From Briefing.com: 4:13 pm Cisco Systems beats by $0.01, reports revs in-line; guides Q3 EPS in-line, revs in-line; raises dividend 12% (CSCO) :
Reports Q2 (Jan) earnings of $0.57 per share, $0.01 better than the Capital IQ Consensus of $0.56; revenues fell 2.9% year/year to $11.58 bln vs the $11.56 bln Capital IQ Consensus, with product revenue down 4% and service revenue up 5%.
Revenue by geographic segment was: Americas down 3%, EMEA flat, and APJC down 3%.
Product revenue performance was led by Security which increased 14%. Collaboration and Wireless product revenue increased by 4% and 3%, respectively. NGN Routing, Switching and Data Center product revenue decreased by 10%, 5% and 4%, respectively. Service Provider Video product revenue decreased by 41%.
Non-GAAP total gross margin and product gross margin were 64.1% (vs. 63-64% guidance) and 62.4%, respectively. The decrease in non-GAAP product gross margin compared with 63.3% in the second quarter of fiscal 2016 was primarily due to pricing and to a lesser extent product mix, partially offset by continued productivity improvements.
Co issues in-line guidance for Q3, sees EPS of $0.57-0.59, excluding non-recurring items, vs. $0.58 Capital IQ Consensus Estimate; sees Q3 revs down 0-2% to ~$11.76-12.0 bln vs. $11.87 bln Capital IQ Consensus; adj. gross margin 63-64%.
Increases quarterly cash dividend 12% to $0.29
4:09 pm SunPower misses by $0.18, beats on revs; guides Q1 revs below consensus; reaffirms FY17 revs guidance (SPWR) :
Reports Q4 (Dec) loss of $0.64 per share, excluding non-recurring items, $0.18 worse than the Capital IQ Consensus of ($0.46); revenues fell 19.5% year/year to $1.1 bln vs the $1.06 bln Capital IQ Consensus.
Co issues downside guidance for Q1, sees Q1 revs of $370-420 mln, excluding non-recurring items, vs. $459.23 mln Capital IQ Consensus Estimate.
Gross margin of 0 percent to 2 percent;
Adjusted EBITDA of ($45) million to ($20) million;
Megawatts deployed in the range of 150 MW to 180 MW.
Co reaffirms guidance for FY17, sees FY17 revs of $2.1-2.6 bln, excluding non-recurring items, vs. $2.35 bln Capital IQ Consensus Estimate.
Reaffirms the following:Non-GAAP operational expenses of less than $350 million;Capital expenditures of approximately $120 million;Gigawatts (:GW) deployed in the range of 1.3 GW to 1.6 GW. Expects to record GAAP restructuring charges totaling $50 million to $100 million in fiscal year 2017.Expects to generate positive operating cash flow through the end of fiscal year 2017 and exit the year with approximately $300 million in cash. Despite current industry conditions the company is forecasting positive Adjusted EBITDA for the full year 2017, weighted toward the second half of the year. The company believes that cash flow and liquidity are the key evaluation metrics for investors in the near term. 4:07 pm NetApp beats by $0.08, reports revs in-line; guides Q4 EPS above consensus, revs in-line (NTAP) :
Reports Q3 (Jan) earnings of $0.82 per share, $0.08 better than the Capital IQ Consensus of $0.74; revenues rose 1.3% year/year to $1.4 bln vs the $1.39 bln Capital IQ Consensus.
All-flash array annualized net revenue run rate almost $1.40 billion, up 160% year-over-year.
Nearly 300 petabytes of flash shipped.
Co issues guidance for Q4, sees EPS of $0.79-0.84 vs. $0.77 Capital IQ Consensus Estimate; sees Q4 revs of $1.365-1.515 bln vs. $1.4 bln Capital IQ Consensus Estimate.
"Q3 marked another quarter of strong execution by NetApp," said George Kurian, chief executive officer. "The transformation of NetApp is yielding solid results and has changed the trajectory of our business. With our industry-leading portfolio of solutions and Data Fabric strategy, NetApp is well positioned to lead in the next era of IT."
4:05 pm Lattice Semi beats by $0.04, misses on revs (LSCC) :
Reports Q4 (Dec) earnings of $0.10 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.06; revenues rose 16.7% year/year to $118.11 mln vs the $126.7 mln Capital IQ Consensus.
Gross margin of 53.7% on a GAAP basis and 53.9% on a non-GAAP basis.
On November 3, 2016, the Company announced that it had entered into a definitive agreement to be acquired by Canyon Bridge Capital Partners, Inc. The transaction with Canyon Bridge will allow Lattice to grow its operations in the U.S. and globally and better reach its target markets. The process of obtaining approval from the Committee on Foreign Investment in the United States (:CFIUS) is well underway, and the Company looks forward to continuing to have constructive discussions with the Committee in order to conclude the deal as soon as possible.
As a result of the acquisition announcement with Canyon Bridge, the Company will not hold a quarterly conference call and webcast, and will not provide an outlook for its future financial results. 4:04 pm Applied Materials beats by $0.01, reports revs in-line; guides Q2 EPS above consensus, revs above consensus (AMAT) :
Reports Q1 (Jan) earnings of $0.67 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.66; revenues rose 45.2% year/year to $3.28 bln vs the $3.27 bln Capital IQ Consensus.
Co issues upside guidance for Q2, sees EPS of $0.72-0.80, excluding non-recurring items, vs. $0.62 Capital IQ Consensus Estimate; sees Q2 revs of $3450-3600 vs. $3.21 bln Capital IQ Consensus Estimate.
4:20 pm : Equity indices marched through a stockpile of economic data to new record highs on Wednesday as the S&P 500 (+0.5%) posted its seventh consecutive advance. The Dow (+0.5%) finished in line with the benchmark index while the Nasdaq (+0.6%) closed a step ahead.
The day's record close appeared somewhat doubtful following this morning's release of January CPI. The report came in hotter than expected with total CPI increasing 0.6% (Briefing.com consensus +0.3%) and core CPI, which excludes food and energy, rising 0.3% (Briefing.com consensus +0.2%). While the Fed's preferred inflation gauge is the PCE Price Index, Wednesday's CPI reading confirms that consumer inflation pressures are rising, which in turn should increase the potential for a rate hike at the March meeting.
Sure enough, the fed funds futures market showed an increase in the implied probability of a March rate hike (to 31.0% today from 17.7% yesterday). Additionally, the fed funds futures market now points to the next FOMC rate hike taking place in May with the corresponding probability rising to 53.1% from yesterday's 40.6%.
U.S. Treasuries slipped immediately following the January CPI release and held the bulk of those losses into the close, finishing lower for the fifth consecutive session. The benchmark 10-yr yield finished three basis points higher at 2.50%.
After the morning's wave of economic data, which included much more than just CPI (see data review below), the stock market found its footing and began a slow but steady climb into the green. Financials (+0.7%) led the advance throughout the morning, but health care (+1.2%) took the reigns in the afternoon.
While the health care space showed broad strength, biotechnology and pharmaceutical names demonstrated notable vigor as a handful components were recently disclosed in new, increased, and/or maintained portfolio positions. The iShares Nasdaq Biotechnology ETF (IBB 294.95, +5.15) advanced 1.8% while pharmaceutical heavyweights like Pfizer (PFE 33.51, +0.76), AbbVie (ABBV 61.65, +0.83), and Eli Lilly (LLY 80.25, +1.44) finished higher between 1.4% and 2.3%.
The top-weighted technology sector (+0.4%) finished a step behind the broader market as Apple (AAPL 135.51, +0.49) resisted the sector's bullish disposition. However, chipmakers somewhat balanced the tech giant's underperformance, evidenced by the 0.8% uptick in the PHLX Semiconductor Index. Analog Devices (ADI 81.60, +3.76) led the chipmaker advance after beating top and bottom line estimates and increasing its quarterly dividend.
Consumer staples (+0.8%) finished just behind the health care space despite the negative response to PepsiCo's (PEP 106.73, -0.19) latest earnings report. The company slipped 0.2% after below-consensus guidance outweighed above-consensus earnings. Also of note, PEP decided to raise its dividend.
Utilities (-0.4%) finished the day at the bottom of the leaderboard, while energy (-0.4%) did only slightly better as crude oil closed 0.2% lower at $53.08/bbl. The energy component counter-intuitively ticked up into positive territory following the latest Energy Information Administration (EIA) inventory report, which dwarfed consensus estimates (+3.5 million) by showing a build of 9.5 million barrels. However, the uptick was short-lived as crude oil soon returned to negative territory.
Wednesday saw a slew of economic reports including January CPI, January Retail Sales, January Industrial Production and Capacity Utilization, February Empire Manufacturing, December Business Inventories, February NAHB Housing Market Index, and the MBA Mortgage Index:
Total CPI rose 0.6% (Briefing.com consensus +0.3%) in January while core CPI, which excludes food and energy, increased 0.3% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.5% and core CPI has increased 2.3%.
While the Fed's preferred inflation gauge is the PCE Price Index, the key takeaway from the report is that consumer inflation pressures are rising, which in turn should increase the potential for a rate hike at the March meeting.
January retail sales increased 0.4%, which compares to the Briefing.com consensus of 0.1%. The prior month's reading was revised higher to 1.0% from 0.6%. Excluding autos, retail sales rose 0.8% while the consensus expected an uptick of 0.4%. The prior month's reading was revised higher to 0.4% from 0.2%.
The key takeaway from the report is that discretionary spending on goods picked up in January, which will compute into a positive input for first quarter GDP forecasts.
January Industrial Production decreased 0.3% (Briefing.com consensus 0.0%) while Capacity Utilization declined to 75.3% (Briefing.com consensus 75.5%) from a revised reading of 75.6% (from 75.5%) in December.
The key takeaway from the report is that the decline in industrial production stemmed entirely from a drop in utilities output, which is to say the headline number is not as bad as it appears.
Business Inventories rose 0.4% in December which is in line with the Briefing.com consensus. The prior month's reading was revised to 0.8% from 0.7%.
The key takeaway from the report is that the inventory-to-sales ratio is at its lowest point since December 2014. That's elevated from pre-financial crisis levels, when it was below 1.30, yet a further downtrend could restore some much needed pricing power.
Empire Manufacturing Survey for February rose to 18.7 from the prior month's reading of 6.5. The Briefing.com consensus estimate was pegged at 7.0.
The NAHB Housing Market Index for February fell to 65 (Briefing.com consensus 68) from an unrevised 67 in January.
The weekly MBA Mortgage Index decreased 3.7% to follow last week's 2.3% uptick.
Thursday will also see a batch of economic data with January Housing Starts (Briefing.com consensus 1.22 million), Initial Claims (Briefing.com consensus 245K), and the Philadelphia Fed Index for February (Briefing.com consensus 17.5) all crossing the wires at 8:30 am ET.
Nasdaq Composite +8.1% YTD
S&P 500 +4.9% YTD
Dow Jones Industrial Average +4.3% YTD
Russell 2000 +3.4% YTD
NASDAQ Adv/Vol/Dec 1822/1.91 bln/1019 NYSE Adv/Vol/Dec 1739/974.6 mln/1206
3:30 pm :
Crude oil ended a volatile pit trading session modestly lower after EIA reported notable builds above Consensus for both crude & gasoline stocks
Mar crude oil futures fell $0.13 (-0.2%) to $53.08/barrel
Rig count data will be released Friday at 1 pm ET
EIA highlights:
Crude oil inventories had a build of +9.5 mln barrels (consensus called for a build of about +3.513 mln barrels)
Gasoline inventories had a build of +2.8 mln barrels (consensus called for a draw of -0.752 mln barrels)
Distillate inventories had a draw of -0.7 mln barrels
Natural gas rallied off of this morning's 3-month low on headlines of a Texas pipeline explosion ahead of tomorrow's EIA data release
Mar natural gas closed $0.02 higher (+0.7%) at $2.92/MMBtu
EIA natural gas data will be released tomorrow at 10:30 am ET
In precious metals, gold rebounded from a 4-session decline on dollar index weakness
April gold ended today's session up $7.70 (+0.6%) to $1233.00/oz
March silver closed today's session $0.07 higher (+0.4%) at $17.97/oz
The dollar index turned negative and is now -0.2% around the 101.07 level, boosting precious metals
Commodities, as measured by the Bloomberg Commodity Index, were +0.4% around the 89.01 level
On the fifth day of cracking into new all-time high territory, the broader market closed with gains of better than half a percent across the board. Leading the advance, the tech-heavy Nasdaq Composite gained 36.87 points today (+0.64%) to 5819.44. The Dow Jones Industrial Average added 107.45 points (+0.52%) to 20611.86, and the S&P 500 was up 11.67 points (+0.50%) when the bell rang to 2349.25.
Wednesday was filled with economic data, including the Total CPI reading which rose 0.6% in January while core CPI, which excludes food and energy, increased 0.3%. On a year-over-year basis, total CPI is up 2.5% and core CPI has increased 2.3%. January retail sales increased 0.4%, compared to the prior month's reading was revised higher to 1.0% from 0.6%. Excluding autos, retail sales rose 0.8% while the consensus expected an uptick of 0.4%. The prior month's reading was revised higher to 0.4% from 0.2%. Also, January Industrial Production decreased 0.3% while Capacity Utilization declined to 75.3% from a revised reading of 75.6% (from 75.5%) in December. Further, Business Inventories rose 0.4% in December while the prior month's reading was revised to 0.8% from 0.7%. The Empire Manufacturing Survey for February rose to 18.7 from the prior month's reading of 6.5, the NAHB Housing Market Index for February fell to 65 from an unrevised 67 in January, and the weekly MBA Mortgage Index decreased 3.7% to follow last week's 2.3% uptick.
The Technology (XLK 51.89, +0.17 +0.33%) space reached levels today it has not seen since the fall of 2000. Component FLIR Systems (FLIR 36.93, +2.78 +8.14%) moved higher today, rebounding off post-earnings weakness. Other sectors as measured by the S&P closed XLV +1.08%, XLP +0.91%, XLF +0.78%, XLI +0.54%, XLY +0.52%, XLB -0.13%, XLU -0.24%, XLRE -0.29%, XLE -0.39%, IYZ -0.70% with Healthcare leading all others.
In the S&P 500 Information Technology (877.44, +3.46 +0.40%) space, trading again made a new high, moving the sector to +8.6% YTD. Component Analog Devices (ADI 81.60, +3.76 +4.83%) was one of the better performing names today after the company reported a better than expected January quarter. Other names in the space which out-performed today included FSLR +2.39%, EA +2.20%, QCOM +1.82%, MCHP +1.58%, CSCO +1.58%, CTXS +1.56%, FFIV +1.44%, YHOO +1.40%, CTSH +1.34%, LLTC +1.25%, CSRA +1.20%, RHT +1.20%, FIS +1.13%.
Other notable news items among sector components:
PayPal (PYPL 41.87, +0.25 +0.60%) to acquire TIO Networks for $233 million, and affirmed outlook.
Per Bloomberg, Yahoo! (YHOO 45.65, +0.63 +1.40%) and Verizon (VZ 48.08, -0.19 -0.39%) may be attempting to reach a revised agreement.
SoftBank (SFTBY 37.90, +0.16 +0.44%) confirmed plans to acquire Fortress Investment Group (FIG 7.99, +1.78 +28.66%) for $3.3 billion.
Analog Devices (ADI), in addition to reporting quarterly results, increased its quarterly dividend to $0.45 per share from $0.42.
KPMG International and Microsoft (MSFT 64.53, -0.04 -0.06%) launched joint Blockchain Nodes, which are designed to create and demonstrate use cases that apply blockchain technology to business propositions and processes.
Manpower (MPWR 86.02, +0.89 +1.05%) signed a purchase agreement with Ciber (CBR 0.38, +0.01 +3.54%) to acquire its biz in Spain. Financial details of the deal were not disclosed.
Intelsat (I 4.09, +0.07 +1.74%) announced the successful launch of the Intelsat 32e satellite aboard an Ariane 5 launch vehicle from French Guiana.
Luxoft Holding (LXFT 57.55, -2.90 -4.80%) CFO Roman Yakushkin to resign effective March 31.
The Communications Workers of America notified AT&T (T 41.12, +0.37 +0.91%) that former DIRECTV tech support employees in seven states voted to ratify an agreement.
SCANA Corp (SCG 67.47, +0.61 +0.91%) received reaffirmation from Westinghouse regarding completion of the V.C. Summer Nuclear Station project.
Twitter (TWTR 16.74, +0.22 +1.33%) CEO Jack Dorsey disclosed purchase of nearly 426K shares worth $7 million (transaction dates 2/13-2/14).
Sapiens Int'l (SPNS 14.68, +0.80 +5.76%) acquired privately held StoneRiver for about $102 million in cash. The company expects the transaction to be accretive to EPS starting in 3Q17.
Vectrus (VEC 23.67, +0.10 +0.42%) receives a $14 million firm-fixed-price installation services task order in support of the U.S. Air Force at Bagram Air Field in Afghanistan.
Synchronoss Tech (SNCR 34.00, +0.24 +0.71%) disclosed that CFO Karen Rosenberger will resign effective April 1 in order to pursue other opportunities.
Oracle (ORCL 41.41, +0.31 +0.75%) announced Oracle Tax Reporting Cloud Service.
In reaction to quarterly results:
Analog Devices (ADI) reported better than expected Q1 EPS and revenues of $0.94 and $984 million, respectively. For Q2, the company guided EPS in the range of $0.74-0.86 and revenues of $870-950 million.
Agilent (A 51.62, +1.23, +2.44%) reported better than expected Q1 EPS and revenues of $0.53 and $1.07 billion, respectively. For Q2, ADI sees EPS and revenues in-line of $0.47-0.49 and $1.04-1.06 billion, respectively. For FY17, the company sees EPS of $2.10-2.16 and revenues of $4.33-4.35 billion.
Shopify (SHOP 60.61, +4.56 +8.14%) reported better than expected Q4 EPS of net of breakeven and revenues which rose 85.8% compared to last year to $130.4 million. For Q1, the company sees revenues of $120-122 million. For FY17, the company sees revenues of $580-600 million.
Groupon (GRPN 4.64, +0.86 +22.75%) reported better than expected Q4 EPS and revenues of $0.07 and $934.9 million, respectively. For FY17, the company sees gross profit in the range of $1.30 billion and $1.35 billion, an increase of $40 to $90 million compared to full year 2016 results for the 15 countries in the company's go-forward footprint on an FX-neutral basis. GRPN also expects adjusted EBITDA to be in the range of $200 million and $240 million, an increase of $16 to $56 million compared to full year 2016 results for the 15 countries in the company's go-forward footprint on an FX-neutral basis.
Wix.com (WIX 61.50, +8.55 +16.15%) reported better than expected Q4 EPS and revenues of $0.06 and $84.2 million, respectively. For Q1, WIX sees revenues ahead of market expectations at $89-90 million. For FY!7, WIX sees revenues ahead of market expectations at $409-411 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: AMAT, CSLT, CSCO, ELNK, EQIX, GDDY, NTAP, NTES, QTWO, QUIK, SSNC, SPWR, SNPS, TIVO, TRIP/BCOR, EIGI, EPAM, HIMX, NICE, SYNT, YNDX
Analyst actions:
HPE was upgraded to Positive from Mixed at OTR Global,
HOLI was upgraded to Buy from Hold at Deutsche Bank,
IPGP was upgraded to Buy from Neutral at Dougherty,
INXN was upgraded to Buy from Neutral at Guggenheim;
HOLI was downgraded to Neutral from Buy at Citigroup,
CVG was downgraded to Hold from Buy at SunTrust,
CALX was downgraded to Market Perform from Outperform at Northland Capital;
KEYW was initiated with an Outperform at RBC Capital Mkts,
OLED was initiated with a Positive at Susquehanna,
COHR was initiated with a Neutral at Susquehanna,
V, MA and CSRA were initiated with a Buy ratings at Loop Capital,
COUP and EGOV were initiated with Hold ratings at Loop Capital
8:03 am Analog Devices beats by $0.20, beats on revs; guides Q2 EPS in-line, revs in-line; Increases dividend 7% (ADI) :
Reports Q1 (Jan) earnings of $0.94 per share, excluding non-recurring items, $0.20 better than the Capital IQ Consensus of $0.74; revenues rose 27.9% year/year to $984 mln vs the $871.79 mln Capital IQ Consensus.
Non-GAAP operating margin of 35% of revenue
Co issues in-line guidance for Q2, sees EPS of $0.74-0.86, excluding non-recurring items, vs. $0.76 Capital IQ Consensus Estimate; sees Q2 revs of $870-950 mln vs. $875.65 mln Capital IQ Consensus Estimate.
Non-GAAP gross margin expected to increase to between approximately 66.5% and approximately 67%
Non-GAAP operating expenses expected to be down approximately 3% to up approximately 1% sequentially
Non-GAAP interest and other expense expected to be approximately $30 million
Non-GAAP tax rate expected to be approximately 8%
ADI also announced that its Board of Directors has approved a 7% increase in its quarterly cash dividend to $0.45 from $0.42 per outstanding share of common stock, representing an annual dividend per share of $1.80.
