From Briefing.com: 4:21 pm Hewlett Packard Enterprise beats by $0.01, reports revs in-line; guides Q2 EPS in-line; reaffirms FY16 EPS guidance (HPE) :
Reports Q1 (Jan) earnings of $0.41 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.40; revenues fell 2.5% year/year to $12.72 bln vs the $12.65 bln Capital IQ Consensus. Enterprise Group revenue was $7.1 billion, up 1% year over year, up 7% in constant currency, with a 13.4% operating margin. Servers revenue was down 1%, up 5% in constant currency, Storage revenue was down 3%, up 3% in constant currency, Networking revenue was up 54%, up 62% in constant currency, and Technology Services revenue was down 9%, down 3% in constant currency. Enterprise Services revenue was $4.7 billion, down 6% year over year, flat in constant currency, with a 5.1% operating margin. Infrastructure Technology Outsourcing revenue was down 8%, down 2% in constant currency, and Application and Business Services revenue was down 3%, up 3% in constant currency. Software revenue was $780 million, down 10% year over year, down 6% in constant currency, with a 17.4% operating margin. License revenue was down 6%, down 2% in constant currency, support revenue was down 13%, down 9% in constant currency, professional services revenue was down 7%, down 2% in constant currency, and software-as-a-service (SaaS) revenue was down 9%, down 7% in constant currency.Co issues in-line guidance for Q2, sees EPS of $0.39-0.43, excluding non-recurring items, vs. $0.42 Capital IQ Consensus Estimate. Co reaffirms guidance for FY16, sees EPS of $1.85-1.95, excluding non-recurring items, vs. $1.87 Capital IQ Consensus Estimate.
4:05 pm Broadcom Intl beats by $0.11, beats on revs; guides Q2 revs in-line (AVGO) :
Reports Q1 (Jan) earnings of $2.41 per share, $0.11 better than the Capital IQ Consensus of $2.30; revenues rose 7.5% year/year to $1.78 bln vs the $1.76 bln Capital IQ Consensus. Co issues in-line guidance for Q2, sees Q2 revs of $3475-3625 bln vs. $3.56 bln Capital IQ Consensus Estimate.Gross Margin expected to be in the range of 58-60%.CapEx is expected to be $210 mln.Following Avago's acquisition of Broadcom Corporation ("BRCM") on February 1, 2016, Broadcom Limited became the ultimate parent company of Avago and BRCM. This is the first release of financial results following the Acquisition and relates solely to the predecessor, Avago, for the fiscal periods prior to the Acquisition.
Thursday trading was capped off by modest gains across the board. The slightly higher bias was led by the S&P 500 which added 6.95 points (+0.35%) to 1993.40. The Dow Jones Industrial Average also closed up, advancing 44.58 points (+0.26%) to close 16943.90. The Nasdaq Composite was the laggard (albeit finishing about flat lines as well), as the index was higher by 4.00 points (+0.09%) to 4707.42.
Market data today included the initial claims reading for the week ending February 27, which showed a slight bump in claims to 278,000, up 6,000 versus last week. Continuing claims for the week ending February 20 increased 3,000 to 2.257 million. The Bureau of Labor Statistics reported non-farm labor productivity declined at a 2.2% annual rate during Q4. Unit labor costs in the non-farm business sector increased 3.3% in Q4, and factory orders were up 2.9% in January.
Action in the Technology (XLK 42.31, flat) sector was flat when Thursday was done as component Western Union (WU 19.09, +0.64 +3.44%) ended the session near highs of the day following an upgrade to Neutral at Sun Trust Rbsn Humphrey. Other sectors closed XLE +1.51%, XLI +0.71%, XLF +0.68%, XLB +0.61%, XLU +0.60%, XLY +0.59%, XLP +0.50%, IYZ -0.20%, XLV -0.28% today led by Energy, while Healthcare lagged.
Solar (TAN 23.85, -0.11 -0.46%) were again in play today as component SunEdison (SUNE 1.51, -0.27 -15.36%) announced the suspension of the payment of quarterly dividends on preferred stock. The shares spent the entirety of the day in the red, ending near lows. Other TAN names which under-performed today included TERP -6.32%, CSIQ -4.00%, JKS -3.89%, VSLR -3.89%, DQ -1.48%, SEDG -1.32%.
When the bell rang, the S&P 500 Information Technology sector (697.25, -0.45 -0.06%) was modestly lower, but an uptrend into the close made things interesting as component Intel (INTC 30.58, +0.04 +0.13%) was modestly higher following an upgrade to Outperform at Robert W. Baird. Other notable sector components which finished the day EA -1.95%, ADBE -1.33%, MSFT -1.13%, GOOGL -1.07%, AKAM -1.01%, INTU -0.93%, GOOG -0.89%, QCOM -0.89%.
Other notable news items among sector components:
TE Connectivity (TEL 60.48, +1.20 +2.02%) approved an additional $1.0 billion share repurchase.
TEL also entered into an enterprise license agreement to leverage ANSYS' (ANSS 86.26, +0.19 +0.22%) engineering simulation software. The agreement provided TEL with enterprise-wide licenses to the ANSYS structures, fluids and high-frequency electromagnetics suites as well as access to high-performance computing solutions.
Broadcom Intl (AVGO 137.33, +0.36 +0.26%) increased its quarterly dividend to $0.49 per share from $0.44 per share.
eBay (EBAY 23.94, +0.22 +0.93%) priced $1.5 billion senior unsecured notes offering.
Encompass will supply HP (HPQ 11.11, +0.21 +1.93%) imaging and computing parts for out-of-warranty repairs primarily in: Argentina, Colombia, Ecuador, Paraguay, Uruguay, Bolivia, Peru, Venezuela, Chile, Puerto Rico, Central America and the Caribbean. Distribution will be handled through the company's partnership with Global Smart Business (GSB), which licenses the Encompass brand and goes to market outside the U.S. as Encompass International.
Elsewhere in the tech space:
SunEdison (SUNE) suspended payment of quarterly dividends on the Company's 6.75% Series A Perpetual Convertible Preferred Stock.
SuperCom (SPCB 4.96, +0.13 +2.69%) acquired Safend Ltd. and expects EPS accretion. Financial terms of the deal were not disclosed.
Perceptron (PRCP 5.23, -0.21 -3.86%) announced a broadly focused financial improvement plan designed to reduce fixed costs, improve the company's profitability and cash flow and further its ability to capture the value of the business diversification strategy begun in 2014. The company now expects revenue for our third fiscal quarter, ending March 31, 2016, will be in the range of $16 million to $19 million, and anticipate fourth-quarter revenue will be slightly higher sequentially.
Angie's List (ANGI 8.60, +0.22 +2.63%) announced the details of its new Profitable Growth Plan at a meeting with investors and financial analysts in New York. The Company is also issuing financial guidance for fiscal 2016. ANGI has historically charged its members a fee to access its ratings and reviews. The company's new Profitable Growth Plan transforms this legacy business model by removing the ratings and reviews paywall and enabling consumers to access this service for free. The company will also be introducing new freemium and premium tiered offerings with additional high value services. Early pilot results from these changes have shown significant increases in consumer engagement and service provider value, including increases in consumer registrations, total profile views, reviews and originations. For the FY16 period, ANGI expects revenues in the range of $345-355 million and adjusted EBITDA in the range of $31-35 million on FCF of about break-even.
In addition to reporting quarterly results, SINA (SINA 43.00, -0.75 -1.71%) announced a $500 million buyback program through the end of June 2017.
Synopsys (SNPS 45.87, -0.02 -0.04%) has acquired WinterLogic. The terms of the deal, which is not material to Synopsys financials, have not been disclosed.
Synchronoss Tech (SNCR 29.49, -0.52 -1.73%) to acquire privately held Openwave Messaging Inc. The acquisition is not expected to have a material impact to the company's revenue and non-GAAP EPS for the 2016 fiscal year.
In reaction to quarterly results:
SINA (SINA) reported better than expected Q4 EPS of $0.35 and worse than expected revenues of $256.2 million. SINA also guided FY16 revenues of $850-950 million.
Cable ONE (CABO 449.90, +32.63 +7.82%) reported better than expected Q4 EPS and revenues of $4.44 and $203.4 million, respectively.
Tech Data (TECD 74.16, +1.18 +1.62%) reported better than expected Q4 EPS and revenues of $2.29 and $7.48 billion, respectively. TECD also guided Q1 EPS in-line at $0.90-0.98 and guided for worse than expected revenues of $5.85-6.05 billion.
Ciena (CIEN 16.99, -3.71 -17.92%) reported better than expected EPS for Q1 of $0.18 on revenues which rose 8.3% year-over-year to $573.1 million. CIEN also guided Q2 revenues of $615-645 million.
Semtech (SMTC 21.00, +1.967 +8.64%) reported better than expected Q4 EPS and revenues of $0.17 and $118.6 million, respectively. For the Q1 period, SMTC sees better than expected revenues and EPS of $124-132 million and $0.26-0.30, respectively.
Stratasys (SSYS 24.53, +3.64 +17.42%) reported better than expected Q4 EPS at a loss per share of $0.01 and better than expected Q4 revenues of $173.4 million. For the FY16 period, SSYS sees better than expected EPS and revenues of $0.17-0.43 and $700-730 million, respectively.
Trina Solar (TSL 10.46, +0.03 +0.29%) reported better than expected Q4 EPS and revenues of $0.43 and $961.9 million, respectively.
Perficient (PRFT 20.17, +1.68 +9.09%) reported better than expected Q4 EPS and revenues of $0.37 and $133.7 million, respectively. In Q1, PRFT sees slightly better than expected revenues of $120-125 million. For FY16, EPS is expected to come in in-line at $1.40-1.52 and revenues are expected to be above anticipations at $505-535 million.
Companies scheduled to report quarterly results tonight: AMBA AVGO CKP MENT NMBL UNXL XTLY XOXO
Analyst actions:
INTC was upgraded to Outperform from Neutral at Robert W. Baird,
INXN was upgraded to Outperform from Mkt Perform at Raymond James,
ITRI was upgraded to Buy from Hold at Argus,
TSS was upgraded to Outperform from Underperform at Credit Agricole;
SUNE was downgraded at Needham and Macquarie,
CKP was downgraded to In-Line from Outperform at Imperial Capital;
PCOM target was lowered at RBC Capital to $17,
SMTC target was raised at MKM Partners, RBC Capital and Drexel Hamilton;
PRFT target was raised to $25 at Maxim Group
4:20 pm : The stock market ended the Thursday affair on a higher note with the S&P 500 gaining 0.4% ahead of tomorrow's release of the February Employment Situation Report. The benchmark index managed to erase a nine-point loss, climbing to its best level by the end of the day. Today's action saw relative strength from commodity-sensitive energy (+1.3%), which managed to outweigh the underperformance of the heavyweight technology (-0.1%) and health care (-0.4%) spaces. Meanwhile, a bid higher in safe haven assets did not detract from an upswing in equities while the greenback lost some ground today.
On the leaderboard, energy (+1.3%) managed to lead the pack while industrials (+0.6%) and financials (+0.5%) followed. Meanwhile, the heavily-weighted health care (-0.4%) and technology (-0.1%) were the only two spaces to end in the red.
The energy sector (+1.3%) showed resilience today as the sector outperformed despite a volatile and ultimately flat showing from WTI crude ($34.57/bbl). On that note, independent oil and gas name ConocoPhillips (COP 38.56, +2.07) managed to add to its advance while oil was up and maintained its footing when oil swung lower. Separately, energy giants Exxon Mobil (XOM 82.40, -0.30) and Chevron (CVX 87.53, +0.39) ended on opposing sides of their flat lines.
Elsewhere, the industrial sector (+0.6%) outperformed today as farm and construction names like Deere (DE 83.67, +1.83) and Caterpillar (CAT 71.75, 2.37) traded higher in sympathy with Joy Global (JOY 16.09, +2.77). Joy boosted sentiment for the sub-group after the company maintained its full-year earnings and revenue guidance, which was viewed as better that feared. Meanwhile, Norfolk Southern (NSC 77.00, +0.00) and Union Pacific (UNP 80.01, +0.51) outperformed, helping the Dow Jones Transportation Average (+1.1%) solidify its position in positive territory for the year (year-to-date +1.2%).
Biotechnology contributed to early and prolonged weakness in the health care sector as the iShares Nasdaq Biotechnology ETF (IBB 264.24, -3.88) surrendered 1.5%. Today's loss in the ETF extended its year-to-date decline to 21.9%. This compares to a 6.8% in the broader sector for the year. Additional weakness in the sector spawned from Abbott Labs (ABT 38.82, -0.52) and Eli Lilly (LLY 73.25, -0.77), which lost 1.3% and 1.0%, respectively.
In the technology space, large-cap constituents pulled back from their recent outperformance as Alphabet (GOOGL 731.59, -7.89) and Microsoft (MSFT 52.35, -0.60) surrendered 1.1% apiece. The two names have climbed 5.1% and 7.5% since the February 11 low in the S&P 500. Separately, the broader technology sector widened its 2016 decline to 3.4%.
The countercyclical sectors were able to recover from some early relative weakness as utilities (+0.6%), consumer staples (+0.5%), and telecom services (+0.3%) ended on their best levels. The three sectors sport the largest year-to-date advances of 6.9%, 2.2%, and 11.2%, respectively.
The Treasury complex ended its day higher despite the afternoon rally in equities. On that note, the yield on the 10-yr note slipped one basis point at 1.83%.
On the currency front, the euro/dollar pair rose 0.9% to 1.0966 while the dollar/yen pair ticked up 0.1% to 113.62, but retreated from its overnight high of 114.28.
Today's trading volume was heavier than the recent average with more than 1.12 billion shares changing hands at they NYSE floor.
Today's economic data included weekly initial claims, Q4 Productivity, Unit Labor Cost data, January Factory Orders, and ISM Services for February:
Initial claims data for the week ending February 27 showed a slight bump in claims to 278,000 (Briefing.com consensus 270,000), up 6,000 from the prior week's unrevised level.
There were no special factors influencing the latest reading, which kept initial claims pinned in the same 250,000 - 300,000 range they have been in since July 2014.
The four-week moving average for initial claims decreased 1,750 to 270,250.
Continuing claims for the week ending February 20 increased 3,000 to 2.257 million, which was basically in-line with the Briefing.com consensus estimate.
The four-week moving average for continuing claims pushed slightly lower to 2.257 million.
The Bureau of Labor Statistics reported nonfarm labor productivity decreased at a 2.2% annual rate during the fourth quarter (Briefing.com consensus -3.3%) versus a preliminary 3.0% decrease.
The updated productivity number was the byproduct of output increasing 1.0% and hours worked increasing 3.2%. From the fourth quarter of 2014 to the fourth quarter of 2015, productivity increased just 0.5%.
Unit labor costs in the nonfarm business sector increased 3.3% in the fourth quarter per the revised data versus a preliminary 4.5% increase. The revision reflected a 1.1% increase in hourly compensation and the 2.2% decrease in productivity.
Unit labor costs have increased 2.1% over the last four quarters.
Factory orders increased 1.6% in January. That was lower than the Briefing.com consensus estimate of 2.0%, but well above the unrevised 2.9% decline for December, which was the largest month-over-month decline since December 2014. Total factory orders are down 3.3% year-over-year.
Excluding transportation, factory orders declined 0.2% on the heels of a downwardly revised 0.9% decline (from -0.8%) for December. On a year-over-year basis, factory orders excluding transportation are down 5.1%.
New orders for manufactured durable goods increased 4.7%, which was down slightly from the 4.9% increase seen in the Durable Goods Orders report for January. New orders for nondefense capital goods excluding aircraft -- a proxy for business investment -- were up 3.4% versus an originally reported 3.9% increase seen in the Durable Goods orders report.
New orders for manufactured nondurable goods declined 1.4% following a downwardly revised 1.1% decline (from -0.8%) for December. That was the third straight monthly decline in orders for manufactured nondurable goods.
Shipments of manufactured durable goods increased 2.0% after an upwardly revised 1.8% decrease (from -2.1%) for December.
The inventory-to-shipments ratio for all manufacturing industries slipped to 1.36 from a downwardly revised 1.37 (from 1.38) for December.
Tomorrow's economic data will be limited to the Employment Situation Report for February (Briefing.com consensus 190k) and the Trade Balance for January (Briefing.com consensus -$44.0 billion).
Nasdaq Composite -6.0% YTD
Russell 2000 -5.3% YTD
Dow Jones -2.8% YTD
S&P 500 -2.5% YTD
DJ30 +44.58 NASDAQ +4.00 SP500 +6.95 NASDAQ Adv/Vol/Dec 1796/1.779 bln/1094 NYSE Adv/Vol/Dec 2312/1.129 bln/722
3:45 pm :
Despite huge gains in many oil and gas stocks, Apr WTI oil prices ended the day flat at $34.57/barrel
Natural gas futures extend weakness, reversing the rally post-EIA data. Apr nat gas finished today's session -2.4% at $1.64/MMBtu
Metals performed better, which found some help from weakness in the dollar
Apr gold finished today's floor session +1.3% at $1258.10/oz, while May silver rose +0.8% to close at $15.14/oz
Apr copper rose as well, gaining +1.4% to end at $2.21/lb
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