From Briefing.com: 6:14 pm EZchip: Raging Capital confirms it opposes Mellanox (MLNX) and EZchip merger (EZCH) : Raging Capital Management, one of the largest shareholders of EZchip Semiconductor (EZCH) owning approximately 6.5% of the ordinary shares outstanding, issued a letter to EZchip shareholders expressing its strong opposition to the $25.50 per share buyout offer from Mellanox Technologies (MLNX). Raging Capital intends to not only vote against the Mellanox acquisition but to vigorously oppose the deal by soliciting proxies from the shareholders against approval of the acquisition at the Annual General Meeting of Shareholders of EZchip scheduled to be held on November 12, 2015. In addition, Raging Capital has nominated Ken Traub and Paul McWilliams for election to the EZchip Board at the General Meeting. In light of its significant concerns with the Mellanox acquisition, Raging Capital believes representation on the Board is necessary to protect the interests of all shareholders and intends to also solicit proxies for the election of Messrs. Traub and McWilliams at the General Meeting.
4:24 pm Freescale Semi beats by $0.05, misses on revs; guides Q4 revs below consensus (FSL) :
Reports Q3 (Sep) earnings of $0.54 per share, $0.05 better than the Capital IQ Consensus of $0.49; revenues fell 7.7% year/year to $1.12 bln vs the $1.14 bln Capital IQ Consensus. Co issues downside guidance for Q4, sees Q4 revs of $0.95-1.0 bln vs. $1.13 bln Capital IQ Consensus Estimate."The fourth quarter will pose challenges as market conditions have continued to weaken. Our results will be impacted in the quarter by normal seasonal declines in our automotive related businesses, continued weakness in wireless infrastructure and enterprise spending which will negatively impact our RF and Digital Networking businesses and weak end-demand in industrial which will lead to lower Microcontroller revenues."
4:20 pm Altera misses by $0.11, misses on revs (ALTR) :
Reports Q3 (Sep) earnings of $0.20 per share, $0.11 worse than the Capital IQ Consensus of $0.31; revenues fell 20.0% year/year to $399.57 mln vs the $429 mln Capital IQ Consensus.
"Market conditions globally were quite varied this quarter as some vertical markets produced good growth while others were weak. In spite of these headwinds we saw double-digit new product growth plus continued strength in data center demand,"
4:20 pm Maxim Integrated misses by $0.16, reports revs in-line; guides Q2 EPS below consensus, revs below consensus (MXIM) :
Reports Q1 (Sep) earnings of $0.25 per share, excluding non-recurring items, $0.16 worse than the Capital IQ Consensus of $0.41; revenues fell 3.1% year/year to $562.5 mln vs the $564.19 mln Capital IQ Consensus. Co issues downside guidance for Q2, sees EPS of $0.29-0.35, excluding non-recurring items, vs. $0.41 Capital IQ Consensus Estimate; sees Q2 revs of $490-520 mln vs. $552.59 mln Capital IQ Consensus Estimate.90-day backlog is $329 mln.Remains on track to reduce costs by $180 mln annually.
4:19 pm QLogic beats by $0.03, reports revs in-line; guides Q3 EPS above consensus, revs in-line (QLGC) :
Reports Q2 (Sep) earnings of $0.17 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.14; revenues fell 18.9% year/year to $103.35 mln vs the $102.75 mln Capital IQ Consensus. Co issues guidance for Q3, sees EPS of $0.24-0.28 vs. $0.22 Capital IQ Consensus Estimate; sees Q3 revs of $115-121 mln vs. $115.24 mln Capital IQ Consensus Estimate.
4:18 pm Juniper Networks beats by $0.04, beats on revs; guides Q4 EPS, revs just above consensus (JNPR) :
Reports Q3 (Sep) earnings of $0.57 per share, $0.04 better than the Capital IQ Consensus of $0.53; revenues rose 10.9% year/year to $1.25 bln vs the $1.23 bln Capital IQ Consensus.
Co issues upside guidance for Q4, sees EPS of $0.57-0.60 vs. $0.57 Capital IQ Consensus Estimate; sees Q4 revs of $1.27-1.31 bln vs. $1.28 bln Capital IQ Consensus Estimate.
4:16 pm Microsoft beats by $0.08, beats on revs (MSFT) :
Reports Q1 (Sep) earnings of $0.67 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $0.59; adj. revenues fell 6.6% year/year to $21.66 bln vs the $21.04 bln Capital IQ Consensus. Revenue in Productivity and Business Processes declined 3% (up 4% in constant currency) to $6.3 billion, with the following business highlights:Office commercial products and cloud services revenue grew 5% in constant currency with Office 365 revenue growth of nearly 70% in constant currency and continued user growth across our productivity offerings Office 365 consumer subscribers increased to 18.2 million, with ~3 million subscribers added in the quarterRevenue in Intelligent Cloud grew 8% (up 14% in constant currency) to $5.9 billion, with the following business highlights:Server products and cloud services revenue grew 13% in constant currency, with revenue from premium products and services growing double-digitsAzure revenue and compute usage more than doubled year-over-year Revenue in More Personal Computing declined 17% (down 13% in constant currency) to $9.4
4:13 pm AT&T beats by $0.05, misses on revs; guides FY15 EPS above consensus (T) :
Reports Q3 (Sep) earnings of $0.74 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.69; revenues rose 18.6% year/year to $39.1 bln vs the $41.02 bln Capital IQ Consensus. Co issues upside guidance for FY15, sees EPS of $2.68-2.74 (Prior $2.62-2.68), excluding non-recurring items, vs. $2.64 Capital IQ Consensus Estimate.Raises free cash flow outlook for 2015 to the $15 billion range or better.
4:07 pm Ultra Clean Holdings reports EPS in-line, misses on revs; guides Q4 EPS below consensus, revs below consensus (UCTT) :
Reports Q3 (Sep) earnings of $0.10 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.10; revenues rose 4.9% year/year to $122.82 mln vs the $124.2 mln Capital IQ Consensus. "Global demand for our products this quarter was influenced by the beginning of the industry-wide semiconductor pullback. With the addition of our second accretive acquisition in the last three quarters, we are adding important manufacturing capabilities to our growing portfolio to position us to outpace the semiconductor equipment market when the ramp of next-generation technologies begins."Co issues downside guidance for Q4, sees EPS of ($0.04)-(0.01), excluding non-recurring items, vs. $0.09 Capital IQ Consensus Estimate; sees Q4 revs of $98-103 mln vs. $124.61 mln Capital IQ Consensus Estimate.
4:07 pm Alphabet beats by $0.14, beats on revs (GOOG) :
Reports Q3 (Sep) earnings of $7.35 per share, $0.14 better than the Capital IQ Consensus of $7.21; revenues rose 13.0% year/year to $18.68 bln vs the $18.42 bln Capital IQ Consensus.
Non-GAAP Operating Margin- Q3 33%; Q2 was 32%. Aggregate paid clicks- Q3 +23%; Q2 +18%. Paid Clicks on Google websites- Q3 +35%; Q2 +30%. Paid clicks on member sites- Q3 -5%; Q2 -9%. Aggregate cost per click- Q3 -11%; Q2 -11%; CPC on Google sites- Q3 -16%; Q2 -16%. CPC on member sites- Q3 -4%; Q2 -3%. Traffic Acquisition Costs (TAC)- Q3 21%; Q2 23% of revenue.FX Impact- Had foreign exchange rates remained constant from the third quarter of 2014 through the third quarter of 2015, our revenues in the third quarter of 2015 would have been $1,291 million higher with a constant currency growth rate of 21% year over year. This includes a foreign exchange rate impact of $1,577 million, offset by hedging gains of $286 million related to our foreign exchange risk management program. Our constant currency revenues are presented in the financial tables following this release as well as in the accompanying materials on the Investor Relations website.
From Briefing.com: The broader market closed Thursday trading with notable gains. The Dow Jones Industrial Average gained 320.55 points (+1.87%) to end 17489.16. The S&P 500 was also notably strong Thursday, ending up 33.57 points (1.66%) to close 2052.51. The Nasdaq Composite followed closely, higher by 79.93 points (+1.65%) to 4920.05. The markets gapped higher on the session, never dipping into negative territory as blue chip names began reporting quarterly earnings. All three major US indices surged to highs in a session with slightly higher than average volume.
The Technology space (XLK 42.64, +0.94 +2.25%) ended Thursday with gains of more than 2%. Quarterly results dictated trading today, as blue chip names like AT&T (T 33.96, +0.36 +1.07%), Alphabet (GOOG 651.79, +9.18 +1.43%) and Microsoft (MSFT 48.03, +0.83 +1.76%) sit on the docket for after the close tonight.
In the Thursday session, Semiconductors (SOX 675.94, +22.70 +3.47%) continued strength from yesterday's session ahead of component Altera (ALTR 52.80, +0.28 +0.53%) and Maxim Integrated's (MXIM 39.12, -0.32 -0.81%) quarterly results.
Also notably strong today were Software (IGV 102.08, +2.67 +2.69%) names as Citrix Systems (CTXS 80.58, +8.66 +12.04%) ,Proofpoint (PFPT 62.21, +6.80 +12.27%) and ServiceNow (NOW 77.95, +4.93 +6.75%) all reported quarterly results. All three names beat on the top and bottom lines, respectively, in regards to analyst expectations. The sector has been strong in the month of October, adding about 8% month-to-date.
In the S&P 500 Information Technology (715.98, +16.52 +2.36%) sector, stocks like Texas Instruments (TXN 58.09, +6.19 +11.93%) and eBay (EBAY 27.58, +3.37 +13.92%) led the way higher following quarterly results. This quarter marked EBAY's first three month period following the Paypal (PYPL 34.79, +0.96 +2.84%) spin-off. Other names like GLW +5.33%, CTSH +5.33%, SWKS +5.18%, AVGO +4.02%, ACN +3.84%, TEL +3.63%, NVDA +3.61%, MCHP +3.60%, APH +3.27%, ORCL +3.19% were also strong on the session.
Other notable news items among sector components:
Seagate Tech (STX) announced Board approval for a 17% increase in targeted annual dividend. Result will have a $2.52 dividend, up from $2.16. The company also appointed David Morton Jr. as EVP and CFO effective immediately.
Citrix Systems (CTXS) appointed Exec Chairman Robert Claderoni as Interim President and CEO effective immediately.
Visa (V 76.42, +0.97 +1.29%) increased quarterly dividend to $0.14 from $0.12 per share.
Apple (AAPL 115.47, +1.71 +1.50%) announced two new programs aimed at reducing the carbon footprint of its manufacturing partners in China. The programs will avoid over 20 million metric tons of greenhouse gas pollution in the country between now and 2020, equivalent to taking nearly 4 million passenger vehicles off the road for one year.
Fixnetix, a CSC (CSC 65.90, +1.06 +1.63%) company, announced the release of iX-eCute Zero Latency, a risk management and trading gateway supporting electronic trading for investment banks, prime brokers, hedge funds and proprietary trading firms.
IBM (IBM 144.09, +3.17 +2.25%), in collaboration with NVIDIA (NVDA 28.40, +0.99 +3.61%) and Mellanox (MLNX 45.84, +2.51 +5.79%), and the Science and Technology Facilities Council Hartree Centre announced plans for the UK's first POWER Acceleration and Design Center designed to help UK businesses exploit high performance computing on OpenPOWER systems for Modelling & Simulation and Big Data Analytics.
Elsewhere in the technology space:
Science Applications (SAIC 42.79, +1.17 +2.81%) was awarded NASA's Langley Information Technology Enhanced Services II contract valued at $200 million.
Benchmark Electronics (BHE 20.56, -1.90 -8.46%) acquired Secure Communications Systems, Inc. for about $230 million in cash. The company expects the deal to be immediately accretive to the company's margins and EPS.
Ruckus Wireless (RKUS 12.85, +0.35 +2.80%) acquired secure Wi-Fi onboarding software provider Cloudpath Networks. Financial terms of the deal were not disclosed.
Cypress Semi (CY 9.76, +0.32 +3.39%) announced a new $450 million stock repurchase program.
NCI (NCIT 14.80, +1.25 +9.23%) was awarded a five-year cost-plus-fixed-fee contract valued at $211 million from the US Army.
LG Display (LPL 9.66, -0.56 -5.48%) plans to acquire the OLED Light business of LG Chem for KRW 160 billion.
Unisys (UIS 14.45, +1.88 +14.96%) was awarded two contracts to provide services to the EU worth about $53 million.
Electronics For Imaging (EFII 45.82, +0.77 +1.71%) reported a favorable outcome in its patent lawsuit with Componex.
IMS Health Holdings (IMS 29.75, -0.72 -2.36%) and Quintiles Transitional (Q 67.69, -1.10 -1.60%) announced a global strategic alliance.
DST Systems' (DST 118.83, +6.29 +5.59%) Argus Health Systems business announced a renewed relationship with Cigna (CI 129.49, -7.12 -5.21%) for the provision of pharmacy solutions services.
In reaction to quarterly results:
Texas Instruments (TXN) reported Q3 EPS and revenues which topped expectations; Q3 EPS was $0.76 on revenues which fell 2.1% year-over-year to $3.43 billion. The company also guided Q4 EPS better than expected at $0.64-0.74 and revenues in-line at $3.07-3.33 billion.
eBay (EBAY) reported Q3 EPS which beat expectations at $0.43 on revenues which were in-line at $2.1 billion. The company also guided Q4 EPS and revenues in-line.
Rogers Comms (RCI 39.90, +2.11 +5.58%) reported Q3 EPS and revenues which beat expectations. The company saw Q3 EPS of CC$0.92 on revenues of CC$3.38 billion.
Alliance Data (ADS 294.79, +18.56 +6.73%) reported Q3 EPS and revenues which were better than expected at $3.95 and $1.59 billion, respectively. The company also reaffirmed FY15 EPS and revenues guidance and guided FY16 EPS and revenues in-line with what was expected.
CA Tech (CA) reported Q2 EPS and revenues which came in in-line with expectations. Q2 saw EPS of $0.56 on revenues of $1 billion.
Unisys (UIS) reported Q3 EPS which beat expectations at $0.67 on revenues which missed expectations at $739.2 million.
Analyst actions:
TXN was upgraded to Buy from Mkt Perform at Charter Equity,
OCLR was upgraded to Buy from Hold at Stifel,
DTLK was upgraded to Buy from Hold at Craig Hallum;
SNDK was downgraded at UBS, Argus, Morgan Stanley, and Piper Jaffray,
KLAC was downgraded at Needham, UBS and Piper Jaffray,
LPL was downgraded to Neutral from Outperform at Macquarie,
VMW was downgraded to Perform from Outperform at Oppenheimer,
EMC was downgraded to Hold from Buy at Stifel,
SWI was downgraded to Hold from Buy at Needham,
SANM was downgraded to Sell from Neutral at Goldman
12:00 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (123) outpacing new lows (92) (SCANX) : Stocks that traded to 52 week highs: AAME, ACXM, AEPI, AF, ASR, ATR, ATVI, AVGR, BBCN, BDGE, BNY, BRSS, CALL, CAM, CB, CBNJ, CBU, CBZ, CCU, CDW, CHFN, CINF, CLI, CLX, COR, CTS, CTXS, DPS, DRAD, EEFT, EFSC, EGHT, ENR, ENVI, ESXB, EVER, EXPD, EXPO, EXR, FBNK, FCVA, FISV, FLO, FMX, FN, FNLC, GABC, GE, GSBC, HA, HAFC, HCKT, HD, HRL, HTBI, IGLD, IM, IPCM, ISBC, JBT, JJSF, K, KMB, KRNY, LII, LMT, MATW, MATX, MCD, MCI, MESG, MNRO, MO, MORE, MSI, MTS, MXL, NAVG, NBBC, NBTB, NDAQ, NOC, NP, NVDA, NWBI, ONFC, ORI, OVTI, PAC, PEP, PRK, PSA, RAI, RNR, ROCK, RRM, RSG, RTN, SAP, SFNC, SIGI, SKYW, SPRO, STL, SYKE, SYY, TBNK, TIS, TOWN, TRV, TSS, TTWO, TYL, UBOH, UFCS, UFPI, VCF, WAFD, WCN, WD, WTM, XRAY, XUE
Stocks that traded to 52 week lows: ACAT, ACST, ADMS, APOL, ASCMA, ATI, ATOS, ATRS, AXP, BCOR, BDE, BHE, BIOD, BKD, BLMN, BOJA, BSI, CAB, COSI, CYAD, CYH, DAN, DAVE, DNAI, DNKN, DOM, EMG, ENDP, ENTL, ENZN, EVH, EVHC, EXAR, EXP, FATE, FDEU, FRGI, FSC, GEN, GHDX, GI, GNCA, GNK, HLS, JAZZ, KND, KONA, LDRH, LOB, LPNT, MBCN, MBUU, MDVX, MIRN, MKSI, MSL, MW, MYL, MYRG, NEOS, NGL, NNBR, NRP, OCIP, OIBR, OZM, PEN, PETX, PHM, PSG, PSO, PTCT, RCKY, RKDA, RLOC, RLYP, RNN, SBH, SGM, SMSI, SSTK, SYRX, THC, TMH, TNDM, TUMI, TWER, USG, UTEK, VCEL, WAYN, WMGI
ETFs that traded to 52 week highs: IYK
ETFs that traded to 52 week lows: UNG
4:10 pm : It was a running of the bulls on Thursday and "re-examine" was the trigger that sparked the charge. The S&P 500 soared 1.7%, overtaking its 100-day moving average (2,038) in the process. The benchmark index settled near its best level of the day, registering its first close above the 100-day average since August 17, as hopes for more stimulus overshadowed mixed corporate earnings.
The stock market was off to the races after equity futures revved higher an hour before the opening bell. The pre-market activity took place in response to comments from European Central Bank President Mario Draghi, who addressed the media following the latest ECB policy meeting. During his press conference, Mr. Draghi said that the central bank will "re-examine" its asset purchases at the December meeting. This was immediately interpreted as a harbinger of more monetary easing in the near future, sending the euro lower while European equities and U.S. futures spiked. Those moves accelerated after Mr. Draghi revealed that the governing council had discussed lowering the deposit facility rate at today's policy meeting. Markets in France, Germany, Spain, and Italy jumped between 2.0% and 2.5% while the euro slid throughout the session to 1.1110 against the dollar after trading just above 1.1300 prior to Mario Draghi's press conference. As a result, the Dollar Index (96.44, +1.37) spiked 1.4%, returning to levels last seen in late September.
Nine sectors ended the day with gains of 1.2% or more, masking the mixed nature of quarterly reports released between yesterday's closing bell and today's open. For instance, Caterpillar (CAT 70.88, +1.98) spiked 2.9% despite missing estimates and lowering its earnings guidance while 3M (MMM 156.00, +6.18) jumped 4.1% after missing revenue estimates, lowering its guidance, and announcing restructuring plans that will involve 1,500 layoffs worldwide. Meanwhile, American Express (AXP 72.50, -4.01) also delivered a disappointing report, but did not get lifted by the tide, falling 5.2%.
To be fair, a few companies delivered better than expected reports with McDonald's (MCD 110.87, +8.33) surging 8.1% to a fresh all-time high and Texas Instruments (TXN 58.09, +6.19) spiking 11.9% after both beat their respective estimates. Texas Instruments contributed to a 3.5% spike in the PHLX Semiconductor Index, which in turn, underpinned the technology sector (+2.3%). That being said, even the two standouts of the day fit an all-too-familiar theme of bottom-line beats combined with sluggish revenue growth.
Elsewhere, PulteGroup (PHM 18.16, -1.29) and Kinder Morgan (KMI 29.75, -1.67) posted respective losses of 6.6% and 5.3% in reaction to disappointing reports; however, their weakness was overshadowed by the broad market strength.
Similarly, Valeant Pharmaceuticals (VRX 109.87, -8.74) had another woeful showing, tumbling 7.4% to extend its two-day loss to 24.7% after Citron Research voiced concerns of potential accounting fraud at the biotech company. On a related note, the health care sector (-0.6%) spent the day in negative territory.
Treasuries bounced around their flat lines throughout the day with the 10-yr yield respecting a six-basis point range before ending unchanged at 2.03%.
Today's trading volume was well above average with more than a billion shares changing hands at the NYSE floor.
Economic data included Initial Claims, Existing Home Sales, Leading Indicators, and FHFA Housing Price Index:
The weekly initial claims level increased to 259,000 for the week ending October 17 from an upwardly revised 256,000 (from 255,000) while the Briefing.com consensus expected an increase to 265,000
The four-week moving average fell to 263,250 from 265,250, representing the lowest level since December 1973
Existing home sales increased 4.7% in September to 5.55 million from a downwardly revised 5.30 million (from 5.31 mln) while the Briefing.com consensus expected an increase to 5.39 million
Unfortunately, the growth in sales may not stable, considering much of the gain resulted from an increase in all-cash and investor demand
All-cash sales accounted for 24% of all sales in September, up from 22% in August. Individual investors purchased 13% of existing homes in September, up from 12% in August
The Conference Board's Leading Economic Index declined 0.2% (consensus -0.1%) in September after a downward revision resulted in no change (from 0.1%) in August
The FHFA Housing Price Index for August rose 0.3%, which followed an unrevised increase of 0.6% in July
There is no economic data on tomorrow's schedule.
Nasdaq Composite +3.9% YTD
S&P 500 -0.3% YTD
Dow Jones Industrial Average -1.9% YTD
Russell 2000 -4.1% YTD
DJ30 +320.55 NASDAQ +79.93 SP500 +33.57 NASDAQ Adv/Vol/Dec 1879/1.98 bln/1020 NYSE Adv/Vol/Dec 2315/1.03 bln/785 3:40 pm :
The dollar index continued to climb higher today, which helped weigh in commodities today
However, commodities, as measured by the Bloomberg Commodity Index, are currently near the unchanged line overall
WTI oil came back some as floor trading came to a close, erasing some of today's losses.
Dec crude ended the day +0.4% at $45.39/barrel.
In other energy, Nov natural gas futures traded in the red all day following the release of the weekly EIA storage data
The data was actually bullish, but overall storage continues to weigh on the market
Nov nat gas ended -0.8% at $2.38/MMBtu today
Silver and copper mostly held gains today. Dec silver closed +0.7% at $15.84/oz, while Dec copper finished +0.8% at $2.38/lb
Dec gold slipped $1 to end at $1166.10/oz
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