkt Perform from Outperform at FBR & Co. and to Neutral from Buy at Roth Capital,
FEYE was downgraded to Sell from Neutral at Goldman,
CTSH was downgraded to Underperform at BofA/Merrill,
AMCC was downgraded to Mkt Perform at Raymond James and to Hold at Canaccord Genuity,
LVLT was downgraded to Neutral from Buy at MoffettNathanson;
BL was initiated at Robert W. Baird, JP Morgan, Goldman, Pacific Crest, William Blair and Raymond
James,
QTNA was initiated at Barclays, Deutsche Bank, Needham, William Blair, Roth Capital and Morgan Stanley, ANSS was initiated with a Hold at Needham,
CSRA was initiated with a Buy at Drexel Hamilton
