From Briefing.com: 4:11 pm NetApp misses by $0.03, misses on revs; guides Q1 EPS below consensus, revs in-line; increases quarterly dividend 6% (NTAP) :
Reports Q4 (Apr) earnings of $0.55 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of $0.58; revenues fell 10.4% year/year to $1.38 bln vs the $1.4 bln Capital IQ Consensus. Co issues guidance for Q1, sees EPS of $0.34-0.39, excluding non-recurring items, vs. $0.45 Capital IQ Consensus Estimate; sees Q1 revs of 1.20-1.35 bln vs. $1.26 bln Capital IQ Consensus Estimate.The Company will increase the first quarter fiscal year 2017 dividend by 6% to $0.19 per share.'We executed well in the fourth quarter and I'm pleased with the progress we are making with our strategic solutions portfolio in addressing customers' needs. We continue to advance our pivot to the growth segments of the market while, at the same time, streamlining the business and reducing our cost base. The team remains sharply focused on disciplined execution and is fully committed to return the company to long-term growth.'
4:11 pm HP beats by $0.03, misses on revs; guides Q3 EPS below consensus; guides FY16 EPS above consensus (HPQ) :
Reports Q2 (Apr) earnings of $0.41 per share, $0.03 better than the Capital IQ Consensus of $0.38; revenues fell 10.7% year/year to $11.59 bln vs the $11.71 bln Capital IQ Consensus.Personal Systems net revenue was down 10% year over year (down 5% in constant currency) with a 3.5% operating margin.
Commercial net revenue decreased 7% and Consumer net revenue decreased 16%. Total units were down 9% with Notebooks units down 6% and Desktops units down 10%. Printing net revenue was down 16% year over year (down 10% in constant currency) with a 17.3% operating margin. Total hardware units were down 16% with Commercial hardware units down 12% and Consumer hardware units down 18%. Supplies revenue was down 16% (down 10% in constant currency).
Co issues downside guidance for Q3, sees EPS of $0.37-0.40 vs. $0.41 Capital IQ Consensus Estimate.
Co issues upside guidance for FY16, sees EPS of $1.59-1.65 vs. $1.58 Capital IQ Consensus Estimate.
4:09 pm Emcore awarded $4.7 mln purchase order to supply RFoG Optical Networking Units to 'major' US supplier of network infrastructure solutions for the Cable TV market (EMKR) : The products are expected to be shipped over the next year
4:10 pm : The stock market ended the Wednesday affair on a higher note as the S&P 500 (+0.7%) extended its May gain to 1.2%. Focal points for today's trade included a positive reading of the Department of Energy's stockpile data, leadership from the heavily-weighted financial (+1.0%) and technology (+0.7%) sectors, and Greece receiving approval for its next bailout tranche. The Dow Jones Industrial Average (+0.8%) finished ahead of the S&P 500 (+0.7%) and the Nasdaq Composite (+0.7%).
Equities gapped higher to begin their day, boosted by a positive bias in overseas trade. Global bourses ended higher, responding to yesterday's rally in U.S. markets, bullish API Inventory data, and a freshly minted agreement for Greece to unlock the next bailout tranche. Additionally, there was an underlying sense that markets are becoming more comfortable with increased U.S. rate hike expectations.
The major averages traded lockstep with oil as the energy component extended its gain. However, the pair briefly paused their advance as investors ruminated over the Department of Energy's latest stockpile data. The Energy Information Administration reported that crude oil inventories declined by 4.22 million barrels, compared to the estimated 2.45 million barrel draw. Furthermore, the report also showed that gasoline inventories rose by 2.04 million barrels, compared to the estimated 1.06 million barrel draw.
The broader market extended its gain through the afternoon as commodity-sensitive energy (+1.5%) and materials (+1.2%) led heavily-weighted financials (+1.0%) and technology (+0.7%). Conversely, countercyclical utilities (-0.3%) ended with the only loss.
The energy space (+1.5%) demonstrated broad-based strength as a rally in oil continued to add support. Independent oil and gas companies, pipeline names, and oilfield servicers each outperformed. Meanwhile, oil and gas refiners displayed relative weakness as the group weighed disappointing gasoline inventories. Phillips 66 (PSX 80.13, +0.43) gained 0.5%, but still ended behind the broader sector and market. For its part, WTI crude jumped 1.9% ($49.56), ending its day at the best level of 2016.
The economically-sensitive financial sector (+1.0%) outperformed as market participants digested more hawkish commentary from FOMC members. St. Louis Fed President and FOMC voter James Bullard commented last night that labor market strength appears to support more interest rate hikes. However, President Bullard did also say that a June or July hike is not set in stone. Money center banks finished in front of the sector on the anticipation that their earnings prospects and net interest margins will improve.
In the technology space (+0.7%), Dow component IBM (IBM 151.69, +3.38) outperformed, gaining 2.3%. Elsewhere, heavyweight constituent Microsoft (MSFT 52.12, +0.53) gained 1.0% after announcing that it would cut 1,850 jobs in order to streamline its smartphone division. Elsewhere, Hewlett Packard Enterprise (HPE 17.35, +1.10) reported above-consensus results for the quarter and announced a tax-free spin-off of its Enterprise Services business with Computer Sciences (CSC 50.65, +15.00).
In the consumer discretionary space (+0.5%), retail names continued their recent rebounds, evidenced by the 1.2% gain in the SPDR S&P Retail ETF (XRT 41.70, +0.50). In the sub-group, Tiffany & Co (TIF 63.89, +0.04) gained 0.1% despite disappointing investors with its quarterly results and guidance.
The U.S. Dollar Index (95.42, -0.15) ended off its low as commodity currencies and the euro gained against the greenback. The euro/dollar pair finished higher by 0.1% (1.1152) while the dollar lost 0.8% against the commodity-sensitive Canadian dollar (1.3025).
The Treasury complex finished on a flat note with the yield on the 10-yr note unchanged at 1.87%.
Today's participation was below the recent average as fewer than 891 million shares changed hands on the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index, April International Trade in Goods, and the March FHFA Housing Price Index:
The weekly MBA Mortgage Index showed a seasonally adjusted increase of 2.3%
April International Trade in Goods showed a deficit of $57.53 billion, compared to the March deficit of $56.90 billion.
The FHFA Housing Price Index for March rose 0.7%, which followed an increase of 0.4% in February
Tomorrow's economic data will include weekly initial claims (Briefing.com consensus 275k) and April Durable Good Order (Briefing.com consensus 0.6%), both crossing the wires at 8:30 ET. Finally, Pending Home Sales for April (Briefing.com consensus 0.6%) will be released at 10:00 ET.
Dow Jones +2.5% YTD
S&P 500 +2.3% YTD
Russell 2000 +0.4% YTD
Nasdaq Composite -2.3% YTD
DJ30 +145.46 NASDAQ +33.84 SP500 +14.48 NASDAQ Adv/Vol/Dec 1817/1.616 bln/999 NYSE Adv/Vol/Dec 2050/890.4 mln/939
3:30 pm :
The dollar index gives up its initial morning gains & trends lower, boosting commodities, down -0.2% around the 95.35 level
Commodities, as measured by the Bloomberg Commodity Index, are up +1.2% at 85.19
Crude oil surges to fresh year-to-date highs into the close after an initial morning drop post-EIA
July crude oil futures rose $0.91 (+1.9%) to $49.56/barrel
Reminders:
Crude oil inventories had a draw of -4.226 mln (consensus called for a draw of about -2.65 mln)
Gasoline inventories had a build of +2.043 mln
Distillate inventories had a draw of -1.284 mln
Demand for gasoline is high as memorial day weekend approaches
The next OPEC meeting is scheduled to take place on June 2, 2016
Natural gas snaps its two-day streak of losses, reversing off its lows in afternoon pit trading and closing near the highs of the day
July natural gas closed $0.03 higher (+1.4%) at $2.18/MMBtu
EIA natural gas inventory data is scheduled to be released tomorrow at 10:30 am ET
In precious metals, gold stages a modest afternoon rally off its morning lows as the dollar weakens, closing still lower on the day
June gold ended today's session down $5.20 (-0.4%) to $1223.60/oz
Silver exhibits notable volatility, briefly dropping near parity with the previous session's close before trending upwards in the afternoon, aided by dollar weakness
July silver closed today's session $0.01 higher (+0.1%) at $16.26/oz
Base metal copper finishes afternoon pit trading notably higher, after two days of flat-lining
July copper closed $0.03 higher (+1.5%) at $2.10/lb
The major averages began their day on a higher note as global bourses advanced following yesterday's rally in U.S. equities. The positive bias overseas can also be attributed to a leg higher in oil and news that eurozone finance ministers reached an agreement to release the next bailout tranche to Greece. To that end, the commodity closed Wednesday ***.
Markets took another leg higher, compounding yesterday's aggressive advance. The first back to back days of gains across the board were led by the Dow Jones Industrial Average which added 145.46 points (+0.82%) to 17851.51. The S&P 500 was up 14.48 points (+0.70%) to 2090.54, and the Nasdaq Composite also advanced (+0.70%), higher by 33.83 points to 4894.89.
Market data today included the weekly MBA Mortgage Index which showed a seasonally adjusted increase of 2.3%. The April International Trade in Goods showed a deficit of $57.53 billion, compared to the March deficit of $56.90 billion. Additionally, the FHFA Housing Price Index for March rose 0.7%.
Technology (XLK 43.69, +0.20 +0.46%) posted respectable gains today, posting back to back positive sessions for the first time in a month. Component Yahoo! (YHOO 35.59, -1.94 -5.17%) was the worst performer today following a Bloomberg article out today highlighted AT&T's (T 38.62, +0.12 +0.31%) possible interest in the company's internet assets. Other sectors as measured by the S&P closed Wednesday XLE +1.58%, XLB +1.23%, XLF +1.06%, XLI +0.68%, XLV +0.62%, XLY +0.55%, IYZ +0.42%, XLP +0.15%, XLU -0.29% as Energy led the sectors higher on the back of a +1.9% advance in July Crude Oil Futures.
In the S&P 500 Information Technology (726.77, +5.31 +0.74%) sector, action was also higher today as the broader market bias carried trading. Component Computer Sciences (CSC 50.66, +15.01 +42.10%) was the best performer today as the company reported mostly better than expected Q4 results and announced a tax-free merger with Hewlett Packard Enterprise's (HPE 17.35, +1.10 +6.77%) Enterprise Services Business. Other names in the space which posted decent gains today included TDC +3.84%, STX +2.87%, XRX +2.59%, HPQ +2.43%, IBM +2.28%, AAPL +1.76%, LRCX +1.70%, CSCO +1.62%, ADS +1.51%, AVGO +1.42%, NTAP +1.23%.
Other notable news items among sector components:
Hewlett Packard Enterprise (HPE) announced plans for a tax-free spin-off and merger of its Enterprise Services Business with Computer Sciences (CSC). Immediately following the transaction, currently targeted to be completed by March 31, 2017, HPE shareholders will own shares of both HPE and about 50% of the new company. The transaction is expected to deliver about $8.5 billion to HPE's shareholders on an after-tax basis. The transaction is intended to be tax-free to HPE and CSC and their respective shareholders for federal income tax purposes. The merger of the two businesses is expected to produce first-year cost synergies of about $1 billion post-close, with a run rate of $1.5 billion by the end of year one.
For fiscal 2016, HPE estimates non-GAAP diluted net EPS to be in the range of $1.85 to $1.95 and GAAP diluted net EPS to be in the range of $1.68 to $1.78.
In addition to reporting quarterly results and announcing the merger/spin-off with CSC, HPE's Board authorized an additional $3 billion for share repurchases. There is currently $4.8 billion now remaining in the stock repurchase authorization.
Microsoft (MSFT 52.12, +0.53 +1.03%) announced plans to streamline its smartphone hardware business, which will impact up to 1,850 jobs. As a result, the company will record an impairment and restructuring charge of about $950 million, of which about $200 million will relate to severance payments.
Medtronic plc (MDT 81.08 +0.14 +0.17%) and Qualcomm (QCOM 55.98, +0.39 +0.70%) through its wholly-owned subsidiary, Qualcomm Life, Inc., announced a global, multi-year collaboration to jointly develop future generation continuous glucose monitoring (CGM) systems that aim to improve health outcomes for people with diabetes.
Harris (HRS 79.36, +0.38 +0.48%) was awarded $106 million in follow-on contract options to sustain ground-based systems that support the U.S. missile warning, missile defense and space surveillance missions. Under the agreement, HRS provides all the support required -- including depot-level maintenance, repairs and upgrades, contractor logistics support and more -- to ensure the weapon systems are continually available and capable.
According to a Bloomberg report, AT&T (T) may by interested in Yahoo!'s (YHOO) internet assets.
Elsewhere in the tech space:
Jabil Circuit (JBL 18.50, +0.22 +1.20%) announced a $300 million private placement of senior unsecured notes due 2023.
Match Group (MTCH 14.25, +0.21 +1.50%) to sell $400 million aggregate principal amount of 6.375% senior notes due 2024 in a private placement.
Nano Dimension (NNDM 618.80, +88.10 +16.60%) announced it has 'successfully' lab-tested a proof of concept 3D bioprinter for stem cells in conjunction with Accellta.
IMS Health Holdings (IMS 25.39, -0.25 -0.98%) acquired Privacy Analytics. Financial terms of the deal were not disclosed.
Energous (WATT 10.38, +0.22 +2.17%) confirmed the FCC approval of the Miniature WattUp transmitter reference design.
Open Text (OTEX 57.88, +1.78 +3.17%) to offer $500 million aggregate principal amount of its senior unsecured fixed rate notes due 2026.
In reaction to quarterly results:
Hewlett Packard Enterprise (HPE) reported in-line EPS for Q2 of $0.42 on better than expected revenues which rose 1.3% versus last year to $12.71 billion. The company also issued downside guidance for Q3 EPS of $0.42-0.46. For the FY16 period, HPE issued in-line guidance for EPS in the range of $1.85-1.95.
Intuit (INTU 105.02, -2.29 -2.13%) reported better than expected Q3 EPS and revenues of $3.43 and $2.3 billion, respectively. INTU guided Q4 EPS in-line at breakeven. For Q4 revenues, INTU sees them coming in ahead of expectations at $720-740 million. As such, the company raised FY16 EPS guidance to $3.63-3.65 on revenues of $4.66-4.68 billion.
Computer Sciences (CSC) reported better than expected Q4 EPS of $0.73 on revenues which came in in-line at $1.81 billion. CSC also guided FY17 EPS in-line at $2.75-3.00.
ViaSat (VSAT 69.41, -3.27 -4.50%) reported worse than expected Q4 EPS of $0.29 and revenues of $372 million.
Nimble Storage (NMBL 8.56, +1.21 +16.46%) reported a better than expected Q1 loss per share of $0.24 on better than expected revenues which also rose 21.2% versus last year to $86.4 million. For Q2, NMBL sees EPS in-line at ($0.21)-($0.19) on better than expected revenues of $93-96 million.
Companies scheduled to report quarterly results tonight/tomorrow morning: APIC, CSRA, EXA, HPQ, BLOX, NTAP, PSTG/TECD, TSL
Analyst actions:
CSC and WDC were upgraded to Overweight from Equal Weight at Barclays,
NOK was upgraded to Outperform from Underperform at Credit Agricole,
AMAT was upgraded to Buy from Neutral at Citigroup,
FLTX was upgraded to Overweight from Sector Weight at Pacific Crest;
CSC was downgraded to Mkt Perform from Outperform at Raymond James,
TSS was downgraded to Outperform from Buy at Credit Agricole,
VIV was downgraded to Neutral from Outperform at Credit Suisse;
QRVO and SWKS were initiated with an Underperform at Credit Agricole,
ON was initiated with an Outperform at Credit Agricole,
TYPE was initiated with a Buy at Ladenburg Thalmann,
DST was initiated with an Equal Weight at Morgan Stanley
(Disclosure: Briefing.com has a business relationship with Yahoo! and Microsoft)
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