From Briefing.com: 4:24 pm Microchip beats by $0.15, beats on revs; guides Q4 EPS above consensus, revs above consensus (MCHP) :
Reports Q3 (Dec) earnings of $1.05 per share, excluding non-recurring items, $0.15 better than the Capital IQ Consensus of $0.90; revenues rose 59.6% year/year to $881.2 mln vs the $849.11 mln Capital IQ Consensus.
Co issues upside guidance for Q4, sees EPS of $1.01-1.11 vs. $0.93 Capital IQ Consensus Estimate; sees Q4 revs of $872-908 mln vs. $863.95 mln Capital IQ Consensus Estimate.
4:17 pm Nanometrics beats by $0.06, beats on revs; guides Q1 EPS below consensus, revs in-line (NANO) :
Reports Q4 (Dec) earnings of $0.33 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.27; revenues rose 38.6% year/year to $59.2 mln vs the $57.18 mln Capital IQ Consensus.
Co issues guidance for Q1, sees EPS of $0.19-0.26, excluding non-recurring items, vs. $0.27 Capital IQ Consensus Estimate; sees Q1 revs of $56-61 mln vs. $58.05 mln Capital IQ Consensus Estimate.
4:13 pm Emcore beats by $0.01, beats on revs; guides Q2 revs above consensus (EMKR) :
Reports Q1 (Dec) earnings of $0.13 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.12; revenues rose 34.2% year/year to $30.2 mln vs the $29.03 mln Capital IQ Consensus.
Co said, "With our improvement in Non-GAAP operating margin to 11.5%, we're rapidly closing in on our target of 12.5% by the end of FY17."
Co issues upside guidance for Q2, sees Q2 revs of $29-31 mln vs. $26.20 mln Capital IQ Consensus Estimate.
4:11 pm Nuance Communications beats by $0.01, beats on revs; guides Q2 EPS & FY17 in-line (NUAN) :
Reports Q1 (Dec) earnings of $0.35 per share, $0.01 better than the Capital IQ Consensus of $0.34; revenues rose 0.2% year/year to $496 mln vs the $490.4 mln Capital IQ Consensus.
Co issues in-line guidance for Q2, sees EPS of $0.36-0.40 vs. $0.38 Capital IQ Consensus Estimate; sees Q2 revs of $493-507 mln vs. $500.05 mln Capital IQ Consensus Estimate.
Co issues in-line guidance for FY17, sees EPS of $1.53-1.63 vs. $1.59 Capital IQ Consensus Estimate; sees FY17 revs of $2.02-2.07 bln vs. $2.04 bln Capital IQ Consensus Estimate.
4:05 pm Coherent (halted) beats by $0.76, beats on revs (COHR) :
Reports Q1 (Dec) adj. earnings of $2.57 per share, $0.76 better than the Capital IQ Consensus of $1.81; revenues rose 81.9% year/year to $346.1 mln vs the $316.98 mln Capital IQ Consensus.
Ending backlog expected to ship in the next 12 months was $823.5 million at December 31, 2016, compared to a backlog of $605.3 million at October 1, 2016 and a backlog of $370.0 million at January 2, 2016.
"Coherent delivered record-setting performance and continues to enjoy a very strong demand environment across its end markets. The FPD business remains robust with an increasing number of opportunities in device packaging that complement our leadership position in ELA. Materials processing also performed well for components, lasers and tools including record orders in medical device manufacturing workstations. All other end markets met or exceeded our expectations and customer engagement is at record levels," said John Ambroseo, Coherent's President and Chief Executive Officer. "The integration of Coherent and Rofin is well underway and there have been few surprises. The project teams are making steady progress and we are on track to meet our synergy targets."
4:15 pm : Minimal movement on Monday set the tone for Tuesday's flat finish as the major averages closed the day relatively unchanged in what was a range-bound trading session. The Nasdaq (+0.2%) and the Dow (+0.2%) eked out small gains while the S&P 500 finished right at its flat line.
Countercyclical sectors had a slight advantage during Tuesday's session with four of the five posting gains. Consumer staples (+0.8%) finished atop the day's leaderboard with Church & Dwight (CHD 47.27, +1.82) adding 4.0% after reporting better than expected earnings and raising its dividend.
On the cyclical side, technology (+0.4%) outpaced the benchmark index on the back of another solid showing from Apple (AAPL 131.53, +1.24). Industrials (+0.2%) were the only other cyclical sector to finish the day higher, rallying around the 4.5% jump in shares of Emerson Electric (EMR 62.54, +2.68). The company beat top and bottom line estimates and issued upbeat guidance for 2017.
General Motors (GM 35.10, -1.73) also reported positive quarterly results before Tuesday's opening bell, beating earnings and revenue estimates. However, the earnings beat may have taken a back seat to the company's 3.8% year-over-year decline in January sales considering shares of GM finished the day lower by 4.7%. Fellow automaker Ford Motor (F 12.34, -0.18) also experienced some pressure, closing 1.4% lower.
The consumer discretionary sector (-0.1%) couldn't escape the automakers' selling pressure. Financials (-0.2%) and materials (-0.8%) also finished in the red, but none fell farther than energy (-1.4%). The energy space moved lower in tandem with crude oil, which was weighed down by myriad concerns. An uptick in U.S. production, signs of slowing demand growth, and a 0.5% climb in the U.S. Dollar Index (100.30, +0.46) left the energy component 1.6% lower at $52.18/bbl.
The U.S. dollar's movement was rooted in comments from Philadelphia Fed President Patrick Harker. On Monday evening, Mr. Harker, who is an FOMC voting member, stated that he would be open to a March rate hike. The news pushed the U.S. Dollar Index (100.25, +0.41) to its highest level of the month (100.66), but a dovish statement during Tuesday's session from Minneapolis Fed President Neel Kashkari, who is also an FOMC voting member, facilitated a pullback in the Dollar Index.
However, regardless of the headlines, the market remains confident that there will be no rate hike in March; the fed funds futures market shows an 8.9% implied probability of a March rate hike, which is unchanged from Monday's reading.
Economic data reported on Tuesday included December Trade Balance, December Job Openings and Labor Turnover Survey, and December Consumer Credit:
The December trade balance showed a deficit of $44.3 billion while the Briefing.com consensus expected the deficit to hit $45.0 billion. The previous month's deficit was revised to $45.7 billion from $45.2 billion.
The key takeaway from the report is that it could stir the political trade pot since there were trade deficits recorded with China, the European Union, Japan, Germany, and Mexico. That isn't new, yet there's a new administration that isn't too fond of that dynamic.
The December Job Openings and Labor Turnover Survey showed that job openings decreased to 5.501 million from a revised 5.505 million (from 5.522 million) in November.
The Consumer Credit report for December showed an increase of $14.2 billion while the Briefing.com consensus expected growth of $19.4 billion. The prior month's credit growth was revised to $25.2 billion from $24.5 billion.
Wednesday's lone economic report will be the 7:00 am ET release of the MBA Mortgage Applications Index.
Nasdaq Composite +5.4% YTD
S&P 500 +2.4% YTD
Dow Jones Industrial Average +1.7% YTD
Russell 2000 +0.3% YTD
DJ30 +37.87 NASDAQ +10.67 SP500 +0.52 NASDAQ Adv/Vol/Dec 1186/1.74 bln/1651 NYSE Adv/Vol/Dec 1331/977.5 mln/1595
3:30 pm :
In precious metals, gold closed at a 3-month high for the second consecutive session despite dollar index strength
April gold ended today's session up $3.70 (+0.3%) to $1236.00/oz March silver closed today's session $0.05 higher (+0.3%) at $17.75/oz
Crude oil extended yesterday's losses ahead of today's API data release- see yesterday's energy sector summary comment for color on oil
Mar crude oil futures fell $0.83 (-1.6%) to $52.18/barrel
Upcoming data reminders:
API petroleum data will be released tomorrow at 4:30 pm ET
EIA petroleum data will be released Wednesday at 10:30 am ET
Baker Hughes rig count data will be released Friday at 1 pm ET
Natural gas extended a prior 3-day rally, closed pit trading near session highs after taking a slight breather & closing modestly lower yesterday
Mar natural gas closed $0.08 higher (+2.6%) at $3.13/MMBtu
The dollar index was +0.4% around 100.30 level, did not appear to pressure precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.04% around the 87.86 level
The broader market ended higher today despite limping into the close with flat action. As it were, both the Nasdaq and the Dow made fresh all-time highs intraday, ending as the best two performing indices at the close. The Nasdaq Composite led slightly, up 10.67 (+0.19%) at the close to 5674.22. The Dow Jones Industrial Average added 37.87 points (+0.19%) to 20090.29, and the S&P 500 was higher by less than a points (+0.02%) to 2293.08 when the bell rang.
Economic data on Tuesday included the December trade balance which showed a deficit of $44.3 billion compared to the previous month's deficit which was revised to $45.7 billion from $45.2 billion. Also, the December Job Openings and Labor Turnover Survey showed that job openings decreased to 5.501 million from a revised 5.505 million (from 5.522 million) in November. Lastly, the Consumer Credit report for December showed an increase of $14.2 billion compared to the prior month's credit growth which was revised to $25.2 billion from $24.5 billion.
Action in the Technology (XLK 50.92, +0.20 +0.39$) space was positive out of the gate, and never looked back. Component Autodesk (ADSK 84.50, +1.68 +2.03%) was one of the better performing names in the space today following news the CEO Carl Bass would step down from his role on February 8; the company also reaffirmed certain guidance. Other sectors as measured by the S&P closed split -- XLP +0.82% XLU +0.25% XLI +0.17% XLV +0.10% XLY -0.09% XLRE -0.20% XLF -0.25% IYZ -0.74% XLB -0.79% XLE -1.42% with Consumer Staples performing the best and Energy falling behind.
In the S&P 500 Information Technology (860.08, +3.53 +0.41%) space, trading made new all-time highs today, ending just shy of the top of the range. Component Motorola Solutions (MSI 77.34, -4.39 -5.37%) was the worst performing name today following a cautious report on the stock by Citron Research. Other names in the space which closed higher with the sector included AKAM +2.02%, CTSH +1.95%, CTXS +1.77%, NVDA +1.55%, ACN +1.52%, IBM +1.48%, STX +1.45%, FFIV +1.38%, EBAY +1.25%, NTAP +1.23%, TSS +1.17%, HPQ +1.11%.
Other notable news items among sector components:
CSRA Inc. (CSRA 32.55, +0.25 +0.77%) signed a three-year Enterprise Agreement with Microsoft (MSFT 63.43, -0.21 -0.33%) to enable CSRA to utilize Microsoft's products, such as Microsoft Office365, for the Microsoft Azure cloud platform.
Workday (WDAY 86.05, +0.68 +0.80%) announced that Amazon (AMZN 812.50, +4.86 +0.60%) has selected and is beginning to deploy Workday Human Capital Management (HCM), including Workday Payroll. The contract was signed in October 2016.
Autodesk (ADSK) announced that Carl Bass has decided to step down as CEO effective February 8. The company's board has instituted a CEO search to consider candidates inside and outside Autodesk and has formed an Interim Office of the Chief Executive to oversee the company's day-to-day operations. Bass will remain on staff as a special advisor to the company in support of the transition to a new CEO. He will continue to sit on the Autodesk board of directors and will be nominated for reelection at the 2017 annual meeting of shareholders. Crawford Beveridge will remain non-executive chairman of the board. Additionally, Autodesk reiterated its non-GAAP business outlook for Q$ and FY17 and expects revenue, earnings per share, and subscription additions to be at the high end of guidance disclosed on November 29, 2016.
IBM (IBM 178.46, +2.60 +1.48%) announced a blockchain initiative with Dubai Customs, Dubai Trade, advancing Dubai's government blockchain strategy. As part of the initiative, IBM is also working with leading businesses including Emirates NBD, du, Aramex, and Banco Santander.
eBay (EBAY 32.43, +0.40 +1.25%) filed a mixed securities shelf offering. The company also disclosed material weakness in its internal control regarding financial reporting.
FXCM (FXCM 3.45, -3.40 -49.64%) announced simultaneous regulatory settlements with the National Futures Association and the Commodity Futures Trading Commission against its U.S. subsidiary, Forex Capital Markets LLC, FXCM Holdings, LLC and certain of its principals. The named FXCM entities and principals neither admit nor deny the allegations associated with the settlements. The NFA settlement has no monetary fine, and the CFTC settlement includes a $7 million fine. Pursuant to the settlement agreements, the Company will be withdrawing from business in the United States.
GAIN Capital (GCAP 8.06, +0.41 +5.36%) signed a non-binding letter of intent to acquire the client base of
FXCM's (FXCM) U.S. operations.
Juniper Networks (JNPR 27.20, -0.08 -0.29%) and Pradeep Sindhu, current Chief Technology Officer and EVP, have agreed to redefine his duties and responsibilities so that he can reduce the time he spends at the company and devote a majority of his time to Fungible, Inc., a startup company that Dr. Sindhu co-founded in 2015. Dr. Sindhu will remain employed with JNPR as EVP and Chief Scientist, and will continue to serve as Chief Technology Officer in order to assist with the transition to his successor. The Company has commenced a search to identify a successor.
comScore (SCOR 22.86, -0.36 -1.55%) announced, as expected, it received notice from the Nasdaq Hearings Panel that the Panel had determined to delist the shares of SCOR common stock from the Nasdaq Global Select Market and suspend trading in SCOR shares effective at the open of business on February 8, 2017.
In reaction to quarterly results:
Fidelity Nat'l Info (FIS 77.30, -2.05 -2.58%) reported in-line Q4 EPS of $1.14 on revenues which missed market expectations at $2.44 billion. The company also issued downside guidance for FY17 EPS and revenues in the range of $4.15-4.30 and $9.333-9.426 billion, respectively.
Arrow Elec (ARW 70.52, -4.06 -5.44%) reported in-line Q4 earnings of $2.00 per share on revenues which missed expectations at $6.44 billion. For Q1, the company sees EPS of $1.37-1.49 on revenues of $5.38-5.78 billion.
Vishay (VSH 15.80, -0.75 -4.53%) reported worse than expected Q4 EPS and revenues of $0.18 and $570.8 million, respectively. For Q1, the company sees revenues ahead of expectations at $575-615 million.
Knowles (KN 18.75, +0.77 +4.28%) reported better than expected Q4 EPS and revenues of $0.35 and $240.6 million, respectively. For Q1, KN sees EPS and revenues worse than expected at $0.08-0.14 and $180-200 million, respectively.
Fabrinet (FN 43.04, +0.94 +2.23%) reported better than expected Q2 EPS and revenues of $0.91 and $351.2 million, respectively. For Q3, FN sees EPS and revenues ahead of market expectations at $0.87-0.89 and $360-364 million, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: AKAM CALD COHR CSRA EMKR EEFT FTV IPHI JKHY JIVE LITE MCHP MOBL NANO NTGR NEWR NUAN PDVW PRO SCSC SPSC TTWO TCX TWLO ULTI ZG/BR CTSH GRUB ORBK RDWR
Analyst actions:
CHKP was upgraded to Buy from Neutral at BTIG Research,
VMW was upgraded to Outperform at Daiwa,
VSAT was upgraded to Outperform from Mkt Perform at Raymond James,
NOK was upgraded to Overweight from Equal Weight at Morgan Stanley,
TU was upgraded to Outperform from Sector Perform at National Bank
7:33 am Vishay misses by $0.03, misses on revs; guides Q1 revs above consensus (VSH) :
Reports Q4 (Dec) earnings of $0.18 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of $0.21; revenues rose 2.7% year/year to $570.8 mln vs the $581.37 mln Capital IQ Consensus.
"We are pleased to have delivered solid 11% growth in book value per share in 2016. Investment results reflect the benefits of our short-duration fixed-maturity portfolio in a rising interest rate environment and a decent lift from our allocation to risk assets. Underwriting results reflect the strong performance of our portfolio of specialty businesses. Going into 2017, we are positioned to continue delivering good underwriting results across our diverse portfolio of businesses."
Co issues upside guidance for Q1, sees Q1 revs of $575-615 mln vs. $585.02 mln Capital IQ Consensus Estimate. Co sees adj gross margins between 24-26% at constant exchange rates.
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