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Wednesday, July 30, 2014 10:16:59 PM
From Briefing.com: 4:15 pm : The stock market ended the Wednesday session on a mixed note with small caps displaying relative strength. The Nasdaq Composite (+0.5%) and Russell 2000 (+0.4%) registered modest gains, while the Dow Jones Industrial Average (-0.2%) and S&P 500 (+0.01%) underperformed.
Despite the mixed finish, the key indices traded higher across the board at the start of the session after the advance reading of second quarter GDP surpassed estimates (4.0% versus Briefing.com consensus 3.2%). However, the early strength was short-lived with the S&P 500 sliding into red during the opening 90 minutes of action.
One could argue that the inability to rally on a strong data point and better than expected earnings resulted from concerns about a potential fed funds rate hike taking place sooner than expected. To that point, Treasuries spent the session in a steady retreat and finished near their lows. The 10-yr note fell 26 ticks, sending its yield higher by nine basis points to 2.55%.
However, the jitters about a swift rate hike should have been partially calmed by today's policy statement from the FOMC, which was very similar to the June directive. The Fed lowered the size of monthly asset purchases to $25 billion and reiterated that participants saw continued "significant underutilization" of labor resources. Household spending was described as "rising moderately," while the housing sector continued recovering at a slow pace.
Despite the familiar undertone, there was a slight change in the portion of the statement dealing with inflation. Specifically, the directive acknowledged that "the likelihood of inflation running persistently below two percent has diminished somewhat," while the prior statements focused on the potential risks stemming from inflation running below the two-percent target.
The statement did not receive unanimous support with Philadelphia Fed President Charles Plosser dissenting due to his view that the guidance is time dependent and does not reflect the considerable economic progress that has been made already.
When the dust settled, five sectors posted gains, while the other five finished in the red. Cyclical groups displayed broad strength at the open, but finished the trading day on a mixed note.
Heavily-weighted consumer discretionary (+0.6%) and financial (+0.4%) sectors hovered near their flat lines into the afternoon, but surged to the top of the leaderboard shortly after the release of the FOMC statement. In the financial sector, American Express (AXP 90.91, -0.80) lost 0.9% despite reporting better than expected earnings.
Meanwhile, the discretionary space was supported by retailers, while homebuilders slumped. The SPDR S&P Retail ETF (XRT 85.07, +0.83) added 1.0%, narrowing its July loss to 2.0%. For its part, the iShares Dow Jones US Home Construction ETF (ITB 22.59, -0.17) lost 0.8% as higher interest rates weighed.
Elsewhere, the industrial sector (+0.1%) was a notable laggard during the early portion of the session, but sprung to life in the afternoon. Transport stocks fueled the move with the Dow Jones Transportation Average climbing 0.7%. CH Robinson (CHRW 68.53, +4.12) paced the rally with a 6.4% gain after beating bottom-line estimates.
Also of note, the top-weighted sector-technology (+0.3%)-received support from chipmakers as the PHLX Semiconductor Index advanced 1.0%, which gave a boost to the Nasdaq Composite.
The tech-heavy Nasdaq also benefitted from a rally among biotech names. Amgen (AMGN 130.01, +6.70) surged 5.4% following its strong earnings and guidance, while the iShares Nasdaq Biotechnology ETF (IBB 257.25, +2.47) rose 1.0%.
The outperformance of biotech helped keep the health care sector (+0.4%) in the green even as some large cap components displayed relative weakness. WellPoint (WLP 112.47, -0.08) shed 0.1% despite beating estimates, while Humana (HUM 120.34, -7.18) lost 5.6% in reaction to an in-line report.
Another countercyclical sector-utilities-ended at the bottom of the leaderboard with a loss of 1.7% that was likely due in part to the increase in Treasury yields.
Today's participation was an improvement when compared to recent sessions, but remained below average with less than 670 million shares changing hands at the NYSE.
Economic data included the weekly MBA Mortgage Index, ADP Employment Change, and the Q2 GDP report:
Second quarter GDP increased 4.0% in the advance release after declining an upwardly revised 2.1% (from -2.9%) in Q1 2014. The Briefing.com consensus expected GDP to increase 3.2%
Real final sales, which fell 1.0% in the first quarter, rebounded and increased 2.3%. That is still well off the pace from the second half of 2013 when real final sales increased 3.0% and 3.9%, respectively, in the third and fourth quarters
Simply put, all the predictions for 2014 economic growth that were based on the second half 2013 rebound proved to be faulty. Last year's gains were not sustainable
Inventories added 1.66 percentage points to GDP growth in second quarter after subtracting 1.16 percentage points in Q1 2014
According to the ADP National Employment Report, employment in the nonfarm private business sector rose 218K in July, while the Briefing.com consensus expected an increase of 215K
The June reading was left unrevised at 281,000
The weekly MBA Mortgage Index fell 2.2% to follow last week's increase of 2.4%
Tomorrow, the July Challenger Job Cuts will be announced at 7:30 ET, while weekly initial claims (Briefing.com consensus 310K) and the Q2 Employment Cost Index (consensus 0.4%) will be released at 8:30 ET. The day's data will be topped off with the 9:45 ET release of the Chicago PMI for July (expected 61.8).
S&P 500 +6.6% YTD
Nasdaq Composite +6.9% YTD
Dow Jones Industrial Average +1.8% YTD
Russell 2000 -1.5% YTD
DJ30 -31.75 NASDAQ +20.20 SP500 +0.12 NASDAQ Adv/Vol/Dec 1662/1.73 bln/1106 NYSE Adv/Vol/Dec 1183/666.5 mln/1865 3:30 pm :
Aug gold fell into negative territory in morning action as the dollar index strengthened after an advance GDP reading showed a 4.0% expansion during Q2 (Briefing.com consensus expected GDP to increase 3.2%). The move lower also came ahead of the latest policy statement from the FOMC released at 14:00 ET. The yellow metal slipped from its session high of $1303.00 per ounce and spent the remainder of the session trading in the red. It eventually settled with a 0.3% loss at $1294.80 per ounce.
Sep silver popped to a session high of $20.67 per ounce in morning trade after trading as low as $20.48 per ounce earlier in the session. The move was short lived, however, as it quickly retreated towards the unchanged line and settled just 1 cent higher at $20.59 per ounce.
Sep crude oil fell for a third consecutive session despite better-than-anticipated inventory data. The energy component advanced to a session high of $101.67 per barrel when the EIA reported that crude oil inventories had a draw of 3.7 mln barrels when consensus called for a draw of 1.2-1.5.
However, prices quickly turned negative and trended lower for the remainder of the session, leaving crude oil to settle with a 0.6% loss at $100.27 per barrel.
In electronic trade, Sept crude oil just hit a new LoD of $99.57/barrel and is -1.3% at $99.63/barrel
Sep natural gas traded in the red today, dipping to a session low of $3.75 per MMBtu. Unable to find buying support, it settled with a 1.0% loss at $3.78 per MMBtu.
4:53 pm Silicon Image reports EPS in-line, revs in-line; guides Q3 revs below consensus; guides FY14 revs in-line (SIMG) : Reports Q2 (Jun) earnings of $0.04 per share, in-line with the Capital IQ Consensus Estimate of $0.04; revenues fell 19.3% year/year to $59.5 mln vs the $59.17 mln consensus.
Co issues downside guidance for Q3, sees Q3 revs of $70-75 mln vs. $75.26 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY14, sees FY14 revs of down 4-8% to ~$254.3-265.4 mln vs. $262.48 mln Capital IQ Consensus Estimate. "Strength in our CE business partially offset the headwinds in our mobile business. We are also pleased with the increased momentum and market acceptance of the worldwide standards in which we participate. In particular, this quarter, the MHL ecosystem showed continued growth with tier one manufacturers shipping MHL 3.0-enabled TVs and the addition of another 4K Ultra HD MHL 3.0 phone."
4:32 pm Intersil beats by $0.01, reports revs in-line; guides Q3 EPS in-line, revs below consensus (ISIL) : Reports Q2 (Jun) earnings of $0.19 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.18; revenues rose 2.0% year/year to $147.76 mln vs the $147.2 mln consensus.
Non-GAAP gross margin improved to 58.3% in the second quarter, a 170 basis point sequential improvement.
Co issues mixed guidance for Q3, sees EPS of $0.19-0.20, excluding non-recurring items, vs. $0.19 Capital IQ Consensus Estimate; sees Q3 revs flat to +3% (~$147.8-152.2 mln) vs. $152.87 mln Capital IQ Consensus Estimate. Co expects Q3 gross margin to be flat.
4:32 pm Microsoft adds new board member John Stanton (MSFT) : Co announced that John W. Stanton has been appointed to the co's board of directors, increasing the board's size to 11 members. Stanton currently serves as chairman of Trilogy Equity Partners, a private equity fund that invests in early-stage growth opportunities in the wireless ecosystem, and Trilogy International Partners, a wireless operator in Central and South America and New Zealand.
4:28 pm Nanometrics reports EPS in-line, misses on revs; guides Q3 sharply lower (NANO) : Reports Q2 (Jun) earnings of $0.05 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.05; revenues rose 39.0% year/year to $48.0 mln vs the $49.5 mln consensus. Co issues sharply downside guidance for Q3, sees EPS of $(0.30)-(0.17), excluding non-recurring items, vs. $0.08 Capital IQ Consensus Estimate; sees Q3 revs of $25-30 mln vs. $49.7 mln Capital IQ Consensus Estimate.
Management expects that the current pause in industry spending will include a very significant decline in process control metrology spending by its two largest customers in Q3.
4:27 pm Veeco Instruments misses by $0.21, beats on revs; guides Q3 EPS below consensus, revs below consensus (VECO) : Reports Q2 (Jun) loss of $0.39 per share, excluding non-recurring items, $0.21 worse than the Capital IQ Consensus Estimate of ($0.18); revenues fell 2.4% year/year to $95.1 mln vs the $92.94 mln consensus. Co issues downside guidance for Q3, sees EPS of ($0.15) to ($0.07), excluding non-recurring items, vs. ($0.03) Capital IQ Consensus Estimate; sees Q3 revs of $92-100 mln vs. $105.35 mln Capital IQ Consensus Estimate.
Outlook
"LED market trends remain favorable, as indicated by our MOCVD first half order and revenue patterns. While quarterly MOCVD order patterns are lumpy, we see solid growth ahead. We currently expect orders in the second half of fiscal 2014 to be better than the first half, driven primarily by growth in MOCVD. We remain focused on delivering improved results by: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED display encapsulation and other emerging technologies; 2) improving customer cost of ownership as well as our gross margins; 3) driving process improvement initiatives to make us more efficient; and 4) lowering expenses. It is our goal to get the Company back to double-digit adjusted EBITDA profitability by 2015 through a combination of improved business conditions, execution on our growth initiatives, a more streamlined Veeco, and lower operating expenses."
4:24 pm Coherent misses by $0.05, misses on revs (COHR) : Reports Q3 (Jun) earnings of $0.73 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus Estimate of $0.78; revenues fell 8.1% year/year to $196.5 mln vs the $201.2 mln consensus.
4:22 pm Lam Research beats by $0.02, reports revs in-line; guides Q1 EPS below consensus, revs in-line (LRCX) : Reports Q4 (Jun) earnings of $1.25 per share, $0.02 better than the Capital IQ Consensus Estimate of $1.23; revenues rose 26.6% year/year to $1.25 bln vs the $1.24 bln consensus; gross margin 46.4%.
Co issues guidance for Q1, sees EPS of $0.85-0.99, excluding non-recurring items, vs. $1.00 Capital IQ Consensus Estimate; sees Q1 revs of $1.1-1.2 bln vs. $1.15 bln Capital IQ Consensus Estimate.
4:20 pm FormFactor beats by $0.02, beats on revs (FORM) : Reports Q2 (Jun) earnings of $0.08 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.06; revenues rose 7.5% year/year to $67.4 mln vs the $66.55 mln consensus.
"In Q2, we saw increased business and improved operational performance, resulting in our first non-GAAP profitable quarter since Q4 of 2007...We made significant progress in each of our DRAM, Flash Memory and SOC product lines during the quarter and are positioned to support our growth objectives through 2016."
4:18 pm Western Digital beats by $0.11, beats on revs (WDC) : Reports Q4 (Jun) earnings of $1.85 per share, excluding non-recurring items, $0.11 better than the Capital IQ Consensus Estimate of $1.74; revenues fell 2.1% year/year to $3.65 bln vs the $3.6 bln consensus.
"We achieved strong financial results in the June quarter, with better-than-anticipated revenue, healthy gross margin performance and continued strong cash flow generation...We did so by addressing continued robust demand in gaming and stronger-than-expected demand in notebook PCs, demonstrating our flexibility and capability in high-volume businesses. We also saw strength in our performance enterprise business."Co will guide on conference call at 17:00.
4:10 pm TTM Tech reports EPS in-line, revs in-line; guides Q3 EPS in-line, revs in-line (TTMI) : Reports Q2 (Jun) earnings of $0.05 per share, in-line with the Capital IQ Consensus Estimate of $0.05; revenues fell 12.0% year/year to $297.6 mln vs the $300.09 mln consensus.
Co issues in-line guidance for Q3, sees EPS of $0.11-0.17 vs. $0.16 Capital IQ Consensus Estimate; sees Q3 revs of $325-355 mln vs. $333.47 mln Capital IQ Consensus Estimate.
4:08 pm Roadrunner Transportation misses by $0.01, beats on revs; guides Q3 EPS in-line, revs above consensus (RRTS) : Reports Q2 (Jun) earnings of $0.38 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.39; revenues rose 38.7% year/year to $460.2 mln vs the $438.34 mln consensus. Co issues mixed guidance for Q3, sees EPS of $0.37-0.41 vs. $0.41 Capital IQ Consensus Estimate; sees Q3 revs of $455-480 mln vs. $454.92 mln Capital IQ Consensus Estimate.
4:08 pm FEI beats by $0.04, beats on revs; guides Q3 EPS below consensus, revs below consensus; guides FY14 revs below consensus (FEIC) : Reports Q2 (Jun) earnings of $0.70 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.66; revenues rose 6.5% year/year to $237 mln vs the $234.45 mln consensus.
Co issues downside guidance for Q3, sees EPS of $0.60-0.70, excluding non-recurring items, vs. $0.90 Capital IQ Consensus Estimate; sees Q3 revs of $228-243 mln vs. $258.03 mln Capital IQ Consensus Estimate.Co lowers FY14 guidance for FY14, lowers revs growth to +5-7% YoY, which calculates to ~$973.8-992.4 mln vs. $1.01 bln Capital IQ Consensus Estimate, down from growth of +8-10%, which equates to ~$1.0-1.02 bln.
4:05 pm Tessera Tech and Micron Technology (MU) announce execution of new technology and patent license agreements (TSRA) : Cos announced the execution of new, multiyear technology and patent license agreements. In addition to the new patent license agreement, Tessera's wholly-owned subsidiary Invensas Corporation will license its Multi-Die Face-Down (xFDTM) semiconductor packaging technology to Micron and cooperate with Micron on the manufacturing of Micron products that incorporate xFD technology. As part of the agreements, Tessera and Micron will also explore other possible joint development efforts.
The specific terms and conditions of the agreements are confidential and have not been disclosed by the companies.
4:00 pm Lattice Semi's iCE40 FPGA shipments reach 200 mln unit milestone (LSCC) :
12:20 pm 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
TWTR (46.9 +21.53%): Beat quarterly EPS by $0.03 ($0.02 vs -$0.01 estimate), revs rose 124.0% yoy to $312 mln vs $283.3 mln estimate; Q3 average monthly active users rose 24% yoy to 271 mln vs 256.64 mln Briefing.com consensus; sees Q3 revs of $330-340 mln vs $323.72 mln estimate; sees FY14 revs of $1.31-1.33 bln (raised from $1.20-1.25 bln) vs $1.27 bln estimate; upgraded at BofA/Merrill, Cowen, UBS, CRT Capital, and FBN Securities
ASML (95.24 +14.36%): Co confirmed that one customer has exposed more than 500 wafers on an NXE:3300B extreme ultra-violet (:EUV) system winthin 24 hours; seeing reports that co is ahead of scheduled with tests for EUV machines
YPF (38.56 +8.34%): Reuters reporting that Argentine banks will offer to buy out the country's debt held by holdout investors to avert default
Large Cap Losers
ROK (111.68 -6.91%): Missed quarterly EPS by $0.06 ($1.49 vs $1.55 estimate), revs rose 1.6% yoy to $1.65 bln vs $1.68 bln estimate; sees FY14 EPS of $6.10-6.25 vs $6.19 estimate, organic sales growth of 4-6%
HUM (119.85 -6.01%): Reported Q2 EPS of $2.19 (in-line); reaffirmed FY14 EPS guidance of $7.25-7.75 vs $7.82 estimate
TOT (66.29 -4.50%): Missed quarterly Eps by $0.02 ($1.38 vs $1.40 estimate), revs $56.2 bln vs $52.9 bln estimate; Hydrocarbon production was 2,054 kboe/d in the second quarter, down 10% from last year; Liquids production declined 15% and gas production fell 5% from the prior year
Mid Cap Gainers
X (32.8 +18.54%): Reported Q2 adjusted EPS of $0.17, revs fell 0.7% yoy to $4.4 bln vs $4.2 bln estimate; co expects operating income for its reportable segments and other businesses to increase significantly over the second quarter, as it returns to normal operating levels
EW (93.57 +10.81%): Beat quarterly EPS by $0.11 ($0.88 ex items vs $0.77 estimate), revs rose 11.2% yoy to $575.1 mln vs $544.3 mln estimate; sees Q3 EPS of $0.66-0.72 ex items vs $0.74 estimate, revs of $530-570 mln vs $525.9 mln estimate; sees FY14 EPS of $3.24-3.34 ex items vs $3.17 estimate, revs at high end of $2.05-2.25 bln vs $2.17 bln estimate
ICLR (52.28 +9.14%): Beat quarterly EPS by $0.06 ($0.64 vs $0.58 estimate), revs rose 12.5% yoy to $376 mln vs $374.88 mln estimate; sees FY14 EPS of $2.62-2.68 (raised from $2.30-2.40) vs $2.36 estimate, revs of $1.49-1.53 bln vs $1.5 bln estimate
Mid Cap Losers
PWE (7.61 -16.83%): Disclosed that the company's Audit Committee is conducting a voluntary, internal review of certain of the company's accounting practices; reported Q2 average production of 108,130 barrels of oil equivalent per day, maintained guidance of 101,000-106,000 boe per day
BWLD (143.2 -14.33%): Beat quarterly EPS by $0.05 ($1.25 vs $1.20 estimate), revs rose 20.0% yoy to $366.0 mln vs $359.6 mln estimate; same store sales increased 7.7% at company-owned restaurants and 6.5% at franchised restaurants
GNW (14.22 -12.56%): Missed quarterly EPS by $0.02 ($0.34 vs $0.36 estimate), revs rose 1.9% yoy to $2.42 bln vs $2.36 bln estimate; downgraded to Neutral from Outperform at Macquarie, target lowered to $17 from $20
11:46 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (94) outpacing new lows (78) (:SCANX) : Stocks that traded to 52 week highs: AIV, AMGN, AMID, AMP, AMRE, AMT, APC, APD, ARLP, AUO, AVB, BABY, BFR, BMA, CHE, CHKE, CHRW, CLMS, CMG, COO, CORE, DEJ, DHX, DLR, DMLP, ECF, EMC, EQR, EW, FLT, FSRV, GAGA, GB, GFIG, GGAL, GILD, GLNG, GLP, HCA, HES, HIW, HNRG, HOLX, HSKA, HSP, ICLR, IDIX, INGR, IPHI, IRWD, KEP, KTWO, LAZ, LEJU, NTRS, NUVA, NVEC, PEIX, PMBC, PPS, PTRY, PTSI, Q, QRE, RFMD, SBAC, SEM, SFBC, SHG, SKM, SKX, SLCA, SLF, SLI, SNP, SRCL, SUMR, SWC, TCX, TFX, TKC, TMH, TOUR, TQNT, TRN, TV, UFI, UNTY, WDC, WEX, WLB, WLP, X, YPF
Stocks that traded to 52 week lows: ACPW, ACXM, AGCO, ALLY, AMCC, AOI, ATNY, AVHI, BAA, BAK, BDR, BECN, BGFV, BODY, BPI, BRP, CAS, CBDE, CERU, CGA, CGG, CKH, CMCT, CNHI, COT, CPWR, CREG, CS, DAR, DCTH, DEST, DORM, DWA, EDMC, ESI, FRAN, GEOS, HOV, IKAN, IOSP, ISSC, JEC, KBR, KIOR, LPX, MGAM, MMSI, MTZ, NILE, NKSH, NPK, NPTN, PED, PGEM, PIKE, PSTI, PSUN, PT, QLGC, QRM, RSH, SPAR, SSE, TAXI, TCCO, TEU, TGE, TNAV, TR, TRGT, TSE, UBS, UUU, VII, VNOM, WMS, WSH, ZQK
ETFs that traded to 52 week highs: EPP, EWH, EWY, IHF, XLV
ETFs that traded to 52 week lows: BAL, FXS, RJA
11:43 am IBM slip to fractional new session/weekly low (IBM) : The stock has recently edged under the low of this week's multi-month high bar from Monday at 193.65 (session low 193.59).
11:34 am Currency Commentary: DXY Hits 10-month Highs (:SUMRX) :
The Dollar Index continues to rally as the first glance at Q2 GDP came in higher than expected. The beat was driven by a rise in inventories but it has helped increase market expectations for a rate hike sooner than currently anticipated. This has led to more buying in the dollar as it presses to fresh multi-month highs. The last time that the dollar traded in this area was September of 2013. The market now prepares for the FOMC this afternoon but it is generally expected to be a non event. Expectations are for another $10 bln taper. The primary focus will be ion language around the economy, inflation, and potential dissenters. The euro has fallen to a ten month low as the divergence between the FOMC and the ECB gets priced into the currencies. CPI data from Germany came in slightly higher than expected while Spain saw a miss. This will lead to mixed expectations ahead of tomorrow's region wide inflation report. But the primary focus remains on the dollar, the Fed, and U.S. jobs. The pound has also pulled back against the dollar as it slides back to 1.69. The dollar has been closing the gap as the expectations for timing of rate hikes from the Bank of England and the Fed tightens. Sterling is also seeing a flattening out of its rise against the euro as the pair settle in the 0.79 area following a steady 3-month rally. The yen has broken out of its recent range as it falls to 102.84 against the dollar. This move has been a pure pair trade though and not risk on as equities have been selling off despite the yen selling (BONDX, FOREX).
Ixia (XXIA) announced a partnership agreement with Empowered Networks, a Canadian value-added reseller, to offer service providers, enterprises and network equipment manufacturers more comprehensive and complete solutions to address complex network requirements.
7:31 am Qualcomm further enhances commitment to 24/7 mobile learning with acquisition of Silicon Valley-based learning technology company EmpoweredU (QCOM) : Co announced that its subsidiary, Qualcomm Technologies, Inc., has taken a further step towards the vision of demonstrating how technology innovations can help address some of the challenges the education sector faces, by completing the acquisition of EmpoweredU, a pioneer in the development of an intuitive, mobile-centric cloud-based learning environment that is both device and operating system agnostic.
The integration of EmpoweredU, with other education initiatives within Qualcomm, will allow Qualcomm Technologies to accelerate mobile innovation and 24/7 learning into education -- providing institutions, students and parents access to best-in-class education tools.
7:22 am United Micro beats by $0.04, revs in-line; Foundry Segment Wafer Shipments expected to increase by low single-digit percentage range (UMC) : Reports Q2 (Jun) earnings of $0.28 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.24; revenues rose 16.1% year/year to NT$35.9 bln vs the NT$35.9 bln consensus.
"In the second quarter of 2014, UMC recorded NT$32.57 billion in revenue from the foundry segment, with operating margin from foundry operations of 10.2%. Wafer shipments reached 1.426 million 8-inch equivalent wafers."Our 28nm business represented 1% of revenue, while 40nm accounted for 21%." Second quarter foundry revenue grew 13.4% sequentially, fueled by strong communication segment demand that lifted capacity utilization to 90%."Market conditions also reflected a turnaround, with rising demand for portable computing devices helping to drive our 28nm shipments."We project continued 28nm revenue contribution growth in 3Q14 as a result of the sustained demand for mobile and tablet computing. We are optimistic in the long term that our 28nm production ramp will strengthen our overall product mix and generate abundant opportunities for UMC to win additional foundry market share."Quarter-over-Quarter Guidance:
Foundry Segment Wafer Shipments: To increase by low single-digit percentage rangeFoundry Segment ASP in US$: To remain flatFoundry Segment Profitability: Gross profit margin will be in the mid-20 percentage rangeFoundry Segment Capacity Utilization: Low-90% range2014 CAPEX for Foundry Segment: US$1.3bnGuidance to New Business Segment: Revenue to be ~NT$1.2bn and net loss attributable to UMC parent company to be ~NT$760mn
7:08 am KVH Industries beats by $0.01, misses on revs (KVHI) : Reports Q2 (Jun) earnings of $0.05 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.04; revenues fell 5.3% year/year to $40.9 mln vs the $43.39 mln consensus.
6:02 am JinkoSolar Holding to receive $225 mln private equity investment led by China Development Bank International and Macquarie for downstream solar power project business (JKS) : Co announced that China Development Bank International, the Macquarie Greater China Infrastructure Fund and New Horizon Capital have agreed to invest a total of $225 million in the co's downstream solar power project business.
JinkoSolar Power Engineering, a wholly-owned subsidiary of JinkoSolar that develops and operates its downstream solar power project business, entered into separate definitive share purchase agreements with each of CDBI, MGCIF and New Horizon. Under the subscription agreements, CDBI, MGCIF and New Horizon have agreed to invest a total of $225 million in Jinko Power. Upon completion of the investment and the co's additional capital contribution to Jinko Power, the three investors will hold a total of ~ 45% of Jinko Power's equity interest.The three investors are expected to provide support and additional resources to facilitate Jinko Power's business development in terms of project financing, project development, project operation and global green energy network.
1:35 am SunPower announces 29-Megawatt supply agreement with Nangoku Corp (SPWR) : Co announces it has signed a definitive agreement to supply Nangoku Corporation (Nangoku) with 29-MWdc of the high efficiency E20/327 Solar Panel by SunPower Corporation. Nangoku, an independent power producer will build a mega solar plant in the Hioki, Kagoshima prefecture on the Island of Kyushu.
Despite the mixed finish, the key indices traded higher across the board at the start of the session after the advance reading of second quarter GDP surpassed estimates (4.0% versus Briefing.com consensus 3.2%). However, the early strength was short-lived with the S&P 500 sliding into red during the opening 90 minutes of action.
One could argue that the inability to rally on a strong data point and better than expected earnings resulted from concerns about a potential fed funds rate hike taking place sooner than expected. To that point, Treasuries spent the session in a steady retreat and finished near their lows. The 10-yr note fell 26 ticks, sending its yield higher by nine basis points to 2.55%.
However, the jitters about a swift rate hike should have been partially calmed by today's policy statement from the FOMC, which was very similar to the June directive. The Fed lowered the size of monthly asset purchases to $25 billion and reiterated that participants saw continued "significant underutilization" of labor resources. Household spending was described as "rising moderately," while the housing sector continued recovering at a slow pace.
Despite the familiar undertone, there was a slight change in the portion of the statement dealing with inflation. Specifically, the directive acknowledged that "the likelihood of inflation running persistently below two percent has diminished somewhat," while the prior statements focused on the potential risks stemming from inflation running below the two-percent target.
The statement did not receive unanimous support with Philadelphia Fed President Charles Plosser dissenting due to his view that the guidance is time dependent and does not reflect the considerable economic progress that has been made already.
When the dust settled, five sectors posted gains, while the other five finished in the red. Cyclical groups displayed broad strength at the open, but finished the trading day on a mixed note.
Heavily-weighted consumer discretionary (+0.6%) and financial (+0.4%) sectors hovered near their flat lines into the afternoon, but surged to the top of the leaderboard shortly after the release of the FOMC statement. In the financial sector, American Express (AXP 90.91, -0.80) lost 0.9% despite reporting better than expected earnings.
Meanwhile, the discretionary space was supported by retailers, while homebuilders slumped. The SPDR S&P Retail ETF (XRT 85.07, +0.83) added 1.0%, narrowing its July loss to 2.0%. For its part, the iShares Dow Jones US Home Construction ETF (ITB 22.59, -0.17) lost 0.8% as higher interest rates weighed.
Elsewhere, the industrial sector (+0.1%) was a notable laggard during the early portion of the session, but sprung to life in the afternoon. Transport stocks fueled the move with the Dow Jones Transportation Average climbing 0.7%. CH Robinson (CHRW 68.53, +4.12) paced the rally with a 6.4% gain after beating bottom-line estimates.
Also of note, the top-weighted sector-technology (+0.3%)-received support from chipmakers as the PHLX Semiconductor Index advanced 1.0%, which gave a boost to the Nasdaq Composite.
The tech-heavy Nasdaq also benefitted from a rally among biotech names. Amgen (AMGN 130.01, +6.70) surged 5.4% following its strong earnings and guidance, while the iShares Nasdaq Biotechnology ETF (IBB 257.25, +2.47) rose 1.0%.
The outperformance of biotech helped keep the health care sector (+0.4%) in the green even as some large cap components displayed relative weakness. WellPoint (WLP 112.47, -0.08) shed 0.1% despite beating estimates, while Humana (HUM 120.34, -7.18) lost 5.6% in reaction to an in-line report.
Another countercyclical sector-utilities-ended at the bottom of the leaderboard with a loss of 1.7% that was likely due in part to the increase in Treasury yields.
Today's participation was an improvement when compared to recent sessions, but remained below average with less than 670 million shares changing hands at the NYSE.
Economic data included the weekly MBA Mortgage Index, ADP Employment Change, and the Q2 GDP report:
Second quarter GDP increased 4.0% in the advance release after declining an upwardly revised 2.1% (from -2.9%) in Q1 2014. The Briefing.com consensus expected GDP to increase 3.2%
Real final sales, which fell 1.0% in the first quarter, rebounded and increased 2.3%. That is still well off the pace from the second half of 2013 when real final sales increased 3.0% and 3.9%, respectively, in the third and fourth quarters
Simply put, all the predictions for 2014 economic growth that were based on the second half 2013 rebound proved to be faulty. Last year's gains were not sustainable
Inventories added 1.66 percentage points to GDP growth in second quarter after subtracting 1.16 percentage points in Q1 2014
According to the ADP National Employment Report, employment in the nonfarm private business sector rose 218K in July, while the Briefing.com consensus expected an increase of 215K
The June reading was left unrevised at 281,000
The weekly MBA Mortgage Index fell 2.2% to follow last week's increase of 2.4%
Tomorrow, the July Challenger Job Cuts will be announced at 7:30 ET, while weekly initial claims (Briefing.com consensus 310K) and the Q2 Employment Cost Index (consensus 0.4%) will be released at 8:30 ET. The day's data will be topped off with the 9:45 ET release of the Chicago PMI for July (expected 61.8).
S&P 500 +6.6% YTD
Nasdaq Composite +6.9% YTD
Dow Jones Industrial Average +1.8% YTD
Russell 2000 -1.5% YTD
DJ30 -31.75 NASDAQ +20.20 SP500 +0.12 NASDAQ Adv/Vol/Dec 1662/1.73 bln/1106 NYSE Adv/Vol/Dec 1183/666.5 mln/1865 3:30 pm :
Aug gold fell into negative territory in morning action as the dollar index strengthened after an advance GDP reading showed a 4.0% expansion during Q2 (Briefing.com consensus expected GDP to increase 3.2%). The move lower also came ahead of the latest policy statement from the FOMC released at 14:00 ET. The yellow metal slipped from its session high of $1303.00 per ounce and spent the remainder of the session trading in the red. It eventually settled with a 0.3% loss at $1294.80 per ounce.
Sep silver popped to a session high of $20.67 per ounce in morning trade after trading as low as $20.48 per ounce earlier in the session. The move was short lived, however, as it quickly retreated towards the unchanged line and settled just 1 cent higher at $20.59 per ounce.
Sep crude oil fell for a third consecutive session despite better-than-anticipated inventory data. The energy component advanced to a session high of $101.67 per barrel when the EIA reported that crude oil inventories had a draw of 3.7 mln barrels when consensus called for a draw of 1.2-1.5.
However, prices quickly turned negative and trended lower for the remainder of the session, leaving crude oil to settle with a 0.6% loss at $100.27 per barrel.
In electronic trade, Sept crude oil just hit a new LoD of $99.57/barrel and is -1.3% at $99.63/barrel
Sep natural gas traded in the red today, dipping to a session low of $3.75 per MMBtu. Unable to find buying support, it settled with a 1.0% loss at $3.78 per MMBtu.
4:53 pm Silicon Image reports EPS in-line, revs in-line; guides Q3 revs below consensus; guides FY14 revs in-line (SIMG) : Reports Q2 (Jun) earnings of $0.04 per share, in-line with the Capital IQ Consensus Estimate of $0.04; revenues fell 19.3% year/year to $59.5 mln vs the $59.17 mln consensus.
Co issues downside guidance for Q3, sees Q3 revs of $70-75 mln vs. $75.26 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY14, sees FY14 revs of down 4-8% to ~$254.3-265.4 mln vs. $262.48 mln Capital IQ Consensus Estimate. "Strength in our CE business partially offset the headwinds in our mobile business. We are also pleased with the increased momentum and market acceptance of the worldwide standards in which we participate. In particular, this quarter, the MHL ecosystem showed continued growth with tier one manufacturers shipping MHL 3.0-enabled TVs and the addition of another 4K Ultra HD MHL 3.0 phone."
4:32 pm Intersil beats by $0.01, reports revs in-line; guides Q3 EPS in-line, revs below consensus (ISIL) : Reports Q2 (Jun) earnings of $0.19 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.18; revenues rose 2.0% year/year to $147.76 mln vs the $147.2 mln consensus.
Non-GAAP gross margin improved to 58.3% in the second quarter, a 170 basis point sequential improvement.
Co issues mixed guidance for Q3, sees EPS of $0.19-0.20, excluding non-recurring items, vs. $0.19 Capital IQ Consensus Estimate; sees Q3 revs flat to +3% (~$147.8-152.2 mln) vs. $152.87 mln Capital IQ Consensus Estimate. Co expects Q3 gross margin to be flat.
4:32 pm Microsoft adds new board member John Stanton (MSFT) : Co announced that John W. Stanton has been appointed to the co's board of directors, increasing the board's size to 11 members. Stanton currently serves as chairman of Trilogy Equity Partners, a private equity fund that invests in early-stage growth opportunities in the wireless ecosystem, and Trilogy International Partners, a wireless operator in Central and South America and New Zealand.
4:28 pm Nanometrics reports EPS in-line, misses on revs; guides Q3 sharply lower (NANO) : Reports Q2 (Jun) earnings of $0.05 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.05; revenues rose 39.0% year/year to $48.0 mln vs the $49.5 mln consensus. Co issues sharply downside guidance for Q3, sees EPS of $(0.30)-(0.17), excluding non-recurring items, vs. $0.08 Capital IQ Consensus Estimate; sees Q3 revs of $25-30 mln vs. $49.7 mln Capital IQ Consensus Estimate.
Management expects that the current pause in industry spending will include a very significant decline in process control metrology spending by its two largest customers in Q3.
4:27 pm Veeco Instruments misses by $0.21, beats on revs; guides Q3 EPS below consensus, revs below consensus (VECO) : Reports Q2 (Jun) loss of $0.39 per share, excluding non-recurring items, $0.21 worse than the Capital IQ Consensus Estimate of ($0.18); revenues fell 2.4% year/year to $95.1 mln vs the $92.94 mln consensus. Co issues downside guidance for Q3, sees EPS of ($0.15) to ($0.07), excluding non-recurring items, vs. ($0.03) Capital IQ Consensus Estimate; sees Q3 revs of $92-100 mln vs. $105.35 mln Capital IQ Consensus Estimate.
Outlook
"LED market trends remain favorable, as indicated by our MOCVD first half order and revenue patterns. While quarterly MOCVD order patterns are lumpy, we see solid growth ahead. We currently expect orders in the second half of fiscal 2014 to be better than the first half, driven primarily by growth in MOCVD. We remain focused on delivering improved results by: 1) developing and launching game-changing new products that enable cost effective LED lighting, flexible OLED display encapsulation and other emerging technologies; 2) improving customer cost of ownership as well as our gross margins; 3) driving process improvement initiatives to make us more efficient; and 4) lowering expenses. It is our goal to get the Company back to double-digit adjusted EBITDA profitability by 2015 through a combination of improved business conditions, execution on our growth initiatives, a more streamlined Veeco, and lower operating expenses."
4:24 pm Coherent misses by $0.05, misses on revs (COHR) : Reports Q3 (Jun) earnings of $0.73 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus Estimate of $0.78; revenues fell 8.1% year/year to $196.5 mln vs the $201.2 mln consensus.
4:22 pm Lam Research beats by $0.02, reports revs in-line; guides Q1 EPS below consensus, revs in-line (LRCX) : Reports Q4 (Jun) earnings of $1.25 per share, $0.02 better than the Capital IQ Consensus Estimate of $1.23; revenues rose 26.6% year/year to $1.25 bln vs the $1.24 bln consensus; gross margin 46.4%.
Co issues guidance for Q1, sees EPS of $0.85-0.99, excluding non-recurring items, vs. $1.00 Capital IQ Consensus Estimate; sees Q1 revs of $1.1-1.2 bln vs. $1.15 bln Capital IQ Consensus Estimate.
4:20 pm FormFactor beats by $0.02, beats on revs (FORM) : Reports Q2 (Jun) earnings of $0.08 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.06; revenues rose 7.5% year/year to $67.4 mln vs the $66.55 mln consensus.
"In Q2, we saw increased business and improved operational performance, resulting in our first non-GAAP profitable quarter since Q4 of 2007...We made significant progress in each of our DRAM, Flash Memory and SOC product lines during the quarter and are positioned to support our growth objectives through 2016."
4:18 pm Western Digital beats by $0.11, beats on revs (WDC) : Reports Q4 (Jun) earnings of $1.85 per share, excluding non-recurring items, $0.11 better than the Capital IQ Consensus Estimate of $1.74; revenues fell 2.1% year/year to $3.65 bln vs the $3.6 bln consensus.
"We achieved strong financial results in the June quarter, with better-than-anticipated revenue, healthy gross margin performance and continued strong cash flow generation...We did so by addressing continued robust demand in gaming and stronger-than-expected demand in notebook PCs, demonstrating our flexibility and capability in high-volume businesses. We also saw strength in our performance enterprise business."Co will guide on conference call at 17:00.
4:10 pm TTM Tech reports EPS in-line, revs in-line; guides Q3 EPS in-line, revs in-line (TTMI) : Reports Q2 (Jun) earnings of $0.05 per share, in-line with the Capital IQ Consensus Estimate of $0.05; revenues fell 12.0% year/year to $297.6 mln vs the $300.09 mln consensus.
Co issues in-line guidance for Q3, sees EPS of $0.11-0.17 vs. $0.16 Capital IQ Consensus Estimate; sees Q3 revs of $325-355 mln vs. $333.47 mln Capital IQ Consensus Estimate.
4:08 pm Roadrunner Transportation misses by $0.01, beats on revs; guides Q3 EPS in-line, revs above consensus (RRTS) : Reports Q2 (Jun) earnings of $0.38 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.39; revenues rose 38.7% year/year to $460.2 mln vs the $438.34 mln consensus. Co issues mixed guidance for Q3, sees EPS of $0.37-0.41 vs. $0.41 Capital IQ Consensus Estimate; sees Q3 revs of $455-480 mln vs. $454.92 mln Capital IQ Consensus Estimate.
4:08 pm FEI beats by $0.04, beats on revs; guides Q3 EPS below consensus, revs below consensus; guides FY14 revs below consensus (FEIC) : Reports Q2 (Jun) earnings of $0.70 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.66; revenues rose 6.5% year/year to $237 mln vs the $234.45 mln consensus.
Co issues downside guidance for Q3, sees EPS of $0.60-0.70, excluding non-recurring items, vs. $0.90 Capital IQ Consensus Estimate; sees Q3 revs of $228-243 mln vs. $258.03 mln Capital IQ Consensus Estimate.Co lowers FY14 guidance for FY14, lowers revs growth to +5-7% YoY, which calculates to ~$973.8-992.4 mln vs. $1.01 bln Capital IQ Consensus Estimate, down from growth of +8-10%, which equates to ~$1.0-1.02 bln.
4:05 pm Tessera Tech and Micron Technology (MU) announce execution of new technology and patent license agreements (TSRA) : Cos announced the execution of new, multiyear technology and patent license agreements. In addition to the new patent license agreement, Tessera's wholly-owned subsidiary Invensas Corporation will license its Multi-Die Face-Down (xFDTM) semiconductor packaging technology to Micron and cooperate with Micron on the manufacturing of Micron products that incorporate xFD technology. As part of the agreements, Tessera and Micron will also explore other possible joint development efforts.
The specific terms and conditions of the agreements are confidential and have not been disclosed by the companies.
4:00 pm Lattice Semi's iCE40 FPGA shipments reach 200 mln unit milestone (LSCC) :
12:20 pm 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
TWTR (46.9 +21.53%): Beat quarterly EPS by $0.03 ($0.02 vs -$0.01 estimate), revs rose 124.0% yoy to $312 mln vs $283.3 mln estimate; Q3 average monthly active users rose 24% yoy to 271 mln vs 256.64 mln Briefing.com consensus; sees Q3 revs of $330-340 mln vs $323.72 mln estimate; sees FY14 revs of $1.31-1.33 bln (raised from $1.20-1.25 bln) vs $1.27 bln estimate; upgraded at BofA/Merrill, Cowen, UBS, CRT Capital, and FBN Securities
ASML (95.24 +14.36%): Co confirmed that one customer has exposed more than 500 wafers on an NXE:3300B extreme ultra-violet (:EUV) system winthin 24 hours; seeing reports that co is ahead of scheduled with tests for EUV machines
YPF (38.56 +8.34%): Reuters reporting that Argentine banks will offer to buy out the country's debt held by holdout investors to avert default
Large Cap Losers
ROK (111.68 -6.91%): Missed quarterly EPS by $0.06 ($1.49 vs $1.55 estimate), revs rose 1.6% yoy to $1.65 bln vs $1.68 bln estimate; sees FY14 EPS of $6.10-6.25 vs $6.19 estimate, organic sales growth of 4-6%
HUM (119.85 -6.01%): Reported Q2 EPS of $2.19 (in-line); reaffirmed FY14 EPS guidance of $7.25-7.75 vs $7.82 estimate
TOT (66.29 -4.50%): Missed quarterly Eps by $0.02 ($1.38 vs $1.40 estimate), revs $56.2 bln vs $52.9 bln estimate; Hydrocarbon production was 2,054 kboe/d in the second quarter, down 10% from last year; Liquids production declined 15% and gas production fell 5% from the prior year
Mid Cap Gainers
X (32.8 +18.54%): Reported Q2 adjusted EPS of $0.17, revs fell 0.7% yoy to $4.4 bln vs $4.2 bln estimate; co expects operating income for its reportable segments and other businesses to increase significantly over the second quarter, as it returns to normal operating levels
EW (93.57 +10.81%): Beat quarterly EPS by $0.11 ($0.88 ex items vs $0.77 estimate), revs rose 11.2% yoy to $575.1 mln vs $544.3 mln estimate; sees Q3 EPS of $0.66-0.72 ex items vs $0.74 estimate, revs of $530-570 mln vs $525.9 mln estimate; sees FY14 EPS of $3.24-3.34 ex items vs $3.17 estimate, revs at high end of $2.05-2.25 bln vs $2.17 bln estimate
ICLR (52.28 +9.14%): Beat quarterly EPS by $0.06 ($0.64 vs $0.58 estimate), revs rose 12.5% yoy to $376 mln vs $374.88 mln estimate; sees FY14 EPS of $2.62-2.68 (raised from $2.30-2.40) vs $2.36 estimate, revs of $1.49-1.53 bln vs $1.5 bln estimate
Mid Cap Losers
PWE (7.61 -16.83%): Disclosed that the company's Audit Committee is conducting a voluntary, internal review of certain of the company's accounting practices; reported Q2 average production of 108,130 barrels of oil equivalent per day, maintained guidance of 101,000-106,000 boe per day
BWLD (143.2 -14.33%): Beat quarterly EPS by $0.05 ($1.25 vs $1.20 estimate), revs rose 20.0% yoy to $366.0 mln vs $359.6 mln estimate; same store sales increased 7.7% at company-owned restaurants and 6.5% at franchised restaurants
GNW (14.22 -12.56%): Missed quarterly EPS by $0.02 ($0.34 vs $0.36 estimate), revs rose 1.9% yoy to $2.42 bln vs $2.36 bln estimate; downgraded to Neutral from Outperform at Macquarie, target lowered to $17 from $20
11:46 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (94) outpacing new lows (78) (:SCANX) : Stocks that traded to 52 week highs: AIV, AMGN, AMID, AMP, AMRE, AMT, APC, APD, ARLP, AUO, AVB, BABY, BFR, BMA, CHE, CHKE, CHRW, CLMS, CMG, COO, CORE, DEJ, DHX, DLR, DMLP, ECF, EMC, EQR, EW, FLT, FSRV, GAGA, GB, GFIG, GGAL, GILD, GLNG, GLP, HCA, HES, HIW, HNRG, HOLX, HSKA, HSP, ICLR, IDIX, INGR, IPHI, IRWD, KEP, KTWO, LAZ, LEJU, NTRS, NUVA, NVEC, PEIX, PMBC, PPS, PTRY, PTSI, Q, QRE, RFMD, SBAC, SEM, SFBC, SHG, SKM, SKX, SLCA, SLF, SLI, SNP, SRCL, SUMR, SWC, TCX, TFX, TKC, TMH, TOUR, TQNT, TRN, TV, UFI, UNTY, WDC, WEX, WLB, WLP, X, YPF
Stocks that traded to 52 week lows: ACPW, ACXM, AGCO, ALLY, AMCC, AOI, ATNY, AVHI, BAA, BAK, BDR, BECN, BGFV, BODY, BPI, BRP, CAS, CBDE, CERU, CGA, CGG, CKH, CMCT, CNHI, COT, CPWR, CREG, CS, DAR, DCTH, DEST, DORM, DWA, EDMC, ESI, FRAN, GEOS, HOV, IKAN, IOSP, ISSC, JEC, KBR, KIOR, LPX, MGAM, MMSI, MTZ, NILE, NKSH, NPK, NPTN, PED, PGEM, PIKE, PSTI, PSUN, PT, QLGC, QRM, RSH, SPAR, SSE, TAXI, TCCO, TEU, TGE, TNAV, TR, TRGT, TSE, UBS, UUU, VII, VNOM, WMS, WSH, ZQK
ETFs that traded to 52 week highs: EPP, EWH, EWY, IHF, XLV
ETFs that traded to 52 week lows: BAL, FXS, RJA
11:43 am IBM slip to fractional new session/weekly low (IBM) : The stock has recently edged under the low of this week's multi-month high bar from Monday at 193.65 (session low 193.59).
11:34 am Currency Commentary: DXY Hits 10-month Highs (:SUMRX) :
The Dollar Index continues to rally as the first glance at Q2 GDP came in higher than expected. The beat was driven by a rise in inventories but it has helped increase market expectations for a rate hike sooner than currently anticipated. This has led to more buying in the dollar as it presses to fresh multi-month highs. The last time that the dollar traded in this area was September of 2013. The market now prepares for the FOMC this afternoon but it is generally expected to be a non event. Expectations are for another $10 bln taper. The primary focus will be ion language around the economy, inflation, and potential dissenters. The euro has fallen to a ten month low as the divergence between the FOMC and the ECB gets priced into the currencies. CPI data from Germany came in slightly higher than expected while Spain saw a miss. This will lead to mixed expectations ahead of tomorrow's region wide inflation report. But the primary focus remains on the dollar, the Fed, and U.S. jobs. The pound has also pulled back against the dollar as it slides back to 1.69. The dollar has been closing the gap as the expectations for timing of rate hikes from the Bank of England and the Fed tightens. Sterling is also seeing a flattening out of its rise against the euro as the pair settle in the 0.79 area following a steady 3-month rally. The yen has broken out of its recent range as it falls to 102.84 against the dollar. This move has been a pure pair trade though and not risk on as equities have been selling off despite the yen selling (BONDX, FOREX).
Ixia (XXIA) announced a partnership agreement with Empowered Networks, a Canadian value-added reseller, to offer service providers, enterprises and network equipment manufacturers more comprehensive and complete solutions to address complex network requirements.
7:31 am Qualcomm further enhances commitment to 24/7 mobile learning with acquisition of Silicon Valley-based learning technology company EmpoweredU (QCOM) : Co announced that its subsidiary, Qualcomm Technologies, Inc., has taken a further step towards the vision of demonstrating how technology innovations can help address some of the challenges the education sector faces, by completing the acquisition of EmpoweredU, a pioneer in the development of an intuitive, mobile-centric cloud-based learning environment that is both device and operating system agnostic.
The integration of EmpoweredU, with other education initiatives within Qualcomm, will allow Qualcomm Technologies to accelerate mobile innovation and 24/7 learning into education -- providing institutions, students and parents access to best-in-class education tools.
7:22 am United Micro beats by $0.04, revs in-line; Foundry Segment Wafer Shipments expected to increase by low single-digit percentage range (UMC) : Reports Q2 (Jun) earnings of $0.28 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.24; revenues rose 16.1% year/year to NT$35.9 bln vs the NT$35.9 bln consensus.
"In the second quarter of 2014, UMC recorded NT$32.57 billion in revenue from the foundry segment, with operating margin from foundry operations of 10.2%. Wafer shipments reached 1.426 million 8-inch equivalent wafers."Our 28nm business represented 1% of revenue, while 40nm accounted for 21%." Second quarter foundry revenue grew 13.4% sequentially, fueled by strong communication segment demand that lifted capacity utilization to 90%."Market conditions also reflected a turnaround, with rising demand for portable computing devices helping to drive our 28nm shipments."We project continued 28nm revenue contribution growth in 3Q14 as a result of the sustained demand for mobile and tablet computing. We are optimistic in the long term that our 28nm production ramp will strengthen our overall product mix and generate abundant opportunities for UMC to win additional foundry market share."Quarter-over-Quarter Guidance:
Foundry Segment Wafer Shipments: To increase by low single-digit percentage rangeFoundry Segment ASP in US$: To remain flatFoundry Segment Profitability: Gross profit margin will be in the mid-20 percentage rangeFoundry Segment Capacity Utilization: Low-90% range2014 CAPEX for Foundry Segment: US$1.3bnGuidance to New Business Segment: Revenue to be ~NT$1.2bn and net loss attributable to UMC parent company to be ~NT$760mn
7:08 am KVH Industries beats by $0.01, misses on revs (KVHI) : Reports Q2 (Jun) earnings of $0.05 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.04; revenues fell 5.3% year/year to $40.9 mln vs the $43.39 mln consensus.
6:02 am JinkoSolar Holding to receive $225 mln private equity investment led by China Development Bank International and Macquarie for downstream solar power project business (JKS) : Co announced that China Development Bank International, the Macquarie Greater China Infrastructure Fund and New Horizon Capital have agreed to invest a total of $225 million in the co's downstream solar power project business.
JinkoSolar Power Engineering, a wholly-owned subsidiary of JinkoSolar that develops and operates its downstream solar power project business, entered into separate definitive share purchase agreements with each of CDBI, MGCIF and New Horizon. Under the subscription agreements, CDBI, MGCIF and New Horizon have agreed to invest a total of $225 million in Jinko Power. Upon completion of the investment and the co's additional capital contribution to Jinko Power, the three investors will hold a total of ~ 45% of Jinko Power's equity interest.The three investors are expected to provide support and additional resources to facilitate Jinko Power's business development in terms of project financing, project development, project operation and global green energy network.
1:35 am SunPower announces 29-Megawatt supply agreement with Nangoku Corp (SPWR) : Co announces it has signed a definitive agreement to supply Nangoku Corporation (Nangoku) with 29-MWdc of the high efficiency E20/327 Solar Panel by SunPower Corporation. Nangoku, an independent power producer will build a mega solar plant in the Hioki, Kagoshima prefecture on the Island of Kyushu.
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