Seeking Alpha
  • Friday, July 31, 2015

  • 8:25 PM
    • After five weeks of closure, the Athens stock exchange will reopen on Monday, after what seems like a geological time frame's worth of developments in Greek solvency.
    • After the government's compromise with creditors, investors say it will take some time, likely months, before the companies there can raise money internationally.
    • “The Greek crisis has had an adverse impact on all sectors of the economy,” said Apostolos Gkoutzinis of law firm Shearman & Sterling.
    • The Luxembourg stock exchange lifted a suspension on trading of Greek bonds a week ago.
    • GREK +2.6% today, though still down 21.7% over the past three months. The National Bank of Greece (NYSE:NBG) gained 6% today (and is down 19.9% over the past month).
    • Related tickers: OTC:ALBKY, OTC:BPIRY, OTC:EGFEY
    • Previously: IMF drops bombshell on Greece (Jul. 31 2015)
    • Previously: Greece, creditors begin talks to secure bailout deal (Jul. 28 2015)
  • 7:52 PM
    • For the second quarter in a row, LinkedIn (NYSE:LNKD) fell hard post-earnings. Evercore and Avondale Partners downgraded to neutral ratings, while various other firms defended the company.
    • Evercore's Ken Sena notes LinkedIn's 2H15 sales (officially guided above consensus) were guided down if one excluded an accounting benefit related to the acquisition. "The reasons for the company’s more conservative outlook have mostly to do with limited visibility on its Marketing Solutions line, where it continues to make a transition away from higher-priced premium display to feed-based and more performance-based ads."
    • Though Sena thinks the ad transition can be managed, he declares "the combination of another FY effective guide down, a steep deceleration in the company’s 2Q sequential user growth (measured on unique visitors), and margins showing compression (with and without Lynda) leads [Evercore] to move to the sidelines on shares." He also compared LinkedIn's ad challenges to Twitter's.
    • BGC's Colin Gillis, on the other hand, considers ad concerns overblown in light of the strong performance of LinkedIn's Sponsored Updates ads. "[D]isplay advertising is approximately 3% of overall revenue, and in our view its low quality revenue ... The irony is that the marketing solutions business that contains display advertising is the only business segment that accelerated its growth in the June quarter, growing at 32% YoY compared to 24% growth in the June 2014 quarter."
    • Jefferies' Brian Pitz also sees reasons to stay bullish. "The company is still early in large market opportunities, including Sales Navigator, Lead Accelerator, Bizo and Lynda ... The company saw dramatic improvements in Sales Navigator customer satisfaction as well as higher than expected customer renewal at the higher Sales Navigator prices implemented this year.”
    • Q2 results/Q3 guidance, details, CC transcript
  • 7:46 PM
  • 7:21 PM
    • Down sharply this morning in response to its FQ4 miss and soft FQ1 guidance, Synaptics (NASDAQ:SYNA) managed to close up 0.1%. Likely helping: The company guided on its earnings call (transcript) for FY16 (ends June '16) revenue to rise 20%-25%, above a 19.3% consensus. (hat tip: SA commenter Philip Marlowe).
    • Also: Multiple analysts defended Synaptics, arguing the FQ1 guidance (blamed on LCD driver weakness) shouldn't be taken as a sign of Apple share loss. Stifel's Kevin Cassidy thinks supply chain inventory issues are the culprit, and Pac Crest's John Vinh predicts Synaptics' LCD drivers will retain their sole-sourced status with the iPhone 6S.
    • When asked by Needham's Rajvindra Gill about squaring the LCD driver outlook with a pending iPhone refresh, CEO Rick Bergman downplayed the magnitude of the expected sales decline, albeit without getting specific. "Specifically around [display drivers] there's various product cycles and customer ramps and so on that impact that business. And some of those were favorable in our fiscal Q4 and in Q1, they're down. Now, down is a relative term. It's relatively a small decrease in the grand scheme of things, but it is a little bit lower than what we saw in Q4. And again, we depend on certain customer ramps, inventories, where we are in the [bill of materials], and so forth."
    • Regarding the company's just-launched TDDI (integrated touch controller/display driver) ICs, Bergman cautioned design wins could take longer to ramp than for standard touch controllers, but added TDDI could provide a lift in the second half of FY16. CFO Wajid Ali stated TDDI gross margins should be higher than LCD driver GMs.
  • 7:07 PM
    • Enterprise Products Partners (NYSE:EPD) sold off for the second day, -2%, after a huge miss on revenues yesterday ($7.09B, more than 26% off a consensus expectation of $9.7B).
    • Revenues fell by 43%, and analysts had baked in a 20% revenue decline. But costs and expenses fell 45% as well, to $6.4B.
    • Shares fell 1.9% yesterday after earnings, bringing the two-day decline to 3.8%.
    • Stifel Nicolaus cut its price target on the shares to $34, from $38. Shares closed today at $28.33. But Wunderlich's Jeff Birnbaum said the results were "satisfying," maintaining a Buy rating on one of his top picks coming into earnings season.
    • "While not huge growth, it comes despite a tough macro backdrop, particularly for natural gas gathering and processing," he writes. "With [more than] $8.3B in new projects set to enter service by YE17, we believe it can continue its 6% distribution growth and 1.3x distribution coverage with potential upside should commodities rebound over time or additional M&A opportunities materialize."
  • 6:48 PM
    • Though Control4 (NASDAQ:CTRL) beat Q2 estimates, it guided for Q3 EPS of $0.10-$0.16 vs. a $0.16 consensus.
    • Revenue guidance is a little better: Q3 revenue of $44M-$47M vs. a $44.9M consensus, and 2H15 revenue growth of 12%-18% vs. a 16.1% consensus.
    • On the earnings call (transcript), the home automation tech provider suggested an online ad campaign will weigh on Q3 EPS. Sales/marketing spend rose 22% Y/Y in Q2 to $7.8M.
    • North American revenue rose 24% Y/Y in Q2 to $44.6M, and international revenue 20% to $9.8M. 143 dealers were added, raising the active dealer count to 3,421.
    • Shares had rallied strongly ahead of earnings.
    • Q2 results, PR
    | Comment!
  • 6:25 PM
    • AppliedMicro (NASDAQ:AMCC) rallied to $6.21 today after beating FQ1 estimates and guiding on its earnings call (transcript) for FQ2 revenue of $39M (+/- $2M) and EPS of -$0.03 (+/- $0.02). That's close to a consensus of $39.2M and -$0.03, and better than feared given the light calendar Q3 outlooks offered by many other chipmakers with strong networking/telecom exposure.
    • Also: AppliedMicro said it landed over 20 new "end-customer engagements" during FQ1 for its X-Gene ARM server CPUs - clients are said to include several large financial institutions and a major Asia-Pac data center operator. A second-gen CPU (X-Gene 2) is undergoing customer evaluation, and a 3rd-gen product that will rely on an advanced 16nm FinFET manufacturing process (presumably TSMC's) has reached the tape-out stage.
    • FQ1 book-to-bill was above 1. Strong demand for AppliedMicro's X-Weave Ethernet/OTN connectivity chips (100G-capable) partly offset soft PowerPC processor sales.
    • FQ1 results, PR
    | Comment!
  • 6:16 PM
    • Alliance Resource Partners (ARLP -1.7%) says it's completed acquiring the rest of the White Oak Resources equity interests that it didn't already own, and has updated production and financial guidance accordingly.
    • The move means an Alliance unit takes operating control of White Oak Mine No. 1 in Illinois, producing 6M tons/year of high-sulfur coal.
    • The company now guides to coal production of 42.8M-43.5M tons for the year, and sales volumes of 42.7M-43.8M tons.
    • It also sees 2015 revenues (excluding transportation) of $2.37B-$2.41B -- above consensus of $2.36B -- and full-year EBITDA of $765M-$795M (in line) and net income of $405M-$435M.
    • Alliance paid $50M at closing and may owe contingent consideration in the future. The company will hold a conference call to talk about the guidance on Monday at 11 a.m. ET.
  • 5:51 PM
    • In addition to beating Q2 estimates, (NASDAQ:WWWW) used its earnings call (transcript) to guide for Q3 revenue of $138.5M-$140M and 2015 revenue of $554M-$558M, favorable at the midpoints to consensus estimates of $138.6M and $554.7M.
    • Q3 and full-year EPS guidance is at $0.59-$0.61 and $2.36-$2.42 vs. consensus estimates of $0.61 and $2.38. 2015 free cash flow guidance has been hiked by $15M to $115M.
    • Subscribers rose by 21K Q/Q to 3.32M, and ARPU by $0.16 to $13.91. For now, the company is sticking to a net subscriber add target range of 10K-15K.
    • Shares rallied to $24.89 today, making new 52-week highs in the process.
    • Q2 results, PR
    | Comment!
  • 5:37 PM
    • Top gainers, as of 5.25 p.m.: WPX +3.7%. TSE +2.7%. ELP +2.3%. FI +2.1%. CXP +1.8%.
    • Top losers, as of 5.25p.m.: EDU -9.8%. IM -5.1%. TDS -4.3%. TRUE -3.7%. PBF -2.9%.
    | Comment!
  • 5:10 PM
    • In addition to slightly missing Q2 revenue estimates (while posting in-line EPS), Brightcove (NASDAQ:BCOV) has guided for Q3 revenue of $32.9M-$33.4M (below a $33.8M consensus) and full-year revenue of $132.5M-$133.5M (below a $134.7M consensus).
    • The online video hosting/monetization service provider blamed its Q2 sales weakness on "the timing of certain customer renewals." It also reported seeing "some softness in our European markets," while adding North America and Japan were healthier.
    • Notably, Brightcove's total and premium customer counts respectively fell by 174 and and 17 Q/Q in Q2 to 5,404 and 1,847. The company's recurring dollar retention rate was 88%, below a low-to-mid 90s target range. On the bright side, average revenue per premium customer rose by $1K Q/Q and $4K Y/Y to $64K.
    • Shares made a new 52-week low of $4.81 before rebounding a bit to close at $5.47.
    • Q2 results, PR
    | Comment!
  • 4:51 PM
    | Comment!
  • 4:24 PM
    • Murphy Oil (NYSE:MUR) fell consistently into the close to finish -6.2% today as Oppenheimer downgraded the stock to Perform, from Outperform.
    • The firm also pulled its $55 price target, "as we expect the deficit spending to continue into 2017 and beyond at average crude oil prices below $80/b," writes analyst Fadel Gheit.
    • Shares closed yesterday at $34.97 after rising 2.3% in the wake of earnings where it posted a net loss narrower than expected. UBS pulled its Sell rating on the results.
    • "We expect MUR to face a cash flow deficit of $1.6B this year and $900M next year, which will be funded from $1.3B cash on hand and additional borrowing," said Oppenheimer's Gheit.
    | 1 Comment
  • 4:11 PM
    | Comment!
  • 4:09 PM
    • A10 Networks (NYSE:ATEN) surged to $6.51 today after beating Q2 estimates and guiding on its earnings call (transcript) for Q3 revenue of $48M-$52M and EPS of -$0.08 to -$0.12, favorable at the midpoints to a consensus of $49.3M and -$0.12.
    • Thanks in part to easier comps, the midpoint of the Q3 revenue guidance range implies 15% Y/Y growth - a notable improvement from Q2's 5%.
    • Enterprise revenue rose by just $100K Y/Y in Q2 to $27.5M, while service provider revenue rose by $2.3M to $20M. A major deal with an unnamed service provider customer (14% of Q2 revenue) provided a lift.
    • Q2 results, PR
    | Comment!
  • 3:58 PM
    • Outerwall (NASDAQ:OUTR) has tumbled today, -13.4%, following on yesterday's earnings where revenues fell short of consensus as DVD rentals from its Redbox kiosks fell.
    • Rental nights per Redbox disappointed, falling 19% Y/Y. And: "Rental volume is more likely to decelerate than stabilize going forward," Pacific Crest's Andy Hargreaves wrote. "All previous physical (media) formats that we have data on have shown a similar pattern of accelerating declines as they age. We expect DVD to be similar."
    • Pricing was up, but rentals per kiosk dropped 8.9%, the fifth straight quarter of declines. Redbox made up 80.5% of the company's revenue.
    • Outerwall took an $85.9M charge related to its ecoATM segment, kiosks designed to buy used mobile devices. "EcoATM is a failure," says Wedbush's Michael Pachter. "The impairment charge reflects an honest assessment that the company overpaid for the business, and continuing losses two years after acquisition make us question whether the segment will ever be profitable."
    • "Given its unique value proposition, we still expect ecoATM revenue growth and profitability over time as the business scales," said Outerwall interim CEO Nora Denzel.
    • The company named Erik Prusch as its new CEO, effective today. Prusch most recently was CEO of Clearwire.
    • Press Release
    | 1 Comment
  • 3:26 PM
    • ConocoPhillips (NYSE:COP) is down 3.3%, a day after posting a Q2 earnings beat where it cut capex but continued to expand production.
    • Meanwhile, debate on this oil major rages around the safety of its sizable dividend (declared at $0.74 quarterly this month).
    • Credit Suisse finds the dividend safe: "ConocoPhillips outlined how they could cover their dividend with unchanged 2017 production at a $60/bbl Brent price. This is impressive." Considering capex of $11B this year, "the project cycle helps."
    • Meanwhile, JPMorgan thinks the dividend can't stick around in the long run: "While management did a good job of highlighting the incremental levers available to pull, our caution remains that the strategy of increasing the mix of short cycle production with high decline rates will make it more difficult to cover the sacrosanct dividend in the out years when productivity slows."
    • Conoco's yield is now a point higher than closest peer Chevron, at 5.7%, but "without the same downstream cushion and more than twice the leverage."
    • Today: XOM -4.6%, and CVX -5.3%, after earnings reports this morning.
    • Previously: Exxon Mobil off 1.8% premarket after lowest profit since 2009 (Jul. 31 2015)
    • Previously: Chevron -1.8% as earnings tumble, paced by $2.2B upstream loss (Jul. 31 2015)
  • 3:16 PM
    • In addition to missing Q2 revenue estimates (while posting in-line EPS), ROVI has guided for 2015 revenue of $500M-$530M and EPS of $1.35-$1.60, below a consensus of $546.6M and $1.70. The low end of the guidance range assumes no new/one-time revenue sources, something Rovi considers "unlikely."
    • The company plans to spend $50M on buybacks in Q3. Following today's selloff to new 52-week lows, that $50M should go further. Shares trade for 7.6x the midpoint of Rovi's 2015 EPS guidance range.
    • Q2 results, PR
    | Comment!
  • 3:02 PM
    • Telecom KT Corp. (NYSE:KT) is up 2% after growing net income 14.7% sequentially, to KRW 321.8B, though revenues of KRW 5,431B declined nearly 4% and missed an expected KRW 5568B.
    • EBITDA of KRW 1,206B missed an expected KRW 1,223B.
    • Revenue breakout: Service revenue, KRW 4,826.5B (up 1% Y/Y); Merchandise revenue, KRW 604.9B (down 29.4%).
    • Wireless subscribers hit 17.7M after net adds of 238K. LTE subscribers came to 11.99M (67.6% of total subscribers). Wireless ARPU was up 3.7% Y/Y,k to KRW 34,879.
    • Wireline revenue overall fell 10.9% Y/Y. Meanwhile, in broadband, revenue fell 2.5% though subscribers grew to 8.23M.
    • Total capex was KRW 477.8B.
    • Press Release
    | Comment!
  • 2:46 PM
    • Though officially missing consensus, Quantum's (NYSE:QTM) FQ1 revenue was roughly in-line with the guidance provided in its July 16 warning. However, the company also guided for FQ2 revenue of $120M-$130M, below a $141.2M consensus, and declined to provide FY16 (ends March '16) sales guidance.
    • Scale-out storage hardware/service revenue rose 54% Y/Y in FQ1 to $27.8M; Quantum still expects 50% growth for the business in FY16. But branded tape automation hardware/service revenue fell 30% to $15.1M, OEM tape automation 39% to $9.5M, and devices/media 39% to $10.9M. Disk backup system/service revenue was nearly flat at $17.3M.
    • Shares are $0.05 above a 52-week low of $1.02.
    • FQ1 results, PR
    | Comment!
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