Sector Investing

[ReturntoSender]

From Briefing.com: 4:20 pm : Stocks finished the session with modest gains, but the Dow failed to hold the 12,000 level, and the S&P never reached 1300. The FOMC interest rate decision and statement was pretty much a non-event. The lone question of how many dissenters there would be on the statement was answered when none of the members voted against the decision.

The major market averages opened mixed, but were soon solidly in positive territory after the better-than-expected New home sales data. New home sales for December increased 17.5% month-over-month to an annualized rate of 329,000 units, a bit above the rate of 300,000 units that had been expected, on average, among economists polled by Briefing.com. Nonetheless, the 17.5% increase comes following the 5.5% gain that occurred in November.

Energy shares were the leaders all session long as the S&P 500 Energy Index closed higher by 2.1%. Halliburton (HAL 43.40, +3.20) and Baker Hughes (BHI 65.99, +3.67) led the advance as 39 of 41 stocks in the index finished higher. Occidental Petroleum (OXY 96.94, -0.21) lagged following the company's mixed earnings report. The company topped EPS expectations by $0.03 per chare, but missed on revenues.

Two IPOs began trading today, and both ended the day with solid gains. Nielsen (NLSN 25.00, +2.00) priced its 71.4 million share IPO at $23, above the $20-22 expected range, while Demand Media (DMD 22.61, +5.61) priced an 8.9 million share IPO at $17, vs. expectations for 7.5 million shares at $14-16.

Shares of Boeing (BA 70.02, -2.22) were under pressure following the company's weaker-than-expected full year 2011 forecast. The company guided earnings of $3.80-$4.00 per share, which is weaker than the consensus estimate of $4.55 per share. The company announced earnings of $1.56 per share (which may not compare) versus the Thomson Reuters consensus of $1.12. Revenues came in soft at $16.55 billion versus the consensus estimate of $17.02 billion. Shares of competitors Lockheed Martin (LMT 78.39, -0.68) and Northrop Grumman (NOC 68.81, -0.70) were weaker on the results.

Shares of Netflix (NFLX 183.03, -3.71) closed lower ahead of the company's Q4 earnings after the closing bell. The Thomson Reuters consensus is calling for earnings per share of $0.71 and revenues of $597.49 million. Analysts will be focusing on subscriber growth, which arguably the most important metric. The company has previously guided for Q4 total subscriptions to be in the range of 19.0-19.7 million.

Treasuries ended the day near their worst levels of the session despite a solid $35 billion 5-yr note auction. The results of the auction caused yields to ease off their highest levels of the session, but buying was short-lived as sellers piled on ahead of the FOMC interest rate decision. After some initial buying following the release of the statement, the selling pressure was too great, and yields moved to their highest levels of the day. The 10-yr ended the day higher by nine basis points at 3.419%. The yield curve ended the day steeper, with the 2-10-yr spread running 279.2.

The dollar index saw some immediate weakness following the FOMC statement, but losses quickly turned to gains before easing back towards the flat line. The pound was the best performing currency all session long, and ended U.S. trading up 85 pips to 1.5900.DJ30 +8.25 NASDAQ +20.25 SP500 +5.45 NASDAQ Adv/Vol/Dec 1995/2.04 bln/649 NYSE Adv/Vol/Dec 2089/1.12 bln/920

6:34PM Teradyne soars 11% to $16.25 after beating Q4 earnings expectations and guiding Q1 well above consensus (See 18:33 comment) (TER) 14.63 +0.49 :

6:33PM Teradyne beats by $0.12, beats on revs; guides Q1 EPS above consensus, revs above consensus (TER) 14.63 +0.49 : Reports Q4 (Dec) earnings of $0.37 per share, excluding non-recurring items, $0.12 better than the Thomson Reuters consensus of $0.25; revenues rose 20.6% year/year to $322.2 mln vs the $316.3 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.33-0.39, excluding non-recurring items, vs. $0.19 Thomson Reuters consensus; sees Q1 revs of $350-375 mln vs. $295.44 mln Thomson Reuters consensus.

4:14PM Lam Research beats by $0.17, beats on revs (LRCX) 54.05 +1.35 : Reports Q2 (Dec) earnings of $1.74 per share, excluding non-recurring items, $0.17 better than the Thomson Reuters consensus of $1.57; revenues rose 78.7% year/year to $870.7 mln vs the $828.7 mln consensus.

4:12PM Integrated Silicon misses by $0.02, reports revs in-line; guides Q2 EPS in-line, revs above consensus (ISSI) 9.92 +0.26 : Reports Q1 (Dec) earnings of $0.26 per share, $0.02 worse than the Thomson Reuters consensus of $0.28; revenues rose 30.6% year/year to $66.1 mln vs the $66.2 mln consensus. Co issues guidance for Q2, sees EPS of $0.22-0.29 vs. $0.22 Thomson Reuters consensus; sees Q2 revs of $59-64.0 mln vs. $58.50 mln Thomson Reuters consensus.

4:11PM Cohu beats by $0.08, beats on revs (COHU) 16.66 +0.53 : Reports Q4 (Dec) earnings of $0.48 per share, excluding non-recurring items, $0.08 better than the Thomson Reuters consensus of $0.40; revenues rose 85.6% year/year to $96.9 mln vs the $95 mln consensus.

4:03PM LSI Logic beats by $0.01, beats on revs; guides Q1 EPS in-line, revs in-line (LSI) 5.86 -0.05 : Reports Q4 (Dec) earnings of $0.14 per share, excluding non-recurring items, $0.01 better than the Thomson Reuters consensus of $0.13; revenues rose 4.1% year/year to $664 mln vs the $649.4 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.07-0.13, excluding non-recurring items, vs. $0.10 Thomson Reuters consensus; sees Q1 revs of $605-635 mln vs. $615.88 mln Thomson Reuters consensus.

4:02PM Qualcomm beats by $0.10, beats on revs; guides Q2 EPS above consensus, revs above consensus; guides FY11 EPS above consensus, revs above consensus (QCOM) 51.86 +0.34 : Reports Q1 (Dec) earnings of $0.82 per share, $0.10 better than the Thomson Reuters consensus of $0.72; revs rose 25% YoY to $3.35 bln vs $3.20 bln Thomson Reuters consensus. Co issues upside guidance for Q2, sees EPS of $0.77-0.81 vs. $0.68 Thomson Reuters consensus; sees Q2 revs of $3.45-3.75 bln vs. $3.12 bln Thomson Reuters consensus. Co issues upside guidance for FY11, sees EPS of $2.91-3.05 vs. $2.78 Thomson Reuters consensus; sees FY11 revs of $13.6-14.2 bln vs. $12.78 bln Thomson Reuters consensus. "We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points... In addition, we have resolved one of our previously disclosed licensee disputes, which will be reflected beginning with the second fiscal quarter results. We continue to execute on our strategic objectives as our partners leverage our technologies and solutions to offer leading wireless products and services to consumers around the globe. We believe we are uniquely positioned to benefit from these industry trends and are substantially raising our revenue and earnings guidance for the fiscal year."

Silicon Laboratories (SLAB) announced the acquisition of Silicon Valley-based SpectraLinear. Silicon Labs acquired the talented SpectraLinear team and a complementary portfolio of programmable clock ICs for ~$40 million.

Silicom (SILC) announced that a Tier 1 server manufacturer will begin offering appliances which integrate Silicom's SETAC Server To Appliance Converter with one of the popular models of its standard servers.

JA Solar Holdings (JASO) announced that the Company has signed a module supply contract with a leading Italian renewable energy company, which belongs to a large utility group in Europe. Under the terms of this agreement, JA Solar will supply this customer with a total of 29 megawatts of photovoltaic modules during 2011.

8:08AM Silicon Labs beats by $0.09, beats on revs; guides Q1 revs above consensus (SLAB) 47.62 : Reports Q4 (Dec) earnings of $0.46 per share, $0.09 better than the Thomson Reuters consensus of $0.37; revenues fell 12.0% year/year to $111.9 mln vs the $108 mln consensus. Co issues upside guidance for Q1, sees Q1 revs of $116-122 mln vs. $111.34 mln Thomson Reuters consensus. The co anticipates 2011 will be another growth year, with strong contributions from both the broadcast and broad-based businesses. Specifically, the company expects its video business to ramp and triple in size, while the timing business is expected to deliver high double-digit growth again in 2011.

8:01AM Cisco Systems announces intent to acquire Pari Networks (CSCO) 21.57 : Co announced its intent to acquire privately-held Pari Networks, a provider of network configuration and change management (NCCM) and compliance management solutions that will complement Cisco's smart service capabilities. Based in Milpitas, Calif., with part of its employee base in Hyderabad, India, Pari Networks' technology will integrate into Cisco's smart services and help accelerate the ability of Cisco and its partners to manage the health and stability of customer networks.

4:06AM United Micro beats by $0.01, reports revs in-line (UMC) 3.26 : Reports Q4 (Dec) earnings of $0.09 per share, $0.01 better than the Thomson Reuters consensus of $0.08; revenues rose 24.4% year/year to $1.08 bln vs the $1.07 bln consensus. "After experiencing growth momentum for over a year and a half at UMC, we anticipate revenue for the first quarter of 2011 to decline slightly due to appreciation of NT dollar, certain customers undergoing product and technology-node transitions, and other seasonal adjustments. UMC is optimistic about demand for high-end chips this year, with revenue contribution from 40nm growing quarterly in 2011 to become a main revenue driver."

Advanced Energy Industries (AEIS), a leader in power conversion solutions, announced that it will showcase its innovative new products, the Paramount Series of power generators, and the Navigator II matching network at SEMICON Korea 2011.

Thailand's second largest operator, DTAC, with 20 mln subscribers, has signed its first contract with Ericsson (ERIC) to modernize its nationwide 2G, GSM/EDGE network, and prepare for mobile-broadband services based on WCDMA/HSPA and LTE/4G.

08:20 am JA Solar downgraded to Hold at Collins Stewart; tgt $7: . Collins Stewart downgrades JASO to Hold from Buy and sets target price at $7 due to concerns that its business of selling solar cells to independent module makers will come under significant pressure in 2H11 as the current demand strength subsides. Firm says recent statistics from Italy's renewable energy regulator, the GSE, imply a pace of solar installations in CY10 in that country that is 2-3x higher than previously believed. They believe that strength in Italy helped sustain an unnaturally strong level of demand in 2H10.

10:58 am MIPS Q2 EPS Tops Expectations (MIPS)

MIPS Tech (MIPS $13.65 -1.48) reported fourth quarter earnings of $0.14 per share, $0.02 better than the Thomson Reuters consensus of $0.12.

Revenues rose 43.9% year-over-year to $21.9 million versus the $22.2 million consensus.

The company said, "Both our royalty revenue and earnings exceeded our expectations during the quarter."