From Briefing.com: 4:35 pm Motorola Solutions beats by $0.14, beats on revs; guides Q2 EPS below consensus, revs above consensus; guides FY17 EPS in-line, revs above consensus (MSI) :
Reports Q1 (Mar) earnings of $0.71 per share, excluding non-recurring items, $0.14 better than the Capital IQ Consensus of $0.57; revenues rose 7.4% year/year to $1.28 bln vs the $1.25 bln Capital IQ Consensus.
Co issues mixed guidance for Q2, sees EPS of $0.98-1.03, excluding non-recurring items, vs. $1.10 Capital IQ Consensus Estimate; sees Q2 revs of +2-3% y/y (Approx $1.458-1.472 bln) vs. $1.44 bln Capital IQ Consensus Estimate.
Co issues guidance for FY17, sees EPS of $5.08-5.23 (Prior $5.05-5.20), excluding non-recurring items, vs. $5.19 Capital IQ Consensus Estimate; sees FY17 revs of +2% (Prior +1-2%) vs. $6.15 bln Capital IQ Consensus Estimate.
4:34 pm Sierra Wireless beats by $0.08, beats on revs; guides Q2 EPS, revs above consensus (shares halted) (SWIR) :
Reports Q1 (Mar) earnings of $0.24 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.16; revenues rose 13.3% year/year to $161.79 mln vs the $155.94 mln Capital IQ Cons
4:19 pm Closing Market Summary: S&P 500 Ekes Out Third Win of the Week (:WRAPX) :
On Thursday, the House of Representatives passed the revised American Health Care Act, crude oil plunged 4.7% to $45.55/bbl, and Facebook's (FB 150.82, -0.98) upbeat earnings were overshadowed by a slowdown in ad revenue growth. However, the day's many headlines were met by a muted response from investors, who left the S&P 500 (+0.1%) just a tick above its unchanged mark. The Nasdaq (+0.1%) also finished with a slim gain while the Dow (unch) registered a small loss.
Without question, today's victory on the floor of the House was a big deal for the GOP, which has lacked a sense of cohesion since taking control of Congress and the Presidency earlier this year. However, the party still has an uphill battle to get its health care bill through the Senate, where it can only afford to lose two Republican votes. That looming uncertainty could delay action on other pro-growth promises like tax reform, and likely helped keep the bulls in check today.
Buyers in the equity market also struggled to overcome today's sell-off in the crude oil futures market, which left the energy component at its worst level in five months. The tumble was credited to a supply overhang following recent inventory reports, some weak data out of China, and the deteriorating technical picture for the commodity. Unsurprisingly, the energy sector (-1.9%) settled at the bottom of the day's leaderboard by a wide margin.
The lightly-weighted telecom services sector (-1.1%) also underperformed while the remaining laggard--consumer discretionary (-0.1%)--finished just short of its flat line. On the flip side, the consumer staples group (+0.8%) settled atop the sector standings with Kellogg (K 70.40, +1.46) adding 2.1% on better than expected earnings.
The health care sector (+0.6%) also finished ahead of the broader market thanks in part to the biotech industry, which rallied around Regeneron Pharmaceuticals' (REGN 434.31, +27.28) better than expected revenues. REGN shares jumped 6.7% while the iShares Nasdaq Biotechnology ETF (IBB 298.45, +2.11) increased by 0.7%. The financials (+0.2%), industrials (+0.1%), technology (unch), utilities (+0.4%), materials (+0.2%), and real estate (+0.1%) groups also closed in positive territory.
In the bond market, U.S. Treasuries settled lower across the board, steepening the yield curve along the way. The 10-yr yield (2.36%) increased four basis points while the 2-yr yield (1.31%) added only one. Meanwhile, gold ($1228.50/ozt) and silver ($16.29/ozt) settled solidly lower, losing 1.6% apiece, while the price of copper ($2.51/lb) declined by 1.2%.
On the data front, investors received a slew of economic reports on Thursday, including March Trade Balance, Initial Claims, March Factory Orders, and the preliminary reading of first quarter Productivity & Unit Labor Costs:
The March trade balance showed a deficit of $43.7 billion while the Briefing.com consensus expected the deficit to hit $44.4 billion. The previous month's deficit was revised to $43.8 billion from $43.6 billion.
The key takeaway from the report is that both exports and imports were down, led by decreases in economically-sensitive areas like industrial supplies, autos, and capital goods that spoke to the soft activity seen in the first quarter.
The latest weekly initial jobless claims count totaled 238,000 while the Briefing.com consensus expected a reading of 246,000. Today's tally was below the unrevised prior week count of 257,000. As for continuing claims, they declined to 1.964 million from the revised count of 1.987 million (from 1.988 million).
The key takeaway from the report is that it reflects a continued tightening in the labor market that will underpin expectations for a continuation of solid hiring activity.
The Factory Orders Report for March showed an increase of 0.2% while the Briefing.com consensus expected an increase of 0.4%. The February reading was revised to 1.2% (from 1.0%).
The key takeaway from the report is that overall business spending accelerated in March, evidenced by the 0.5% increase in nondefense capital goods orders excluding aircraft (the proxy for business spending), which came on top of an upwardly revised 0.1% increase (from -0.1%) in February.
Unit labor costs increased 3.0% during the first quarter, which was higher than the 2.6% increase that had been anticipated by the Briefing.com consensus. The preliminary productivity reading showed an decrease of 0.6%. The Briefing.com consensus expected an increase of 0.1%.
The key takeaway from the report is that productivity is weak, which is an important point since weak productivity gets in the way of a rising standard of living.
Tomorrow, investors will receive the Employment Situation Report for April (Briefing.com consensus 180,000) at 8:30 ET and March Consumer Credit (Briefing.com consensus $16.0 billion) at 15:00 ET.
Nasdaq Composite +12.9% YTD
S&P 500 +6.7% YTD
Dow Jones Industrial Average +6.0% YTD
Russell 2000 +2.3% YTD
4:17 pm Infinera reports EPS in-line, beats on revs (INFN) :
Reports Q1 (Mar) loss of $0.15 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of ($0.15); revenues fell 28.3% year/year to $175.5 mln vs the $172.62 mln Capital IQ Consensus.
Guides on call
4:17 pm Universal Display beats by $0.22, beats on revs; guides FY17 revs above consensus (OLED) :
Reports Q1 (Mar) earnings of $0.22 per share, excluding non-recurring items, $0.22 better than the Capital IQ Consensus of ($0.00); revenues rose 87.2% year/year to $55.6 mln vs the $33.53 mln Capital IQ Consensus.
Co issues upside guidance for FY17, sees FY17 revs of at least $260-280 mln vs. $246.91 mln Capital IQ Consensus Estimate.
"As we look forward, we believe that the OLED industry is poised to grow faster than earlier expectations this year. We are therefore raising our 2017 revenue guidance range to at least$260 million to $280 million, reflecting year-over-year growth of 30% to 40%. Additionally, we are pleased to announce that the Board of Directors approved a second quarter dividend of $0.03 per share."
4:17 pm Veeco Instruments beats by $0.01, reports revs in-line; guides Q2 EPS below consensus, revs in-line (VECO) :
Reports Q1 (Mar) earnings of $0.09 per share, $0.01 better than the Capital IQ Consensus of $0.08; revenues rose 21.0% year/year to $94.39 mln vs the $94.5 mln Capital IQ Consensus.
Our Q1 gross margin reflects, among other factors, the temporary impact of our manufacturing consolidation efforts. We now expect to complete these plans in the third quarter. We believe our consolidation efforts combined with sustained cost discipline will drive positive operating leverage, as revenues scale...In addition, we are pleased with the progress we've made towards completing the
Ultratech [UTEK] acquisition, which we expect to close in late May."
Co issues guidance for Q2, sees EPS of ($0.05)-$0.09 vs. $0.13 Capital IQ Consensus Estimate; sees Q2 revs of $85-100 mln vs. $95.79 mln Capital IQ Consensus Estimate.
Gross margin was 34.5% in the first quarter of 2017, compared to 32.9% in the first quarter of 2016.
Co issues upside guidance for Q2, sees EPS of $0.24-0.32, excluding non-recurring items, vs. $0.21 Capital IQ Consensus Estimate; sees Q2 revs of $165-175 mln vs. $163.52 mln Capital IQ Consensus Estimate.
4:04 pm Axcelis Tech beats by $0.07, beats on revs; guides Q2 EPS above consensus, revs above consensus (ACLS) :
Reports Q1 (Mar) earnings of $0.29 per share, $0.07 better than the Capital IQ Consensus of $0.22; revenues rose 28.7% year/year to $86.9 mln vs the $80.15 mln Capital IQ Consensus.
Co issues upside guidance for Q2, sees EPS of $0.30-0.35 vs. $0.27 Capital IQ Consensus Estimate; sees Q2 revs of $100 mln vs. $85.00 mln Capital IQ Consensus Estimate.
"I am very pleased with our financial performance in the first quarter. We exceeded guidance and consensus estimates across the board," said Chief Financial Officer and Executive Vice President Kevin Brewer. "Our gross margin initiatives continue to deliver results and this quarter we demonstrated that Axcelis can generate 40% gross margins."
The Thursday session ended mixed as the Dow Jones was the lone laggard. The S&P 500 and the Nasdaq Composite were modestly higher, with the former adding 1.39 points (+0.06%) to 2389.52 and the latter adding 2.79 points (+0.05%) to 6075.34. The Dow was down only 6.43 points (-0.03%) at the bell to 20951.47.
Today's economic data included the March trade balance which showed a deficit of $43.7 billion. The previous month's deficit was revised to $43.8 billion from $43.6 billion. The latest weekly initial jobless claims count totaled 238,000, below the unrevised prior week count of 257,000. As for continuing claims, they declined to 1.964 million from the revised count of 1.987 million (from 1.988 million). The Factory Orders Report for March showed an increase of 0.2%, while the February reading was revised to 1.2% (from 1.0%). Lastly, unit labor costs increased 3.0% during the first quarter. The preliminary productivity reading showed a decrease of 0.6%.
The Technology (XLK 54.77, -0.04 -0.07%) space held onto modest declines into the bell. Component Qorvo (QRVO 67.02, -1.03 -1.51%) was notably weaker today following the company's light Q1 guidance. The US Telecom space displayed the weakest session today out of the remaining 10 S&P sectors IYZ -2.34% followed by XLE -1.84%, XLY -0.16%, XLRE +0.10%, XLI +0.11%, XLB +0.11%, XLF +0.17%, XLU +0.35%, XLV +0.66%, XLP +0.77%.
In the S&P 500 Information Technology (938.05 +0.26 +0.03%) space, trading just barely eked out gains today. Component Facebook (FB 150.85, -0.95 -0.63%) turned in a modestly lower session after the company's latest quarterly report from last night. Other names in the space which outperformed with the sector today included GPN +6.21%, ADP +1.63%, CSRA +1.62%, FISV +1.51%, KLAC +1.37%, PAYX +1.35%, ORCL +1.29%, FSLR +0.97%, SYMC +0.94%, TEL +0.77%, APH +0.77%, QCOM +0.77%.
Other notable news items among sector components:
GoDaddy (GDDY 38.87, +0.42 +1.09%) announced a public offering of 24,000,000 shares of Class A common stock; expects to repurchase, from the selling stockholders, an aggregate of $275 million of limited liability company units of Desert Newco.
Cisco Systems (CSCO 34.18, -0.07 -0.20%) announced intent to acquire the Advanced Analytics team from Saggezza.
Wi-LAN (WILN 1.62, -0.35 -17.77%) acquired VIZIYA Corp through share purchases of about $40.5 million.
Cogent Communications (CCOI 41.20, -2.12 -4.90%) increased its quarterly common stock dividend to $0.44 from $0.42.
Oracle (ORCL 45.47, +0.58 +1.29%) and AT&T (T 38.01, -0.39 -1.02%) signed a strategic agreement to move thousands of T's large scale internal databases to Oracle's Cloud Infrastructure as a Service and Platform as a Service.
Itron (ITRI 66.00, +3.05 +4.85%) announced that RGC Resources (RGCO 23.70, -0.05 -0.21%) Roanoke Gas Company collaboration to modernize gas distribution system.
HubSpot (HUBS 70.20, -1.65 -2.30%) intends to offer $300 million aggregate principal amount of Convertible Senior Notes due 2022, in a private offering.
In reaction to quarterly results:
Facebook (FB) reported better than expected Q1 GAAP earnings of $1.04 on better than expected revenues of $8.03 billion. Monthly Active Users were 1.94 billion, a 17% increase year-over-year, while daily active users were up 18% compared to a year ago to about 1.28 billion.
NXP Semi (NXPI 106.78, +0.99 +0.94%) reported Q1 earnings of $3.79 on better than expected revenues of $2.21 billion.
Qorvo (QRVO) reported better than expected Q4 EPS and revenues of $0.85 and $643 million, respectively. For Q1, QRVO sees EPS and revenues below market expectations at $0.70-0.90 and $610-650 million, respectively.
Square (SQ 19.90, +1.62 +8.86%) reported better than expected Q1 EPS and revenues of $0.05 and $204 million, respectively. For Q1, the company sees EPS and revenues in-line at $0.03-0.05 and $223-226 million, respectively. For FY17, SQ raised their EPS and revenue guidance to $0.16-0.20 (up $0.01) and $890-910 million (up $10 million), respectively.
MAXIMUS (MMS 61.39, +1.70 +2.85%) reported better than expected Q2 EPS of $0.80 and in-line revenues of $622 million. For FY17, the company sees in-line EPS of $3.00-3.10 (from $2.90-3.10) on revenues of $2.425-2.475 million, respectively.
Tableau Software (DATA 58.05, +3.35 +6.12%) reported better than expected Q1 EPS of $0.03 on revenues of $199.9 million. On the conference call, DATA guided Q2 EPS of ($0.02)-($0.09) on revenues of $205-215 million. For FY17, DATA sees EPS of breakeven on revenues of $850-890 million.
Cogent Communications (CCOI) reported in-line Q1 EPS of $0.09 on worse than expected revenues o $117.2 million.
Gogo (GOGO 12.85, +0.51 +4.13%) reported a better than expected Q1 loss of $0.52 per share on better than expected revenues of $165.41 million. The company also reaffirmed FY17 revenue guidance in the range of $670-695 million.
KEYW Holding (KEYW 8.67, -0.87 -9.12%) reported a GAAP loss of $0.08 on revenues which fell 7.3% compared to a year ago and missed market expectations at $68.26 million. The company also updated guidance to include the recently closed Sotera deal. KEYW sees FY17 revenues of $455-485 million, updated from the prior guidance for FY17 revenues of $300-320 million (which was excluding the Sotera deal).
Glu Mobile (GLUU 2.40, -0.06 -2.44%) reported a Q1 loss per share of $0.17 on better than expected revenues of $56.8 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: TWOU, ATVI, MDRX, AAOI, APTI, ANET, ABTL, ACLS, RATE, BL, WIFI, BCOV, CALD, CARB, ECOM, CPSI, DGII, G, GSIT, HDP, IMMR, IMPV, PI, INFN, KTOS, LFGR, LOGM, MCHX, MELI, MTD, MB, MSI, UEPS, PCTY, RP, SWIR, UBNT, OLED, VRNS, VECO, WEB, WK, ZEN, ZG, ZNGA/CTSH, MGI, NPTN, TDS, USM
Analyst actions:
FSLR was upgraded to Buy from Neutral at BofA/Merrill,
HIVE was upgraded to Buy from Hold at Wunderlich,
KEYW was upgraded to Buy from Hold at Maxim Group,
NSIT was upgraded to Mkt Perform from Underperform at Raymond James,
TKC was upgraded to Buy from Neutral at VTB Capital;
SQ was downgraded to Neutral from Buy at Guggenheim,
PMTS was downgraded to Mkt Perform from Outperform at Raymond James,
QRVO was downgraded to Neutral from Buy at DA Davidson,
MBT was downgraded to Equal Weight from Overweight at Morgan Stanley,
MMS was downgraded to Hold from Buy at Maxim Group
