Seeking Alpha
  • Today - Thursday, April 24, 2014

  • 4:24 PM
    • Starbucks (SBUX) reports global comparable store sales increased 6% in FQ2 vs. 5% in FQ1 and 6% for the year-ago period.
    • Comp growth was fairly consistent across regions: Americas and U.S. +6%; EMEA +6%; China/Asia Pacific +7%.
    • Operating margin improved 130 bps to 16.6% on sales leverage gains and lower commodity costs (coffee was hedged).
    • The company added 335 net new stores during the quarter.
    • FY14 EPS guidance is increased to $2.62-$2.68.
    • SBUX +0.9% AH
    | Comment!
  • 4:24 PM
    • Microsoft's (MSFT) Commercial revenue grew 7% Y/Y in FQ3 to $12.7B, a little below FQ2's 10% clip. Devices & Consumer revenue grew 12% to $8.3B after growing 13% in FQ2.
    • Commercial Licensing (50% of revenue, 65% of gross profit) sales +10% vs. +7%, with Windows volume licensing up 11% and and key server productivity offerings (Lync, SharePoint, Exchange) collectively growing double-digits.
    • Commercial Other +31% vs. +28%; 100% and 150% respective increases for Office 365 and Azure fueled the growth. The division is now nearly 10% of revenue, but still makes up less than 4% of gross profit (lower cloud margins).
    • D&C licensing rose 1% after falling 6% in FQ2, thanks in part to stabilizing PC sales; Windows OEM revenue rose 4%.
    • D&C hardware +41% (thanks to Xbox One sales) ahead of the Nokia deal's closing; Surface revenue totaled just $500M. D&C Other +18%; Office 365 Home added almost 1M subs, raising its total base to 4.4M.
    • Drops in sales/marketing and G&A spend led opex to fall 7% Y/Y to $7.49B. That boosted EPS, as did $1.8B in buybacks.
    • Satya Nadella hosts his first CC at 5:30PM ET, guidance will be provided.
    • MSFT +2% AH. FQ3 results, PR.
    | Comment!
  • 4:07 PM
    • Starbucks Corporation (SBUX): FQ2 EPS of $0.56 in-line.
    • Revenue of $3.87B (+8.7% Y/Y) misses by $80M.
    • Shares +2.7%.
    • Press Release
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  • 4:05 PM
    • Microsoft Corporation (MSFT): FQ3 EPS of $0.68 beats by $0.05.
    • Revenue of $20.4B (-0.4% Y/Y) in-line.
    • Shares +2%.
    • Press Release
    | 2 Comments
  • 4:02 PM
    • Las Vegas Sands Corp. (LVS): Q1 EPS of $0.97 beats by $0.03.
    • Revenue of $4.01B (+21.5% Y/Y) beats by $130M.
    • Shares +1.6%.
    • Press Release
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  • 3:57 PM
    • Core Labs (CLB -9.2%) shares plunge after Q1 results surprised investors with below-consensus earnings driven by weather disruptions in January and February, slower than expected international activity, and offshore project delays.
    • CLB is downgraded to Underweight from Overweight with a $200 price target, lowered from $220, at Morgan Stanley, but Cowen believes the company's challenges are largely transitory and maintain its respective 2014 and 2015 EPS estimates of $6.15 and $7.15 (Briefing.com).
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  • 3:47 PM
    • Higher than expected net interest income against lower than expected provision expenses are the reason's for E*Trade's (ETFC +5.3%) earnings beat last night, says KBW's Joel Jeffrey, raising his estimates and his price target, but leaving the stock rated at Market Perform.
    • Compass Point (Buy-rated) lifts its PT by $1 to $26.
    • Sandler O'Neill's Richard Repetto upgrades to a Buy with $24 price target.
    • Previously: Heavy client activity boosts E*Trade
    | Comment!
  • 3:34 PM
    • Peabody Energy (BTU +2.8%) powers steadily higher, reversing early losses after CEO Gregory Boyce says during this morning's earnings call that the company is looking seriously at closing some of its met coal operations.
    • Some analysts also have come to BTU's defense: Brean Capital's Lucas Pipes wrote that investors should be relieved by the company’s ability to continue to navigate the low price environment relatively well, Simmons' analysts said BTU's downside guidance was reasonable given lower benchmark met and thermal coal prices ahead, and Cowen said it would be buyers on share price weakness.
    • Most other coal names also are up: ANR +3.9%, ACI -1.5%, YZC +0.2%, CLD +0.4%, WLT +0.9%, CNX +2.8%.
    | Comment!
  • 3:25 PM
    • In-service occupancy of 92.4% is down from 92.9% at the end of 2013, up from 89.6% a year ago. Same property cash basis NOI up 2.3%. Rental rates up 3.1% on a cash basis. Leasing costs of $1.97 per foot.
    • The company lowers full-year 2014 FFO per share guidance by $0.02, with the range now $1.09-$1.19. Average quarter-end in-service occupancy rate is cut 0.5% on both ends, now at 92.0-93.0%.
    • CEO Bruce Duncan: "Prospective tenants are active across our markets seeking facilities to grow their businesses or enhance supply chain efficiencies.  We are positioned to grow cash flow as we increase occupancy in our existing portfolio and lease-up our new investments."
    • Keycorp downgrades First Industrial (FR -2.1%) to Hold from Buy.
    • Previously: First Industrial Realty Trust FFO misses by $0.03, beats on revenue
    | Comment!
  • 3:18 PM
    • Net income of $28.3M fell 15% from a year ago, and EPS of $0.60 fell 25% after January's capital raise.
    • Q1 saw non-performing assets rise, primarily attributable to one borrower. Non-accrual loans of $43.6M, or 0.48% of loans ticked up 10 basis points from Q4.
    • Raymond James downgrades the stock to Market Perform from Outperform.
    • Source: Press Release
    • Previously: Texas Capital Bancshares misses by $0.13
    • TCBI -12.3%
    | Comment!
  • 3:17 PM
    • Shipping magnate John Fredriksen agrees to acquire rival Knightsbridge Tankers (VLCCF +5.7%), creating a major operator of dry bulk carriers with 39 vessels as the sector gears up for an expected recovery.
    • Fredriksen's unlisted Frontline 2012 Ltd., which already owns 38% of VLCCF, will hand over newbuild contracts on 25 vessels in exchange for new shares that will raise its stake in the company to 70%.
    | Comment!
  • 2:48 PM
    • Helmerich & Payne (HP -6%) shares are sharply lower after Q1 earnings came in lower than expected and the company’s international land operations business unit posted disappointing results.
    • Operating revenues in U.S. land operations totaled $742M (83% of total revenue), up 8.2% Y/Y; average rig revenue per operating day was ~$28K, down 0.8%, while average rig margin per day fell 1.4% to $14,957.
    • International land operations recorded revenues of $85.5M, down 9.1% Y/Y; average daily rig revenue was ~$37K, down 8.8%, while rig margin per day was $10,918, down 1.2%.
    • Signed multi-year deals with five E&P companies to build and operate nine additional FlexRigs to drill unconventional U.S. resource plays, bringing the total number of newbuild FlexRig commitments announced in FY 2014 to 44.
    | Comment!
  • 2:29 PM
    • Cabot Oil & Gas (COG +5.2%) trades sharply higher, overcoming Q1 results that trailed analyst expectations, as earnings doubled and revenues rose 36% Y/Y to $510M.
    • Q1 total production grew 34% Y/Y to 119.9B cfe, driven by higher realized natural gas prices.
    • Total per unit costs fell 19% Y/Y to $2.66/Mcfe from $3.29/Mcfe; all operating expense categories fell on a per unit basis except for exploration expense, which was flat, and transportation and gathering, which rose due to slightly higher transportation rates and new transportation agreements in the Marcellus.
    • Tightened 2014 production guidance range to 530B-585B cfe from 519B-598B cfe, and 20%-30% output growth in 2015; raises its capital budget to $1.375B-$1.475B amid an increase in rig count and higher activity in the Eagle Ford.
    | 3 Comments
  • 2:27 PM
    • United Continental (UAL -9.4%) put in a weaker quarter than Delta Air Lines and American Airlines in Q1 with passenger traffic dropping 0.3% and a key revenue metric sliding 2%.
    • Of note, the company's higher exposure to Asia was a drag in Q1 and could continue to pull down its overall results.
    • The under-performance by UAL in Q1 was enough to prompt Wolfe Research to warn the carrier may face a "significant structural disadvantage" to its peers.
    • Investors have some concerns of their own, pushing UAL shares down to below $42.
    | Comment!
  • 1:42 PM
    • Lam Research (LRCX +11%) beat FQ3 estimates and guided on its CC (transcript) for FQ4 revenue of $1.19B-$1.29B and EPS of $1.14-$1.28, above a consensus of $1.16B and $1.09. Ultratech (UTEK +3.6%) missed Q1 estimates, but has reiterated guidance for 25%-30% 2014 revenue growth (above a 23.5% consensus).
    • Just as importantly for the industry, Lam has forecast the global wafer fab equipment market will be worth $32B in 2014 - $1B more than what Gartner previously forecast.
    • Lam also mentioned it has "seen some strengthening" in DRAM equipment orders - clients have been conservative with their capex following industry consolidation - and a "sustained commitment" among logic/foundry clients (Intel and TSMC?) to advanced processes (20nm, 3D transistors, etc.). However, there have been "some slight delays" in 3D NAND flash investments.
    • Chip equipment peers are also up: AMAT +1.4%. KLAC +1.5%. ASML +2.1%. ACLS +1.6%. CAMT +5.3%. RTEC +1.5%. PLAB +3.4%. One notable exception is Teradyne (TER -4.1%), which provided light Q2 EPS guidance - $0.36-$0.43 vs. a consensus of $0.49 - to go with a Q1 beat. Revenue guidance is in-line.
    • The group sold off last week after ASML offered soft guidance and a cautious 2H outlook. KLA reports after the bell.
    | Comment!
  • 1:21 PM
    • The iShares DJ U.S. Home Construction ETF (ITB +2.7%) gains as earnings roll in from D.R. Horton, PulteGroup, Ryland, and M/I Homes. While PulteGroup saw slowdowns in closings and new orders, but offsetting increases in prices, D.R. Horton reported sales, new orders, and prices all on the rise. DHI is ahead 8%, Pulte 3%, Ryland (RYL +2.2%), M/I Homes (MHO +5.9%).
    • The SPDR S&P Homebuilders ETF (XHB +1.2%) is more of a homebuilding supply play.
    • Other builders: NVR (NVR +3.4%), Lennar (LEN +3.5%) Standard Pacific (SPF +2.8%), M.D.C. Holdings (MDC +3.2%), Hovnanian (HOV +2.5%), Toll Bros (TOL +4.2%).
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  • 1:10 PM
    • FQ2 net income of $131M or $0.38 per share is up 18% from a year ago. Revenue of $1.7B is up 22%. Homes closed of 6,194 is up 10%. Average sales price up 10%.
    • Net sales orders during Q of 8,569 up 9% Y/Y; value of net sales orders of $2.4B up 20%. Cancellation rate of 19%. Backlog of 10,059 homes up 5%; value of backlog of $2.8B up 18%.
    • Source: Press Release
    • Previously: D. R. Horton beats by $0.04, beats on revenue
    • DHI +8.3%
    | 1 Comment
  • 1:08 PM
    • Re/code reports Amazon (AMZN +3.5%) is paying HBO (TWX +0.1%) $300M+ over three years for its streaming deal. While steep, that figure is less than many estimated, particularly given the cost of Amazon's deals with Viacom and Epix.
    • The Amazon/HBO deal covers many of HBO's biggest hits, including The Sopranos, The Wire, Six Feet Under, Boardwalk Empire, and True Blood (early seasons for the last two). But it doesn't cover HBO's biggest current hit (Game of Thrones).
    • Separtely, Amazon has launched Prime Pantry, its latest salvo at supermarkets and Wal-Mart/Target's grocery ops. Prime Pantry allows Prime subs in the continental U.S. to have up to 45 pounds of groceries shipped for a flat fee of $6. It arrives as Amazon gradually expands the reach of its AmazonFresh same-day delivery service.
    • Shares are up strongly ahead of today's Q1 report. Recent ChannelAdvisor data has been encouraging, a sales tax survey less so.
    | 1 Comment
  • 12:46 PM
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  • 12:26 PM
    • In addition to beating Q1 estimates, Infinera (INFN +5.9%) guided on its CC (transcript) for Q2 revenue of $160M-$170M and EPS of $0.02-$0.06 vs. a consensus of $156.3M and $0.05. As is its custom, rival Ciena (CIEN +5.8%) is following Infinera higher.
    • Thanks to a favorable mix, Q1 gross margin was 41.8%, +40 bps Q/Q and +590 bps Y/Y, and above guidance of 40%. Infinera only forecasts a GM of 39%-41% for Q2 due to the margin pressure caused by new large-footprint deployments, but still expects a low-40s GM for the full year and future margin gains as it fulfills capacity expansion orders for major deployments.
    • Strong North American demand allowed revenue to grow 3% Q/Q in seasonally weak Q1. Infinera had two 10%+ customers - a cable MSO and a tier-1 North American carrier, and added one more client for its dense/high-capacity DTN-X optical transmission platform, raising the total to 42.
    • Not surprisingly, a positive outlook was provided for the 100G optical market, where the company and Ciena have leading positions. Infinera says it's confident it can outgrow the broader 100G market in 2014.
    | Comment!
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