From Briefing.com: The broader market action took the three major US indices all higher. The advance was led by the Dow Jones Industrial Average which added 79.92 points (+0.49%) today to close 16416.58. The S&P 500 was up 2.92 points (+0.15%) to 1915.45, and the Nasdaq Composite rounded out the bunch up 5.32 points (+0.12%) to 4509.56. Bellwether GoPro (GPRO 9.78, -0.93 -8.68%) was sharply lower today as the company reported worse than expected Q4 results and gave worse than expected guidance. Also, the company announced a new CFO, and shares did not react well to the quarterly report.
The January Challenger Job Cuts were released today, showing a mark of 75,114, up 41.6% year-over-year. Also, Initial Claims came in for the week ending January 30 showing an increase of 8,000 to 285,000. Continuing Claims for the week ending January 23 declined by 18,000 to 2.255 million. The preliminary report on Q4 productivity showed productivity declined at a 3.0% annual rate, the largest drop in productivity since Q1 of 2014. Q4 unit labor costs increased 4.5%, reflecting a 1.3% increase in hourly compensation. Also, factory orders declined 2.9% in December on the heels of a downwardly revised 0.7% decline (from -0.2%) for November.
Technology (XLK 40.65, +0.05 +0.12) held up well today, as the sector closed just above flat lines. Level 3 (LVLT 50.02, +3.25 +6.95%) reported quarterly results before the bell this morning as EPS came in slightly below expectations and revenues were unchanged versus the prior year. Other sectors ended XLB +2.78%, XLI +1.73%, IYZ +0.91%, XLF +0.86%, XLE -0.05%, XLU -0.43%, XLV -0.55%, XLY -0.58%, XLP -0.92% today.
Semis (SOX 607.72, +10.61 +1.78%) were strong today as the SMH and XSD also finished near the top in terms of percentage gains on the session. Component NXP Semi (NXPI 76.31, +5.53 +7.81%) was higher when the day was done as the company beat expectations for its Q4 earnings report before the markets opened today. Other SOX names which outperformed included CREE +5.39%, QRVO +4.64%, MU +4.37%, AVGO +3.62%, SUNE +2.14%, ARMH +2.10%, QCOM +2.08%, TXN +2.01%.
The S&P 500 Information Technology sector (671.84, +0.78 +0.12%) was also modestly higher when the bell rang, holding onto slight gains. Component Teradata (TDC 25.57, +1.88 +7.94%) finished with notable gains as the company reported quarterly results ahead of the open and consolidated the early rally nicely. Other components finished the day TEL +2.04%, CSC +2.01%, TSS +1.92%, CSCO +1.90%, FISV +1.82%, AMAT +1.68%, XLNX +1.67%, NTAP +1.67%, WU +1.56%, INTC +1.47%.
Other notable news items among sector components:
Cisco Systems (CSCO 23.54, +0.44 +1.90%) to acquire Jasper Technologies for $1.4 billion in cash, assumed equity awards, & retention based incentives.
VirnetX Holding (VHC 7.06, +2.27 +47.39%) announced a jury in the United States Court for the Eastern District of Texas, Tyler Division, in the case VirnetX Inc., et al. v. Apple Inc., (AAPL 96.60, +0.77 +0.80%) No. 6:12-cv-00855, has awarded VirnetX $625.6 million in a verdict against AAPL for infringing four VHC patents, marking the second time a federal jury has found AAPL liable for infringing VHC's patented technology.
Elsewhere in the technology space:
The European Commission cleared the acquisition of SanDisk (SNDK 69.86, +0.05 +0.07%) by Western Digital (WDC 49.14, +1.10 +2.29%).
Glu Mobile (GLUU 2.67, +0.66 +32.84%) partnered with Taylor Swift on the development of a new mobile game.
Cascade Microtech (CSCD 20.21, +4.93 +32.26%) to be acquired by FormFactor (FORM 6.86, -0.99 -12.61%) for about $21.13 per share in cash and stock.
ON Semiconductor (ON 8.49, +0.22 +2.66%) extended its tender offer to acquire Fairchild Semi (FCS 20.66, flat).
Advanced Semi (ASX 5.35, +0.18 +3.48%) extended the tender offer to acquire Siliconware Precision (SPIL 7.71, +0.02 +0.26%) until March 17 from previous February 16 expiry.
Synchronoss Tech (SNCR 22.34, -4.38 -16.39%) announced a $100 million share repurchase plan.In reaction to quarterly results:
GoPro (GPRO) named Brian McGee as Chief Financial Officer.
BCE Inc (BCE 57.57, +0.83 +1.46%) reported in-line results for the Q4 period. EPS was CC$0.72 and revenues rose 1.4% year-over-year to CC$5.6 billion. The company also issued in-line guidance for FY16 EPS of C$3.45-3.55 on revenues up 1-3% to roughly C$21.7-22.2 billion.
Teradata (TDC) reported in-line Q4 EPS of $0.70 while revenues were better than expected, yet fell year-over-year to $719 million. The company also guided FY16 EPS better than expected at $2.35-2.50, yet guided revenues worse than expected at $2.315-2.360 billion.
NXP Semi (NXPI) reported better than expected Q4 EPS and revenues of $1.25 per share and $1.58 billion, respectively. The company also guided Q1 EPS and revenues in-line with expectations at $1.05-1.15 and $2.15-2.27 billion, respectively. Gartner (IT 83.99, -2.32 -2.69%) reported better than expected Q4 EPS of $0.92 on in-line revenues which rose 10.2% year-over-year to $643.8 million. IT also sees worse than expected GAAP EPS for FY16 of $2.15-2.37 on revenues of $2.39-2.45 billion.
MAXIMUS (MMS 50.41, -2.04 -3.89%) reported worse than expected Q1 EPS and revenues of $0.40 and $556.7 million, respectively. The company also reaffirmed their FY16 EPS and revenue guidance of $2.40-2.70 and $2.4-2.5 billion, respectively.
Imperva (IMPV 41.95, -7.53 -15.22%) reported better than expected Q4 EPS of $0.20 on revenues which were also better than expected, and which rose 41.4% year-over-year to $72.7 million. IMPV also issued guidance for Q1 EPS of ($0.32)-($0.26) with revenues of $58-$60 million. For FY16,
IMPV issued mixed guidance with worse than expected EPS of $0.17-0.23 and better than expected revenues of $302-307 million. GoPro (GPRO) reported worse than expected Q4 adjusted EPS of a loss of $0.08 per share.
GPRO also saw Q4 revenues in-line with the warning of $436.6 million. The company guided Q1 revenues worse than expected at $160-180 million on non-GAAP gross margins of 35-37%. Also, GPRO issued downside FY16 guidance for revenues of $1.35-1.50 billion.
FormFactor (FORM) reported better than expected Q4 EPS and revenues of $0.10 and $71.78 million, respectively.
Companies reporting after the close: ACXM ASYS TEAM ECOM CTCT ECHO EGAN G IPHI LNKD LITE MTD MOBL MPWR MFLX UEPS NTGR NSR NEWR EGOV PCTY PXLW POWI QRVO RNG SQI SWIR DATA TTMI UBNT
Analyst actions:
YHOO was upgraded to Buy from Neutral at Citigroup,
AMBA was upgraded to Buy from Neutral at Dougherty & Company, CDNS was upgraded to Buy from Neutral at DA Davidson,
CDK was upgraded to Outperform from Mkt Perform at Barrington Research,
CHU was upgraded to Buy from Hold at HSBC;
GPRO was downgraded at Sterne Agee CRT and Dougherty & Company, SNCR was downgraded to Hold from Buy at Stifel,
MTCH was downgraded to Equal Weight from Overweight at Barclays, CYOU was downgraded to Neutral from Outperform at Credit Suisse
5:07 pm Texas Instruments will webcast a review / update of the Capital Management Strategy on February 9 at 11am ET (TXN) :
4:48 pm Sierra Wireless misses by $0.02, misses on revs; guides FY16 below consensus; TSX approves normal course issuer bid for ~10% of shares (SWIR) :
Reports Q4 (Dec) earnings of $0.08 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $0.10; revenues fell 2.9% year/year to $144.8 mln vs the $149.36 mln Capital IQ Consensus. Co issues downside guidance for FY16, sees EPS of $0.60-0.80, excluding non-recurring items, vs. $0.97 Capital IQ Consensus Estimate; sees FY16 revs of $630-670 mln vs. $674.03 mln Capital IQ Consensus Estimate. "In the fourth quarter of 2015, our revenue was slightly below our expectations, as we experienced softer demand at select OEM customers. We believe this reflects increased caution on the part of some customers in the face of an uncertain macro-economic environment. Notwithstanding the current environment, we expect our business to gain strength over the course of the year as we enter commercial production on a number of new customer programs, and continue to bring new industry-leading products and solutions to market."Pursuant to the Bid, Sierra Wireless may purchase for cancellation up to 3,149,199 of its common shares, or ~9.7% of the Common Shares outstanding as of the date of this announcementThe Board of Directors of the Company today appointed Kent Thexton as Chair of the Board of Directors to succeed Charles Levine who will continue to serve as an independent Director
4:20 pm TTM Tech beats by $0.07, beats on revs; guides Q1 EPS below consensus, revs in-line (TTMI) :
Reports Q4 (Dec) earnings of $0.31 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus of $0.24; revenues rose 71.1% year/year to $668.9 mln vs the $655.37 mln Capital IQ Consensus. Adjusted EBITDA was $95.8 millionCo issues guidance for Q1, sees EPS of $0.05-0.11, excluding non-recurring items, vs. $0.15 Capital IQ Consensus Estimate; sees Q1 revs of $570-610 mln vs. $599.75 mln two analyst estimate.
4:13 pm LinkedIn beats by $0.16, reports revs in-line; guides Q1 and FY16 EPS and rev below consensus (LNKD) :
Reports Q4 (Dec) earnings of $0.94 per share, excluding non-recurring items, $0.16 better than the Capital IQ Consensus of $0.78; revenues rose 34.0% year/year to $862 mln vs the $857.26 mln Capital IQ Consensus. Co issues downside guidance for Q1, sees EPS of ~$0.55, excluding non-recurring items, vs. $0.74 Capital IQ Consensus Estimate; sees Q1 revs of ~$820 mln vs. $866.50 mln Capital IQ Consensus Estimate. Co issues downside guidance for FY16, sees EPS of ~$3.05-3.20, excluding non-recurring items, vs. $3.73 Capital IQ Consensus Estimate; sees FY16 revs of $3.6-3.65 bln vs. $3.91 bln Capital IQ Consensus Estimate. In the quarter, cumulative members grew 19% to 414 million, unique visiting members grew 7% to an average of 100 million per month, and member page views grew 26%. This yielded 17% year over year growth in page views per unique visiting member, continuing a pattern of strong engagement growth over the past several quarters. Mobile in particular grew 3x faster than overall member activity, and now represents 57% of all traffic to LinkedIn.
4:11 pm Qorvo beats by $0.09, reports revs in-line; guides Q4 EPS in-line, lowers revs guidance, below consensus (QRVO) :
Reports Q3 (Dec) earnings of $1.03 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.94; revenues rose 56.3% year/year to $620.7 mln (in-line with Jan 7 forecast of $620) vs the $620.45 mln Capital IQ Consensus. Co issues guidance for Q4, sees EPS of $0.90-0.95 vs. $0.92 Capital IQ Consensus Estimate; lowers guidance for Q4, sees Q4 revs of ~$600 mln vs. $620.64 mln Capital IQ Consensus EstimateOn Jan 7, the company guided for Q3 and for Q4, issuing Q3 revenue guidance of ~$620 mlnAlso, on Jan 7, so said it sees Q4 revenue being flat QoQ (implying ~$620 mln)Today, the co gave guidance of $600 mln
4:05 pm Power Integrations beats by $0.05, misses on revs; guides Q1 revs below consensus (POWI) :
Reports Q4 (Dec) earnings of $0.58 per share, $0.05 better than the Capital IQ Consensus of $0.53; revenues rose 0.8% year/year to $87.3 mln vs the $89.41 mln Capital IQ Consensus. Co issues downside guidance for Q1, sees Q1 revs of $81-87 mln vs. $89.03 mln Capital IQ Consensus Estimate (specific guidance was $84 mln, plus or minus $3 mln
4:05 pm Monolithic Power beats by $0.02, beats on revs; guides Q1 revs in-line; also announced $50 mln buyback (MPWR) :
Reports Q4 (Dec) earnings of $0.51 per share, $0.02 better than the Capital IQ Consensus of $0.49; revenues rose 14.8% year/year to $86.9 mln vs the $85.78 mln Capital IQ Consensus.Co issues in-line guidance for Q1, sees Q1 revs of $81-85 mln vs. $81.45 mln Capital IQ Consensus Estimate. Sees non-GAAP gross margin between 54.5% and 55.5%. This excludes an estimated impact of stock-based compensation expenses of 0.4% and amortization of acquisition-related intangible assets of 0.6%. Co also announces $50 mln stock repurchase program
4:15 pm : The stock market ended its Thursday session on a modestly higher note as shaky trading in oil weighed on the market as a whole. Today's trade saw the continued influence of a few other repeat players, as central bank policies, mixed earnings results, and weaker than expected economic data remained in focus ahead of tomorrow's Employment Situation Report for January. The Dow Jones Industrial Average (+054%) was able to end its day ahead of both the S&P 500 (+0.2%) and the Nasdaq Composite (+0.1%).
After yesterday's close, Fed Governor Lael Brainard argued for a gradual pace to future rate hikes as, "recent developments reinforce the case for watchful waiting". This dovish tone was echoed internationally as the Bank of England left their existing policy stance unchanged. Shortly before today's open, futures were anchored by a collection of weaker than expected data. Initial jobless claims were reported above analyst expectations, nonfarm productivity came in below estimates, and unit labor costs rose faster than expected.
A rally in crude oil was able to lift futures as the commodity climbed above the $33.00/bbl price level heading into today's session. The rally in the energy component acted as a counterweight to the detrimental data for part of the session. However, as speculation regarding production cuts between OPEC and non-OPEC states declined, so did the commodity. Despite tailwinds from a falling dollar, WTI crude ended its day 2.1% lower at $31.62/bbl.
Only four sectors were able to end their day in positive territory with materials (+2.8%), industrials (+1.7%), and financials (+0.9%) leading the pack. On the flipside, consumer staples (-0.9%) and consumer discretionary (-0.6%) ended with the largest losses.
Money center banks were able to help the larger rebound effort in the financial sector, as JPMorgan Chase (JPM 58.40, +0.99) and Wells Fargo (WFC 48.25, +0.65) outperformed. Elsewhere, MetLife (MET 39.75, -2.20) underperformed the broader sector after missing analyst expectations in it Q4 earnings report.
The industrials space was able to take advantage of the weakening U.S. Dollar Index. Constituents saw an easing of currency headwinds that US companies have faced when attempting to gain pricing power, as falling import prices have negatively affected their core businesses. Large-caps General Electric (GE 29.18, +0.51) and Boeing (BA 123.61, +1.74) showed relative strength with gains of 1.8% and 1.4%, respectively.
In the consumer discretionary space, retailers showed relative weakness after the group reported same store sales before today's open. L Brands (LB 88.57, -6.60) declined 6.9% after reporting that it missed its January estimates. Meanwhile, Kohl's (KSS 41.52, -9.61) plunged 18.8% after the company reported that sales were volatile in Q4 and that January was particularly soft as lower demand for cold-weather goods led to lower store traffic.
Energy (UNCH) companies ConocoPhillips (COP 35.32, -3.31) and Occidental Petroleum (OXY 66.98, -1.15) both reported earnings misses before today's session. Occidental was able to limit its losses after it stated that maintaining operations funding and dividends are the company's top priority. Meanwhile, ConocoPhillips declined 8.6% after it announced that it would be cutting its dividend.
In the health care space (-0.5%), biotechnology showed relative strength today, evidenced by the 0.3% uptick in the iShares Nasdaq Biotechnology ETF (IBB 264.69, +0.69). Celgene (CELG 101.93, +2.44) lead the sub-group after climbing 2.5% today.
Investor participation was true to recent form with more than a billion shares changing hands at the NYSE floor.
Treasuries ended their day near their highs with the yield on the 10-yr note lower by three basis points at 1.85%
Today's economic data included the Challenger Job Cuts report, weekly Initial Claims, the preliminary Q4 Productivity and Unit Labor Cost and December's Factory Orders.
January Challenger Job Cuts totaled 75,114 up 41.6% year-over-year
Initial claims for the week ending January 30 increased by 8,000 to 285,000 (Briefing.com consensus 275,000).
This reading remains true to the range of 250,000 to 300,000 which has bounded the reading since July 2014.
Today's reading pushed up the four-week moving average from 282,750 to 284,750, which is the highest since July 2015.
Continuing claims for the week ending January 23 decreased by 18,000 to 2.255 million (Briefing.com consensus 2.253 million).
The four-week moving average increased by 5,250 to 2.253 million.
The preliminary report on Q4 productivity showed productivity decreased at a 3.0% annual rate (Briefing.com consensus -1.7%)
This was the largest drop in productivity since the first quarter of 2014.
Output increased a mere 0.1% while hours worked increased 3.3% while productivity is up just 0.3% year-over-year.
Annual average productivity increased 0.6% from 2014 to 2015, with output and hours increasing 2.8% and 2.2%, respectively.
Productivity has increased at an annual rate of less than 1.0% in each of the last five years well below the long-term rate of 2.1% from 1947 to 2015.
Fourth quarter unit labor costs increased 4.5% (Briefing.com consensus +3.8%), reflecting a 1.3% increase in hourly compensation and a 3.0% decrease in productivity.
That was the largest jump in unit labor costs since the fourth quarter of 2014.
Third quarter nonfarm business productivity was revised down to 2.1% from 2.2% while unit labor cost growth was revised up to 1.9% from 1.8%.
Factory orders declined 2.9% in December (Briefing.com consensus -2.6%) on the heels of a downwardly revised 0.7% decline (from -0.2%) for November.
That is the largest month-over-month decline since December 2014. This the fourth decline in the last five months for factory orders, which are down 6.6% year-over-year.
New orders for manufactured durable goods were down 5.0% versus a previously reported 5.1% decline in the Durable Orders report for December.
Tomorrow's economic data includes the January Nonfarm Payrolls report (Briefing.com consensus 188k) and December's Trade Balance (Briefing.com consensus -$43.5 billion), which will be reported at 8:30 ET. Meanwhile, December Consumer Credit (Briefing.com consensus $16.50 billion) will cross the wires at 15:00 ET.
Russell 2000 -10.6% YTD
Nasdaq -9.9% YTD
S&P 500 -6.3% YTD
Dow Jones -5.8% YTD
DJ30 +79.92 NASDAQ +5.32 SP500 +2.92 NASDAQ Adv/Vol/Dec 1790/2.011 bln/1194 NYSE Adv/Vol/Dec 1955/1.169 bln/1091
3:40 pm :
The dollar index traded lower today, which only helped select commodities today, such as the metals space
Energy, on the other hand, was trading on other catalyst
Oil started the day strong, but lost steam and sunk to new lows on the day
Mar crude ultimately ended the session -2.1% at $31.62/barrel, closing near its LoD
Mar nat gas lost steam following the weekly storage data, finishing -3.4% at $1.97/MMBtu
In the metals space, Apr gold and Mar silver closed out the day near its highs
Gold finished +1.4% at $1157.60/oz, while silver +0.9% at $14.87/oz
Mar copper gained 1.4% to $2.13/l
9:01 am Ultratech beats by $0.04, misses on revs (UTEK) :
Reports Q4 (Dec) loss of $0.14 per share, $0.04 better than the Capital IQ Consensus of ($0.18); revenues fell 41.4% year/year to $28.3 mln vs the $33.75 mln Capital IQ Consensus.At December 31, 2015, UTEK had $251.9 mln in cash, cash equivalents and short-term investments. Working capital was $315.4 mln and stockholders' equity was $12.89 per share based on 26,522,276 total shares outstanding as of December 31, 2015.
7:14 am FormFactor beats by $0.02, beats on revs, announced $352 mln acquisition of Cascade Microtech (CSCD) (FORM) :
Reports Q4 (Dec) earnings of $0.10 per share, $0.02 better than the Capital IQ Consensus of $0.08; revenues rose 0.7% year/year to $71.78 mln vs the $70.46 mln Capital IQ Consensus.
7:11 am Cascade Microtech beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs in-line (Being acquired by FormFactor (FORM)) (CSCD) :
Reports Q4 (Dec) earnings of $0.28 per share, $0.03 better than the Capital IQ Consensus of $0.25; revenues rose 12.9% year/year to $40.41 mln vs the $40 mln single analyst estimate. Co issues guidance for Q1, sees EPS of $0.10-0.16 vs. $0.18 Capital IQ Consensus Estimate; sees Q1 revs of $33-37 mln vs. $35.79 mln Capital IQ Consensus Estimate.
7:05 am iRobot sells Defense and Security business to Arlington Capital Partners for up to $45 mln; reaffirms its Q4 and FY15 EPS guidance; expects Q4 and FY15 revs at top end of guidance (IRBT) :
iRobot announced that it has signed a definitive agreement to sell its Defense and Security business to Arlington Capital Partners for up to $45 million in total consideration, including a contingent payment based on achieving certain milestones. The transaction is expected to close in the next few months.
This transaction enables iRobot to solidify its position as the leader in diversified Home Robots and focus on technologies for the connected home.The company reaffirmed its Q4 guidance for EPS of $0.53-0.58/share ($0.57 Consensus) and full-year 2015 EPS guidance of $1.35-1.40 ($1.44 Consensus) provided on October 20, 2015.Co expects Q4 revenues to be at high end of guidance range of $200-205 mln ($202.3 mln Consensus) and full-year 2015 results to be at the high end of the range of $610-615 mln ($612.2 mln Consensus), following a successful holiday season for the new Roomba 980 Series robot.
7:01 am Cascade Microtech to be acquired by FormFactor (FORM) for ~$21.13/share in cash&stock (shares halted) (CSCD) :
Cascade stockholders will be entitled to receive $16.00 in cash and 0.6534 of a share of FormFactor common stock. The transaction values Cascade at $21.13 per share, or $352 million in equity value. The 2015 revenues of the combined company on a pro forma basis would be over $426 million. This transaction is expected to be immediately accretive to FormFactor's earnings per share. The combined company expects to realize $10 million to $12 million in annualized cost synergies.Under the terms of the definitive agreement, FormFactor will acquire Cascade for approximately $352 million in aggregate consideration, consisting of $270 million in cash and approximately 10.4 million shares of FormFactor common stock, valued at $7.85 per share.Cascade common stockholders are expected to own approximately 15% of the combined company. FormFactor intends to fund the cash consideration for the transaction using approximately $120 million of cash on hand and approximately $150 million in debt financing. The transaction was unanimously approved by the boards of directors of both companies. The transaction is expected to close in mid-2016.
6:48 am Siliconware Precision: Advanced Semiconductor Engineering (ASX) extends the tender offer until March 17 from previous February 16 expiry (SPIL) :
6:37 am Wi-LAN beats by $0.05, misses on revs; to implement Normal Course Issuer Bid (WILN) :
Reports Q4 (Dec) earnings of $0.13 per share, $0.05 better than the Capital IQ Consensus of $0.08; revenues rose 17.6% year/year to $26 mln vs the $28.84 mln two analyst estimate.The Board has approved the implementation of a Normal Course Issuer Bid to repurchase for cancellation up to 10% of the publicly held issued and outstanding common shares of the Company, subject to the receipt of regulatory and other approvals.
6:01 am Fairchild Semi: ON Semiconductor (ON) extends tender offer to acquire Fairchild Semiconductor (FCS) : Offer between ON Semiconductor (ON) and Fairchild will now expire one minute following 11:59 pm, New York City time, on Feb 18, 2016, unless further extended as required or permitted by the merger agreement. All other terms and conditions of the Offer remain unchanged.
2:34 am NXP Semi beats by $0.23, beats on revs; guides Q1 EPS in-line, revs in-line (NXPI) :
Reports Q4 (Dec) earnings of $1.25 per share, $0.23 better than the Capital IQ Consensus of $1.02; revenues rose 5.1% year/year to $1.58 bln vs the $1.54 bln Capital IQ Consensus. Co issues in-line guidance for Q1, sees EPS of $1.05-1.15 vs. $1.07 Capital IQ Consensus Estimate; sees Q1 revs of $2.15-2.27 bln vs. $2.24 bln Capital IQ Consensus Estimate.
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