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Thursday, April 17, 2014 10:24:07 PM
From Briefing.com: 4:10 pm : The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 billion (expected $15.52), while IBM revealed in-line earnings on revenue that was roughly $500 million below expectations.
The results from the two pressured the technology sector (-0.3%), which was down as much as 1.0% during early action. The sector was able to shed the bulk of its losses thanks to strength among chipmakers and other high-beta components. Chipmakers rallied throughout the session after upbeat earnings from SanDisk (SNDK 82.99, +7.14) and Taiwan Semiconductor (TSM 20.71, +0.56) underpinned the space. The broader PHLX Semiconductor Index, meanwhile, jumped 1.9%.
Even though Google and IBM pressured the market early on, equity indices were able to rebound with help from several other major listings that reported above-consensus results. General Electric (GE 26.56, +0.44), Goldman Sachs (GS 157.44, +0.22), Morgan Stanley (MS 30.76, +0.87), and PepsiCo (PEP 85.55, +0.78) all beat their estimates.
Also of note, the biotech space remained volatile with the iShares Nasdaq Biotechnology ETF (IBB 222.16, -0.57) spending some time on each side of its flat line. Furthermore, the ETF ended just above its 200-day moving average (220.19) after spending the past week near that key level.
Although the Nasdaq and S&P 500 posted modest gains, the Dow Jones (-0.1%) was unable to catch up to its peers as losses in several large components like IBM, American Express (AXP 86.22, -1.18), and UnitedHealth (UNH 75.78, -2.41) acted as a wet blanket on the price-weighted index.
Treasuries retreated steadily throughout the session, causing the benchmark 10-yr yield to add nine basis points to 2.72%. The slide took place amid reports from Geneva indicating representatives from the European Union, United States, Ukraine, and Russia have reached an agreement on steps aimed at de-escalating the crisis in Ukraine. The agreement was announced by Russia's Foreign Minister Sergei Lavrov, who also said Ukraine needs 'decentralization' and 'more regional powers.'
Trading volume was above average thanks to a boost in activity resulting from options expiration. As a result more than 800 million shares changed hands at the New York Stock Exchange.
Today's data was limited to two releases:
The initial claims level increased to 304,000 for the week ending April 12 from an upwardly revised 302,000 for the week ending April 5. The Briefing.com consensus expected the initial claims level to increase to 312,000. The Department of Labor stated that there were no special factors impacting the claims data. However, we remain skeptical of that. Over the past few years, the DOL has had extreme difficulties managing the seasonal adjustment factors around the Easter holiday. With Easter falling on a later date this year, we suspect that the claims are underreporting actual layoff levels. We expect some volatility in the next few weeks before the initial claims level settles back in the 320,000 -- 330,000 range by the beginning of May.
The Philadelphia Fed's Business Outlook increased to 16.6 in April from 9.0 in March. The Briefing.com consensus expected the index to fall to 8.6. There was a general strengthening across the board. Shipments spiked to 22.7 in April from 5.7 in March. Most of the gain was the result of a significant strengthening in new orders demand, 14.8 from 5.7. The gains in shipments, however, may not be sustainable. Unfilled orders softened as the related index fell to 2.0 in April from 2.6 in March. Without a steady supply of backlogs, weaker new orders will pull down shipments growth. The employment index increased to 6.9 in April from 1.7 in March.
Monday's data will be limited to the Leading Indicators report for March, which will be released at 10:00 ET.
S&P 500 +0.9% YTD
Dow Jones Industrial Average -1.0% YTD
Nasdaq Composite -1.9% YTD
Russell 2000 -2.1% YTD
Week in Review: Stocks Rebound From Recent Pressure
The major averages finished the Monday session on a modestly higher note, but they ended below their best levels of the day after volatility during the last two hours of action forced the indices to test their flat lines. The S&P 500 rose 0.8%, while the Nasdaq added 0.6% after being up as much as 1.3%. The stock market began the session on an upbeat note, casting aside renewed concerns about the situation in Ukraine, where the country's army was called in over the weekend to deal with pro-Russian separatists in several cities in the Southeast. Instead, the market rallied in the morning after Citigroup's (C 48.22, +0.04) above-consensus quarterly results, combined with a better-than-expected March Retail Sales report, invited buyers into the mix. In all likelihood, the early advance was assisted by some short-covering as many areas that displayed weakness in recent sessions, showed relative strength.
On Tuesday, equities ended on a modestly higher note, but not before heavy selling pressure sent the Nasdaq Composite (+0.3%) for a test of its 200-day moving average. The S&P 500, meanwhile, added 0.7% with all ten sectors posting gains. Stocks climbed at the open with the advance built on the relative strength of biotechnology and other momentum names. Despite the solid early gains in those areas, the market began fading from its high as multiple reports pointed to an escalation of tensions in Ukraine. Specifically, a skirmish reportedly took place at the Kramatorsk airbase, but there were inconsistencies with regard to the number of injured. Some reports put the number of casualties between four and 11, while others said there were no casualties. After these reports made the rounds, Ukraine's acting President Oleksandr Turchynov was quoted by Interfax as saying the airfield has been retaken from pro-Russian militants.
The stock market ended the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains. The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly. Stocks began the trading day with modest gains after the overnight session featured the release of China's Q1 GDP. Although the report could be classified as better-than-feared, it did not necessarily produce a clear-cut signal as the year-over-year reading of 7.4% beat estimates (7.3%), while the quarter-over-quarter growth of 1.4% was just below expectations (1.5%).
DJ30 -16.31 NASDAQ +9.29 SP500 +2.54 NASDAQ Adv/Vol/Dec 1791/1.78 bln/1042 NYSE Adv/Vol/Dec 1788/818.4 mln/1276
3:30 pm :
June gold slipped deeper into negative territory today as the dollar index erased earlier losses. The yellow metal pulled back from its session high of $1303.20 per ounce set in morning action and fell as low as $1292.80 per ounce. Unable to gain momentum, it settled 0.7% lower at $1294.20 per ounce.
May silver chopped around slightly below the unchanged line after retreating from a session high of $19.69 per ounce set moments after floor trade opened. It brushed a session low of $19.56 per ounce and eventually settled with a 0.2% loss at $19.60 per ounce.
May crude oil traded higher, rising as high as $104.78 per barrel in morning action. It dipped to a session low of $103.85 per barrel but recovered some of the gain in afternoon floor trade. The energy component eventually settled 0.6% higher at $104.31 per barrel.
May natural gas slipped to a session low of $4.48 per MMBtu in morning action but rallied sharply into positive territory following bullish inventory data that showed a build of 24 bcf when a larger build of 34-36 bcf was anticipated.
It inched higher for the remainder of the session and settled 4.6% higher at $4.74 per MMBtu, just below its session high of $4.75 per MMbtu.
5:12PM This week's biggest % gainers/losers (SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).
This week's top 20 % gainers
Technology: ZIGO (19.25 +31.13%), GRUB (35.95 +16.31%), WBMD (44.99 +15.06%), SPLK (65.84 +12.74%), RALY (13.86 +12.5%)
Services: GLOG (28.04 +12.61%), GLNG (46.47 +12.6%)
Healthcare: AKBA (26.09 +41.18%), RGEN (15.84 +15.79%), AGN (133.92 +14.82%)
Financial: BOFI (85.3 +14.59%), AHL (44.45 +12.76%), IBKR (23.95 +12.6%)
Basic Materials: GDP (24.36 +35.94%), TPLM (9.83 +21.81%), HK (5.34 +17.88%), MPO (5.91 +17.03%), CRK (26.4 +12.53%), PSXP (57.66 +12.22%), AXAS (5.15 +12.2%)
This week's top 20 % losers
Technology: NQ (12.9 -19.32%), HIMX (9.12 -16.02%), OIBR (1.18 -15.11%)
Services: CNSI (26.41 -24.43%), PBY (10.26 -15.14%)
Healthcare: RARE (42.56 -26.54%), RTRX (14.5 -20.55%), ARWR (12.77 -19.53%), INO (2.52 -16%), DYAX (6.73 -15.24%), MGNX (20.02 -14.77%), NWBO (5.88 -14.16%), INSM (13.41 -14.04%), GWPH (46.2 -13.81%), ECYT (18.15 -13.2%)
Financial: MGI (14.81 -17.58%), NBG (4.48 -17.19%)
Basic Materials: CAK (0.7 -17.35%), PVG (5.48 -16.21%), ANV (3.63 -13.57%)
4:20PM Advanced Micro beats by $0.02, beats on revs; guides Q2 revs above consensus (AMD) 3.69 -0.07 : Reports Q1 (Mar) earnings of $0.02 per share, $0.02 better than the Capital IQ Consensus Estimate of ($0.00); revenues rose 28.4% year/year to $1.4 bln vs the $1.34 bln consensus; GAAP gross margin flat QoQ at 35%.
Computing Solutions segment revenue decreased 8 percent sequentially and 12 percent year-over-year. The sequential and year-over-year declines were due to decreased client unit shipments.
Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.
Microprocessor average selling price (ASP) was flat sequentially and decreased slightly year-over-year.
Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon R7 and R9 family of products.
Operating income was $91 million compared with $121 million in Q4 2013 and $16 million in Q1 2013. The sequential decline was primarily due to decreased revenue from semi-custom SoCs while the year-over-year increase was driven by higher sales of semi-custom SoCs.
GPU ASP increased sequentially and year-over-year driven by the Radeon R7 and R9 family of products.
Co issues upside guidance for Q2, sees Q2 revs +0-6% QoQ to ~$1.40-1.48 bln vs. $1.36 bln Capital IQ Consensus Estimate.
3:41PM Earnings Preview for the week of April 21 - 25 (SUMRX) : Of the companies reporting earnings for the week of April 21 - 25 some of the bigger names include:
Monday:
Pre Market - HAL, KMB, RCI, STI, LII, HAS, TNC
After Hours - CE, NFLX, RCII, ZION, WCN
Tuesday:
Pre Market - CMCSA, UTX, LMT, MCD, TRV, PHG, XRX, BK, GPC, ITW, OMC, CNC, SAH, PNR, IPG, HOG, CP, AKS, RF, SPG, ATI, LXK, ACI
After Hours - T, AMGN, GILD, YUM, CNI, DFS, FTI, WRB, NBR, SANM, PKG, VMW, JNPR, TMK, UIS, BCR, ISRG, CREE, ILMN, CBST,
Wednesday:
Pre Market - ERIC, PG, BA, DOW, JCI, DAL, GD, NOC, EMC, MAN, SVU, TMO, TEL, PX, NSC, IR, APD, BIIB, RAI, FDML, R, AVY, OCR, GDI, DPS, OC, ABG, APH, BEAV, PII, AMTD
After Hours - AAPL, IM, SWY, QCOM, CBI, TXN, AIZ, FB, SYK, ORLY, RE, NXPI, USTR, LRCX, USTR, LRCX, TSCO, RJF, FLS, LPLA, RHI, CCI, OII, VAR, CTXS, ETFC, FFIV, ZNGA, ANGI
Thursday:
Pre Market - GM, CAJ, VZ, ABC, NVS, UPS, AET, CAT, AAL, MMM, AVT, AZN, TWC, RTN, FCX, NUE, LLY, DLPH, LUV, MO, PAG, WM, ETR, SWK, RS, CAM, CMS, GPI, CCE, HSY, WCC, CELG, DGX, BTU, DHI, UFS, NLSN, POT, HOT, JBLU, NBL, SCG, BMS,
After Hours - MSFT, AMZN, SBUX, LVS, WFT, CB, V, RGA, PFG, EMN, UHS, RSG, MAS, BRCM, NEM, BIDU, CINF, FSL, SPN, HBI, CERN, SPWR, DV, P,
Friday:
Pre Market - HMC, F, ABBV, CL, WHR, LEA, AON, VFC, DTE, COV, TYC, STT, ALV, WY, DAN, LH, ALK, LPNT, MCO, BKW
12:34PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
SNDK (83.67 +10.31%): Beat on EPS by $0.19, beat on revs; sees Q2 revs of $1.55-1.625 bln vs $1.58 bln consensus; reaffirmed FY14 revs of $6.4-6.8 bln vs $6.67 bln consensus; target raised to $125 from $85 at Credit Suisse; assumed with an Overweight at Piper Jaffray; tgt $85; target raised to $77 at Cowen; target raised to $90 at Needham; target raised to $97 at Pacific Crest.
BHI (69.41 +4.67%): Beat on EPS by $0.06, reported revs in-line.
MS (30.91 +3.41%): Beat on EPS by $0.08, beat on revs.
Large Cap Losers
ADS (250.81 -5.02%): Beat on EPS by $0.07, missed on revs; guided Q2 EPS below, revs above consensus; raised FY14 guidance.
FITB (20.85 -4.55%): Missed on EPS by $0.06.
UNH (75.7 -3.18%): Beat on EPS by $0.01, reported rev in-line; reaffirmed FY14 EPS guidance, revs guidance.
Mid Cap Gainers
SHLD (35.5 +5.65%): Director disclosed purchase of 475000 shares, worth total of $15.94 mln on 4/15 and 4/16.
PVTB (29.34 +5.2%): Beat on EPS by $0.03.
BWP (15.75 +4.72%): Upgraded to Overweight from Underweight at JP Morgan; tgt raised to $18 from $14.
Mid Cap Losers
CHMT (23.61 -6.35%): Platform Specialty Products (PAH) announced agreement to acquire agrochemicals business from Chemtura for ~ $1 bln.
WU (15.4 -4.04%): Trading lower following Wal-Mart (WMT) news: WMT introduced exclusive money transfer service, cut fees by up to 50% for customers.
STLD (18.15 -3.97%): Reported Q1 adj. earnings of $0.16 per share, $0.02 worse than consensus (GAAP EPS was $0.17 vs $0.16 consensus), missed on revs.
12:28PM Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (126) outpacing new lows (38) (SCANX) : Stocks that traded to 52 week highs: AA, AAV, ADM, AEP, AGN, AGRO, ALSN, ALV, AN, ANDE, ARCW, ASX, ATHL, ATO, AXAS, BAM, BBW, BDC, BHI, BIOF, BKH, BLL, BPO, BRK.A, BRK.B, CAR, CCK, CENX, CJES, CLB, CLR, CMS, CNX, CODE, CPE, CQP, CWEI, CXDC, CXO, DIOD, DTE, DVCR, DVN, E, ECA, EGY, EIX, EMN, ERF, ESCA, FANG, FNHC, FTR, GA, GAS, GLBZ, GLNG, HAL, HIL, HOLI, HP, IIIN, IM, ITC, JFBI, KMB, KNL, KONA, LNT, LYB, MINI, MPLX, MTRN, MYE, NED, NEE, NFX, NLP, NS, NU, ORAN, ORM, PBA, PDS, PEG, PFIS, PLXS, PPC, PTEN, RDS.B, REI, RES, RHP, ROIC, RRC, RUSHB, SAFM, SE, SEP, SGY, SLB, SMIT, SNA, SPCB, SPN, SPRO, SRE, ST, SWN, TFSL, TRGP, TSLX, TSM, UHAL, VET, VLP, VNO, VOCS, VVC, WBC, WEC, WIN, WLL, WR, WRES, WSO
Stocks that traded to 52 week lows: ACFN, AMBT, ARQL, AUY, AVP, AXGN, BIOC, CFFI, COCO, CWTR, CYH, DRD, EGLT, EVRY, GLMD, GYRO, MGI, NEWL, OIBR.C, OPWR, PMFG, QSII, QURE, RBCAA, RDC, RSH, SBY, SDRL, SIGM, SQBK, SSN, STRL, SWAY, TEAR, TEDU, TZOO, UNXL, ZNH
ETFs that traded to 52 week highs: DIG, EWT, FXB, IEO, IGE, IXC, IYE, OIH, USCI, XLE, XLU, XOP
ETFs that traded to 52 week lows: none
BlackBerry (BBRY) announced the launch of the BlackBerry Smartphone App Development Award for Canada-Wide Science Fair 2014
Huawei has designed TrueTouch Gen4 capacitive touchscreen controllers from Cypress Semiconductor (CY) into five of its newest smartphones.
7:38AM Fairchild Semi beats by $0.01, misses on revs; guides Q2 revs in-line (FCS) 13.52 : Reports Q1 (Mar) earnings of $0.04 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.03; revenues rose 0.3% year/year to $344.1 mln vs the $348.63 mln consensus.
GMs
Co reported first quarter adjusted gross margin of 30.3%, down 100 basis points from the prior quarter but 250 basis points higher than the first quarter of 2013.
Adjusted gross margin in past quarters excluded accelerated depreciation related to a line closure.
Guidance:
Co issues in-line guidance for Q2, sees Q2 revs of $355-375 mln, excluding non-recurring items, vs. $362.88 mln Capital IQ Consensus Estimate.
Co expects adjusted gross margin to be 31.0 to 32.0% due primarily to higher sales and factory loadings as well as improved product mix which all more than offsets the impact of our merit increase.
7:04AM Trina Solar announces grid connection for 23.8 MW PV projects in UK (TSL) 12.00 : Co announced two of its PV power plants in the United Kingdom have successfully completed connection to the grid. The company is an investor in and sole project developer for these projects, which have a total capacity of 23.77 MW. The two projects, which are located in Cornwall and Dorset, commenced construction in December 2013 and were completed on schedule in March 2014. The two projects were developed using Trina PC05A 255Wp modules and will receive 1.6 Renewables Obligation Certificates (ROCs), equivalent to GBP 42.02 per megawatt-hour (MWh). They are expected to generate 24,673MWh electricity annually, reducing over 16,542 tons of carbon dioxide emissions. The projects will be able to supply clean energy to approximately 7,477 local homes each year.
6:49AM Taiwan Semi beats by $0.13, reports revs in-line; guides Q2 revs above consensus (TSM) 20.15 : Reports Q1 (Mar) earnings of NT 1.85 per share, NT 0.13 better than the Capital IQ Consensus Estimate of $1.72; revenues rose 11.6% year/year to NT 148.22 bln vs the NT 147.78 bln consensus.
Co issues upside guidance for Q2, sees Q2 revs of NT 180-183 bln vs. NT 171.75 bln Capital IQ Consensus Estimate. Co sees Q2 Gross profit margin is expected to be between 47.5 % and 49.5%.
Gross margin for the quarter was 47.5%, operating margin was 35.4%, and net profit margin was 32.3%.
Shipments of 28-nanometer process technology accounted for 34% of total wafer revenues. 40/45-nanometer accounted for 21% of total wafer revenues.
Advanced technologies, defined as 40/45-nanometers and more advanced technologies, accounted for 55% of total wafer revenues.
"In the first quarter, we saw much stronger demand for our wafers across all segments but more pronounced in mobile related applications, than we had initially predicted in Januar...Driven by better than expected 4Q'13 business, IC companies have turned more positive on their 2014 outlook. Meanwhile, the low level of supply chain inventory has prompted the IC companies to begin restocking inventory actively. Thanks to the better performance and higher yield and reliability of our advanced technologies, we saw a strong rebound of demand for our leading nodes extending beyond the first quarter. Based on our current business outlook and exchange rate assumption of 1 US dollar to 30.10 NT dollars, management expects overall performance for second quarter 2014 to be as follows":
6:37AM General Electric beats by $0.01, reports revs in-line; 2014 framework unchanged (GE) 26.12 : Reports Q1 (Mar) earnings of $0.33 per share, $0.01 better than the Capital IQ Consensus of $0.32; revenues fell 2.2% year/year to $34.18 bln vs the $34.43 bln consensus.
Industrial sales of $24 billion increased 8% compared to the first quarter of 2013. GECC revenues of $10.5 billion decreased 8% from last year. Industrial segment profits rose 12% to $3.3 billion. Industrial segment margins improved 50 basis points over the prior-year period. Industrial segment revenues grew 8%, with organic growth of 8%. Growth market revenues were up 7% for the quarter, with double-digit growth in five of nine growth regions. Services revenues grew 3%, with double-digit growth in Aviation and Oil & Gas. Equipment revenues grew 12%, on strong new product introductions and solid share positions. The breadth of the GE portfolio was reflected in the quarter as the Company offset market volatility in Appliances, Healthcare, and Mining.
Infrastructure orders for the quarter were $23.7 billion, flat with the year-ago period. GE's backlog of equipment and services at the end of the quarter was $245 billion, with increases in every segment over the year-ago period.
GE Capital earnings were flat, with ENI (excluding cash and equivalents) at $374 billion at quarter-end, down $7 billion from last quarter. General Electric Capital Corporation's (GECC) estimated Tier 1 common ratio (Basel 1) rose 32 basis points to 11.4%, and net interest margin was strong at 4.9%. During the quarter, GECC paid $500 million in dividends to the parent.
Also during the quarter, GE filed a registration statement with the SEC for the IPO of its North American Retail Finance business, the first step in a planned, staged exit from that business. The Company made good progress in accelerating efforts to achieve its simplification goals.
GE is on track to achieve its goal of $1 billion or more in structural cost-out for the year. Industrial structural costs in the first quarter were down $254 million versus the prior-year period, driven by simplification initiatives and benefits from restructuring investments.
"We're off to a good start to the year, and our 2014 framework remains unchanged. The environment is consistent with our expectations, with a positive bias. The GE team is executing with strong organic growth, consistent margin enhancement, cash growth with disciplined allocation, and a stronger GE Capital. We are on track for our Retail Finance IPO and remain committed to a GE that has 70% of our earnings from the Industrial businesses. GE is in good shape."
SanDisk (SNDK) reported first quarter earnings of $1.44 per share, excluding non-recurring items, which is higher than expected, while revenues rose 12.8% year/year to $1.51 billion which is higher than expected. SanDisk reports Q1 non-GAAP gross margin of 51.2% vs guidance of 47-49%, compared to 40.5% in Q1 of prior year. "We delivered record first quarter results, driven by 61 percent growth in our SSD revenue and strong retail performance...We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives." The company sees Q2 revenues of $1.55-1.625 billion with reaffirmed fiscal year 2014 $6.4-6.8 billion which his line with estimates. The company sees FY14 non-GAAP gross margin of 47-49% (raised from 45-48%), reflecting continued strengthening of product mix. Co sees same range for gross margin in Q2.
Google (GOOG) reported first quarter earnings of $6.27 per share, which is worse than expected, while revenues rose 19.1% year/year to $15.42 billion which is line with estimate. Sites Revenues- Generated revenues of $10.47 billion, or 68% of total revenues, in the first quarter of 2014. This represents a 21% increase over first quarter of 2013 sites revenues of $8.64 billion. Network Revenue- Partner sites generated revenues of $3.40 billion, or 22% of total revenues, in the first quarter of 2014. This represents a 4% increase over first quarter of 2013 network revenues of $3.26 billion. Other Revenues- Were $1.55 billion, or 10% of total revenues, in the first quarter of 2014. This represents a 48% increase over first quarter of 2013 other revenues of $1.05 billion. International Revenues- Revenues from outside of the United States totaled $8.76 billion, representing 57% of total revenues in the first quarter of 2014, compared to 56% in the fourth quarter of 2013 and 55% in the first quarter of 2013. Paid Clicks- Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the first quarter of 2013 and decreased approximately 1% over the fourth quarter of 2013. Cost-Per-Click- Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 9% over the first quarter of 2013 and remained constant from the fourth quarter of 2013. TAC- Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.23 billion in the first quarter of 2014, compared to $2.96 billion in the first quarter of 2013. TAC as a percentage of advertising revenues was 23% in the first quarter of 2014, compared to 25% in the first quarter of 2013. Operating Expenses- Operating expenses, other than cost of revenues, were $5.34 billion in the first quarter of 2014, or 35% of revenues, compared to $4.07 billion in the first quarter of 2013, or 31% of revenues. Depreciation and loss on disposal of property and equipment and amortization expenses were $1.09 billion for the first quarter of 2014, of which $1.06 billion was related to Google, compared to $899 million in the first quarter of 2013. Of the $1.09 billion, $116 million was related to amortization of Motorola intangibles, which Google will retain subsequent to the disposal of Motorola Mobile. Cash Flow and Capital Expenditures Net cash provided by operating activities in the first quarter of 2014 totaled $4.39 billion, compared to $3.63 billion in the first quarter of 2013. In the first quarter of 2014, capital expenditures were $2.35 billion, the majority of which was for production equipment, data-center construction, and real estate purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2014, free cash flow was $2.05 billion "We expect to continue to make significant capital expenditures." Cash As of March 31, 2014, cash, cash equivalents, and marketable securities were $59.38 billion, which excludes cash classified as held for sale, compared to $58.72 billion as of December 31, 2013.
IBM (IBM) reported first quarter earnings of $2.54 per share, which is line with estimates, while revenues fell 3.9% year/year to $22.48 billion which his line with estimates. Non-GAAP gross margin +90 bps tp 47.6%. Revenue: $22.5 billion, down 4%; down 1% adjusting for currency, excluding divested customer care outsourcing business: Software, Services and Global Financing each grew, adjusting for currency; Software up 2% as reported and adjusting for currency. Services down 2%; up 2% adjusting for currency and excluding divested customer care outsourcing business. Global Financing up 3%, up 6% adjusting for currency. Systems and Technology down 23% as reported and adjusting for currency; Services backlog of $138 billion, up 1% adjusting for currency and excluding divested customer care outsourcing business; Business analytics revenue up 5%, up 6 percent adjusting for currency; Cloud revenue up more than 50%: For cloud delivered as a service, first-quarter annual run rate of $2.3 billion doubled year to year. The company reaffirm guidance for the fiscal year 2014 with EPS of least $18.00, excluding non-recurring items which his higher than expected. Geographic Regions. The Americas' first-quarter revenues were $9.6 billion, a decrease of 4% (down 2%, adjusting for currency) from the 2013 period. Revenues from Europe/Middle East/Africa were $7.6 billion, up 4% (up 1%, adjusting for currency). Asia-Pacific revenues decreased 12% (down 6%, adjusting for currency) to $5.0 billion. OEM revenues were $355 million, down 17% compared with the 2013 first quarter. Growth Markets Revenues from the company's growth markets decreased 11% (down 5%, adjusting for currency). Revenues in the BRIC countries - Brazil, Russia, India and China - decreased 11% (down 6%, adjusting for currency).
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 billion (expected $15.52), while IBM revealed in-line earnings on revenue that was roughly $500 million below expectations.
The results from the two pressured the technology sector (-0.3%), which was down as much as 1.0% during early action. The sector was able to shed the bulk of its losses thanks to strength among chipmakers and other high-beta components. Chipmakers rallied throughout the session after upbeat earnings from SanDisk (SNDK 82.99, +7.14) and Taiwan Semiconductor (TSM 20.71, +0.56) underpinned the space. The broader PHLX Semiconductor Index, meanwhile, jumped 1.9%.
Even though Google and IBM pressured the market early on, equity indices were able to rebound with help from several other major listings that reported above-consensus results. General Electric (GE 26.56, +0.44), Goldman Sachs (GS 157.44, +0.22), Morgan Stanley (MS 30.76, +0.87), and PepsiCo (PEP 85.55, +0.78) all beat their estimates.
Also of note, the biotech space remained volatile with the iShares Nasdaq Biotechnology ETF (IBB 222.16, -0.57) spending some time on each side of its flat line. Furthermore, the ETF ended just above its 200-day moving average (220.19) after spending the past week near that key level.
Although the Nasdaq and S&P 500 posted modest gains, the Dow Jones (-0.1%) was unable to catch up to its peers as losses in several large components like IBM, American Express (AXP 86.22, -1.18), and UnitedHealth (UNH 75.78, -2.41) acted as a wet blanket on the price-weighted index.
Treasuries retreated steadily throughout the session, causing the benchmark 10-yr yield to add nine basis points to 2.72%. The slide took place amid reports from Geneva indicating representatives from the European Union, United States, Ukraine, and Russia have reached an agreement on steps aimed at de-escalating the crisis in Ukraine. The agreement was announced by Russia's Foreign Minister Sergei Lavrov, who also said Ukraine needs 'decentralization' and 'more regional powers.'
Trading volume was above average thanks to a boost in activity resulting from options expiration. As a result more than 800 million shares changed hands at the New York Stock Exchange.
Today's data was limited to two releases:
The initial claims level increased to 304,000 for the week ending April 12 from an upwardly revised 302,000 for the week ending April 5. The Briefing.com consensus expected the initial claims level to increase to 312,000. The Department of Labor stated that there were no special factors impacting the claims data. However, we remain skeptical of that. Over the past few years, the DOL has had extreme difficulties managing the seasonal adjustment factors around the Easter holiday. With Easter falling on a later date this year, we suspect that the claims are underreporting actual layoff levels. We expect some volatility in the next few weeks before the initial claims level settles back in the 320,000 -- 330,000 range by the beginning of May.
The Philadelphia Fed's Business Outlook increased to 16.6 in April from 9.0 in March. The Briefing.com consensus expected the index to fall to 8.6. There was a general strengthening across the board. Shipments spiked to 22.7 in April from 5.7 in March. Most of the gain was the result of a significant strengthening in new orders demand, 14.8 from 5.7. The gains in shipments, however, may not be sustainable. Unfilled orders softened as the related index fell to 2.0 in April from 2.6 in March. Without a steady supply of backlogs, weaker new orders will pull down shipments growth. The employment index increased to 6.9 in April from 1.7 in March.
Monday's data will be limited to the Leading Indicators report for March, which will be released at 10:00 ET.
S&P 500 +0.9% YTD
Dow Jones Industrial Average -1.0% YTD
Nasdaq Composite -1.9% YTD
Russell 2000 -2.1% YTD
Week in Review: Stocks Rebound From Recent Pressure
The major averages finished the Monday session on a modestly higher note, but they ended below their best levels of the day after volatility during the last two hours of action forced the indices to test their flat lines. The S&P 500 rose 0.8%, while the Nasdaq added 0.6% after being up as much as 1.3%. The stock market began the session on an upbeat note, casting aside renewed concerns about the situation in Ukraine, where the country's army was called in over the weekend to deal with pro-Russian separatists in several cities in the Southeast. Instead, the market rallied in the morning after Citigroup's (C 48.22, +0.04) above-consensus quarterly results, combined with a better-than-expected March Retail Sales report, invited buyers into the mix. In all likelihood, the early advance was assisted by some short-covering as many areas that displayed weakness in recent sessions, showed relative strength.
On Tuesday, equities ended on a modestly higher note, but not before heavy selling pressure sent the Nasdaq Composite (+0.3%) for a test of its 200-day moving average. The S&P 500, meanwhile, added 0.7% with all ten sectors posting gains. Stocks climbed at the open with the advance built on the relative strength of biotechnology and other momentum names. Despite the solid early gains in those areas, the market began fading from its high as multiple reports pointed to an escalation of tensions in Ukraine. Specifically, a skirmish reportedly took place at the Kramatorsk airbase, but there were inconsistencies with regard to the number of injured. Some reports put the number of casualties between four and 11, while others said there were no casualties. After these reports made the rounds, Ukraine's acting President Oleksandr Turchynov was quoted by Interfax as saying the airfield has been retaken from pro-Russian militants.
The stock market ended the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains. The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly. Stocks began the trading day with modest gains after the overnight session featured the release of China's Q1 GDP. Although the report could be classified as better-than-feared, it did not necessarily produce a clear-cut signal as the year-over-year reading of 7.4% beat estimates (7.3%), while the quarter-over-quarter growth of 1.4% was just below expectations (1.5%).
DJ30 -16.31 NASDAQ +9.29 SP500 +2.54 NASDAQ Adv/Vol/Dec 1791/1.78 bln/1042 NYSE Adv/Vol/Dec 1788/818.4 mln/1276
3:30 pm :
June gold slipped deeper into negative territory today as the dollar index erased earlier losses. The yellow metal pulled back from its session high of $1303.20 per ounce set in morning action and fell as low as $1292.80 per ounce. Unable to gain momentum, it settled 0.7% lower at $1294.20 per ounce.
May silver chopped around slightly below the unchanged line after retreating from a session high of $19.69 per ounce set moments after floor trade opened. It brushed a session low of $19.56 per ounce and eventually settled with a 0.2% loss at $19.60 per ounce.
May crude oil traded higher, rising as high as $104.78 per barrel in morning action. It dipped to a session low of $103.85 per barrel but recovered some of the gain in afternoon floor trade. The energy component eventually settled 0.6% higher at $104.31 per barrel.
May natural gas slipped to a session low of $4.48 per MMBtu in morning action but rallied sharply into positive territory following bullish inventory data that showed a build of 24 bcf when a larger build of 34-36 bcf was anticipated.
It inched higher for the remainder of the session and settled 4.6% higher at $4.74 per MMBtu, just below its session high of $4.75 per MMbtu.
5:12PM This week's biggest % gainers/losers (SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).
This week's top 20 % gainers
Technology: ZIGO (19.25 +31.13%), GRUB (35.95 +16.31%), WBMD (44.99 +15.06%), SPLK (65.84 +12.74%), RALY (13.86 +12.5%)
Services: GLOG (28.04 +12.61%), GLNG (46.47 +12.6%)
Healthcare: AKBA (26.09 +41.18%), RGEN (15.84 +15.79%), AGN (133.92 +14.82%)
Financial: BOFI (85.3 +14.59%), AHL (44.45 +12.76%), IBKR (23.95 +12.6%)
Basic Materials: GDP (24.36 +35.94%), TPLM (9.83 +21.81%), HK (5.34 +17.88%), MPO (5.91 +17.03%), CRK (26.4 +12.53%), PSXP (57.66 +12.22%), AXAS (5.15 +12.2%)
This week's top 20 % losers
Technology: NQ (12.9 -19.32%), HIMX (9.12 -16.02%), OIBR (1.18 -15.11%)
Services: CNSI (26.41 -24.43%), PBY (10.26 -15.14%)
Healthcare: RARE (42.56 -26.54%), RTRX (14.5 -20.55%), ARWR (12.77 -19.53%), INO (2.52 -16%), DYAX (6.73 -15.24%), MGNX (20.02 -14.77%), NWBO (5.88 -14.16%), INSM (13.41 -14.04%), GWPH (46.2 -13.81%), ECYT (18.15 -13.2%)
Financial: MGI (14.81 -17.58%), NBG (4.48 -17.19%)
Basic Materials: CAK (0.7 -17.35%), PVG (5.48 -16.21%), ANV (3.63 -13.57%)
4:20PM Advanced Micro beats by $0.02, beats on revs; guides Q2 revs above consensus (AMD) 3.69 -0.07 : Reports Q1 (Mar) earnings of $0.02 per share, $0.02 better than the Capital IQ Consensus Estimate of ($0.00); revenues rose 28.4% year/year to $1.4 bln vs the $1.34 bln consensus; GAAP gross margin flat QoQ at 35%.
Computing Solutions segment revenue decreased 8 percent sequentially and 12 percent year-over-year. The sequential and year-over-year declines were due to decreased client unit shipments.
Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.
Microprocessor average selling price (ASP) was flat sequentially and decreased slightly year-over-year.
Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon R7 and R9 family of products.
Operating income was $91 million compared with $121 million in Q4 2013 and $16 million in Q1 2013. The sequential decline was primarily due to decreased revenue from semi-custom SoCs while the year-over-year increase was driven by higher sales of semi-custom SoCs.
GPU ASP increased sequentially and year-over-year driven by the Radeon R7 and R9 family of products.
Co issues upside guidance for Q2, sees Q2 revs +0-6% QoQ to ~$1.40-1.48 bln vs. $1.36 bln Capital IQ Consensus Estimate.
3:41PM Earnings Preview for the week of April 21 - 25 (SUMRX) : Of the companies reporting earnings for the week of April 21 - 25 some of the bigger names include:
Monday:
Pre Market - HAL, KMB, RCI, STI, LII, HAS, TNC
After Hours - CE, NFLX, RCII, ZION, WCN
Tuesday:
Pre Market - CMCSA, UTX, LMT, MCD, TRV, PHG, XRX, BK, GPC, ITW, OMC, CNC, SAH, PNR, IPG, HOG, CP, AKS, RF, SPG, ATI, LXK, ACI
After Hours - T, AMGN, GILD, YUM, CNI, DFS, FTI, WRB, NBR, SANM, PKG, VMW, JNPR, TMK, UIS, BCR, ISRG, CREE, ILMN, CBST,
Wednesday:
Pre Market - ERIC, PG, BA, DOW, JCI, DAL, GD, NOC, EMC, MAN, SVU, TMO, TEL, PX, NSC, IR, APD, BIIB, RAI, FDML, R, AVY, OCR, GDI, DPS, OC, ABG, APH, BEAV, PII, AMTD
After Hours - AAPL, IM, SWY, QCOM, CBI, TXN, AIZ, FB, SYK, ORLY, RE, NXPI, USTR, LRCX, USTR, LRCX, TSCO, RJF, FLS, LPLA, RHI, CCI, OII, VAR, CTXS, ETFC, FFIV, ZNGA, ANGI
Thursday:
Pre Market - GM, CAJ, VZ, ABC, NVS, UPS, AET, CAT, AAL, MMM, AVT, AZN, TWC, RTN, FCX, NUE, LLY, DLPH, LUV, MO, PAG, WM, ETR, SWK, RS, CAM, CMS, GPI, CCE, HSY, WCC, CELG, DGX, BTU, DHI, UFS, NLSN, POT, HOT, JBLU, NBL, SCG, BMS,
After Hours - MSFT, AMZN, SBUX, LVS, WFT, CB, V, RGA, PFG, EMN, UHS, RSG, MAS, BRCM, NEM, BIDU, CINF, FSL, SPN, HBI, CERN, SPWR, DV, P,
Friday:
Pre Market - HMC, F, ABBV, CL, WHR, LEA, AON, VFC, DTE, COV, TYC, STT, ALV, WY, DAN, LH, ALK, LPNT, MCO, BKW
12:34PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
SNDK (83.67 +10.31%): Beat on EPS by $0.19, beat on revs; sees Q2 revs of $1.55-1.625 bln vs $1.58 bln consensus; reaffirmed FY14 revs of $6.4-6.8 bln vs $6.67 bln consensus; target raised to $125 from $85 at Credit Suisse; assumed with an Overweight at Piper Jaffray; tgt $85; target raised to $77 at Cowen; target raised to $90 at Needham; target raised to $97 at Pacific Crest.
BHI (69.41 +4.67%): Beat on EPS by $0.06, reported revs in-line.
MS (30.91 +3.41%): Beat on EPS by $0.08, beat on revs.
Large Cap Losers
ADS (250.81 -5.02%): Beat on EPS by $0.07, missed on revs; guided Q2 EPS below, revs above consensus; raised FY14 guidance.
FITB (20.85 -4.55%): Missed on EPS by $0.06.
UNH (75.7 -3.18%): Beat on EPS by $0.01, reported rev in-line; reaffirmed FY14 EPS guidance, revs guidance.
Mid Cap Gainers
SHLD (35.5 +5.65%): Director disclosed purchase of 475000 shares, worth total of $15.94 mln on 4/15 and 4/16.
PVTB (29.34 +5.2%): Beat on EPS by $0.03.
BWP (15.75 +4.72%): Upgraded to Overweight from Underweight at JP Morgan; tgt raised to $18 from $14.
Mid Cap Losers
CHMT (23.61 -6.35%): Platform Specialty Products (PAH) announced agreement to acquire agrochemicals business from Chemtura for ~ $1 bln.
WU (15.4 -4.04%): Trading lower following Wal-Mart (WMT) news: WMT introduced exclusive money transfer service, cut fees by up to 50% for customers.
STLD (18.15 -3.97%): Reported Q1 adj. earnings of $0.16 per share, $0.02 worse than consensus (GAAP EPS was $0.17 vs $0.16 consensus), missed on revs.
12:28PM Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (126) outpacing new lows (38) (SCANX) : Stocks that traded to 52 week highs: AA, AAV, ADM, AEP, AGN, AGRO, ALSN, ALV, AN, ANDE, ARCW, ASX, ATHL, ATO, AXAS, BAM, BBW, BDC, BHI, BIOF, BKH, BLL, BPO, BRK.A, BRK.B, CAR, CCK, CENX, CJES, CLB, CLR, CMS, CNX, CODE, CPE, CQP, CWEI, CXDC, CXO, DIOD, DTE, DVCR, DVN, E, ECA, EGY, EIX, EMN, ERF, ESCA, FANG, FNHC, FTR, GA, GAS, GLBZ, GLNG, HAL, HIL, HOLI, HP, IIIN, IM, ITC, JFBI, KMB, KNL, KONA, LNT, LYB, MINI, MPLX, MTRN, MYE, NED, NEE, NFX, NLP, NS, NU, ORAN, ORM, PBA, PDS, PEG, PFIS, PLXS, PPC, PTEN, RDS.B, REI, RES, RHP, ROIC, RRC, RUSHB, SAFM, SE, SEP, SGY, SLB, SMIT, SNA, SPCB, SPN, SPRO, SRE, ST, SWN, TFSL, TRGP, TSLX, TSM, UHAL, VET, VLP, VNO, VOCS, VVC, WBC, WEC, WIN, WLL, WR, WRES, WSO
Stocks that traded to 52 week lows: ACFN, AMBT, ARQL, AUY, AVP, AXGN, BIOC, CFFI, COCO, CWTR, CYH, DRD, EGLT, EVRY, GLMD, GYRO, MGI, NEWL, OIBR.C, OPWR, PMFG, QSII, QURE, RBCAA, RDC, RSH, SBY, SDRL, SIGM, SQBK, SSN, STRL, SWAY, TEAR, TEDU, TZOO, UNXL, ZNH
ETFs that traded to 52 week highs: DIG, EWT, FXB, IEO, IGE, IXC, IYE, OIH, USCI, XLE, XLU, XOP
ETFs that traded to 52 week lows: none
BlackBerry (BBRY) announced the launch of the BlackBerry Smartphone App Development Award for Canada-Wide Science Fair 2014
Huawei has designed TrueTouch Gen4 capacitive touchscreen controllers from Cypress Semiconductor (CY) into five of its newest smartphones.
7:38AM Fairchild Semi beats by $0.01, misses on revs; guides Q2 revs in-line (FCS) 13.52 : Reports Q1 (Mar) earnings of $0.04 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.03; revenues rose 0.3% year/year to $344.1 mln vs the $348.63 mln consensus.
GMs
Co reported first quarter adjusted gross margin of 30.3%, down 100 basis points from the prior quarter but 250 basis points higher than the first quarter of 2013.
Adjusted gross margin in past quarters excluded accelerated depreciation related to a line closure.
Guidance:
Co issues in-line guidance for Q2, sees Q2 revs of $355-375 mln, excluding non-recurring items, vs. $362.88 mln Capital IQ Consensus Estimate.
Co expects adjusted gross margin to be 31.0 to 32.0% due primarily to higher sales and factory loadings as well as improved product mix which all more than offsets the impact of our merit increase.
7:04AM Trina Solar announces grid connection for 23.8 MW PV projects in UK (TSL) 12.00 : Co announced two of its PV power plants in the United Kingdom have successfully completed connection to the grid. The company is an investor in and sole project developer for these projects, which have a total capacity of 23.77 MW. The two projects, which are located in Cornwall and Dorset, commenced construction in December 2013 and were completed on schedule in March 2014. The two projects were developed using Trina PC05A 255Wp modules and will receive 1.6 Renewables Obligation Certificates (ROCs), equivalent to GBP 42.02 per megawatt-hour (MWh). They are expected to generate 24,673MWh electricity annually, reducing over 16,542 tons of carbon dioxide emissions. The projects will be able to supply clean energy to approximately 7,477 local homes each year.
6:49AM Taiwan Semi beats by $0.13, reports revs in-line; guides Q2 revs above consensus (TSM) 20.15 : Reports Q1 (Mar) earnings of NT 1.85 per share, NT 0.13 better than the Capital IQ Consensus Estimate of $1.72; revenues rose 11.6% year/year to NT 148.22 bln vs the NT 147.78 bln consensus.
Co issues upside guidance for Q2, sees Q2 revs of NT 180-183 bln vs. NT 171.75 bln Capital IQ Consensus Estimate. Co sees Q2 Gross profit margin is expected to be between 47.5 % and 49.5%.
Gross margin for the quarter was 47.5%, operating margin was 35.4%, and net profit margin was 32.3%.
Shipments of 28-nanometer process technology accounted for 34% of total wafer revenues. 40/45-nanometer accounted for 21% of total wafer revenues.
Advanced technologies, defined as 40/45-nanometers and more advanced technologies, accounted for 55% of total wafer revenues.
"In the first quarter, we saw much stronger demand for our wafers across all segments but more pronounced in mobile related applications, than we had initially predicted in Januar...Driven by better than expected 4Q'13 business, IC companies have turned more positive on their 2014 outlook. Meanwhile, the low level of supply chain inventory has prompted the IC companies to begin restocking inventory actively. Thanks to the better performance and higher yield and reliability of our advanced technologies, we saw a strong rebound of demand for our leading nodes extending beyond the first quarter. Based on our current business outlook and exchange rate assumption of 1 US dollar to 30.10 NT dollars, management expects overall performance for second quarter 2014 to be as follows":
6:37AM General Electric beats by $0.01, reports revs in-line; 2014 framework unchanged (GE) 26.12 : Reports Q1 (Mar) earnings of $0.33 per share, $0.01 better than the Capital IQ Consensus of $0.32; revenues fell 2.2% year/year to $34.18 bln vs the $34.43 bln consensus.
Industrial sales of $24 billion increased 8% compared to the first quarter of 2013. GECC revenues of $10.5 billion decreased 8% from last year. Industrial segment profits rose 12% to $3.3 billion. Industrial segment margins improved 50 basis points over the prior-year period. Industrial segment revenues grew 8%, with organic growth of 8%. Growth market revenues were up 7% for the quarter, with double-digit growth in five of nine growth regions. Services revenues grew 3%, with double-digit growth in Aviation and Oil & Gas. Equipment revenues grew 12%, on strong new product introductions and solid share positions. The breadth of the GE portfolio was reflected in the quarter as the Company offset market volatility in Appliances, Healthcare, and Mining.
Infrastructure orders for the quarter were $23.7 billion, flat with the year-ago period. GE's backlog of equipment and services at the end of the quarter was $245 billion, with increases in every segment over the year-ago period.
GE Capital earnings were flat, with ENI (excluding cash and equivalents) at $374 billion at quarter-end, down $7 billion from last quarter. General Electric Capital Corporation's (GECC) estimated Tier 1 common ratio (Basel 1) rose 32 basis points to 11.4%, and net interest margin was strong at 4.9%. During the quarter, GECC paid $500 million in dividends to the parent.
Also during the quarter, GE filed a registration statement with the SEC for the IPO of its North American Retail Finance business, the first step in a planned, staged exit from that business. The Company made good progress in accelerating efforts to achieve its simplification goals.
GE is on track to achieve its goal of $1 billion or more in structural cost-out for the year. Industrial structural costs in the first quarter were down $254 million versus the prior-year period, driven by simplification initiatives and benefits from restructuring investments.
"We're off to a good start to the year, and our 2014 framework remains unchanged. The environment is consistent with our expectations, with a positive bias. The GE team is executing with strong organic growth, consistent margin enhancement, cash growth with disciplined allocation, and a stronger GE Capital. We are on track for our Retail Finance IPO and remain committed to a GE that has 70% of our earnings from the Industrial businesses. GE is in good shape."
SanDisk (SNDK) reported first quarter earnings of $1.44 per share, excluding non-recurring items, which is higher than expected, while revenues rose 12.8% year/year to $1.51 billion which is higher than expected. SanDisk reports Q1 non-GAAP gross margin of 51.2% vs guidance of 47-49%, compared to 40.5% in Q1 of prior year. "We delivered record first quarter results, driven by 61 percent growth in our SSD revenue and strong retail performance...We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives." The company sees Q2 revenues of $1.55-1.625 billion with reaffirmed fiscal year 2014 $6.4-6.8 billion which his line with estimates. The company sees FY14 non-GAAP gross margin of 47-49% (raised from 45-48%), reflecting continued strengthening of product mix. Co sees same range for gross margin in Q2.
Google (GOOG) reported first quarter earnings of $6.27 per share, which is worse than expected, while revenues rose 19.1% year/year to $15.42 billion which is line with estimate. Sites Revenues- Generated revenues of $10.47 billion, or 68% of total revenues, in the first quarter of 2014. This represents a 21% increase over first quarter of 2013 sites revenues of $8.64 billion. Network Revenue- Partner sites generated revenues of $3.40 billion, or 22% of total revenues, in the first quarter of 2014. This represents a 4% increase over first quarter of 2013 network revenues of $3.26 billion. Other Revenues- Were $1.55 billion, or 10% of total revenues, in the first quarter of 2014. This represents a 48% increase over first quarter of 2013 other revenues of $1.05 billion. International Revenues- Revenues from outside of the United States totaled $8.76 billion, representing 57% of total revenues in the first quarter of 2014, compared to 56% in the fourth quarter of 2013 and 55% in the first quarter of 2013. Paid Clicks- Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the first quarter of 2013 and decreased approximately 1% over the fourth quarter of 2013. Cost-Per-Click- Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 9% over the first quarter of 2013 and remained constant from the fourth quarter of 2013. TAC- Traffic acquisition costs, the portion of revenues shared with Google's partners, increased to $3.23 billion in the first quarter of 2014, compared to $2.96 billion in the first quarter of 2013. TAC as a percentage of advertising revenues was 23% in the first quarter of 2014, compared to 25% in the first quarter of 2013. Operating Expenses- Operating expenses, other than cost of revenues, were $5.34 billion in the first quarter of 2014, or 35% of revenues, compared to $4.07 billion in the first quarter of 2013, or 31% of revenues. Depreciation and loss on disposal of property and equipment and amortization expenses were $1.09 billion for the first quarter of 2014, of which $1.06 billion was related to Google, compared to $899 million in the first quarter of 2013. Of the $1.09 billion, $116 million was related to amortization of Motorola intangibles, which Google will retain subsequent to the disposal of Motorola Mobile. Cash Flow and Capital Expenditures Net cash provided by operating activities in the first quarter of 2014 totaled $4.39 billion, compared to $3.63 billion in the first quarter of 2013. In the first quarter of 2014, capital expenditures were $2.35 billion, the majority of which was for production equipment, data-center construction, and real estate purchases. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the first quarter of 2014, free cash flow was $2.05 billion "We expect to continue to make significant capital expenditures." Cash As of March 31, 2014, cash, cash equivalents, and marketable securities were $59.38 billion, which excludes cash classified as held for sale, compared to $58.72 billion as of December 31, 2013.
IBM (IBM) reported first quarter earnings of $2.54 per share, which is line with estimates, while revenues fell 3.9% year/year to $22.48 billion which his line with estimates. Non-GAAP gross margin +90 bps tp 47.6%. Revenue: $22.5 billion, down 4%; down 1% adjusting for currency, excluding divested customer care outsourcing business: Software, Services and Global Financing each grew, adjusting for currency; Software up 2% as reported and adjusting for currency. Services down 2%; up 2% adjusting for currency and excluding divested customer care outsourcing business. Global Financing up 3%, up 6% adjusting for currency. Systems and Technology down 23% as reported and adjusting for currency; Services backlog of $138 billion, up 1% adjusting for currency and excluding divested customer care outsourcing business; Business analytics revenue up 5%, up 6 percent adjusting for currency; Cloud revenue up more than 50%: For cloud delivered as a service, first-quarter annual run rate of $2.3 billion doubled year to year. The company reaffirm guidance for the fiscal year 2014 with EPS of least $18.00, excluding non-recurring items which his higher than expected. Geographic Regions. The Americas' first-quarter revenues were $9.6 billion, a decrease of 4% (down 2%, adjusting for currency) from the 2013 period. Revenues from Europe/Middle East/Africa were $7.6 billion, up 4% (up 1%, adjusting for currency). Asia-Pacific revenues decreased 12% (down 6%, adjusting for currency) to $5.0 billion. OEM revenues were $355 million, down 17% compared with the 2013 first quarter. Growth Markets Revenues from the company's growth markets decreased 11% (down 5%, adjusting for currency). Revenues in the BRIC countries - Brazil, Russia, India and China - decreased 11% (down 6%, adjusting for currency).
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