From Briefing.com: 4:15 pm : Equities managed to finish today's session with slim gains despite a mid-morning stumble. The S&P 500 and Dow were able to overcome the early weakness thanks in part to upbeat earnings from major sector components.
The 30-stock Dow Jones led the way as earnings from DuPont (DD 47.82, +0.83), Travelers (TRV 77.95, +1.64), and Verizon Communications (VZ 42.94, +0.40) contributed to the outperformance. Though Verizon missed on the bottom line, its stock added 0.9%.
In other earnings of note, Delta Air Lines (DAL 14.01, +0.40) gained 2.9% on the back of an in-line report. Note that Delta, along with its rivals, has soared over 30% since the start of December. The advance has been notable as crude oil gained nearly $10 in the same timeframe.
As the S&P 500 and Dow pushed to fresh highs, the Nasdaq was more deliberate in its climb off session lows. Semiconductor manufacturers weighed on the index and the PHLX Semiconductor Index slipped 0.3%. The cautious trade preceded earnings announcements from Advanced Micro Devices (AMD 2.45, -0.01) and Texas Instruments (TXN 33.46, -0.06). The market will receive quarterly reports from the two semiconductor producers after today's close.
Additionally, two major tech names, Google (GOOG 702.87, -1.64) and International Business Machines (IBM 169.08, +1.61), will also reveal their earnings after the closing bell.
While earnings contributed to today's gains, the market also received some headlines from Washington. Midday reports indicated the White House would welcome a three-month debt ceiling extension. This comes as the House of Representatives prepares to vote on a temporary extension tomorrow.
Among stocks moving on news, Boeing (BA 41.16, -0.88) shed 1.2% after Reuters reported that electrical issues with the Dreamliner were not caused by faulty batteries as previously thought. Elsewhere, Caterpillar (CAT 97.72, +0.10) saw little change following the discovery of accounting misconduct at its Chinese subsidiary. As a result of the discovery, Caterpillar will take a fourth quarter non-cash charge of approximately $580 million.
Crude oil climbed steadily throughout the session and ended higher by 0.7%. The energy component settled at $96.68.
The CBOE Volatility Index (VIX 12.57, +0.22) advanced 0.9%, but the near-term volatility measure remained at its multi-year low.
Floor volume at the New York Stock Exchange was in-line with the 50-day average as 700 million shares changed hands during today's session.
Today's lone economic data point was the December existing home sales report which pointed to an annualized rate of 4.94 million units, weaker than the rate of 5.10 million units that had been generally expected by the Briefing.com consensus. The pace for December was down from the prior month's revised rate of 4.99 million units. Looking at tomorrow's economic releases, the weekly MBA Mortgage Index will be reported at 7:00 ET while the November FHFA Housing Price Index will cross the wires at 9:00 ET. In notable earnings, McDonald's (MCD 92.95, +0.69) will announce its fourth quarter results ahead of the opening bell.DJ30 +62.43 NASDAQ +8.47 SP500 +6.53 NASDAQ Adv/Vol/Dec 1539/1.73 bln/927 NYSE Adv/Vol/Dec 2097/699.9 mln/929
3:30 pm : Mar crude oil lifted off its session low of $95.97 per barrel set in morning floor action and trended higher for the remainder of the session as the dollar index remained in negative territory. The energy component eventually settled with a gain of 0.7% at $96.69 per barrel, which was slightly below its session high of $96.89 per barrel.
Feb natural gas fell into the red and to a session low of $3.51 per MMBtu but managed to recover into the black in afternoon pit trade. Although it traded as high as $3.59 per MMBtu, natural gas gave up the gains and closed 0.3% lower at $3.56 per MMBtu.
Feb gold advanced to a pit session high of $1695.90 per ounce after trading as low as $1686.30 per ounce in morning action. The yellow metal pulled-back slightly as it headed into the close and settled at $1693.10 per ounce, or 0.3% higher.
Mar silver came off its session low of $31.87 per ounce set in morning action and advanced to a session high of $32.24 per ounce. It traded in a consolidative pattern just below that level in afternoon action and settled 0.8% higher at 32.17 per ounce. DJ30 +47.78 NASDAQ +1.51 SP500 +4.73 NASDAQ Adv/Vol/Dec 1435/1.41 bln/1037 NYSE Adv/Vol/Dec 1927/451.9 mln/1060
4:31PM O2Micro granted patent for Converter Controller Architecture (OIIM) 3.10 -0.06 : Co announced that it was issued 14 claims under United States patent number 8,289,731 for its Power Converter Controller architecture. O2Micro's patented architecture regulates power supplies without cost concerns or stability issues compared to conventional designs.
4:21PM Super Micro Computer beats by $0.04, beats on revs; guides Q3 EPS above consensus, revs above consensus (SMCI) 10.52 +0.17 : Reports Q2 (Dec) earnings of $0.18 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.14; revenues rose 16.6% year/year to $291.5 mln vs the $280.13 mln consensus. Gross margin and non-GAAP gross margin for the second quarter were each 13.8% compared to 17.1% in the same period a year ago. Non-GAAP gross margin was 13.0% for the first quarter of fiscal year 2013.
Co issues upside guidance for Q3, sees EPS of $0.17-0.21, excluding non-recurring items, vs. $0.15 Capital IQ Consensus Estimate; sees Q3 revs of $275-295 mln vs. $269.82 mln Capital IQ Consensus Estimate.
4:20PM Volterra Semi announces acquisition of Element Energy; financial terms not disclosed (VLTR) 16.77 +0.03 : Element Energy is a "startup with technology that significantly improves the performance, lifetime, reliability and cost of large battery packs used in a wide range of applications including stationary and renewable energy storage and hybrid and electric vehicles."
4:20PM Advanced Micro beats by $0.05, reports revs in-line; guides Q1 revs below consensus (AMD) 2.45 -0.01 : Reports Q4 (Dec) loss of $0.14 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus Estimate of ($0.19); revenues fell 31.7% year/year to $1.16 bln vs the $1.15 bln consensus.
Computing Solutions segment revenue decreased 11% sequentially and 37% year-over-year. The sequential and year-over-year decreases were primarily driven by lower microprocessor unit volume shipments. Graphics segment revenue decreased 5% sequentially and 15% year-over-year. Graphics processor unit (GPU) revenue decreased sequentially and year-over-year due to lower unit volume shipments.
Non-GAAP gross margin 39%
Co issues downside guidance for Q1, sees Q1 revs -6 to -12% QoQ to ~$1.016-1.086 bln vs. $1.11 bln Capital IQ Consensus Estimate.
4:15PM IBM beats by $0.14, reports revs in-line; guides FY13 EPS above consensus (IBM) 196.08 +1.61 : Reports Q4 (Dec) earnings of $5.39 per share, excluding non-recurring items, $0.14 better than the Capital IQ Consensus Estimate of $5.25; revenues fell 0.6% year/year to $29.3 bln vs the $29.09 bln consensus; flat adjusting for currency; up 1% excluding divested RSS business adjusting for currency.
Free cash flow of $9.5 billion, up $0.6 billion;
Software revenue up 3%, up 4% adjusting for currency;
Services revenue down 2%, down 1% adjusting for currency;
Services backlog of $140 billion, flat, up $1 billion adjusting for currency;
Systems and Technology revenue down 1%, up 4% excluding RSS: System z mainframe up 56%
By region:
The Americas' fourth-quarter revenues were $12.5 billion, flat (up 1%, adjusting for currency) from the 2011 period.
Revenues from Europe/Middle East/Africa were $9.1 billion, down 5% (down 3%, adjusting for currency).
Asia-Pacific revenues increased 4% (up 5%, adjusting for currency) to $7.0 billion.
OEM revenues were $679 million, down 5% compared with the 2011 fourth quarter.
Revenues from the co's growth markets increased 7%. Revenues in the BRIC countries - Brazil, Russia, India and China - increased 11% (up 14%, adjusting for currency).
Co issues upside guidance for FY13, sees EPS of at least $16.70, excluding non-recurring items, vs. $16.63 Capital IQ Consensus.
4:15PM Volterra Semi beats by $0.02, beats on revs (VLTR) 16.77 +0.03 : Reports Q4 (Dec) earnings of $0.28 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.26; revenues rose 3.9% year/year to $40.3 mln vs the $39.41 mln consensus.
4:05PM RF Micro Device beats by $0.02, beats on revs; guides Q4 EPS in-line, revs above consensus (RFMD) : Reports Q3 (Dec) earnings of $0.08 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.06; revenues rose 20.3% year/year to $271.2 mln vs the $245.73 mln consensus. Co issues mixed guidance for Q4, sees EPS of $0.04-0.05 vs. $0.04 Capital IQ Consensus Estimate; sees Q4 revs of $250-255 mln vs. $227.92 mln Capital IQ Consensus Estimate. "RFMD's December quarterly revenue increased by 29% quarter-over-quarter and supported a near tripling in non-GAAP operating income quarter-over-quarter to $26.8 million. On the balance sheet, RFMD generated $43.3 million in cash flow from operations during the December quarter, versus $1.9 million in the prior quarter, nearly offsetting the purchase in November of Amalfi Semiconductor. In the March quarter, we expect our ability to capture an increasing amount of semiconductor content within smart devices and reference designs will enable RFMD to outperform normal seasonality in the March quarter."
4:05PM Cree beats by $0.02, beats on revs; guides Q3 EPS above consensus, revs above consensus (CREE) 33.47 -0.29 : Reports Q2 (Dec) earnings of $0.32 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.30; revenues rose 13.9% year/year to $346.3 mln vs the $331.06 mln consensus. Co issues upside guidance for Q3, sees EPS of $0.30-0.35, excluding non-recurring items, vs. $0.28 Capital IQ Consensus Estimate; sees Q3 revs of $325-345 mln vs. $322.21 mln Capital IQ Consensus Estimate.
"Fiscal Q2 was another strong quarter with record revenue and earnings per share that were higher than our target range due to stronger sales in both LEDs and Lighting combined with improved gross margins...Overall company backlog is in line with seasonal trends for our fiscal Q3. Longer term, we remain focused on driving adoption through innovation, and with our broad understanding of the technology levers from materials through systems, we see opportunities to move the market even faster than what has been experienced to date."
For its third quarter of fiscal 2013 ending March 31, 2013, Cree targets GAAP gross margin targeted to be similar to Q2 and non-GAAP gross margin targeted to be 39.5%+/-.
12:47PM LDK Solar signs share purchase agreement with Fulai Investment (LDK) 1.89 +0.06 : Co announced that it has entered into a share purchase agreement dated January 21, 2013 with Fulai Investments Limited, which has agreed to purchase 17,000,000 newly issued ordinary shares of LDK Solar, at a purchase price of US$1.83 per share with an aggregate purchase price of $31,110,000, subject to the terms and conditions of the share purchase agreement, including a lock-up for 180 days from the closing date of the contemplated transactions. Pursuant to the share purchase agreement, the parties will endeavor to fulfill the closing conditions to consummate the transactions prior to February 28, 2013. Fulai Investments also has the right to designate two non-executive directors to the LDK Solar board upon consummation of the transactions. The net proceeds will be used for general corporate purposes in LDK Solar's operations
12:02PM Microsoft announces Surface Windows 8 Pro will be available for purchase on Feb 9, 2013 (MSFT) 27.11 -0.15 : Starting at an estimated retail price of $899, Surface Windows 8 Pro will be available in 64GB and 128GB models. In addition to being able to buy Surface Windows 8 Pro in the coming weeks, customers will soon be able to purchase Surface Windows RT in 14 additional markets worldwide, more than double the number of markets in which Surface is currently available.
Wind River, a subsidiary of Intel (INTC), announced its partnership with Hyundai MOBIS for in-vehicle infotainment systems.
For the third consecutive year, Ixia (XXIA) BreakingPoint has provided a fully operational network assessment solution for COMBINED ENDEAVOR, a military communications and cyber defense exercise run by U.S. European Command and NATO nations.
Atmel (ATML) has signed an agreement with Exegin Technologies to jointly offer integrated wireless communications solutions for smart grid applications.
6:36AM Verizon misses by $0.13, reports revs in-line (VZ) 42.51 : Reports Q4 (Dec) earnings of $0.38 per share ex items, (see impacts below), $0.13 worse than the Capital IQ Consensus Estimate of $0.51; revenues rose 5.7% year/year to $30.05 bln vs the $29.78 bln consensus.
A reduction of 7 cents per share due to impacts from Superstorm Sandy yielded a total of 38 cents per share in adjusted fourth-quarter 2012 earnings (non-GAAP).
Fourth-quarter 2012 charges totaled $1.86 per share: $1.55 per share related to severance, pension and benefit charges primarily for the annual actuarial valuation of Verizon's benefit plans as well as the annuitization of various pension liabilities during the quarter, and 31 cents per share related to the early retirement of debt and other restructuring activities.
Wireless
Verizon Wireless added 2.2 million net retail connections in the fourth quarter, including a record-high 2.1 million retail postpaid net connections.
The company added 5.0 million net retail postpaid connections in 2012, the most in four years.
At year-end 2012, smartphones accounted for more than 58 percent of the Verizon Wireless retail postpaid customer phone base, up from 53 percent at the end of third-quarter 2012.
Wireline:
Fourth-quarter 2012 operating revenues were $10.0 billion, a decline of 1.5 percent compared with fourth-quarter 2011
Veeco Instruments (VECO) announced that the University of Waterloo has purchased a GEN10 Molecular Beam Epitaxy system for its recently opened Quantum-Nano Centre hosting the Waterloo Institute for Nanotechnology and the Institute for Quantum Computing -ECOtality (ECTY) announced the launch of the fastest opportunity charger ever built for the material handling industry, the Minit-Charger 12.
Mellanox Technologies (MLNX) announced its industry and performance-leading InfiniBand solutions have been integrated in Australian cloud service provider, OrionVM, enterprise private and public clouds, who is now standardizing on InfiniBand for their enterprise deployments around the world.
STMicroelectronics (STM) announced availability of innovative software and associated microcontrollers that will allow simple, low-cost high-tech electronic equipment to become more compelling and easy to use.
NeoPhotonics (NPTN) announced it has entered into a definitive agreement to acquire the semiconductor optical components business unit (OCU) of LAPIS Semiconductor. LAPIS Semiconductor is a wholly-owned subsidiary of ROHM Co. Ltd. OCU is to be acquired by NeoPhotonics Semiconductor GK, a Japanese subsidiary of NeoPhotonics. Co has agreed to pay approximately $36.8 million in cash, which is comprised of approximately $21.2 million in cash, before adjustments for the business unit and an additional $15.6 million over three years for the associated real estate. The acquisition agreements provide for the purchase of the LAPIS Semiconductor OCU business, together with a portfolio of more than 150 patents and patents applications, its campus and high speed semiconductor and laser and detector fabrication facility. Based on co ests, the addition of OCU is expected to be accretive to the company's Adjusted EBITDA within the first year following the transaction.
10:11 am S&P Information Tech sector trading lower by -0.2% today
The tech sector is trading lower today, just trailing narrower losses in the broader market. Semiconductors are showing relative weakness with the SOX trading 0.6% lower. Within the chip index, SPRD (-1.7%) is a notable laggard. Among other major indices, the SPY is trading 0.1% lower today, while the QQQ and the NASDAQ are trading 0.2% lower on the session. Among tech bellwethers, FB (+3.1%) is showing notable strength, while ORCL (-1.1%) and TXN (-1.0%) are under pressure.
In tech earnings, VZ (+0.7%) posted an EPS miss with in-line revenues. In news, SIMO (+3.1%) announced the authorization of a new share repurchase program and also approved its first quarterly cash dividend. Among rumors, RIMM (+9.6%) may consider sale of software licenses or hardware production as part of strategic review, according to reports. Among notable analyst upgrades this morning in the tech space, ASML (+0.7%) was upgraded at Deutsche Bank and ABN Amro and RIMM (+9.8%) was upgraded to Sector Outperform at Scotia Capital. Among notable downgrades, Benchmark downgraded ARMH (-2.2%) to Hold. GOOG (-0.9%), IBM (+0.2%), AMD (+1.0%), CA (-0.8%), and TXN (-1.0%) are the only notable names in tech scheduled to report quarterly results today after the close.
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