From Briefing.com: 4:10 pm : The trading action in the stock market today left a lot to be desired, yet that didn't stop the market from finishing the day higher. Led by the health care (+1.2%), energy (+0.7%), and technology (+0.4%) sectors, the S&P 500 jumped 0.4% and closed the session with its fifth consecutive gain -- a first in 2014.
The US market reopened after the three-day Easter weekend, but for all intents and purposes, it continued to operate in holiday mode. Trading conditions were thin, no doubt kept that way by the lack of activity out of Europe where markets remained closed for the Easter holiday. NYSE volume totaled just 591 mln mln shares, which was well below a recent average of 725 mln shares.
There were only a handful of earnings reports today, yet the earnings news and the trading volume should pick up as the week progresses with roughly 150 S&P 500 companies reporting results for the March quarter.
Today's trading featured a report that Pfizer (PFE 30.86, +0.61) may be considering a $100 bln acquisition of AstraZeneca (AZN 69.11, +5.62). That speculation underpinned the health care sector all day. Additionally, the sector drew added support from the biotech stocks, which continued to rebound from their recent drubbing. The iShares Nasdaq Biotechnology ETF (IBB 227.34, +5.18) jumped 2.3% and contributed handsomely to the Nasdaq's outperformance.
Overall, there wasn't a lot of significant sector strength. Gains were modest in size, evidenced by the fact that the health care sector was the only sector to gain at least 1.0%. Similarly, there weren't any big losers from a sector standpoint either. The utilities sector (-0.2%) was the biggest laggard, but it was the financial sector (-0.04%) that was the most influential laggard despite a better than expected earnings report from SunTrust Banks (STI 38.52, +0.57). The sector's weakness can be blamed mostly on the money-center banks, which dipped modestly in today's action.
Other companies topping earnings expectations, like Halliburton (HAL 62.92, +2.02) and Hasbro (HAS 55.66, +1.05), fared well. Kimberly-Clark (KMB 110.94, -1.60), on the other hand, did not even though it surpassed the Capital IQ consensus EPS estimate for its March quarter by a penny.
Ford (F 15.97, -0.03) was another company that drew some added attention after reports indicated the company will be announcing CEO Alan Mulally's departure date on May 1. After Mr. Mulally's departure, COO Mark Fields will take over the CEO post.
Separately, IBM (IBM 192.27, +2.26) rebounded from its post-earnings lashing on Thursday to lead the Dow Jones Industrial Average. It was the only component, however, to gain at least a point.
On the economic front, the Leading Indicators report for March met expectations, showing a 0.8% increase that marked the third consecutive monthly increase. That was up from 0.5% in February and could be construed as an encouraging indication for future growth. That point notwithstanding, the Treasury market held firm today.
Tuesday's economic calendar will feature the Existing Home Sales report for March. The Briefing.com consensus estimate calls for existing home sales to be flat versus February at 4.60 mln units.
S&P 500 YTD: +1.3%
Dow Jones Industrial Average YTD: -0.7%
Nasdaq Composite YTD: -1.3%
Russell 2000 YTD: -2.0%
DJ30 +40.71 NASDAQ +26.03 SP500 +7.04 NASDAQ Adv/Vol/Dec 1637/1.45 bln/1055 NYSE Adv/Vol/Dec 1898/591 mln/1161
3:30 pm :
Precious metals traded lower today as the dollar index saw modest gains.
June gold brushed a session high of $1293.90 per ounce in morning action but retreated back below the $1290 per ounce level. It eventually settled 0.5% lower at $1288.20 per ounce.
May silver touched a session high of $19.47 per ounce in early morning action and settled with a 1.3 % loss at $19.34 per ounce.
May crude oil touched a session low of $103.99 per barrel in late afternoon action after pulling back from a session high of $104.77 per barrel set in morning action.
It managed to recover back into positive territory and settled 4 cents higher at $104.35 per barrel.
May natural gas slipped into negative territory after retreating from a session high of $4.78 per MMBtu.
Unable to regain momentum, it settled at its session low of $4.69 per MMBtu, or 1.1% lower.
4:13PM Cadence Design beats by $0.01, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; guides FY14 EPS in-line, revs in-line (CDNS) 14.84 -0.02 : Reports Q1 (Mar) earnings of $0.20 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.19; revenues rose 6.9% year/year to $378.6 mln vs the $376.8 mln consensus.
Co issues downside guidance for Q2, sees EPS of $0.19-0.21, excluding non-recurring items, vs. $0.23 Capital IQ Consensus Estimate; sees Q2 revs of $370-380 mln vs. $382.1 mln Capital IQ Consensus Estimate.
Co issues in-line guidance for FY14, sees EPS of $0.92-1.02, excluding non-recurring items, vs. $0.97 Capital IQ Consensus Estimate; sees FY14 revs of $1.55-1.59 bln vs. $1.57 bln Capital IQ Consensus Estimate.
4:07PM Cadence Design announces agreement to acquire Jasper Design automation for $170 mln in cash; to be accretive to non-GAAP EPS in FY15 (CDNS) 14.84 -0.02 :
Co intends to finance the transaction with available cash and an existing revolving credit facility.
The transaction is expected to close in the second quarter of fiscal 2014, subject to customary closing conditions including regulatory approvals.
Co expects the transaction to be accretive to its non-GAAP earnings per share in fiscal 2015 after the impact of merger-related accounting.
The impact on fiscal 2014 non-GAAP earnings per share will be provided when co reports its second quarter fiscal 2014 financial results.
The impact on GAAP earnings per share will be available after the completion of valuation and purchase accounting.
4:07PM Tessera Tech subsidiary, Invensas, and STS Semiconductor to partner on high volume bond via array mobile solutions (TSRA) 22.34 +0.15 : TSRA announced that Invensas Corporation, its wholly owned subsidiary, and Seoul, South Korea-based STS Semiconductor & Telecommunications, a leading semiconductor assembly and test solution provider specializing in mobile and communication devices, have entered into an agreement to validate high volume manufacturing capability for Invensas' Bond Via Array (BVATM) technology for next generation smartphone and tablet customers.
BVA is a proven advanced Package-on-Package (PoP) technology for System on Chip (SOC) and memory integration in mobile devices. Styled as a "Bridge Technology to 3DIC", it is a unique solution that utilizes established wire-bond assembly techniques to enable low power and high-bandwidth (1000 IO+) packaging in an ultra-small form factor, ideal for mobile devices. STS's state of the art engineering and worldwide high-volume capabilities provide an ideal platform for high volume manufacturing of BVA.
4:06PM Mellanox Tech: ITC rules co does not infringe Avago's (AVGO) laser driver patent (MLNX) 37.29 +0.51 : MLNX announced that, on April 17, 2014, the U.S. International Trade commission (ITC) issued its Final Determination ruling that Mellanox's Active Optical Cable products and VCSEL drivers do not infringe Avago's U.S. Patent Number 5,596,456, directed to a laser driver, which was asserted against Mellanox by Avago in an ITC complaint filed in September 2012.
"We are happy with the ITC's ruling, which confirms our position that Mellanox and IPtronics do not infringe the key patent at issue in the case," said Eyal Waldman, president and CEO of Mellanox Technologies. "Our customers can expect to continue receiving the same quality products that they have relied upon historically from Mellanox."
The ITC also affirmed the ALJ ruling that certain Mellanox cable products that contain a particular type of vertical cavity surface emitting laser ("VCSEL") do infringe another of Avago's patents, US Patent No. 5,596,595, directed to a VCSEL and issued a limited exclusion order and cease and desist orders with respect to those products. The VCSELs in the products at issue are supplied to Mellanox by third parties.
These orders, however, will not interrupt Mellanox's ability to supply cables or otherwise impact Mellanox's current or planned product offerings. Those orders are also not expected to have a material adverse effect on the company's business, financial position, results of operations or cash flow.
Large Cap Gainers
AZN (67.01 +5.54%): Seeing reports that Pfizer (PFE) is considering a GBP 60 bln (~$100 bln) bid for the company
NEM (24.83 +5.48%): Strength on WSJ report that merger talks between NEM and Barrick Gold (ABX) have broken down
CHTR (124.22 +5.42%): Reuters reporting that Comcast (CMCSA) is in talks with Charter over divestitures related to Comcast's takeover of Time Warner Cable (TWC)
Large Cap Losers
TRP (44.83 -3.74%): Weakness following further delay on decision of Keystone XL pipeline; downgraded to Sector Perform from Sector Outperform at CIBC World Markets
ABX (17.35 -3.50%): Weakness on WSJ report that merger talks with Newmont Mining (NEM) have broken down
TCK (21.82 -1.13%): Announced it has subscribed for and acquired an additional 2 mln common shares of Erdene Resource Development at a cost of $0.175 per common share, in a private placement conducted by Erdene
Mid Cap Gainers
AMD (4.14 +12.33%): Beat quarterly EPS by $0.02 ($0.02 vs $0.00 estimate), revs rose 28.4% yoy to $1.4 bln vs $1.34 bln estimate; sees Q2 revs +0-6% quarter over quarter (~$1.40-1.48 bln) vs $1.36 bln estimate
CSGP (172.04 +3.89%): Upgraded to Buy from Neutral at B. Riley & Co
CPN (22.2 +3.88%): Agreed to sell six Southeast power plants for $1.57 bln
Mid Cap Losers
ATHN (136.45 -6.27%): Missed quarterly EPS by $0.05 ($0.12 ex items vs $0.17 estimate), revs rose 29.8% yoy to $163.03 mln vs $170.45 mln estimate; sees FY14 revs of $725-755 mln vs $751 mln estimate, adjusted EPS of $0.98-1.10 vs $1.09 estimate
CPHD (45.05 -6.01%): Beat quarterly EPS by $0.06 (-$0.01 ex items vs -$0.07 estimate), revs rose 16.3% yoy to $106.9 mln vs $104.98 mln estimate; sees FY14 EPS of $0.19-0.24 ex items (lowered from $0.24-0.29) vs $0.26 estimate, revs of $446-461 mln vs $457.71 mln estimate
LII (86.51 -3.11%): Beat quarterly EPS by $0.01 ($0.42 ex items vs $0.41 estimate), revs rose 4.0% yoy to $695.4 mln vs $701.4 mln estimate; reaffirmed FY14 EPS guidance of $4.20-4.60 ex items vs $4.57 estimate, revs +3-7%
12:00PM Microsoft and Motorolla Solutions (MSI) sign licensing agreement (MSFT) 40.11 +0.10 : Co announced a patent licensing agreement with Motorola Solutions (MSI). The license provides worldwide coverage under Microsoft's patent portfolio for Motorola Solutions' devices running the Android platform and Chrome OS operating system.
9:58AM Nokia expects the sale of substantially all of its Devices & Services business to Microsoft (MSFT) to close on April 25, 2014 (NOK) 7.40 +0.06 : The transaction is now subject only to certain customary closing conditions. The transaction was originally announced on September 3, 2013.
MU +2% ( tgt raised to $50 at Drexel Hamilton; Buy),
Altera (ALTR) and TSMC (TSM) announced the two cos have worked together to bring TSMC's patented, fine-pitch copper bump-based packaging technology to Altera's 20 nm Arria 10 FPGAs and SoCs. Altera is the first company to adopt this technology in commercial production to deliver improved quality, reliability and performance to Altera's 20 nm device family.
1:19AM Ixia announces intent to restate 2013 First and Second Quarters, SEC Filings update and Nasdaq extension of time to regain compliance (XXIA) 12.93 : Co announces has concluded that the company's previously issued condensed consolidated financial statements contained in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013 should no longer be relied upon and should be restated.
The correction of the errors is expected to reduce total revenues by ~$2.0 million and $4.5 million for the quarters ended March 31, 2013 and June 30, 2013, respectively. Further, the correction of the errors is expected to increase deferred revenues by ~$2.0 million and $6.5 million as of March 31, 2013 and June 30, 2013, respectively.
The company's restated condensed consolidated financial statements for the affected periods will also reflect the correction of errors related to the income tax effects of the revenue errors, as well as the correction of certain other tax items.
The restatement will result in revenue recognition timing differences between quarterly periods and will not have any impact on the total revenue to be recognized over the life of the applicable arrangements. As part of the restatement process, the company is continuing to assess the estimated errors identified above and will assess any other potential identified errors for correction as needed.
Updated Plan to Regain Compliance with Nasdaq Listing Rule
As previously reported, as a result of Ixia's delayed filing of its Form 10-Q and Form 10-K, the company is not in compliance with Nasdaq Listing Rule 5250, which requires the timely filing with the SEC of all required periodic financial reports. The company announced today that, as requested by the company in an updated plan to regain compliance with the Listing Rule, The Nasdaq Stock Market has granted the company through April 30, 2014 to regain compliance with the Listing Rule, which will permit the continued listing of our common stock on the Nasdaq Global Select Market.
Advanced Micro (AMD) reported first quarter earnings of $0.02 per share, which is higher than expected, while revenues rose 28.4% year/year to $1.4 billion which is higher than expected 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. The company issued guidance for the second quarter with revenues of +0-6% QoQ to approximately $1.40-1.48 billion which is higher than expected. Interactive
Intelligence (ININ) has entered into a letter of intent to acquire OrgSpan Inc., a privately held company that offers cloud-based enterprise social communications solutions. Subject to the negotiation of definitive documentation approval by the Interactive Intelligence audit committee and board, and the satisfaction of customary conditions, the companies expect to close the transaction within 30 days. Among its solutions, OrgSpan offers OrgSpan Select, which enables customers to search and view agent social profiles by multiple criteria, creating new and more effective ways of connecting customers and contact center agents. The company also offers OrgSpan Connect, a unified company directory of OrgSpan Connect users that includes information-rich personal profiles designed to improve employee collaboration.
Mercury (MRCY) receives $3.2 mln order for high-performance digital signal processing modules for synthetic aperture radar application.
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