From Briefing.com: The broader market ended Friday in a sell-off, much like yesterday. Action took all three major US indices to lows of the day as the bell rang, with the Dow Jones Industrial Average shedding 367.39 points (-2.10%) to close 17128.45. The S&P 500 closed down 36.37 points (-1.78%) to 2005.52. The Nasdaq Composite ended the week down 79.47 points (-1.59%) to 4923.08. For the year, the Nasdaq remains positive at about +3.9% -- the S&P 500 extended yearly losses this week, now down about -2.6% YTD -- the Dow is down even further this year, losing -3.9% so far.
Also closing in the red today, Technology (XLK 42.10, -0.90 -2.10%) sank to session lows as the bell rang. Component IBM (IBM 134.91, -1.84 -1.35%) reported the expansion and extension of relationships with two existing clients, but shares ultimately finished in the red. Other sectors closed today XLF -2.67%, XLP -1.77%, XLE -1.73%, XLY -1.57%, XLI -1.52%, XLV -1.45%, XLB -1.27%, XLU -1.24%, IYZ -1.21%.
The S&P 500 Information Technology sector (710.20, -14.76 -2.04%) closed out the week with losses in back-to-back sessions. Component Apple (AAPL 106.03, -2.95 -2.71%) today confirmed a partnership with China UnionPay to bring Apple Pay to China. Shares ultimately finished in the red as broader market pressure weighed on action. Other components which closed the session in the red included CTXS -3.80%, HPQ -3.28%, ADBE -3.07%, MA -3.06%, V -3.01%, EA -3.01%, INTC -2.95%, MSFT -2.82%, TXN -2.81%, INTU -2.35%, FIS -2.27%, EBAY -2.10%, FB -2.05%.
Other notable news items among sector components:
IBM (IBM) and AT&T (T 33.63, -0.40 -1.18%) announced an extension of their relationship, whereby AT&T will transition its managed application and managed hosting services unit to IBM.
IBM (IBM) and Box (BOX 14.00, +0.04 +0.29%) expanded their strategic partnership.
Rambus (RMBS 11.61, -0.07 -0.60%) to collaborate with Microsoft researchers in the exploration of future memory requirements for quantum computing.
Apple (AAPL) confirmed partnership with China UnionPay to bring Apple Pay to China.
Microsoft (MSFT 54.13, -1.57 -2.82%) acquired data analytics firm Metanautix. Financial terms of the deal were not disclosed.
Elsewhere in the tech space:
Qihoo 360 Tech. (QIHU 73.00, +1.19 +1.66%) entered into a definitive merger agreement to be acquired by a consortium of investors in an all-cash transaction valued at about $9.3 billion, or $77.00 per share.
GSI Group (GSIG 13.36, -0.52 -3.75%) acquired RFID solutions firm SkyeTek for $2.6 million in cash.
Synopsys (SNPS 44.77, -0.45 -1.00%) acquired privately held software firm Goanna Software. Financial terms of the deal were not disclosed.
AT&T (T) increased quarterly dividend to $0.48 from $0.47 per share.
Synchronoss Tech (SNCR 35.89, -0.25 -0.69%) entered into a new contract with AT&T (T), adding two more years to the remaining one year on its existing contract.
CoreLogic (CLGX 34.26, -1.65 -4.59%) to acquire FNC Inc for $475 million. The deal is expected to be accretive to 2016 financial results.
Criteo (CRTO 39.00, +1.06 +2.79%) announced Founder, Chairman and CEO JB Rudelle to become Executive Chairman.
Power Integrations (POWI 47.36, -0.47 -0.98%) was awarded $139.8 million in damages from Fairchild Semiconductor (FCS 20.01, -0.04 -0.20%).
Fairchild Semi (FCS) commented on the damages award granted to Power Integrations (POWI). The company expects the damages to be overturned or significantly reduced in further proceedings and appeals.
Marvell (MRVL 8.56, +0.09 +1.12%) received supplemental notice from NASDAQ for failure to file its Form 10-Q. In its supplemental notice, NASDAQ requested that MRVL submit an update to its compliance plan previously filed with NASDAQ by January 13, 2016.
TheStreet.com (TST 1.64, +0.04 +2.50%) appointed Larry Kramer as non-Executive Chairman of the Board effective immediately.
Vantiv (VNTV 46.67, -1.87 -3.85%) partnered with Fragmob. The partnership provides mutual corporate clients of the two companies with payment processing features offering increased security and embedded into the Fragmob Direct Selling mobile app.
DHI Group (DHX 8.97, +0.06 +0.67%) authorized a new $50 million stock repurchase program.
PC Connection (PCCC 22.42, -0.19 -0.84%) declared a special cash dividend of $0.40 per share.
In reaction to quarterly results:
BlackBerry (BBRY 8.61, +0.81 +10.38%) reported Q3 loss per share which was better than expected at ($0.03) on revenues which fell 30.9% year-over-year to $548 and beat expectations. The company also guided Q4 revenues better than expected as it sees sequential Q4 revenue growth (from $548 million). The company also reaffirmed positive free cash flow guidance.
Red Hat (RHT 81.40, +2.54 +3.22%) reported Q3 EPS which beat expectations at $0.48 on revenues which rose 14.8% year-over-year to $523.6 million. The company reported Subscription revenue from Infrastructure-related offerings for the quarter was $373 million, an increase of 12% in U.S. dollars year-over-year and 18% measured in constant currency. RHT also issued guidance for Q4, as they see EPS of $0.47 per share and revenues of $535-539 million.
Companies scheduled to report quarterly results next week: PAYX, CAMP, MU
Analyst actions:
MSFT was upgraded to Neutral from Sell at Goldman,
CRM was upgraded to Outperform from Neutral at Wedbush;
TXN was downgraded to Mkt Perform from Outperform at Bernstein,
TSU was downgraded to Sell from Neutral at Goldman,
AIXG was downgraded to Equal Weight from Overweight at Morgan Stanley
Weekly Recap - Week ending 18-Dec-15Before the market opened yesterday, recent IPO ReWalk (RWLK) announced that the U.S. Department of Veteran Affairs issued a national coverage policy for its robotics exoskeleton system. Specifically, the policy put forth by the VA provides veterans with spinal cord injury access to referral and evaluations at every RWLK training center. Veterans who meet the physical criteria will then be referred for training on use of the device and successful candidates will be eligible to obtain a ReWalk personal system. The news sent the stock roaring higher by 83% yesterday, and with shares up another 27% today, the two-day gain total now stands at a staggering 138%.
Israel-based RWLK is the developer of the aforementioned exoskeleton system that allows wheel-chair bound individuals with mobility impairments the ability to stand and walk again. The exoskeleton, called ReWalk, uses its tilt-sensor technology and on-board computer and motion sensors to drive motorized legs that power movement.
Current ReWalk designs are intended for people with paraplegia, a spinal cord injury resulting in complete or incomplete paralysis of the legs, who have the use of their upper bodies and arms. RWLK currently offers two products: ReWalk Personal and ReWalk Rehabilitation. ReWalk Personal is designed for everyday use by individuals at home and in their communities, and is custom-fit for each user. ReWalk Rehabilitation is designed for the clinical rehabilitation environment where it provides valuable exercise and therapy. It also enables individuals to evaluate their capacity for using ReWalk Personal in the future.
The company began marketing ReWalk Personal in Europe with CE mark clearance at the end of 2012 and received FDA clearance to market it in the United States in June 2014. ReWalk is the first exoskeleton cleared by the FDA for personal use. In the future, it will need to obtain approval from the applicable regulatory agency of any additional jurisdiction in which it seeks to market ReWalk.
RWLK's strategy has been to generate revenue from a combination of self-payors and third party payors. But, with a system costing upwards of $70,000, RWLK's commercial success has always hinged on its ability to find commercial coverage to cover some or most of the costs. Since its September 12, 2014 IPO, this has been a major focus of investors and has acted as a headwind to the stock as the company struggled to make much progress here. But, of late, the company has been making some strides, and yesterday's announcement was the company's most significant win yet.
In its Q3 report, RWLK commented that it increased commercial reimbursement submissions by 68% from Q2 to 99 pending insurance claims. Of these 99 claims, it had received ten favorable reimbursement decisions as of the end of Q3. That was a record quarterly result for the company, and it may indicate that the ReWalk system is gaining more acceptance in the commercial insurance market. Further, the VA's decision to cover the costs of new systems may encourage more insurance providers in the private sector to consider coverage of these systems.
Due to the initial difficulties RWLK has had in gaining meaningful traction from third party payors, its financial results have been quite weak. In Q3 (reported on November 5), it reported a loss per share of ($0.53), which was $0.04 worse than expected, as revenue fell 20% year/year to $1.2 million. During the quarter, it placed 23 ReWalk systems during the third quarter of 2015 compared to 27 systems during the prior year quarter. But, again, as news circulates that the VA will be covering ReWalks, demand should begin to increase materially.
In short, yesterday's news looks like a potential game-changer for RWLK. Even with this two-day surge, the company still only has a valuation of about $180 million. At the moment, analysts are forecasting revenue of only $13 million next year, but those estimates are bound to go up, perhaps substantially. And lastly, RWLK has a solid balance sheet with no debt and cash and equivalents of $31.2 million.
7:07 am BlackBerry beats by $0.12, beats on revs; guides Q4 revs above consensus; reaffirms positive FCF (BBRY) :
Reports Q3 (Nov) adj. loss of $0.03 per share, $0.12 better than the Capital IQ Consensus of ($0.15); revenues fell 30.9% year/year to $548 mln vs the $487.98 mln Capital IQ Consensus.
Co issues upside guidance for Q4, sees sequential Q4 rev growth (from $548 mln) vs. $529.81 mln Capital IQ Consensus Estimate.
The company continues to anticipate positive free cash flow and adjusted EBITDA.
"To sustain our current direction, we are stepping up investments to drive continued software growth and the additional PRIV launches."
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