MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Friday, May 17, 2013
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2:14 PM Donaldson (DCI -0.2%) bucks a weak FQ3 report late yesterday to trade slightly higher in today's session. Net profit fell 1.6% Y/Y on significantly lower revenue due to softer engine-product and industrial-product sales. The company again lowered its full-year guidance, now seeing FY13 EPS coming in between $1.57 - $1.65, below Street estimates of $1.70. It also lowers its FY13 sales outlook from $2.50B to $2.40B - 2.45B, also below consensus $2.51B estimates. Comment!
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12:51 PM After barely moving yesterday in response to nearly in-line Q1 results and strong Q2 revenue guidance, Youku (YOKU -9.6%) is falling hard today. The decline comes even though Youku has received two upgrades since the report (from HSBC and Maxim), as well as a bullish coverage launch from BofA. Concerns about mobile monetization could be a factor. On its earnings call, Youku stated mobile daily video views rose 50%+ Q/Q and are now above 170M, that mobile monthly users have topped 100M (PC users are around 400M), and that mobile now makes up ~30% of traffic. However, the company added "mobile monetization this year is relatively modest." 2 Comments
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12:14 PM A revenue miss and light guidance lead Brocade (BRCD -4.2%) to slump. On its earnings call, Brocade guided for FQ3 revenue of $510M-$530M and EPS of $0.11-$0.13, below a consensus of $556M and $0.15. The company partly blames soft storage array sales from OEM partners (IBM, H-P, and Dell appear to be culprits, NetApp could be another). Brocade's storage switch division sales (69% of total) fell 10% Q/Q and 6% Y/Y in FQ2, in spite of growing demand for 16G Fibre Channel switches (Brocade has had a big lead on Cisco (CSCO) here, but Cisco is finally catching up). Ethernet switch division sales -4% Q/Q and +15% Y/Y. Comment!
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8:19 AM More on Stage Stores (SSI): The retailer misses estimates by a decent margin as the quarter's stretch cool weather hurt traffic. Execs say they ended the period with a "clean" inventory position and think pent-up demand could help sales recover in Q2. Full-year guidance of 2% to 4% comparable store sales growth and EPS of $1.45-$1.55 is maintained. SSI -1.3% premarket. (PR) Comment!
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Thursday, May 16, 2013
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7:54 PM Some notes from the J.C. Penney (JCP) Q1 earnings call: CEO Mike Ullman has identified 30 to 40 areas to improve, adding that he doesn't see any structural issues that would prevent a turnaround and thinks margin will return to 2011 levels. He notes that 2013 CAPEX spending is nearing completion, and he plans to bring back 3 or 4 private label brands. Read more on JCP's earnings call here: Earnings Call Transcript. Shares -1.7% AH. 1 Comment
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6:34 PM More on Viasat (VSAT): Q4 revenue beats consensus as total sales grow by 28% Y/Y on strong top line growth across all our business segments, including Government Systems despite severe budget pressures. Steady gains in Exede satellite broadband subscribers coupled with 36% growth in contract awards pushed revenues up 30% to over the $1B mark for FY13. Shares +1.7% AH. Comment!
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5:38 PM Aruba (ARUN) -16.2% AH after guiding on its FQ3 call for FQ4 revenue $148M-$150M and EPS of $0.10-$0.12, below a consensus of $157.1M and $0.17. Management admits it's seeing tougher competition from Cisco (CSCO), which is now bundling its Wi-Fi solutions with its routers and data center products - Cisco just reported 27% Y/Y growth for April quarter Wi-Fi sales. Aruba now -34% since its May 7 warning. Comment!
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5:31 PM More on Nordstrom (JWN): Q1 misses across the board. Net earnings fell 2.7% Y/Y as higher input costs masked slightly better revenue. The company also cut its FY14 total sales and same-store sales guidance ranges by half a percentage point each, now expecting 4% to 6% growth, and 3% to 5% growth, respectively. For the current period, it projects its EPS to grow by more than 7%, or around $0.86, just below the $0.87 projected by analysts. Shares -3.5% AH. 1 Comment
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5:17 PM More on Applied Materials: FQ3 revenue guidance is for sales to be "up slightly" Q/Q, worse than a consensus for 8% Q/Q growth. EPS is expected to be in a range of $0.16-$0.20 vs. a $0.19 consensus. Backlog +9% Q/Q in FQ2 to $2.3B. EPS was boosted by a 340 bps Q/Q increase in gross margin to 43.2%, as well as $100M in buybacks. Total orders +7% Q/Q but -19% Y/Y to $2.27B. Chip equipment orders +14% Q/Q and -22% Y/Y. Services -12% and -26%. Display +41% and +140%. Solar -43% and -38%. AMAT -0.8% AH. (PR) Comment!
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4:48 PM More on J.C. Penney (JCP) Q1 earnings: Cash burned through from operations is $752M vs. $577M a year ago. Cash used for capex of $214M vs. $107M a year ago. Totalled together, the company went through nearly $1B in cash in Q4 vs. $684M a year ago. New CEO Mike Ullman: "We are looking forward, not back." Indeed. Shares are all over the place AH, currently flat. CC at 5 ET. (PR) Comment!
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