From Briefing.com: It was a mixed day of trading on Tuesday, which featured the outperformance of the health care sector and the semiconductor stocks, but little else. The broader market spent its time fluttering above and below the unchanged mark before finally settling with a small decline.
Buying efforts were impeded by increasing noise in the echo chamber regarding Greece's perilous financial condition and batch of earnings reports from blue-chip companies that was long on EPS surprises but short on revenue increases.
IBM (IBM 164.26, -1.90, -1.1%) found itself in that grouping, having topped first quarter EPS expectations by a comfortable margin despite a 12% decline in revenue.
News that Teva Pharmaceutical (TEVA 64.16, +0.87, +1.3%) made an $82 per share cash and stock offer for Mylan (MYL 74.11, +6.07, +8.5%) underpinned the health care sector while better-than-expected earnings results and guidance from Lam Research (LRCX 77.87, +5.88, +8.3%) pushed up a number of related semiconductor stocks.
The S&P 500 information technology sector (-0.1%) suffered a negligible decline, with a drop in Apple (AAPL 126.91, -0.69, -0.5%) holding things back.
Notable news items from sector components included the following:
Broadcom (BRCM 43.98, +0.36, +0.8%): After Tuesday's close, reported Q1 (Mar) earnings of $0.64 per share, excluding non-recurring items, which was ahead of analysts' average expectation. Revenues rose 3.7% year/year to $2.06 bln, also ahead of estimates. For Q2, sees revenues of $2.025-2.175 bln and non-GAAP Gross Margin in the range of 55.25-56.75%.
Corning (GLW 22.61, -0.07, -0.3%): There were reports that the next Apple or Samsung smartphones may contain Corning glass products.
Harris (HRS 81.93, +2.63, +3.3%): Company said it sees Q3 (Mar) adjusted EPS of $1.32, which is ahead of analysts' average expectation, and revenues of $1.19 bln, which is shy of analyst' average estimate. For FY15 (Jun), raises adjusted EPS to $5.00-5.10 from $4.95-5.05. FY15 (Jun) revenues are expected to decline 4% versus prior guidance for a decline of 1-3%.
Hewlett-Packard (HPQ 33.21, -0.20, -0.6%): Company and FireEye, Inc. (FEYE 43.49, +1.06, +2.5%) announced a first of its kind, go-to-market partnership to make incident response, compromise assessment and threat detection offerings available to HP Enterprise Services' most strategic clients globally. Together, HP Enterprise Services and FireEye will jointly go to market with these offerings. Separately, Hewlett-Packard confirmed it will divest Snapfish to District Photo; terms not disclosed
IBM (IBM 164.26, -1.90, -1.1%): Announced it is bringing its market-leading Security Intelligence technology, IBM QRadar, to the cloud. The new services are available to clients through a cloud-based Software as a Service (SaaS) model, with optional IBM Security Managed Services to provide deeper expertise and flexibility for security professionals.
Red Hat (RHT 75.20, +0.76, +1.0%): Introduced a new business resource planner as part of the latest releases of Red Hat JBoss BPM Suite and Red Hat JBoss BRMS. The planner, is based on the open source OptaPlanner JBoss community project.
Teradata (TDC 43.45, +0.30, +0.7%): Company and the Ural Federal University in Russia announced the delivery and deployment of the Teradata Aster Big Analytics Appliance 3H. The company also announced that LCL, a retail bank and subsidiary of Groupe Credit Agricole SA, has selected the Teradata Data Warehouse Appliance and associated software as the cornerstone of its data warehouse project and the enabler of its migration to big data analytics. The company further announced that Yodel, the UK parcel carrier, is overhauling its data management strategy using Teradata's data solutions
Yahoo! (YHOO 44.49, -0.16, -0.4%): After Tuesday's close, reported Q1 (Mar) earnings of $0.15 per share, which was shy of analysts' average expectation. Revenues fell 4.0% year/year to $1.04 bln, which was also below expectations. Company said it repurchased ~4 million shares of its common stock for $204 million and satisfied the $3.3 billion income tax liability related to the sale of Alibaba Group ADSs in 2014. Cash, cash equivalents, and marketable securities were $6.9 billion as of March 31, 2015
Elsewhere in the technology space:
ADTRAN (ADTN 18.53, +0.26, +1.4%): Announced Nouveau Solutions is using ADTRAN ProCloud service to transition to a managed service provider model. Applied Micro Circuits Corporation (AMCC 5.15, -0.10, -1.9%): Company and E4 Computer Engineering SpA announced a collaboration to develop E4's new product series, the ARKA RK003.
BlackBerry (BBRY 10.03, +0.02, +0.2%): Company announced it will acquire WatchDox to further enhance BlackBerry's mobile security and give enterprises unmatched control over their files even after data leaves the corporate network; financial terms not disclosed
Celestica (CLS 11.94, +0.44, +3.8%): Before Tuesday's open, reported Q1 (Mar) earnings of $0.19 per share, excluding non-recurring items, which was shy of analysts' average estimate but within prior guidance of $0.18-0.24. Revenues fell 1.1% year/year to $1.30 bln, also shy of estimates and compared to guidance of $1.275-1.375 bln. For Q2, sees EPS of $0.20-0.26, excluding non-recurring items, and revenues of $1.35-1.45 bln. Company also announced an expanded relationship with Honeywell Aerospace.
Fortinet (FTNT 38.08, +3.45, +10.0%): Reported Q1 (Mar) earnings of $0.08 per share, excluding non-recurring items, which was ahead of analysts' average expectation. Total revenue was $212.9 mln, up 26% year/year. Sees Q2 EPS $0.08-0.09 and revenues of $224-228 mln. Raises FY15 EPS guidance to $0.51-0.52 from $0.49-0.50 and revenues to $935-940 mln from $915-925 mln. Both estimate ranges are ahead of analysts' average expectations.
JDSU (JDSU 13.35, +0.04, +0.3%): Announced that it has signed an exclusive distribution agreement with Laser 2000 GmbH, a optical solutions provider of almost 30 years, based in Munich, Germany, to provide its kW class fiber laser and kW class direct-diode laser products throughout Europe.
SAP AG (SAP 74.14, +1.82, +2.5%): Before Tuesday's open, reported Q1 (Mar) earnings of 0.58 per share, which was shy of analysts' average expectation. Revenues rose 21.7% year/year to 4.5 bln, which was ahead of estimates. The Company expects full-year 2015 non-IFRS operating profit to be in a range of 5.6 billion - 5.9 billion at constant currencies (2014: 5.64 billion)
Twitter (TWTR 51.32, -0.08, -0.2%): re/code details news that Twitter has begun selling sports tickets in tweets.
Workday (WDAY 86.02, -0.09, -0.1%): Announced that Northern & Shell, a magazine and newspaper publisher in the United Kingdom, has selected Workday Financial Management.
Analyst Action:
Check Point Software (CHKP 86.69, +0.81, +0.9%): target raised to $91 from $83 at RBC Capital Markets; Sector Perform
Facebook (FB 83.62, +0.53, +0.6%): initiated with a Buy at Cleveland Research; target $100
Fortinet (FTNT 38.15, +3.42, +10.0%) target raised to $44 from $39 at FBR Capital... target raised to $43 from $40 at Northland Capital; Outperform... target raised to $45 from $33 at Deutsche Bank... target raised to $43 from $38 at Nomura... target raised to $45 from $38 at Piper Jaffray... target raised to $43 from $37 at UBS; Buy
IBM (IBM 164.26, -1.90, -1.1%): target raised to $170 from $160 at UBS; maintain Neutral
Lam Research (LRCX 77.84, +5.85, +8.1%): target lowered to $76 from $82 at RBC Capital Mkts; Sector Perform... target raised to $95 from $93 at Needham... target raised to $105 from $102 at Credit Suisse.. target raised to $95 from $88 at JP Morgan... target raised to $100 from $95 at Deutsche Bank; Buy
Paychex (PAYX 49.06, +0.08, +0.2%): upgraded to Neutral from Underweight at JP Morgan(Disclosure: Briefing.com has a business relationship with Yahoo!)
4:10 pm Yahoo! misses by $0.03, misses on revs (YHOO) : Reports Q1 (Mar) earnings of $0.15 per share, $0.03 worse than the Capital IQ Consensus Estimate of $0.18; revenues fell 4.0% year/year to $1.04 bln vs the $1.05 bln consensus.
"This quarter, we saw encouraging revenue growth of 8%, with display revenue growing a modest 2% and search growing 20% on a GAAP basis. Our mobile GAAP revenue reached $234 million in Q1, growing 61% year-over-year." Yahoo repurchased ~4 million shares of its common stock for $204 million and satisfied the $3.3 billion income tax liability related to the sale of Alibaba Group ADSs in 2014.Cash, cash equivalents, and marketable securities were $6.9 billion as of March 31, 2015
4:08 pm Super Micro Computer misses by $0.02, reports revs in-line; guides Q4 EPS midpoint below consensus, revs in-line (SMCI) : Reports Q3 (Mar) earnings of $0.47 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.49; revenues rose 26.1% year/year to $471.2 mln vs the $475.88 mln consensus.
Co issues guidance for Q4, sees EPS of $0.53-0.62 vs. $0.62 Capital IQ Consensus Estimate; sees Q4 revs of $510-560 mln vs. $543.75 mln Capital IQ Consensus Estimate.Non-GAAP gross margin for the third quarter was 16.3% compared to 15.4% in the same period a year ago.
4:07 pm Broadcom beats by $0.04, beats on revs; guides Q2 revs in-line (BRCM) : Reports Q1 (Mar) earnings of $0.64 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.60; revenues rose 3.7% year/year to $2.06 bln vs the $2.01 bln consensus. Co issues in-line guidance for Q2, sees Q2 revs of $2.025-2.175 bln vs. $2.07 bln Capital IQ Consensus Estimate. Sees Non-GAAP Gross Margin in the range of 55.25-56.75%.
4:06 pm CalAmp beats by $0.04, beats on revs; guides Q1 EPS in-line, revs below consensus (CAMP) : Reports Q4 (Feb) earnings of $0.32 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.28; revenues rose 15.6% year/year to $69.2 mln vs the $67.77 mln consensus.
Co issues guidance for Q1, sees EPS of $0.24-0.28, excluding non-recurring items, vs. $0.26 Capital IQ Consensus Estimate; sees Q1 revs of $63-67 mln vs. $67.80 mln Capital IQ Consensus Estimate.
4:06 pm Cree misses by $0.01, beats on revs; guides Q4 EPS below consensus, revs in-line (CREE) : Reports Q3 (Mar) earnings of $0.22 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.23; revenues rose 1.0% year/year to $409.5 mln vs the $405.05 mln consensus.
Gross margin decreased 250 basis points from Q2 of fiscal 2015 to 30.6% on a GAAP basis, and decreased 250 basis points to 31.4% on a non-GAAP basis.
Inventory decreased by $33.2 million from Q2 of fiscal 2015 to $299.4 million and represents 95 days of inventory.
Guidance: Co issues mixed guidance for Q4, sees EPS of $0.24-$0.28 vs. $0.29 Capital IQ Consensus Estimate; sees Q4 revs of $420-$440 mln vs. $436.02 mln Capital IQ Consensus Estimate.
Sees Non GAAP gross margin of 32.0% +/- . Operating expenses are targeted to increase $5 million compared to fiscal Q3.
4:10 pm : The stock market ended Tuesday on a mixed note with the Dow and S&P 500 losing 0.5% and 0.2%, respectively, while the Nasdaq Composite (+0.4%) outperformed.
Today's session was relatively quiet as equity indices diverged during the opening hour of action and maintained narrow ranges into the afternoon. The S&P 500 opened with a nine-point gain, but was back near its flat line before the opening hour ended.
For its part, the Nasdaq spent the day near its early high thanks to solid gains among biotech names after Teva Pharmaceutical (TEVA 64.14, +0.85) offered to acquire Mylan (MYL 74.11, +6.06) for $82.00/share in cash and stock. The two names posted respective gains of 1.3% and 8.9% while the iShares Nasdaq Biotechnology ETF (IBB 364.50, +6.55) settled higher by 1.8%. Furthermore, the health care sector advanced 0.7% and was the only sector with a gain larger than 0.1%.
Meanwhile, the consumer discretionary space (+0.1%) was the second-best performer with homebuilders showing broad strength. DR Horton (DHI 28.53, +0.49) jumped 1.8% ahead of tomorrow's earnings report while the broader iShares Dow Jones US Home Construction ETF (ITB 27.87, +0.39) gained 1.4%. On the earnings front, Under Armour (UA 83.54, -4.22) tumbled 4.8% after reporting in-line results and guiding below analyst expectations.
In other earnings, four Dow components delivered bottom-line beats since yesterday, but only one-Travelers (TRV 101.88, -4.26)-showed year-over-year revenue growth while United Technologies (UTX 116.95, +0.44), DuPont (DD 70.69, -2.15), and IBM (IBM 164.26, -1.90) saw their top lines contract.
Overall, cyclical sectors were responsible for the slide from opening highs with four of six growth-sensitive groups registering larger losses than the S&P 500. The energy sector (-1.0%) finished at the bottom while crude oil fell 2.3% to $56.58/bbl. The dollar was not a big factor today as the Dollar Index (97.96, +0.02) surrendered its modest overnight gain during morning action.
Elsewhere among cyclical groups, financials (-0.5%) and industrials (-0.2%) lagged with the latter pressured by General Electric (GE 26.62, -0.40). The conglomerate surrendered 1.5% while transport stocks overcame their early weakness. The Dow Jones Transportation Average added 0.3% even though Kansas City Southern (KSU 105.17, -2.20) lost 2.1% after missing bottom-line estimates.
Treasuries ended on their lows after sliding from their overnight highs, sending the 10-yr yield up two basis points to 1.91%.
Today's participation was relatively light with fewer than 700 million shares changing hands at the NYSE floor.
Investors did not receive any economic data today, but tomorrow's session will include the 7:00 ET release of the weekly MBA Mortgage Index, February FHFA Housing Price Index at 9:00 ET, and the Existing Home Sales report for March at 10:00 ET (Briefing.com consensus 5.05 million).
Nasdaq Composite +5.9% YTD
Russell 2000 +4.9% YTD
S&P 500 +1.9% YTD
Dow Jones Industrial Average +0.7% YTD
DJ30 -85.34 NASDAQ +19.50 SP500 -3.11 NASDAQ Adv/Vol/Dec 1454/1.59 bln/1414 NYSE Adv/Vol/Dec 1530/674.4 mln/1526
3:40 pm :
The dollar index is back near the flat line in afternoon trade
WTI crude oil sold off in afternoon trade, but held above the $56/area
June crude finished the day $0.03 lower at $57.88/barrel
May nat gas gained $0.04 to $2.58/MMBtu
Gold held above $1200/oz.. ending +$9.5 at $1203.00/oz, while May silver ended $0.11 higher at $16.00/oz
12:59 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
MYL (74.75 +9.85%): Teva Pharma (TEVA) proposed to acquire Mylan for $82.00 per share in cash and stock.
LRCX (77 +6.96%): Beat Q3 consensus EPS estimates by $0.10, beat on revs; guided Q4 revs above consensus; Price tgt raised at Cowen, Needham, Credit Suisse, others.
ARMH (53.68 +4.54%): Reported Q1 (Mar) earnings of GBP0.07 per share, in-line with the Capital IQ Consensus Estimate of GBP0.07; revenues rose 21.9% year/year to GBP227.5 mln vs the GBP224.2 mln consensus; Price tgt raised at Topeka Capital Mkts.
Large Cap Losers
HOG (56.42 -8.67%): Beat Q1 consensus EPS estimates by $0.03, missed on revs; lowered FY15 shipment guidance, reaffirmed margin guidance.
UA (83.73 -4.59%): Reported Q1 EPS in-line, revs in-line; raised 2015 outlook, which is still below estimates.
BAM (55.46 -4.11%): Priced a secondary offering of 17.9 million shares at $56/share.
Mid Cap Gainers
ATI (34.01 +12.24%): Reported Q1 (Mar) earnings of $0.09 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.08; revenues rose 14.0% year/year to $1.13 bln vs the $1.08 bln consensus.
FTNT (37.78 +9.1%): Reported Q1 (Mar) earnings of $0.08 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.06. Total revenue was $212.9 mln, up 26% year/year; Issues mixed Q2 guidance, raised FY15 guidance; Price tgt raised at FBR Capital, RBC Capital Mkts, others.
WUBA (73.03 +5.06%): Upgraded to Outperform from Neutral at Credit Suisse.
Mid Cap Losers
PKG (70.19 -8.87%): Reported Q1 (Mar) earnings of $1.01 per share, excluding non-recurring items, $0.07 worse than the Capital IQ Consensus Estimate of $1.08; revenues fell 0.4% year/year to $1.43 bln vs the $1.44 bln consensus.
TCK (13.07 -5.5%): Reported Q1 (Mar) earnings of CAD $0.11 per share, CAD $0.06 worse than the Capital IQ Consensus Estimate of CAD $0.17; revenues fell 2.9% year/year to CAD $2.02 bln vs the CC$2.06 bln consensus.
RLI (48.73 -4.45%): Reported Q1 (Mar) operating earnings of $0.50 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.52; revenues rose 8.1% year/year to $195.8 mln vs the $186.9 mln consensus.
12:39 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (148) outpacing new lows (32) (:SCANX) : Stocks that traded to 52 week highs: ABG, ABTL, ACIW, ADRA, ADUS, AEL, AHS, AKAM, AKRX, ALNY, ALSK, ALV, AMG, AMOT, AMZN, ARIA, ASTE, ATRA, BABY, BBNK, BDC, BLKB, BLUE, BRKL, CAJ, CBYL, CEA, CHKP, CHL, CHU, CISG, CMT, CRI, CUBI, DCM, DDC, DIS, DST, DVA, DXCM, DXJS, EBSB, ECF, ECHO, ELY, ERI, EURN, EWBC, FDP, FLKS, FMD, FTNT, GMAN, GNE, GOGO, GPN, GWPH, HAS, HF, HIFS, HILL, HNI, HRC, HXL, HZNP, IMAX, INCY, INSM, IPCM, ISBC, ISCA, ISRG, ITG, JBSS, JOF, KEN, LAD, LAZ, LBY, LEA, LGND, LNBB, LXFT, LYTS, MACK, MAN, MANH, MCO, MCRI, MHF, MLNX, MTG, MTU, MYCC, MYL, NAP, NHTB, NOAH, NPD, NTT, NVO, NVS, NYCB, PAG, PANW, PETS, PFBC, PMD, PNFP, QQQC, QQXT, QTM, QUNR, RDN, RDWR, SBNY, SCAI, SCHL, SCI, SCMP, SEIC, SIRO, SKX, SORL, STBZ, SYUT, TAST, TECH, THRM, TLMR, TNP, TRK, TSE, TSRO, TWOU, TYPE, UFI, USCR, UWN, VIMC, VLRS, VLTC, WAL, WBC, WINA, WOOF, WUBA, ZBRA
Stocks that traded to 52 week lows: ACTG, AKAO, ATL, BDR, BPTH, CPTA, ELTK, FNJN, FREE, FTEK, HGT, HTR, INVT, IPDN, ITEK, KOF, LTRE, MNI, NVTA, PAR, PBMD, PFBX, RLJE, RLOC, SCON, SIF, STRI, STRM, UCTT, WPCS, WPG, XGTI
ETFs that traded to 52 week highs: EWJ, PPH
ETFs that traded to 52 week lows: DBA, EGPT, FUD, GREK, VXX
7:49 am Arch Coal misses by $0.04, misses on revs (ACI) : Reports Q1 (Mar) loss of $0.54 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus Estimate of ($0.50); revenues fell 8.0% year/year to $677 mln vs the $731.7 mln consensus.
Quarterly Adj. EBITDA increases threefold versus the prior-year quarterArch's first quarter cash margin per ton expands 12% versus the prior quarterStrong operational quarter drives down Appalachian 2015 cost-per-ton guidanceAs of March 31, 2015, Arch had available liquidity of $1.1 bln, including cash and short-term investments of $939 mln and undrawn borrowings on its credit facilities. "We are focused on managing our available liquidity through these difficult conditions," said John T. Drexler, Arch's senior vice president and chief financial officer.Arch now expects thermal sales volumes for 2015 to be in the range of 120-130 mln tons.The co has lowered its metallurgical coal sales guidance, and now expects to ship between 6.0-6.8 mln tons for 2015.Using this revised volume guidance, Arch is more than 95% committed on thermal sales and 75% committed on metallurgical sales for the full year.7:07 am Celestica misses by $0.03, misses on revs; guides Q2 EPS in-line, revs in-line; co intends to commence up to $350 mln substantial issuer bid (CLS) : Reports Q1 (Mar) earnings of $0.19 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus Estimate of $0.22 but within prior guidance of $0.18-0.24; revenues fell 1.1% year/year to $1.30 bln vs the $1.33 bln consensus and vs guidance of $1.275-1.375 bln. Co issues in-line guidance for Q2, sees EPS of $0.20-0.26, excluding non-recurring items, vs. $0.26 Capital IQ Consensus Estimate; sees Q2 revs of $1.35-1.45 bln vs. $1.45 bln Capital IQ Consensus Estimate.
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