From Briefing.com: 4:05 pm Oracle beats by $0.07, reports revs in-line; raises dividend 27% (ORCL) :Reports Q3 (Feb) earnings of $0.69 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus of $0.62; revenues rose 2.9% year/year to $9.27 bln vs the $9.25 bln Capital IQ Consensus.
Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $1.0 billion, up 73% in U.S. dollars and up 74% in constant currency.
Non-GAAP SaaS and PaaS revenues were $1.1 billion, up 85% in U.S. dollars and up 86% in constant currency. Total Cloud Revenues, including infrastructure as a service (IaaS), were $1.2 billion, up 62% in U.S. dollars and up 63% in constant currency. Total Cloud and On-Premise Software Revenues were $7.4 billion, up 4% in U.S. dollars and up 5% in constant currency.
"Our new, large, fast growing, high-margin cloud businesses are driving Oracle's total revenue and earnings up and improving nearly every important non-GAAP business metric you care to inspect; total revenue is up, margins are up, operating income is up, net income is up, EPS is up. Take a look. Q3 was a very strong quarter."
"Over the last year, we sold more new SaaS and PaaS than Salesforce.com [CRM], and we're growing more than 3 times faster," said Oracle CEO, Mark Hurd. "If these trends continue, where we are selling more SaaS and PaaS in absolute dollars AND growing dramatically faster, it's just a matter of when we catch and pass Salesforce.com in total cloud revenue."
"Both our SaaS and PaaS businesses are doing great, but I'm even more excited about our second generation IaaS business," said Oracle Chairman and CTO, Larry Ellison. "Our new Gen2 IaaS is both faster and lower cost than Amazon Web Services. And now our biggest customers can run their largest and most demanding Oracle database workloads in the Oracle Cloud -- something that is absolutely impossible to do in the Amazon Cloud."
Oracle announced that its Board of Directors declared a quarterly cash dividend of $0.19 per share of outstanding common stock, reflecting a 27% increase over the current quarterly dividend of $0.15.
4:04 pm Jabil Circuit beats by $0.02, beats on revs; guides Q3 (May) EPS in-line, revs in-line (JBL) :
Reports Q2 (Feb) earnings of $0.48 per share, $0.02 better than the Capital IQ Consensus of $0.46.
Co issues in-line guidance for Q3 (May), sees EPS of 0.16-0.39 vs. $0.28 Capital IQ Consensus Estimate; sees Q3 (May) revs of 4.25-4.55 vs. $4.38 bln Capital IQ Consensus Estimate.
"Jabil's focus remains on our commitment to return capital to shareholders, our multi-year financial objectives and the goal of becoming the world's most advanced manufacturing solutions company,"
4:17 pm Closing Market Summary: Fed Hikes Rates, Stocks Move Higher (:WRAPX) :
As expected, the Federal Open Market Committee voted to raise the fed funds target range by 25 basis points to 0.75%-1.00% on Wednesday. More notably, the Fed still believes that three rate hikes are appropriate for 2017, relieving investors' fears that the central bank could begin setting the groundwork for a fourth hike. The major averages started the day in the green thanks to a bullish sentiment in the crude oil market and climbed to new session highs in the afternoon following the FOMC decision. The S&P 500 and the Nasdaq finished higher by 0.8% and 0.7%, respectively, while the Dow (+0.5%) struggled to keep pace with its peers. Also of note, small-caps surged on Wednesday with the Russell 2000 jumping 1.6%.
U.S. Treasuries spiked across the board in the wake of the FOMC's decision to tighten monetary policy. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, finished ten basis points lower at 2.51%. Meanwhile, the 2-yr yield, which is more vulnerable to short-term interest rate hikes, lost seven basis points to finish at 1.31%.
In the same breath, the U.S. Dollar Index (100.69, -0.93) plunged 0.9% lower, ultimately aiding crude oil in its already solid performance.
Crude oil set today's bullish tone in pre-market action after the API reported encouraging inventory data on Tuesday evening. The EIA validated those positive numbers this morning, showing a draw of 200,000 barrels (+3.7 million barrels consensus). The reading prompted WTI crude to finish the day 2.1% higher at $48.71/bbl.
As one might expect, the energy sector (+2.1%) rode the commodity's performance to the top spot on today's leaderboard. The rate-sensitive utilities (+1.6%) and real estate (+1.9%) spaces closed in the same neighborhood as the energy sector, profiting from the slip in interest rates within the Treasury market, while the financial group (-0.1%) reacted in opposite fashion as the decline in yields weighed.
Meanwhile, the top-weighted technology sector (+0.6%) underperformed as semiconductor giant Intel (INTC 35.10, -0.08) continued to see weakness in the wake of its acquisition of Mobileye (MBLY 60.77, -0.19), which was announced on Monday. The two names lost 0.2% and 0.3% on the day, respectively.
Like technology, the consumer discretionary group (+0.5%) also struggled as large-cap names like Amazon (AMZN 852.97, +0.44), Walt Disney (DIS 111.87, -0.44), McDonald's (MCD 127.88, +0.08), and Target (TGT 54.57, -0.18) underperformed, among others.
Wednesday saw a slew of economic data, including February CPI, February Retail Sales, March Empire Manufacturing, March NAHB Housing Market Index, January Business Inventories, and the weekly MBA Mortgage Applications Index, but it was largely overshadowed by the Fed's rate decision:
Total CPI rose 0.1% (Briefing.com consensus +0.1%) in February while core CPI, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.7% and core CPI has increased 2.2%.
The key takeaway from the report is that consumer inflation is certainly firming and offering a data-based rationale for the Fed to move on rates.
The key takeaway from the report is that consumer inflation is certainly firming and offering a data-based rationale for the Fed to move on rates.February retail sales increased 0.1%, which is in line with the Briefing.com consensus. The prior month's reading was revised higher to 0.6% from 0.4%. Excluding autos, retail sales rose 0.2% while the consensus expected an uptick of 0.1%. The prior month's reading was revised higher to 1.2% from 0.8%.
The key takeaway from the February report is that retail sales activity didn't necessarily corroborate the high readings seen for consumer confidence, exposing some of the disconnect between "soft" survey data and the "hard" data.
The key takeaway from the February report is that retail sales activity didn't necessarily corroborate the high readings seen for consumer confidence, exposing some of the disconnect between "soft" survey data and the "hard" data.The Empire Manufacturing Survey for March rose to 16.4 from the prior month's reading of 18.7. The Briefing.com consensus estimate was pegged at 14.5.The NAHB Housing Market Index for March rose to 71 (Briefing.com consensus 65) from an unrevised reading of 65 in February.Business Inventories rose 0.3% in January, which is in line with the Briefing.com consensus. The prior month's reading was left unrevised at 0.4%.
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.
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.The weekly MBA Mortgage Applications Index increased 3.1% to follow last week's 3.3% uptick.Tomorrow's economic data will include February Housing Starts (Briefing.com consensus 1.260 million), Initial Claims (Briefing.com consensus 242,000), and March Philadelphia Fed (Briefing.com consensus 25.0) at 8:30 ET, while January JOLTS will cross the wires at 10:00 ET.
Nasdaq Composite +9.6% YTD
S&P 500 +6.5% YTD
Dow Jones Industrial Average +6.0% YTD
Russell 2000 +2.0% YTD
Finishing with some impressive gains, the S&P 500 led the three major averages higher today after the FOMC decided to raise rates 25 basis points at its March meeting, as was widely expected. To that end, the S&P closed up 19.81 points (+0.84%) to 2385.26. The Nasdaq Composite added 43.23 points (+0.74%) to 5900.05, while the Dow Jones Industrial Average gained 112.73 points (+0.54%) to 20950.10.
Further, economic data came today in the form of the Total CPI reading, which showed a rise of 0.1% in February while core CPI, which excludes food and energy, increased 0.2%. On a year-over-year basis, total CPI is up 2.7% and core CPI has increased 2.2%. Also, February retail sales were up 0.1%, while the prior month's reading was revised higher to 0.6% from 0.4%. Excluding autos, retail sales rose 0.2% while the consensus expected an uptick of 0.1%. The prior month's reading was revised higher to 1.2% from 0.8%. The Empire Manufacturing Survey for March rose to 16.4 from the prior month's reading of 18.7. Additionally, the NAHB Housing Market Index for March rose to 71 from an unrevised reading of 65 in February. Business Inventories rose 0.3% in January, and the prior month's reading was left unrevised at 0.4%. Lastly, the weekly MBA Mortgage Applications Index increased 3.1% to follow last week's 3.3% uptick.
Action in the Technology (XLK 53.40, +0.36 +0.68%) was influenced by the Fed's rate decision, taking to highs after the announcement. Component NVIDIA (NVDA 102.55, +0.77 +0.76%) was modestly higher after announcing a deal with Bosch to develop self-driving systems. The Energy space XLE +2.21% again outperformed all other S&P sectors, followed by XLRE +1.92%, XLU +1.61%, XLB +1.60%, IYZ +1.45%, XLV +1.22%, XLI +1.14%, XLP +0.75%, XLY +0.53%, XLF -0.16%.
In the S&P 500 Information Technology (901.71, +5.39 +0.60%) space, trading closed just under highs of the day, but eclipsed the 900-level for the first time ever. Components MSI +2.26%, MU +2.11%, HPE +2.07%, AMAT +1.70%, QRVO +1.62%, LRCX +1.49%, GLW +1.42%, MA +1.38%, WDC +1.35%, APH +1.28%, AKAM +1.19% performed the best today.
Other notable news items among sector components:
Bosch announced it is working with NVIDIA (NVDA) to develop artificial intelligence self-driving systems for mass market cars.
Verizon (VZ 50.14, +0.78 +1.58%) and CBS Corporation (CBS 68.18, +0.17 +0.25%) have announced a new multiyear content carriage agreement that includes continued retransmission consent of CBS-owned television stations, including CBS-owned The CW affiliates, in multiple markets across the country.
Twitter (TWTR 15.03, -0.29 -1.89%): Early investor and long-time advocate Chris Sacca in series of tweets said no longer a shareholder, 'love the service, hate the stock'.
In addition to reporting quarterly results, Rubicon Project (RUBI 6.06, -2.33 -27.77%) appointed Michael Barrett as CEO.
Alliance Data (ADS 245.55, +0.02 +0.01%) provided an update on its Card Services segment for February. The company also reaffirmed the net loss rate is consistent with maintaining the company's full year guidance of $7.7 billion in total revenue, $18.50 in core EPS, and a net loss rate in a mid-5% range.
The European Commission approved AT&T's (T 42.59, +0.50 +1.19%) pending acquisition of Time Warner (TWX 98.74, +0.38 +0.39%); companies expect to close the transaction by the end of 2017.
Accenture (ACN 124.80, +0.89 +0.72%) announced an expansion of its capabilities in Oregon, including a new office that is now home to 100 Accenture employees who work with clients in Washington County.
Cognizant (CTSH 59.26, +0.10 +0.17%) announced that the United Kingdom's Financial Services Compensation Scheme (FSCS) has selected Cognizant as its technology partner to help FSCS enhance customer experience using digital technologies.
In reaction to quarterly results:
NeoPhotonics (NPTN 9.55, +1.47 +18.19%) reported better than expected Q4 EPS and revenues of $0.13 and $109.84 million, respectively. For Q1, the company sees EPS and revenues worse than expectations at ($0.30)-($0.20) and $67-73 million, respectively.
Rubicon Project (RUBI) reported better than expected Q4 EPS and revenues of $0.37 and $66.9 million, respectively. However, Q1 EPS and revenue guidance was below market expectations at ($0.26)-($0.22) and $41-44 million, respectively.
Everi (EVRI 3.84, +0.60 +18.52%) reported a Q4 GAAP loss of $3.29 per share on revenues of $217.5 million. For FY17, the company expects to report revenue and adj EBITDA growth with adj EBITDA currently expected to be between $204 million and $209 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: ALRM, GSUM, JBL, CALL, ORCL, YRD/JASO
Analyst actions:
NFLX was upgraded to Hold from Underperform at Jefferies,
FNSR was upgraded to Buy from Hold at Jefferies,
EVRI was upgraded to Outperform from Market Perform at Telsey Advisory Group and to Buy from Hold at Craig Hallum,
A was upgraded to Overweight from Equal Weight at Morgan Stanley,
QRVO was upgraded to Buy from Mkt Perform at Charter Equity;
INTC was downgraded to Neutral from Outperform at Credit Suisse,
WBMD was downgraded to Market Perform from Outperform at Cowen,
CGNX was downgraded to Hold from Buy at Needham,
MBLY was downgraded to Neutral from Buy at Goldman and to Equal Weight from Overweight at Barclays, RUBI was downgraded to Neutral from Buy at B. Riley & Co. and to Hold from Buy at Craig Hallum,
CTXS was downgraded to Neutral from Buy at BofA/Merrill;
SNAP was initiated with an Underweight at Cantor Fitzgerald,
CLRO was initiated with a Buy at B. Riley & Co.
