Seeking Alpha
  • Wednesday, July 9, 2014

  • 5:51 PM
    • DragonWave (DRWI) expects FQ2 revenue to be up 25%-40% Q/Q in FQ2. That spells a range of $36M-$40M, soundly above a $34M consensus.
    • Gross margin rose to 20.5% in FQ1 from 14.5% in FQ4 and 11.5% a year ago. Opex -10% Y/Y to $12.1M.
    • The "Nokia channel" accounted for 61% of revenue vs. 68% in FQ4 and 57% a year ago. Cash/equivalents fell to $15.6M at the end of FQ1 from $19M at the end of FQ4.
    • FQ1 results, PR
    | 1 Comment
  • 5:49 PM
    • Seventy Seven Energy (SSE) +4.8% AH after Carl Icahn discloses a 9.98% stake, ~4.74M shares, in the company that was spun off recently by Chesapeake Energy.
    • Icahn received the shares in connection with the spinoff via a pro-rata distribution to CHK shareholders.
    | 1 Comment
  • 5:34 PM
    | 1 Comment
  • 5:23 PM
    • Axiall (AXLL) -3.8% AH after reporting that its PHH vinyl chloride monomer manufacturing facility in Lake Charles, La., has returned to full operating rates, but the slow ramp up will result in lower than expected sales volumes and higher operating and maintenance costs during Q2.
    • Also, AXLL says it saw normal seasonal increases in U.S. building products sales volumes during Q2 along with weaker Canadian sales and the impact of a weaker Canadian dollar; operating income results in the aromatics segment will come in ~$12M lower than the year-ago Q2 due to lower operating rates and lower margins.
    | Comment!
  • 5:11 PM
    • Dragonwave (DRWI): Q1 EPS of -$0.11 beats by $0.02.
    • Revenue of $28.8M (+17.4% Y/Y) beats by $1.84M.
    • Shares +12.5% AH.
    • Press Release
    | Comment!
  • 4:54 PM
    • Confirming earlier reports, Standard General will provide $25M in "immediate financial support" to American Apparel (APP), and agree to "certain standstill and voting limitations through the Company's 2015 annual meeting."
    • As part of the deal, fired CEO/founder Dov Charney and 4 other directors will leave APP's board. They'll be replaced by 3 new directors chosen by Standard General, and 2 directors jointly chosen by the company and Standard.
    • APP's investigation into Charney's behavior will continue. The company will use its findings to "determine if it is appropriate for Mr. Charney to serve as CEO or an officer or employee."
    • The standstill agreement prohibits Standard and Charney from buying additional APP shares, and limits their vote to "no more than one third of the company's shares." Together, Standard and Charney own 44% of APP.
    | 1 Comment
  • 4:47 PM
    • Re-opened for after-hours trade after warning on Q2 results, Potbelly (PBPB) tumbles 16.4%.
  • 4:47 PM
    • Kosmos Energy (KOS) -3.1% AH on news that funds affiliated with The Blackstone Group and Warburg Pincus plan to sell a total of 17M KOS common shares in a public offering; the underwriter has a 30-day option to purchase up to an additional 2.55M common shares from the selling shareholders.
    • KOS will receive no proceeds from the sale.
    | Comment!
  • 4:45 PM
    • Revenue passenger miles were flat Y/Y, while available seat miles increased 0.8%. The airline's consolidated load factor fell 0.6 points to 87.1%.
    • The performance looks to lag industry averages for June, but is ahead of UAL's previous expectation, and shares are up 6.1% in after-hours trade.
    • Press release
  • 4:43 PM
    • Lumber Liquidators (LL) reports Q2 sales of $263.1M (+2.3% Y/Y), and expects to report EPS of $0.59-$0.61. Those figures are well below a consensus of $303.2M and $0.90. Gross margin is expected to be down Y/Y.
    • The company now forecasts full-year sales of $1.05B-$1.1B and EPS of $2.65-$3.00, below a consensus of $1.16B and $3.34. Same-store sales are expected to be up by a low-single digit %, down from prior guidance of mid-to-high single-digit growth.
    • Same-store sales fell 7.1% Y/Y in Q2, much worse than Q1's 0.6% drop and a big reversal from last year's 14.9% growth. SG&A spend rose an estimated 9% Y/Y.
    • CEO Robert Lynch: "Customer traffic to our stores was significantly weaker than we expected, particularly in geographic areas severely impacted by the unusually harsh weather in the first quarter ... Our reduced customer traffic has coincided with certain weak macroeconomic trends related to residential remodeling, including existing home sales."
    • He adds LL now believes "the prolonged purchase cycle associated with our customers' discretionary, large-ticket home improvement projects is likely to be delayed for some customers into the fall flooring season, and for others, into spring of 2015."
    • Shares fell 8.1% in regular trading ahead of the warning.
  • 4:40 PM
    • Zumiez (ZUMZ) reports comparable-store sales rose 3.1% in June.
    • Total sales were up 11.1% Y/Y to $65.3M.
    • Based on the strong results, Zumiez lifts Q2 EPS guidance to $0.21-$0.23 vs. $0.14-0.18 prior and $0.18 consensus.
    • ZUMZ +7.2% AH.
    | Comment!
  • 4:37 PM
    • Memorial Production Partners (MEMP) -4.4% AH after announcing a public offering of 8.6M common units; the underwriters will be granted a 30-day option to purchase up to an additional 1.29M common units.
    • MEMP intends to use the proceeds to repay a portion of the outstanding borrowings under its revolving credit facility.
  • 4:27 PM
    • Releasing preliminary Q2 results, Potbelly (PBPB) expects a fall in company-operated comp store sales of 1.6%, or 0.9% when excluding the timing of the Easter holiday. Comp sales rose 3% in 2013's Q2. Adjusted net income is expected to be $2M, or $0.06 per share.
    • "We are disappointed," says CEO Aylwin Lewis. "Comparable store sales growth improved as we moved throughout the quarter, but fell short of anticipated levels."
    • The revised 2014 outlook calls for 40-48 new shop openings, flat-to-negative low single-digit comp sales, and adjusted net income per share of $0.18-$0.21.
    • PBPB is halted until 4:35 ET.
    • Source: Press Release
  • 4:26 PM
    • Tractor Supply (TSCO) had Q2 sales of $1.58B (+8.8% Y/Y), below a $1.6B consensus. The company expects Q2 EPS of $0.94-$0.95, below a $1.02 consensus. Gross margin is expected to be flat Y/Y.
    • Moreover, Tractor Supply now forecasts full-year revenue, EPS, and same-store sales will be at the low end of prior guidance ranges of $5.62B-$5.7B, $2.54-$2.62, and 2.5%-4%. Revenue and EPS consensus are at $5.67B and $2.62.
    • Same-store sales rose 1.9% Y/Y in Q2, down from 2.2% in Q1 and 7.2% a year ago. Solid traffic and strong sales of consumable, usable, and edible products was partly offset by weak sales of seasonal products (mostly in Northern regions), ongoing softness in TSCO's safe category, and deflation.
    • Full Q2 results arrive on July 23.
    | Comment!
  • 4:13 PM
    • Now under new management, CommonWealth REIT (CWH) sells its 22M shares of Select Income REIT (SIR) to Government Properties Income Trust (GOV) and Reit Management & Research (the Portnoys' management company) for $705M.
    • GOV made the bulk of the purchase with 21.5M shares and RMR purchased the other 500K. Both GOV and SIR continue to be managed by RMR.
    • Source: Press Release
    • CWH +6.1%, SIR -1.6% AH
    | Comment!
  • 4:09 PM
    • Regina Dugan, currently the head of Google's Advanced Technology & Products (ATAP) R&D unit, has been added to Zynga's (ZNGA) board.
    • Among other things, ATAP is responsible for Google's Project Ara custom/modular phone initiative. Before joining Google, Dugan headed the DoD's DARPA R&D division.
    • Zynga also announces famed VC John Doerr (already on the board) has been named lead independent director. LinkedIn co-founder Reid Hoffman and DreamWorks CEO Jeffrey Katzenberg left Zynga's board earlier this year.
    • ZNGA +1.3% AH.
  • 3:58 PM
    • Jeffrey Klausner, who was only hired to be Mandalay Digital's (MNDL -3.6%) CFO last August, has resigned.
    • Andrew Schleimer, who in the past has been a UBS banker and an EVP for Dick Clark Productions, is Mandalay's new CFO.
    | Comment!
  • 3:55 PM
    • Indonesian ETFs EIDO (EIDO +4%), IDX (IDX +4.8%), and IDXJ (IDXJ +4%) are flying after "quick-count" tallies show reform-minded Jakarta Governor Joko Widodo with a victory in the presidential election.
    • Closed for election day, Indonesian markets open next at 10:30 ET, and the Jakarta Index is already ahead nearly 20% YTD.
    • “The key economic challenge facing Jokowi will be re-igniting the economy, which has slowed markedly over the past couple of years,” says Gareth Leather, Asia Economist for Capital Economics. “There is no magic bullet to reviving growth. In the short-term, monetary and fiscal policy are likely to remain fairly tight."
    | Comment!
  • 3:46 PM
    • P-E/VC firm Attiva Capital says it has taken a "small stake" in You On Demand (YOD).
    • The news comes a week after YOD disclosed it had fired auditor UHY, and replaced it with KPMG.
  • 3:19 PM
    • Brazil's devastating World Cup loss may have provided a boost today for Petrobras (PBR +3.6%) shares, as the theory goes that the shock defeat will focus Brazilians' already widespread disenchantment with Pres. Rousseff.
    • For investors, Rousseff has increased government meddling in business, hurting PBR and other companies; for Brazil's citizens, billions of dollars were spent to host and win the games, but the population received very little direct benefit - which ultimately could help to lead to Rousseff's ouster.
    • Recent reports also say the fields PBR operates in the pre-salt areas of the Santos and Campos basins offshore Brazil have exceeded production of 500K bbl/day.
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