Today - Monday, April 27, 2015
- After a two-week delay, Telefonica Brasil (NYSE:VIV) has priced its new share offering at 47 reais ($16.11) for preferred shares and 38.47 reais ($13.19) for common shares.
- The shares should start trading in Sao Paulo on Wednesday.
- The company's raising the funds to buy local broadband provider GVT, which is expected to cost €7.2B ($7.8B).
- Vivo's ADRs closed today up 1.5% on the NYSE, and were down 0.4% after hours to $16.46.
- Barrick Gold (NYSE:ABX) -3% AH after reporting Q1 earnings and revenues that trailed analyst estimates, and production that also slightly lagged expectations.
- ABX says net Q1 EPS was $0.05 on revenues of $2.25B, below the consensus estimate of $0.09 EPS on $2.35 in revenues and less than year-ago results of $0.08 and $2.65.
- Q1 gold production totaled 1.39M oz. at an all-in sustaining cost of $927/oz., with $316M in operating cash flow; year-ago production was 1.59M oz. and the Q1 analyst consensus was 1.49M.
- ABX left unchanged its production and cost forecast for the year at 6.2M-6.6M oz. of gold at all-in sustaining costs of $860-$895/oz., and remains committed to debt reduction of at least $3B by the end of 2015.
- Says it has started a process to sell a stake in its Zaldivar copper mine in Chile, and announced a "significant" new gold discovery, known as Alturas, in Chile.
- CenturyLink (NYSE:CTL) has expanded its data-center presence into Australia with five in-country locations, the company said.
- The move comes as a deal with NEXTDC Limited, providing a data-center-as-a-service offering.
- CenturyLink will be able to sell co-location space and offer managed hybrid IT services to customers around the world (including East Asia) who are aiming to expand in Australia.
- It will deploy a public cloud service there later this year. CenturyLink recently deployed a public cloud platform in Singapore.
- The company's hosting and co-location services are available now through NEXTDC's sites in Sydney, Melbourne, Brisbane, Canberra and Perth.
- After fighting off a hostile bid from Charter Communications (NASDAQ:CHTR) just over a year ago, Time Warner Cable (NYSE:TWC) is now open to merger talks with the cableco now that Comcast (NASDAQ:CMCSA) has called off its $45B friendly pursuit, Reuters reports.
- One key change from before: TWC now views Charter stock as more valuable this time around. CHTR shares are up 40.7% over the past 12 months.
- Still, the deal would have to be significantly sweeter as well. Charter's previous hostile bid for TWC was for about $132.50/share; Comcast's $45B offer was valued around $158.82/share.
- As for competitive concerns, Charter/TWC would have about 15M video customers, whereas Comcast/TWC would have had about 30M.
- A.H. Belo (AHC -2.3%) posted a revenue gain of 1.6% in Q1 and net income from continuing operations swung to a gain of $0.02/share, though EBITDA fell to -$1.4M. Production costs rose 10.6%, leading to an operating loss.
- Overall consolidated net operating revenue was $65.4M.
- Revenue breakouts: Advertising/marketing services, $36.8M (down 2.4%); circulation, $21M (flat); printing, distribution and other, $7.6M (up 33.8%).
- Cash and equivalents stood at $81.4M at quarter's end, against no debt.
- Conference call tomorrow at 2 p.m. ET.
- Press release
- Results from a 14,724-patient CV risk study, TECOS (Trial Evaluating Cardiovascular Outcomes with Sitagliptin), showed Merck's (NYSE:MRK) Januvia (sitagliptin) was no worse than (non-inferior) placebo in cardiovascular (CV) risk as measured by the composite CV endpoint. The composite CV endpoint was defined as the composite of time to the first of any of the following confirmed events: CV-related death, nonfatal myocardial infarction, nonfatal stroke or unstable angina requiring hospitalization. The mean followup period was ~three years.
- Also, there was no increase in hospitalization for heart failure in the sitagliptin cohort versus placebo.
- The complete results will be presented on June 8 at the 75th Scientific Sessions of the American Diabetes Association.
- Januvia is indicated as an adjunct to diet and exercise to improve glycemic control in patients with type 2 diabetes mellitus.
- T-Mobile (NYSE:TMUS) reports earnings Tuesday morning and it's likely going to be the only major U.S. wireless firm to actually add postpaid subscribers, Goldman Sachs says.
- Revenues are expected to rise 12%, a contrast to AT&T and Verizon, where wireless service revenues dropped in Q1.
- As necessary as it is, the sub growth could "pressure Q1 EBITDA and EBITDA margins," says Evercore's Jonathan Schildkraut. T-Mobile had forecast postpaid subscriber adds of 2.2M-3.2M.
- Consensus expectations have the company losing $0.04/share (losing $0.10/share on a GAAP basis) on $7.7B in revenues. EBITDA is expected at $1.4B.
- The Container Store (NYSE:TCS) -24.9% AH after FQ4 earnings came in well below expectations and guiding Q1 2016 and full-year 2016 earnings below analyst estimates.
- Comparable store sales fell 0.8% for FQ4 and 1.4% for full-year 2015, and gross margin narrowed to 57.8% from 58.2% a year earlier; TCS says the strong dollar hurt sales for the quarter, wiping 14.9% from net sales of Elfa in the Nordic market due to the dollar's gain against the Swedish krona.
- The quarter typically accounts for 60% of TCS annual profit, and management had put more emphasis on the quarter this time, expecting to make 70% of the year's profit.
- TCS also issues downside guidance, now seeing Q1 EPS of $0.12-$0.14, with comp-store sales falling 3%-4%, and FY 2016 EPS of $0.30-$0.38 vs. $0.56 consensus on revenues of $800M-$815M vs. $873M consensus, with comp-store sales flat to -2%.
- In addition to slightly beating FQ4 estimates, Barrcauda Networks (NYSE:CUDA) has guided on its CC for FQ1 revenue of $76M-$78M and EPS of $0.08-$0.09 (favorable to a consensus of $76M and $0.08), and FY16 (ends Feb. '16) revenue of $325M-$330M and EPS of $0.36-$0.41 (above a consensus of $322.1M and $0.35).
- The firewall/application delivery controller vendor's shares have nonetheless fallen to $41.50 AH. They went into earnings up over 80% from their fall lows, thanks in part to a broader rally in security tech plays.
- FQ4 results, PR
- Silicon Motion (NASDAQ:SIMO) expects Q2 revenue to be up 5%-10% Q/Q. That implies a range of $84.6M-$88.7M vs. an $85.7M consensus. Full-year revenue is expected to be up 17%-25% Y/Y; consensus is for 22.5% growth.
- Though officially beating consensus, Q1 revenue of $80.6M matched guidance (provided in SIMO's April 8 pre-announcement) for sales to be roughly flat from a Q4 level of $80.5M.
- SIMO: "Our first quarter revenue benefited from strong client SATA 3 SSD controller sales momentum and stable eMMC controller sales. Client SSD controller sales doubled sequentially ... we expect a new major SSD program with our controllers, again for both channel and OEM markets, to begin shipping in the second quarter. Our storage OEM partner began shipping SSDs to three global tier-1 PC OEMs in the first quarter and recently started shipping to two additional OEMs."
- Mobile storage (flash controller) sales rose 41% Y/Y to $63.6M. Mobile communications (4G transceiver and TV IC) sales rose 176% to $15.2M. Gross margin (non-GAAP) was 52% vs. 52.5% in Q4 and 48.6% a year ago. Op. margin was 24.1% vs. 26% in Q4 and 16.7% a year ago. Q2 GM guidance is at 50%-52%; full-year GM guidance is still at 49.5%-51.5%.
- Shares have risen to $31.70 AH. They fell hard on Friday after SIMO announced it's buying Chinese SSD/storage array vendor Shannon Systems and (perhaps more importantly) Northland Securities reported SK Hynix is planning to launch its own UFS 2.0 flash controllers.
- MDC Partners (NASDAQ:MDCA) logged a 10% increase in revenue in Q1, but its net loss widened to $32.1M as the company noted "continued currency headwinds." Adjusted EBITDA of $31.2M (down 13%) beat an expected $28.15M.
- Organic revenue was up 7.4%. The company's maintaining guidance for 2015 of $1.3B-$1.33B in revenue and adjusted EBITDA of $195M-$205M, both in line with expectations.
- MDC Partners also noted CEO Miles Nadal reimbursed the company $8.6M in perks and payments connected to an SEC inquiry, an amount that the company will recognize as a gain in Q2.
- Shared closed down 1.5% today, but are up 23.2% YTD.
- Press release
- Gold surged above $1,200/oz. today in its best day since January, as U.S. June gold futures settled up 2.4% to $1,203.20/oz. in its best percentage jump since Jan. 15, amid reports Friday that Venezuela's central bank had converted 1.4M oz. of its gold reserves into at least $1B in cash through a swap with Citibank.
- "That was a huge potential seller taken out of the market. It's not an overhang anymore," Dennis Gartman said of the Venezuela deal.
- Other gold watchers say the bigger factor driving prices was the expiration of May options and short covering; an increase of 13K shorts in the market is a positive since those traders could be forced to buy gold when they cover, says Kevin Grady of Phoenix Futures and Options.
- ETFs: GLD, IAU, SGOL, UGL, DGP, GLL, UGLD, DZZ, GLDI, OUNZ, DGL, DGZ, DGLD, AGOL, TBAR, GEUR, UBG, GYEN, BAR
- Miners finished mostly higher: NEM +2.4%, ABX +2.2%, AU +2.6%, GOLD -0.4%, GFI +5.3%, GG +0.9%, SBGL +3%, NGD +3.1%, EGO +1.7%, AUY +1.8%, KGC flat, IAG +4.2%, BTG +1.9%, HL +1.9%, RGLD -0.8%, FNV +0.8%, AGI +1.3%, AUQ +2.3%.
- About 20% of the iPhone installed base has upgraded to the iPhone 6/6 Plus, Tim Cook states on the FQ2 call. He adds Apple has seen a higher rate of switchers from other platforms than in previous iPhone cycles, and that a large number of first-time buyers of the iPhone (69% of FQ2 revenue) still come from emerging markets. (live blogs: BI, WSJ)
- No numbers have been given for early Apple Watch sales. Cook does note demand is higher than supply (previous), and that over 3,500 Watch apps are now available. "Customer response is close to 100% positive from what I've seen." The device will is expected to launch in more markets in late June.
- Cook also talked up Apple's (NASDAQ:AAPL) Chinese performance (Greater China sales +71% and 29% of total revenue). In addition to iPhone 6 sales, local demand was lifted by higher Mac and (in spite of weakness elsewhere) iPad sales, and a 100%+ increase in Chinese App Store revenue. 70% of Chinese iPad buyers and 40% of U.S. buyers are first-time.
- Multiple analysts asked about Apple's FQ3 gross margin guidance (38.5%-39.5% vs. a year-ago GM of 39.4%) CFO Luca Maestri states Watch margins (below the company average for now) will have an impact, as will a strong dollar (affecting many U.S. multinationals).
- Other details: 1) Over $171B of Apple's $193.5B cash/investment balance is offshore. 2) iPhone channel inventory rose by 1M Q/Q, but is at the low end of Apple's target range. iPad inventory fell by 1.1M. 3) Cook thinks the iPhone and Mac are cannibalizing iPad sales. 4) Total emerging markets revenue (much of it from China) was up 58% Y/Y.
- AAPL +1.5% AH to $134.58. Results/guidance, details.
- Boeing (NYSE:BA) is seeing renewed interest in the freighter version of its 747-8 jumbo jet as the global air cargo market rebounds from a long slump, CEO Jim McNerney says.
- While the jet's fate has been in question amid dwindling demand for four-engine jets, the IATA said this month that airfreight volumes jumped 12% in February, crediting Asian Lunar New Year holiday shipments and congestion in U.S. ports with accelerating an increase that began last year.
- "It’s premature to say we’re at the end of the program," the CEO says.
- A few months after Dish Network (NASDAQ:DISH) made the surprise bids in the FCC's AWS-3 wireless spectrum auction, the FCC may reject the company's $3.3B in small-business discounts it sought, The Wall Street Journal reports.
- The discounts have been unapproved since the auction. Competing bidders including T-Mobile (NYSE:TMUS), AT&T (NYSE:T) and Verizon (NYSE:VZ) -- along with FCC commissioner Ajit Pai -- raised loud complaints about Dish's use of two designated entities, SNR Wireless and Northstar Wireless, to bid for $13.3B in spectrum but pay only $10B.
- FCC Chairman Tom Wheeler reportedly told his staff after the auction that something didn't "smell right." Both Dish Network and its partner in Northstar Wireless stuck up for the practice.
- If the discounts are rejected, the small companies would have to pay back the discounts or risk losing the licenses.
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