Sector Investing

[ReturntoSender]

From Briefing.com Yesterday: 4:20 pm : Equities began the session with a bullish bias which failed to hold past the opening minutes. After opening near session highs, the S&P 500 spent the first hour in a steady decline towards the flat line. Once that level was reached, the index spent the remainder of the day trapped in a narrow range before ending with a slim gain of 0.3%.

Technology stocks lagged the broader market. The biggest tech component, Apple (AAPL 609.53, -7.29) slipped 1.2% as investors awaited the company's third quarter earnings report scheduled for this evening. Meanwhile, Microsoft (MSFT 27.88, -0.02) showed little change after the company unveiled its Windows 8 operating system, and launched the Surface tablet at an event in New York.

Elsewhere, F5 Networks (FFIV 83.00, -10.32) fell 11.1% after reporting mixed quarterly results. The company reported fourth quarter earnings of $1.12, which was $0.06 worse than the Capital IQ consensus forecast. Meanwhile, the revenue of $362.5 million was in-line with expectations. The company provided a cloudy outlook on the next quarter as it expects earnings and revenue to fall below consensus. The disappointing earnings report was met with two analyst downgrades and four price target cuts.

Symantec (SYMC 18.54, +1.16) advanced 6.7% after beating on earnings and revenues. The security software company announced second quarter earnings of $0.45 which was $0.07 better than the Capital IQ consensus forecast. Regarding future outlook, the company issued mixed guidance as it expects in-line revenues and earnings below consensus estimates.

Zynga (ZNGA 2.39, +0.26) spiked 12.3% after beating on the top and the bottom line. The social media gaming site reported third quarter revenue of $316.6 million, which was ahead of the expected $307.53 million. In addition, the company issued downside full-year 2012 guidance and announced plans to repurchase up to $200 million of its outstanding Class A common stock. Following the earnings release, Needham upgraded the stock to ‘buy' from ‘hold' with a $4.00 price target.

The Dow Jones Transportation Average outperformed the broader market and ended higher by 0.6%. United Continental (UAL 19.26, -1.01) was one of the weakest performers among the select transportation stocks. Earlier, the air carrier reported third quarter earnings of $1.35 which was $0.20 worse than the Capital IQ consensus estimate. Meanwhile, the airline's revenue was in-line with expectations. Following the earnings report, United Continental lost 5.0%. Peer Delta Air Lines (DAL 9.64, -0.40) slid 4.0% after announcing plans to withdraw older jets from its fleet. In addition, the company is looking to reduce its costs by about $1 billion.


4:37PM Apple (halted, will resume at 16:50) misses by $0.08, reports revs in-line; guides Q1 EPS, revs below consensus ( AAPL) 609.54 -7.29 : Reports Q4 (Sep) earnings of $8.67 per share, $0.08 worse than the Capital IQ Consensus Estimate of $8.75; revenues rose 27.2% year/year to $35.97 bln vs the $35.78 bln consensus.

26.9 mln iPhones sold in Q4 vs Street est of ~25 mln
14 mln iPads sold in Q4 vs Street est of ~17 mln
4.9 mln Macs sold in Q4 vs Street est of ~5 mln
Co reported Q4 gross margins of 40.0% vs Street est of 40.6% and 38.5% guidance.

Co issues downside guidance for Q1, sees EPS of ~$11.75 vs. $15.53 Capital IQ Consensus Estimate; sees Q1 revs of ~52 bln vs. $54.95 bln Capital IQ Consensus Estimate. CO typically guides conservatively.

4:36PM Ingram Micro beats by $0.02; beats on revs; guides Q4 revs ( IM) 15.30 +0.02 : Reports Q3 (Sep) earnings of $0.40 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.38; revenues rose 1% year/year to $9.0 bln vs the $8.8 bln consensus. Co currently expects 2012 Q4 sales to be relatively flat with the 2011 Q4, which approximates to $9.95 bln vs $9.8 bln consensus

While remaining under pressure, 2012 Q4 gross margin is expected to increase sequentially over the 2012 Q3 in-line with historic seasonality, although the co will not have the gross margin uplift from higher hard disk drive pricing that benefited the 2011 Q4.

4:31PM Freescale Semi beats by $0.09, beats on revs; guides Q4 revs below consensus ( FSL) 8.88 -0.30 : Reports Q3 (Sep) earnings of $0.04 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus Estimate of ($0.05); revenues fell 11.6% year/year to $1.01 bln vs the $977.91 mln consensus. Gross margins to decrease approximately 300 basis points on a sequential basis. Co issues downside guidance for Q4, sees Q4 revs of $920-960 mln vs. $997.21 mln Capital IQ Consensus Estimate.

4:26PM Micros Systems beats by $0.04, reports revs in-line; reaffirms FY13 EPS guidance, revs guidance ( MCRS) 48.13 +0.33 : Reports Q1 (Sep) earnings of $0.57 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.53; revenues rose 16.9% year/year to $299.9 mln vs the $298.94 mln consensus.

4:19PM Micrel beats by $0.01, misses on revs; guides Q4 revs below consensus ( MCRL) 9.65 +0.09 : Reports Q3 (Sep) earnings of $0.10 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.09; revenues fell 2.0% year/year to $62.9 mln vs the $63.79 mln consensus. Gross margin was 52.9% compared to 55.2% in the prior quarter.

Co issues downside guidance for Q4, sees Q4 revs flat to down 6%, sequentially, equating to approx $59.13-$62.9 mln vs. $66.25 mln Capital IQ Consensus Estimate. For Q4, gross profit margin is expected to be in the range of approximately 51.0% to 53.0% based on its anticipated product mix and factory utilization rate. In addition, it expects that fourth quarter 2012 GAAP net income will be approximately $0.04 to $0.07 per diluted share.

4:16PM KLA-Tencor misses by $0.05, misses on revs ( KLAC) 47.14 +0.01 : Reports Q1 (Sep) earnings of $0.84 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus Estimate of $0.89; revenues fell 9.4% year/year to $721 mln vs the $739.97 mln consensus.

4:13PM Applied Micro reports EPS in-line, beats on revs ( AMCC) 4.54 +0.07 : Reports Q2 (Sep) loss of $0.16 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of ($0.16); revenues fell 28.7% year/year to $46.3 mln vs the $45.3 mln consensus.

4:11PM Maxim Integrated beats by $0.04, reports revs in-line; guides Q2 EPS in-line, revs in-line ( MXIM) 26.49 +0.21 : Reports Q1 (Sep) earnings of $0.47 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.43; revenues fell 2.0% year/year to $623 mln vs the $620.88 mln consensus. The Company's 90 day backlog at the beginning of the second fiscal quarter of 2013 was $400 million. Co issues in-line guidance for Q2, sees EPS of $0.39-0.43, excluding non-recurring items, vs. $0.43 Capital IQ Consensus Estimate; sees Q2 revs of $595-623 mln vs. $622.26 mln Capital IQ Consensus Estimate.

F5 Networks (FFIV $81.80 -11.72) reported fourth quarter earnings of $1.12 per share, $0.06 worse than the Capital IQ consensus of $1.18, while revenues rose 15.2% year/year to $362.5 million versus the $366.09 mln consensus. The company issued downside guidance for the first quarter with EPS of $1.14-1.16, excluding non-recurring items, versus the $1.20 consensus and sees first quarter revs of $363-370 million versus $373.68 million consensus.