From Briefing.com: 4:05 pm Finisar misses by $0.03, misses on revs; guides Q4 EPS below consensus, revs below consensus (FNSR) : Reports Q3 (Jan) earnings of $0.59 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of $0.62; revenues rose 23.1% year/year to $380.6 mln vs the $389.69 mln Capital IQ Consensus.
Co issues downside guidance for Q4, sees EPS of $0.50-0.56 vs. $0.58 Capital IQ Consensus Estimate; sees Q4 revs of $360-380 mln vs. $393.09 mln Capital IQ Consensus Estimate
Finisar has not provided a reconciliation of its fourth quarter outlook for non-GAAP gross margin, non-GAAP operating margin and non-GAAP earnings per fully diluted share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate of certain reconciling items between such non-GAAP forward-looking measures and the comparable forward-looking GAAP measures.
Certain factors that are materially significant to Finisar's ability to estimate these items are out of its control and/or cannot be reasonably predicted, including with respect to restructuring charges, litigation settlements and resolutions and related costs, and the timing of tax related adjustments. Accordingly, a reconciliation of such non-GAAP forward-looking measures to the comparable forward-looking GAAP measures are not available within a reasonable range of predictability.
4:24 pm Closing Market Summary: Energy Shakes Off Crude Oil's Decline to Lead Stocks Higher on Thursday (:WRAPX) :
The bulls and the bears slugged it out on Thursday until the energy sector (+0.6%) gave the bulls a slight edge in the final stretch. The S&P 500 finished with a slim 0.1% gain while the Nasdaq and the Dow closed flat. Meanwhile, the Russell 2000 underperformed, posting a loss of 0.4%.
Crude oil followed up its 5.3% Wednesday plunge with another disappointing performance on Thursday as investors continued to digest yesterday's bearish EIA reading. The energy component closed its trading day 2.1% lower at $49.24/bbl, but regained a good portion of that loss in electronic trade. The energy sector appreciated the belated effort, leading the late afternoon rally and finishing near the top of the day's leaderboard after holding the bottom spot for much of Thursday's action.
One of the reasons energy stocks rebounded so sharply in the afternoon session is that few people expected it given the continued drop in oil prices. The weakness in crude oil likely spurred some participants to short the energy stocks, so when they started to exhibit relative strength, weak-handed short sellers likely got nervous, covered their positions, and effectively aided in the sector's recovery effort.
Outside of the energy world, the European Central Bank (:ECB) captured investors' attention for a while this morning with its latest policy decision to leave rates unchanged. More notably, the ECB raised its 2017 GDP forecast to 1.8% from 1.7%, but did not suggest an impending reduction to stimulus. This gave a boost to the euro, helping the currency climb 0.4% against the dollar to 1.0587.
Back in the U.S., the health care sector (+0.6%) finished with the energy group at the top of the day's leaderboard. Similarly, the financial (+0.3%), consumer staples (+0.2%), and telecom services (+0.4%) sectors also outperformed the broader market.
The financial sector held the top spot on the day's leaderboard going into afternoon action, but comments from White House Press Secretary Sean Spicer were met with some backtracking in bank stocks. During today's press briefing, Mr. Spicer said that President Donald Trump remains committed to restoring the Glass-Steagall Act.
On the flip side, the lightly-weighted real estate group (-1.3%) finished at the bottom of the sector standings while the industrials (-0.5%) and materials (-0.4%) groups also finished solidly lower.
The consumer discretionary space (unch) closed just below the broader market as retailers pushed the SPDR S&P Retail ETF (XRT 41.83, -0.54) lower by 1.3%. Despite its small market cap, Tailored Brands (TLRD 15.84, -7.53), the parent company of Men's Wearhouse and Jos. A. Bank, contributed to the bearish sentiment among retailers after the company missed top and bottom line estimates and issued downbeat guidance. TLRD shares sank 32.2%.
In the Treasury market, U.S. sovereign debt finished Thursday's session lower as investors eyed tomorrow's Employment Situation Report, which is regarded as the last potential barrier to a March rate hike. The benchmark 10-yr yield finished four basis points higher at 2.60%.
Today's economic data included February Export/Import Prices and Initial Claims:
Import prices excluding oil rose 0.3% in February after ticking down 0.1% in January (revised from -0.2%). Export prices excluding agriculture increased 0.3% in February after rising 0.2% in January (revised from +0.1%).
The key takeaway from the report is that it won't alter the market's newfound belief that the Fed is likely to raise the target range for the fed funds rate at its March meeting since there are evident signs of increasing inflation in the year-over-year readings for both import and export prices.
The latest weekly initial jobless claims count totaled 243,000 while the Briefing.com consensus expected a reading of 240,000. Today's tally was above the unrevised prior week count of 223,000. As for continuing claims, they declined to 2.058 million from the revised count of 2.064 million (from 2.066 million).
Despite the jump in initial claims, which was not influenced by any special factors, the key takeaway from the report is that there was no discernible change in the long-term trend in initial claims, which held below 300,000 for the 105th straight week.
Tomorrow's economic data will include the Employment Situation Report for February (Briefing.com consensus 188,000), which will be released tomorrow at 8:30 ET while the February Treasury Budget will follow at 14:00 ET.
Nasdaq Composite +8.5% YTD
S&P 500 +5.6% YTD
Dow Jones Industrial Average +5.5% YTD
Russell 2000 +0.2% YTD
After a modestly higher start on Thursday, the broader market gradually fell off, tapping lows just after midday and ultimately finishing just above flat lines in a surge into the close. The eventual gains were led by the Nasdaq Composite which added a clean 10 points (+0.17%) to 5847.55. The S&P 500 was up 1.89 points (+0.08%) to 2364.87 at the close, while the Dow Jones Industrial Average gained 2.46 points (+0.01%) to 20858.19.
Today's economic data included import prices, which excluding oil rose 0.3% in February after ticking down 0.1% in January (revised from -0.2%). Export prices excluding agriculture increased 0.3% in February after rising 0.2% in January (revised from +0.1%). The latest weekly initial jobless claims count totaled 243,000, above the unrevised prior week count of 223,000. As for continuing claims, they declined to 2.058 million from the revised count of 2.064 million (from 2.066 million).
Hovering around flat lines for the majority of Thursday, the Technology (XLK 52.83, -0.01 -0.02%) space eventually ended modestly lower. Among the worst performers today were STX -2.97%, WDC -2.86%, IBM -1.26%, CTXS -1.11%, ACN -1.03%, MU -0.91%, WU -0.81%, XRX -0.81%, CSRA -0.77%. Other sectors as measured by the S&P closed Thursday XLE +0.66%, XLV +0.54%, IYZ +0.44%, XLF +0.36%, XLP +0.16%, XLY -0.09%, XLU -0.22%, XLB -0.31%, XLI -0.46%, XLRE -1.28%.
In the S&P 500 Information Technology (892.96, -0.52 -0.06%) space, trading also closed slightly lower. Components GPN -0.75%, INTU -0.67%, HPE -0.66%, RHT -0.60%, FSLR -0.55%, EBAY -0.42%, NTAP -0.40%, MSFT -0.40% were among the worst performers.
Other notable news items among sector components:
KEYW Holding (KEYW 8.97, -0.16 -1.75%) acquired Sotera Defense Solutions in an all-cash transaction valued at about $235 million inclusive of an expected $46 million net present value of acquired tax benefits. The deal is also expected to be immediately accretive to 2017 adj. EPS, and significantly accretive to 2018 GAAP EPS.
Hewlett Packard Enterprise's (HPE 22.48, -0.14 -0.62%) pending sale of its software business to Micro Focus was cleared by the EU.
Nokia (NOK 5.27, +0.09 +1.83%) renewed its managed services agreement with Chorus, New Zealand's largest telecommunications infrastructure company, for a further three years.
Commvault (CVLT 48.50, -1.05 -2.12%) announced the integration of its Commvault Data Platform and IntelliSnap technology for FlashStack, a flexible, converged infrastructure solution offered jointly by Cisco (CSCO 34.07, +0.05 +0.15%) and Pure Storage (PSTG 10.10, -0.18 -1.75%), combining the latest in compute, network, and storage hardware into a single, integrated architecture.
In reaction to quarterly results:
Semtech (SMTC 34.05, -0.25 -0.73%) reported better than expected Q4 EPS and revenues of $0.37 and $140 million, respectively. For Q1, the company sees EPS and revenues ahead of expectations at $0.39-0.43 and $142-150 million, respectively.
TeleTech (TTEC 29.45, -1.25 -4.07%) reported worse than expected Q4 EPS of $0.42 on better than expected revenues of $344.9 million.
KEYW Holding (KEYW) reported worse than expected GAAP EPS of $0.08 on worse than expected revenues of $68.9 million. For FY17, the company sees revenues in-line at $300-320 million.
Companies scheduled to report quarterly results tonight: ABTL, FNSR, MGI, QADA, PAY
Analyst actions:
TECD was upgraded to Buy from Hold at Needham,
ERIC was upgraded to Buy from Sell at Goldman,
HIMX was upgraded to Buy at Mizuho,
TEF was upgraded to Buy from Hold at Deutsche Bank;
VRTU was downgraded to Hold from Buy at Maxim Group,
TVPT was downgraded to Neutral from Buy at UBS;
SNAP was initiated with a Sector Perform at FBN Securities,
MRCY was initiated with an Overweight at JP Morgan,
ITRI was initiated with a Mkt Outperform at JMP Securities
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