From Briefing.com: 5:35 pm Tower Semi: Audio Pixels fabrication partner Tower Semiconductor reached a 'critical milestone' with the initial delivery of half structure MEMS devices (TSEM) : Over the coming weeks a number of additional interim delivery milestones have been coordinated with Tower to further enable compliance testing without disrupting Tower's rapid advancement toward the production of fully functional MEMS devices. Audio Pixels and Tower personnel are making every effort to improve on the initial advised timelines for the delivery of fully functional MEMS devices by May 31st 2017; which would eclipse the latest advised delivery by our second MEMS vendor.
4:24 pm Juniper Networks beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs in-line (JNPR) :
Reports Q4 (Dec) earnings of $0.66 per share, $0.03 better than the Capital IQ Consensus of $0.63; revenues rose 5.0% year/year to $1.39 bln vs the $1.36 bln Capital IQ Consensus.
Non-GAAP operating margin for the fourth quarter of 2016 was 26.5%, an increase from 26.0% in the fourth quarter of 2015, and an increase from 24.4% in the third quarter of 2016.
Co issues guidance for Q1, sees EPS of $0.38-0.44, excluding non-recurring items, vs. $0.45 Capital IQ Consensus Estimate; sees Q1 revs of $1.190-1.210 bln vs. $1.2 bln Capital IQ Consensus Estimate.
Non-GAAP gross margin will be approximately 62.5%, plus or minus 0.5%.
Non-GAAP operating expenses will be approximately $515 million, plus or minus $5 million.
Non-GAAP operating margin will be approximately 19.5% at the midpoint of revenue guidance.
4:20 pm Super Micro Computer beats by $0.02, beats on revs; guides Q3 EPS above consensus, revs above consensus (SMCI) :
Reports Q2 (Dec) earnings of $0.48 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.46; revenues rose 2.0% year/year to $651.9 mln vs the $609.2 mln Capital IQ Consensus and guidance of $570-640 mln.
Non-GAAP gross margin for the second quarter was 14.4% compared to 16.7% in the same period a year ago.
Co issues upside guidance for Q3, sees EPS of $0.34-0.42, excluding non-recurring items, vs. $0.32 Capital IQ Consensus Estimate; sees Q3 revs of $570-630 mln vs. $552.03 mln Capital IQ Consensus Estimate.
"We expect to continue the growth of last quarter and be reflected in the year-over-year revenue growth in the March quarter based on an increasing number of sizable customer engagements demanding the performance and advantages of our leading product lines. In addition, we are well positioned to benefit from technology transitions in 2017 and have upgraded our product lines to optimize these new technologies."
4:18 pm Celestica beats by $0.09, beats on revs; guides Q1 EPS in-line, revs in-line (CLS) :
Reports Q4 (Dec) earnings of $0.41 per share, $0.09 better than the Capital IQ Consensus of $0.32; revenues rose 7.2% year/year to $1.62 bln vs the $1.55 bln Capital IQ Consensus.
Co issues in-line guidance for Q1, sees EPS of $0.24-0.30 vs. $0.27 Capital IQ Consensus Estimate; sees Q1 revs of $1.4-1.5 bln vs. $1.41 bln Capital IQ Consensus Estimate.
"Celestica delivered a strong fourth quarter, with growth in revenue of 7% and growth in operating earnings of 16%, compared to the fourth quarter of 2015," said Rob Mionis, Celestica's President and Chief Executive Officer. "Celestica's strong close to the year helped deliver full-year 2016 revenue growth of 7%, 14% growth in operating earnings and over $100 million of free cash flow. Among the many highlights for 2016, we achieved our highest level of operating margins since 2001 and the highest revenue levels since 2012."
4:17 pm KLA-Tencor beats by $0.12, beats on revs (KLAC) :
Reports Q2 (Dec) earnings of $1.52 per share, $0.12 better than the Capital IQ Consensus of $1.40; revenues rose 23.5% year/year to $877 mln vs the $838.99 mln Capital IQ Consensus.
Co states: "In addition, new orders topped $1 billion for the first time in the December quarter, reflecting KLA-Tencor's market leadership and the critical role process control plays in enabling our customers' success at the leading edge. These outstanding results are against the backdrop of a healthy overall demand environment for wafer fab equipment in the marketplace today, and position KLA-Tencor with good momentum heading into calendar 2017."
4:16 pm Maxim Integrated beats by $0.03, beats on revs; guides Q3 EPS in-line with midpoint above consensus, revs in-line (MXIM) :
Reports Q2 (Dec) earnings of $0.46 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.43; revenues rose 7.9% year/year to $551 mln vs the $540.48 mln Capital IQ Consensus.
Co issues in-line guidance for Q3, sees EPS of $0.49-0.55, excluding non-recurring items, vs. $0.50 Capital IQ Consensus Estimate; sees Q3 revs of $555-595 vs. $568.33 mln Capital IQ Consensus Estimate. Backlog $388 mln.
"Our December quarter marked the beginning of our return to revenue growth, as Automotive, Core Industrial and diversification in Consumer all contributed gains from the same quarter last year." Mr. Doluca continued, "In the March quarter, we expect to build upon our growth momentum in our Automotive and Industrial businesses."
4:15 pm Microsoft beats by $0.04, beats on revs; guides on call (MSFT) :
Reports Q2 (Dec) earnings of $0.83 per share, $0.04 better than the Capital IQ Consensus of $0.79; revenues rose 1.5% year/year to $26.07 bln vs the $25.29 bln Capital IQ Consensus.
Revenue in Productivity and Business Processes was $7.4 billion and increased 10% (up 12% in constant currency),
Revenue in Intelligent Cloud was $6.9 billion and increased 8% (up 10% in constant currency),
Revenue in More Personal Computing was $11.8 billion and decreased 5% (down 4% in constant currency) driven primarily by lower phone revenue,
"I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,"
Microsoft will provide forward-looking guidance on its conference call at 5:30 pm ET
4:12 pm Flex beats by $0.01, misses on revs; guides Q4 EPS in-line, revs in-line (FLEX) :
Reports Q3 (Dec) earnings of $0.34 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.33; revenues fell 9.6% year/year to $6.12 bln vs the $6.21 bln Capital IQ Consensus.
Adjusted gross margin increased approximately 40 basis points on a year-over-year basis.
Co issues in-line guidance for Q4, sees EPS of $0.27-0.31, excluding non-recurring items, vs. $0.29 Capital IQ Consensus Estimate; sees Q4 revs of $5.5-5.9 bln vs. $5.72 bln Capital IQ Consensus Estimate.
4:10 pm Intel beats by $0.04, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY17 EPS below consensus (INTC) :
Reports Q4 (Dec) earnings of $0.79 per share, $0.04 better than the Capital IQ Consensus of $0.75; revenues rose 10.1% year/year to $16.4 bln vs the $15.75 bln Capital IQ Consensus.
Client Computing Group revenue of $9.1 billion, up 4 percent year-over-year
Data Center Group revenue of $4.7 billion, up 8 percent year-over-year
Internet of Things Group revenue of $726 million, up 16 percent year-over-year
Co issues upside guidance for Q1, sees EPS of $0.65 vs. $0.61 Capital IQ Consensus Estimate; sees Q1 revs of $14.8 bln vs. $14.51 bln Capital IQ Consensus Estimate. Sees 63% gross margin.
Co issues guidance for FY17, sees EPS of $2.80 vs. $2.81 Capital IQ Consensus Estimate; sees FY17 revs flat, which would imply roughly $59.5 bln vs. $60.85 bln Capital IQ Consensus Estimate. Sees 63% gross margin.
"The fourth quarter was a terrific finish to a record-setting and transformative year for Intel. In 2016, we took important steps to accelerate our strategy and refocus our resources while also launching exciting new products, successfully integrating Altera, and investing in growth opportunities," said Brian Krzanich, Intel CEO. "I'm pleased with our 2016 performance and confident in our future."
4:10 pm Alphabet misses by $0.26, beats on revs (GOOG) :
Reports Q4 (Dec) earnings of $9.36 per share, excluding non-recurring items, $0.26 worse than the Capital IQ Consensus of $9.62; revenues rose 22.2% year/year to $26.06 bln vs the $25.14 bln Capital IQ Consensus.Other Bets revenue $262 mln compared to $150 mln in prior year; Loss of ($1.08 bln) compared to a Loss of ($1.213 bln) in prior year.Cost of Revenue- 41% compared to 38% in prior year.Operating Expense as % of revenue 34% compared to 36% in prior yearFree Cash Flow $6.335 blnEffective Tax Rate 22%Aggregate Paid Clicks-Q4- +36%, street expectations were +25%; Q3 +33%; Q2 +29%; Q1 +29%.
Paid Clicks on Google websites- Q4 +43%; Q3 +42%; Q2 +37%; Q1 +38%.
Paid clicks on member sites- Q4 +7%; Q3 +1%; Q2 0%; Q1 +2%.
Aggregate cost per click-
Q4- -15%, street expectations were for approx -15%; Q3 -11%; Q2 -7%; Q1 -9%.
CPC on Google sites- Q4- -16%; Q3 -13%; Q2 -9%; Q1 -12%.
CPC on member sites- Q4- -19%; Q3 -14%; Q2 -8%; -8%; Q1 -8%.
4:05 pm Microsemi reports EPS in-line, revs in-line; guides Q2 EPS above consensus, revs above consensus (MSCC) :
Reports Q1 (Dec) earnings of $0.86 per share, in-line with the Capital IQ Consensus of $0.86; revenues rose 32.3% year/year to $435.5 mln vs the $435.25 mln Capital IQ Consensus.
Co issues upside guidance for Q2, sees EPS of $0.86-0.96 vs. $0.89 Capital IQ Consensus Estimate; sees Q2 revs of $430-450 mln vs. $439.99 mln Capital IQ Consensus Estimate.
"During our first fiscal quarter of 2017, we continued to execute on our winning strategy," stated James J. Peterson, Microsemi's chairman and CEO. "Gross margins improved 90 basis points sequentially, benefiting from strong results in our data center and optical end markets as well as the realization of expected integration synergies. These efforts will enable us to outgrow the industry and outperform our peers to the benefit of our shareholders."4:10 pm : Investors were very selective of their pitches when they stepped up to the plate on Thursday, ultimately choosing to take ball four rather than risking a swing and miss. Despite news, earnings, and economic data, the major averages finished in the neighborhood of where they began, with the S&P 500 (-0.1%) closing just a tick lower.
Conversely, Donald Trump did take a swing today tweeting that Mexican President Enrique Pena Nieto should cancel his upcoming meeting with the U.S. President "if Mexico is unwilling to pay for the badly needed wall." The Mexican President responded by doing just that.
The market ticked down ever so slightly on Mr. Pena Nieto's response, but regardless, the incident does highlight some concerns about Mr. Trump's ability to play nice with foreign leaders. Only time will tell if President Trump's international agenda will be as friendly to the stock market as his domestically focused, pro-growth one has been so far.
Sector standings looked just as unenthusiastic as the market itself with some sectors green, some red, but no one space swinging too far from its flat line. Cyclical sectors had a slight edge over the defensive groups, with four of the six finishing higher. Technology (-0.2%) and energy (unch) bucked the trend, however, with the latter sector ignoring crude oil's 1.9% climb. The energy component closed its trading day at $53.75/bbl.
The downtick in technology stemmed from a downbeat response to Qualcomm's (QCOM 54.05, -2.85) quarterly report. The company finished 5.0% lower after missing on revenues, signaling a possible slowdown in demand for semiconductors, which are a component of nearly every modern technological device.
Industrials (+0.3%) finished near the top of the leaderboard, beside financials (+0.3%), as airlines willed the industrial sector to a modest gain. Southwest Airlines (LUV 53.92, +4.46) added 9.0% after reporting favorable earnings per share, however, the industrial sector's gains were capped by a lackluster earnings report from Caterpillar (CAT 97.22, -0.93) and continued weakness from United Technologies (UTX 110.36, -0.60), who reported quarterly results before yesterday's session. The two names finished down 1.0% and 0.5%, respectively.
On the countercyclical side, health care (-0.7%) finished in last place after Bristol-Myers Squibb (BMY 46.82, -2.73) missed earnings per share estimates and issued downbeat guidance. The company slipped 5.5%, putting pressure on its fellow health care components. Consumer staples (-0.4%) finished just a hair better than the health care sector, while the lightly-weighted telecom services, utilities, and real estate sectors finished near their flat lines.
U.S. Treasuries closed modestly higher, bouncing back in the afternoon after succumbing to morning selling pressure. The benchmark 10-yr yield finished one basis point lower at 2.50%.
Today's economic data included Initial Claims, International Trade in Goods, New Home Sales, and Leading Indicators:
The latest weekly initial jobless claims count totaled 259,000 while the Briefing.com consensus expected a reading of 246,000. Today's tally was above the revised prior week count of 237,000 (from 234,000). As for continuing claims, they rose to 2.100 million from the revised count of 2.059 million (from 2.046 million).
The headline for initial claims was a bit disappointing, yet the key takeaway is that there wasn't really any major deviation from the underlying trend considering how low the initial claims reading has been in recent weeks.
December International Trade in Goods decreased by $65.00 billion on the back of a unrevised $65.30 billion decline in November.
New Home Sales in December hit an annualized rate of 536,000, which was below the revised November rate of 598,000 (from 592k), and less than the 589,000 that was expected by the Briefing.com consensus.
The key takeaway from the report is that the combination of higher prices and higher mortgage rates appears to have squeezed the home-buying capability of lower-income consumers, evidenced by the drop in sales of new homes priced under $299,999.
The Conference Board's Leading Indicators report for December ticked up 0.5% (Briefing.com consensus +0.5%) after a 0.1% increase (from 0.0%) in November.
The key takeaway from the December report is that the component indexes suggest the economic expansion should continue and possibly increase in the near term.
Tomorrow's economic data will include advance fourth quarter GDP (Briefing.com consensus 2.2%) and December Durable Orders (Briefing.com consensus 3.0%) at 8:30 am ET, with the final reading of the Michigan Sentiment Index for January following at 10:00 am ET.
Russell 2000 +1.4% YTD
Dow Jones Industrial Average +1.7% YTD
S&P 500 +2.6% YTD
Nasdaq Composite +5.1% YTD
DJ30 +32.40 NASDAQ -1.16 SP500 -1.69 NASDAQ Adv/Vol/Dec 1170/1.66 bln/1796 NYSE Adv/Vol/Dec 1402/958.9 mln/1522 3:30 pm :
Crude oil erased all of yesterday's post-EIA losses & closed pit trading nearly +2% ahead of tomorrow's rig count data
Mar crude oil futures rose $0.99 (+1.9%) to $53.75/barrel
Baker Hughes rig count data will be released tomorrow at 1 pm ET.
Rig count data released last Friday showed the biggest single weekly oil rig count increase in 4 years.
The U.S. oil rig count increased by 29 to 551 rigs last week.
It is worth noting that this pick-up in US activity could potentially cap oil price gains in the future.
Natural gas closed higher for the 4th consecutive session on a bullish EIA reading; supported by a colder weather outlook released earlier in the week
Mar natural gas closed $0.05 higher (+1.5%) at $3.40/MMBtu
Color on 4-day rally in natural gas:
In addition to today's EIA data giving natural gas a boost, U.S. natural gas futures have been trading higher the past 4 sessions on forecasts for colder-than-normal weather and higher heating demand expected to last into the second week of Feb.
This rally came despite a warmer-than-normal outlook through Jan 27 and for much of the rest of Feb and Mar, ahead of tomorrow's EIA data.
In precious metals, gold closed pit trading near this morning's 2-week low on continued dollar index strength
Feb gold ended today's session down $8.10 (-0.7%) to $1,189.90/oz
Mar silver closed today's session $0.13 lower (-0.8%) at $16.85/oz
The dollar index was +0.4% around the 100.45 level, weighed on precious metals
Commodities, as measured by the Bloomberg Commodity Index, were -0.1% around the 88.27 level
After a record-setting day yesterday, the broader market closed flat, albeit mixed. Action in the Dow Jones Industrial Average made new all-time highs despite broad weakness in other areas, ultimately ending Thursday up 32.40 points (+0.16%) to 20100.91. The S&P 500 was the worst performing index, shedding 1.69 points (-0.07%) to 2296.68, and the Nasdaq Composite lost 1.16 points (-0.02%) to 5655.18.
Donald Trump made more news today after tweeting that Mexican President Enrique Pena Nieto should cancel his upcoming meeting with the U.S. President "if Mexico is unwilling to pay for the badly needed wall." The Mexican President responded by doing just that.
The market ticked down ever so slightly on Mr. Pena Nieto's response, but regardless, the incident does highlight some concerns about Mr. Trump's ability to play nice with foreign leaders. Only time will tell if President Trump's international agenda will be as friendly to the stock market as his domestically focused, pro-growth one has been so far.
Market data today included the latest weekly initial jobless claims count which totaled 259,000; for continuing claims, they rose to 2.100 million from the revised count of 2.059 million (from 2.046 million). Also, the December International Trade in Goods report came out today, declining by $65.00 billion on the back of an unrevised $65.30 billion decline in November. Further, New Home Sales in December hit an annualized rate of 536,000, which was below the revised November rate of 598,000 (from 592k). Lastly, the Conference Board's Leading Indicators report for December ticked up 0.5% after a 0.1% increase (from 0.0%) in November.
Following suit, the Technology (XLK 50.54, -0.14 -0.28%) space was pressured out of the gate by sellers. Component F5 Networks (FFIV 133.72, -12.03 -8.25%) was the worst performing name today after reporting what amounted to be a tepid quarter and forward guidance. Other sectors as measured by the S&P closed out the session IYZ +0.88%, XLB +0.26%, XLI +0.26%, XLF +0.25%, XLY +0.16%, XLE +0.08%, XLU +0.04%, XLRE -0.06%, XLP -0.43%, XLV -0.77%.
Media names, and Telecoms in general, were strong today on reports that Charter Comm (CHTR 333.15, +22.84 +7.36%) and Verizon (VZ 49.12, -0.65 -1.31%) had entered into merger talks. Reports circulated premarket about the potential transaction, with follow up reports by Reuters, the Wall Street Journal, Bloomberg and CNBC highlighting the details (or lack thereof) at the moment of the potential tie-up. Peers which also traded higher today included LBRDA +8.86%, LVNTA +5.38%, CABO +3.54%, CMCSA +2.81%, SNI +2.61%, FOXA +2.31%, VIAB +2.10%, LBTYA +1.96%, CBS +1.84%, SBGI +1.80%, MSGN +1.80%, DISCA +1.16%, AMCX +0.43%
The S&P 500 Information Technology (852.39, -1.78 -0.21%) space had an equally bad day, but even a 'bad day' in the space wasn't all that bad. Component eBay (EBAY 31.74, +1.51 +5.00%) helped the sector stay afloat while the rest of the broader market was tumbling as investors rewarded shares after a mixed quarter. Despite EBAY, the broader trend was lower today; stocks which ended today in the red included CTXS -6.50%, QCOM -5.01%, XLNX -3.68%, HPQ -2.63%, ADS -2.45%, WU -2.44%, MSI -2.26%, CTSH -2.22%, LRCX -2.22%, WDC -1.94%, GPN -1.89%, FSLR -1.88%.
Other notable news items among sector components:
Shares of Charter Comm (CHTR) spiked in the premarket session following reports that the company may be in merger talks with Verizon (VZ). After the open, a Wall Street Journal report was out suggesting VZ was in talks with CHTR. Then, CNBC's David Faber chimed in that not much had occurred between VZ and CHTR thus far. Reuters was then out on the deal, suggesting VZ had not yet proposed an acquisition, while the FT reported that both VZ and CHTR had hired advisors to evaluate the deal.
Moneygram (MGI 12.92, +1.04 +8.75%) agreed to be acquired by Alibaba's (BABA 102.75, -1.31 -1.26%) Ant Financial for $13.25 per share in cash, or about $880 million. This agreement confirmed a Wall Street Journal report which came out last night, suggesting the deal may occur.
Fidelity Nat'l Info (FIS 79.56, -0.32 -0.40%) increased its quarterly dividend to $0.29 from $0.26 per share.
LogMeIn (LOGM 102.60, -7.05 -6.43%) stockholders approved issuance of shares of its common stock to equity holders of Citrix Systems (CTXS 89.52, -6.22 -6.50%) in connection with its proposed merger with CTXS. The merger is expected to be completed on January 31, 2017.
Nuance Communications (NUAN 15.97, -0.03 -0.19%) shareholder Carl Icahn lowered passive stake to 4.43% (to about 12.91 million shares vs. about 19.68 million held at the end of Q3).
Quality Systems's (QSII 14.17, +0.39 +2.83%) Principal Accounting Officer John Stumpf announced resignation, effective February 10.
Cimpress (CMPR 86.57, -11.60 -11.82%) announced its intention to implement organizational changes aimed at decentralizing its operations.
In reaction to quarterly results:
AT&T (T 41.77, +0.39 +2.83%) reported in-line Q4 EPS and revenues of $0.66 and $41.84 billion, respectively. Also rees FY17 revenue growth in the low-single digits, adjusted EPS growth in the mid-single digit range, and adjusted operating margin expansion. Also expects capital expenditures in the $22 billion range and free cash flow near the $18 billion range.
Qualcomm (QCOM 54.05, -2.85 -5.01%) reported better than expected Q1 EPS of $1.19 on revenues which came in below expectations at $6 billion. The company also guided Q2 EPS and revenues in-line at $1.15-1.19 and $5.5-6.3 billion, respectively.
eBay (EBAY) reported better than expected Q4 EPS of $0.54 and revenues of $2.4 billion. For Q1, the company sees worse than expected EPS of $0.46-0.48 and worse than expected revenues of $2.17-2.21 billion. For FY17, EBAY expects EPS below market expectations at $1.98-2.03 on revenues of $9.3-9.5 billion.
Western Digital (WDC 78.47, -1.55 -1.94%) reported better than expected Q2 EPS and revenues of $2.30 and $4.89 billion, respectively. For Q3, sees EPS of $2.00-2.10 and revenues of about $4.55 billion.
Ericsson (ERIC 6.07, +0.18 +3.06%) reported Q4 EPS of SEK0.62 on revenues of SEK65.2 billion.
Lam Research (LRCX 114.33, -2.59 -2.22%) reported Q2 EPS and revenues which came in ahead of expectations at $2.24 and $1.88 billion, respectively. For Q3, the company sees EPS and revenues ahead of market expectations at $2.45-2.65 and $2.075-2.2 billion, respectively.
F5 Networks (FFIV) reported better than expected Q1 EPS of $1.98 and revenues of $516 million. For Q2, the company sees in-line EPS and revenues of $1.95-1.98 and $518-528 million, respectively.
Companies scheduled to report quarterly results tonight: MSFT GOOG INTC PYPL VMW KLAC MXIM JNPR ETFC FLEX MSCC AZPN NATI PFPT LITE SYNA CLS OSIS SMCI INVN AMCC UIS SHOR DGII GSIT
Analyst actions:
WDC was upgraded to Outperform from Sector Perform at FBN Securities;
MGI was downgraded to Market Perform from Outperform at William Blair,
ADS was downgraded to Mkt Perform from Outperform at Raymond James
