From Briefing.com: 4:10 pm : Stocks finished off their best levels as the early morning excitment following the Spanish auctions and better than expected earnings from Alcoa faded over the course of the session. The Fed's latest Beige Book was released this afternoon, and suggested that overall economic activity in the dozen Fed districts continued to increase at a modest to moderate pace in February and early March. Reports of consumer spending were "encouraging." However, stocks saw little response to the Beige Book, and drifted lower over the remainder of the session as some traders worried the good news would prevent the Fed from implementing a third round of quantitative easing later this year.
Shares of Alcoa (AA 9.90, +0.58) jumped 6.2% after the company posted a surprise gain of $0.10 per share for the first quarter when the Capital IQ Consensus Estimate was calling for a loss of $0.03. Revenues climb 0.8% YoY to $6.01 billion, and the company raised its 2012 global growth forecast for the aerospace market three percentage points. The company also expects global aluminum demand to grow 7% in 2012.
Nokia (NOK 4.24, -0.79) plunged 15.7% after the company lowered its first quarter devices and services operating margin guidance to approximately -3%. This compares with the company’s previous forecast which projected a a range of “around breakeven, ranging either above or below by approximately 2%.” Competitive industry dynamics, particularly in India, the Middle East, Africa, and China were stated as reasons for the change in forecast.
JC Penney (JCP 34.43, +1.22) gained 3.7% after announcing the departure of CFO Michael Dastugue. COO Michael Kramer will hold the position as interim CFO until a replacement can be found.
Banco Santander (STD 6.70, +0.19), Barclays (BCS 13.49, +0.48), and Deutsche Bank (DB 45.06, +1.56) finished off their opening highs as traders took profits on the early surge. The strength in European financials came after Italy raised EUR11 bln through the sale of short-term bills. The space will remain in focus tomorrow as Italy readies for 5- and 10-yr note auctions.
Apple (AAPL 626.20, -2.24) lost 0.4% after the Department of Justice filed an antitrust suit against the company and several publishers who they say colluded to fix eBook prices.
Treasuries ended the day off their worst levels, but still saw sizable losses as traders dumped maturities and moved back into riskier assets. The 10-yr fell just less than half a point and saw its yield climb four basis points to 2.028%. Today’s selling swung the yield curve steeper as the 2-10-yr spread widened to 174.5 basis points. DJ30 +89.54 NASDAQ +25.24 SP500 +10.12 NASDAQ Adv/Vol/Dec 1964/1.48 bln/549 NYSE Adv/Vol/Dec 2429/779.4 mln/643
4:01PM Micron launches $870 mln offering of convertible senior notes (MU) 7.17 +0.02 : Co announced that it intends to offer, subject to market and other considerations, $435.0 mln aggregate principal amount of convertible senior notes due 2032 and $435.0 mln aggregate principal amount of convertible senior notes due 2032. The terms of the Notes will require Micron to repurchase such Notes at the option of the holders for cash on dates to be determined, in each case at a purchase price equal to the principal amount thereof plus accrued and unpaid interest to, but excluding the repurchase date.
Mattson Technology (MTSN) announced that a CMOS image sensor manufacturer has accepted the paradigmE etch system, which was shipped in the 4Q 2011, for use in its production facility.
SMSC (SMSC $28.69 +2.46) reported fourth quarter earnings of $0.05 per share, excluding non-recurring items, $0.22 better than the Capital IQ Consensus of ($0.17), while revenues fell 11.2% year/year to $89.9 million versus the $90.95 mln consensus. The company issued upside guidance for the first quarter with EPS of $0.29-0.38, excluding non-recurring items, versus the $0.27 consensus and revenues of $98-102 million versus the $97.70 million consensus.
Applied Micro (AMCC $6.25 -0.01) issued downside guidance for the fourth quarter with EPS of ($0.10)-($0.12) versus the ($0.08) consensus and fourth quarter revenues of $48.9 million versus the $52.04 million Capital IQ Consensus Estimate. "The overall shortfall of $3.1M was spread across both the Transport and Processor product families. Our OTN revenue and sequential ramp came through as expected and did not contribute to the revenue shortfall. The revenue shortfall is related to slowness in the service provider space and the overall wire line market weakness."
09:44 am SMSC shares spike over 10% following beat on earnings per share
SMSC (SMSC $26.72 +2.49) reported fourth quarter earnings of $0.05 per share, excluding non-recurring items, $0.22 better than the Capital IQ Consensus of ($0.17), while revenues fell 11.2% year/year to $89.9 million versus the $90.95 mln consensus.
The company issued upside guidance for the first quarter with EPS of $0.29-0.38, excluding non-recurring items, versus the $0.27 consensus and revenues of $98-102 million versus the $97.70 million consensus.
09:42 am Applied Micro shares little changed despite downside guidance
Applied Micro (AMCC $6.26 +0.00) issued downside guidance for the fourth quarter with EPS of ($0.10)-($0.12) versus the ($0.08) consensus and fourth quarter revenues of $48.9 million versus the $52.04 million Capital IQ Consensus Estimate.
"The overall shortfall of $3.1M was spread across both the Transport and Processor product families. Our OTN revenue and sequential ramp came through as expected and did not contribute to the revenue shortfall. The revenue shortfall is related to slowness in the service provider space and the overall wire line market weakness."
09:39 am Alcoa kicks off earnings season with beat on top and bottom lines, shares rise over 6%
Alcoa (AA $9.95 +0.63) reported first quarter adjusted earnings of $0.10 per share, $0.13 better than the consensus of ($0.03), while revenues rose 0.8% year/year to $6.01 billion versus the $5.75 billion consensus. The improvement over 4Q11 results was driven by strong productivity improvements across all businesses, higher realized prices for aluminum, and improved volume and mix. These were offset somewhat by a lower realized alumina price and higher input costs.
Alcoa recorded revenue growth in Q1 across global end markets, including industrial products (14%), automotive (13%), packaging (11%), and commercial transportation (11%), compared to fourth quarter 2011. Compared to first quarter 2011, revenues were up in commercial transportation (32%), aerospace (15%), and automotive (7%), while revenues were down in industrial products (14%) and building and construction (5%). Alcoa is raising its 2012 global growth forecast for the aerospace market 3 percentage points (13-14%), and expects global growth in the automotive (3-7%), commercial transportation (1-5%), packaging (2-3%), building and construction (2.5 - 3.5%), and industrial gas turbine (1-2%) markets. Alcoa continues to project a global aluminum supply deficit in 2012 and reaffirmed its forecast that global aluminum demand would grow 7% in 2012, on top of the 10% growth seen in 2011.
09:36 am Nokia shares fall more than 12% following profit warning
Nokia (NOK $4.39 -0.64) currently estimates that its non-IFRS Devices & Services operating margin in Q1 was approx. -3%, compared to the previously expected range of "around breakeven, ranging either above or below by ~2 percentage points" primarily due to Competitive industry dynamics, which negatively affected net sales in the Mobile Phones and Smart Devices business units, particularly in India, the Middle East and Africa and China; and gross margin declines, particularly in the Smart Devices business unit. Nokia currently estimates that Devices & Services net sales in Q1 were EUR 4.2 bln, comprised of Mobile Phones net sales of EUR 2.3 billion (71 million units), Smart Devices net sales of EUR 1.7 billion (12 million units), and Devices & Services Other net sales of EUR 0.2 billion. Based on the preliminary view, Nokia ended the first quarter 2012 around the high end of our normal 4 to 6 week channel inventory range, but on an absolute unit basis, channel inventories declined sequentially. In Q1, Nokia sold more than 2 million Lumia devices at an ASP of approxmately EUR 220. Furthermore, Nokia has seen sequential growth in Lumia device activations every month since starting sales of Lumia devices in November 2011. Lumia has gained market share with both distribution partners and consumers. The Windows Phone ecosystem is also attracting developers and has expanded rapidly with more than 80,000 applications available.
Q2 outlook: The company expects its non-IFRS Devices & Services operating margin in the second quarter to be similar to or below the first quarter 2012 level. This outlook reflects that the first quarter of 2012 benefit related to lower warranty costs is expected to be non-recurring, as well as expectations regarding a number of factors including: - competitive industry dynamics continuing to negatively affect the Smart Devices and Mobile Phones business units; - timing, ramp-up, and consumer demand related to new products; and- the macroeconomic environment... Nokia will continue to increase its focus on accelerating Lumia sales, as well as on lowering the company's cost structure, improving cash flow and maintaining a strong financial position.
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