From Briefing.com: 4:35 pm Texas Instruments beats by $0.06, beats on revs; guides Q2 in-line (TXN) :
Reports Q1 (Mar) earnings of $0.89 per share, excluding a $0.08/share tax benefit, $0.06 better than the Capital IQ Consensus of $0.83; revenues rose 13.1% year/year to $3.4 bln vs the $3.31 bln Capital IQ Consensus.
"Revenue increased 13 percent from the same quarter a year ago. Demand for our products continued to be strong in the automotive market and continued to strengthen in the industrial market. "In our core businesses, Analog revenue grew 20 percent and Embedded Processing revenue grew 10 percent from the same quarter a year ago. Operating margin increased in both businesses. "Gross margin of 63.0 percent reflected the quality of our product portfolio, as well as the efficiency of our manufacturing strategy, including the benefit of 300-millimeter Analog production."
Co issues in-line guidance for Q2, sees EPS of $0.89-1.01 including a $30 mln or ~$0.03/share tax benefit vs. $0.90 Capital IQ Consensus Estimate; sees Q2 revs of $3.4-3.7 bln vs. $3.5 bln Capital IQ Consensus Estimate.
4:29 pm Cree reports Q3 (Mar) results, revs in-line; guides Q4 EPS below consensus, revs in-line (CREE) :
Reports Q3 (Mar) earnings of $0.01 per share, may not be comparable to the Capital IQ Consensus of $0.06; revenues fell 6.9% year/year to $341.51 mln vs the $339.41 mln Capital IQ Consensus.
The Company's third fiscal quarter financial results included two items that would not have occurred if the Wolfspeed sale had closed. First, the Company was required to record an income tax expense charge of $86 million in the quarter to establish a valuation allowance on its US deferred tax assets and other deferred charges. In addition, the Company recorded an additional $12 million in expenses, net of tax, primarily associated with the resumption and catch-up of depreciation and amortization on Wolfspeed's long lived assets, which was partially offset by the Infineon termination fee. Wolfspeed depreciation and amortization of its long lived assets had been suspended while the assets had been held for sale pending the closing of the Wolfspeed transaction. Excluding the two items, which were not factored into the financial targets provided on January 24, 2017 based on the Company's belief at that time that the Wolfspeed sale would be consummated, non-GAAP net income would have been $11 million, or $0.11 per diluted share, which is within the target range provided on January 24.
Co issues guidance for Q4, sees EPS of $0.02-0.07, excluding non-recurring items, vs. $0.14 Capital IQ Consensus Estimate; sees Q4 revs of $340-360 mln vs. $359.51 mln Capital IQ Consensus Estimate.
Cree also announced that it is forming a joint venture, to be called Cree Venture LED Company Ltd., with San'an Optoelectronics Company Inc. (Xiamen, China) to produce and deliver to market high performing, mid-power lighting class LEDs in an exclusive arrangement to serve the expanding markets of North and South America, Europe and Japan.
"Our Wolfspeed and LED Products businesses performed at or above their targets for the quarter, while Lighting Products came in a little below plan due to softer market conditions and the lingering effects of the third party product driver issue that we mentioned in Q2. We believe the factors that impacted our lighting business are temporary and we target improvement in all three businesses in Q4."
4:28 pm Juniper Networks beats by $0.04, beats on revs; guides Q2 EPS in-line, revs in-line (JNPR) :
Reports Q1 (Mar) earnings of $0.46 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.42; revenues rose 11.2% year/year to $1.22 bln vs the $1.2 bln Capital IQ Consensus. Non-GAAP gross margin will be approximately 62.5%, plus or minus 0.5%. Non-GAAP operating expenses will be approximately $500 million, plus or minus $5 million. Non-GAAP operating margin will be approximately 23.5% at the midpoint of revenue guidance.
Co issues in-line guidance for Q2, sees EPS of $0.51-0.57, excluding non-recurring items, vs. $0.53 Capital IQ Consensus Estimate; sees Q2 revs of $1.25-1.31 bln vs. $1.28 bln Capital IQ Consensus Estimate.
4:19 pm Closing Market Summary: Earnings Give Stocks a Push on Tuesday (:WRAPX) :
Bullish catalysts were ripe for the picking on Tuesday as buyers advanced the S&P 500 (+0.6%) for the second time in a row, increasing the benchmark index's week-to-date gain to 1.7%. The Nasdaq (+0.7%) settled a tick higher than the S&P 500 while the Dow blew its peers away, adding 1.1%.
The positive sentiment surrounding the first round the French presidential election continued to linger on Tuesday, but investors turned their attention back to the home front where they were met with a slew of earnings reports. The results were largely favorable with Dow components like Caterpillar (CAT 10442, +7.61), McDonald's (MCD 141.70, +7.47), and DuPont (DD 82.21, +2.84) giving the price-weighted average a clear advantage. CAT shares spiked 7.9% in reaction to a big, upside earnings surprise, better than expected revenues, and upbeat guidance. MCD and DD also settled solidly higher, adding 5.6% and 3.6%, respectively, after beating top and bottom line estimates.
However, not all Dow components rallied around their latest earnings reports. 3M (MMM 195.13, +0.90) added only 0.5% despite beating top and bottom line estimates and issuing upbeat guidance. Coca-Cola (KO 43.11, -0.17) finished lower by 0.4% after a miss on earnings outweighed better than expected revenues.
Sector standings were largely determined by the day's earnings. For instance, MCD's positive performance helped the consumer discretionary sector (+0.8%) outperform while DuPont influenced the materials sector (+1.6%) to the top of the day's leaderboard. In the industrial space (+0.5%), Caterpillar did all it could to give the sector an edge, but Lockheed Martin's (LMT 270.02, -6.19) worse than expected revenues and disappointing guidance weighed, leaving the industrial group just behind the benchmark index.
Biogen (BIIB 286.89, +10.03) rallied the biotech industry, jumping 3.6%, after the company beat top and bottom line estimates. The iShares Nasdaq Biotechnology ETF (IBB 295.55, +3.81) settled higher by 1.3%, however, the health care sector (+0.5%) was held back by big losses from Eli Lilly (LLY 81.20, -2.22) and Express Scripts (ESRX 60.01, -7.24). ESRX plunged 10.8% after disclosing that its contract with Anthem (ANTM 172.46, +4.05) is unlikely to be extended.
With the uncertainty regarding the French presidential election largely in the rear-view mirror, the financial sector (+0.8%) benefited from some belated buying as investors tried to make up for last week's muted response to a host of better than expected earnings reports from top financial components.
Summarizing the sector standings, nine of eleven sectors finished in positive territory. The materials group closed at the top of the standings by a wide margin while the utilities (-0.1%) and telecom services (-0.3%) spaces finished in negative territory at the bottom. The real estate (+0.2%) and consumer staples (+0.3%) sectors underperformed, and the remaining sectors--financials, consumer discretionary, industrials, energy, technology, and health care--settled with gains between 0.5% and 0.8%.
However, it is important to note that while a swath of earnings was the most obvious catalyst behind today's advance, politics certainly played a supporting role. Namely, investors cheered the renewed push for tax reform (with, or without, health care reform), a sense that Congress will avoid a government shutdown this week, and China's diplomatic emphasis on quieting tensions over North Korea.
The resulting risk-on sentiment was felt throughout the bond market with Treasuries closing lower across the board. The 10-yr yield settled six basis points higher at 2.33%, which is notable given the recent resistance the benchmark yield has encountered around the 2.30% mark.
On the data front, investors received several economic reports on Tuesday, including March New Home Sales, April Consumer Confidence, the February Case-Shiller Home Price Index, and the February FHFA Housing Price Index:
New Home Sales in March hit an annualized rate of 621,000, which was above the revised February rate of 587,000 (from 592,000), and more than the 590,000 that was expected by the Briefing.com consensus.
The key takeaway from the report is that demand for new homes was strong, notwithstanding higher price points from the same period a year ago.
The consumer confidence reading for April fell to 120.3 from the prior month's revised reading of 124.9 (from 125.6). The Briefing.com consensus expected the survey to hit 122.3.
The key takeaway from the report is that confidence remains at high levels and indicative of an expectation that the economy will continue to expand in the months ahead.
The February Case-Shiller 20-city Index hit 5.9% to follow last month's unrevised 5.7% increase. The Briefing.com consensus expected a reading of 5.8%.
The FHFA Housing Price Index for February increased 0.8%, which followed a revised uptick of 0.2% (from 0.0%) in January.
Tomorrow, investors will receive only one economic report--the weekly MBA Mortgage Applications Index--at 7:00 ET.
Nasdaq Composite +11.9% YTD
S&P 500 +6.7% YTD
Dow Jones Industrial Average +6.2% YTD
Russell 2000 +4.0% YTD
4:12 pm iRobot beats EPS handily, beats on revs; guides FY17 EPS in-line, revs above consensus (IRBT) :
Reports Q1 (Mar) earnings of $0.58 per share, $0.27 better than the Capital IQ Consensus of $0.31; revenues rose 28.8% year/year to $168.5 mln vs the $155.9 mln Capital IQ Consensus. Note: In Q1, co adopted a new accounting standard related to stock comp expense. As a result, co recorded a $0.06 discrete tax benefit. Not clear if this is in the consensus but looks like a solid EPS beat either way.
Co issues guidance for FY17, sees EPS of $1.45-1.70 vs. $1.70 Capital IQ Consensus Estimate and vs prior guidance of $1.35-1.65; sees FY17 revs of $780-790 mln vs. $774.8 mln Capital IQ Consensus Estimate and vs prior guidance of $770-785 mln.
Co says the guidance reflects its confidence that the momentum built during the 2016 holiday season, particularly in the US and EMEA, will continue throughout 2017. In addition, greater control over marketing in China and Japan will enable the co to accelerate growth in those regions..."We are off to a great start in 2017 and tracking well to our near and longer term plans."
4:03 pm Cree forms JV w/ San'an Optoelectronics to produce and deliver to market high-performing, mid-power lighting class LED packaged products in an exclusive arrangement to serve the expanding markets of North and South America, Europe and Japan, and serve China (CREE) :
Leveraging Cree's superior portfolio of patents and global sales channels, this joint venture will bring to market a broad portfolio of high-performance mid-power products to serve the fast growing, $4 billion global mid-power LED market. Cree will own 51 percent of the joint venture, and San'an will own 49 percent of the joint venture. Cree and San'an are targeting initial product sales by the joint venture in the third calendar quarter of 2017. Cree will receive royalties from the joint venture on its patent portfolio.
The broader market backed up yesterday's strong session with an equally positive Tuesday affair. Leading the action higher, the Dow Jones Industrial Average gained 232.23 points (+1.12%) to 20996.12. The Nasdaq Composite was up 41.67 points (+0.70%) to 6025.49, while the S&P 500 finished 14.46 points higher (+0.61%) to 2388.61. Today's action in the Nasdaq put the index above the 6K mark for the first time ever.
Economic data today included the New Home Sales reading for March which hit an annualized rate of 621,000, which was above the revised February rate of 587,000 (from 592,000). Also, the consumer confidence reading for April fell to 120.3 from the prior month's revised reading of 124.9 (from 125.6). The February Case-Shiller 20-city Index hit 5.9% to follow last month's unrevised 5.7% increase. Lastly, the FHFA Housing Price Index for February increased 0.8%, which followed a revised uptick of 0.2% (from 0.0%) in January.
The Technology (XLK 54.08, +0.28 +0.52%) space fell about middle of the pack on Tuesday among fellow S&P sectors. Component Corning (GLW 28.54, +1.02 +3.71%) was among the better performers today after better than expected Q1 earnings. As for the remaining S&P sectors Materials XLB +1.61% led the way, followed by IYZ +1.36%, XLF +0.89%, XLE +0.85%, XLY +0.79%, XLI +0.48%, XLV +0.43%, XLP +0.40%, XLRE +0.22%, XLU -0.13%.
In the S&P 500 Information Technology (922.11, +5.72 +0.62%) space, trading was well higher. Component Texas Instruments (TXN 82.36, +1.28 +1.58%) was also strong ahead of its quarterly report tonight. Other names in the space which outperformed today included EBAY +2.37%, LRCX +2.28%, STX +2.21%, NVDA +1.74%, FSLR +1.70%, MU +1.58%, WDC +1.29%, GOOGL +1.13%, GOOG +1.11%, MCHP +1.03%, PYPL +0.99%, ATVI +0.94%.
Other notable news items among sector components:
Logitech Intl SA (LOGI 31.79, +0.99 +3.21%) entered a new $250 million share buyback program.
IBM (IBM 160.39, -0.36 -0.22%) increased its quarterly dividend to $1.50 per share from $1.40 per share.
Marvell (MRVL 15.49, +0.43 +2.86%) appointed Neil Kim as Chief Technology Officer.
Straight Path Comms' (STRP 128.96, +18.07 +16.30%) Board determined that an unsolicited offer from a 'multi-national telecommunications company' for $104.64 per share in stock constitutes a 'Superior Proposal'. The company in question was confirmed later by Reuters, citing a source, as Verizon (VZ 46.70, -0.35 -0.74%).
MTS Systems (MTSC 46.80, +0.80 +1.74%) announced the appointment of Brian Ross to CFO effective May 12.
TD Ameritrade (AMTD 39.04, -0.09 -0.23%) priced an offering of $800 million of senior notes due 2027; will bear interest at a rate of 3.300%.
ABB (ABB 24.24, +0.31 +1.30%) and IBM (IBM) announced a strategic collaboration that brings together ABB's industry leading digital offering, ABB Ability, with IBM Watson Internet of Things cognitive capabilities to unlock new value for customers in utilities, industry, transport and infrastructure.
In reaction to quarterly results:
SAP AG (SAP 102.13, +0.75 +0.74%) reported worse than expected Q1 earnings of EUR0.73 on better than expected revenues of EUR5.29 billion. For FY17, SAP reaffirmed revenue guidance in the range of EUR23.2-23.6 billion.
T-Mobile US (TMUS 67.35, +1.42 +2.15%) reported Q1 GAAP EPS of $0.80 on in-line revenues of $9.61 billion.
Corning (GLW) reported better than expected Q1 EPS of $0.39 on in-line revenues of $2.38 billion.
Ericsson (ERIC 6.25, -0.11 -1.73%) reported worse than expected Q1 EPS and revenues of SEK2.42 and SEK46.4 billion, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: T, CLGX, CREE, EEFT, JNPR, LOGI, MRCY, RNG, TXN, TSS, ULTI, ZIXI/APH, AUDC, BCE, FLIR, LN, STX, SLAB, SONS, TEL, TWTR, VNTV
Analyst actions:
AMX was upgraded to Hold from Sell at Deutsche Bank,
APPS was upgraded to Buy from Hold at Craig Hallum;
AMZN was downgraded to Mkt Perform from Outperform at Raymond James,
CDNS was downgraded to Neutral from Buy at DA Davidson,
DSPG was downgraded to Hold from Buy at Wunderlich;
QRVO, FIT, ORBC, CAMP, WIFI, MOBL, DGII, IMMR, SQNS, and IPAS were all initiated with Buy ratings at The Benchmark Company,
OLED, IDCC, SWIR, SSNI, DSPG were initiated with Hold ratings at The Benchmark Company,
EQIX was initiated with an Overweight at Mitsubishi UFJ,
RESN was initiated with a Buy at Rodman & Renshaw
