From Briefing.com: 4:09 pm Cray beats by $0.12, beats on revs; guides Q2 revs below consensus; guides FY16 revs in-line (CRAY) : Reports Q1 (Mar) loss of $0.13 per share, $0.12 better than the Capital IQ Consensus of ($0.25); revenues rose 32.9% year/year to $105.5 mln vs the $100.8 mln Capital IQ Consensus.Overall gross profit margin for 1Q16 was 38%, compared to 30% for 1Q15. Total non-GAAP gross profit margin percentage for 1Q16 was consistent with the GAAP result for the same period. Co issues downside guidance for Q2, sees Q2 revs of $100 mln vs. $120.73 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY16, sees FY16 revs of $825 mln vs. $826.34 mln Capital IQ Consensus Estimate. However, company says "there is an increased level of risk to achieving this target. This increased risk is driven by the Company's reliance on key third-party components, some of which have already been delayed, and the level and timing of new orders." Non-GAAP gross margin for the year is expected to be in the range of 33%.
4:08 pm Maxwell Tech misses by $0.03, beats on revs; guides Q2 revs in-line (MXWL) :
Reports Q1 (Mar) loss of $0.14 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of ($0.11); revenues rose 1.4% year/year to $35.2 mln vs the $34.6 mln Capital IQ Consensus. Adjusted EBITDA for the first quarter of 2016, compared with $3.9 million for the fourth quarter of 2015 and $(4.9) million for the prior year quarter. Co issues in-line guidance for Q2, sees Q2 revs of $34-36 mln vs. $34.97 mln Capital IQ Consensus Estimate; Co sees Q2 Non-GAAP gross margin for the second quarter of 2016 is expected to be in the range of 30% to 32%.
4:05 pm Ixia beats by $0.03, beats on revs (XXIA) :
Reports Q1 (Mar) earnings of $0.09 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.06; revenues fell 6.9% year/year to $112.7 mln vs the $109.6 mln Capital IQ Consensus. (Pre-announced Q1 EPS of $0.05-0.08 & $108-11 mln on April 14 versus $0.12/$123.4 mln Capital IQ consensus at that time)."We believe we are well positioned to capitalize on the growing technology trends across enterprise, service provider, and cloud networks by leveraging our security expertise and IP across our test and visibility products."
4:15 pm : The major averages ended the Tuesday affair under pressure as the Nasdaq Composite (-1.1%) and the S&P 500 (-0.9%) erased yesterday's modest gains. Today's trade centered on a downtick in oil, concerns over global growth, continued swings in the currency market, and weakness in the financial (-1.3%) sector.
The major averages began the day on a wobbly note as renewed selling pressure from the oil pit and below-consensus economic data from overseas forced macroeconomic concerns back into focus. On that note, disappointing manufacturing PMI readings from China (49.4 in April from 49.7 in March) and the U.K. (49.2 in April from 50.7 in March) both showed larger than expected contractions in April.
The European Commission underscored the unsettling developments when it cut its 2016 euro area GDP (to 1.6% from 1.7%) and inflation forecasts (to 0.2%; from 0.5%). As a result, investors assumed a risk-off posture during the European session and bid safe haven Treasuries, gold, and the yen higher. On the home front, risk-off trade would bring the benchmark index to a session low by the late morning.
The stock market ticked off its low after midday, as all ten sectors trimmed their losses. The benchmark index would end off its low despite all ten sectors ending in the red. Rounding out the board, commodity-sensitive energy (-2.2%) and materials (-1.7%) trailed financials (-1.3%), telecom services (-1.0%) and consumer discretionary (-0.9%).
The energy space (-2.2%) trimmed its year-to-date gain to 9.6% as it surrendered to pressure in oil. WTI crude ended its day lower by 2.5% ($43.64/bbl) as investors ruminated over supply increases from OPEC states and looked forward to the API's latest inventory report. The API will release its latest stockpile data at 16:35 ET. In the broader sector, Halliburton (HAL 40.44, -1.61) declined by 3.8% after beating bottom-line estimates for the quarter. To be fair though, the company recorded asset impairments and severance costs of approximately $2.1 billion.
In the financial sector (-1.3%), money center banks displayed relative weakness as they traded lower in sympathy with a downturn in European banks. Furthermore, banks likely underperformed due to their exposure to oil and gas loans. On that note, JPMorgan Chase (JPM 62.56, -1.23) and Citigroup (C 45.57, -1.11) declined 1.9% and 2.4%, respectively. Elsewhere, MetLife (MET 44.79, -1.05) fell 2.3% after receiving a $25 million fine from the Financial Industry Regulatory Authority for omissions and negligent misrepresentations regarding its variable annuity replacements.
The industrial sector (-0.8%) displayed broad-based weakness. United Technologies (UTX 102.13, -2.24) fell 2.2% after receiving a downgrade to "Sector Perform" from "Outperform" at RBC Capital Markets. Meanwhile, the Dow Jones Transportation Average (-1.2%) displayed relative weakness as Expeditors International (EXPD 47.39, -2.87) slid 5.7% after missing top- and bottom-line estimates for the quarter.
In the heavyweight technology sector (-0.8%), Apple (AAPL 95.18, +1.54) outperformed as it rebounded from an eight-day losing streak. Elsewhere, Fidelity National (FIS 71.29, +4.11) gained 6.1% after reporting a bottom-line beat on light revenue for the first quarter. Conversely, the high-beta chipmakers underperformed, evidenced by the 1.2% decline in the PHLX Semiconductor Index.
The U.S. Dollar Index (92.95, +0.32) ended on its high as the greenback gained against the Canadian dollar and trimmed losses against the yen and euro. The dollar/yen pair ended flat at 106.45 after falling as low as 105.55 overnight. Meanwhile, the euro lost 0.2% against the dollar (1.1508) while the dollar/Canadian dollar pair finished higher by 1.5% (1.2717).
The Treasury complex settled near its session high as the yield on the 10-yr note fell seven basis points to 1.80%.
Today's participation was above the recent average as more than 975 million shares changed hands at the NYSE floor.
Today's economic data was limited to April Auto and Truck Sales.
Tomorrow's economic data will include the weekly MBA Mortgage Index and the April ADP Employment Change (Briefing.com consensus 196k), which will be released at 7:00 ET and 8:15 ET, respectively. Meanwhile, preliminary Q1 Productivity (Briefing.com consensus -1.4%), Unit Labor Cost (Briefing.com consensus 2.6%), and the March Trade Balance (Briefing.com consensus -$41.4 Billion) will all be released at 8:30 ET. Finally, the day's data will be capped off with March Factory Orders (Briefing.com consensus 0.5%) and April ISM Services (Briefing.com consensus 54.5) both crossing the wires at 10:00 ET.
Dow Jones +1.9% YTD
S&P 500 +1.0 YTD
Russell 2000 -1.2% YTD
Nasdaq Composite -4.9% YTD
DJ30 -140.25 NASDAQ -54.37 SP500 -18.06 NASDAQ Adv/Vol/Dec 752/1.815 bln/2391 NYSE Adv/Vol/Dec 741/975 mil/2287
3:30 pm :
The dollar index rallies all day with little variation, weighing on commodities, currently up +0.3% around the 92.94 level
Commodities, as measured by the Bloomberg Commodity Index, are down -1.4% at 83.58
Crude oil consolidates around the morning lows, closing down on the day
June crude oil futures fell $1.11 (-2.5%) to $43.64/barrel
Natural gas stages an afternoon rally, consolidating and closing higher on the day
June natural gas closed $0.05 higher (+2.5%) at $2.09/MMBtu
In precious metals, gold trends slightly lower, closing just below its recent year-to-date highs
June gold ended today's session down $4.10 (-0.3%) to $1291.80/oz
Gold is trading near a key level of resistance below $1300/oz, just under its year-to-date highs
Silver trades sideways, directionless in afternoon trading after this morning's drop
July silver closed today's session $0.21 lower (-1.2%) at $17.49/oz
Base metal copper inches lower in afternoon pit trading
July copper closed $0.05 lower (-2.2%) at $2.22/lb
Corn and wheat futures end pit trading notably lower following the USDA weekly crop progress report released late yesterday
July corn closed $0.13 lower (-3.3%) at $3.79/bushel
July wheat closed $0.17 lower (-3.5%) at $4.71/bushel
The USDA reports that U.S. farmers have planted 45% of corn crop ,up from 30% a week ago and above 5-year avg of 30%, while wheat plantings rose to 54%, up from 42% a week ago and above 5-year avg of 39%
Yesterday's strength was given back in action today as the broader market was led lower by the Nasdaq Composite which shed 54.37 points (-1.13%) to 4763.22. The S&P 500 was also lower, losing 18.06 points (-0.87%) to 2063.37. Rounding out the trio, the Dow Jones Industrial Average was down 140.25 points (-0.78%) today to end 17750.91. Stocks which led the Nasdaq 100 lower today included SBAC -5.9%, TSLA -3.9%, JD -3.5%, REGN -3.4%, and INCY -3.1%.
Broad weakness permeated US equities, helped along by a -2.5% drop in June Crude Oil Futures and renewed concerns over the state of the global economy weigh on the major averages. Futures slipped overnight following negative economic data out of China and Europe. China's Caixin Manufacturing PMI (49.4) reading disappointed investors and also marked the 14th consecutive contraction in the purchasing managers' index. The April figure came in below the March reading of 49.7. Elsewhere, the U.K. Manufacturing PMI also missed expectations when it dropped to 49.2 in April from the March reading of 50.7. The EU Commission added to the negative sentiment after it lowered its GDP and inflation estimates for the eurozone in 2016. The EU Commission now sees 2016 GDP growth coming in at 1.6% (revised from 1.7%) while inflation estimates for the year were revised to 0.2% from 0.5%.
Weakness in the Technology (XLK 42.05, -0.39 -0.92%) sector was also notably weak today, never overcoming flat lines. Shares of telecom firm CenturyLink (CTL 30.57, -0.91 -2.89%) were notably weak today on the heels of a premarket downgrade to Market Perform from Outperform at Wells Fargo. Other sectors as measured by the S&P closed the session XLE -2.36%, XLB -1.65%, XLF -1.28%, IYZ -1.20%, XLY -0.92%, XLI -0.81%, XLV -0.31%, XLP -0.19%, XLU -0.08% as the worst losses were out of the Energy space, while Utilities managed the most modest session.
In the S&P 500 Information Technology (695.63, -5.77 -0.82%) sector, trading began the session near flat lines but quickly succumbed to broader market pressure. Shares of financial payment tech firm Fidelity Nat'l Info (FIS 71.29, +4.11 +6.12%) bucked the broader trend and ended the session higher on the back of the company's mixed Q1 report; conversely, shares of communications firm Harris (HRS 76.43, -4.43 -5.48%) were the worst performing component today following its Q3 report and subsequent tepid guidance. Other stocks in the sector which closed the day lower included STX -5.08%, WDC -3.65%, FSLR -3.65%, HPQ -3.38%, CRM -3.04%, JNPR -2.74%, RHT -2.65%, FFIV -2.60%, MU -2.50%, CTXS -2.40%.
Other news items among sector components:
Microsoft (MSFT 49.78, -0.83 -1.64%) acquired IoT firm Solair. Financial terms of the deal were not disclosed.
Adobe Systems (ADBE 93.62, -1.28 -1.35%) acquired Livefyre. Financial terms of the deal were not disclosed, and the company noted expectations for the deal to close within the next few months.
Elsewhere in the tech space:
IMS Health Holdings (IMS 25.92, -0.95 -3.54%) and Quintiles Transnational (Q 67.46, -1.61 -2.33%) to merge. Under the terms of the merger agreement, IMS shareholders will receive a fixed exchange ratio of 0.384 shares of Q common stock for each share of IMS common stock.
In addition to reporting quarterly results, GrubHub (GRUB 24.65, -1.89 -7.12%) announced the acquisition of LAbite. Financial terms of the deal were not disclosed, but the company subsequently entered into a $185 million credit facility.
SolarCity (SCTY 26.45, -3.10 -10.49%) announced a $227 million investment from John Hancock.
MiX Telematics (MIXT 4.60, +0.53 +13.02%) entered into an agreement to repurchase all of its shares currently held by Imperial Holdings Limited. MIXT expect the transaction will be earnings and value accretive for shareholders.
Tessera Tech (TSRA 31.00, +1.35 +4.55%) signed a license and development agreement with Advanced Semiconductor Engineering (ASX 4.91, -0.04 -0.81%).
In addition to reporting quarterly results, Cognex (CGNX 41.13, +5.92 +16.81%) increased its quarterly dividend to $0.075 per share from $0.07 per share.
In addition to reporting quarterly results, Qualys (QLYS 25.71, -0.28 -1.08%) appointed Melissa Fisher as CFO effective immediately.
Vivint Solar (VSLR 2.87, -0.35 -10.87%) appointed David Bywater as CEO on interim basis to succeed current CEO Greg Butterfield, who is stepping down from his role.
Vishay (VSH 12.55, +0.44 +3.63%) announced a $100 million stock repurchase authorization.
Marvell (MRVL 9.65, -0.10 -1.03%) appointed Richard Hill as Chairman of the Board effective May 1.
In reaction to quarterly results:
Fidelity Nat'l Info (FIS) reported better than expected Q1 EPS of $0.79 and worse than expected revenues which rose 40.3% versus last year to $2.18 billion. Additionally, FIS reaffirmed FY16 EPS guidance in the range of $3.70-3.80.
Sprint (S 3.67, +0.17 +5.00%) reported worse than expected Q4 EPS of (-$0.14) and better than expected revenues which were down 2.5% versus last year to $8.07 billion. The company also reaffirmed FY16 EBITDA guidance of $9.5-10 billion.
SBA Comm (SBAC 99.03, -6.16 -5.86%) reported better than expected funds from operations of $1.45 and in-line revenues which fell 2.5% versus last year to $399.8 million. Additionally, SBAC issued downside Q2 and FY16 revenue guidance of $396-406 million and $1.608-1.643 billion, respectively.
Harris (HRS) reported better than expected Q3 EPS of $1.45 and in-line revenues which rose 60.8% versus last year to $1.91 billion. HRS also guided FY16 EPS slightly worse than expected at 'about $5.70' and revenues of 'about $7.5 billion.'
IMS Health Holdings (IMS) reported better than expected EPS and revenues of $0.42 and $774 million, respectively. The company also guided Q2 EPS in-line at +2-3%, and sees better than expected Q2 revenues of +7.5-8.5% to about $798-805 million. Further, IMS guided FY16 better than expected for EPS of +4-6% to about $1.58-1.61 and revenues of +9-11% to about $3.18-3.24 billion.
GrubHub (GRUB) reported in-line Q1 EPS and revenues of $0.20 and $112.2 million, respectively. Also, GRUB sees Q2 revenues in-line at $109-111 million, and raised the low end of FY16 revenues guidance to $450-465 million from $445-465 million. GRUB also reaffirmed FY16 EBITDA guidance in the range of $122-130 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: CALX CALD CRAY ENPH EPIQ FARO GLUU IMPR IL XXIA JKHY MTCH MXWL MB NTRI OCLR PAYC PLT PRO QUMU RSYS RUBI TNAV VIAV WU ZEN ZG/CRTO INXN KLIC NVMI OIIM ORBK PCLN SHOP WIX YGE
Analyst actions:
IVAC was upgraded to Buy from Hold at Maxim Group,
AXTI was upgraded to Buy from Hold at Craig Hallum;
BRCD and ALLT were downgraded to Hold from Buy at Wunderlich,
SBAC was downgraded to Neutral from Overweight at JP Morgan,
CTL was downgraded to Market Perform from Outperform at Wells Fargo,
QLYS was downgraded to Neutral from Outperform at Robert W. Baird,
TXTR was downgraded to Underperform from Mkt Perform at Barrington Research,
OPWR was downgraded to Mkt Perform from Mkt Outperform at Avondale;
CAVM was initiated with a Buy at Brean Capital
12:02 pm Amkor and Cadence Design Systems (CDNS) expand collaboration (AMKR) :
Co announced the expansion of its collaboration with Cadence Design Systems to streamline semiconductor package verification with the joint development of a package assembly design kit for Amkor's SLIM and SWIFT advanced fan-out package technologies.
As a leader in electronic design automation, Cadence will provide Amkor with PADK development support based on the Cadence Physical Verification System software tool. This integrated solution allows Amkor's customers to shorten the SLIM and SWIFT design and verification cycles. 1
0:05 am Semiconductor Hldrs ETF slides to new session low (SMH) : The SMH has extended to 52.16 in recent trade which leaves the ETF modestly above last week's seven week low (52.12) and its 200 day sma (52.04) -- AMD, MU, TSM, AVGO, LSCC, ASML, MCHP, LRCX, ADI, INTC, TER.
7:49 am KEMET misses by $0.03, beats on revs; board authorizes a debt repurchase plan, initially up to $20 mln (KEM) :
Reports Q4 (Mar) earnings of $0.04 per share, excluding non-recurring items, $0.03 worse than the two analyst estimate of $0.07; revenues fell 5.0% year/year to $183.9 mln vs the $180.8 mln two analyst estimate."We ended the year on a solid note with a strong finish with our cash flow exceeding our earlier forecasts...Overall, in a challenging economic environment, our operational excellence continued to improve margins and meet or exceed customer expectations."Co says finishing the fiscal year in this position has allowed its Board of Directors to authorize a debt repurchase plan, initially up to $20 mln over the course of FY17, which began April 1, 2016, to facilitate lower interest payments and position the company to accomplish its strategic objectives.
7:33 am Vishay beats by $0.03, beats on revs; guides Q2 revs in-line (VSH) :
Reports Q1 (Mar) earnings of $0.19 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.16; revenues fell 3.8% year/year to $570.6 mln vs the $559.2 mln Capital IQ Consensus and vs prior guidance of $540-580 mln. Co issues in-line guidance for Q2, sees Q2 revs of $565-605 mln vs. $580.7 mln Capital IQ Consensus Estimate.Co says a broad recovery of orders from all regions resulted in higher revenues than expected. The automotive market and several industrial product sectors continue to do well. The point of sales of distribution improved during Q1 and inventory turns for Vishay products at distributors recovered.
7:17 am SolarCity announces $227 mln investment from John Hancock (SCTY) :
Co announced that it has completed its first cash equity transaction with partner John Hancock Financial.
John Hancock is investing $227 million in a diversified portfolio of residential, commercial and industrial solar power projects that collectively represent 201 megawatts of generation capacity. Co retains a minority share of annual cash flows throughout the contract term as well as 99% of post-contract cash flows. The transaction raised $3.00 of financing per watt of solar generation capacity for SolarCity including tax equity investments, upfront rebates and prepayments; a blend of $3.24/watt for residential projects and $2.35/watt for commercial projects.
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