From Briefing.com: 4:57 pm Diodes announces production delay at Lee's Summit Wafer Fab; sees Q4 sales of $222 -238 mln including $10 mln impact (prior $232-248 mln) vs $240 mln consensus (DIOD)
Co announced that on Friday, November 18, 2016, Diodes' wafer fab in Lee's Summit, MO experienced a fire in its wet etch wafer fabrication area. Due to the fire, all production in KFAB has been temporarily suspended.
At this time, the Company is unable to predict when approval might be given or when repairs will be completed and subsequently approved by city inspectors.
As a result of the delayed production at KFAB, the co is revising its financial guidance for the fourth quarter of 2016. Assuming the repairs cannot be completed or approval to resume production is not received from the city in time to impact fourth quarter, the Company expects revenue to be impacted by as much as $10 million, with a revised revenue range of $222 million and $238 million (vs $240 mln consensus). Gross margin is also expected to be reduced by ~3% to 29.2 percent of revenue, plus or minus 1% (prior guidance 32.2 percent, plus or minus 1 percent).
4:44 pm Western Digital raises Q2 outlook (WDC) :
Enabled by continued strong acceptance from customers and favorable mix of its broad product portfolio, solid execution in a favorable market environment, and including the contribution of incremental intellectual property revenue from the new cross license agreement with Samsung Ltd. that was separately announced today, the company expects its second quarter revenue to be approximately $4.75 billion compared to its earlier forecast of approximately flat with first quarter revenue of $4.7 billion (Capital IQ consensus $4.72 bln).
Non-GAAP gross margin is expected to be approximately 36%, versus the earlier forecast of approximately 35%.
Non-GAAP operating expenses and net interest expense are expected to be approximately $805 million and $205 million respectively, unchanged from the original forecasts.
Non-GAAP tax rate is estimated to be approximately 13%, versus the 14% to 16% range forecasted previously.
Co has increased its forecasted second quarter non-GAAP EPS range to $2.10 to $2.15 from its earlier forecast range of $1.85 to $1.95 (Capital IQ consensus $1.90).
4:36 pm Western Digital renews patent cross-license agreement with Samsung (SSNLF); Financial terms of the renewed agreement were not disclosed (WDC) : The terms of the renewed agreement are retroactive to the end date of the prior agreement, which expired on August 14, 2016. The renewed agreement will run through December 31, 2024. The agreement includes rights to each party's patents broadly covering multi-level cell flash memory and flash storage systems. The original agreement, which dates back to 1997 and had been renewed twice before, had permitted Samsung to use patented flash memory technologies invented by SanDisk, which Western Digital acquired in May 2016.
4:18 pm Linear Tech: Analog Devices (ADI) completes long-term debt financing arrangements for proposed acquisition of Linear tech; transaction expected to close by the end of 2Q17 (LLTC) :
4:08 pm Sigma Designs beats by $0.02, misses on revs (SIGM) :
Reports Q3 (Oct) earnings of $0.09 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.07; revenues rose 1.8% year/year to $62.7 mln vs the $63.38 mln Capital IQ Consensus.
Co said, "Our profitable third quarter was led by a healthy rebound in our Internet-of-Things revenue on top of our seasonally strong Smart TV business, strong gross margin performance, and lower operating expenses. We remain encouraged by our outlook for the Internet-of-Things business, which should continue to grow as consumer adoption of Z-Wave enabled products improves. For the long-term, we expect to capitalize on the multitude of new opportunities across our business to drive revenue, and combine this execution with cost reductions, in order to deliver stronger earnings."
4:10 pm : The stock market registered its third consecutive advance on Tuesday with the S&P 500 rising 0.3% while the Nasdaq Composite (+0.5%) outperformed slightly.
Once again, the trading day was very quiet, but once again, that did not stop the market from inching higher. Investor sentiment remained upbeat despite the weekend failure of a constitutional reform referendum in Italy. The country's MIB index surged 4.2% while demand for Italian debt sent Italy's 10-yr yield lower by four basis points to 1.95%.
Equities spent the first two hours of action near their flat lines, but climbed into the afternoon amid gains in most sectors. A few cyclical sectors opened in the red, but only energy (-0.1%) remained in negative territory when the closing bell rang. To be fair, most other growth-sensitive groups settled near the broader market while financials (+1.0%) continued their recent outperformance. The financial sector extended its December gain to 2.8%.
Only one other sector-telecom services (+1.5%)-ended the day ahead of the broader market, underscoring today's range-bound action. However, small cap stocks saw more movement with the Russell 2000 rising 1.1% as participants showed increased demand for domestically-oriented names.
Market participants received a flurry of earnings, but the consumer discretionary sector (+0.3%) settled near the S&P 500 even though Autozone (AZO 779.81, +3.39) and Toll Brothers (TOL 31.94, +1.47) climbed after releasing above-consensus results. The two posted respective gains of 0.4% and 4.8% while the iShares Dow Jones US Home Construction ETF (ITB 27.86, +0.46) climbed 1.7%.
The modest uptick in the discretionary space masked a 7.6% dive in the shares of Chipotle Mexican Grill (CMG 366.37, -29.90). The stock extended its 2016 decline to 23.7% after management made cautious comments about guidance for fiscal year 2017.
Elsewhere, Dow component Boeing (BA 152.24, +0.08) made its way into the morning newsflow after President-Elect Donald Trump complained about the high cost of the Air Force One program. Shares of Boeing were down about 0.5% in early action, but the stock erased its loss by the close, likely due to the understanding that Boeing's business would see little to no impact even if the U.S. government cancelled its order for a new aircraft.
It is worth noting that the energy sector (-0.1%) displayed resilience. The sector erased a 1.0% loss even though crude oil slumped, ending the day lower by 1.5% at $50.95/bbl.
Treasuries spent the day inside narrow ranges with modest demand for the 10-yr note sending its yield lower by a basis point to 2.39%.
Today's participation was a bit light as fewer than 860 million shares changed hands at the NYSE floor.
Economic data included Productivity, Unit Labor Costs, Trade Balance, and Factory Orders:
Third-quarter productivity was left unrevised at 3.1% (Briefing.com consensus 3.3%) while Unit Labor Costs were revised up to 0.7% from 0.3% (Briefing.com consensus 0.2%)
Higher unit labor costs may not be the best thing for corporate profit margins, yet there is an encouraging element for consumer spending growth since the revision for unit labor costs was driven solely by an increase in hourly compensation growth
The trade deficit widened to $42.6 billion in October (Briefing.com consensus -$41.8 bln) from an upwardly revised $36.2 billion deficit (from -$36.4 bln) in September
Net exports will be a drag on fourth-quarter real GDP, considering October real trade deficit of $60.30 billion was above the third-quarter average of $56.60 billion
New orders for manufactured goods increased 2.7% in October (Briefing.com consensus +2.5%) on top of an upwardly revised 0.6% increase (from 0.3%) in September
Overall demand remains sluggish, considering orders are still down 2.0% year-over-year
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while October JOLTS will be announced at 10:00 ET. October Consumer Credit (Briefing.com consensus $18.70 billion) will be reported at 15:00 ET.
Russell 2000 +19.5% YTD
Dow Jones Industrial Average +10.5% YTD
S&P 500 +8.2% YTD
Nasdaq Composite +6.5% YTD
DJ30 +35.54 NASDAQ +24.11 SP500 +7.52 NASDAQ Adv/Vol/Dec 1901/1.79 bln/972 NYSE Adv/Vol/Dec 2098/859.5 mln/851 3:30 pm :
Crude oil snapped its 4-session streak after OPEC reported another all-time high in oil production, despite last Wednesday's agreement to cut OPEC output by 1.2 mln barrels/day
Jan 2017 crude oil futures fell $0.78 (-1.5%) to $50.95/barrel
Contributing factors affecting the price of oil:
The latest OPEC data comes ahead of the Dec 10 meeting with OPEC & non-OPEC producers in Vienna to discuss the details of the 600k barrel/day non-OPEC production cut.
OPEC's oil output set another record high in Nov, rising to 34.2 mln barrels/day from 33.8 mln barrels/day in Oct.
Reminder: Over the weekend, Russia, the largest non-OPEC oil producer, reported Nov avg daily oil output at 11.2 mln barrels/day. That was its highest output level in ~30 years. Russia is expected to make up half of the non-OPEC portion of the production cut, or 300k barrels/day.
EIA data will be released tomorrow at 10:30 am ET.
API data is expected to be released today after the bell.
Natural gas reversed their initial morning gains and closed modestly lower ahead of Thursday's EIA
Jan 2017 natural gas closed $0.02 lower (-0.6%) at $3.63/MMBtu
Weekly EIA data will be released Thursday at 10:30 am ET.
In precious metals, gold & silver traded lower on continued strength in the dollar index
Feb 2017 gold ended today's session down $6.60 (-0.6%) to $1170.00/oz
Mar 2017 silver closed today's session $0.12 lower (-0.7%) at $16.80/oz
The dollar index reversed initial morning losses and traded to a session high, +0.4% around the 100.49 level
Commodities, as measured by the Bloomberg Commodity Index, were -0.4% around the 88.03 level
Base metal copper closed just shy of yesterday's 17-month high
Mar 2017 copper closed $0.02 lower (-0.7%) at $2.68/lb
When Tuesday came to a close, the S&P 500 had carved out its third straight session of gains. Leading the broader market higher today, though, was the Nasdaq Composite which added 24.11 points (+0.45%) to 5333.00. The S&P 500 was up 7.52 points (+0.34%) to 2212.23, and the Dow Jones Industrial Average gained 35.54 points (+0.18%) to 19251.78. Helping the Nasdaq out-perform today, top Nasdaq 100 names NFLX +4.5%, VRTX +3.4%, INCY +2.3%, SIRI +1.9% and TMUS +1.8% all finished strong.
Once again, the trading day was very quiet, but once again, that did not stop the market from inching higher. Investor sentiment remained upbeat despite the weekend failure of a constitutional reform referendum in Italy. The country's MIB index surged 4.2% while demand for Italian debt sent Italy's 10-yr yield lower by four basis points to 1.95%.
Market data today included third-quarter productivity which was left unrevised at 3.1% while Unit Labor Costs were revised up to 0.7% from 0.3%. Also, the trade deficit widened to $42.6 billion in October from an upwardly revised $36.2 billion deficit (from -$36.4 billion) in September. Lastly, new orders for manufactured goods increased 2.7% in October on top of an upwardly revised 0.6% increase (from 0.3%) in September.
The Technology (XLK 47.28, +0.14 +0.30%) space ended around middle of the pack today as only Energy and Utilities under-performed. Component Autodesk (ADSK 76.32, +5.14 +7.22%) out-performed on no specific catalyst. Other sectors as measured by the S&P closed the session XLFS +2.19%, XLF +0.87%, IYZ +0.74%, XLRE +0.43%, XLP +0.30%, XLV +0.28%, XLY +0.23%, XLI +0.19%, XLB +0.12%, XLE -0.19%, XLU -0.19%.
In the S&P 500 Information Technology (790.66, +1.51 +0.19%) sector, trading cleared flat lines higher in the final moments of action aided by a push higher in the broader market. Component Western Union (WU 21.63, +0.74 +3.54%) was higher today after announcing a strategic investment in Walletron. Other names in the space which finished higher today included QRVO +3.01%, WDC +2.83%, MU +2.42%, SWKS +1.80%, ADS +1.69%, NVDA +1.64%, QCOM +1.64%, MSI +1.61%, GLW +1.52%, NTAP +1.44%, KLAC +1.42%, ORCL +1.28%, TXN +1.22%, CTSH +0.99%.
Other news items among components:
Microsoft's (MSFT 59.95, -0.27 -0.45%) deal to acquire LinkedIn (LNKD 195.94, +0.69 +0.35%) was cleared by the European Union, subject to conditions.
According to the Wall Street Journal, Softbank's (SFTBY 30.99, +0.90 +2.99%) Masayoshi Son met with President elect Donald Trump to discuss a $50 billion investment in the US to create jobs.
Equinix (EQIX 329.49, -2.59 -0.78%) to acquire a portfolio of 24 data center sites and their operations from Verizon (VZ 50.36, +0.61 +1.23%) for $3.6 billion. The company expects the portfolio to be accretive to adjusted funds from operations per share upon closing.
Western Union (WU) made a strategic investment in Walletron.
GoDaddy (GDDY 36.37, +1.63 +4.69%) acquired Host Europe Group for $1.79 billion. The company intends to explore strategic alternatives for the PlusServer business.
IntraLinks Holdings (IL 13.12, +1.85 +16.42%) to be acquired by Synchronoss Technologies (SNCR 42.59, -6.41 -13.08%) for $13.00 per share in cash, or about $821 million.
Digital Ally (DGLY 5.00, -0.10 -1.96%) announced plans to enter the non-lethal weapon market.
Wi-LAN (WILN 1.41, flat) acquired a portfolio of patents from Eastman Kodak (KODK 15.85, +0.35 +2.26%). Financial terms of the deal were not disclosed.
Synopsys (SNPS 58.00, +0.58 +1.01%) initiated a $100 million accelerated share repurchase agreement.
ComScore (SCOR 30.07, +0.91 +3.12%) co-founder Dr. Magid Abraham resigned from the Board.
ePlus (PLUS 113.55, +0.35 +0.31%) acquired the IT Services equipment and integration business of
Consolidated Communications (CNSL 27.21, flat).
Advanced Micro (AMD 9.45, +0.77 +8.87%) shares were strong today following a Tweaktown article that the company's Radeon GPU might power Intel's (INTC 34.72, +0.33 +0.96%) GPUs.
Asure Software (ASUR 8.01, -0.61 -7.08%) priced an underwritten public offering of 1,695,000 newly issued shares of common stock at $8.00 per share.
TSYS (TSS 48.23, -0.49 -1.01%) renewed its payments agreement with Advanzia Bank S.A., the largest issuer of credit cards in Luxembourg, to continue processing the bank's consumer credit card portfolio.
PAR Technology (PAR 5.29, +0.01 +0.19%) appointed Bryan Menar as its new CFO effective January 3
Teradyne (TER 24.97, +0.70 +2.88%) announced a private offering of $400 million of senior convertible notes.
Micron Technology (MU 19.06, +0.45 +2.42%) has completed the acquisition of Inotera Memories; Micron acquired all of Inotera's outstanding shares for consideration worth 30 New Taiwan Dollars per share or about $0.94 per share.
Cognizant (CTSH 55.30, +0.54 +0.99%) announced the expansion of its operations in the Kingdom of Saudi Arabia with the opening of a new office in Riyadh
In reaction to quarterly results:
Photronics (PLAB 10.25, +0.45 +4.59%) reported better than expected Q4 EPS of $0.05 on in-line revenues of $107.37 million. The company also guided Q1 EPS and revenues in-line at $0.01-0.06 an $104-112 million, respectively.
Coupa Software (COUP 27.74, +1.72 +6.61%) reported a better than expected Q3 loss per share of $0.22 on better than expected revenues of $35.44 million. For Q4, the company sees EPS and revenues ahead of market expectations at ($0.19)-($0.16) and $35.5-36 million, respectively.
Stocks set to report quarterly results tonight/tomorrow morning: APDN, HQY, SEAC, SIGM/SCWX
Analyst actions:
NFLX was upgraded to Hold from Sell at Evercore ISI,
CNSL was upgraded to Mkt Perform from Underperform at Raymond James,
P was upgraded to Outperform from Perform at Oppenheimer;
CBB was downgraded to Underperform from Mkt Perform at Raymond James,
SPWR was downgraded to Neutral from Buy at Guggenheim,
IL was downgraded to Mkt Perfrom from Mkt Outperform at JMP Securities;
LDOS was initiated with an Outperform at Oppenheimer,
AVGO, INVN, CAVM, MRVL, SIMO, CY, IDTI, RMBS, MXIM, AMD were initiated with Buy ratings at Loop Capital,
HLIT was initiated with a Buy at Dougherty,
GDS was initiated with an Outperform at RBC Capital Mkts,
P, XOXO and ETN were initiated with Buy ratings at Aegis Capital,
SBAC was initiated with a Neutral at Macquarie,
ENPH was initiated with a Buy at Craig Hallum,
SPSC was initiated with a Buy at The Benchmark Company,
TEF was initiated with a Hold at Societe Generale
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