From Briefing.com: 4:17 pm Cirrus Logic beats by $0.25, beats on revs; guides Q4 revs in-line (CRUS) :
Reports Q3 (Dec) earnings of $1.87 per share, excluding non-recurring items, $0.25 better than the Capital IQ Consensus of $1.62; revenues rose 50.3% year/year to $523 mln vs the $495.24 mln Capital IQ Consensus; adj. gross margin 48.8%.
Co issues in-line guidance for Q4, sees Q4 revs of $300-340 mln vs. $333.57 mln Capital IQ Consensus; GAAP GM 48-50%.
"Cirrus Logic delivered outstanding revenue, operating profit and earnings per share growth in the December quarter as demand for certain portable audio products accelerated," said Jason Rhode, president and chief executive officer. "The company is delighted to be on track to deliver our third consecutive year of more than 25 percent annual revenue growth. With a comprehensive portfolio of products and extensive roadmap we are well positioned for success in the coming years as demand for innovative audio and voice technology continues to increase."
4:15 pm Extreme Networks beats by $0.05, misses on revs; guides Q3 EPS above consensus, revs in-line (EXTR) :
Reports Q2 (Dec) earnings of $0.12 per share, $0.05 better than the Capital IQ Consensus of $0.07; revenues rose 6.3% year/year to $148.1 mln vs the $152.3 mln Capital IQ Consensus.
Non-GAAP Gross Margin 50.9%.
Non-GAAP gross margin is targeted between 55.5% and 56.5%.
Co issues guidance for Q3, sees EPS of $0.06-0.10, excluding non-recurring items, vs. $0.06 Capital IQ Consensus Estimate; sees Q3 revs of $151-161 mln vs. $155.77 mln Capital IQ Consensus Estimate.4:14 pm Cadence Design beats by $0.01, reports revs in-line; guides Q1 EPS in-line, revs above consensus; guides FY17 EPS in-line, revs in-line (CDNS) :
Reports Q4 (Dec) earnings of $0.34 per share, $0.01 better than the Capital IQ Consensus of $0.33; revenues rose 6.3% year/year to $469 mln vs the $468.81 mln Capital IQ Consensus.
Co issues guidance for Q1, sees EPS of $0.30-$0.32 vs. $0.31 Capital IQ Consensus Estimate; sees Q1 revs of $470-$480 mln vs. $464.40 mln Capital IQ Consensus Estimate.
Co issues in-line guidance for FY17, sees EPS of $1.32-$1.42 vs. $1.35 Capital IQ Consensus Estimate; sees FY17 revs of $1.9-$1.95 bln vs. $1.92 bln Capital IQ Consensus Estimate.
Co states: "...In the fourth quarter we completed our $1.2 billion stock repurchase program, cumulatively repurchasing 52 million shares representing approximately 18 percent of shares outstanding as of July 4, 2015. This week, we replaced our December 2012 senior credit facility, increasing our borrowing capacity and extending the term; and we maintain an investment grade rating for our outstanding public debt."
4:13 pm Mellanox Tech misses by $0.04, misses on revs; guides Q1 revs below consensus (MLNX) :
Reports Q4 (Dec) earnings of $0.82 per share, $0.04 worse than the Capital IQ Consensus of $0.86; revenues rose 25.3% year/year to $221.7 mln vs the $225.04 mln Capital IQ Consensus.
Co issues downside guidance for Q1, sees Q1 revs of $200-210 mln vs. $226.28 mln Capital IQ Consensus Estimate.
Sees Non-GAAP gross margins of 71 percent to 72 percent
Sees an increase in non-GAAP operating expenses of 3 percent to 5 percent
Share-based compensation expense of $15.8 million to $16.3 million
4:13 pm Exar reports EPS in-line, revs in-line; guides Q4 EPS in-line, revs below consensus (EXAR):
Reports Q3 (Dec) earnings of $0.07 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.07; revenues rose 7.5% year/year to $27.22 mln vs the $27.1 mln Capital IQ Consensus.
Non-GAAP gross margin of 53.4% increased from 51.9% reported in the previous quarter and the 46.1% reported in the third quarter last year.
Co issues guidance for Q4, sees EPS of $0.07-0.09, excluding non-recurring items, vs. $0.08 Capital IQ Consensus Estimate; sees Q4 revs of $27.2-28.2 mln vs. $28.77 mln Capital IQ Consensus Estimate.
4:10 pm Axcelis Tech beats by $0.03, reports revs in-line; guides Q1 EPS above consensus (ACLS) :
Reports Q4 (Dec) earnings of $0.13 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.10; revenues fell 1.6% year/year to $69.4 mln vs the $69.41 mln Capital IQ Consensus (Preannouced EPS above $0.04-0.08 guidance and rev at high end of $65-70 mln guidance on Jan 10)
Co issues upside guidance for Q1, sees EPS of $0.20-0.24 vs. $0.18 Capital IQ Consensus Estimate.
"We expect 2017 to be the start of a solid up cycle for the industry, with robust implant CAPEX spending, providing Axcelis with substantial opportunities for continued growth..I am pleased with our financial performance in 2016. We increased gross margins to 37.3%, up from 33.7% in 2015..."We expect to realize further improvements in gross margin in 2017 with continued focus on supply chain optimization, value engineering and lean programs."
4:10 pm Power Integrations beats by $0.05, reports revs in-line; guides Q1 revs in-line (POWI) :
Reports Q4 (Dec) earnings of $0.67 per share, $0.05 better than the Capital IQ Consensus of $0.62; revenues rose 15.8% year/year to $101.1 mln vs the $101.3 mln Capital IQ Consensus.
Cash flow from operations for the quarter was $27.7 mln.
Co issues in-line guidance for Q1, sees Q1 revs to be flat, plus or minus 3%, compared to recast Q4 revenue of $102.4 mln. That equates to revs of $99.3-$105.5 mln vs. $99.28 mln Capital IQ Consensus Estimate. GAAP gross margin is expected to be between 47.9-48.4%; non-GAAP gross margin is expected to be between 49-49.5%.
4:09 pm Intevac beats by $0.06, misses on revs (IVAC) :
Reports Q4 (Dec) earnings of $0.13 per share, $0.06 better than the Capital IQ Consensus of $0.07; revenues rose 76.8% year/year to $29 mln vs the $29.76 mln Capital IQ Consensus.
Order backlog totaled $68.5 million on December 31, 2016, compared to $72.9 million on October 1, 2016 and $51.2 million on January 2, 2016. Backlog at December 31, 2016 included four 200 Lean HDD systems, four INTEVAC VERTEX display cover panel coating systems, one INTEVAC MATRIX solar system, and two ENERGi solar ion implant systems. Backlog at October 1, 2016 included four 200 Lean
HDD systems, three INTEVAC VERTEX display cover panel coating systems, two INTEVAC MATRIX solar systems, and two ENERGi solar ion implant systems. Backlog at January 2, 2016 included three solar systems and one PVD display cover panel coating system.
The Company ended the year with $49.8 million of total cash, restricted cash and investments and $71.0 million in tangible book value.
4:07 pm Cavium Networks beats by $0.02, reports revs in-line; guides on the call (CAVM) :
Reports Q4 (Dec) earnings of $0.56 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.54; revenues rose 124.2% year/year to $226.2 mln vs the $224.46 mln Capital IQ Consensus. Non-GAAP gross margin was 65.0% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 21.6%.
Guides on call
4:06 pm Adobe Systems' Board elects President and CEO Shantanu Narayen as Chairman of the Board (ADBE) : Narayen will continue in his role as President and CEO of Adobe and succeeds Co-Chairs and Co-Founders of the company, John Warnock and Chuck Geschke, who will remain on the Board.
4:06 pm Facebook beats by $0.10, beats on revs (FB) :
Reports Q4 (Dec) earnings of $1.41 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $1.31; revenues rose 53.1% year/year to $8.809 bln vs the $8.49 bln Capital IQ Consensus.Daily active users: DAUs were 1.23 billion on average for December 2016, an increase of 18% y/y; Expected to come in at approx 1.20 bln; Q3 was 1.18 bln, up 17% y/y(Expectations approx 1.16 bln); Q3 increased 17%, Q1 16%, Q4 17%. Mobile DAUs- Mobile DAUs were 1.15 billion on average for December 2016, an increase of 23% year-over-year. Monthly active users: MAUs were 1.86 billion as of December 31, 2016, an increase of 17% y/y; Expected to come in at approx 1.84 bln; Q3 was 1.79 bln, +16% y/y(Expectations approx 1.76 bln); Q2 increased 20%; Q1 21%. Mobile MAUs -- Mobile MAUs were 1.74 billion as of December 31, 2016, an increase of 21% year-over-year.Mobile advertising revenue represented approximately 84% of advertising revenue for the fourth quarter of 2016, up from approximately 80% of advertising revenue in the fourth quarter of 2015. Capital expenditures for the full year 2016 were $4.49 billion (Gudiance was $4.5 bln).
4:05 pm Qorvo beats by $0.10, reports revs in-line; guides Q4 EPS below consensus (QRVO) :
Reports Q3 (Dec) earnings of $1.35 per share, $0.10 better than the Capital IQ Consensus of $1.25; GAAP revenues rose 33.1% year/year to $826.3 mln vs the $821.42 mln Capital IQ Consensus.
Co issues guidance for Q4, sees EPS of $0.70-0.90, excluding non-recurring items, vs. $1.04 Capital IQ Consensus Estimate; sees Q4 non-GAAP revs of $610-650 mln, not comparable to $718.67 mln GAAP Capital IQ Consensus Estimate.
"In the March quarter, we're forecasting a greater than historical sequential decline as two of our leading customers in China and a tier-one customer in Korea delay flagship smartphone launches. In fiscal year 2018, we expect double-digit revenue growth, driven by continued broad-based growth in IDP and increasing demand for our mobile products, including multiplexers, diversity receive modules, WiFi, RF Fusion, and RF Flex. We are also forecasting year-over-year content gains in marquee smartphones, driven by low-band PADs, envelope trackers and tuners."
4:03 pm Brooks Automation beats by $0.05, reports revs in-line; guides Q2 EPS, revs above consensus (BRKS) :
Reports Q1 (Dec) earnings of $0.25 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.20; revenues rose 33.3% year/year to $159.96 mln vs the $160.03 mln Capital IQ Consensus.
Bookings for BSSG in the first quarter totaled $122.8 million, compared to $140.1 million in the fourth quarter. BLSS booked a total of $64.2 million of new contract value, compared to $32.0 million in the fourth quarter.
Non-GAAP gross margin, which excludes amortization expense, impact of purchase
price accounting adjustments and special charges described above, was 36.3% in
the first quarter, down 0.4 points from the prior quarter.
Co issues upside guidance for Q2, sees EPS of $0.24-0.27, excluding non-recurring items, vs. $0.21 Capital IQ Consensus Estimate; sees Q2 revs of $165-170 mln vs. $158.89 mln Capital IQ Consensus Estimate.
4:25 pm : Pockets of strength kept the S&P 500 near its flat line on Wednesday despite investors' lack of buying conviction. The S&P 500 finished flat while the Nasdaq (+0.5%) and Dow Jones industrial Average (+0.1%) ended modestly higher thanks to a huge move in shares of Apple (AAPL 129.92, +8.57, +7.1%) following its fiscal first quarter earnings report, which was replete with record revenues, earnings, and iPhone sales.
Wednesday's session opened with a lot of optimism as market participants reacted favorably to Apple's earnings results; however, investors soon lost conviction and the major indices soon relinquished most, if not all, of their opening gains.
The inability to maintain a bullish bias in the wake of Apple's report was regarded as a disappointing development that weighed on investor sentiment. At the same time, market participants were grappling with some inflation concerns and some rate-hike edginess in front of the FOMC policy decision at 2:00 p.m. ET after the ADP Employment Change and Manufacturing ISM Index reports for January checked in stronger than expected.
The aforementioned reports supported the notion that economic growth looks poised to accelerate in 2017 -- a view that in turn fueled a belief that higher inflation will accompany that growth. That outlook manifested itself in a weak Treasury market and a strengthening dollar, yet those respective moves were tempered following the release of the FOMC's policy directive.
The FOMC voted unanimously to maintain the current fed funds target range at 0.50%-0.75%, as expected. By and large, there was little change in the wording of the directive from the December meeting. There was some concern ahead of its release that it might have a hawkish-sounding angle to it, but the fact that it was little changed took a little of the rate-hike edge off the market.
That edge was rooted in the thinking that the directive's language might contain some signaling that the FOMC is leaning to a rate hike in March, which the fed funds futures market currently does not expect.
In any event, buying efforts in the dollar subsided and selling efforts in the Treasury market tapered off after the release of the directive. The 2-yr note yield, which is sensitive to changes in the fed funds rate, dropped from 1.25% to 1.21% after the FOMC decision. The benchmark 10-yr yield for its part closed relatively flat, up one basis point at 2.48%.
For sector standings, technology finished near the top of the day's leaderboard amid the spike in Apple's stock and a positive showing from chipmakers. The PHLX Semiconductor Index finished 1.7% higher following Advanced Micro Devices's (AMD 12.06, +1.69) upbeat earning report. The company closed Wednesday's session 16.3% higher.
The heavily-weighted financial sector (unch) also closed the day higher, along with materials (+0.6%), and health care (+0.7%). The health care space rallied on Anthem's (ANTM 160.79, +6.65) better than expected quarterly earnings report and an uptick from the biotechnology industry. The iShares Nasdaq Biotechnology ETF (IBB 280.42, +2.35) finished higher for the second day in a row, adding 0.9%.
At the bottom of the leaderboard was utilities (-1.7%), which suffered from the uptick in interest rates and the negative response to the earnings report from Dominion Resources (D 71.85, -4.43, -5.8%). The lightly-weighted telecom services (-0.7%) and real estate (-1.1%) sectors also finished lower, extending their losses for the week to 1.1% and 0.9%, respectively.
Today's economic data included the FOMC Rate Decision, January ISM Index, January ADP Employment Change, December Construction Spending, and the weekly MBA Mortgage Index:
The FOMC voted unanimously to maintain the fed funds target range at 0.50%-0.75%.
The ISM Index for January rose to 56.0 from a revised reading of 54.5 in December (from 54.7) while the Briefing.com consensus expected an uptick to 55.0.
The key takeaway from the report is that helps validates the market's upbeat assumptions about economic growth accelerating in 2017.
The ADP National Employment Report showed an increase of 246,000 in January (Briefing.com consensus 165,000) while the December reading was revised lower to 151,000 from 153,000.
The Construction Spending report for December showed a 0.2% decrease while the Briefing.com consensus expected an increase of 0.2%.
The key takeaway from the report is that private construction spending was up for the third straight month. The value of this report for the market, though, is negligible since it is a dated report, the output of which was already imputed in the fourth quarter GDP report last week.
The weekly MBA Mortgage Index declined 3.2% to follow last week's 4.0% increase.
Tomorrow's economic data will include January Challenger Job Cuts at 7:30 am ET, Initial Claims (Briefing.com consensus 250k) at 8:30 am ET, and fourth quarter Productivity (Briefing.com consensus 1.0%) also at 8:30 am.
Russell 2000 +0.2% YTD
Dow Jones Industrial Average +0.7% YTD
S&P 500 1.8% YTD
Nasdaq Composite 4.8% YTD
3:30 pm :
Crude oil shrugged off a slurry of bearish inventory data, closed at its highest level of the session, extended yesterday's gain; rig count data expected Friday
Mar 2017 crude oil futures rose $1.12 (+2.1%) to $53.88/barrel
Baker Hughes rig count data will be released Friday at 1 pm ET.
Color on price action in crude:
Crude oil futures for Mar 2017 delivery are on track to extend yesterday's gains despite EIA reporting builds on all fronts above expectations. Crude futures also shrugged off last night's bearish API reading (a 5.83 mln barrel build of oil vs. last week's build of 2.93 mln barrels, Gasoline showed a build of 2.86 mln barrels, and distillates showed a build of 2.27 mln barrels) earlier after Russia reported they have reduced output by 100k barrels/day out of the total expected 300k barrels/day cut agreed to late last year.
This latest data out of Russia comes after yesterday's news that OPEC has reduced collective output by over 1 mln barrels/day out of their expected portion of the collective output cut of 1.2 mln barrels/day.
Reminder: The total collective production cut agreed to late last year between OPEC/non-OPEC members is expected to be 1.6 mln barrels/day.
Lastly, its worth noting that crude caught a bid towards the end of the pit trading session following comments out of the White House from the National Security Adviser stating Iran's missile is in defiance of the UN & Iran is officially on notice.
EIA highlights:
Crude oil inventories had a build of +6.5 mln barrels (consensus called for a build of about +3.289 mln barrels).
Gasoline inventories had a build of +3.9 mln barrels (consensus called for a build of +0.982 mln barrels).
Distillate inventories had a build of +1.6 mln barrels.
Natural gas broke out of its 4-session downtrend ahead of tomorrow's EIA data release
Mar 2017 natural gas closed $0.05 higher (+1.6%) at $3.17/MMBtu
EIA natural gas data will be released tomorrow at 10:30 am ET.
In precious metals, gold snapped its 2-session streak on renewed dollar index strength
April 2017 gold ended today's session down $3.00 (-0.3%) to $1208.40/oz
Mar 2017 silver closed today's session $0.08 lower (-0.5%) at $17.46/oz
The dollar index was +0.2% around the 99.69 level, pressured precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +1.1% around the 88.54 level
Beginning the week with two sessions of losses, the broader market posted a modestly higher Wednesday close. The Nasdaq Composite won the day, adding 27.86 points (+0.50%) to 5642.65. The Dow Jones Industrial Average gained 26.85 points (+0.14%) to 19890.94, and the S&P 500 was up less than a point (+0.03%) when the bell rang to 2279.55.
Market data today included the ISM Index for January which rose to 56.0 from a revised reading of 54.5 in December (from 54.7). Also, the ADP National Employment Report showed an increase of 246,000 in January while the December reading was revised lower to 151,000 from 153,000. Additionally, the Construction Spending report for December showed a 0.2% decrease. Lastly, the weekly MBA Mortgage Index was down 3.2% to follow last week's 4.0% increase.
Also on the Street today, the first Federal Open Market Committee (FOMC) of 2017 came to pass and the word to the market is that there was no change in the FOMC's policy. The target range for the federal funds rate was maintained at 0.50% to 0.75%, as expected, and that target range was agreed to by all voting members, four of whom -- Chicago Fed President Evans, Philadelphia Fed President Harker, Dallas Fed President Kaplan, and Minneapolis Fed President Kashkari -- were new voting members.
After back-to-back sessions of losses to open the week, the Technology (XLK 50.46, +0.38 +0.76%) space recouped a portion of that weakness. Component Apple (AAPL 128.79, +7.44 +6.13%) was the best performing name today following its quarterly report from last night. Other sectors as measured by the S&P closed XLV +0.75%, XLB +0.50%, XLF +0.13%, XLI -0.16%, XLY -0.19%, XLP -0.72%, XLE -0.74%, XLRE -1.11%, XLU -1.69%, IYZ -2.85% as gains in Tech were only outdone by Healthcare.
In the S&P 500 Information Technology (849.35, +6.32 +0.75%) space, trading ended Wednesday near highs. Component Automatic Data (ADP 95.25, -5.74 -5.68%) was the worst performer today following this morning's mixed Q2 print and FY17 outlook. Other names in the space which outperformed with the sector included NVDA +4.37%, MU +2.65%, LRCX +2.51%, AMAT +2.28%, FB +2.23%, AVGO +2.10%, XRX +2.02%, FSLR +1.92%, CSRA +1.71%, ADI +1.64%, MCHP +1.57%, EBAY +1.10%.
Other notable news items among sector components:
GoPro (GPRO 10.57, -0.18 -1.67%) confirmed its drone, Karma, is now on sale at GoPro.com and select U.S. retailers.
Seagate Tech (STX 44.78, -0.37 -0.82%) priced $750 million of senior notes due 2022 at 99.770% and $500 million of senior notes due 2024 at 99.328%.
Corning (GLW 26.20, -0.29 -1.09%) raised its quarterly dividend to $0.155 per share from $0.135 per share.
Take-Two (TTWO 54.36, +0.71 +1.32%) acquired Social Point S.L. for $250 million in cash and stock, plus earn-out potential.
Luxoft Holding (LXFT 58.75, -0.10 -0.17%) acquired IntroPro. Financial terms of the deal were not disclosed.
Amazon (AMZN 832.19, +8.71 +1.06%) confirmed air cargo hub details in Kentucky - will create 2,000 jobs.
Carbonite (CARB 19.15, +1.90 +11.01%) acquired Double-Take Software for $65.25 million and reported prelim Q4 results; EPS of $0.07-0.11, revenues of $47.1-52.1 million. The company issued FY17 guidance with Double-Take Software impact - EPS of $0.72-0.80 on revenues of $232.5-252.5 million.
DISH Network (DISH 61.14, +1.97 +3.33%) will transfer certain EchoStar (SATS 55.06, +4.13 +8.11%) assets and operations, including its EchoStar Technologies hardware and software development group to DISH in exchange for DISH's 80% interest in Hughes Retail Group.
Medidata Solutions (MDSO 49.44, -0.10 -0.20%) to acquire CHITA to create industry's first integrated, end-to-end system for all R&D content and document management needs. MDSO also announced a strategic partnership agreement with Box (BOX 17.21, +0.14 +0.82%).
Ericsson (ERIC 5.86, -0.03 -0.51%) and the Finnish telecommunications group DNA Plc have introduced the new 700 MHz spectrum for mobile broadband as of February 1, 2017, following the conditions of the radio license granted by the Finnish Communications Regulatory Authority. The spectrum previously used for digital television enables build-up of 4G capacity, particularly in sparsely populated areas.
In reaction to quarterly results:
Apple (AAPL) reported better than expected Q1 EPS and revenues of $3.36 and $78.35 billion, respectively. For Q2, the company sees revs of $51.5-53.5 billion on gross margins between 38-39%.
Automatic Data (ADP) reported better than expected Q2 EPS of $0.87 on revenues which came in-line with expectations at $2.99 billion. ADP now expects full year revenue growth of about 6% compared to prior forecast of 7% to 8% growth. This equates to roughly $12.37 billion. Also, ADP continues to expect full year diluted EPS from continuing operations to grow 15% to 17%, and adjusted diluted EPS growth of 11% to 13%, or roughly $3.62-3.68.
Electronic Arts (EA 83.00, -0.43 -0.52%) reported better than expected Q3 GAAP EPS of net breakeven. GAAP revenues for Q3 were up 7.4% year-over-year to $1.15 billion. For FY17, the company sees EPS of $2.91 from prior expectations of $2.69. FY17 revenues are now expected to be about $4.80 billion from prior $1.775 billion.
CGI Group (GIB 48.93, +0.84 +1.75%) reported worse than expected Q1 EPS and revenues of C$0.90 on revenues of C$2.68 billion.
Advanced Micro (AMD 12.06, +1.69 +16.30%) reported a better than expected Q4 non-GAAP loss per share of $0.01 on revenues which rose 15.4% compared to a year ago to $1.11 billion. AMD gave in-line Q1 revenues guidance of down 8-14% sequentially to about $951-1,018 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: DOX ACLS BKFS EPAY BRKS CACI CDNS CAVM CRUS CSGS ESIO EXAR EXTR FB IVAC MLNX EGOV NXPI CNXN POWI QRVO SYMC WSTC/BCE CDK DSPG ENTG IT HRS KEM KLIC MITK MKSI NOK
Analyst actions:
MRVL was upgraded to Buy from Sell at UBS,
TWLO was upgraded to Mkt Outperform from Mkt Perform at JMP Securities;
GLW was downgraded to Mkt Perform from Outperform at Bernstein,
MBLY was downgraded to Equal Weight from Overweight at Morgan Stanley,
AUDC was downgraded to Market Perform from Outperform at Northland Capital
