From Briefing.com: Riding the momentum of Friday's broad-based rally and gains in foreign equity markets to begin the week, the U.S. stock market strung together some additional gains on Monday.
The advance was led by the financials sector (+1.0%), which has been one of the biggest laggards year-to-date.
The S&P 500 information technology sector (unchanged) trailed behind the 0.3% gain registered by the S&P 500 as a relatively weak showing from Apple (AAPL 128.73, -0.22, -0.2%), Microsoft (MSFT 48.25, -0.40, -0.8%), and a number of semiconductor-related stocks, like Altera (ALTR 45.00, -0.76, -1.7%), Applied Materials (AMAT 19.87, -11, -0.5%), and Micron (MU 28.67, -0.32, -1.1%), weighed on matters.
Notable news items from sector components included the following:
Cisco Systems (CSCO 29.18, +0.05, +0.2%): Company announced that its Board of Directors has appointed Chuck Robbins as Chief Executive Officer, replacing John Chambers, effective July 26, 2015. Robbins was also elected to the Board of Directors of Cisco, effective May 1, 2015. Robbins joined Cisco in 1997 and most recently served as Cisco's senior vice president of worldwide operations. John Chambers will assume the role of Executive Chairman on July 26, 2015, and will continue to serve as the Chairman of Cisco's Board.
Cognizant Technology Solutions (CTSH 62.76, +3.62, +6.1%): Reported Q1 (Mar) earnings of $0.71 per share, which was ahead of analysts' average expectation. Revenues rose 23.5% year/year to $2.99 bln, also ahead of estimates. For Q2, sees EPS of at least $0.72 and revenues of at least $3.01 billion. For FY15, raises EPS to at least $2.93 from at least $2.91 and revenues to at least $12.24 billion from at least $12.21 billion. Company said, "Our strong revenue performance this quarter versus our guidance was driven primarily by organic growth of our core businesses and is a reflection that our strategy and offerings are resonating with our clients."
Google (GOOG 540.79, +2.89, +0.5%): TimeFul will be joining GOOG; terms not disclosed
Hewlett-Packard (HPQ 33.65, -0.15, -0.4%): Aruba Networks disclosed recent clearances regarding planned merger with Hewlett-Packard; subject to remaining conditions, merger is expected to close in 2Q2015. On April 28, 2015, the Federal Cartel Office cleared the Merger under the Act against Restraints of Competition in Germany. On April 29, 2015, the Federal Competition Authority and the Federal Cartel Prosecutor cleared the Merger under the Austrian Cartel Act.
IBM (IBM 173.97, +0.30, +0.2%): Warren Buffett added to his position during Q1
Intuit (INTU 101.29, +0.70, +0.7%): Announced it is investing in a new $100 million fund that will let small businesses use their QuickBooks Online data to access low-rate loan offers. The fund will include investment from Intuit and third parties.
Jabil Circuit (JBL 23.32, +0.36, +1.6%): Announced it will be a supplier of solutions based on Intel Reference Designs; including the Intel IoT Retail Gateway
Salesforce.com (CRM 71.60, -1.76, -2.4%): According to a Bloomberg report, which cited people familiar with the matter, SAP and CRM CEOs held discussions last year regarding a potential strategic alliance or acquisition of CRM by SAP. The same article, however, quoted a SAP spokeswoman as saying there is no truth whatsoever to the suggestion of SAP considering or having considered an acquisition of Salesforce.
Seagate Tech (STX 59.22, -0.41, -0.7%): Company announced it will combine its Cloud Systems and Solutions group and Electronic Solutions group to further align its full breadth of enterprise storage hardware capabilities.
Elsewhere in the technology space:
Agilent (A 41.94, +0.11, +0.3%): To acquire Cartagenia, a provider of software and services for clinical genetics and molecular pathology labs; terms not disclosed
Ciena (CIEN 21.62, +0.33, +1.6%): Announced the acquisition of Cyan (CYNI 4.62, +0.97, +27.4%). Under the terms of the agreement, Ciena will acquire all of the outstanding shares of Cyan in a cash and stock transaction currently valued at approximately $400 million and inclusive of Cyan's outstanding convertible notes on an as-converted basis. In connection with the acquisition, Ciena will assume Cyan's $50 million in outstanding principal amount of 8.0% Convertible Senior Secured Notes due 2019
Lattice Semi (LSCC 6.19, +0.07, +1.1%): After Monday's close, reported Q1 (Mar) earnings of $0.03 per share. Revenues fell 8.3% year/year to $88.6 mln, which was ahead of expectations. Revenue for the second quarter of 2015 is expected to be approximately $120 million plus or minus 3% on a non-GAAP basis, with revenue for the full year 2015 expected to be approximately $485 million plus or minus 3% on a non-GAAP basis.
Qualys (QLYS 55.08. +2.94, +5.6%): After Monday's close, reported Q1 (Mar) earnings of $0.15 per share, which was ahead of analysts' average expectation. Revenues rose 23.5% year/year to $37.49 mln. For Q2, sees EPS of $0.09-0.11 and revenues of $39.5-40 mln. The high end of both guidance ranges is below analysts' average expectation. For FY15, sees EPS of $0.50-0.55 and revenues of $165-166.5 mln. Company said, "While our growth rate for our other products remains unchanged, we project a lower growth rate for our Vulnerability Management business than we did at the beginning of 2015. As a result, we are adjusting Qualys' full year revenue guidance to reflect a mid-point revenue growth rate of 24% instead of 26%. Importantly, our full year earnings guidance remains unchanged, reflecting our expectations that we will be able to effectively manage costs and leverage the strength of our platform."
Teradyne, Inc. (TER 20.28, -0.02, -0.1%): Company and Galaxy Semiconductor Solutions announced they have entered into an OEM agreement to provide an integrated, advanced analysis capability for Teradyne's entire line of semiconductor test equipment
Analyst Action:
Riding the momentum of Friday's broad-based rally and gains in foreign equity markets to begin the week, the U.S. stock market strung together some additional gains on Monday.
The advance was led by the financials sector (+1.0%), which has been one of the biggest laggards year-to-date.
The S&P 500 information technology sector (unchanged) trailed behind the 0.3% gain registered by the S&P 500 as a relatively weak showing from Apple (AAPL 128.73, -0.22, -0.2%), Microsoft (MSFT 48.25, -0.40, -0.8%), and a number of semiconductor-related stocks, like Altera (ALTR 45.00, -0.76, -1.7%), Applied Materials (AMAT 19.87, -11, -0.5%), and Micron (MU 28.67, -0.32, -1.1%), weighed on matters.
Notable news items from sector components included the following:
Cisco Systems (CSCO 29.18, +0.05, +0.2%): Company announced that its Board of Directors has appointed Chuck Robbins as Chief Executive Officer, replacing John Chambers, effective July 26, 2015. Robbins was also elected to the Board of Directors of Cisco, effective May 1, 2015. Robbins joined Cisco in 1997 and most recently served as Cisco's senior vice president of worldwide operations. John Chambers will assume the role of Executive Chairman on July 26, 2015, and will continue to serve as the Chairman of Cisco's Board.
Cognizant Technology Solutions (CTSH 62.76, +3.62, +6.1%): Reported Q1 (Mar) earnings of $0.71 per share, which was ahead of analysts' average expectation. Revenues rose 23.5% year/year to $2.99 bln, also ahead of estimates. For Q2, sees EPS of at least $0.72 and revenues of at least $3.01 billion. For FY15, raises EPS to at least $2.93 from at least $2.91 and revenues to at least $12.24 billion from at least $12.21 billion. Company said, "Our strong revenue performance this quarter versus our guidance was driven primarily by organic growth of our core businesses and is a reflection that our strategy and offerings are resonating with our clients."
Google (GOOG 540.79, +2.89, +0.5%): TimeFul will be joining GOOG; terms not disclosed
Hewlett-Packard (HPQ 33.65, -0.15, -0.4%): Aruba Networks disclosed recent clearances regarding planned merger with Hewlett-Packard; subject to remaining conditions, merger is expected to close in 2Q2015. On April 28, 2015, the Federal Cartel Office cleared the Merger under the Act against Restraints of Competition in Germany. On April 29, 2015, the Federal Competition Authority and the Federal Cartel Prosecutor cleared the Merger under the Austrian Cartel Act.
IBM (IBM 173.97, +0.30, +0.2%): Warren Buffett added to his position during Q1
Intuit (INTU 101.29, +0.70, +0.7%): Announced it is investing in a new $100 million fund that will let small businesses use their QuickBooks Online data to access low-rate loan offers. The fund will include investment from Intuit and third parties.
Jabil Circuit (JBL 23.32, +0.36, +1.6%): Announced it will be a supplier of solutions based on Intel Reference Designs; including the Intel IoT Retail Gateway
Salesforce.com (CRM 71.60, -1.76, -2.4%): According to a Bloomberg report, which cited people familiar with the matter, SAP and CRM CEOs held discussions last year regarding a potential strategic alliance or acquisition of CRM by SAP. The same article, however, quoted a SAP spokeswoman as saying there is no truth whatsoever to the suggestion of SAP considering or having considered an acquisition of Salesforce.
Seagate Tech (STX 59.22, -0.41, -0.7%): Company announced it will combine its Cloud Systems and Solutions group and Electronic Solutions group to further align its full breadth of enterprise storage hardware capabilities.
Elsewhere in the technology space:
Agilent (A 41.94, +0.11, +0.3%): To acquire Cartagenia, a provider of software and services for clinical genetics and molecular pathology labs; terms not disclosed
Ciena (CIEN 21.62, +0.33, +1.6%): Announced the acquisition of Cyan (CYNI 4.62, +0.97, +27.4%). Under the terms of the agreement, Ciena will acquire all of the outstanding shares of Cyan in a cash and stock transaction currently valued at approximately $400 million and inclusive of Cyan's outstanding convertible notes on an as-converted basis. In connection with the acquisition, Ciena will assume Cyan's $50 million in outstanding principal amount of 8.0% Convertible Senior Secured Notes due 2019
Lattice Semi (LSCC 6.19, +0.07, +1.1%): After Monday's close, reported Q1 (Mar) earnings of $0.03 per share. Revenues fell 8.3% year/year to $88.6 mln, which was ahead of expectations. Revenue for the second quarter of 2015 is expected to be approximately $120 million plus or minus 3% on a non-GAAP basis, with revenue for the full year 2015 expected to be approximately $485 million plus or minus 3% on a non-GAAP basis.
Qualys (QLYS 55.08. +2.94, +5.6%): After Monday's close, reported Q1 (Mar) earnings of $0.15 per share, which was ahead of analysts' average expectation. Revenues rose 23.5% year/year to $37.49 mln. For Q2, sees EPS of $0.09-0.11 and revenues of $39.5-40 mln. The high end of both guidance ranges is below analysts' average expectation. For FY15, sees EPS of $0.50-0.55 and revenues of $165-166.5 mln. Company said, "While our growth rate for our other products remains unchanged, we project a lower growth rate for our Vulnerability Management business than we did at the beginning of 2015. As a result, we are adjusting Qualys' full year revenue guidance to reflect a mid-point revenue growth rate of 24% instead of 26%. Importantly, our full year earnings guidance remains unchanged, reflecting our expectations that we will be able to effectively manage costs and leverage the strength of our platform."
Teradyne, Inc. (TER 20.28, -0.02, -0.1%): Company and Galaxy Semiconductor Solutions announced they have entered into an OEM agreement to provide an integrated, advanced analysis capability for Teradyne's entire line of semiconductor test equipment
Analyst Action:
Alibaba (BABA 80.59, -0.58, -0.8%): MKM Partners lowers target to $115 from $125; Buy
Amazon.com (AMZN 423.03, +0.16, +0.3%): Oppenheimer raises target to $525 from $415; Ouperform
Baidu.com (BIDU 203.74, +1.27, +0.7%): upgraded to Buy from Hold at T.H. Capital; target $239
LinkedIn (LNKD 203.42, -1.79, -1.1%): upgraded to Buy from Hold at Argus; target $280
Teradyne (TER 20.28, -0.02, -0.1%): target raised to $26 from $22.50 at UBS; Buy
Twitter (TWTR 37.88, +0.04, +0.1%): Stifel upgrades to Hold from Sell
(Disclosure: Briefing.com has a business relationship with Microsoft)
4:14 pm Luminex beats by $0.10, beats on revs; guides Q2 & FY15 revs in-line (LMNX) : Reports Q1 (Mar) earnings of $0.23 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.13; revenues rose 2.1% year/year to $57.74 mln vs the $56.3 mln consensus.
Co issues in-line guidance for Q2, sees Q2 revs of $56-58 mln vs. $56.04 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY15, sees FY15 revs of $230-236 mln vs. $231.59 mln Capital IQ Consensus Estimate.4:14 pm Advanced Energy beats by $0.14, reports revs in-line; guides Q2 EPS below consensus, revs below consensus (AEIS) : Reports Q1 (Mar) earnings of $0.57 per share, excluding non-recurring items, $0.14 better than the Capital IQ Consensus Estimate of $0.43; revenues rose 0.1% year/year to $141.11 mln vs the $142.03 mln consensus. Co issues downside guidance for Q2, sees EPS of $0.38-0.41, excluding non-recurring items, vs. $0.41 Capital IQ Consensus Estimate; sees Q2 revs of $126-136 mln vs. $145.37 mln Capital IQ Consensus Estimate.
4:11 pm Intevac beats by $0.03, beats on revs (IVAC) : Reports Q1 (Mar) loss of $0.12 per share, $0.03 better than the Capital IQ Consensus Estimate of ($0.15); revenues rose 17.1% year/year to $19.9 mln vs the $18.56 mln consensus. Order backlog totaled $39.2 million on April 4, 2015, compared to $48.4 million on January 3, 2015 and $51.9 million on March 29, 2014.
4:10 pm Ingram Micro misses by $0.01, reports revs in-line; guides Q2 EPS in-line, revs a bit below (IM) : Reports Q1 (Mar) earnings of $0.43 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.44; revenues rose 2.5% year/year to $10.64 bln vs the $10.54 bln consensus. Co issues in-line guidance for Q2, sees EPS of $0.50-0.58, excluding non-recurring items, vs. $0.56 Capital IQ Consensus Estimate. Co sees Q2 YoY revenue growth being relatively flat YoY vs consensus of +4%.
"We experienced healthy demand across our geographic regions. Asia Pacific and Latin America were clear standouts, as strong revenues were complemented by solid increases in profitability. As anticipated, our sales mix in Europe improved over the 2014 fourth quarter, with lower contribution from consumer markets leading to modest year-over-year improvement in the profitability of our European core business. In mobility, we had good growth across all regions, while cloud and supply chain solutions continued to grow at robust rates.""We continue to generate significant revenue momentum as we expand our capabilities globally, including in our higher margin cloud and supply chain solutions, which is an important element of leveraging our customer, vendor and global infrastructure basis to achieve our longer-term financial targets."4:10 pm : The stock market kicked off the new trading week on an upbeat, albeit quiet, note. The Dow and S&P 500 gained 0.3% apiece while the Nasdaq Composite (+0.2%) slipped behind the broader market during afternoon action.
"Quiet" was the general theme on Monday as most global equity markets also posted gains while Japan's Nikkei and UK's FTSE were closed for holidays.
Seven of ten sectors finished in the green with financials (+1.0%) and utilities (+0.7%) ending in the lead. The countercyclical utilities sector lost the lead during the final hour while financials crept higher throughout the day, also overtaking the health care sector (+0.6%) during afternoon action.
Still, the health care space ended ahead of the broader market despite an intraday pullback in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 345.19, +1.19) was up more than 2.0% at the start, but narrowed its advance to 0.4% by the close. Furthermore, the ETF was pressured back below its 50-day moving average (349.00) after spiking above that level at the start.
Turning to the cyclical side, only the financial sector (+1.0%) could finish the day ahead of the S&P 500 while the other five growth-sensitive groups underperformed. The top-weighted technology sector (unch) spent the day behind the broader market with large cap names trading in mixed fashion. To that point, Google (GOOGL 552.84, +1.68) and IBM (IBM 173.97, +0.30) posted respective gains of 0.3% and 0.2% while Apple (AAPL 128.70, -0.25) and Microsoft (MSFT 48.24, -0.41) registered losses. Similarly, chipmakers lagged with the PHLX Semiconductor Index shedding 0.2%. The semiconductor index underperformed even as ON Semiconductor (ON 12.50, +0.69) spiked 5.8% following better than expected results.
On the downside, the energy sector (-0.2%) was an early leader, but the group surrendered its early gain during the opening hour and remained in negative territory until the close. Crude oil weighed, but the energy component managed to trim its loss to 0.3% by the close. WTI crude settled at $58.92/bbl, likely seeing some pressure from the second consecutive advance in the Dollar Index (95.43, +0.14).
Treasuries climbed during morning action, but reversed to lows following today's economic data with the 10-yr rising three basis points to 2.14%.
Today's participation was on the light side with fewer than 680 million shares changing hands at the NYSE floor.
Economic data was limited to the Factory Orders report for March, which increased 2.1% after declining a negatively revised 0.1% (from +0.2%) in February while the Briefing.com consensus expected an increase of 2.1%
The March gain was the first month-over-month increase since July 2014 with the bulk of the gain resulting from a 41.9% increase in March aircraft orders
Durable goods orders were revised up to 4.4% from 4.0% reported in the advance estimate
Excluding transportation, durable goods orders were revised up to +0.4% from -0.2%
Tomorrow, the Trade Balance for March (Briefing.com consensus -$40.00 billion) will be released at 8:30 ET while the April ISM Services report (consensus 56.4) will cross the wires at 10:00 ET.
Nasdaq Composite +5.9% YTD
S&P 500 +2.7% YTD
Russell 2000 +2.3% YTD
Dow Jones Industrial Average +1.4% YTD
DJ30 +46.34 NASDAQ +11.54 SP500 +6.20 NASDAQ Adv/Vol/Dec 1736/1.53 bln/1205 NYSE Adv/Vol/Dec 1779/677.3 mln/1285 3:35 pm :
WTI crude oil lost steam today and finished below the $59/level
June crude ultimately finished floor trading -$0.19 at $58.92/barrel
In other energy, June nat gas rose $0.04 to $2.82/MMBtu
June gold rose $12.70 to $1186.90/oz, while May silver gained $0.30 to $16.41/oz despite modest strength in the dollar index
However, following this along with weak China econ data overnight, copper fell modestly
4:05 pm Lattice Semi reports Q1 (Mar) results, beats on revs (LSCC) : Reports Q1 (Mar) earnings of $0.03 per share, may not be comparable to the Capital IQ Consensus Estimate of $0.03; revenues fell 8.3% year/year to $88.6 mln vs the $83.7 mln consensus.
Net loss for the first quarter on a GAAP basis was $53.3 million ($0.46 per basic and diluted share), with first quarter net income on a non-GAAP basis of $3.9 million ($0.03 per basic and diluted share). GAAP results for the first quarter of 2015 reflect $4.9 million in restructuring costs, $18.2 million in acquisition related charges, a $24.7 million tax provision, $2.9 million in amortization of acquired intangibles and $3.4 million in stock based compensation expense.Revenue for the second quarter of 2015 is expected to be approximately $120 million plus or minus 3% on a non-GAAP basis, with revenue for the full year 2015 expected to be approximately $485 million plus or minus 3% on a non-GAAP basis.
Gross margin percentage for both the second quarter and full year 2015 is expected to be approximately 56.5% plus or minus 2% on a non-GAAP basis.
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