Sector Investing

[ReturntoSender]

From Briefing.com: 4:34 pm Celestica beats by $0.01, beats on revs; guides Q3 EPS in-line, revs above consensus (CLS) :

Reports Q2 (Jun) earnings of $0.29 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.28; revenues rose 4.8% year/year to $1.49 bln vs the $1.46 bln Capital IQ Consensus.

Co issues guidance for Q3, sees EPS of $0.27-0.33 vs. $0.29 Capital IQ Consensus Estimate; sees Q3 revs of $1.475-1.575 bln vs. $1.46 bln Capital IQ Consensus Estimate.

4:21 pm Advanced Micro beats by $0.03, beats on revs, Issues upside Q3 revenue guidance (AMD) :

Reports Q2 (Jun) loss of $0.05 per share, $0.03 better than the Capital IQ Consensus of ($0.08); revenues rose 9.0% year/year to $1.03 bln vs the $0.95 bln Capital IQ Consensus.

Gross margin was 31%, down 1 percentage point sequentially, due primarily to a higher mix of semi-custom SoC sales.

Non-GAAP operating income was $3 mln, compared to non-GAAP operating loss of $55 mln in 1Q16, primarily due to higher sales.

Outlook: For 3Q16, AMD expects revenue to increase 18% sequentially, plus or minus 3%. At +18%, that would equate to revenue of $1.21 bln vs. Capital IQ Consensus of $1.12 bln.

4:21 pm Skyworks increases quarterly dividend to $0.28/share from $0.26/share, announces new $400 mln repurchase program (SWKS) : This newly authorized stock repurchase program replaces in its entirety the $400 million stock repurchase program that was approved by the Board of Directors on November 10, 2015, and had approximately $73 million of repurchase authority remaining.

4:20 pm Skyworks beats by $0.03, reports revs in-line; guides SepQ EPS above consensus, revs in-line (SWKS) :

Reports Q3 (Jun) earnings of $1.24 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $1.21 and above prior guidance of $1.21; revenues fell 7.2% year/year to $751.7 mln vs the $750.2 mln Capital IQ Consensus and vs $750 mln prior guidance.

Co issues guidance for Q4 (Sep), sees EPS of approx $1.43, excluding non-recurring items, vs. $1.41 Capital IQ Consensus Estimate; sees Q4 revenue growth +10-11% sequentially which we compute as $827-834 mln vs. $830.4 mln Capital IQ Consensus Estimate.

"Skyworks exceeded expectations in the third fiscal quarter of 2016 driven by increasing global demand for high-speed connectivity coupled with strong operational execution...Our highly integrated solutions are enabling a broad array of applications ranging from streaming media to e-commerce to cloud-based services."

4:08 pm Flex reports EPS in-line, beats on revs; guides Q2 EPS in-line, revs in-line (FLEX) :

Reports Q1 (Jun) earnings of $0.27 per share, in-line with the Capital IQ Consensus of $0.27; revenues rose 5.6% year/year to $5.88 bln vs the $5.7 bln Capital IQ Consensus.

GAAP gross margin increased approximately 60 basis points and adjusted gross margin increased over 50 basis points on a year-over-year basis.

Co issues in-line guidance for Q2, sees EPS of $0.26-$0.30 vs. $0.30 Capital IQ Consensus Estimate; sees Q2 revs of $5.8-$6.2 bln vs. $6.14 bln Capital IQ Consensus Estimate.

4:04 pm Ingram Micro announces that after consultation with the Committee on Foreign Investment in the US, the company's elected to submit a joint voluntary notice to the Committee, which will be filed in due course (IM) : The co announced that after consultation with the Committee on Foreign Investment in the United States (:CFIUS), the co and Tianjin Tianhai Investment Company, Ltd. (Tianjin Tianhai) have elected to submit a joint voluntary notice to the Committee, which will be filed in due course. The companies continue to expect the transaction to close in the H2 2016 as previously announced. The companies also said that they are maintaining steady progress in receiving the required competition authority approvals in various jurisdictions, obtaining early termination of the waiting period under the U.S. HSR Act and antitrust authority approval from the Ministry of Commerce People's Republic of China (:MOFCOM), as well as approvals from antitrust authorities in Brazil, Canada, India, Mexico, South Africa and Turkey

4:03 pm Maxim Integrated beats by $0.01, misses on revs; guides Q1 EPS in-line, revs in-line; increases dividend by 10% (MXIM) :

Reports Q4 (Jun) earnings of $0.49 per share, $0.01 better than the Capital IQ Consensus of $0.48; revenues fell 2.8% year/year to $566.12 mln vs the $575.54 mln Capital IQ Consensus.

Co issues in-line guidance for Q1, sees EPS of $0.44-0.50 vs. $0.47 Capital IQ Consensus Estimate; sees Q1 revs of $540-580 mln vs. $568.23 mln Capital IQ Consensus Estimate.

Quarterly dividend increased 10% to $0.33 per share

4:15 pm : The major averages ended the Thursday affair under moderate selling pressure, pulling back from their recent rally to new all-time highs. The heavyweight industrial group (-1.0%) paced the retreat as weaker-than-expected quarterly reports and guidance weighed on the sector. Additionally, a leg lower in oil futures and the weakness in the financial (-0.5%) and technology (-0.5%) groups added to the negative tone. The Dow Jones Industrial Average (-0.4%) finished in-line with the S&P 500 (-0.4%) and behind the Nasdaq Composite (-0.3%).

The major averages began the day on a flat note as investors weighed a plethora of earnings reports and recently-released economic data. The European Central Bank released its latest policy statement this morning, deciding to maintain its assets purchase program and its interest rate corridor. The decision was largely expected after the Bank of England stated earlier in the month that it was too early to assess the economic impact of the United Kingdom's exit from the European Union. However, ECB President Mario Draghi stated that the central bank is ready to act should the need arise.

Equity indices teetered near their flat lines into the late morning as leadership from heavily-weighted technology (-0.5%) and health care (+0.4%) kept the market afloat. However, the benchmark index ebbed lower through the afternoon as a persistent downturn in crude oil weighed on equities. The S&P 500 (-0.4%) violated technical support near the 2166 price level in the early afternoon, drifting to the 2160 area. The major averages inched off that level in the final hour as eight sectors finished in the red. Materials (-0.6%), energy (-0.9%), and industrials (-1.0%) underperformed while the remaining decliners finished with losses between 0.3% (consumer staples) and 0.5% (technology). Conversely, health care (+0.4%) and utilities (+0.6%) finished above their flat lines.

The Dow Jones Transportation Average (-1.3%) finished well behind the benchmark index as airlines lagged. The U.S. Global Jets ETF (JETS 22.25, -0.79) fell 3.4% as disappointing results and guidance from Southwest Air (LUV 37.32, -4.71) weighed. The company stated that third-quarter revenue per available seat mile is expected to decline between 3.0% and 4.0% year-over year. Separately, Union Pacific (UNP 90.93, -3.19) underperformed among rail names after lowering its full-year volume estimates.

Defense names underperformed in the broader industrial sector (-1.0%) as Lockheed Martin (LMT 254.14, -2.53) and Raytheon (RTN 134.90, -3.28) fell by 1.0% and 2.4%, respectively. Today's loss extended Lockheed's post-earnings retreat to 0.8%. Elsewhere, General Electric (GE 32.59, -0.19) ticked lower by 0.6% ahead of tomorrow morning's earnings report. The broader sector has declined 0.9% this week, compared to a 0.2% gain in the benchmark index.

The high-beta chipmakers displayed relative weakness, evidenced by the 1.3% decline in the PHLX Semiconductor Index. In the group, Intel (INTC 34.27, -1.42) fell by 4.0% after disappointing investors with its top-line results. Conversely, iPhone supplier Qualcomm (QCOM 59.98, +4.16) rallied 7.5% after beating top- and bottom-line estimates for the quarter.

The heavyweight health care sector (+0.4%) outperformed amid relative strength in biotechnology. The sub-group traded higher in sympathy with Biogen (BIIB 282.45, +20.04) after the company reported top- and bottom-line beats for the quarter. Health care service plans also outperformed after Humana (HUM 171.53, +13.12) increased its outlook for the year. However, it is worth mentioning that the sub-group was under early selling pressure after the Department of Justice announced that it is seeking to block mergers between Anthem (ANTM 139.00, +3.53) & Cigna (CI 140.32, +7.21) and Aetna (AET 118.30, +1.81) & Humana.

The U.S. Dollar Index (96.94, -0.26) settled modestly lower as the euro and the yen gained ground against the greenback. The single currency ticked higher by 0.1% against the buck (1.1022) while the dollar/yen pair finished lower by 1.1% (105.76). The move in the yen was prompted by commentary out of Japan, which called into question the size and nature of potential easing measures.

The Treasury complex finished higher with yields slipping throughout the group. The yield on the 10-yr note settled lower by three basis points at 1.56%.

Today's trading volume was below the recent average as fewer than 803 million shares changed hands on the NYSE floor.

Today's economic data included weekly initial claims, July Philadelphia Fed Survey, FHFA Housing Price Index for May, Existing Home Sales for June, and June Leading Indicators:

Initial claims for the week ending July 16 were 253,000 (Briefing.com consensus 265,000), a decrease of 1,000 from the prior week.
The initial claims reading was the lowest it has been since mid-April, which belies the fact that initial claims are close to their lowest levels over the past 45 years.
This suggests employers are very comfortable with the size of their existing workforces even if they are not altogether comfortable increasing their headcount with new, full-time employees.
There were no special factors influencing the initial claims reading, which held below 300,000 for the 72nd straight week -- the longest streak since 1973!
The four-week moving average for initial claims fell to 257,750 from 259,000
Continuing claims for the week ending July 9 dropped to 2.128 million from 2.153 million in the prior week.
The four-week moving average for continuing claims dropped to 2.141 million, a decrease of 2,750 from the prior week.
The Philadelphia Fed Index produced a headline disappointment for July, falling to -2.9 (Briefing.com consensus 5.0) from 4.7 in June.
The indexes for new orders, shipments, and unfilled orders all moved back into an expansion mode.
New orders rose from -3.0 to 11.8; shipments increased from -2.1 to 6.3; and unfilled orders jumped from -12.6 to 1.9.
The current employment index remained in a state of contraction; however, the pace of contraction slowed noticeably, evidenced by a reading of -1.6 for July versus -10.9 for June.
Separately, there was an uptick in the diffusion index for future general business activity, which increased four points to 33.7, bringing it close to its five-year average of 35.9.
The FHFA Housing Price Index for May rose 0.2%, which followed an increase of 0.3% in April.
Existing home sales increased 1.1% in June to a seasonally adjusted annual rate of 5.57 million (Briefing.com consensus 5.50 million).
The most encouraging aspect of the June report was that first-time buyers accounted for 33% of home sales, which was up from 30% in May and marked the highest share since July 2012.
The high-price obstacle didn't go away in June, which produced a 4.8% increase in the median existing-home price for all housing types to $247,700.
That is the 52nd straight month of year-over-year gains and tops May's peak median sales price of $238,900.
Price support continues to be underpinned by limited supply and it doesn't sound as if there will be a meaningful break in the pricing trend on the near horizon.
To that end, unsold inventory is at a 4.6-month supply at the current sales pace versus 4.7 months in May.
Individual investors, who account for many cash sales, purchased only 11% of homes in June, which is the lowest since July 2009. Their reduced interest is likely a reflection of high-price constraints.
Single-family home sales increased 0.8% in June to a seasonally adjusted annual rate of 4.92 million while existing condominium and co-op sales rose 3.2% to 650,000 units on the same basis.
On a regional basis, existing home sales declined 1.3% in the Northeast, increased 3.8% in the Midwest, remained unchanged in the South, and jumped 1.7% in the West.
Existing home sales in May were revised from 5.53 million to 5.51 million.
The Conference Board's Leading Economic Index for June increased 0.3%, which was right in-line with the Briefing.com consensus estimate and followed on the heels of an unrevised 0.2% decline for May.
Every component index contributed to the monthly increase, with the exception of the average workweek in manufacturing (-0.07 percentage points) and average consumer expectations for business conditions (unchanged).
The largest contributors to the Leading Economic Index for June were average weekly initial claims (0.15 percentage points) and the interest rate spread (0.14 percentage points).
The two components estimated by the Conference Board -- manufacturers' new orders for consumer goods and materials and nondefense capital goods orders excluding aircraft -- were tagged as contributing 0.02 percentage points and 0.03 percentage points, respectively.
Over the first half of the year, the Leading Economic Index increased 0.3% (about a 0.6% annual rate), which is roughly the same pace seen in the second half of 2015, according to the Conference Board.
Separately, the Coincident Economic Index increased 0.3% in June after being unchanged in May. The Lagging Index, meanwhile, decreased 0.1% on the heels of a 0.4% increase in May.

There is no economic data of note scheduled to be released tomorrow.

Dow Jones +6.3% YTD
Russell 2000 +6.0% YTD
S&P 500 +5.9% YTD
Nasdaq Composite +1.3% YTD

DJ30 -79.24 NASDAQ -16.03 SP500 -7.92 NASDAQ Adv/Vol/Dec 1064/1.72 bln/1769 NYSE Adv/Vol/Dec 1255/802.0 mln/1724

3:30 pm :

The dollar index is down -0.3% at the 96.94 level, boosting select commodities in afternoon trade
Commodities, as measured by the Bloomberg Commodity Index, -0.2% at the 84.95 level
Crude oil closes near session lows ahead of tomorrow's rig count data
August crude oil futures fell $1.02 (-2.2%) to $44.71/barrel
Weekly rig count data will be released tomorrow at 1 pm ET
Natural gas surges to close near session highs after the release of EIA data, which showed a smaller-than-expected build compared to Consensus
August natural gas closed $0.03 higher (+1.1%) at $2.69/MMBtu
Natural gas inventory showed a build of +34 bcf vs expectations for inventory to be build a of +40 bcf.
Working gas in storage was 3,277 Bcf as of Friday, July 15, 2016, according to EIA estimates.
Stocks were 471 Bcf higher than last year at this time and 559 Bcf above the five-year average of 2,718 Bcf.
At 3,277 Bcf, total working gas is above the five-year historical range.
In precious metals, gold erases nearly all of the previous session's losses as the dollar index turns red
August gold ended today's session up $11.80 (+0.9%) to $1331.10/oz
Silver sees an initial morning rally, consolidating around its highs in the afternoon, closing near highs as the dollar weakens
September silver closed today's session $0.20 higher (+1.0%) at $19.81/oz
Base metal copper closes pit trading unchanged for the second trading day in a row
September copper closed flat at $2.26/lb

Today's session began on a choppy note as participants ruminated over a mixed set of earnings results and the latest policy statement from the European Central Bank. The ECB policy statement and press conference went largely as expected, indicating that more easing measures remain available should Brexit-related issues arise. Separately, today's economic data came in mostly above consensus, but failed to spark another round of buying interest.

Market data today included initial claims for the week ending July 16 which were 253,000, a decrease of 1,000 from the prior week. Continuing claims for the week ending July 9 dropped to 2.128 million from 2.153 million in the prior week. Also, the Philadelphia Fed Index produced a headline disappointment for July, falling to -2.9 from 4.7 in June. The FHFA Housing Price Index for May rose 0.2%, which followed an increase of 0.3% in April. Existing home sales increased 1.1% in June to a seasonally adjusted annual rate of 5.57 million. Finally, the Conference Board's Leading Economic Index for June increased 0.3%, following an unrevised 0.2% decline for May.

Stocks slid today after opening the session split, ending slightly off lows of the day. Action was led to the downside by the Dow Jones Industrial Average as the index lost 77.80 points (-0.42%) to 18517.23m snapping its nine session winning streak; also weighing om the index, September crude oil futures fell $1.02 (-2.2%) to $44.71/barrel. Additionally, the Dow was hurt by all but two of the top ten holdings ended in the green -- MMM -0.64%, INTC -3.98%, GS -1.06%, UNH -0.10%, BA -0.88%, HD -0.98%, JNJ +0.01%, MCD +0.89%, TRV -0.25%, CVX -0.19%.The S&P 500 edged 7.85 points (-0.36%) lower today to close 2165.17, and the Nasdaq Composite finished modestly down 16.03 points (-0.31%) to 5073.90.

Similar action in the Technology (XLK 45.54, -0.26 -0.57%) sector saw modest gains melt away as the day progressed, ultimately ending near lows as component Intel (INTC 34.27, -1.42 -3.98%) was the worst sector performer following the company's Q2 report. Other sectors as measured by the S&P closed the day IYZ -1.50%, XLI -1.02%, XLE -0.99%, XLB -0.61%, XLF -0.51%, XLP -0.29%, XLY -0.27%, XLV +0.29%, XLU +0.60% as Telecoms lagged and Utilities managed to escape Thursday with modest gains.

In the S&P 500 Information Technology (753.12, -3.82 -0.50%) sector, trading closed the day just off session lows as component eBay (EBAY 29.93, +2.94 +10.89%) posted a strong session on the back of its quarterly report. Other names in the space which under-performed included MU -3.02%, ACN -2.68%, ADBE -2.09%, LRCX -2.07%, SYMC -2.03%, NVDA -1.84%, VRSN -1.79%, EA -1.72%, RHT -1.66%.

Other notable news items among sector components:

In addition to reporting quarterly results, F5 Networks (FFIV 121.86, +0.39 +0.32%) named Ben Gibson as CMO.

Qorvo (QRVO 60.10, -0.70 -1.15%) disclosed consent of independent registered public accounting firm.

Accenture (ACN 112.36, -3.12 -2.70%) has completed the first phase of an overhaul of premium German car manufacturer BMW's (BMWYY 27.67, +0.09 +0.31%) Chinese website, ensuring that the new design provides an optimized customer experience and meets a growing demand that BMW is seeing for mobile web usage in China.

MasterCard (MA 92.46, -0.84 -0.90%) entered into a definitive agreement to acquire 92.4% of VocaLink Holdings Limited for about 700 million (about $920 million), after adjusting for cash and certain other estimated liabilities. VocaLink's existing shareholders have the potential for an earn-out of up to an additional 169 million (about $220 million), if performance targets are met.

Elsewhere in the tech space:

Fitbit (FIT 12.80, -0.17 -1.31%) was lower following reports of an unfavorable ITC patent ruling versus Jawbone.

Monotype Imaging (TYPE 19.80, -5.12 -20.55%) to acquire Olapic for about $130 million. The company expects the deal closing to occur in Q3.

Nuance Communications (NUAN 16.04, -0.29 -1.78%) to acquire TouchCommerce for $215 million. The company noted the transaction is not expected to have a material impact on NUAN's fiscal 2016 revenues.

Littelfuse (LFUS 119.16, -1.49 -1.23%) increased its quarterly dividend to $0.33 per share from $0.29 per share.

Expedia (EXPE 116.58, -0.61 -0.52%) acquired travel photo sharing website Trover. Financial terms of the deal were not disclosed.

Net Element (NETE 2.21, +0.03 -1.38%) to acquire a majority interest in PayStar and Nexcharge.

In reaction to quarterly results:

Intel (INTC) reported better than expected Q2 EPS of $0.59 and in-line revenues which rose 2.6% versus last year to $13.53 billion. Additionally, the company guided Q3 revenues of $14.4-15.4 billion on gross margins of about 62% plus or minus a couple percentage points. INTC also reaffirmed FY16 guidance for mid-single digit revenue growth.

Qualcomm (QCOM 59.93, +4.11 +7.36%) reported better than expected Q3 EPS of $1.16 on better than expected revenues which rose 2.9% versus last year to $6 billion. For Q4, the company sees in-line EPS of $1.05-1.15 on in-line revenues of $5.4-6.2 billion.

eBay (EBAY) reported better than expected Q2 EPS of $0.43 on better than expected revenues which rose 5.7% versus last year to $2.23 billion. EBAY also guided Q3 EPS in-line at $0.42-0.44 on better than expected revenues of $2.16-2.19 billion. For FY16, the company raised EPS guidance to $1.85-1.90 from $1.82-1.87 and raised revenue guidance to $8.85-8.95 billion from $8.6-8.8 billion.

Alliance Data (ADS 228.85, +13.83 +6.43%) reported better than expected Q2 EPS and revenues of $3.68 anf $1.75 billion, respectively. The company guided Q3 EPS of $4.42 on revenues of $1.78 billion. ADS also raised guidance for FY16 EPS to $16.85 from $16.75 and raised FY16 revenue guidance to $7.15 billion from $7.1 billion.

F5 Networks (FFIV) reported better than expected Q3 EPS of $1.81 on in-line revenues which rose 2.7% versus last year to $496.52 million. The company also gave in-line guidance for Q4 EPS of $1.92-1.95 and revenue guidance of $515-525 million.

Companies scheduled to report quarterly results tonight: EGHT, AMD, T, CLS, ETFC, FLEX, MXIM, P, PYPL, PLCM, PFPT, SIMO, SWKS, V

Analyst actions:

QCOM was upgraded to Buy from Mkt Perform at Charter Equity,
ARMH was upgraded to Mkt Perform from Underperform at Bernstein;
FFIV was downgraded to Neutral from Outperform at Credit Suisse,
TER was downgraded to Hold from Buy at Stifel,
BKFS was downgraded to Sell from Neutral at Monness Crespi & Hardt

Cree (CREE) and Avnet (AVT) announce a strategic agreement that expands coverage in the Americas for the distribution of Cree's comprehensive portfolio of innovative LED components including high-power, Chip-on-Board, high brightness and LED modules. Terms of the agreement were not disclosed.

7:04 am Benchmark Electronics misses by $0.01, reports revs in-line; offers Q3 guidance (BHE) :

Reports Q2 (Jun) earnings of $0.31 per share, $0.01 worse than the Capital IQ Consensus of $0.32; revenues fell 12.8% year/year to $579.34 mln vs the $582.92 mln Capital IQ Consensus.

Co issues guidance for Q3, sees EPS of 0.33-0.38 vs. $0.35 Capital IQ Consensus Estimate; sees Q3 revs of $570-600 mln vs. $600.78 mln Capital IQ Consensus Estimate.

Q2 Bookings:New program bookings were $105 to $130 million; 12 engineering awards supporting early engagement opportunities; 33 manufacturing wins across all market sectors."While our third quarter outlook reflects caution from customer forecasts, we remain committed to delivering higher returns on invested capital through better operating margins and working capital management."