From Briefing.com: It was a mixed-up day of trading on Wednesday. The stock market was primed for a big finish, but then had the rug pulled out from under it in the last half hour when the European Central bank (ECB) announced it has lifted the current waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by the Hellenic Republic (i.e. Greece) since it is currently not possible to assume successful conclusion of the programme review.
That statement hit the stock market as much for its timing as its substance. On Tuesday, a rally was forged in part on the reported notion that Greece was striking a more conciliatory tone in its debt negotiation efforts. Many participants were perhaps lulled into thinking that everyone is going to play nice in the end and that Greece will ultimately get the funding it needs to run its country and make its debt payments.
That could still happen, but today's statement makes it known that nothing can be taken for granted and that the new leaders of Greece are quickly finding out that it is not as easy to confront the country's creditors as duly elected leaders as it is being duly nominated candidates.
The major indices finished mixed, contending as well with a massive pullback in crude oil prices (-8.7% to $48.44/bbl) that occurred in the wake of a bearish inventory report released by the Energy Information Administration.
Helped by the gain in Apple (AAPL 119.56, +0.91, +0.8%) and some other large-cap components, the S&P 500 information technology sector increased 0.1% and outperformed the S&P 500 (-0.4%), which was dragged lower primarily by a weak energy sector (-1.6%).
Some notable news items from the S&P 500 information technology sector included:
Automatic Data (ADP 86.58, +1.44, +1.7%): Reported Q2 (Dec) earnings of $0.70 per share, which was ahead of analysts' average expectation. Revenues rose 6.7% year/year to $2.66 bln. For FY15, sees EPS of +12-14% (up from +11-13%) to ~$3.51-3.58, which is ahead of expectation. Sees FY15 revenues of +7-8% to ~$13.06-13.18 bln. Noted the diluted earnings per share forecast includes the anticipated $0.02 per share benefit resulting from incremental share repurchases funded by the $825 million in dividend proceeds ADP received as a result of the CDK spin-off. Worldwide new business bookings are now anticipated to grow about 10% compared to the prior forecast of about 8% growth.
Cognizant Technology (CTSH 57.88, +2.78, +5.1%): Reported Q4 (Dec) earnings of $0.67 per share, excluding non-recurring items, which was above estimates. Revenues rose 16.4% year/year to $2.74 bln, also ahead of expectations. Net headcount addition for the quarter was ~11,800, including TriZetto, and year-end headcount was ~211,500. For Q1, sees EPS of atleast $0.69, excluding non-recurring items, and revenues of at least $2.88 bln. For FY15, sees EPS of at least $2.91, excluding non-recurring items, which is shy of analysts' average expectation; sees FY15 revenues of at least $12.21 bln, which is ahead of expectations.
EMC (EMC 26.84, +0.01, +0.04%): Director bought 20,000 shares at $26.13 worth ~$522,000
Facebook (FB 75.63, +0.23, +0.3%): Director, M. Andreessen, sold 853,994 shares at $77.38 worth ~$66.1 mln
Fiserv (FISV 75.79, +1.31, +1.8%): Reported Q4 (Dec) earnings of $0.89 per share, in-line with estimates. Revenues rose 4.2% year/year to $1.32 bln, also in-line. For FY15, sees EPS of $3.73-3.83 and expects adjusted internal revenue to grow in a range of 5-6%.
IBM (IBM 156.96, -1.51, -1.0%): Announced the launch of the IBM Middle East and Africa Digital Sales Center in Cairo. The center, which represents a $3 million investment by IBM, is part of a broader three year agreement with the Egyptian government in which IBM will create jobs and work with clients to transform using cloud, Big Data and analytics, mobile and social technologies.
Motorola Solutions (MSI 63.94, -0.07, -0.1%): Reported Q4 (Dec) earnings of $1.25 per share, comfortably ahead of analysts' average expectation. Revenues rose 0.3% year/year to $1.82 bln , which was also ahead of estimates. For Q1, sees EPS of $0.22-0.27, which is below expectations, and expects a revenue decline of 2 to 4 percent compared with the first quarter of 2014. For FY15, sees EPS of $3.15-3.35 and expects revenue to be flat to down 2 percent compared to 2014, or roughly $5.763-5.881 bln, which is below expectations.
Western Digital (WDC 104.04, +3.36, +3.3%): Announced that the board of directors declared a cash dividend for the quarter ending Apr. 3, 2015, of $0.50 per share of common stock. The cash dividend will be paid on Apr. 16, 2015, to the company's stockholders of record as of Apr. 3, 2015. The board also authorized an additional $2.0 billion for share repurchases by the company. As of Feb. 2, 2015, the company had approximately $384 million remaining under prior share repurchase authorizations. The additional repurchase authorization is effective immediately.
Western Union (WU 17.69, unch, 0.00%):Announced that, effective immediately, consumers in China will be able to receive remittances through the Western Union Money TransferSM service from abroad in minutes at select Bank of China branches and sub-branches throughout the country Elsewhere in the technology arena:
Lattice Semi (LSCC 6.54, -0.65, -9.0%): Reported Q4 (Dec) earnings of $0.03 per share. Revenues fell 6.6% year/year to $83.6 mln, which was light of expectations. For Q1, sees revenues of -2 to +2% quarter-over-quarter to ~$81.9-85.3 mln, which is below analysts' average expectation. Gross margin percentage is expected to be approximately 55% plus or minus 2%. Total operating expenses are expected to increase approximately 1%, as compared to the fourth quarter of 2014.
Take Two (TTWO 28.97, -0.87, -2.9%): Reported Q3 (Dec) non-GAAP earnings of $1.87 per share, excluding non-recurring items, well ahead of estimates. Non-GAAP revenues rose 24.3% year/year to $954.0 mln, which also easily beat expectations. For Q4 (Mar), company sees non-GAAP EPS of $0.15-0.25, excluding non-recurring items, which is shy of expectations, and non-GAAP revenues of $410-460 mln, excluding non-recurring items, in-line with estimates. Looking ahead, Take-Two said it expects its fourth quarter will provide a strong finish to fiscal 2015, which is lining up to be one of Take-Two's best years ever.Analyst Action:
Cognizant Technology (CTSH 57.88, +2.78, +5.1%): target raised to $68 from $64 at Goldman; Buy
Fiserv (FISV 75.79, +1.31, +1.8%): downgraded to Market Perform from Outperform at BMO Capital.. target raised to $81 from $79 at Monness Crespi & Hardt; Buy... target raised to $67 from $58 at Deutsche Bank; Hold
Take-Two (TTWO 28.97, -0.87, -2.9%): target raised to $40 from $35 at MKM Partners; Buy
Twitter (TWTR 40.72, +0.93, +2.3%): target raised to $44 from $40 at Monness Crespi & Hardt; Neutral4:15 pm : The stock market ended the Wednesday session on a lower note. The S&P 500 lost 0.4% after tumbling from its high to a new low during the final 30 minutes of action.
Equity indices endured some choppy waters after the S&P 500 spiked nearly 3.0% during the first two sessions of the week. The market appeared to be out of the woods by the start of the final hour, but the benchmark index plunged through its 50-day moving average after it was reported that the European Central Bank has lifted its waiver that allowed for the acceptance of Greek debt as collateral.
The announcement came with a caveat that the counterparty status of Greek banks remains unchanged and they may satisfy their liquidity needs through Emergency Liquidity Assistance. However, the news showed that the negotiations are likely to be tumultuous, which contrasted with the rosy picture painted over the last two days.
Despite the closing slide, a handful of influential sectors like consumer discretionary (+0.7%), technology (+0.1%), and consumer staples (+0.1%) were able to finish in the green.
The consumer discretionary space received solid support from carmakers and media names. General Motors (GM 35.83, +1.85) surged 5.4% after beating estimates and announcing plans to boost its dividend by 20.0% to $0.36. Meanwhile, Dow component Disney (DIS 101.28, +7.18) spiked 7.6% in reaction to above-consensus earnings and revenue.
Elsewhere among Dow members, the top-weighted listing-Visa (V 264.89, +5.10)-soared 2.0% and helped underpin the price-weighted index, which ended flat. Furthermore, the stock contributed to the relative strength of the technology sector. Other large sector components were mixed with Apple (AAPL 119.56, +0.91) and Microsoft (MSFT 41.83, +0.23) posting gains while Google (GOOGL 526.10, -7.20), IBM (IBM 156.96, -1.51), and Oracle (ORCL 42.42, -0.62) registered losses.
In turn, the tech sector provided a boost to the Nasdaq Composite (-0.2%), helping the index finish ahead of the broader market. The Nasdaq overcame another decline in the biotechnology group as the iShares Nasdaq Biotechnology ETF (IBB 312.55, -5.24) lost 1.7% and widened its week-to-date decline to 2.8%. Conversely, the health care sector (-1.4%) settled near the bottom of the leaderboard.
Health care was not the only influential group that struggled today. The energy sector (-1.6%) finished at the bottom of the leaderboard due to a daylong slide in crude oil. The energy component plunged 9.3% and surrendered the bulk of its February gain. As for the energy sector, the cyclical group trimmed its week-to-date gain to 4.2%.
Treasuries spiked during afternoon action, sending the 10-yr yield lower by three basis points to 1.76%.
Today's participation was well above average with more than a billion shares changing hands at the NYSE floor.
Economic data included ADP Employment, ISM Services, and the MBA Mortgage Index:
The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 213K in January while the Briefing.com consensus expected an increase of 230K
The December reading was revised up to 253,000 from 241,000
The ISM Non-Manufacturing Index increased to 56.7 in January from a previously revised 56.5 (from 56.2) in December while the Briefing.com consensus expected the index to remain at 56.5
Overall, the non-manufacturing sector remained strong in January, but future gains may be difficult as backlogs contracted for the second consecutive month, falling to 49.0 from 49.5
Business activities in the non-manufacturing sector strengthened in January as the related index increased to 61.5 from 58.6 in December
The weekly MBA Mortgage Index rose 1.3% to follow last week's 3.2% decline
Tomorrow, the Challenger Job Cuts report for January will be released at 7:30 ET while Initial Claims (Briefing.com consensus 290K), December Trade Deficit (consensus $38.00 billion), and Q4 Productivity and Unit Labor Costs data will all be released at 8:30 ET.
Nasdaq Composite -0.4% YTD
S&P 500 -0.8% YTD
Dow Jones Industrial Average -0.8% YTD
Russell 2000 -1.0% YTD
4:32 pm AXT lowers revenue outlook; co announces Q4 preliminary revenue guidance at $19.5 mln vs $21.04 Capital IQ Consensus Est, down from $20.5-21.5 mln (AXTI) :
The revenue shortfall is primarily attributable to reduced sales as customers worked down their substrate inventory levels at year end. While we are disappointed in these preliminary revenue results, we remain confident in our strategy and business opportunity across our key markets in 2015," said Morris Young, chief executive officer.These preliminary, unaudited results are based on management's initial review of operations for the quarter ended Dec. 31, 2014, and remain subject to completion of the company's customary quarterly closing and review procedures.
4:22 pm FEI misses by $0.02, misses on revs; guides Q1 revs below consensus (FEIC) : Reports Q4 (Dec) earnings of $0.98 per share, $0.02 worse than the Capital IQ Consensus Estimate of $1.00; revenues were unchanged from the year-ago period at $265.3 mln.
Co issues downside guidance for Q1, sees Q1 revs of $215-230 mln vs. $250.37 mln Capital IQ Consensus Estimate.
4:22 pm TTM Tech beats by $0.03, beats on revs; guides Q1 EPS in-line, mid-pt of revs above consensus (TTMI) : Reports Q4 (Dec) earnings of $0.28 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.25; revenues rose 6.8% year/year to $390.91 mln vs the $380 mln consensus.
Co issues Q1 guidance, sees EPS of $0.06-0.12 vs. $0.09 Capital IQ Consensus Estimate; sees Q1 revs of $310-300 mln vs. $311.05 mln Capital IQ Consensus Estimate.
4:18 pm Atmel beats by $0.01, reports revs in-line (ATML) : Reports Q4 (Dec) earnings of $0.12 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.11; revenues fell 2.0% year/year to $346 mln vs the $346.82 mln consensus.
Non-GAAP gross margin was 49.0% in the fourth quarter of 2014 compared to 47.0% in the immediately preceding quarter and 43.7% in the fourth quarter of 2013.
Cash provided by operations totaled $37.2 million for the fourth quarter of 2014, compared to $43.9 million for the third quarter of 2014 and $48.4 million for the fourth quarter of 2013.
4:07 pm iRobot misses by $0.05, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY15 EPS below consensus, revs below consensus (IRBT) : Reports Q4 (Dec) earnings of $0.31 per share, $0.05 worse than the Capital IQ Consensus Estimate of $0.36; revenues rose 26.1% year/year to $159.3 mln vs the $163.65 mln consensus.
Co issues downside guidance for Q1, sees EPS of $0.08-0.10 vs. $0.28 Capital IQ Consensus Estimate; sees Q1 revs of $114-117 mln vs. $132.10 mln Capital IQ Consensus Estimate. Co issues downside guidance for FY15, sees EPS of $1.25-1.45 vs. $1.56 Capital IQ Consensus Estimate; sees FY15 revs of $625-635 mln vs. $641.08 mln Capital IQ Consensus Estimate.
4:07 pm Cadence Design reports EPS in-line, revs in-line; guides Q1 EPS below consensus, revs in-line; guides FY15 EPS below consensus, revs in-line (CDNS) : Reports Q4 (Dec) earnings of $0.27 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.27; revenues rose 12.2% year/year to $423 mln vs the $422.76 mln consensus.
Co issues guidance for Q1, sees EPS of $0.20-0.22, excluding non-recurring items, vs. $0.23 Capital IQ Consensus Estimate; sees Q1 revs of $405-415 mln vs. $407.90 mln Capital IQ Consensus Estimate.
Co issues guidance for FY15, sees EPS of $0.94-1.06, excluding non-recurring items, vs. $1.07 Capital IQ Consensus Estimate; sees FY15 revs of $1.68-1.72 bln vs. $1.7 bln Capital IQ Consensus Estimate.
4:05 pm Power Integrations beats by $0.07, reports revs in-line; guides Q1 revs in-line (POWI) : Reports Q4 (Dec) earnings of $0.59 per share, $0.07 better than the Capital IQ Consensus Estimate of $0.52; revenues fell 4.2% year/year to $86.6 mln vs the $86.08 mln consensus.
Co issues in-line guidance for Q1, sees Q1 revs of $82-88 mln vs. $86.72 mln Capital IQ Consensus Estimate.
4:05 pm Monolithic Power beats by $0.01, beats on revs; guides Q1 revs in-line (MPWR) : Reports Q4 (Dec) earnings of $0.43 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.42; revenues rose 19.0% year/year to $75.7 mln vs the $74.15 mln consensus.
Co issues in-line guidance for Q1, sees Q1 revs of $70-74 mln vs. $70.96 mln Capital IQ Consensus Estimate.
Large Cap Gainers
SNE (25.77 +10.18%): Announced it sees Q3 EPS of $0.63 vs $0.25 Capital IQ consensus estimate; revs of $21.1 bln vs $20.3 bln consensus.
DIS (101.68 +8.06%): Reported Q1 (Dec) adj earnings of $1.27 per share, $0.20 better than the Capital IQ Consensus Estimate of $1.07; revenues rose 8.8% year/year to $13.39 bln vs the $12.88 bln consensus; Price target raised at FBR Capital, Wunderlich, RBC Capital, others.
CTSH (58.57 +6.3%): Beat Q4 consensus estimates by $0.02, beat on revs; guides Q1 revs above consensus; guides FY15 revs above consensus; price target raised to $68 from $64 at Goldman -- Added to Conviction Buy List.
Large Cap Losers
RL (142.34 -16.68%): Missed Q3 consensus EPS estimates by $0.09, missed on revs; guided Q4 rev below consensus.
SPLS (17.09 -10.1%): Announced acquisition of Office Depot (ODP), which values ODP at $6.3 bln equity value.
EC (18.37 -7.22%): Downgraded to Mkt Perform from Outperform at Raymond James.
Mid Cap Gainers
MANH (47.82 +6.1%): Beat Q4 consensus EPS estimates by $0.02, beat on revs; guided FY15 EPS above consensus, revs above consensus; upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $52 from $42.
XPO (40.09 +7.45%): Disclosed that it sees Q4 revenue in the range of $825-835 mln, vs $764.32 mln Capital IQ Consensus Estimate; achieved its year-end 2014 targets for an annual revenue run rate of at least $3 bln.
SLGN (54.85 +4.46%): Beat Q4 consensus EPS estimates by $0.02, beat on revs; guided Q1 EPS in-line; guided FY15 EPS in-line; announced intention to commence "modified Dutch Auction" tender offer to purchase up to $200 mln of common stock.
Mid Cap Losers
MYGN (34.05 -10.68%): Beat Q2 consensus EPS estimates by $0.06, reported revs in-line; guided Q3 EPS below consensus, revs below consensus; lowered FY15 guidance; CEO will retire; Downgraded at Mizuho, Credit Suisse, others.
LFUS (93.03 -8.03%): Missed Q4 consensus EPS estimates by $0.08, beat on revs; guided Q1 below consensus; guided FY15 EPS below estimates.
ISIS (60.68 -6.21%): Downgraded to Neutral from Overweight at Piper Jaffray; tgt lowered to $68 from $81.
12:06 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (157) outpacing new lows (38) (:SCANX) : Stocks that traded to 52 week highs: AAON, AAPL, ABG, ABMD, ADP, ALV, AMWD, AOS, ARMK, ASH, AXL, BCC, BDL, BERY, BIP, BLJ, BMI, BOBE, BR, BRLI, BSX, BX, CEVA, CHD, CHH, CHL, CLX, CMU, CNC, CNK, COR, COST, CPB, CPF, CRUS, CTAS, CTSH, CUBI, DEG, DIS, DLTR, DLX, DOX, DSPG, DST, EBSB, EMAN, ENH, ENL, ESSA, ETFC, EW, EXLS, FBHS, FCAU, FIS, FISV, FLEX, FNRG, GFF, GK, HAE, HCC, HCSG, HD, HII, HNH, HOFT, HPF, HRB, HZO, IBCA, IBKR, IIVI, IMAX, INAP, IPGP, ISBC, ITG, JLL, KR, KRFT, KSS, KTF, KTF, KW, LAMR, LB, LBY, LEA, LG, LII, LVLT, MANH, MANT, MAS, MATX, MCY, MENT, MHFI, MHK, MHLD, MIC, MLI, MMS, MSCC, MSCI, MSG, MTD, NAZ, NEU, NJR, NOC, NOW, NQM, NTES, ODP, OMCL, ORAN, PETM, PNI, PRE, PSO, PTP, RE, RECN, RESN, RHI, RUK, RVSB, SABR, SAPE, SCSS, SEIC, SERV, SJM, SLGN, SMG, SNE, SPR, STZ, SUBK, TDG, TM, TNAV, TREX, TRK, TSO, TSRA, TW, UIHC, UNFI, UTG, VMC, VNTV, WHR, WTBA
Stocks that traded to 52 week lows: AGYS, AI, AOI, ARLP, ATV, BOX, CACH, CBD, CBLI, CHMG, COCO, CRDC, CRRS, FMY, KBIO, LFVN, NBHC, NKA, NOV, OGXI, ONP, ONTX, OPXA, PANL, PDLI, PHT, POWL, PRXI, PVH, RGSE, RSYS, SGM, SIEB, SPA, SR, SVVC, VPCO, VVUS
ETFs that traded to 52 week highs: ITA, RTH
ETFs that traded to 52 week lows: none
8:04 am O2Micro misses by $0.12, misses on revs (OIIM) : Reports Q4 (Dec) loss of $0.23 per share, $0.12 worse than the Capital IQ Consensus Estimate of ($0.11); revenues fell 25.1% year/year to $14.3 mln vs the $14.7 mln consensus.
"Our fourth quarter and fiscal year 2014 results reflect a challenging end market demand environment, coupled with weakness in the notebook computer market which affected our notebook computer power management business,"
7:19 am MPLX LP misses by $0.06, beats on revs (MPLX) : Reports Q4 (Dec) earnings of $0.38 per share, $0.06 worse than the Capital IQ Consensus Estimate of $0.44; revenues rose 10.7% year/year to $139.1 mln vs the $137.38 mln consensus.
In 2015, MPLX plans to spend approximately $220 million on organic expansion projects and nearly $40 million of capital to maintain high reliability of its assets. Growth projects for 2015 include the proposed Cornerstone Pipeline and other associated Utica shale build-out projects, which completed a non-binding open season in the second half of 2014. A binding open season is expected during the first quarter of 2015.
7:07 am Silicon Labs beats by $0.10, beats on revs; guides Q1 EPS in-line, revs above consensus (SLAB) : Reports Q4 (Dec) earnings of $0.57 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.47; revenues rose 10.8% year/year to $162 mln vs the $158.2 mln consensus.
Co issues guidance for Q1, sees EPS of $0.42-0.48 vs. $0.44 Capital IQ Consensus Estimate; sees Q1 revs of $156-162 mln vs. $153.72 mln Capital IQ Consensus Estimate.
7:04 am Motorola Solutions beats by $0.11, beats on revs; guides Q1 EPS below consensus; guides FY15 EPS in-line (MSI) : Reports Q4 (Dec) earnings of $1.25 per share, $0.11 better than the Capital IQ Consensus Estimate of $1.14; revenues rose 0.3% year/year to $1.82 bln vs the $1.78 bln consensus.
Co issues downside guidance for Q1, sees EPS of $0.22-0.27 vs. $0.44 Capital IQ Consensus Estimate; expects a revenue decline of 2 to 4 percent compared with the first quarter of 2014Co issues in-line guidance for FY15, sees EPS of $3.15-3.35 vs. $3.33 Capital IQ Consensus Estimate; expects revenue to be flat to down 2 percent compared to 2014, or roughly $5.763-5.881 bln vs. $5.973 bln consensus.
2:22 am SunEdison commissions 7.72 MW solar system for Brakes India (SUNE) : Co and Brakes India, a manufacturer of Automotive and Non-Automotive Braking Systems and Ferrous Castings in India, announced that they have installed a solar power plant that will generate 7.72 megawatts of electricity at Brake India's facilities in Munanjipatti in the state of Tamil Nadu.
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