From Briefing.com: 4:35 pm Apple beats by $0.14, beats on revs; guides Q2 revs below consensus (AAPL) :
Reports Q1 (Dec) earnings of $3.36 per share, $0.14 better than the Capital IQ Consensus of $3.22; revenues rose 3.3% year/year to $78.35 bln vs the $77.26 bln Capital IQ Consensus. Gross margin 38.5%, in-line with estimates vs. 40.5% last year.
iPhones 78.3 mln vs 77.3 mln ests and 74.8 mln last year.
iPads 13.1 mln vs 14.7 mln ests and 16.1 mln last year Macs 5.4 mln vs 5.2 mln ests versus 5.3 mln last year.
Co issues downside guidance for Q2, sees Q2 revs of $51.5-53.5 bln vs. $54.05 bln Capital IQ Consensus; gross margin between 38-39% vs 38.7% ests and 39.4% last year.; operating expenses between $6.5 billion and $6.6 billion; other income/(expense) of $400 million; tax rate of 26 percent
4:34 pm Apple shares +3% to $125 area on better-than-expected Q1 EPS and revenue, and upside iPhone units; however, Q2 rev guidance was below analyst estimates (AAPL) :
4:26 pm Seagate Tech prices $750 mln of senior notes due 2022 at 99.770% and $500 mln of senior notes due 2024 at 99.328% (STX) :
4:23 pm Advanced Micro beats by $0.01, beats on revs; guides Q1 revs in-line (AMD) :
Reports Q4 (Dec) non-GAAP loss of $0.01 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of ($0.02); revenues rose 15.4% year/year but fell 15.4 % sequentially to $1.11 bln vs the $1.07 bln Capital IQ Consensus.
Co issues in-line guidance for Q1, sees Q1 revenue down 8-14% sequentially which we compute as $951-1,018 mln vs. $964.3 mln Capital IQ Consensus Estimate.
Non-GAAP gross margin was 32%, up 2 percentage points YoY and up 1 percentage point sequentially primarily due to higher Computing and Graphics segment revenue.
Computing and Graphics segment revenue was $600 million, up 28% YoY and 27% sequentially. The YoY increase was primarily driven by higher GPU sales. The sequential increase was primarily due to higher GPU and client processor sales. Enterprise, Embedded and Semi-Custom segment revenue was $506 mln, up 4% YoY primarily driven by higher embedded and semi-custom SoC revenue.
4:25 pm : Investors continued hedging their investment risk on Tuesday, choosing to play it safe in the wake of last week's record high levels and amid a week full of influential reports on both the earnings and economic fronts. However, an afternoon rally helped the major averages finish at their highest levels of the day. The S&P 500 shed 0.1% after being down more than 0.5% in the early going.
The health care sector assumed a leadership position in today's market, underpinned by the outperformance of the drug and biotech stocks. Those issues rallied on the other side of a meeting President Trump had with industry executives. While the president pressed his case for lowering drug prices, market participants were heartened by his added belief that regulations should be reduced and that the drug approval process should be sped up. Those declarations lent some relief to investors, who appeared heartened by the notion that the meeting with the president was better than feared.
A host of health care names kicked off today's trading session by reporting quarterly results before the opening bell including Pfizer (PFE 31.73, +0.42), Eli Lilly (LLY 77.03, +2.33), Thermo Fisher Scientific (TMO 152.39, +9.10), and Aetna (AET 118.61, +1.90). The results were mixed, but the four names added between 1.3% and 6.4% after President Trump met with CEOs from top U.S. drugmakers on Tuesday morning. Biotechnology stood out with the iShares Nasdaq Biotechnology ETF (IBB 278.07, +7.68) spiking 2.8%.
On the cyclical side, Exxon Mobil (XOM 83.89, -0.97) also reported earnings this morning. The reaction to the report was negative, pushing the company and the energy space lower by 1.1% and 0.1%, respectively. However, the energy sector's loss was capped by crude oil, which finished its trading day 0.3% higher at $52.81/bbl. The energy component's gain came amid a downtick in the U.S. Dollar Index (99.60, -0.82), which finished Tuesday 0.8% lower.
The remaining cyclical sectors fell as cautious sentiment lingered throughout the day. Industrials (-0.9%) closed at the bottom of the leaderboard following United Parcel Service's (UPS 109.13, -7.90) disappointing fourth quarter earnings report and relative weakness in airline names. The top-weighted technology sector also underperformed the benchmark index, thanks in part to a poor showing from chipmakers. The PHLX Semiconductor Index finished Tuesday lower by 1.3%. In the broader tech sector, Apple (AAPL 121.29, -0.34) shed 0.3% ahead of its earnings report.
Conversely, countercyclical spaces and Treasuries thrived on wary investors' actions; all five defensive spaces finished higher while the benchmark 10-yr yield closed five basis points lower at 2.44%. The utilities sector (+1.6%) was the day's top performer, while telecom services (+0.1%) eked out a small gain.
Today's economic data included fourth quarter Employment Cost Index, November Case-Shiller Home Price Index, January Chicago PMI, and January Consumer Confidence:
The fourth quarter Employment Cost Index rose 0.5%, while the Briefing.com consensus expected an uptick of 0.6%.
The key takeaway from the report is that compensation costs did move higher in 2016, which creates some profit margin constraints while at the same time lending employees some increased spending potential.
The Case-Shiller 20-city Home Price Index for November rose 5.3%, which was above the Briefing.com consensus of 5.0%. This followed the previous month's unrevised reading of 5.1%.
Chicago PMI for January decreased to 50.3 from 54.6 in December while the Briefing.com consensus expected a reading of 55.0.
The key takeaway from this report is that it's a first quarter report, and with the pullback to a level that is just above a contraction reading, it will serve perhaps to temper some of the market's heightened optimism surrounding economic growth prospects.
The consumer confidence reading for January declined to 111.8 from the prior month's revised reading of 113.3 (from 113.7). The Briefing.com consensus expected the survey to hit 112.5.
The key takeaway from the report is that consumer confidence is still at relatively high levels, although consumers' outlook was reined in a bit following the post-election surge.
Tomorrow will see a full slate of economic reports including MBA Mortgage Applications Index at 7:00 am ET, January ADP Employment Change (Briefing.com consensus 165k) at 8:15 am ET, January ISM Index (Briefing.com consensus 55.0) at 10:00 am ET, December Construction Spending (Briefing.com consensus 0.2%), February FOMC Rate Decision (Briefing.com consensus 0.625%) at 2:00 pm ET, and January Auto & Truck Sales at 2:00 pm ET.
Russell 2000 +0.3% YTD
Dow Jones Industrial Average +0.5% YTD
S&P 500 1.8% YTD
Nasdaq Composite 4.3% YTD
DJ30 -107.04 NASDAQ +1.07 SP500 -2.03 NASDAQ Adv/Vol/Dec 1776/1.85 bln/1125 NYSE Adv/Vol/Dec 1858/1.48 bln/1058 3:30 pm :
Crude oil broke out of its 3-session downtrend ahead of tonight's API on headlines that OPEC has surpassed 1 mln barrels/day in output reductions
Mar crude oil futures rose $0.14 (+0.3%) to $52.76/barrel
Color on price action in oil:
Mar 2017 crude oil futures snapped out of a 3-session downtrend. Crude sharply reversed off of session lows after dropping as much as -0.7% initially, following headlines that OPEC has cut more than 1 mln barrels/day of the promised 1.2 mln barrels/day in planned oil production cuts (the OPEC portion).
Crude oil supply from the 11 OPEC members with targeted production reductions avged 30.01 mln barrels/day in Jan, compared to 31.17 mln in Dec.
Other factors to consider:
U.S. oil production has risen by ~6.3% since July last year to almost 9 mln bpd, according to EIA data.
Concerns these increases in US production will offset the coordinated OPEC/non-OPEC output reductions initially put pressure on crude futures in morning pit trading.
Also initially adding pressure on oil prices was this morning's statements from Goldman regarding an estimation that y/y U.S. oil production will rise by 290k barrels/day in 2017, if a backlog on rigs that are still to become operational is accounted for.
Note: The spread between Brent and WTI crude has been increasing, as market participants appear willing to pay a premium for Brent, as oil supply in the Middle East shrinks due to OPEC reductions, while US WTI crude oil is becoming increasingly plentiful.
Data reminders:
API data will be released today at 4:30 pm ET.
EIA data will be released tomorrow at 10:30 am ET.
Baker Hughes rig count data will be released Friday at 1 pm ET.
Natural gas closed pit trading lower for the third day in a row ahead of Thursday's inventory data on updated warmer weather forecasts across much of the US
Mar natural gas closed $0.11 lower (-3.4%) at $3.12/MMBtu
EIA natural gas inventory data will be released Thursday at 10:30 am ET
In precious metals, gold extended yesterday's gain, silver rallied on continued weakness in the dollar index
April gold ended today's session up $15.40 (+1.3%) to $1,211.40/oz
Gold futures have switched their front month to April from Feb, as indicated by the active amount of volume in the contracts
Mar silver closed today's session $0.39 higher (+2.3%) at $17.54/oz
The dollar index was -0.8% around the 99.62 level, boosted precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.7% around the 87.59 level
After opening the week with losses on Monday, the broader market managed a split session on Tuesday. Action was only higher in the Nasdaq Composite, and in that case only just, as the index added 1.07 points (+0.02%) today to close 5614.79. The Dow Jones Industrial Average, on the other hand, closed 107.04 points (-0.54%) lower to 19864.09, and the S&P 500 lost 2.03 points (-0.09%) to 2278.87.
Market data today included the fourth quarter Employment Cost Index which rose 0.5%; also, Chicago PMI for January declined to 50.3 from 54.6 in December. The Case-Shiller 20-city Home Price Index for November rose 5.3%. This followed the previous month's unrevised reading of 5.1%. Lastly, the consumer confidence reading for January declined to 111.8 from the prior month's revised reading of 113.3 (from 113.7).
Also posting another down day, the Technology (XLK 50.08, -0.25 -0.50%) sector regained a portion of afternoon losses but still ended firmly in the red. Component MasterCard (MA 106.33, -2.97 -2.72%) was one of the weakest names today after the company reported mixed Q4 results this morning. Other sectors as measured by the S&P closed the session XLV +1.57%, XLU +1.55%, XLRE +0.82%, XLP +0.48%, IYZ +0.17%, XLE +0.00%, XLY -0.15%, XLB -0.59%, XLF -0.64%, XLI -0.88% as Healthcare led the charge.
In the S&P 500 Information Technology (843.03, -5.17 -0.61%) space, trading lower but well off daily lows. Component Apple (AAPL 121.29, -0.34 -0.28%) traded modestly lower ahead of earnings, while Xerox (XRX 6.93, -0.02 -0.29%) traded modestly lower following earnings. Other names in the space which underperformed included TXN -3.03%, MCHP -2.48%, CTSH -2.05%, AVGO -1.83%, ADI -1.76%, INTC -1.60%, XLNX -1.52%, KLAC -1.32%, MSI -1.21%, V -1.18%, TSS -1.15%, EBAY -1.06%.
Other notable news items among sector components:
Seagate Tech (STX 45.15, +0.25 +0.56%) to offer senior notes in a private placement. Terms of the placement were not disclosed.
F5 Networks (FFIV 134.03, -0.66 -0.49%) named Franois Locoh-Donou as President and CEO effective April 3.
GoPro (GPRO 10.72, -0.08 -0.74%) named Charles Prober as Chief Operating Officer.
Microsoft (MSFT 64.65, -0.48 -0.74%) priced $17 billion of debt offerings in 7 tranches.
Vonage (VG 7.08, +0.00 +0.07%) named Kenneth Wyatt Chief Revenue Officer.
Accenture (CAN 113.87, -0.76 -0.66%) to acquire InvestTech Systems Consulting. Financial terms of the deal were not disclosed.
Radware (RDWR 14.69, +0.22 +1.52%) acquired Seculert for undisclosed sum. The deal is expected to be immaterial to its 2017 revenues, but slightly dilutive to its fully diluted 2017 non-GAAP EPS.
Everbridge (EVBG 18.47, -0.30 -1.60%) acquired IDV Solutions for about $18.7 million in cash.
Broadcom (AVGO 199.50, -3.72 -1.83%) filed a prospectus supplement relating to the possible issuance of up to 22,804,591 ordinary shares in the capital of the company to the holders of exchangeable limited partnership units of Broadcom Cayman L.P.
In reaction to quarterly results:
MasterCard (MA) reported better than expected Q4 EPS of $0.86 on revenues which missed market expectations despite growing 9.5% compared to a year ago to $2.76 billion.
Sprint (S 9.23, +0.12 +1.32%) reported a worse than expected Q3 loss per share of $0.12 on revenues which beat market expectations at $8.55 billion.
Xerox (XRX) reported in-line Q4 EPS of $0.25 on revenues which came in below market expectations at $2.73 billion. For FY17, the company guided EPS in-line at $0.80-0.88.
Integrated Device (IDTI 25.19, -1.15 -4.38%) reported better than expected Q3 EPS of $0.35 on revenues which came in at $176.4 million. For Q4, the company sees EPS of $0.32-0.36 on revenues of $170-180 million, both in-line with market expectations.
Intersil (ISIL 22.43, +0.05 +0.22%) reported in-line Q4 EPS of $0.19 on revenues which beat market expectations at $139.81 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: ACXM AMD AAPL BBOX EA FICO MANH MTCH MSTR OCLR PLT TNAV VIAV/ADP CEVA GIB LFUS SLAB VNTV
Analyst actions:
VSAT was upgraded to Outperform from Market Perform at Wells Fargo,
XGTI was upgraded to Buy from Neutral at Roth Capital;
FIT was downgraded to Sell from Neutral at Citigroup,
CTSH was downgraded to Equal Weight from Overweight at Morgan Stanley,
IDTI was downgraded to Hold from Buy at Summit Redstone,
XXIA was downgraded to Hold from Buy at Gabelli & Co.,
NTCT was downgraded to Hold from Buy at Craig Hallum,
YNDX was downgraded to Equal Weight from Overweight at Alfa Bank;
T, S, VZ were initiated with Hold ratings at Evercore ISI,
TMUS was initiated with a Buy at Evercore ISI,
