Seeking Alpha
  • Today - Wednesday, April 23, 2014

  • 12:46 PM
    • Though investors aren't thrilled with AT&T's (T -3.3%) Q1 wireless numbers, Wells Fargo (Outperform) calls them "big time solid." The firm notes net adds and churn were better-than-expected, and thinks Q1 results suggest the telco's 2014 guidance is "quite achievable."
    • Morgan Stanley (Equal-Weight) is less charitable: It estimates 500K of AT&T's 625K postpaid net adds came from tablets, and notes cheaper Mobile Share plans - launched following intense price competition and promotional efforts from T-Mobile (TMUS -3%) - led wireless service revenue growth to fall.
    • Canaccord observes strong uptake for Next upgrade plans boosted subscriber adds, but expects the trend to moderate. The firm has cut its 2014 EPS estimate to $2.69 from $2.78 (consensus is at $2.71).
    • On the CC (transcript), management talked up the ability of Next adoption to lower subsidy expenses, and mentioned U-verse revenue is now on a ~$14B/year run rate.
    • Strong U-verse growth has narrowed AT&T's wireline revenue declines, albeit while pressuring margins. The company promises wireline margins (-110 bps in Q1 to 10%) will improve in 2016.
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  • 12:45 PM
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  • 12:41 PM
    • Gulfmark Offshore (GLF +1.6%) is upgraded to Buy from Neutral with a $49 price target, up from $44, at Global Hunter, which believes GLF is positioned to deliver more earnings growth than current consensus expectations through 2015.
    • Although market softness is expected to continue in the Gulf of Mexico in 2Q14, the scheduled ramp in the floating rig count and GLF's imminent capacity additions should significantly improve its prospects there by H2 2014, the firm says.
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  • 12:34 PM
    • Shares of Keurig Green Mountain (GMCR -4.4%) fall after a report from Israel indicates Starbucks is closing in on taking a 10% stake in SodaStream.
    • Earlier this year, Keurig fired the first shot in the at-home beverage war by deciding to partner with Coca-Cola.
    • There's some debate amongst industry insiders on what the new lineup card will do to Starbucks' existing deal with Keurig Green Mountain which clearly benefits both firms.
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  • 12:29 PM
    • Hugoton Realty Trust (HGT +20.2%) spikes ~20% higher, near a 52-week high, after receiving a positive ruling in its arbitration proceeding against XTO Energy.
    • HGT receives permanent injunctive relief barring XTO from treating the Fankhouser settlement as a production cost, and is awarded ~$6.1M.
    | Comment!
  • 12:26 PM
    • Starbucks (SBUX -0.9%) is in advanced talks to purchase 10% of SodaStream (SODA +11.5%), according to a report from Globes.
    • The Israeli publication indicates the deal price could be at a 30% premium over SodaStream's market price.
    • The spotlight turned to SodaStream after Coca-Cola and Keurig Green Mountain struck what could be a disruptive deal earlier this year.
    | 1 Comment
  • 12:17 PM
    • Supervalue (SVU) has been shopping its Farm Fresh and Shoppers grocery chains, according to dealReporter's sources.
    • Shares of SVU have been on a wild adventure today, moving up 12% before falling back down to a 2.1% gain for the day. Volume is already 5X normal activity.
    • Previous: earnings
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  • 12:08 PM
    • InterCloud (ICLD -7.1%) has filed to sell over 1.7M shares on behalf of buyers of its December 12% convertible debt offering (used to finance its acquisition of managed telecom services firm Integration Partners-NY). The company says the filing was necessary to comply with its obligations under the offering.
    • Separately, CEO Mark Munro has issued an open letter talking up InterCloud's acquisitions and cloud services efforts, and defending his company against recent paid promotion allegations.
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  • 11:58 AM
    • The online brokers trade lower despite a big earnings report from TD Ameritrade (AMTD -2%), and an upgrade to Outperform for E*Trade (ETFC -1.5%) from Wells Fargo ahead of its results after the bell today. Schwab (SCHW -1.5%) - reported Q1 last week.
    • Big picture: Though struggling for the last month amid the heightened level of HFT hubbub, the brokerage names have had major runs thanks to sharply higher levels of trading activity. The next catalyst higher will likely be boosted short-term interest rates ... timing yet to be decided.
    • On the earnings call, AMTD management says it expects FY EPS near the high end of $1.20-$1.40 guidance. Street consensus is for $1.44.
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  • 11:55 AM
  • 11:31 AM
    • NetApp (NTAP -1.1%), Fusion-io (FIO -2.1%), and Nimble Storage (NMBL -3.2%) are all lower after EMC reported a 3% revenue drop for its core Information Storage ops, and a 7% drop in the unit's product sales.
    • EMC's high-end storage sales were particularly weak, falling 22% Y/Y. On the other hand, emerging storage sales (inc. flash storage, object storage, and scale-out NAS) rose 81%, and unified storage and backup/recovery sales rose 4%.
    • NetApp is EMC's biggest rival in the unified storage space. All three of the aforementioned companies compete to varying degrees against products offered by EMC's emerging storage ops.
    • EMC's numbers follow a relatively healthy Q4 for the storage industry. But they also come amid concerns about the long-term impact of cloud infrastructure services on traditional storage arrays from the likes of EMC, IBM, NetApp, and H-P - concerns heightened by an ongoing price war.
    • Separately, upstart flash array vendor Pure Storage has raised $225M at a $3B valuation. CEO Scott Dietzen says Pure, which asserts its flash arrays are cheaper than rival solutions and offer a superior data-reduction feature set, isn't in any rush to go public.
    • Nutanix, a maker of clustered server/storage systems for web-scale data centers, raised funding earlier this year at a ~$1B valuation.
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  • 10:59 AM
    • FMC Technologies (FTI +5.6%) trades just shy of 52-week highs after Q1 earnings and revenues beat expectations.
    • Subsea technologies achieved a record backlog in the quarter, totaling $1.9B of FMC's total inbound orders of $2.6B; total company backlog stands at $7.8B, including subsea technologies backlog of $6.8B.
    • Revenues in the surface technologies segment were $479.5M, up 14% Y/Y, driven by volume growth in the international surface wellhead and North American fluid control businesses.
    • Sees FY 2014 EPS of $2.55-$2.75 vs. analyst consensus estimate of $2.65.
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  • 10:52 AM
    • A day after getting crushed thanks to a Q1 miss, Medidata (MDSO +4.8%) is higher following an upgrade to Buy from B. Riley. The firm's PT is $49.
    • In spite of the Q1 miss, Medidata reiterated its full-year outlook on yesterday's CC (transcript), and also reported billings rose 43% Y/Y to $90M (exceeded revenue of $76.6M, +21% Y/Y). Analysts pressed the company on platform deal activity, services margin pressure, and the demand environment among biotech clients.
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  • 10:39 AM
    • Nabors Industries (NBR +2.3%) marches higher despite reporting Q1 earnings that were cut in half from the previous year, as weather-related interruptions in its completion services segment overshadowed an otherwise solid performance by its drilling operations.
    • The weather impact was concentrated in completion services operations, which posted a $33.6M loss; the results also were affected by the expiration of a significant long-term contract.
    • CEO Anthony Petrello said market activity and pricing are strengthening, as higher than expected customer cash flows and moderating rig productivity are translating into incremental rig demand.
    • Argus lowers its FY 2014 EPS estimate, expecting the next two quarters to be challenging for NBR due to the launch of new rigs by competitors, but the firm sees earnings growing over the longer term and recommends the stock for investors with a time horizon of six months or longer (
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  • 10:20 AM
    • Morgan Stanley has downgraded Quality Systems (QSII -5.2%) to Underweight. Its PT stands at $15.
    • Shares of the patient care software provider have made fresh 52-week lows. They fell hard in January thanks to an FQ3 warning.
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  • 10:19 AM
    • The seasonally adjusted new home sales pace of 384K in March is 14.5% below that of February and 13.3% lower than a year ago. It's the slowest pace since July, and 14.5% is the 3rd-largest decline in 20 years. The median sales price of $290K is up 12.6% Y/Y. The supply of new homes on the market is 6 months at the current sales pace, up from 5 months in February.
    • Homebuilder ETFs: ITB -1.7%, XHB -1.2%.
    • Toll Brothers (TOL -1.6%), Lennar (LEN -1.9%), Hovnanian (HOV -1.5%), Pulte (PHM -1.6%), KB Home (KBH -3.3%), Beazer (BZH -2.4%), Ryland (RYL -2.6%)
    • The 10-year Treasury yield dips two basis points to 2.69%. TLT +0.4%, TBT -0.8%
    • Full report
  • 9:53 AM
    • Shares of Dr. Pepper Snapple (DPS +4.4%) trade higher after the company tops earnings estimates with its Q1 report and reaffirms guidance at a level that is also ahead of the consensus mark of analysts.
    • Volume growth was only up 1%, but the company was able to lower costs and realize some productivity gains in the quarter.
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  • 9:49 AM
    • Agnico Eagle Mines (AEM +1.9%) is upgraded to Outperform from Sector Perform with a $43 price target at RBC Capital following the combined bid with Yamana for Osisko, which is expected to succeed as Goldcorp's (GG) final offer has now expired.
    • The firm views the overall transaction as positive and accretive to EPS and cash flow/share, and sees recent share price weakness as creating an attractive entry point.
  • 9:45 AM
    • RGS Energy (RGSE +2.5%) will design, install, and operate a 2.6MW ground-mount solar system in Auburn, MA. The town of Auburn has agreed to buy all of the electricity produced by the system.
    • The deal will be financed via RGS' $150M JV with Altus Power America. It follows a January agreement to install and maintain 4 Massachusetts solar farms featuring 3.5MW of capacity, and a December agreement to co-develop Vermont solar projects sporting 4.5MW of capacity.
  • 9:44 AM
    • Avery Dennison (AVY) net income climbed to $71.2M from $57.8M.
    • Sales rose almost 5% on an organic basis.
    • Sales breakdown: Pressure-sensitive Materials +6%, Retail Branding & Information Solutions +2%.
    • Expects FY adjusted EPS from continuing operations of $2.90-3.20 vs consensus of $3.04.
    • Shares are -4.8% following the Q1 EPS and revenue misses.
    • PR
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