From Briefing.com: US equities markets headed higher on Thursday, rebounding from a sell-off yesterday amid concerns over the ECB's removal of a waiver that allowed for Greek Government bonds to be used as collateral. Investors feared this would send Greece into a credit crunch, but the fear subsided today as negotiations between Greece and European authorities continued.
Major indices finished conclusively higher, with the S&P 500 gaining 1%. The S&P Information Technology Index also performed well, boasting a 0.9% gain on the day.
Top performing constituents in the S&P Tech Index include: Frontier Communications (FTR 7.70, +0.42, +5.8%), Microchip Technologies (MCHP 48.91, +2.58, +5.6%), and Electronic Arts (EA 56.39, +1.84, +3.4%).
Some notable news items from the S&P 500 information technology sector included:
Teradata (TDC 42.19, -4.79, -10.2%): Reported Q4 (Dec) earnings of $0.91 per share, excluding non-recurring items, $0.01 better than estimates of $0.90. Revenues rose 0.3% year/year to $761 million vs the $778.2 million consensus. Additionally, TDC issued downside guidance for FY15, noting it sees EPS of $2.50-2.70, versus the $2.99 analyst estimate. FY15 revenues are expected to be flat to down 2% which equates to roughly $2.68-$2.73 billion, lower than the $2.83 billion consensus.
Fidelity National Information Services (FIS 64.00, -0.49, -0.8%): Reported Q4 (Dec) earnings of $0.87 per share, right in-line with the $0.87 consensus. Non-GAAP revenues rose 7.4% year/year to $1.69 billion vs the $1.70 billion consensus. FIS issued guidance for FY15 in-line, noting it sees EPS of $3.37-3.49 versus the $3.47 analyst estimate; sees FY15 non-GAAP revs of $6.74-6.87 billion vs. $6.86 billion consensus.
NXP Semi (NXPI 78.27, -1.48, -1.9%): Reported Q4 (Dec) earnings of $1.35 per share, $0.03 better than analyst estimates. Revenues rose 18.9% year/year to $1.54 billion, also above consensus. NXPI issued mixed guidance for Q1, noting it sees EPS of $1.25-1.35, vs. the $1.22 average estimate; sees Q1 revs of $1.41-1.47 billion, in-line with analyst estimations.
Microchip (MCHP 48.91, +2.58, +5.6%) announced proposed $1 bln offering of convertible senior subordinated notes due 2025. Microchip intends to use a substantial portion of the net proceeds from this offering to retire a portion of its outstanding convertible debt concurrently with this offering.
Elsewhere in the technology space:
Twitter (TWTR 41.26 , +0.54, +1.3%): Reports earnings results after the close today, but earlier announced it has struck a deal with Google (GOOG) to make tweets easier to search through the search engine.Maximus (MMS 59.68, +2.23, 3.9%): Reported Q1 (Dec) earnings of $0.63 per share, $0.07 better than estimates. Revenues rose 14.9% year/year to $467 million, which also beat the $469.23 million consensus. Signed contract awards totaled $1.3 billion and the sales pipeline remained strong at $3.6 billion at December 31, 2014.
Liquidity Services (LQDT 10.27, +2.24, +27.9%): Reported Q1 (Dec) loss of $2.14 per share, includes items, but may not be comparable to analyst's $0.16 estimate. Revenues rose 2.6% year/year to $125.1 million vs the $110.28 million consensus.
GrubHub (GRUB 39.76, +2.33, +6.2%): Reported Q4 (Dec) earnings of $0.13 per share, $0.02 better than analyst estimates. Revenues rose 49.6% year/year to $73.3 million vs the $70.31 million consensus. GRUB issued upside guidance for Q1, noting it sees Q1 revs of $83-85 vs. $80.12 million estimate, and Adjusted EBITDA of $24-26 million
Analyst Action:
GrubHub (GRUB 39.76, +2.33, +6.2%): upgraded to Strong Buy from Outperform at Raymond James
Brocade (BRCD 11.92, +0.24, +2%): upgraded to Buy from Sell at Citigroup; target raised to $15 from 9.50
Qualcomm (QCOM 67.95, +0.99, +1.5%): downgraded to Market Underperform from Market Perform at Charter Equity
Apple (AAPL 119.94, +0.38, +0.3%): target raised to $140 from $130 at Credit Suisse; Outperform
Automatic Data (ADP 87.17, +0.59, +0.9%): target raised to $98 from $88 at Argus; Buy... target raised to $88 from 77 at Deutsche Bank; Hold
Tableau Software (DATA 99.73, +14.52, +17.24): target raised to $110 from $95 at Deutsche Bank; Buy... target raised to $109 from $97 at UBS; Buy... target raised to $150 from $130 at Cantor Fitzgerald; Buy... target raised to $100 from $88 at Oppenheimer; Perform... target raised to $100 from $90 at Jefferies; Hold... target raised to $110 from $100 at RBC Capital; Outperform... target raised to $100 from $88 at FBR Capital; Market Perform
Tyler Technology (TYL 114.03, +4, +3.64%): target raised to $127 from $123 at Oppenheimer; Buy
Cognizant Tech (CTSH 57.64, -0.35, -0.4%): target raised to $67 from $60 at Needham; Buy
NXP Semiconductor (NXPI 78.27, -1.48, -1.9%): target raised to $95 from $90 at FBR Capital; Ouperform
4:10 pm : The major averages zoomed higher on Thursday, allowing the S&P 500 (+1.0%) to reclaim its loss from yesterday and then some. The benchmark index erased the remainder of its decline from January while the Dow (+1.2%) and Russell 2000 (+1.3%) outperformed.
Equity indices made the bulk of their advance during the opening hour and spent the rest of the trading day in narrow ranges near their highs. The opening spike took place after investors realized that yesterday's ECB decision to lift a waiver that allowed for the acceptance of Greek government bonds as collateral was political at its core.
For the time being, Greek banks are still allowed to turn to the Bank of Greece, which in turn has access to funds through Emergency Liquidity Assistance from the European Central Bank. To that point, Germany's Die Welt reported that the ECB has granted up to EUR60 billion in funding to the Bank of Greece through ELA channels.
That being said, the negotiations are unlikely to unfold without a hitch, evidenced by today's press conference after Greece's Finance Minister Yanis Varoufakis met with his German counterpart Wolfgang Schaeuble. Mr. Schaeuble said he was advised to say the two "Agreed to disagree," but Mr. Varoufakis countered, saying "We didn't even agree to disagree."
The S&P 500 opened just above its 50-day moving average (2,044) and built on its early gain with the assistance from most sectors. The materials space (+2.4%) finished in the lead while health care (+1.6%) and energy (+1.4%) also outperformed.
The energy sector received a helping hand from crude oil, which followed yesterday's 9.3% plunge with a 4.2% spike to $50.47/bbl. Despite the surge, the energy component remains below its 50-day moving average, which resides in the $55.00/bbl area.
Meanwhile, the health care sector benefitted from strength in the biotech group with the iShares Nasdaq Biotechnology ETF (IBB 319.91, +7.36) climbing 2.4% to snap its four-day losing streak. Furthermore, Dow component Pfizer (PFE 32.99, +0.92) added 2.9% after agreeing to acquire Hospira (HSP 87.64, +22.84) for $90/share, which represents a 38.9% premium to HSP's closing price from yesterday.
Elsewhere among influential sectors, financials (+1.0%), industrials (+1.0%), and technology (+0.9%) finished near the broader market while the consumer discretionary sector (+0.6%) underperformed. Homebuilders struggled amid today's increase in Treasury yields with the iShares Dow Jones US Home Construction ETF (ITB 26.20, -0.15) shedding 0.6%. Also of note, apparel names ended in mixed fashion with Michael Kors (KORS 69.77, -1.61) falling 2.3% after cautious guidance and below-consensus comparable store sales overshadowed a bottom-line beat.
Treasuries retreated, ending near their lows with the 10-yr yield higher by six basis points at 1.81%.
Today's participation was below average with roughly 775 million shares changing hands at the NYSE floor.
Economic data included Initial Claims, Trade Deficit, Productivity/Unit Labor Cost Data, and Challenger Job Cuts:
The initial claims level increased to 278,000 from an upwardly revised 267,000 (from 265,000) while the Briefing.com consensus expected an increase to 290,000
For the first few weeks of January, the initial claims level suddenly accelerated above 300,000. There was no supporting evidence that explained the increase, but we assumed that it must have been the result of increased layoff activities in the oil and gas sector
The trade deficit widened to $46.60 billion in December from a downwardly revised $39.8 billion ($39.0 billion) in November while the consensus expected a decrease to $38.00 billion
According to the advance fourth quarter GDP report, the BEA assumed that the trade deficit would widen in December to roughly $45.00 billion. Not only did the December deficit exceed those expectations but inclusion of the downside November revisions means that the trade deficit will subtract more from GDP growth in the second estimate than it did in the advance release
Nonfarm labor productivity declined 1.8% in the fourth quarter after increasing an upwardly revised 3.7% (from 2.3%) in Q3 2014 while the Briefing.com consensus expected an increase of 0.2%
Unit labor costs increased 2.7% in the fourth quarter after declining in both the second and third quarters. The increase resulted from a 0.9% jump in hourly compensation coupled with lower output gain
The Challenger Job Cuts report for January indicated a 17.6% increase to follow the prior rise of 6.6%
Tomorrow, the Nonfarm Payrolls report for January will be released at 8:30 ET (Briefing.com consensus 235K) while the Consumer Credit report for December will cross at 15:00 ET (consensus $15.00 billion).
Nasdaq Composite +0.6% YTD
Dow Jones Industrial Average +0.4% YTD
Russell 2000 +0.3% YTD
S&P 500 +0.2% YTD
DJ30 +211.86 NASDAQ +48.39 SP500 +21.01 NASDAQ Adv/Vol/Dec 2080/1.89 bln/733 NYSE Adv/Vol/Dec 2375/776.4 mln/754 3:40 pm :
Oil was at it again today, which was driven by a few catalysts including rising violence in Libya and a declining dollar
Mar crude oil rallied today as high as $52.10/barrel and closed pit trading $2.03 higher at $50.47/barrel
Nat gas was in the red all morning/afternoon and closed $0.06 lower at $2.60/MMBtu
Apr gold lost $1.60 to $1263/oz and Mar silver fell $0.22 to $17.19/oz
Mar copper futures climb slowly higher today off its low and ended $0.01 higher at $2.60/lb
5:31 pm Silicon Image beats by $0.02, beats on revs; note: co previously announced it's being acquired by LSCC (SIMG) : Reports Q4 (Dec) earnings of $0.09 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.07; revenues rose 8.6% year/year to $66.6 mln vs the $63.7 mln consensus.
Note, on Jan 26, co announced it agreed to be acquired by Lattice Semiconductor (LSCC) for $7.30 per share in cash. The deal has been unanimously approved by the boards of directors of both companies and is expected to close by the end of March 2015. Due to the pending acquisition, co will not provide Q1 guidance.
5:00 pm Riverbed Technology: Brocade (BRCD) announces its intent to acquire the assets of Riverbed Technology's SteelApp business in all cash transaction; terms not disclosed (RVBD) :
4:36 pm Sierra Wireless beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs above consensus (SWIR) : Reports Q4 (Dec) earnings of $0.29 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.26; revenues rose 25.7% year/year to $149.1 mln vs the $146.82 mln consensus.
4:30 pm Amtech Systems misses by $0.26, misses on revs; guides Q2 revs above consensus (ASYS) : Reports Q1 (Dec) loss of $0.53 per share, $0.26 worse than the Capital IQ Consensus Estimate of ($0.27); revenues fell 16.0% year/year to $12.4 mln vs the $14.4 mln consensus.
Customer orders in the first quarter of fiscal 2015 were $30.0 million, up from orders of $9.8 million in the first quarter of fiscal 2014.
At December 31, 2014, the Company's total order backlog was $48.3 million, compared to total backlog of $28.5 million at September 30, 2014.
Gross margin in the first quarter of fiscal 2015 was 28%, compared to 31% in the first quarter of fiscal 2014.
Co issues upside guidance for Q2, sees Q2 revs of $24-26 mln vs. $22.12 mln Capital IQ Consensus Estimate. Gross margin in that quarter is expected to be in the low 20s percent range, negatively influenced by anticipated revenue deferrals. Operating margin for the quarter ending March 31, 2015, is expected to be negative, but improved from the quarter ended December 31, 2014. For the second half of fiscal 2015 the company expects gross margins to migrate to the low 30's percent range and to positive operating margins
4:22 pm Brooks Automation beats by $0.02, misses on revs; guides Q2 EPS below consensus, revs below consensus (BRKS) : Reports Q1 (Dec) earnings of $0.08 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.06; revenues rose 4.8% year/year to $122.7 mln vs the $127.63 mln consensus.
Co issues downside guidance for Q2, sees EPS of $0.04-0.06 vs. $0.11 Capital IQ Consensus Estimate; sees Q2 revs of $130-135 mln vs. $136.95 mln Capital IQ Consensus Estimate.
4:19 pm Axcelis Tech beats by $0.03, beats on revs (ACLS) : Reports Q4 (Dec) net of breakeven, $0.03 better than the Capital IQ Consensus Estimate of ($0.03); revenues rose 6.7% year/year to $62.5 mln vs the $51.6 mln consensus. System sales of $29.9 million, a 254% increase over the third quarter.
4:13 pm ON Semiconductor beats by $0.01, reports revs in-line; guides Q1 rev midpoint above consensus (ONNN) :
Reports Q4 (Dec) earnings of $0.17 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.16; revenues rose 20.4% year/year to $864.2 mln vs the $856.04 mln consensus.
Co issues upside guidance for Q1, sees Q1 revs of $840-880 mln vs. $840.21 mln Capital IQ Consensus Estimate.
"We are off to a solid start in 2015 with improving order rates and a favorable macro-economic backdrop. Our strategy of focusing our investments in automotive, industrial, and smartphone end-markets is showing strong results with solid revenue growth and growing design win pipeline. Our acquisitions of Truesense and Aptina should further accelerate our momentum in 2015 in automotive and industrial markets. With a strong outlook for our business, we should be able to achieve our free cash target of $300 million to $400 million in the current year. We intend to deploy most of the free cash generated in 2015 for share repurchase in accordance with our recently announced capital allocation policy."
4:06 pm Amtech Systems announces $12 million in orders in January 2015, including $10 million of solar orders from China and Japan for diffusion, PECVD, and Ion Implant Systems (ASYS) : Co announced that in the month of January, it has received approximately $12 million in orders, including $10 million in orders for its solar diffusion, PECVD and ion implant systems.
The solar orders come from leading cell and module manufacturers in China and Japan and are expected to ship within the next three to nine months.For the first four months of fiscal 2015 orders total $42 million, including $31 million in solar orders.
4:02 pm Ultra Clean Holdings announces acquisition of Marchi Thermal Systems for purchase price of ~$43.6 million; transaction to be accretive to earnings immediately following the close of the transaction (UCTT) : UCT paid a purchase price of approximately $43.6 million.
The transaction signed and closed on February 5, 2015. The consideration consisted of $30 million in cash and 1,437,500 shares of UCT common stock.In conjunction with this acquisition, UCT closed a new $80 million debt facility with East West Bank and City National Bank which UCT used to refinance amounts outstanding under its existing credit facility and fund the cash portion of the purchase price of Marchi. The existing credit facility was terminated.
2:19 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
HSP (87.62 +35.22%): To be acquired by Pfizer (PFE) for $90 per share in cash for a total enterprise value of ~$17 bln
CX (9.8 +11.49%): Reported Q4 revs of $3.8 billion vs $3.9 bln estimate; on a like-to-like basis, operating earnings before other expenses, net in Q4 increased 31% to $443 mln
ORLY (208.75 +8.32%): Beat quarterly EPS by $0.09 ($1.76 vs $1.67 estimate), revs rose 8.8% yoy to $1.76 bln vs $1.74 bln estimate; Q4 same store comps +6.3%; sees Q1 EPS of $1.89-1.93 vs $1.87 estimate; sees FY15 EPS of 8.20-8.30 vs $8.33 estimate, revs of $7.60-7.80 bln vs $7.68 bln estimate
Large Cap Losers
PRU (75.15 -5.93%): Missed quarterly EPS by $0.25 ($2.12 ex items vs $2.37 estimate), revs $15.83 bln
FOXA (32.82 -5.32%): Beat quarterly EPS by $0.12 ($0.53 ex items vs $0.41 estimate), revs fell 1.3% yoy to $8.05 bln vs $7.35 bln estimate; target lowered to $41 from $43 at Topeka Capital Markets; downgraded to Market Perform from Outperform at FBR Capital, target lowered to $36 from $43; initiated with a Sell at Rosenblatt, target $30
ADS (279.7 -4.32%): Beat quarterly EPS by $0.13 ($3.45 ex items vs $3.32 estimate), revsrose 30.2% yoy to $1.49 bln vs $1.49 bln estimate; sees Q1 EPS of $3.40 vs $3.48 estimate, revs of $1.54 bln vs $1.55 bln estimate; sees FY15 EPS of $14.80 vs $14.94 estimate, revs of $6.5 bln vs $6.61 bln estimate
Mid Cap Gainers
DATA (98 +16.38%): Beat quarterly EPS by $0.31 ($0.42 vs $0.11 estimate), revs rose 75.3% yoy to $142.9 mln vs $122.58 mln estimate; sees Q1 EPS of -$0.06 to -$0.02 vs -$0.03 estimate, revs of $110-115 mln vs $107.2 mln estimate; sees FY15 EPS of $0.13-0.23 vs $0.23 estimate, revs of $565-580 mln vs $554.6 mln estimate; target raised at UBS, FBN, Cowen, Jefferies, RBC Capital Markets
GRA (102.96 +13.01%): Beat quarterly EPS by $0.12 ($1.37 ex items vs $1.25 estimate), revs rose 3.5% yoy to $804.1 mln vs $839.52 mln estimate; sees FY15 EPS of $5.05-5.45 vs $5.06 estimate
CEB (79.05 +11.84%): Beat quarterly EPS by $0.24 ($1.27 ex items vs $1.03 estimate), revs rose 7.5% yoy to $240.1 mln vs $248.11 mln estimate; sees FY15 EPS of $3.55-3.90 vs $3.70 estimate, adjusted revs of $960-985 mln vs $1 bln estimate
Mid Cap Losers
TDC (41.98 -10.64%): Beat quarterly EPS by $0.01 ($0.91 ex items vs $0.90 estimate, revs rose 0.3% yoy to $761 mln vs $778.2 mln estimate; sees FY15 EPS of $2.50-2.70 ex items vs $2.99 estimate, revs flat to -2% (~$2.38-2.73 bln) vs $2.83 bln estimate
DFT (33.8 -8.23%): Reported Q4 FFO fo $0.62 (in-line), revs rose 8.7% yoy to $108 mln vs $106.66 mln estimate; sees Q1 FFO of $0.59-0.63 per share vs $0.63 estimate; sees FY15 FFO of $2.27-2.47 per share vs $2.57 estimate
FEIC (79.91 -7.46%): Missed quarterly EPS by $0.02 ($0.98 vs $1.00 estimate), revs flat at $265.3 mln; co sees Q1 revs of $215-230 mln vs $250.37 mln estimate; target lowered to $90 from $100 at Stifel
11:38 am Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (174) outpacing new lows (41) (:SCANX) : Stocks that traded to 52 week highs: ABMD, ADVS, AET, AKRX, ALV, AMPH, AMWD, APD, ARMK, ASH, AWH, BAM, BCC, BCE, BERY, BIIB, BIP, BLL, BOOT, BR, BRCM, BRKS, BURL, CACC, CBL, CDK, CEB, CERU, CEVA, CHH, CHL, CHRS, CHTR, CI, CNC, COMM, COR, COTY, CPB, CPF, CRUS, CSGS, CTCT, CXE, DIS, DLPH, DLTR, DLX, DNBF, DOX, DST, EBSB, EIO, EL, ENH, EQY, ESPR, ETFC, EXPO, FBP, FCE.A, FISV, FLEX, FLWS, FTR, G, GEO, GFF, GIB, GK, GPK, GPN, HAE, HAR, HCC, HCSG, HD, HELE, HII, HRB, HSP, HZO, IART, IBCA, IBKR, IPHS, ISBC, ITG, JMM, JOUT, KIRK, KR, KRFT, KSS, LAMR, LBY, LII, LM, LOW, MANT, MATX, MCY, MD, MENT, MHFI, MHLD, MIK, MKL, MKTX, MMS, MMV, MNK, MRGE, MSCI, MSG, MTD, MYD, NAVG, NICE, NOC, NOW, NQM, NYV, OCR, OPK, ORLY, PBH, PDT, PETM, PFPT, PGZ, PLAY, PTP, PZZA, QTS, RE, RHI, RHP, ROP, RTEC, SABR, SBH, SBUX, SEIC, SIMO, SIRI, SIX, SLGN, SMG, SMRT, SNA, SNE, SON, SRC, SSS, TARO, TNET, TRK, TSO, TSRA, TW, TYL, UA, UHAL, UNFI, V, VIAS, VKI, VMC, WETF, WOOD, WSM, ZBRA, ZLTQ
Stocks that traded to 52 week lows: ADEP, AI, ARUN, AXE, BAK, BIOS, BOX, CBLI, CRRS, DRWI, FXEN, GEOS, HAYN, HWCC, ICA, IRBT, IVAC, LFVN, LTRX, LXFR, MPV, NAV, NKA, NSPR, NWY, ONTX, OPXA, PANL, PLM, PMFG, POWL, PRU, PRXI, QUIK, RELV, RGSE, RL, SLTC, SYMX, WILN, WSTL
ETFs that traded to 52 week highs: IHI, MDY, PPA, RTH, XLY
ETFs that traded to 52 week lows: COW, UNG
9:02 am Ultratech misses by $0.08, beats on revs (UTEK) : Reports Q4 (Dec) loss of $0.06 per share, $0.08 worse than the Capital IQ Consensus Estimate of $0.02; revenues rose 101.2% year/year to $48.3 mln vs the $45.3 mln consensus.
2:25 am NXP Semi beats by $0.03, beats on revs; guides Q1 EPS above consensus, revs in-line (NXPI) : Reports Q4 (Dec) earnings of $1.35 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $1.32; revenues rose 18.9% year/year to $1.54 bln vs the $1.51 bln consensus. Co issues mixed guidance for Q1, sees EPS of $1.25-1.35, excluding non-recurring items, vs. $1.22 Capital IQ Consensus Estimate; sees Q1 revs of $1.41-1.47 bln vs. $1.45 bln Capital IQ Consensus Estimate.
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