From Briefing.com: 4:31 pm Cree will terminate the definitive agreement to sell its Wolfspeed Power and RF division to Infineon Technologies AG (IFNNY) (CREE) :
"We are disappointed that the Wolfspeed sale to Infineon could not be completed," stated Chuck Swoboda, Cree chairman and CEO. "In light of this development, we are going to shift our focus back to growing the Wolfspeed business. The Wolfspeed business has performed well this year as our customers have further realized the value of our unique technology and is on a great path as a part of Cree. The strength of our balance sheet and improving operating cash flow gives us the ability to invest in Wolfspeed, while continuing to pursue our LED and Lighting growth plans. We believe investing to grow all three businesses will create the most value for our shareholders."
The termination of this transaction with Infineon will trigger a termination fee of $12.5 million being paid to Cree. As a result of the transaction termination and Cree's decision to focus on running the Wolfspeed business, Wolfspeed will now be reported as a separate segment of Cree's continuing operations.
The Company will provide a complete review of its fiscal 2017 third quarter results and fourth quarter outlook on its regularly scheduled financial results call on April 25th at 5:00pm ET.
4:10 pm Veeco Instruments beats by $0.02, reports revs in-line; guides Q1 EPS in-line, revs in-line (VECO) :
Reports Q4 (Dec) earnings of $0.09 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.07; revenues fell 12.1% year/year to $93.6 mln vs the $93.41 mln Capital IQ Consensus.
Co issues in-line guidance for Q1, sees EPS of $0.00-0.16, excluding non-recurring items, vs. $0.12 Capital IQ Consensus Estimate; sees Q1 revs of $85-100 mln vs. $96.71 mln Capital IQ Consensus Estimate.
"Entering 2017, we are seeing healthy LED industry dynamics and positive business momentum. We closed an exclusive, multi-year agreement with OSRAM Opto Semiconductors GmbH to supply Metal Organic Chemical Vapor Deposition and Precision Surface Processing) systems for their new high volume LED production facility in Kulim. We made significant progress in growing our Advanced Packaging business, increasing sales into the Advanced Packaging, MEMS & RF markets by ~10% year over year. In addition, our recently announced agreement to acquire Ultratech [UTEK] will establish Veeco as a leading equipment supplier to the Advanced Packaging industry. We are excited by this proposed combination, which is expected to increase our scale, diversify our revenue and provide a stable platform to drive long-term shareholder value. The transaction is subject to regulatory clearance and approval by Ultratech's stockholders and is expected to close in the second quarter."
4:10 pm Univ Elec reports EPS in-line, misses on revs; guides Q1 EPS in-line, revs in-line (UEIC) :
Reports Q4 (Dec) earnings of $0.70 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.70; revenues fell 1.2% year/year to $160.1 mln vs the $164.65 mln Capital IQ Consensus.
Co issues in-line guidance for Q1, sees EPS of $0.57-0.67 vs. $0.59 Capital IQ Consensus Estimate; sees Q1 revs of $155-163 mln vs. $156.65 mln Capital IQ Consensus Estimate. GAAP gross margins were 25.7%, compared to 28.5%. Adjusted Non-GAAP gross margins were 26.9%, compared to 28.8%.
4:06 pm Tessera Tech signs a technology transfer and license agreement for Direct Bond Interconnect technology (TSRA) : This agreement enables Teledyne (TDY) DALSA to leverage Invensas' revolutionary semiconductor wafer bonding and 3D interconnect technologies to deliver next-generation MEMS and image sensor solutions to customers in the automotive, IoT and consumer electronics markets.
4:03 pm Cohu beats by $0.15, beats on revs; guides Q1 revs above consensus, co guides on the earnings call (COHU) :
Reports Q4 (Dec) earnings of $0.24 per share, excluding non-recurring items, $0.15 better than the Capital IQ Consensus of $0.09; revenues rose 11.3% year/year to $70.7 mln vs the $65.12 mln Capital IQ Consensus.
Co issues upside guidance for Q1, sees Q1 revs of ~$78 mln vs. $69.00 mln Capital IQ Consensus Estimate.
Cohu's Board of Directors approved a quarterly cash dividend of $0.06 per share payable on April 14, 2017 to shareholders of record on February 28, 2017.
Co guides on the earnings call.
4:20 pm : Investors took a breather on Thursday, pulling the S&P 500 and Nasdaq away from their freshly-minted record highs after seven consecutive advances. The pullback was modest in scope, leaving the S&P 500 and the Nasdaq lower by 0.2% while the Dow (unch) resisted, eking out a slight gain.
The Treasury market, which had posted six consecutive losses coming into Thursday, also reversed its recent ways. Treasuries finished higher across the board with shorter-dated issues showing relative strength in a yield-curve steepening trade. The benchmark 10-yr yield closed five basis points lower at 2.45% while the 2-yr yield finished lower by seven basis points at 1.20%.
The recent losing streak aside, the Treasuries' uptick was somewhat surprising given today's strong economic data; Housing Starts (1246K; Briefing.com consensus 1220K), Initial Claims (239K; Briefing.com consensus 245K), and the Philadelphia Fed Index (43.3; Briefing.com consensus 17.5) all surpassed estimates.
However, the hotter than expected readings turned out to be a non-event, at least for now, considering the market's updated rate hike expectations. The fed funds futures market is once again pointing to June as the most likely time for the next hike to be announced. The implied probability of a June hike sits at 73.9%, down from yesterday's 76.2% while the implied likelihood of a hike in May is down to 47.1%.
Earnings news was relatively quiet today as nearly 80.0% of S&P 500 components have already reported their results. However, Cisco Systems (CSCO 33.60, +0.78) did make a splash with its latest report. CSCO shares jumped 2.4% after the company raised its dividend and reported better than expected earnings.
Cisco's upbeat performance supported a modest gain in the technology sector (+0.2%), which finished with industrials (unch) as the only cyclical spaces to close in the green.
Utilities (+1.0%) closed at the top of the leaderboard, thanks to the downtick in Treasury yields and a positive reaction to Duke Energy's (DUK 78.90, +2.12) latest earnings report. Shares of DUK climbed 2.8% despite the company's earnings per share miss.
Real estate (+0.4%), telecom services (+0.5%), and consumer staples (+0.1%) also finished higher, while health care (-0.1%) could not keep up with its countercyclical peers.
The remaining sectors-financials, consumer discretionary, materials, and energy-finished with losses between 0.1% (materials) and 1.4% (energy).
The energy space's slip came despite crude oil's 0.6% advance. The commodity closed at $53.41/bbl after news that OPEC is mulling a production cut extension & could potentially cut more than previously expected.
Today's economic data included January Housing Starts, Initial Claims, and the Philadelphia Fed Index for February:
Housing starts decreased to a seasonally adjusted annualized rate of 1.246 million units in January, down from a revised 1.279 million units in December (from 1.226 million). The Briefing.com consensus expected starts to decrease to 1.220 million units. Building permits increased to a seasonally adjusted 1.285 million in January from a revised 1.228 million (from 1.210 million) for December. The Briefing.com consensus expected a reading of 1.230 million.
The key takeaway is that, absent the December revision, starts would have increased month-over-month, which is to say the headline decline isn't as disappointing as it might sound at first blush.
The latest weekly initial jobless claims count totaled 239,000 while the Briefing.com consensus expected a reading of 245,000. Today's tally was above the unrevised prior week count of 234,000. As for continuing claims, they declined to 2.076 million from the revised count of 2.079 million (from 2.078 million).
The key takeaway from the report is that initial claims continue to be stuck at low levels historically, which is a good portent for nonfarm payroll growth.
The Philadelphia Fed Survey for February rose to 43.3 from an unrevised 23.6 in January while economists polled by Briefing.com had expected a reading of 17.5.
The key takeaway from the report is that manufacturing activity is proceeding at a healthy pace in the Philadelphia Fed region.
Friday's lone economic report, January Leading Indicators (Briefing.com consensus 0.5%), will be released at 10:00 am ET.
Nasdaq Composite +8.0% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average +4.3% YTD
Russell 2000 +3.1% YTD
NASDAQ Adv/Vol/Dec 1239/1.79 bln/1593 NYSE Adv/Vol/Dec 1255/997.4/1670
3:30 pm :
Natural gas closed pit trading at a fresh 3-month low on a smaller-than-expected EIA inventory draw
Mar natural gas closed $0.07 lower (-2.4%) at $2.85/MMBtu
EIA natural gas highlights:
Natural gas inventory showed a draw of -114 bcf vs expectations for inventory to be a draw of approx. -124 bcf.
Working gas in storage was 2,445 Bcf as of Friday, Feb 10, 2017, according to EIA estimates.
Stocks were 303 Bcf less than last year at this time and 87 Bcf above the five-year average of 2,358 Bcf.
At 2,445 Bcf, total working gas is within the five-year historical range.
In precious metals, gold extended yesterday's gain & ended pit trading at a 1-week high on continued dollar index weakness
April gold ended today's session up $8.50 (+0.7%) to $1241.50/oz
Mar silver closed today's session $0.11 higher (+0.6%) at $18.08/oz
Crude oil closed a volatile pit trading session higher on headlines OPEC is mulling a production cut extension & could potentially cut more than previously expected
Mar crude oil futures rose $0.33 (+0.6%) to $53.41/barrel
Baker Hughes rig count data will be released tomorrow at 1 pm ET.
Last week, the total active U.S. rig count, which includes oil and natural gas rigs, rose by 12 to 741 rigs, following the prior week's increase of 17 rigs.
Of that total, the U.S. rigs drilling for oil rose by 8 to 591 rigs last week.
This marked the 4th consecutive weekly increase in the weekly oil rig count.
US drillers have added oil rigs for 14 out of the past 15 weeks.
The dollar index was -0.7% around the 100.45 level, provided support to precious metals
Commodities, as measured by the Bloomberg Commodity Index, were -0.6% around the 88.48 level
After a five-day winning streak, the broader market finally got a look at the other side of flat lines. That being said, the Dow Jones did manage to eke out modest gains on the session, despite pressure out of the gate. To that end, the Dow added 7.91 points (+0.04%) today to 20619.77. The S&P 500 shed 2.03 (-0.09%) to 2347.22, and the Nasdaq Composite lost about 4.54 points (-0.08%) to 5814.90.
Economic data today included the housing starts reading, which decreased to a seasonally adjusted annualized rate of 1.246 million units in January, down from a revised 1.279 million units in December (from 1.226 million). Also, building permits increased to a seasonally adjusted 1.285 million in January from a revised 1.228 million (from 1.210 million) for December. The latest weekly initial jobless claims count totaled 239,000, above the unrevised prior week count of 234,000. As for continuing claims, they declined to 2.076 million from the revised count of 2.079 million (from 2.078 million). Lastly, the Philadelphia Fed Survey for February rose to 43.3 from an unrevised 23.6 in January.
Despite the broader market pressure, the Technology (XLK 52.01, +0.12 +0.23%) sector traded modestly higher today. Component NetApp (NTAP 40.56, +1.63 +4.19%) was the best performer today following better than expected Q3 earnings. Other sectors as measured by the S&P closed XLU +1.00%, XLRE +0.42%, XLP +0.13%, XLI +0.03%, IYZ +0.00%, XLB +0.00%, XLV -0.14%, XLF -0.24%, XLY -0.51%, XLE -1.36% with Utilities out-performing.
In the S&P 500 Information Technology (879.29, +1.85 +0.21%) space, trading barely edged higher as a late sell-off took shares below flat lines. Component Cisco Systems (CSCO 33.60, +0.78 +2.38%) was a strong performer today after its Q2 report. Other names in the space which closed modestly higher included GLW +1.28%, HRS +1.24%, XLNX +1.17%, AVGO +1.06%, INTC +1.00%, KLAC +0.97%, ADSK +0.92%, TXN +0.77%, QCOM +0.69%, PYPL +0.67%.
Other notable news items among sector components:
Qualcomm's (QCOM 56.88, +0.39 +0.69%) Chief Accounting Officer John Murphy to resign effective March 17 to pursue other opportunities. Simultaneously, Adobe Systems (ADBE 118.93, +0.20 +0.17%) issued a press release stating John Murphy would begin his duties as CAO at the company on March 20.
Time Warner (TWX 96.35, +0.04 +0.04%) shareholders approved the proposed merger with AT&T Inc. (T 41.25, +0.13 +0.32%). The parties continue to expect the transaction to close before year-end 2017.
Tata Motors (TTM 33.04, +0.65 +2.01%) and Microsoft (MSFT 64.52, -0.01 -0.02%) India confirmed that the companies will collaborate on connected cars.
Microsoft (MSFT) and MGM Resorts (MGM 26.86, -2.74 -9.26%) came to a multi-year agreement
Equinix (EQIX 373.18, -7.58 -1.99%) increased its quarterly dividend to $2.00 per share from $1.75 per share.
CoreLogic (CLGX 39.20, +0.68 +1.78%) Board granted President and CEO Anand Nallathambi a temporary medical leave of absence.
Verizon (VZ 48.47, +0.39 +0.81%) acquired drone operations management firm Skyward. Financial terms of the deal were not disclosed.
Diebold Nixdorf (DBD 30.00, +0.05 +0.17%) appointed Juergen Wunram as COO. Additionally, President Eckard Heidloff resigned effective March 31.
Netease.com (NTES 298.73, +36.88 +14.08%) increased its dividend to $1.01 per ADS from $0.78 per ADS.
In reaction to quarterly results:
Cisco Systems (CSCO) reported better than expected Q2 EPS of $0.57 on revenues which fell about 2.9% versus last year to $11.58 billion. For Q3, the company sees EPS in the range of $0.57-0.59 on revenue growth of flat to up 2% to about $11.76-12.0 billion.
Netease.com (NTES) reported better than expected Q4 EPS and revenues of $4.30 per ADS and $1.74 billion, respectively.
Applied Materials (AMAT 35.18, -0.31 -0.87%) reported better than expected Q1 EPS of $0.67 on in-line revenues of $3.28 billion. For Q2, AMAT sees better than expected revenues and EPS of $3.450-3.600 billion and $0.72-0.80, respectively.
Equinix (EQIX) reported better than expected adjusted funds from operations of $4.08 on revenues which rose about 29.0% compared to last year to about $942.6 million. For Q1, EQIX sees revenues in the range of $940-946 million. For FY17, the company expects revenues of greater than $3.933 billion.
NetApp (NTAP) reported better than expected Q3 EPS of $0.82 on revenues which rose about 1.3% compared to last year to $1.4 billion. For Q4, NTAP sees EPS of $0.79-0.84 on revenues between $1.365-1.515 billion.
SS&C Techs (SSNC 35.35, +2.54 +7.74%) reported better than expected Q4 EPS and revenues of $0.46 and $400.92 million, respectively. For Q1, SSNC sees revenues of $402.5-408.5 million. For FY17, SSNC sees revenues in the range of $1.655-1.685 billion.
TripAdvisor (TRIP 46.92, -5.78 -10.97%) reported worse than expected Q4 EPS and revenues of $0.16 and $316 million, respectively.
GoDaddy (GDDY 35.88, -1.58 -4.22%) reported Q$ EPS of $0.02 on revenues which rose 14.2% compared to a year ago to $485.9 million. For Q1, GDDY sees worse than expected revenues in the range of $485-490 million. For FY17, GDDY sees better than expected revenues between $2.18-2.22 billion.
Companies scheduled to report quarterly results tonight/tomorrow morning: AIRG MDRX AMBR ANET BCOV CGNX COHU FIVN GLOB PI MCHX TTD TRUE VECO WBMD YUME/TYPE
Analyst actions:
NTAP was upgraded to Market Perform from Underperform at William Blair and to Buy from Hold at Lake Street,
CAVM was upgraded to Buy from Neutral at BofA/Merrill,
SPWR was upgraded to Outperform from Perform at Oppenheimer,
SSNC was upgraded to Outperform from Neutral at Macquarie;
GDDY was downgraded to Hold from Buy at Summit Redstone,
ADI was downgraded to Market Perform from Outperform at Wells Fargo,
GRPN was downgraded to Neutral from Outperform at Wedbush,
SONS was downgraded to Neutral from Buy at DA Davidson,
ANGI was downgraded to Sell from Neutral at Roth Capital,
IDTI was downgraded to Neutral from Buy at BofA/Merrill,
XXIA was downgraded to Hold from Buy at Stifel;
CRM was initiated with a Hold at Needham,
SAIC and CACI were initiated with Buy ratings at Seaport Global Securities,
OTEX was initiated with a Neutral at Citigroup
