From Briefing.com: 4:24 pm Closing Market Summary: Major Indices Finish Flat on Tuesday (:WRAPX) :
The Nasdaq (+0.3%) opened Tuesday's session in positive territory and never looked back, settling at a new record high. Meanwhile, the S&P 500 (-0.1%) and the Dow (-0.2%) finished a step below their flat lines as the energy (-0.9%) and financials (-0.5%) sectors weighed.
After closing Monday at its lowest level since December 1993, the CBOE Volatility Index (VIX 10.00, +0.23, +2.4%) finished right at the 10.00 mark on Tuesday. The historically-low level points to a feeling of complacency among investors, which may be a cause for concern in a market where valuations are stretched.
Following a small relief rally yesterday, crude oil returned to its bearish ways, dropping 1.2% to $45.88/bbl. The slip left the energy sector (-0.9%) with the utilities space (-0.9%) at the bottom of the leaderboard. The utilities group underperformed despite Duke Energy's (DUK 82.11, -0.81) upbeat earnings and in-line revenues. The lightly-weighted telecom services (-0.6%), real estate (-0.4%), and materials (-0.7%) groups also underperformed.
However, the day's most notable laggard may have been the financials sector (-0.5%), which clung to its flat line for the majority of Tuesday's session but was hit by a wave of selling pressure in the last hour of action. Influential bank names like Wells Fargo (WFC 54.68, -0.36) and Goldman Sachs (GS 223.76, -1.27) led the retreat.
Financials' late-afternoon tumble coincided with the broader market slipping to a fresh low in response to a Sky News interview with North Korea's ambassador to the UK Choe Il. The North Korean ambassador said his country will proceed with its 6th nuclear test when it is deemed appropriate by Supreme Leader Kim Jong-un.
The influential technology (+0.2%) and health care (+0.1%) sectors managed to keep their heads above water. The technology space was helped by chipmakers, evidenced by the 1.0% increase in the PHLX Semiconductor Index, but it didn't receive much help from the rest of its components. Similarly, the biotechnology industry provided the health care group with a pocked of strength; the iShares Nasdaq Biotechnology ETF (IBB 292.95, +3.50) climbed 1.2%.
Earnings news was relatively light. However, Marriott's (MAR 102.50, +6.13) better than expected earnings/revenues and upbeat guidance helped the consumer discretionary (+0.5%) sector outpace its peers. The industrial space (+0.2%) also managed to secure a modest gain.
In the bond market, Treasuries settled slightly lower across the board with the benchmark 10-yr yield (2.41%) adding two basis points. Meanwhile, the U.S. Dollar Index (99.47, +0.44) advanced 0.4%.
On the data front, investors received March JOLTS and March Wholesale Inventories:
The March Job Openings and Labor Turnover Survey showed that job openings increased to 5.743 million from a revised 5.682 million (from 5.743 million) in February.
March Wholesale Inventories increased 0.2% (Briefing.com consensus -0.1%). The prior month's reading was revised to 0.3% from 0.4%.
The market doesn't typically pay much attention to this release since the full business inventories report is usually released a short time later.
Tomorrow, investors will receive a batch of economic reports, including the MBA Mortgage Applications Index at 7:00 ET, April Import/Export Prices at 8:30 ET, and the April Treasury Budget at 14:00 ET.
Nasdaq Composite +13.7% YTD
S&P 500 +7.1% YTD
Dow Jones Industrial Average +6.1% YTD
Russell 2000 +2.6% YTD
4:24 pm NVIDIA beats by $0.04, beats on revs; guides Q2 revs above consensus; Reiterates 2018 capital return plans (NVDA) :
Reports Q1 (Apr) earnings of $0.85 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.81; revenues rose 48.7% year/year to $1.94 bln vs the $1.91 bln Capital IQ Consensus.
Co issues upside guidance for Q2, sees Q2 revs of $1.95 bln +/-2% (~$1.911-1.989 bln) vs. $1.9 bln Capital IQ Consensus Estimate.
For fiscal 2018, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. During the first quarter of fiscal 2018, NVIDIA paid $82 million in cash dividends
GAAP and non-GAAP gross margins are expected to be 58.4 percent and 58.6 percent, respectively, plus or minus 50 basis points.
Capital expenditures are expected to be approximately $55 million to $65 million.
4:22 pm SolarEdge Technologies beats by $0.06, reports revs in-line; guides Q4 revs in-line (SEDG) :
Reports Q3 (Mar) earnings of $0.36 per share, $0.06 better than the Capital IQ Consensus of $0.30; revenues fell 8.1% year/year to $115.1 mln vs the $114.1 mln Capital IQ Consensus.
Co issues in-line guidance for Q4, sees Q4 revs of $120-130 mln vs. $120.31 mln Capital IQ Consensus Estimate. Gross margins to be within the range of 32% to 34%.
"In a quarter where the PV market is exhibiting decline in the United States, we have increased our revenues, profitability and cash flow generation quarter over quarter. Much of this is attributed to increased sales in Europe and our growing worldwide geographic spread," said Guy Sella, Founder, Chairman and CEO of SolarEdge. "We are confident that with our financial strength, cash balance and substantial R&D capabilities, we are well positioned to continue to increase revenues in existing markets and new markets as we see fit."
4:20 pm Microchip beats by $0.10, beats on revs; guides Q1 EPS above consensus, revs above consensus; co announces record net sales for Q4 and FY17 (MCHP) :
Reports Q4 (Mar) earnings of $1.16 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $1.06; revenues rose 61.9% year/year to $902.7 mln vs the $891.14 mln Capital IQ Consensus.
Co issues upside guidance for Q1, sees EPS of $1.17-1.27, excluding non-recurring items, vs. $1.11 Capital IQ Consensus Estimate; sees Q1 revs of $920.7-965.9 mln vs. $913.05 mln Capital IQ Consensus Estimate.
Co said, "Non-GAAP earnings per share was an all-time record and was 10 cents per share better than the mid-point of our February 28, 2017 guidance, and up 64.7% from the March quarter of a year ago due to improving sales, gross margin percentage, operating expense leverage and the successful execution of our core business as well as accretion from our acquisitions. GAAP earnings per share for the March quarter was heavily impacted by acquisition-related expenses and hence, not meaningfully comparable to the March quarter a year ago."
4:18 pm Diodes beats by $0.08, beats on revs; guides Q2 revs above consensus (DIOD) :
Reports Q1 (Mar) earnings of $0.14 per share, $0.08 better than the Capital IQ Consensus of $0.06; revenues rose 6.1% year/year to $236.3 mln vs the $231.03 mln Capital IQ Consensus.
Co issues upside guidance for Q2, sees Q2 revs of $250-270 mln vs. $250.27 mln Capital IQ Consensus Estimate. Expects non-GAAP gross margin to be approximately 33 percent.
4:14 pm SunPower beats by $0.13, beats on revs; guides Q2 revs below consensus; reaffirms FY17 revs guidance (SPWR) :
Reports Q1 (Mar) loss of $0.36 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus of ($0.49); revenues fell 0.9% year/year to $429.5 mln vs the $388.07 mln Capital IQ Consensus.
SPWR announced that it has reached an agreement with Total whereby Total will guarantee up to $100 million of the company's $300 million credit revolver facility for a period through August of 2019.
Co issues downside guidance for Q2, sees Q2 revs of $275-325 mln, excluding non-recurring items, vs. $514.46 mln Capital IQ Consensus Estimate.
On a non-GAAP basis, the company expects gross margin of 2 percent to 4 percent, Adjusted EBITDA of negative $25 million to breakeven and megawatts deployed in the range of 330 MW to 360 MW. The company's second quarter non-GAAP guidance excludes approximately $13 million in above market polysilicon costs.
Co reaffirms guidance for FY17, sees FY17 revs of $2.1-2.6 bln, excluding non-recurring items, vs. $2.29 bln Capital IQ Consensus Estimate.
The company is reiterating the following key financial metrics for 2017: non-GAAP operational expenses of less than $350 million, capital expenditures of approximately $120 million, and gigawatts (:GW) deployed in the range of 1.3 GW to 1.6 GW.
Also, the company expects to record GAAP restructuring charges totaling $50 million to $100 million in fiscal year 2017.
The company expects to generate positive operating cash flow through the end of fiscal year 2017 and exit the year with approximately $300 million in cash.
The company is also forecasting positive Adjusted EBITDA for the full year 2017, weighted toward the second half of the year.
Additionally, the company's 2017 non-GAAP guidance excludes approximately $100 million in above market polysilicon costs.
4:10 pm Vivint Solar misses by $0.02, beats on revs (VSLR) :
Reports Q1 (Mar) loss of $0.50 per share, $0.02 worse than the Capital IQ Consensus of ($0.48); revenues rose 208.2% year/year to $53.11 mln vs the $47.09 mln Capital IQ Consensus.
Co expects Q2 MW Installed of 44-48 MWs and cost per watt between $2.95 and $3.05
The broader market ended Tuesday split with the Nasdaq Composite adding 17.93 points (+0.29%) to 6120.59. The Dow Jones Industrial Average shed 36.50 points (-0.17%) to 20975.78, while the S&P 500 lost about 2.46 points (-0.10%) to 2396.92.
The Technology (XLK 55.28, +0.07 +0.13%) space ended higher albeit despite the best efforts of sellers as see-saw action into the close almost left the space with losses. Component Analog Devices (ADI 78.50, +2.12 +2.78%) posted strong gains on no specific news. As far as the remaining ten S&P sectors, the Consumer Discretionary space XLY +0.58% was the best performer, followed by XLI +0.13%, XLV +0.12%, XLP -0.36%, XLF -0.38%, XLRE -0.38%, XLU -0.73%, XLB -0.75%, IYZ -0.76%, XLE -0.83%.
In the S&P 500 Information Technology (946.36, +1.44 +0.15%) space, trading was higher almost the entirety of the session. Component Cisco Systems (CSCO 33.90, -0.39 -1.14%) had a tough day after being downgraded this morning to a Market Perform rating at BMO Capital. Unlike CSCO, names like MU +2.67%, FSLR +1.79%, AVGO +1.50%, ADSK +1.45%, EBAY +1.44%, MSI +1.41%, MCHP +1.31%, YHOO +1.31%, AMAT +1.20%, ATVI +1.17% were a credit to the space in trading today.
Other notable news items among sector components:
KKR (KKR 18.97, +0.23 +1.23%) announced $150 million in investment in Pandora Media (P 9.94, -0.46 -4.42%).
DST Systems (DST 124.44, +1.52 +1.24%) announced a $300 million share repurchase program. The company also announced a 2:1 stock split and expects the shares to begin trading ex-split on June 9, 2017. And lastly, DST declared a $0.36 pre-split dividend, an increase from the prior $0.35 per share dividend.
Black Knight Financial (BKFS 38.75, -1.85 -4.56%) priced a secondary offering by selling shareholders of $5 million shares of common stock; final terms not disclosed.
Electronics For Imaging (EFII 45.96, -0.19 -0.41%) acquired CRC Information Systems; terms not disclosed.
FactSet (FDS 162.64, +1.41 +0.87%) increased its quarterly common stock dividend to $0.56 per share from $0.50.
j2 Global (JCOM 89.00, -1.27 -1.41%) approved a quarterly cash dividend of $0.3750 per common share.
Model N (MODN 12.45, +0.70 +5.96%) named David Barter as CFO.
In reaction to quarterly results:
Open Text (OTEX 32.86, -1.97 -5.66%) reported worse than expected Q3 EPS and revenues of $0.45 and $593.13 million, respectively.
Zebra Tech (ZBRA 98.45, +1.76 +1.82%) reported better than expected Q1 EPS and revenues of $1.37 and $865 million, respectively. For Q2, the company sees in-line EPS of $1.35-1.55 and revenues in the range of $864.4-890.8 million. Further, the company now sees mid-single digit organic net sales growth for FY17 compared to the prior outlook for low single digit growth.
j2 Global (JCOM) reported in-line Q1 EPS of $1.19 on worse than expected revenues of $254.7 million. The company also sees FY17 EPS and revenues of $5.60-6.00 and $1.13-1.17 billion, respectively.
Pandora Media (P) reported a better than expected Q1loss of $0.20 per share on in-line revenues of $316 million. For Q2, the company sees revenues worse than expected in the range of $360-375 million. For FY17, the company sees revenues worse than expected at $1.50-1.65 billion.
Vonage (VG 7.02, +0.01 +0.14%) reported better than expected Q1 adjusted EPS of $0.07 on revenues which rose 7.3% compared to last year to $243.3 million. For FY17, VG sees revenues of $966-981 million (ex-$4 million in revenues from the divested business).
Model N (MODN) reported a better than expected Q2 loss per share of $0.25 on revenues which rose 27.6% to about $33.3 million. The company also sees Q3 EPS in-line at ($0.19)-($0.17) on worse than expected revenues between $33.5-33.8 million. For FY17, MODN sees better than expected EPS of ($0.68)-($0.66) on worse than expected revenues in the range of $129.4-130.0 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: ACIA, ALRM, DOX, ATTO, BBOX, CALX, COHR, DIOD, ESIO, EA, ENPH, EVRI, EXAR, FARO, HCKT, MRIN, MXL, MXWL, MCHP, MIME, NEWR, NUAN, NVDA, PCTI, PCLN, QNST, RPD, FUEL, SCSC, SSNI, SEDG, SPWR, TTEC, TRIP, TRUE, TCX, VEC, VSLR, WSTC, XOXO, YELP, YUME, ZAYO/AVID, BR, SATS, KEM, NIHD, OIIM, WIX
Analyst actions:
ADSK was upgraded to Outperform from Neutral at Wedbush,
MODN was upgraded to Buy from Hold at Craig Hallum;
CSCO was downgraded to Market Perform from Outperform at BMO Capital,
GIMO was downgraded to Neutral from Buy at DA Davidson,
ECOM was downgraded to Equal Weight from Overweight at First Analysis Sec;
TKC was initiated with a Hold at Berenberg,
CY was initiated with an Overweight at Stephens
