From Briefing.com: 4:10 pm Nuance Communications beats by $0.03, reports revs in-line; guides Q3 EPS in-line, revs in-line; raises FY16 EPS, in-line, lowes rev slightly (NUAN) : Reports Q2 (Mar) earnings of $0.38 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.35; revenues fell 0.1% year/year to $487.4 mln vs the $490.57 mln Capital IQ Consensus. Net new bookings +3%Co issues in-line guidance for Q3, sees EPS of $0.35-0.38, excluding non-recurring items, vs. $0.36 Capital IQ Consensus Estimate; sees Q3 revs of $483-497 mln, excluding non-recurring items, vs. $496.12 mln Capital IQ Consensus Estimate. Co issues in-line guidance for FY16, raises EPS to $1.48-1.56 from $1.41-1.51, excluding non-recurring items, vs. $1.49 Capital IQ Consensus Estimate; lowers FY16 revs to 1.975-2.005 bln from $1.98-2.03 bln, excluding non-recurring items, vs. $2.01 bln Capital IQ Consensus Estimate.
4:07 pm Harmonic misses by $0.08, misses on revs; guides Q2 EPS below consensus, revs in-line; guides FY16 EPS below consensus, revs in-line (HLIT) :
Reports Q1 (Mar) loss of $0.11 per share, $0.08 worse than the Capital IQ Consensus of ($0.03); revenues fell 21.3% year/year to $81.8 mln vs the $83.98 mln Capital IQ Consensus.Bookings were $109.6 mln, compared with $101.0 mln for 4Q15 and $97.3 mln for 1Q15.Co issues guidance for Q2, sees EPS of ($0.05)-($0.02) vs. $0.00 Capital IQ Consensus Estimate; sees Q2 revs of $103-$108 mln vs. $103.74 mln Capital IQ Consensus Estimate. Sees gross margin of 50-51%.Co issues guidance for FY16, sees EPS of $0.09-$0.12 vs. $0.12 Capital IQ Consensus Estimate; sees FY16 revs of $400-$415 mln vs. $407.06 mln Capital IQ Consensus Estimate. Sees gross margin of ~55%.
4:06 pm Rubicon Tech misses by $0.12, misses on revs (RBCN) :
Reports Q1 (Mar) loss of $0.38 per share, $0.12 worse than the single analyst estimate of ($0.26); revenues fell 51.7% year/year to $4.3 mln vs the $4.67 mln two analyst estimate.Q2 guidance: The Company expects second quarter revenue and GAAP loss per share to be similar to the first quarter (consensus -$0.23). Revenue growth is expected to resume in the third quarter primarily from increasing PSS wafer sales (consensus calls for $6.1 mln). "We expect meaningful increases in six-inch PSS sales over the course of this year because of our large diameter capability and vertical integration. We are working diligently to reduce wafer cost in order to fully benefit from this opportunity."Excess sapphire capacity in the market continues to depress sapphire pricing. As a consequence, the Company has been limiting the amount of two and four-inch core sold in recent quarters due to the particularly challenging pricing. The Company continues to work with developers of some very interesting potential new applications for sapphire which could open up new markets. Equities finished with gains today, building on the split session from yesterday. Action ended at highs of the day, and when it was all said and done the Nasdaq Composite was up 59.67 points (+1.26%) to 4809.88. The Dow Jones Industrial Average was up 222.44 points (+1.26%) to 17928.35. The S&P 500 added 25.70 points (+1.25%) to end 2084.39. Market data today came in the form of wholesale inventories which increased 0.1% in March after declining a downwardly revised 0.6% in February. Additionally, the March Job Openings and Labor Turnover Survey showed that job openings decreased to 5.757 million from a revised 5.608 million in February.
The major averages gapped up to begin the day as investors weighed positive development from overseas. In Japan, finance minister Taro Aso was able to talk down yen strength for the second day, warning of intervention if the Japanese economy appears threatened by the continued strength of its currency. Elsewhere, China's April CPI data (+2.3% year-over-year) fell in-line with expectations while Germany's Trade Balance Report for March showed export growth (+1.9%).
Technology (XLK 42.80, +0.55 +1.30%) finished flat yesterday, but was middle of the rung in terms of sector gainers today. Component Fidelity Nat'l Info (FIS 73.85, +2.11 +2.94%) was an out-performer today following FY18 guidance in a slide presentation. Other sectors as measured by the S&P ended Tuesday action XLE +1.76%, XLI +1.72%, XLB +1.67%, XLF +1.43%, IYZ +1.31%, XLY +1.28%, XLP +0.99%, XLV +0.84%, XLU +0.10% with Energy leading the way on the back of a +2.9% advance in June Crude Oil Futures.
In the S&P 500 Information Technology (706.86, +9.23 +1.32%) sector, yesterday's modest gains were backed up by a strong session as the sector capped off the day near highs. Component Western Digital (WDC 38.37, +1.41 +3.81%) was higher today following the Ministry of Commerce of China approval of the WDC/SanDisk (SNDK 76.57, +1.06 +1.40%) acquisition. Other names in the space which closed in the green today included AKAM +3.63%, GLW +2.84%, CTXS +2.52%, FFIV +2.43%, QRVO +2.24%, MU +2.23%, STX +2.07%, TDC +2.02%, ADBE +2.02%, NTAP +2.00%, CSCO +1.96%, JNPR +1.94%.
Other news items among sector components:
Accenture (ACN 116.94, +1.47 +1.27%) acquired OPS Rules, a boutique analytics consulting company. Financial terms of the deal were not disclosed.
According to a Wall Street Journal article, and later confirmed on the company's website, HP (HPQ 11.61, +0.18 +1.57%) announced the launch of a tech startup investment arm of the company.
Total System (TSS 53.23, +0.39 +0.74%) announced that Ecobank deployed the latest version of the PRIMESM payments solution platform, PRIME 4, to support its acquirer processing of MasterCard (MA 97.64, +0.92 +0.95%), Visa (V 79.20, +0.98 +1.25%) and UnionPay International point-of-sale (POS) transactions across 28 countries in Middle Africa.
Broadcom Limited (AVGO 144.61, +2.21, +1.55%) announced a new generation of 5A gate drive optocoupler devices, the ACPL-352J and ACNW3430, designed for a wide range of industrial applications including motor drives and power inverters.
IBM Research (IBM 149.97, +2.63 +1.78%) and the University of Maryland, Baltimore County announced plans for a multi-year collaboration to create the Accelerated Cognitive Cybersecurity Laboratory (ACCL), which will be housed within the College of Engineering and Information Technology at UMBC.
SanDisk (SNDK) and Western Digital (WDC) announced the MOFCOM has approved the acquisition of SNDK by WDC.
Elsewhere in the tech space:
Cinedigm Digital Cinema (CIDM 1.60, -0.40 -20.00%) effected a 1:10 reverse stock split of its Class A common stock at the open of trading today.
TubeMogul (TUBE 12.21, -0.68 -5.28%) appointed Ron Will as CFO; current CFO Paul Joachim was promoted to Chief Admin Officer effective May 11.
Baidu.com (BIDU 166.21, -3.28 -1.94%) reported on an examination of its search ranking practices by PRC regulators that followed news reports and critical public comments regarding those practices.
In reaction to quarterly results:
Nokia (NOK 5.31, -0.38 -6.68%) reported in-line Q1 EPS of 0.03 but worse than expected revenues which fell 8.6% versus last year to 5.6 billion. The company also announced expectations for a FY16 non-IFRS net sales decline year-over-year, FY16 Non-IFRS financial income and expense of about EUR 300 million, and FY16 Capital expenditures of about EUR 650 million.
Rackspace (RAX 23.39, +0.85 +3.77%) reported better than expected Q1 EPS of $0.34 and in-line revenues of $518.1 million. RAX also guided Q2 revenues at $519-524 million and FY16 revenues at $2.08-2.16 billion.
Zebra Tech (ZBRA 51.46, -11.12 -17.77%) reported worse than expected Q1 EPS and revenues of $1.01 and $847 million, respectively. For the Q2 period ZBRA sees worse than expected EPS and revenues of $1.00-1.20 and $867-894 million, respectively. For the FY16 period, ZBRA expects revenues to be in the range of -3% to +1% to about $3.56-3.70 billion.
Convergys (CVG 27.83, +1.03 +3.84%) reported better than expected Q1 EPS of $0.50 and worse than expected revenues of $722.2 million. CVG also guided FY16 revenue growth of about zero percent versus prior guidance of about 1% growth.
Echostar Holdings (SATS 41.09, +1.51 +3.82%) reported better than expected Q1 EPS and revenues of $0.54 and $816.35 million, respectively.
SolarCity (SCTY 17.82, -4.69 -20.84%) reported a worse than expected Q1 loss per share of $2.56 and better than expected revenues of $122.57 million. The company also guided Q2 EPS and revenues worse than expected at ($2.80)-($2.70) and $135-143 million, respectively.
MaxLinear (MXL 18.47, +2.04 +12.42%) reported better than expected Q1 EPS of $0.47 on in-line revenues which rose 190.1% versus last year to $102.7 million. The company also guided Q2 revenues of $100-104 million.
SolarEdge Technologies (SEDG 19.17, -3.42 -15.14%) reported better than expected Q1 EPS and revenues of $0.51 and $125.2 million, respectively. SEDG also guided Q2 revenues in-line at $125-134 million.
Fidelity Nat'l Info (FIS) guided in a slide presentation for FY18 EPS in the range of $4.70-5.10, mostly in-line with expectations.
Companies scheduled to report quarterly results tonight/tomorrow morning: ALRM ATTO BBOX CSLT DGLY ESIO EA EVRI FIVN HCKT HLIT JIVE KEYW CALL MTSC NEWR NUAN QTM QNST FUEL RBCN SCSC VEC/CSIQ MTLS YGE
Analyst actions:
SCTY was downgraded to Mkt Perform at Avondale and to Neutral at BofA/Merrill,
CHKP was downgraded to Neutral from Buy at Citigroup,
RAX was downgraded to Outperform from Strong Buy at Raymond James;
BATS was initiated at Barclays, Sandler O'Neill, Morgan Stanley, Citigroup, Goldman, Keefe Bruyette, JP Morgan and Jefferies
4:15 pm : The stock market ended the Tuesday affair broadly higher as the S&P 500 (+1.3%; month-to-date +0.9%) erased its monthly loss. Focal points of today's trade included positive data from overseas, a rebound in oil prices, a largely range-bound session in the U.S. dollar, and the outperformance of the heavily-weighted industrial (+1.7%) and financial (+1.4%) sectors. The Dow Jones Industrial Average (+1.3%) ended ahead of the benchmark index (+1.3%) and the tech-heavy Nasdaq (+1.3%).
The stock market began its day with a broad-based rally after most global equity markets traded higher in overnight action. In Germany, the DAX gained 0.7% after Germany's Trade Balance Report for March revealed that export growth (+1.9%; consensus -0.1%) for the month beat analysts' estimates. In Asia, the yen received another reprieve from finance minister Taro Aso. The minister issued another warning of intervention in the currency market should the recent strength in the yen threaten Japan's economy.
The major averages extended their opening gains in lockstep with oil. The energy component climbed throughout the session as it rebounded from yesterday's 2.6% decline. WTI crude ended its day higher by 2.9% at $44.70/bbl. Oil still remains lower by 4.4% since last month's settlement at $46.76/bbl. Supply disruptions in Canada and Nigeria have been widely credited for the increased buying interest.
Equities extended their rally through the afternoon as the six cyclical sectors outperformed. On that note, commodity-sensitive energy (+1.8%) and materials (+1.7%) led industrials (+1.7%), financials (+1.4%), consumer discretionary (+1.3%), and technology (+1.3%) followed.
In the industrial space (+1.7%), farm equipment names and aerospace companies outperformed. Caterpillar (CAT 72.51, +1.73) and Deere (DE 83.81, +3.23) gained a respective 2.4% and 4.0% after the World Agricultural Supply and Demand Estimates Report elicited a bullish response in agriculture names. Meanwhile, rail companies outperformed in the Dow Jones Transportation Average (+1.2%) as CSX (CSX 26.37, +0.52) and Norfolk Southern (NSC 90.31, +2.03) gained 2.0% and 2.3%, respectively.
The financial sector (+1.4%) traded higher in sympathy with European banking names after Credit Suisse (CS 13.90, +0.56) reported better than feared quarterly results. Elsewhere, investment brokerages outperformed as Goldman Sachs (GS 161.42, +3.91) and Charles Schwab (SCHW 28.01 +0.74) jumped 2.5% and 2.7%, respectively. Elsewhere, Leucadia National (LUK 17.71, +0.99) gained 5.9% after it agreed to buy ITG Investment Research from Investment Technology (ITG 18.89, +0.30) for $12 million in cash. Investment Technology does not expect to book a material loss or gain from the deal.
In the consumer discretionary space (+1.3%), Amazon (AMZN 703.24, +23.494) hit a new 52-week intraday high (704.55) after ChannelAdvisor disclosed positive April same stores sales for the company. Separately, Amazon received a price target increase to $1000 from $770 at Deutsche Bank. Elsewhere, Walt Disney (DIS 106.60, +1.26) gained 1.2% ahead of this evening's quarterly report.
The heavyweight technology sector (+1.3%) ended ahead of the broader market as large caps Alphabet (GOOG 723.18, +10.28) and Microsoft (MSFT 51.02, +0.95) outperformed. Meanwhile, Apple (AAPL 93.39, +0.60) ended behind the broader sector as a report from Nikkei weighed. The article received a bearish response as it cited increased competition in the Chinese smartphone market.
The U.S. Dollar Index (94.24, +0.10) finished flat with the greenback gaining against the euro and the yen, but falling against the commodity-sensitive Canadian dollar. The euro/dollar pair finished lower by 0.1% at 1.1370 while the dollar gained 0.9% against the yen (109.28). The dollar/Canadian dollar pair ended lower by 0.4% (1.2914) as it benefited from an uptick in oil.
The Treasury complex ended flat with the yield on the 10-yr note unchanged at 1.75%.
Today's participation was below the recent average as fewer than 831 million shares changed hands on the NYSE floor.
Today's economic data included the March Job Openings and Labor Turnover Survey and Wholesale Inventories for March:
Wholesale inventories increased 0.1% in March (Briefing.com consensus +0.2%) after declining a downwardly revised 0.6% (from -0.5%) in February.
This was the first time in six months that there was an increase in wholesale inventories.
The modest uptick was fueled by a 0.5% increase in nondurable inventories, which was powered by a 2.0% increase in drug inventories and a 3.3% jump in petroleum inventories.
Durable inventories were down 0.1%. That decline was led by a 2.0% drop in metals inventories and a 1.6% drop in electrical inventories. A 1.0% jump in automotive inventories acted as a major offset.
Wholesale sales increased 0.7% following an unrevised 0.2% decline in February.
The wholesale inventories to sales ratio held steady at 1.36, but was up from 1.32 in the same period a year ago.
On a year-over-year basis, wholesale sales are down 2.0% while wholesale inventories are up 0.3%.
The March Job Openings and Labor Turnover Survey showed that job openings decreased to 5.757 million from a revised 5.608 million (revised from 5.445 million) in February.
Tomorrow's economic data will be limited to the 14:00 ET release of the April Treasury Budget.
Nasdaq Composite -3.9% YTD
Russell 2000 -0.6% YTD
S&P 500 +2.0% YTD
Dow Jones +2.9% YTD
DJ30 +222.44 NASDAQ +59.67 SP500 +25.70 NASDAQ Adv/Vol/Dec 1983/1.604 bln/967 NYSE Adv/Vol/Dec 2310/831.0 mln/700
3:30 pm :
The dollar index continues its morning rally, trading +0.2% at the 94.28 level, not appearing to weigh on commodities overall
Commodities, as measured by the Bloomberg Commodity Index, are up +2.0% at 83.36
Crude oil closes near a fresh high of the day after a steady morning rally and an afternoon of sideways action
June crude oil futures rose $1.25 (+2.9%) to $44.70/barrel
EIA petroleum inventory data is scheduled to be released tomorrow at 10:30 am ET
API inventory data is scheduled to be released after the market close today
Natural gas sees a notable rally, briefly sinking in the afternoon before spiking back up near its highs of the day to close pit trading
June natural gas closed $0.06 higher (+2.9%) at $2.16/MMBtu
In precious metals, gold sees an afternoon spike above the previous session's close, closing near the high of the day
June gold ended today's session down $2.10 (-0.2%) to $1264.70/oz
Silver sees an afternoon spike
July silver closed today's session $0.01 higher (+0.1%) at $17.09/oz
Base metal copper inches lower in afternoon pit trading
July copper closed $0.02 lower (-1.0%) at $2.09/lb
July corn closed $0.12 higher (+3.3%) at $3.80/bushel
US corn yield is projected to be down to 168 bushels per acre, down 0.4 bushels y/y
July wheat closed $0.03 higher (+0.7%) at $4.61/bushel
Wheat production projected to be -3% y/y to 1.998 bln bushels
July soybeans closed $0.53 higher (+5.2%) at $10.80/bushel
Soybean futures at one point in today's session hit its exchange limit of $0.65
The U.S. soybean crush for 2016/17 is projected at 1,915 million bushels, up 35 million from 2015/16. Domestic soybean meal disappearance is projected to increase with expected gains in U.S. meat production. With limited gains for competing exporters, U.S. soybean meal exports are projected at 12.0 million short tons, up 0.5 million from 2015/16
July sugar closed flat at $0.16/lb
Fertilizer stocks: (POT, +3.4%), (MOS, +4.1%), (CF, -0.4%), (AGU, +3.5%), (IPI, +22.5%), (UAN, +5.4%), (TNH, +2.8%), (RNF, +0.0%), (RTK, +2.4), (BG, +0.7%)
Farm machinery: (DE, +3.7%), (AGCO, +2.3%), (CNH, +1.2%), (TITN, +4.5%)
Seed names: (MON, +2.5%), (SYT, -0.5%), (DD, +1.3%), (DOW, +1.3%)
Irrigation (LNN, +2.4%)
Related ETFs: JJG (grains ETF), CORN (corn ETF) and WEAT (wheat ETF), SOYB (soy ETF)
10:40 am iRobot responds to ISS' report regarding the election of directors to the Board (IRBT) :
'We strongly believe that ISS reached the wrong conclusion.''iRobot is an innovative consumer technology company that commands 62% market share in the highly competitive robotic vacuuming segment. Maintaining this market share requires vision, technological prowess and significant investment. We spend 12% of our revenue on R&D, similar to other technology-enabled consumer products companies. The rewards for our shareholders are tangible and attractive: 47% gross margins and strong revenue growth, driven by our proven ability to create and enter new market segments.''ISS' report starts from the mistaken premise that technology and innovation are not core to iRobot's success or future. We flatly disagree. We do not believe iRobot would be well-served by operating like traditional, low-tech consumer products companies that regularly change packaging, colors and flavors, but offer limited technological innovation. ISS does not recognize that 62% market share, and the profits and cash flow that come with it, are not a given. We earn it through our R&D and technology leadership every quarter and every year. We believe long-term shareholder value would be put at risk if iRobot were to substantially cut R&D spending, as suggested by ISS and Red Mountain. The iRobot Board must continue to act as a responsible steward of the Company's future. We urge you to support our nominees and business plan.''Our nominees -- Mohamad Ali and Michael Bell - bring deep technology experience in software development, cloud computing and SaaS, and the Internet of Things, which will be instrumental to iRobot's next chapter of growth. We are confident that Messrs. Ali and Bell bring the experience necessary to continue driving innovation and profit for years to come.'
8:15 am SanDisk & Western Digital (WDC) announce the Ministry of Commerce of China has approved the acquisition of SanDisk by Western Digital Tech (SNDK) : All necessary regulatory approvals for the acquisition have now been received and the transaction is expected to close on Thursday, May 12, 2016.
7:33 am Vishay Precision misses by $0.04, misses on revs; guides Q2 revs below two analyst estimate; reaffirms FY16 EPS guidance (VPG) :
Reports Q1 (Mar) earnings of $0.13 per share, excluding non-recurring items, $0.04 worse than the two analyst estimate of $0.17; revenues were unchanged from the year-ago period at $56.6 mln. New products -- advanced sensors' revenue grew approximately 95% in the first quarter 2016 from the first quarter 2015, and approximately 42% from the fourth quarter 2015.Co issues downside guidance for Q2, sees Q2 revs of $57-62 mln vs. $62.95 mln two analyst estimate. Co reaffirms guidance for FY16, sees EPS of $0.80-1.00, excluding non-recurring items, vs. $0.97 two analyst estimate.
3:33 am Nokia reports EPS in-line, misses on revs; provides update on cost reductions (NOK) :
Reports Q1 (Mar) earnings of 0.03 per share, in-line with the Capital IQ Consensus of 0.03; revenues fell 8.6% year/year to 5.6 bln vs the 5.75 bln Capital IQ Consensus.Nokia's Networks business: 8% y/y net sales decrease in Q1 2016. Performance was primarily due to Ultra Broadband Networks, which declined 12% y/y and 27% sequentially, consistent with outlook for a greater than normal seasonal decline in the wireless infrastructure market in Q1 2016. IP Networks and Applications grew on a year-on-year basis.Nokia Technologies: 27% year-on-year net sales decrease in Q1 2016.Nokia launches headcount reductions as part of global synergy and transformation program. The headcount reductions are expected to take place between now and the end of 2018, consistent with Nokia's synergy target timeline.Nokia plans to acquire Withings to accelerate entry into Digital Health - Withings has ~200 employees and will be part of our Nokia Technologies business.The planned transaction values Withings at EUR 170 million, would be settled in cash and is expected to close in early Q3 2016 subject to regulatory approvals and customary closing conditions.Nokia also issued new shares to settle the acquisition of Alcatel-Lucent (:ALU) shares from the Alcatel-Lucent depositaryOutlookFY16 non-IFRS net sales: Decline YoY, FY16 Non-IFRS financial income and expense: Expense of ~EUR 300 million, FY16 Capital expenditures: ~EUR 650 million
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