From Briefing.com: 4:10 pm : Equities endured an uninspiring Wednesday session, which unfolded in similar fashion to Tuesday's affair. Like yesterday, the major averages ended mixed with the Dow Jones Industrial Average (-0.3%) coming out on the losing end while the Nasdaq (+0.4%) and S&P 500 (+0.1%) eked out modest gains.
The price-weighted Dow spent the entire session in the red as 19 of its 30 components registered losses. Most notably, the second-largest index member, IBM (IBM 182.25, -6.18), plunged 3.3% after beating its Capital IQ earnings estimate by 13 cents on below-consensus revenue. Despite the bottom-line beat, the report was scrutinized due to the company accounting for a lower tax rate than in previous quarters.
On the upside, another large index member, United Technologies (UTX 116.12, +1.13), gained 1.0% after reporting a bottom-line beat on below-consensus revenue. Furthermore, the stock factored into the outperformance of the industrial sector (+0.2%), which also drew strength from transports. The Dow Jones Transportation Average jumped 1.1% with help from railroads after Norfolk Southern (NSC 92.94, +4.23) reported an earnings beat.
Like industrials, most other cyclical sectors finished just ahead of the broader market. The discretionary sector (+0.3%) rallied despite cautious action among retailers after Coach (COH 49.38, -3.17) reported disappointing earnings and said its North American comparable-store sales tumbled 13.6% during the quarter.
Elsewhere, energy (+0.3%) climbed as crude oil rose 1.8% to $96.72/bbl while materials (-0.9%) lagged after Freeport-McMoRan (FCX 34.52, -0.74) reported a top-line miss.
The remaining cyclical groups, financials (+0.1%) and technology (unch) ended little changed.
On the countercyclical side, health care (+0.1%) and utilities (+0.1%) finished in-line with the S&P 500 while consumer staples (-0.1%) and telecom services (-0.7%) ended in the red.
Treasuries finished in the red as the 10-yr yield ticked up three basis points to 2.86%. Trading volume was well below average with only 616 million shares changing hands at the NYSE.
Today's economic data was limited to the weekly MBA Mortgage Index, which rose 4.7% to follow last week's 11.9% increase.
Tomorrow, weekly initial claims will be reported at 8:30 ET while the November FHFA Housing Price Index will be released at 9:00 ET. December Existing Home Sales and Leading Indicators will cross the wires at 10:00 ET.
Nasdaq Composite +1.6% YTD
Russell 2000 +1.6% YTD
S&P 500 -0.2% YTD
Dow Jones Industrial Average -1.2% YTD
DJ30 -41.10 NASDAQ +17.24 SP500 +1.06 NASDAQ Adv/Vol/Dec 1500/1.88 bln/1082 NYSE Adv/Vol/Dec 1969/616.1 mln/1069
3:30 pm :
Mar crude oil rose for a third consecutive session ahead of tomorrow's release of weekly inventory data. Prices lifted from a session low of $95.64 per barrel and continued to trend higher for the remainder of floor trade. The energy component eventually settled at $96.72 per barrel, or 1.8% higher.
Feb natural gas extended yesterday's gains as it gained strength on a strong Northeast winter storm accompanied by cold temperatures. It trended higher after coming off its session low of $4.57 per MMBtu and settled with a solid 5.9% at $4.69 per MMBtu. Action in precious metals was lackluster today.
Feb gold extended yesterday's losses as the dollar index recovered into positive territory. The yellow metal retreated from its session high of $1242.70 per ounce set moments after pit trade opened and settled 0.2% lower at $1238.60 per ounce.
Mar silver oscillated between positive and negative territory, with prices dipping to a session low of $19.83 per ounce. Unable to gain momentum, it settled with a 0.1% loss at $19.84 per ounce.
5:53PM Teradyne beats by $0.03, beats on revs; guides Q1 EPS below consensus, revs in-line; initiates $0.06 per share quarterly dividend (TER) 19.58 +0.39 : Reports Q4 (Dec) earnings of $0.07 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.04; revenues rose 14.9% year/year to $285.3 mln vs the $275.19 mln consensus.
Bookings in the fourth quarter of 2013 were $290 million of which $225 million were in Semiconductor Test, $47 million in System Test and $18 million in Wireless Test.
"In line with seasonal trends, orders improved in the fourth quarter and we expect that order trend to accelerate in the first quarter as customers build capacity for new consumer devices in 2014
Co issues mixed guidance for Q1, sees EPS of $0.02-0.09, excluding non-recurring items, vs. $0.18 Capital IQ Consensus Estimate; sees Q1 revs of $300-330 mln vs. $325.45 mln Capital IQ Consensus Estimate.
Co also announced that its Board of Directors has approved the initiation of a quarterly cash dividend of $0.06 per share, with the initial quarterly dividend payable on June 2, 2014, to shareholders of record as of the close of business on May 9, 2014.
5:28PM SanDisk, on call, guides Q1 revs $1.45-1.525 bln vs $1.53 bln Capital IQ Consensus Estimate; expects modest price decline for the yr (SNDK) 72.19 :
5:27PM SanDisk, on calls, guides FY14 revs $6.4-6.8 bln vs $6.71 bln Capital IQ Consensus Estimate (SNDK) :
5:25PM SanDisk, on calls, guides Q1 gross margins to 47-49% (Street at 47.7%); FY14 margins at 45-48% (Street at 47.2%) (SNDK) 72.19 +0.30 :
4:10PM SanDisk beats by $0.13, beats on revs; Offers its first quarter dividend of $0.225/share (SNDK) 72.19 +0.30 : Reports Q4 (Dec) earnings of $1.71 per share, $0.13 better than the Capital IQ Consensus Estimate of $1.58; revenues rose 12.1% year/year to $1.73 bln vs the $1.71 bln consensus.
Other Metrics: Gross Margin came in at 50.9% compared to 39.9% year ago. Fourth quarter and fiscal 2013 cash flow from operations set quarterly and annual records of $617 million and $1.86 billion, respectively.
Dividend: Announces its first-quarter dividend of $0.225 per share of common stock, payable on February 24, 2014 to shareholders of record as of the close of business on February 3, 2014.
Commentary: "Our SSD product revenue set another quarterly record and represented 19 percent of our annual revenue, and we also set a record for annual retail product revenue. SanDisk is enabling the next generation of mobile and enterprise data storage solutions, and we are excited about our prospects for 2014."
4:29PM F5 Networks beats by $0.03, beats on revs; guides Q2 EPS above consensus, revs above consensus; authorized additional $500 mln share repurchase program (FFIV) 97.48 -0.72 : Reports Q1 (Dec) earnings of $1.22 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $1.19; revenues rose 11.2% year/year to $406.5 mln vs the $396.43 mln consensus.
F5 Networks reports Q1 GAAP gross margin of ~82.1% versus Street expectations of just under 84%
Co issues upside guidance for Q2, sees EPS of $1.23-1.26, excluding non-recurring items, vs. $1.21 Capital IQ Consensus Estimate; sees Q2 revs of $408-418 mln vs. $404.19 mln Capital IQ Consensus Estimate.
"During the first quarter, increasing demand for the new hardware and software products we introduced in fiscal 2013 continued to drive product revenue, which increased 3 percent from the prior quarter and 7 percent year over year...Strong sales across all geographic regions reflected both demand for the new products and positive customer response to our 'Good, Better, Best' pricing model we introduced in early November."
Share Repurchase: The company also announced today that its board of directors had authorized an additional $500 million for the company's common stock share repurchase program. This new authorization is incremental to the $281.3 million currently unused in the existing program which was initially authorized in October 2010.
4:19PM Western Digital beats by $0.11, beats on revs (WDC) 88.08 -0.78 : Reports Q2 (Dec) adj earnings of $2.19 per share, $0.11 better than the Capital IQ Consensus Estimate of $2.08; revenues rose 3.9% year/year to $3.97 bln vs the $3.86 bln consensus.
"We executed well in the December quarter as we continue participating in the ongoing growth of data in all of our served markets...The industry TAM was slightly higher than anticipated driven by seasonal demand as we saw strength in gaming and branded products."
Co should guide on its conference call at 17:00
4:09PM Cadence Design and Berkeley Design Automation reach a settlement agreement in the case filed by Cadence against BDA last year (CDNS) 14.30 -0.25 : CDNS and Berkeley Design Automation, Inc. (BDA) today announced that the companies have reached a settlement agreement in the case filed by Cadence against BDA last year.
As part of the settlement, BDA and Cadence signed a multi-year agreement to support interoperability between BDA's Analog FastSPICE (AFS) Simulator and Cadence's Virtuoso Analog Design Environment (ADE) through Cadence's OASIS interface, and BDA has agreed to pay Cadence an undisclosed amount.
12:37PM Notable movers of interest (SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
TEL (60.21 +6.95%): Beat quarterly EPS by $0.05 ($0.82 ex items vs $0.77 estimate), revs rose 6.1% yoy to $3.33 bln vs $3.28 bln estimate; sees Q2 EPS of $0.88-0.92 ex items vs $0.89 estimate, revs of $3.4-3.5 bln vs $3.42 bln estimate; sees FY14 EPS of $3.65-3.85 ex items vs $3.80 estimate, revs of $13.8-14.2 bln vs $14.09 bln estimate
TXT (37.94 +5.10%): Reported Q4 EPS of $0.59 ex items (in-line), revs rose 4.3% yoy to $3.51 bln vs $3.44 bln estimate; sees FY14 EPS of $2.00-2.20 vs $2.20 estimate, revs of ~$13.2 bln vs $13.23 bln estimate
NSC (93.01 +4.85%): Beat quarterly EPS by $0.13 ($1.64 vs $1.51 estimate), revs rose 7.3% yoy to $2.88 bln vs $2.85 bln estimate
Large Cap Losers
COH (48.91 -6.93%): Missed quarterly EPS by $0.05 ($1.06 vs $1.11 estimate), revs fell 5.6% yoy to $1.42 bln vs $1.49 bln estimate; sees second half sales declining in the low single digits in constant currencies; target lowered to $47 from $55 at Canaccord Genuity
ABB (25.61 -4.01%): Sees Q4 EPS of ~$0.23 vs $0.41 estimate
PH (122.3 -3.56%): Missed quarterly EPS by $0.01 ($1.24 ex items vs $1.25 estimate), revs rose 1.3% yoy to $3.11 bln vs $3.15 bln estimate; reaffirmed FY14 EPS guidance of $6.20-6.60 ex items vs $6.62 estimate
Mid Cap Gainers
NUAN (16.15 +8.43%): Raised Q1 EPS guidance to $0.23-0.24 ex items vs $0.20 estimate, revs to $487-491 mln vs $481.00 mln estimate
BBRY (10.73 +8.06%): Announced plans to divest Canadian Real Estate Holdings, will not comment on potential value of a sale
HIMX (14.83 +7.24%): Hearing price target raised at BofA/Merrill
Mid Cap Losers
AMD (3.71 -11.01%): Reported Q4 EPS of $0.06 (in-line), revs rose 37.1% yoy to $1.59 bln vs $1.54 bln estimate; gross margin was 35%; sees Q1 revs of $1.287-1.382 bln vs $1.36 bln estimate
PWE (7.47 -9.23%): Provided Q4 and 2013 operational update: production is in-line with guidance and expected to be ~124k and 135.1k boe per day, respectively
ATI (32.17 -5.88%): Beat quarterly EPS by $0.13 (-$0.08 ex items vs -$0.21 estimate), revs fell 10.4% yoy to $915.3 mln vs $969.76 mln estimate; sees FY14 capital expenditures to be ~$300 mln
11:10AM Super Micro Computer (+26%) at session/all time high after beating Q2 ests and guiding Q3 above consensus (SMCI) 23.28 +4.78 :
Super Micro Computer (SMCI) announced it is shipping new single, dual and quad socket G34 motherboards and server solutions with the latest AMD Opteron 6300 series processors built on 32nm "Piledriver" microarchitecture.
First Solar (FSLR) has begun construction on Phase I of the Barilla Solar Project in Pecos County, Texas, west of Fort Stockton. The 22 megawatt (MW)AC project is expected to begin commercial operation in mid-2014.
AMD (AMD) announced the immediate availability of its new 12- and 16-core AMD Opteron 6300 Series server processors, code named "Warsaw."
Broadcom (BRCM) announced that Haier has chosen Broadcom's Wireless Internet Connectivity for Embedded platform to power its latest smart appliances.
Cypress Semiconductor (CY) has been selected by L-3 Cincinnati Electronics, a division of L-3 Communications (LLL), as a supply partner to manufacture its Readout Integrated Circuits.
7:06AM Motorola Solutions beats by $0.05, reports revs in-line; guides Q1 below consensus; guides FY14 (MSI) 67.11 : Reports Q4 (Dec) earnings of $1.67 per share, $0.05 better than the Capital IQ Consensus Estimate of $1.62; revenues rose 2.6% year/year to $2.5 bln vs the $2.49 bln consensus.
Co issues downside guidance for Q1, sees EPS of $0.46-0.52 vs. $0.77 Capital IQ Consensus Estimate. Sees Q1 revenue decline of 4-6% YoY (consensus represents expectations for a 2.5% increase).
For the full-year 2014, the company expects revenue growth of flat to 2 percent compared with 2013 (consensus is for a roughly 3% increase) and Non-GAAP operating earnings of approximately 18.5 percent of sales.
6:16AM ASML +7% in Amsterdam following Q4: beats by EUR0.11, beats on revs; guides Q1 revs below consensus; reaffirms 1H14 guidance; plans to raise dividend 15% and buy back EUR1 bln in stock (ASML) 87.15 : Reports Q4 (Dec) earnings of 1.08 per share, 0.11 better than the Capital IQ Consensus of 0.97; revenues rose 80.6% year/year to 1.85 bln vs the 1.83 bln consensus.
Co issues downside guidance for Q1, sees Q1 revs of 1.4 bln vs. 1.7 bln Capital IQ Consensus Estimate. gross margin of around 42 percent, R&D costs of about EUR 280 million, other income of about EUR 20 million -- which consists of contributions from participants of the Customer Co-Investment Program -- and SG&A costs of about EUR 85 million.The expected first-quarter gross margin of around 42 percent is impacted by the product mix relative to Q4 2013. Similar to Q4 2013, the expected Q1 2014 gross margin includes a negative impact from one NXE:3300B EUV system, without which the gross margin would be 1.9 percentage points higher.
ASML reiterates H1 2014 expected sales of around EUR 3 billion, excluding EUV
ASML intends to increase the dividend by 15 percent compared with last year. Therefore, we will submit a proposal to the 2014 Annual General Meeting of Shareholders (AGM) to declare a dividend in respect of 2013 of EUR 0.61 per ordinary share (for a total amount of ~EUR 267 million), compared with a dividend of EUR 0.53 per ordinary share paid in respect of 2012.
ASML has announced its intention to purchase up to EUR 1.0 billion of its shares in 2013-2014.
Spreadtrum Communications (SPRD) announced that it has entered the tablet market with the introduction of a quad-core chipset for tablets with integrated connectivity, supporting WCDMA/HSPA+, Android 4.4 and a turnkey reference design to help manufacturers reduce the time and resources required to bring new tablets to market.
Cree (CREE) reported second quarter earnings of $0.46 per share, excluding non-recurring items, which is higher than expected, while revenues rose 19.9% year/year to $415.1 million which is slightly above estimates. The company issued guidance for the third quarter with EPS of $0.34-0.41 and revenues $390-420 million which is line with estimates. Q3 Guidance Details: For its third quarter of fiscal 2014 ending March 30, 2014, Cree targets GAAP gross margin targeted to be 37.7%+/- and non-GAAP gross margin targeted to be 38.5%+/-. Operating expenses are targeted to be similar to Q2. The tax rate is targeted at 21.0%+/- for the third quarter of fiscal 2014. Gross margin decreased 110 basis points from Q1 of fiscal 2014 to 37.5% on a GAAP basis and decreased 100 basis points to 38.2% on a non-GAAP basis. Inventory increased $17.1 million from Q1 of fiscal 2014 to $234.5 million, with days of inventory of 81 days. "Fiscal Q2 was another strong quarter as revenue increased to a record $415 million driven by strong growth in LED fixtures and LED bulbs. For the first half of fiscal 2014, revenue is up 22% from the first half of fiscal 2013 and Non-GAAP operating profit is up 38%...Our strategy is working, the business is growing and we've made great initial progress building the Cree brand."
IBM (IBM) reported fourth quarter earnings of $6.13 per share, which is higher than expected, while revenues fell 5.5% year/year to $27.7 billion which is below estimates. The company issued fiscal year 2014 guidance with EPS of at least $18.00 which is in line estimates. Reaffirms 2015 roadmap for operating EPS of at least $20/share. Software, Services and Global Financing each grew, adjusting for currency: Software up 3 percent, up 4 percent adjusting for currency; Services down 2 percent, up 1 percent adjusting for currency; Global Financing revenue flat, up 3 percent adjusting for currency; Systems and Technology revenue declined 26 percent, down 25 percent adjusting for currency; Services backlog of $143 billion, up 2 percent, up 5 percent adjusting for currency; "As we enter 2014, we will continue to transform our business and invest aggressively in the areas that will drive growth and higher value." "We remain on track toward our 2015 roadmap for operating EPS of at least $20, a step in our long-term strategy of industry leadership and continuous transformation." The company's total gross profit margin was 51.7 percent in the 2013 fourth quarter compared with 51.8 percent in the 2012 fourth-quarter period. Total operating (non-GAAP) gross profit margin was 52.6 percent in the 2013 fourth quarter compared with 52.3 percent in the 2012 fourth-quarter period, driven by an increase in Services and a mix to Software.
Nuance Communications (NUAN) issued guidance for the first quarter with raised EPS to $0.23-0.24, excluding non-recurring items, from $0.18-0.21 and revenues of $487-491 million from $477-487 million which is higher than expected. The company has appointed Bill Robbins as executive vice president, Worldwide Sales.
Texas Instruments (TXN) reported fourth quarter earnings of $0.46 per share, which is lien with estimates, while revenues rose 1.6% year/year to $3.03 billion which is higher than expected. The company issued first quarter with EPS of $0.36-0.44 and revenues of $2.83-3.07 billion which is line with estimates. TI's fourth-quarter results and first-quarter outlook include restructuring charges for cost-saving actions in Embedded Processing and in Japan. The company is not exiting any markets or discontinuing any existing products but will reduce investments in markets that do not offer sustainable growth and returns. The savings will reflect the elimination of about 1,100 jobs worldwide. The charges are expected to be about $80 million, of which $49 million was included in the fourth quarter of 2013 and about $30 million will be included in the first quarter of 2014. The co expects to achieve annualized savings of about $130 million by the end of 2014. "Our fourth quarter capped a year in which each quarter's performance increasingly reflected the impact of structural changes we've made to focus TI on Analog and Embedded Processing, where the diversity and longevity of our positions are assets. "The combined revenue from Analog and Embedded Processing grew 12 percent over last year's fourth quarter and comprised 82 percent of total revenue. Individually, Analog was up 12 percent and Embedded Processing was up 11 percent from a year ago."
Advanced Micro (AMD) reported fourth quarter earnings of $0.06 per share, which is in line with estimates, while revenues rose 37.1% year/year to $1.59 billion which is line with estimates.Gross margin was 35 percent in Q4 2013. Gross margin decreased 1 percentage point sequentially. Q4 2013 gross margin included a $7 million benefit from the sale of inventory previously reserved in Q3 2012 as compared to a similar benefit of $19 million in Q3 2013. Cash, cash equivalents and marketable securities balance, including long-term marketable securities, was $1.2 billion at the end of the quarter, in line with expectations.
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