From Briefing.com: 4:15 pm : The stock market halted its three-day slide on Tuesday as the S&P 500 gained 0.6%. The tech-heavy Nasdaq (+0.4%) also finished in the green, but couldn't keep pace with the S&P 500 as Apple (AAPL 506.50, -44.00) weighed following its quarterly report.
Although the largest tech company beat on earnings and revenue, investors were not pleased by below-consensus iPhone sales. In addition, disappointing guidance for the second quarter also factored into the stock's 8.0% loss.
The remainder of the technology sector (-0.7%) was a bit more mixed as large-cap names like Google (GOOG 1123.01, +21.78), Oracle (ORCL 37.10, +0.61), and Intel (INTC 24.90, +0.18) posted solid gains while Seagate (STX 51.52, -6.53) tumbled 11.3% after missing earnings estimates.
Outside of technology, most other cyclical groups finished ahead of the broader market. Financials (+1.3%) ended in the lead while the materials (+0.5%) sector was the only cyclical underperformer. U.S. Steel (X 25.34, -0.11) lost 0.4% after reporting mixed earnings.
Elsewhere, the discretionary sector advanced 0.8% with help from homebuilders after DR Horton (DHI 23.00, +2.06) reported better-than-expected results. The stock surged 9.8% while the broader iShares Dow Jones US Home Construction ETF (ITB 24.52, +0.90) jumped 3.8%.
Also of note, the industrial sector (+0.9%) rallied as transports provided support. The Dow Jones Transportation Average gained 1.1%, finishing just above its 50-day moving average.
On the countercyclical side, consumer staples (+0.7%) and health care (+1.3%) took part in the broad rally while telecom services (UNCH) and utilities (+0.4%) lagged.
Treasuries ended little changed despite showing early losses. The benchmark 10-yr yield settled at 2.75%.
Participation was well below average as only 609 million shares changed hands at the NYSE. So far in January, only six sessions have generated above-average volume with five taking place on days when the market ended lower.
Today's economic data included three reports.
Durable goods orders fell 4.3% in December after increasing a downwardly revised 2.6% (from 3.4%). The Briefing.com consensus expected durable goods orders to increase 2.1%. Boeing (BA 137.09, -0.27) reported solid aircraft orders in December, and that was expected to carry overall durable goods orders higher for the month. Yet, the official Census data showed aircraft orders, defense and nondefense, down 16.7%. A large portion of the decline was due to seasonal adjustments that naturally occur in December. Excluding transportation, durable goods orders fell 1.6% which was well below the 0.6% gain expected by the consensus. These orders were revised down from an originally reported 1.2% gain in November to a 0.1% increase.
The November Case-Shiller 20-city Home Price Index rose 13.6% while a 13.8% increase had been expected by the Briefing.com consensus. This followed the previous month's increase of 13.6%.
The January Conference Board's Consumer Confidence Index increased to 80.7 from a downwardly revised 77.5 (from 78.1) in December. The Briefing.com consensus pegged the Consumer Confidence Index at 77.5. The strengthening in consumer confidence stands in contrast to what the preliminary reading for the January University of Michigan Consumer Sentiment Index showed. That index dropped on weakness in the labor market, increased volatility in equity prices, and higher gasoline prices.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while the FOMC will release its latest policy directive at 14:00 ET.
Nasdaq Composite -1.9% YTD
Russell 2000 -2.1% YTD
S&P 500 -3.0% YTD
Dow Jones Industrial Average -3.9% YTD
4:25PM Freescale Semi beats by $0.01, beats on revs; guides Q1 revs above consensus (FSL) 15.30 +0.00 : Reports Q4 (Dec) earnings of $0.19 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.18; revenues rose 13.1% year/year to $1.08 bln vs the $1.05 bln consensus. Co issues upside guidance for Q1, sees Q1 revs of $1.07-1.11 bln vs. $1.04 bln Capital IQ Consensus Estimate; sees Q1 gross margins increasing approximately 50-75 basis points on a sequential basis.
4:09PM Yahoo! beats by $0.08, reports revs in-line (YHOO) 38.22 +1.57 : Reports Q4 (Dec) earnings of $0.46 per share, $0.08 better than the Capital IQ Consensus Estimate of $0.38; revenues fell 1.7% year/year to $1.2 bln vs the $1.2 bln consensus.
Display:
GAAP display revenue was $553 million for the fourth quarter of 2013, a 6 percent decrease compared to $591 million for the fourth quarter of 2012. Display revenue ex-TAC was $491 million for the fourth quarter of 2013, a 6 percent decrease compared to $520 million for the fourth quarter of 2012.
The Number of Ads Sold (excluding Korea) increased approximately 3 percent compared to the fourth quarter of 2012.
Price-per-Ad (excluding Korea) decreased approximately 7 percent compared to the fourth quarter of 2012.
Search:
GAAP search revenue was $464 million for the fourth quarter of 2013, a 4 percent decrease compared to $482 million for the fourth quarter of 2012. Search revenue ex-TAC was $461 million for the fourth quarter of 2013, an 8 percent increase compared to $427 million for the fourth quarter of 2012.
Paid Clicks (excluding Korea) increased approximately 17 percent compared to the fourth quarter of 2012.
Price-per-Click (excluding Korea) decreased approximately 3 percent compared to the fourth quarter of 2012.
Cash, cash equivalents, and investments in marketable securities were $5 billion as of December 31, 2013 compared to $6 billion as of December 31, 2012, a decrease of $1 billion. During the fourth quarter of 2013, Yahoo repurchased 6 million shares for $231 million and used a net $60 million for acquisitions. During the year ended December 31, 2013, Yahoo repurchased 129 million shares for $3.3 billion and used a net $1.2 billion for acquisitions. During the fourth quarter of 2013, Yahoo received net proceeds of $1.3 billion, which is net of the call spread, from the issuance of 0.00% Convertible Senior Notes due 2018 and net proceeds of $295 million from the settlement of derivative hedge contracts.
4:09PM Pericom Semi reports EPS in-line, misses on revs; guides Q3 revs in-line (PSEM) 8.43 -0.03 : Reports Q2 (Dec) earnings of $0.08 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.08; revenues rose 5.3% year/year to $32 mln vs the $32.4 mln consensus.
Co issues in-line guidance for Q3, sees Q3 revs of $30-32.5 mln vs. $32.14 mln Capital IQ Consensus Estimate.
GAAP gross margins are expected to be between 37.0-39.0%, and adjusting for share-based compensation, amortization of intangibles and fair value adjustments that are expected to total ~1.5%, non-GAAP gross margins are expected to be in the 38.5-40.5% range.
4:06PM RF Micro Device reports EPS in-line, misses on revs; guides Q4 below consensus (RFMD) 4.87 : Reports Q3 (Dec) earnings of $0.13 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.13; revenues rose 6.4% year/year to $288.5 mln vs the $319.7 mln consensus. Co issues downside guidance for Q4, sees EPS of $0.09-0.10 vs. $0.11 Capital IQ Consensus Estimate; sees Q4 revs of $250-260 mln vs. $287.48 mln Capital IQ Consensus Estimate.
4:06PM Tessera Tech and Samsung (SSNLF) enter into new patent license agreements (TSRA) 18.73 0.00 : Co and Samsung Electronics (SSNLF) announced that Tessera's subsidiaries Tessera, Inc. and Invensas each entered into new patent license agreements with Samsung. The specific terms and conditions of the agreements are confidential and have not been disclosed by the companies.
4:05PM Cirrus Logic beats by $0.12, beats on revs; guides Q4 revs below consensus (CRUS) 18.74 -0.88 : Reports Q3 (Dec) earnings of $0.89 per share, excluding non-recurring items, $0.12 better than the Capital IQ Consensus Estimate of $0.77; revenues fell 29.4% year/year to $218.9 mln vs the $212.89 mln consensus.
Q3 Gross margin of 47.4%
Co issues downside guidance for Q4, sees Q4 revs of $130-150 mln vs. $175.84 mln Capital IQ Consensus Estimate; Gross margin is expected to be between 47-49%.
"While our business is typically driven by product cycles that weight our revenue more heavily towards the September and December quarters, we expect to exceed our operating profit goal of 20 percent in FY14 and we remain committed to this long-term target. We are extremely excited to be taping out a wave of new products in advanced geometries this year as we look to capitalize on strategic opportunities in audio with new and existing customers, especially the growing trend of voice as a powerful interface to a wide variety of devices. We anticipate these products will contribute to future revenue growth as early as calendar year 2015."
2:43PM Advanced Micro confirms plans to accelerate the ARM (ARMH) server ecosystem with first ARM-Based CPU and development platform from a server processor vendor (AMD) 3.54 +0.13 :
Large Cap Gainers
AAL (31.45 +4.21%): Reported Q4 adj. earnings (on a combined basis) of $0.59 per share, may not be comparable to $0.55 estimate; revs rose 8.7% y/y to $10 bln vs the $9.92 bln estimate, on a 3.4 percent increase in total ASMs.
TROW (80.23 +4.86%): Beat on EPS by $0.03, reported revs in-line.
MT (16.74 +4%): Upgraded to Outperform at RBC Capital Mkts; tgt raised to $16.
Large Cap Losers
VIP (10.1 -13.16%): Co provided update on strategy and targets for 2014; revenues and EBITDA to be stable y/y; Supervisory Board approved a new dividend policy pursuant to which from 2014 it aims to pay annual dividends of $0.035 per share until the co reaches a group Net Debt to EBITDA ratio of under 2 times.
STX (51.34 -11.56%): Missed on EPS by $0.07, reported revs in-line; sees Q3 revs of approx $3.4 bln, vs $3.459 bln estimate.
GLW (17.08 -6.26%): Beat on EPS by $0.02, beat on revs.
Mid Cap Gainers
OSK (56.71 +10.3%): Beat on EPS by $0.29, beat on revs; guided FY14 EPS above consensus, revs in-line; reaffirmed FY15 EPS guidance.
DHI (22.85 +9.14%): Beat on EPS by $0.07, beat on revs.
SWFT (21.52 +8.03%): Missed on EPS by $0.03, reported revs in-line.
Mid Cap Losers
HIMX (13.31 -8.46%): Downgraded to Neutral at Chardan Capital Markets; Prescription Google Glass frames are now available for developers; CNET reported Google Glass will be available to the public in 'late 2014'.
HLF (61.9 -3.37%): Drop attributed to NY Post story suggesting probe by Canadian regulator.
OCN (45.02 -3.41%): Sees Q4 revs below expectations; sees $100-106 mln in net income in Q4.
10:49AM Verizon shareholders approve issuance of shares to acquire Verizon Wireless (VZ) 47.40 -0.29 : At a special meeting held today, a substantial majority of shareholders of Verizon Communications (VZ) approved the company's issuance of up to 1.28 billion shares of common stock to Vodafone shareholders to complete the acquisition of Vodafone Group PLC's indirect 45 percent interest in Verizon Wireless. Earlier today at a shareholder meeting in London, Vodafone shareholders also approved matters necessary for the transaction to close.
Cisco (CSCO) extended its cloud portfolio with new products and services - including a breakthrough hybrid cloud solution, dubbed Cisco InterCloud, which is intended to lower the total cost of cloud services ownership for IT organizations and pave the way for interoperable and highly secure public, private and hybrid clouds.
Broadcom (BRCM) announced that Dune HD has selected Broadcom's BCM7356 satellite system-on-a-chip for its next generation set-top box deployments.
BlackBerry (BBRY) announced BlackBerry 10 OS version 10.2.1, a new software update for BlackBerry 10 smartphones that lets you do more, more easily, and helps you be more productive and stay better connected.
8:02AM SunPower announces program with Bank of America Merrill Lynch to finance $220 mln in residential solar lease projects (SPWR) 31.02 : Co announced a new program with Bank of America Merrill Lynch (BofA Merrill) that will provide financing to support approximately $220 million of residential solar lease projects. The program will assist thousands of homeowners in financing solar power systems through SunPower solar leases, joining approximately 20,000 Americans currently enrolled in the program.
BofA Merrill and SunPower have worked together since 2009, when BofA Merrill began financing large solar projects SunPower designed and constructed for public agencies in California, including Yolo County and Mendocino Community College.
In addition to attractive terms and low monthly payments, the SunPower Lease includes one of the solar industry's only direct-from-manufacturer performance guarantees.
8:02AM JDS Uniphase announces that it is providing core optical technology for the Kinect system that enables the new Microsoft (MSFT) Xbox One entertainment and communications console to provide highly-precise 3D sensing capabilities (JDSU) 11.94 : In addition to enabling consumers to control Xbox One applications using body movements or gestures instead of using a traditional game controller, the new sensor can now sense multiple users and also much more subtle activities such as facial expressions and heart rate and incorporate them into various Xbox One applications.
7:19AM Corning beats by $0.02, beats on revs (GLW) 18.22 : Reports Q4 (Dec) earnings of $0.29 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.27; revenues fell 2.0% year/year to $2 bln vs the $1.93 bln consensus.
Core gross margin in the quarter was 40%, a 2 percentage points decline from the year-ago period. The decline was the result of lower Gorilla Glass volume, as well as a weaker sales mix in the company's Optical Communications segment.
2014 Outlook
'The incremental profitability we expect to achieve with the consolidation of Samsung Corning Precision into our display business, coupled with a new $2 billion share repurchase program, should result in a 20% accretion to earnings per share on a fully diluted basis." Corning will provide investors with details on the company's 2014 outlook at its annual Investor Relations meeting in New York on Friday, Feb. 7.
Q1 Guidance
Corning anticipates that glass volume in its Display Technologies segment will be down slightly sequentially, in line with normal seasonality. The company expects LCD glass price declines to be higher than previous quarters. The price declines are not related to the SCP acquisition or a result of recent supply contract renewals. The company expects that price declines will return to moderate levels after the first quarter.
Corning anticipates another year of growth in the LCD glass market in 2014, with retail demand up a mid-to-high single digit percentage, as measured in square feet. The company said that supply chain inventory levels remain healthy and industry glass supply appears aligned with overall demand.
In the Optical Communications segment, Corning anticipates first-quarter sales growth to be in the mid-teens on a percentage basis, a significant improvement over the first quarter last year.
For the Environmental Technologies segment, first-quarter sales should increase by a mid-single digit percentage on a year-over-year basis, driven by improvements in heavy-duty diesel products in China and Europe.
Specialty Materials segment sales are expected to be consistent on a year- over-year comparison in the first quarter, which is seasonally the slowest quarter each year.
The company expects its Gorilla Glass volume to increase on a yearly basis in quarter one, and as the year progresses, be more in line with overall industry consumption of glass for devices.
Life Sciences segment sales should be comparable to those of a year-ago first quarter.
Spreadtrum Communications (SPRD) introduced its next generation single-core smartphone platform for WCDMA, TD-SCDMA and EDGE, which integrates a Cortex-A7 CPU running at speeds up to 1.2GHz as well as GPS, WiFi, Bluetooth and FM connectivity functions.
1:27AM Advanced Energy acquires assets of AEG Power control modules product line (AEIS) 24.95 : Co announces it has acquired the assets of AEG Power Solutions GmbH line of Power Control Modules. Owned by 3WPower, AEG PS's Power Control Modules business is the second largest supplier in its served market. It is comprised of the Thyro-Family of products and accessories and serves numerous power control applications in different industries ranging from materials thermal processing through chemical processing, glass manufacturing and numerous other general industrial power applications. AEG's advanced Power Control Modules provide precision power control through advanced communication and control algorithms. The Thyro-Family product line offers clean and controlled power combined with extensive technical and applications support. This acquisition is expected to accelerate Advanced Energy's revenue and profitability over time.
Advanced Energy has acquired the Power Control Module product line for EUR22 million in cash plus a one year earn-out of up to EUR1 million, payable in cash, if the EBITDA target for the product line is met in the first 12 months after closing.
Apple (AAPL) reported first quarter earnings of $14.50 per share, which is higher than expected, while revenues rose 5.7% year/year to $57.59 billion which is line with estimates, and $55-58 billion guidance; gross margin 37.9% versus 36.5-37.5% guidance. 51 million iPhones sold in the first quarter which is below estimates. 26 million iPads sold which is higher than expected. and 4.8 million Macs sold which is also higher than expected. The company issued guidance for the second quarter with revenues of $42-44 billion which is below expectations, gross margin 37-38% vs. 37.4% estimates. "We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion."
Seagate Tech (STX) reported second quarter earnings of $1.32 per share, while revenues fell 3.8% year/year to $3.53 billion which are both below estimates. The company reported NON-GAAP gross margin of 28.5%. "Seagate's results in the December quarter reflect discipline in managing the profitability of our business and strong operational execution. We continue to strategically invest in our product portfolio and enhance our vertically integrated manufacturing capabilities to effectively capitalize on the cloud, mobile and open source storage trends that are being fueled by data growth," The company sees Q3 revenues of $3.4 billion which is slightly below estimates.
Sanmina (SANM) reported first quarter earnings of $0.41 per share, which is higher than expected, while revenues fell 3.0% year/year to $1.45 billion which is line with estimates. The company issued second quarter EPS guidance of $0.36-0.42 and revenues of $1.425-1.475 billion which are both line with estimates. "Our first quarter results were in line with our expectations. We remain focused on higher value-added services, markets and innovative technologies. This allows us to capitalize on opportunities with new and existing customers and further strengthen our operating model. Our outlook for the second quarter reflects our view of a soft first half of fiscal 2014. We are encouraged by our customers' forecasts, recent wins and overall market improvements that will drive modest growth for fiscal 2014.
Rambus (RMBS) reported fourth quarter adjusted earnings of $0.14 per share, which is line with estimates, while revenues rose 27.9% year/year to $73.4 million which is line with estimates, due to the new license agreements signed with SK Hynix, Micron Technology, ST Microelectronics and LSI Corporation during 2013. The company issued upside guidance for fiscal year 2014 with customer licensing income and rev of $295-305 million which is higher than expected. Customer licensing income and revenue are not without risk and include expectations that the Company will sign new customers for patent as well as solutions licensing. The Company also expects to keep its non-GAAP operating expenses relatively flat, year over year.
Semtech (SMTC) announced a reduction in its workforce by approximately 6 percent as part of a previously announced restructuring effort that is expected to strengthen its focus and increase future operating efficiencies. As a result of these activities, the Company also expects to take one-time charges that include, but are not limited to: employee termination benefits, the write down of inventory, goodwill and other intangibles and the impairment of fixed assets and other assets. Such charges are currently under review and additional details will be provided when Semtech reports its fourth quarter fiscal year 2014 financial results in early March. The estimated financial impact of the recent activity is expected to reduce full, normalized annual operating expenses by approximately $35.0 million for the Company's fiscal year 2015. "Due to the significant reduction in demand in the second half of our fiscal year 2014, we have initiated a series of operating expense reductions across the Company. We believe these actions position the Company to accelerate earnings growth as our overall demand returns to growth," said Mohan Maheswaran, President and Chief Executive Officer of Semtech Corporation.
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