From Briefing.com: 4:35 pm : The stock market dropped more than 1% as participants shrugged off another batch of better-than-expected earnings amid renewed concerns about the fiscal health of Greece, but technical support helped set the stage for an afternoon rally that took stocks to a modest gain.
More than 90% of the components in the S&P 500 were in the red during the early going, even though more than 80% of the companies in Briefing.com's coverage universe reported either in-line earnings or positive upside surprises since the prior session's close. However, with strong results now the norm, the sense of surprise has diminished and made the companies that fail to issue strong forecasts susceptible to sellers. PepsiCo (PEP 64.76, -1.22), Qualcomm (QCOM 39.33, -3.30), and eBay (EBAY 24.78, -1.51) each surpassed the consensus for the latest quarter, but their forecasts failed to inspire. In contrast, Starbucks (SBUX 27.75, +1.86), SanDisk (SNDK 42.22, +4.63), and Marriott International (MAR 36.82, +2.15) saw their share prices spike after they had posted better-than-expected earnings and upbeat guidance.
A stronger dollar also acted as an overhang. Its 0.5% gain came mostly against the euro, which fell to a new 11-month low of 1.326. The euro's slide followed news that Greece's budget deficit for 2009 was worse than expected. Greece's deficit led analysts at Moody's to downgrade the country's sovereign rating to A3.
Despite widespread weakness in the early going, stocks steadied their side as the S&P 500 ran into the 1190 line, which marked the stock market's 20-day moving average. The same technical line provided support when stocks sold off late last week.
The technical support set the stage for a rebound, which gained momentum as stocks worked their way above the lows from the prior session and short sellers were squeezed. In the end, nearly 70% of the names in the broader market booked a gain.
Homebuilders were some of the strongest. They rallied to a 6.0% gain, but that was helped by a stronger-than-expected 6.8% increase in existing home sales during March. Sales hit an annualized rate of 5.35 million units, the highest this year, thanks to rush of homebuyers that wanted to take advantage of tax credits.
Other data has less of an impact on trade. Weekly initial jobless claims were slightly higher than expected at 456,000 and continuing claims were worse than expected at 4.65 million. Meanwhile, producer prices increased 0.7% in March, but core producer prices were up a tepid 0.1%, which was in-line with expectations.
Participation was strong as nearly 1.3 billion shares exchanged hands on the NYSE this session. Not only is that above the 200-day moving average of 1.18 billion shares, but it is one of the most actively traded non-options expirations sessions this year.
Advancing Sectors: Consumer Discretionary (+1.7%), Materials (+0.8%), Industrials (+0.7%), Financials (+0.6%), Utilities (+0.4%), Tech (+0.2%)
Declining Sectors: Health Care (-1.3%), Telecom (-0.3%), Consumer Staples (-0.3%), Energy (-0.1%) DJ30 +9.37 NASDAQ +14.46 NQ100 +0.5% R2K +1.1% SP400 +1.2% SP500 +2.73 NASDAQ Adv/Vol/Dec 1667/2.72 bln/998 NYSE Adv/Vol/Dec 2014/1.29 bln/1052
5:20PM STMicroelectronics and Ericsson (ERIC) joint venture reports results (STM) 10.44 -0.05 : ST-Ericsson, a joint venture of STMicroelectronics (STM) and Ericsson (ERIC), reported financial results for the first fiscal quarter ending March 27, 2010. Co report Q1 adjusted operating loss of $114 mln; sales increased 8% y/y to $606 mln. Co expects sequential net sales approximately flat with respect to the first quarter 2010, due to the continued ongoing short-term impact of the portfolio transition. Given expected top line and based on the progression of the restructuring plans, the company does not anticipate improvements of operating result to occur until the second half of 2010.
4:28PM Cymer beats by $0.07, beats on revs; guides Q2 revs in-line (CYMI) 39.69 +0.73 : Reports Q1 (Mar) earnings of $0.53 per share, $0.07 better than the Thomson Reuters consensus of $0.46; revenues rose 101.4% year/year to $113.8 mln vs the $106.3 mln consensus. Co issues in-line guidance for Q2, sees Q2 revs of $115-120 mln vs. $120.01 mln Thomson Reuters consensus. "For Cymer, 2010 represents a year of growth and continued investment in promising new light source and display manufacturing technologies. We anticipate that ArF immersion will continue to represent the majority of our second quarter light source shipments and we expect to ship several KrF sources. We also anticipate that Installed Base Products revenue will increase driven by installed base growth, higher pulse utilization, and a more favorable mix of ArF immersion pulses. We believe our investment in EUV commercialization and TCZ market penetration positions us strategically for future growth and market leadership."
4:18PM Microsoft beats by $0.03, reports revs in-line; lowers expense guidance (MSFT) 31.39 +0.05 : Reports Q3 (Mar) earnings of $0.45 per share, $0.03 better than the Thomson Reuters consensus of $0.42; revenues rose 6.2% year/year to $14.5 bln vs the $14.39 bln consensus. Microsoft reports Q3 gross margins of 81.0% vs Street est of 78.9%. Microsoft offers operating expense guidance of $26.1-26.3 billion for the full year ending June 30, 2010; prior guidance was for expenses of $26.2-26.5 bln. The results include the deferral of $305 million of revenue relating to the Microsoft Office 2010 Technology Guarantee program. Adjusting for the revenue deferral, third-quarter revenue totaled $14.81 billion, an increase of 8% over the prior year period. "Windows 7 continues to be a growth engine, but we also saw strong growth in other areas like Bing search, Xbox LIVE and our emerging cloud services... Our record third-quarter revenue along with continued rigor on cost management resulted in exceptional EPS growth... Business customers are beginning to refresh their desktops and the momentum of Windows 7 continues to be strong," said Kevin Turner, chief operating officer... We are also seeing tremendous interest in our market-leading cloud services for business."
4:14PM Micrel beats by $0.03, beats on revs; guides Q2 EPS above consensus, revs above consensus (MCRL) 12.31 +0.55 : Reports Q1 (Mar) earnings of $0.17 per share, $0.03 better than the Thomson Reuters consensus of $0.14; revenues rose 43.0% year/year to $67.2 mln vs the $64.7 mln consensus. Co issues upside guidance for Q2, sees EPS of $0.19-0.21 vs. $0.14 Thomson Reuters consensus; sees Q2 revs up 12-15% sequentially to $75-77 mln vs. $66.85 mln Thomson Reuters consensus.
4:09PM PMC-Sierra beats by $0.02, beats on revs (PMCS) 9.47 +0.08 : Reports Q1 (Mar) earnings of $0.19 per share, $0.02 better than the Thomson Reuters consensus of $0.17; revenues rose 48.9% year/year to $152.8 mln vs the $149.9 mln consensus. "In the first quarter of 2010, we experienced improving demand in our Wide Area Network Infrastructure business and saw the continuation of healthy demand in our Enterprise Storage business as global IT spending improves year over year. Revenue in the first quarter of 2010 was 9% above our previous quarterly revenue peak in the second quarter of 2008, while non-GAAP net income was 46% above the second quarter of 2008."
4:09PM Microsemi reports EPS in-line, beats on revs; guides Q3 EPS in-line, revs above consensus (MSCC) 17.88 +0.68 : Reports Q2 (Mar) earnings of $0.26 per share, in-line with the Thomson Reuters consensus of $0.26; revenues rose 4.8% year/year to $118.2 mln vs the $116.5 mln consensus. Co issues mixed guidance for Q3, sees EPS of $0.28-0.30 vs. $0.29 Thomson Reuters consensus; sees Q3 revs up 3-5% sequntially, equates to $121.7-124.1 mln vs. $120.35 mln Thomson Reuters consensus. "We are extremely pleased with our second quarter results. As anticipated, we had increases in net sales for all of our end markets accompanied by notable improvements in our gross, operating and net margins. These results, along with an incremental operating cash flow of $28.8 million, continue to demonstrate rock-solid execution in delivering to our shareholders consistently profitable results."
4:02PM Lattice Semi beats by $0.03, beats on revs (LSCC) 4.55 +0.26 : Reports Q1 (Mar) earnings of $0.10 per share, $0.03 better than the Thomson Reuters consensus of $0.07; revenues rose 27.8% year/year to $70.4 mln vs the $67.5 mln consensus. "While we are pleased to see the progress and results of our efforts, our focus remains the same. If anything, we will continue to be aggressive in pursuit of growth opportunities, improved operational efficiencies and profitability. We remain highly confident in Lattice's competitive position and our ability to capture increased share in the markets we serve."
2:35PM SunPower Partners With Flextronics and announces Silicon Valley manufacturing facility (SPWRA) 17.96 0.00 : Co announced that it has partnered with Flextronics (FLEX) to begin manufacturing solar panels in Milpitas, Calif. by the end of this year. The SunPower and Flextronics partnership is expected to create approximately 100 new jobs this year, and produce 75 megawatts of SunPower solar panels annually. The West Coast location will allow SunPower to quickly and cost-effectively supply SunPower panels to solar installations at homes, commercial and public facilities, and power plants throughout the Western U.S. Establishing a U.S. manufacturing facility is a direct result of SunPower's three-year agreement with the US Department of Energy under the Solar Energy Technologies Program. Under the agreement, which was initiated in 2007, SunPower may receive up to $24 mln of federal funding to implement improvements across the value chain.
ChipMOS (IMOS) announced that Spansion and co have entered into a two-year wafer sort services agreement, utilizing the V5400 test platform, making ChipMOS Taiwan the exclusive wafer sort subcontractor of Spansion, except for any sort equipment operated by Spansion or currently located at Spansion Japan Limited...
8:04AM Cypress Semi beats by $0.04, beats on revs (CY) 13.11 : Reports Q1 (Mar) earnings of $0.17 per share, $0.04 better than the Thomson Reuters consensus of $0.13; revenues rose 45.2% year/year to $202.3 mln vs the $196.6 mln consensus. Co reported non-GAAP gross margin of 55.6%. The increase in gross margins was due mainly to increased manufacturing efficiencies and a favorable product mix. First-quarter net inventory decreased 8% quarter-on-quarter and 10% YoY. "Our backlog has reached a multi-year high, and our book-to-bill ended Q1 at 1.34--a substantial, sequential increase that is significantly above our typical expectations. We expect sales and profits to continue to increase throughout 2010 as the economy recovers and we introduce additional proprietary and programmable products into the market."
6:30AM Integrated Device Acquires Power Module VRM Assets of IKOR, a Subsidiary of iWatt Corporation (IDTI) 6.92 : Co announced it has acquired the assets of IKOR, a former subsidiary of iWatt Corporation that manufactures power module VRM solutions for high-performance computing. The all-cash transaction closed on April 16, 2010 and has already received appropriate board approvals.
6:09AM Cabot Micro misses by $0.03, beats on revs (CCMP) 42.69 : Reports Q2 (Mar) earnings of $0.47 per share, $0.03 worse than the Thomson Reuters consensus of $0.50; revenues rose 0.9% year/year to $98.6 mln vs the $96.9 mln consensus. The increase in revenue from the same period last year primarily reflects significantly improved economic and industry conditions. Compared to the prior quarter, sales of CMP polishing pads and slurry for copper and dielectric applications increased, while revenue from the company's other business areas declined.
Monolithic Power Systems (MPWR) announces that the Administrative Law Judge at the U.S. International Trade Commission issued an initial determination finding no violation of Section 337 for MPS and its customers, an action brought by O2 Micro International (OIIM) in 2008.
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