From Briefing.com: 4:09 pm Rambus reports EPS in-line, beats on revs; guides Q1 in-line (RMBS) : Reports Q4 (Dec) earnings of $0.16 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.16; revenues rose 27.1% year/year to $97.6 mln vs the $96 mln Capital IQ Consensus, primarily due to higher revenue from the security technology business, higher product revenue primarily from the memory and interfaces business, and higher royalty revenue. Rev rose 9% on a sequential basis primarily due to higher product revenue from the memory and interfaces business and higher royalty revenue.
Co issues in-line guidance for Q1, sees EPS of $0.13-0.17, excluding non-recurring items, vs. $0.15 Capital IQ Consensus Estimate; sees Q1 revs of $93-98 mln vs. $95.73 mln Capital IQ Consensus.
"Our activity throughout 2016 has prepared us well for profitable growth moving into 2017. Our memory and interfaces business continues to perform well with the ability to accelerate our customer engagements for the data center. We also have several avenues of exciting opportunities to extend beyond our historic business, particularly as we move closer to the consumer with offerings serving the mobile edge."
4:08 pm F5 Networks names Franois Locoh-Donou as President and CEO effective April 3 (FFIV) : Locoh-Donou succeeds current President and CEO, John McAdam, who will remain a Director on F5's Board upon his retirement on April 3, 2017. Locoh-Donou currently serves as Senior Vice President and Chief Operating Officer of Ciena (CIEN).
4:07 pm Advanced Energy beats by $0.25, beats on revs; guides Q1 EPS above consensus, revs above consensus (AEIS) :
Reports Q4 (Dec) earnings of $1.06 per share, $0.25 better than the Capital IQ Consensus of $0.81; revenues rose 55.7% year/year to $135.3 mln vs the $131.14 mln Capital IQ Consensus.
The company generated $44.4 million of operating cash from continuing operations.
Co issues upside guidance for Q1, sees EPS of $0.90-$1.00 vs. $0.80 Capital IQ Consensus Estimate; sees Q1 revs of $141-$151 mln vs. $129.05 mln Capital IQ Consensus Estimate.
Co states: "Our Semiconductor and Service revenues reached new highs, more than offsetting the fourth quarter decline in Industrial applications. We continue to expand our presence as a critical enabler by capitalizing on the build-out and expansion of important semiconductor technologies. We enter 2017 with a healthy outlook, a strong balance sheet and a variety of opportunities that we believe will take AE to the next level and move us closer to our new aspirational goals."
4:05 pm Integrated Device beats by $0.01, reports revs in-line; co guides on the earnings call (IDTI) :
Reports Q3 (Dec) earnings of $0.35 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.34; revenues fell 0.7% year/year to $176.4 mln vs the $176.2 mln Capital IQ Consensus.
"We have increasing momentum in multiple new growth areas, particularly automotive, industrial, and sensors, that will drive future growth. Additionally, we remain disciplined in managing our operating model, delivering best-in-class profitability and earnings leverage."
The co will provide guidance on its earnings call.4:05 pm Sanmina beats by $0.08, beats on revs; guides Q2 EPS above consensus, revs above consensus (SANM) :
Reports Q1 (Dec) earnings of $0.75 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.67; revenues rose 12.1% year/year to $1.72 bln vs the $1.69 bln Capital IQ Consensus.
Co issues upside guidance for Q2, sees EPS of $0.67-0.72, excluding non-recurring items, vs. $0.65 Capital IQ Consensus Estimate; sees Q2 revs of $1.68-1.73 bln vs. $1.65 bln Capital IQ Consensus Estimate. 4:25 pm : Investors decided to err on the side of caution to open a week full of earnings reports and influential economic data. The S&P 500 finished the day lower by 0.6%, while the Nasdaq (-0.8%) closed just a tick below the benchmark index.
Equity indices faced broad-based selling pressure from the start of Monday's session, with many fingers pointing to President Trump's executive order, which suspended the U.S. refugee program and temporarily restricted nationals of seven countries--Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen--from entering the United States, as the driver of the bearish tone.
It is a defensible position, as that order has engendered some concerns about protectionism taking root and has detracted from the market's preferred policy focus of corporate tax reform, but the market will face a full event calendar this week, so some caution is warranted.
The Federal Reserve will release its latest policy statement on Wednesday, which, combined with Friday's release of the January Employment Situation report (Briefing.com consensus 170K), could build a case for a rate hike at the subsequent FOMC meeting. In addition, a full slate of quarterly reports awaits with Apple (AAPL 121.63, -0.32) scheduled to release its results after Tuesday's closing bell.
Today's risk-off tone was most apparent in the stock market while Treasuries finished the day little changed with the benchmark 10-yr yield remaining at 2.48%. The U.S. Dollar Index finished just below its flat line with a loss of 0.1%, masking the dollar's 1.2% decline against the Japanese yen (113.73). It is worth noting the Bank of Japan will release its latest policy statement overnight.
Nine of eleven spaces finished the day in negative territory. Countercyclical sectors populated the upper half of Monday's leaderboard, with consumer staples (+0.1%) eking out a slim gain. The consumer discretionary sector (-0.1%) was the best performer on the cyclical side, finishing just a tick from its flat line. Walt Disney (DIS 110.94, +1.64) underpinned the sector's performance, adding 1.5%, after the company's stock was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley.
The energy sector occupied the bottom spot on the leaderboard, finishing 1.8% lower after pressure on multiple fronts. On the earnings side, Enterprise Products' (EPD 28.45, -0.64) mixed earnings report was met with a downbeat response, pushing the company's stock lower by 2.2%. Crude oil also hurt the energy space, closing its trading day 1.1% lower at $52.62/bbl.
The top-weighted technology sector (-0.8%) finished a tick lower than the benchmark index with top components like Alphabet (GOOGL 823.83, -21.20), Microsoft (MSFT 65.13, -0.65), and Facebook (FB 130.98, -1.20) falling between 0.9% and 2.5%.
Today's economic data included December Personal Income/Spending and December Pending Home Sales:
December personal income rose 0.3% while the Briefing.com consensus expected an increase of 0.4%. Meanwhile, December personal spending increased 0.5% while the Briefing.com consensus expected a reading of 0.4%. The November Personal Spending reading was left unrevised at 0.2% while November Personal Income was revised to 0.1% from 0.0%. Core PCE prices for December rose 0.1% (Briefing.com consensus 0.2%), while the November reading was left unrevised at 0.0%.
With spending rising faster than income, the drop in the personal savings rate suggests consumers were spending out of savings -- something that wouldn't typically be done unless it was out of necessity or consumers were feeling better about their income prospects.
Pending Home Sales for December rose 1.6% while the Briefing.com consensus expected an increase of 1.3%. Today's reading follows a 2.5% downtick in November.
Tomorrow's economic data will include the fourth quarter Employment Cost Index (Briefing.com consensus 0.6%) at 8:30 am ET, the November S&P Case Schiller Home Price Index (Briefing.com consensus 5.0%) at 9:00 am ET, January Chicago PMI (Briefing.com consensus 55.0) at 9:45 am ET, and January Consumer Confidence (Briefing.com consensus 112.5) at 10:00 am ET.
Russell 2000 -0.3% YTD
Dow Jones Industrial Average +1.1% YTD
S&P 500 1.9% YTD
Nasdaq Composite 4.3% YTD
DJ30 -122.65 NASDAQ -47.07 SP500 -13.79 NASDAQ Adv/Vol/Dec 682/1.61 bln/2275 NYSE Adv/Vol/Dec 890/1.03 bln/2082 3:30 pm :
Crude oil doubled Friday's post-rig count data losses ahead of tomorrow's API release
Mar crude oil futures fell $0.56 (-1.1%) to $52.62/barrel
Upcoming data reminders:
Weekly API data will be released tomorrow at 4:30 pm ET.
Weekly EIA petroleum data will released this Wednesday at 10:30 am ET
Weekly Baker Hughes rig count data will be released this Friday at 1 pm ET.
Recap of Friday's rig data:
On Friday, Baker Hughes reported the total US rig count increased by 18 to 712 rigs, following last week's increase of 35 rigs
The number of active U.S. rigs drilling for oil rose by 15 to 566 rigs this week
Last week, the U.S. oil rig count increased by 29 to 551 rigs.
In the week prior to Friday, the rig count declined, but that followed 10 consecutive weekly prior increases
The oil rig count is at its highest level in ~14 months
It is worth noting that this pick-up in US activity could potentially cap oil price gains in the future
Natural gas extended Friday's losses on updated warmer weather forecasts across the US ahead of Thursday's EIA data
Mar natural gas closed $0.12 lower (-3.6%) at $3.23/MMBtu
Weekly EIA natural gas data will be released Thursday at 10:30 am ET.
In precious metals, gold snapped its 4-session losing streak after data showed PCE rose the most in ~2 years, ahead of the 2-day Fed meeting
Feb 2017 gold ended today's session up $5.00 (+0.4%) to $1193.20/oz
The PCE Price Index was up 1.6% year-over-year versus a 1.4% increase seen in Nov. That is tracking toward the Fed's longer-run target of 2.0%, which is what Fed officials will want to see to justify further rate hikes. The core PCE Price Index, which increased 0.1% in Dec (Briefing.com consensus +0.2%), was up 1.7% year-over-year, unchanged from Nov.
Mar 2017 silver closed today's session $0.02 higher (+0.1%) at $17.15/oz
The dollar index was -0.1% around the 100.41 level
Commodities, as measured by the Bloomberg Commodity Index, were -1.1% around the 87.03 level
After a week which saw the broader market notch new highs on multiple sessions, this week in the markets began distinctly lower. Coming off last week's highs, the Nasdaq Composite shed 47.07 points (-0.83%) to 5613.71. The Dow Jones Industrial Average lost 122.65 points (-0.61%) to 19971.13, and the S&P 500 was down 13.79 points (-0.60%) to 2280.90 at the close.
Market data today included the December personal income reading, which rose 0.3%; meanwhile, December personal spending increased 0.5%. The November Personal Spending reading was left unrevised at 0.2% while November Personal Income was revised to 0.1% from 0.0%. Core PCE prices for December rose 0.1%, while the November reading was left unrevised at 0.0%. Pending Home Sales for December rose 1.6%. Today's reading follows a 2.5% downtick in November.
The Technology (XLK 50.33, 0.41 -0.81%) space suffered a minor set-back today as weakness permeated from top to bottom. Names like CTSH -4.42%, GOOG -2.55%, GOOGL -2.51%, AMAT -2.00%, LRCX -1.89%, CSRA -1.86%, HPE -1.77% held the sector lower. Other sectors as measured by the S&P closed Monday XLE -1.86%, XLB -1.02%, IYZ -0.87%, XLI -0.85%, XLF -0.80%, XLRE -0.56%, XLV -0.49%, XLY -0.11%, XLP -0.08%, XLU +0.08% as only Utilities were able to escape Monday with gains.
In the S&P 500 Information Technology (848.20, -7.01 -0.82%) space, trading was decidedly negative. Bellwethers in the space didn't help the sector's cause, finishing all lower -- AAPL -0.26%, MSFT -0.99%, FB -0.91%, V -0.08%, INTC -1.47%, IBM -0.85%, CSCO -0.48%, MA -0.49%, AVGO -1.22%, QCOM -1.16%.
Other notable news items among sector components:
Fitbit (FIT 6.05, -1.15 -16.0%) lowered its Q4 guidance to a loss per share of ($0.51-0.56) from $0.14-0.18. Additionally, revenue guidance was lowered to $572-580 million from $725-750 million. FIT also announced the reorganization of its business, including a reduction in force, that will impact about 110 employees, constituting about 6% of the company's global workforce, creating a more focused and efficient operating model. The cost of these reorganization efforts is expected to be about $4 million to be recorded in the first quarter of 2017. The company is targeting a reduction in the 2016 exit operating expense run rate of about $200 million, to about $850 million for 2017, which includes realigning sales and marketing spend and improved optimization of research and development investments.
The EU cleared the acquisition of Intel (INTC 37.42, -0.56 -1.47%) Security by TPG Capital.
Digital Ally (DGLY 5.75, +1.05 +22.34%) announced its largest commercial order ever received for the sale and installation of DVM-250 event recorder video systems to American Medical Response ("AMR") and ongoing FleetVu Manager cloud storage services. AMR's initial order for deployment during 2017 includes about 1,550 three-camera DVM-250 systems, installation and cloud storage services, representing 2017 revenues about $2 million. Shipments will begin immediately.
Ixia (XXIA 19.45, +1.25 +6.87%) confirmed it will be acquired by Keysight Technologies (KEYS 36.97, -0.04 -0.11%) for $19.65 per share in cash, or approximately $1.6 billion.
Vodafone (VOD 24.90, +0.32 +1.30%) confirmed it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India.
Nokia (NOK 4.53, -0.10 -2.16%) and the Orange Group (ORAN 15.38, -0.09 -0.58%) are to collaborate on the development of services that will allow industries and consumers to take advantage of the unprecedented efficiencies and business models made possible by 5G.
In reaction to quarterly results:
Silicom Limited (SILC 37.31, -1.74 -4.46%) reported better than expected Q4 EPS and revenues of $0.66 and $28.33 million, respectively.
Booz Allen Hamilton (BAH 33.91, -2.35 -6.48%) reported worse than expected Q3 earnings of $0.38 on revenues which beat market expectations at about $1.4 billion. The company also guided FY17 EPS and revenues in-line at $1.70-1.74 from $1.68-1.75 and up 4-6% to about $5.62-5.73 billion, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: AEIS, IDTI, ISIL, RMBS, SANM/AXE, AUDC, MMYT, MA, NTCT, S, XRX
Analyst actions:
NTAP was upgraded to Buy from Neutral at Goldman,
WBMD was upgraded to Buy from Neutral at Citigroup,
HDP was upgraded to Buy from Neutral at Mizuho,
MELI was upgraded to Buy from Neutral at BofA/Merrill;
HIMX was downgraded to Neutral from Outperform at Robert W. Baird,
PAYC was downgraded to Sector Weight from Overweight at Pacific Crest,
TRMB was downgraded to Neutral from Buy at Dougherty,
MGI was downgraded to Hold from Buy at Feltl,
XXIA was downgraded to Neutral from Buy at DA Davidson;
CSLT was initiated with a Market Perform at Cowen,
NPTN was initiated with an Outperform at Cowen
