Sector Investing

[ReturntoSender]

From Briefing.com: 4:15 pm : Equities finished near their best levels of the session as enthusiastic investors gobbled up shares after Spain was able to successfully raise EUR3.2 billion through the sale of 12- and 18-month bills. The auctions were met with robust investor demand despite the rise in yields, and shelved contagion fears for the time being. Today’s gains came despite disappointing housing starts and industrial production data which both missed market expectations.

Futures firmed up ahead of the opening bell after Coca-Cola, Goldman Sachs, and Johnson & Johnson all reported better than expected results.

Coca-Cola (KO 73.95, +1.51) rallied after the company announced better than expected earnings of $0.89 per share on revenues of $11.14 billion. The company had robust volume growth in emerging markets as India (+20%), China (+9%), and Brazil lead the way. However, the company warned the European financial crisis and slowdown in China may impact sales in those economies in the coming quarters.

Shares of Goldman Sachs (GS 116.86, -0.87) slipped 0.7%. Weakness comes after the company announced beat on both its top and bottom lines, announcing earnings per share of $3.92 on revenues of $9.95 billion. Annualized return on average common shareholders’ equity was 12.2% for the first quarter. Today’s selling comes after the stock ran into resistance at its 50-day moving average.

Johnson & Johnson (JNJ 64.22, +0.24) pared its early losses and finished the day with a 0.4% gain. The company announced earnings per share of $1.37 which was $0.03 better than the Capital IQ Consensus Estimate, and said revenues fell 0.2% year over year to an in-line $16.14 billion. Domestic sales for the company fell 2.2% while international sales declined 2.5% on an operational increase of 0.4% and a negative currency impact of 2.9%.

European financials saw strong gains on the heels of this morning’s Spanish bill auctions. Deutsche Bank (DB 46.31, +1.92) and Barclays (BCS 14.09, +0.53) both saw gains in excess of 3.5% while Spain's Banco Santander (STD 6.55, +0.12) underperforming with a 1.9% advance.

Apple (AAPL 609.70, +29.57) surged 5.1% after some early selling dropped the stock to a low of $571.91. Buyers emerged following five days of losses in which the stock dropped more than 9%. The company is scheduled to report its quarterly earnings on April 24.

Treasuries finished near session lows, but losses were rather contained as the long bond’s 0.4% decline to 99 12/32 paced the selling. The 10-yr yield ticked back above 2.00%, finishing at 2.009%. Steepening occurred along the yield curve as the 2-10-yr spread widened to 174 basis points.

Tomorrow’s data is limited to the weekly MBA Mortgage Index which is due out at 7 am ET.DJ30 +194.13 NASDAQ +54.42 SP500 +21.21 NASDAQ Adv/Vol/Dec 1939/1.49 bln/602 NYSE Adv/Vol/Dec 2352/709.8 mln/698

5:07PM Linear Tech reports EPS in-line, revs in-line; guides Q4 revs in-line (LLTC) 33.15 +0.64 : Reports Q3 (Mar) earnings of $0.42 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.42; revenues fell 11.6% year/year to $312.4 mln vs the $312.38 mln consensus. Co issues in-line guidance for Q4, sees Q4 revs growth of 4-8% sequentially, which equates to ~$324.9-337.4 mln vs. $328.95 mln Capital IQ Consensus Estimate. "Given the improvement in our bookings and the broad distribution of this strength across all our major end-markets, we are estimating that we will again grow quarterly revenues sequentially in the 4-8% range in our Q4. We also expect operating income and operating margin to improve." "

4:16PM IBM beats by $0.15, reports revs in-line; guides FY12 EPS above consensus (IBM) 207.45 +4.73 : Reports Q1 (Mar) earnings of $2.78 per share, $0.15 better than the Capital IQ Consensus Estimate of $2.63; revenues rose 0.4% year/year to $24.7 bln vs the $24.81 bln consensus. Co issues upside guidance for FY12, sees EPS of at least $15.00 vs. $14.90 Capital IQ Consensus Estimate; prior guidance was for "at least $14.85". IBM reports Q1 GAAP gross margins of 45.1%; Street Expectations approx 45.3%. Net income margin increased 0.8 points to 12.4 percent. Total operating (non-GAAP) net income margin increased 1.1 points to 13.2%.

Global Technology Services segment revenues increased 2 percent (up 3 percent, adjusting for currency) to $10.0 billion. Global Business Services segment revenues were down 2 percent (down 1 percent, adjusting for currency) to $4.6 billion.

IBM's tax rate was 20.1 percent, down 4.9 points year over year; operating (non-GAAP) tax rate was 20.6 percent, down 4.4 points. The lower tax rate was due to a one-time benefit associated with a tax restructuring in Latin America. The benefit offset the company's first-quarter workforce rebalancing expense, similar to first-quarter 2011 when a one-time gain from asset sales offset workforce rebalancing expenses. The company expects its full-year 2012 effective tax rate on a GAAP and operating (non-GAAP) basis to be in the range of 24 percent; and excluding the one-time benefit in the first quarter, the rate is expected to be in the range of 25 percent.

"In the first quarter, we drove strong profit and earnings per share growth. We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives... Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the company's ongoing margin expansion."

4:12PM Intel beats by $0.03, reports revs in-line; guides Q2 revs in-line (INTC) 28.47 +0.07 : Reports Q1 (Mar) earnings of $0.56 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.53; revenues rose 0.5% year/year to $12.91 bln vs the $12.84 bln consensus. PC Client Group revenue of $8.5 billion, down 7 percent QoQ. Data Center Group revenue of $2.5 billion, down 10 percent QoQ. Other Intel architecture group revenue of $1.1 billion, down 2% QoQ. Co issues in-line guidance for Q2, sees Q2 revs of $13.1-14.1 bln vs. $13.41 bln Capital IQ Consensus Estimate; with non-GAAP gross margin of 63% plus or minus a couple percentage points; co sees FY12 GM 65%, +/- a couple percentage points.

4:07PM Seagate Tech beats by $0.54, beats on revs (STX) 27.89 -0.63 : Reports Q3 (Mar) earnings of $2.64 per share, excluding non-recurring items, $0.54 better than the Capital IQ Consensus Estimate of $2.10; revenues rose 65.1% year/year to $4.45 bln vs the $4.36 bln consensus. Gross margin came in at 37% vs 31.6% in DecQ. Note, co usually guides on the call, which starts at 6pm ET.

4:03PM Cree misses by $0.01, misses on revs; guides Q4 EPS below consensus, revs below consensus (CREE) 31.90 +0.98 : Reports Q3 (Mar) earnings of $0.20 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.21; revenues rose 29.9% year/year to $284.8 mln vs the $300.57 mln consensus. Co issues downside guidance for Q4, sees EPS of $0.20-0.26, excluding non-recurring items, vs. $0.28 Capital IQ Consensus Estimate; sees Q4 revs of $295-315 mln vs. $323.61 mln Capital IQ Consensus Estimate; sees GAAP gross margin targeted to be 35% +/- and non-GAAP gross margin targeted to be 36% +/-; Operating expenses are targeted to increase by +/- $5 million on a GAAP basis and +/- $4 million on a non-GAAP basis. The tax rate is targeted at 13.0% for fiscal Q4.

4:02PM Intel earnings mover: INTC initially spikes to new multi-year highs @ 29.30, now trading modestly lower on Q1 earnings results (INTC) 28.47 :

4:02PM Aehr Test Systems regains compliance with NASDAQ minimum bid price rule (AEHR) 1.45 +0.20 :

4:01PM Flextronics awarded AS9100C aerospace and defense quality certification at three U.S. facilities (FLEX) 7.08 +0.20 : Co announced that three of its U.S. facilities located in Charlotte, North Carolina; Austin, Texas; and Milpitas, California, have separately received certification under the AS9100C aerospace and defense quality standard.

Research In Motion (RIMM) announced that BlackBerry Mobile Voice System 5.1 now supports OpenScape Voice V6 from Siemens (SI) Enterprise Communications. The solution allows customers to access desk phone functionality on their BlackBerry smartphone.

TranSwitch Corp. (TXCC) announced that its HDplay 44143 dual-mode HDMI/DisplayPort transceiver has been selected by Grandbeing for its MS0501-N003 3D Video switch.

9:00AM MIPS Tech: China's SICMicro selects MIPS Technologies' processor IP for new set-top box chip (MIPS) 6.28 : Co announces that SICMicro selected MIPS32 processor cores for the new generation of its highly-secure decoder SoCs for China's rapidly-growing ABS-S set-top box market. ABS-S is the direct-to-home technology for satellite transmission in China, supporting broadcast, data distribution and interactive services.

8:03AM First Solar (halted -- will resume trade at 8:30) restructures operations; cuts 30% of workforce, closes German manufacturing facility, indefintely idles four lines in Maylasia (FSLR) 20.82 : Co is restructuring its operations in response to deteriorating market conditions in Europe and to reduce costs and align its organization with sustainable market opportunities. As part of this program, First Solar will close its manufacturing operations in Frankfurt (Oder), Germany, in 4Q12. Additionally, the co will indefinitely idle four production lines at its manufacturing center in Kulim, Malaysia, on May 1, 2012. These actions, combined with other personnel reductions in Europe and the U.S., will reduce First Solar's global workforce by approximately 2,000 positions, about 30 percent of the total. The restructuring initiatives are expected to reduce First Solar's costs by $30-60 million this year and $100-120 million annually going forward. In addition, the co's average manufacturing cost is expected to improve to $0.70-$0.72 per watt in 2012 as a result of the changes, below prior expectations of $0.74 per watt. In 2013 the co estimates average module manufacturing costs will range from $0.60 to $0.64 per watt. To achieve these significant cost savings, the Company will record restructuring and other related charges of $245-370 million, of which $80-120 million are cash expenditures. First Solar expects to incur these charges primarily during the first quarter of 2012 and the rest over the course of this year... In addition, First Solar has voluntarily paid down ~$145 million of debt ahead of schedule in 2012, which represents repayment in full for outstanding amounts under the Company's German loan agreement.