From Briefing.com: 4:19 pm Skyworks beats by $0.03, beats on revs; guides Q2 EPS in-line, revs above consensus; initiates new $500 mln stock buyback plan (SWKS) :
Reports Q1 (Dec) earnings of $1.61 per share, $0.03 better than the Capital IQ Consensus of $1.58; revenues fell 1.3% year/year to $914.3 mln vs the $902.66 mln Capital IQ Consensus.
Co issues guidance for Q2, sees EPS of $1.40, excluding non-recurring items, vs. $1.39 Capital IQ Consensus Estimate; sees Q2 revs of $840 mln vs. $816.85 mln Capital IQ Consensus Estimate.
"Given our expanding product pipeline and accelerating design win momentum, we expect to outperform industry seasonality in the March quarter," said Kris Sennesael, senior vice president and chief financial officer of Skyworks. "Specifically, for the second fiscal quarter of 2017, we anticipate revenue of $840 million, up 8 percent year-over-year, with non-GAAP diluted earnings per share of $1.40. Further, given the confidence in our business model and plans to enhance cash returns to our shareholders, today we are separately announcing that our Board of Directors has authorized a new $500 million stock repurchase program."SWKS is an Apple (AAPL) supplier.RFMD peers: AVGO, QRVO; SMH.
4:11 pm IBM beats by $0.13, reports revs in-line; guides FY17 EPS just above consensus (IBM) :
Reports Q4 (Dec) earnings of $5.01 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus of $4.88; revenues fell 1.3% year/year to $21.77 bln vs the $21.63 bln Capital IQ Consensus.
Cognitive Solutions (includes solutions software and transaction processing software) -- revenues of $5.3 bln, up 1.4% (up 2.2% adjusting for currency) were driven by growth in cloud, analytics and security.
Global Business Services (includes consulting, global process services and application management) -- revenues of $4.1 bln, down 4.1% (down 3.6% adjusting for currency).
Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software) -- revenues of $9.3 bln, up 1.7% (up 2.4% adjusting for currency). Growth was driven by strong hybrid cloud services, analytics and security performance.
Systems (includes systems hardware and operating systems software) -- revenues of $2.5 bln, down 12.5% (down 12.1% adjusting for currency). Gross profit margins improved driven by z Systems performance.
Fourth-quarter cloud revenues increased 33%. The annual exit run rate for cloud as-a-service revenue increased to $8.6 bln from $5.3 bln at year-end 2015. Revenues from analytics increased 9%. Revenues from mobile increased 16% (up 17% adjusting for currency) and revenues from security increased 7% (up 8% adjusting for currency).
Co issues upside guidance for FY17, sees EPS of at least $13.80, excluding non-recurring items, vs. $13.74 Capital IQ Consensus Estimate.
"In 2016, our strategic imperatives grew to represent more than 40 percent of our total revenue and we have established ourselves as the industry's leading cognitive solutions and cloud platform company," said Ginni Rometty, IBM chairman, president and chief executive officer. "IBM Watson is the world's leading AI platform for business, and emerging solutions such as IBM Blockchain are enabling new levels of trust in transactions of every kind."
4:20 pm : A wait-and-see attitude lingered throughout today's trading session, but the rubber will finally meet the road tomorrow when Donald Trump becomes the 45th President of the United States and gets a chance to deliver on promises that drove the stock market to a fresh record high. The S&P 500 and the Nasdaq closed lower by 0.5% and 0.3%, respectively.
The stock market enjoyed a huge post-election advance, rallying on the vision that Donald Trump promised his electorate; deregulation of the financial industry and increased infrastructure spending. But with over two months to price-in those hopes, investors haven't had much to do as of late but sit back and wait.
This notion has been most apparent in the financial sector (-0.6%), which has been weak despite a growing batch of better-than-expected earnings reports. But in the same breath, after the sector's huge 20.5% Q4 advance, earnings reports are more likely to invoke a "sell-the-news" response.
However, that's not to say the stock market hasn't had its opportunities to move, as the news flow has been steady. For instance, the European Central Bank announced its latest policy decision this morning. The market response was muted, however, as the ECB left rates and the stimulus program unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro slid in reaction to Mr. Draghi's remarks, but retraced that decline to end higher by 0.3% against the dollar at 1.0660.
Economic data also had its chance to move the market, but a better than expected Housing Starts report (1226K; Briefing.com consensus 1193K) could not prevent homebuilders from retreating. The iShares Dow Jones US Home Construction ETF (ITB 27.63, -0.32) lost 1.1%. Separately, initial claims and the Philadelphia Fed survey were met with a muted reaction.
Conversely, corporate news did have some market-moving impact, pushing the industrial sector (+0.6%) atop of the day's leaderboard. Railroads traded up after Union Pacific (UNP 106.24, +2.47) reported above-consensus earnings and Canadian Pacific (CP 150.31, +5.09) CEO Hunter Harrison left the company to pursue changes at CSX (CSX 45.51, +8.63). Shares of CSX spiked 23.4% after The Wall Street Journal reported Mr. Harrison will partner up with activist investor Paul Hilal.
At the opposite end of today's leaderboard were utilities (-0.9%) and real estate (-1.0%), suffering from an uptick in Treasury yields. Treasuries were in negative territory for the entire session, but the benchmark 10-yr yield retreated from its high by the close, ending higher by four basis points at 2.47%.
Energy (-0.7%) finished only slightly better, ignoring crude oil's modest gain. The commodity finished up 0.5% at $51.27/bbl despite the Energy Information Administration reporting that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels.
The top-weighted technology sector (-0.3%) also finished in the red, but ahead of the broader market. Consumer discretionary finished in a similar spot (-0.3%) despite an uptick from its largest component, Amazon (AMZN 809.04, +1.56). The sector was pulled down by retailers who sent the SPDR S&P 500 Retail ETF (XRT 43.52, -0.80) lower by 1.8% on continued weakness following disappointing holiday sales.
Today's economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:
The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).
The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.
The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.
The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.
Investors will not receive any economic data on Friday, allowing them to focus their attention on President-elect Trump's Inauguration at 12:00 ET.
Russell 2000 -0.8% YTD
Dow Jones Industrial Average -0.2% YTD
S&P 500 +1.1% YTD
Nasdaq Composite +3.0% YTD
DJ30 -72.32 NASDAQ -15.57 SP500 -8.20 NASDAQ Adv/Vol/Dec 848/1.66 bln/2215 NYSE Adv/Vol/Dec 739/890.8 mln/2203 3:30 pm :
Crude oil futures ended in the green following the monthly IEA data, despite EIA data showing builds above Consensus for both crude & gasoline inventories
Feb crude oil futures rose $0.26 (+0.5%) to $51.37/barrel
Baker Hughes rig count data will be released at 1 pm ET tomorrow.
Reminder: Oil likely found support near its session low following the EIA release due to monthly IEA report released earlier in the day, which showed OPEC production declines in Dec & a raised global oil demand forecast - see 7:21 am ET comment for highlights
EIA highlights:
Crude oil inventories had a build of +2.3 mln barrels (consensus called for a draw of -0.342 mln barrels).
Gasoline inventories had a build of +6.0 mln barrels (consensus called for a build of +2.023 mln barrels).
Distillate inventories had a draw of -1.0 mln barrels.
Natural gas ended pit trading near session highs & snapped its 2-session streak of losses on bullish EIA which showed a draw above Consensus
Feb natural gas closed $0.08 higher (+2.4%) at $3.37/MMBtu
EIA highlights:
Natural gas inventory showed a draw of -243 bcf vs expectations for inventory to be a draw of approximately -231 bcf.
Working gas in storage was 2,917 Bcf as of Friday, January 13, 2017, according to EIA estimates.
Stocks were 431 Bcf less than last year at this time and 77 Bcf below the five-year average of 2,994 Bcf.
At 2,917 Bcf, total working gas is within the five-year historical range.
In precious metals, gold retreated from a 2-month high hit intra-day yesterday & extended yesterday's modest loss on continued dollar index strength ahead of the Trump Inauguration
Feb 2017 gold ended today's session down $10.90 (-0.9%) to $1201.20/oz
Mar 2017 silver closed today's session $0.36 lower (-2.1%) at $16.92/oz
The dollar index was +0.2% around the 101.17 level, weighed on precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.7% around the 88.14 level
After a split, but mostly positive Wednesday, stocks were lower on Thursday. Beginning the session in the green, action quickly turned lower following economic data, ultimately ending with the Dow Jones Industrial Average lower by 72.32 points (-0.37%) to 19732.40. The S&P 500 was down 8.20 points (-0.36%) when the bell rang to 2263.69, and the Nasdaq Composite shed 15.57 points (-0.28%) to 5540.08. Action in the heavily weighted Nasdaq 100 was soft too, but losses could have been worse were it not for components like Netflix (NFLX 138.41, +5.15 +3.86%) which reported earnings and revenues for Q4 last night, topping market expectations.
Economic data today included the latest weekly initial jobless claims count which totaled 234,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million). Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). Building permits declined to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. Lastly, the Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5).
Jostling between gains and losses today, the Technology (XLK 49.53, -0.07 -0.14%) space ultimately ended modestly in the red as the latter half of the session held a downward bias. Component Western Union (WU 21.13, -0.72 -3.30%) was the worst performing name today after the company confirmed a settlement with the FTC and Justice Department to forfeit $586 million in relation to anti-money laundering violations and consumer fraud charges. Other sectors as measured by the S&P closed XLRE -0.97%, XLU -0.88%, XLB -0.63%, XLV -0.62%, XLE -0.55%, XLF -0.43%, XLP -0.36%, XLY -0.30%, IYZ -0.14%, XLI +0.73% with all but Industrials in the red.
In the S&P 500 Information Technology (831.66, -2.10 -0.25%) space, trading spent equal time above and below flat lines today, but as the bell rang, action skewed to the downside. Component HP Inc (HPQ 14.86, +0.28 +1.92%) was one of the better performing names today after being upgraded to a 'Buy' rating in the premarket at UBS. Other names in the space which closed lower today with the broader sector included MU -2.73%, STX -2.42%, WDC -2.14%, QRVO -1.45%, CTSH -1.24%, MCHP -1.22%, XRX -1.14%, CSRA -1.10%, QCOM -1.06%, TDC -1.04%, SWKS -1.02%, FLIR -1.02%.
Other notable news items among sector components:
Western Union (WU) confirmed anti-money laundering violations and settles consumer fraud charges, forfeits $586 million in settlement with FTC and Justice Department.
The FBI has awarded Accenture Federal Services (ACN 115.50, -0.45 -0.39%) a seven-year blanket purchase agreement with a $100 million ceiling for the provision of application services and the continued introduction of digital solutions to further enhance the bureau's human resources systems capabilities.
ACN also acquired the corporate advisory and aviation consulting businesses of Seabury Group. Financial details were not disclosed.
Oracle (ORCL 39.21, +0.02 +0.05%) to acquire Apiary. Financial terms of the deal were not disclosed.
Wi-LAN (WILN 1.65, +0.03 +1.85%) confirmed the Court of Appeals granted positive rulings in case against
Ericsson (ERIC 5.82, -0.09 -1.52%).
Sphere 3D (ANY 0.36, +0.06 +21.67%) to acquire HVE and Unified ConneXions. The transaction is expected to be accretive to ANY in Q1.
Coupa Software (COUP 25.33, +0.17 +0.68%) announced a 'significant' manufacturing customer in Germany.
Leidos (LDOS 49.69, -0.13 -0.26%) received a prime contract by the U.S. Army Program Executive Office - Simulation, Training and Instrumentation value at about $22 million.
Everbridge (EVBG 18.72, -0.01 -0.05%) acquired Svensk Krisledning and its mobile collaboration and crisis management product Crisis Commander. Financial terms of the deal were not disclosed.
SBA Comm (SBAC 105.76, -1.30 -1.21%) amended/restated bylaws became effective upon closing of merger on January 13 - included changes to proxy access provisions.
Toshiba (TOSBF 2.18, -0.29 -11.74%) shares were lower after report that company might have a JPY 700 billion/$6 billion write-down on nuclear unit.
Following quarterly results:
Check Point Software (CHKP 96.34, +6.73 +7.51%) reported better than expected Q4 EPS and revenues of $1.46 and $486.7 million, respectively. For Q1, the company sees better than expected EPS and revenues of $1.15-1.20 and $420-440 million, respectively.
Netflix (NFLX) reported better than expected Q4 earnings of $0.15 and revenues of $2.48 billion. For Q1, the company sees EPS ahead of market views at $0.37. Additionally, NFLX's Q4 sub number was huge, coming in at 7.05 million net adds vs guidance of 5.20 million. Both the domestic and international net add results came in ahead of guidance, in fact, as NFLX also reported average selling price (ASP) growth of 15%.
Plexus (PLXS 53.31, -0.10 -0.19%) reported better than expected Q1 earnings of $0.82 on revenues of $635 million. For Q2, the company sees revenues below market expectations at $620-650 million. Also, GAAP EPS is expected at $0.71-0.79.
PTC (PTC 50.21, +2.83 +5.97%) reported in-line Q1 EPS and revenues of $0.26 and $286 million, respectively. For Q2, PTC guided EPS in-line but revenues below market expectations at $0.26-0.31 and $280-285 million, respectively. For FY17, PTC lowered revenue guidance and narrowed its EPS guidance range. The resulting guidance for FY17 is EPS of $1.20-1.30 from prior $1.20-1.35 and revenues of $1.17-1.18 billion from prior $1.19-1.21 billion.
Companies scheduled to report quarterly results tonight: TEAM, IBM, SWKS
Analyst actions:
HPQ was upgraded to Buy from Neutral at UBS,
NFLX was upgraded to Neutral from Underperform at Macquarie,
MBLY was upgraded to Buy from Neutral at Goldman,
DBD was upgraded to Outperform from In-Line at Imperial Capital;
AAPL was downgraded to Negative from Mixed at OTR Global,
NTCT was downgraded to Sector Perform from Outperform at RBC Capital Mkts,
ASML was downgraded to Neutral from Buy at Citigroup,
ERIC was downgraded to Sell from Neutral at Goldman,
CEL was downgraded to Equal Weight from Overweight at Barclays;
MRCY was initiated with a Buy at SunTrust,
FLIR was initiated with a Hold at SunTrust,
VZ was initiated with a Buy at HSBC,
INFN was initiated with a Neutral at Piper Jaffray,
BELFB was initiated with a Buy at B. Riley & Co.
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