Today - Tuesday, April 21, 2015
- Nabors Industries (NYSE:NBR) +1.6% AH after reporting better than expected Q1 earnings and revenues, as improved earnings in its drilling and rig services segment offset losses at the completion and production business it recently sold to C&J Energy.
- The Q1 results include the completion and production results through March 23, during which the segment generated an operating loss of $58.5M that had a $0.15/share negative impact on NBR's bottom line.
- NBR says Q1 operating earnings at its drilling and rig services segment rose 29% Y/Y to $201M, U.S. drilling operating earnings improved 6.3%, while international drilling profit more than doubled.
- NBR also says it had cut its global workforce by more than 18% since the end of 2014, including respective reductions of 41% and 26% in the U.S. drilling and Canada segments; excluding Q1 severance charges, NBR says it has reduced overhead costs by ~$20M Q/Q.
- Windstream (WIN +2.1%) spinoff Communications Sales & Leasing (CSAL; currently trading when-issued at CSALV) will replace Cliffs Natural Resources (NYSE:CLF) in the S&P MidCap 400 after Friday's close, pending the spinoff's completion around then.
- Cliffs, down 4.4% today, has a market cap below $800M and is no longer representative of the mid-cap space, the indexers said.
- Windstream will remain in the MidCap 400 after the spinoff.
- Coupons.com (COUP +2.2%) says Michael Walsh resigned from its board effective in June, and the board confirmed Steve Horowitz's appointment to join them June 11.
- Horowitz, a former CTO at the company and currently VP of engineering at Snapchat, was set to join the board in June. He's been reclassified to Class I from a previous Class III director.
- He'll get a stock option with grant date value of $250K along with a $30K annual retainer, and another option with grant date value of $150K at the 2016 annual meeting.
- In addition to beating Q1 estimates, Broadcom (NASDAQ:BRCM) is guiding for Q2 revenue of $2.1B (+/- $75M), above a $2.07B consensus. Strong Galaxy S6 sales could be partly responsible - Broadcom is believed to supply a Wi-Fi/Bluetooth combo chip and a GPS/sensor hub IC. Continued iPhone 6 and data center hardware strength (driven by Web/cloud demand) might also be factors.
- Q1 gross margin (non-GAAP) was 54.4%, -30 bps Q/Q and +250 bps Y/Y, and slightly below a guidance midpoint of 54.7%. However, GM is expected to rise to 56% (+/- 75 bps) in Q2.
- In addition, R&D/SG&A spend is expected to drop ~$15M Q/Q (+/- $10M). Thanks to Broadcom's baseband modem exit, R&D spend was down 15% Y/Y in Q1 to $539M, and SG&A spend 4% to $177M.
- $335M was spent on buybacks, providing a lift to EPS. Broadcom established a $1B 2015 buyback authorization last December.
- BRCM +5.5% AH to $46.38, slightly topping a 52-week high of $46.31.
- Q1 results, PR
- CalAmp (NASDAQ:CAMP) is guiding for FQ1 revenue of $63M-$67M, below a $67.4M consensus. However, it also expects wireless datacom revenue (87% of total FQ4 revenue) to grow "at or above" a mid-teens clip in FY16 (ends Feb. '16), with further margin expansion. The consensus for total FY16 revenue growth is at 14.3%.
- FQ1 EPS guidance of $0.24-$0.28 is in-line with a $0.26 consensus. Wireless datacom revenue is expected to be up significantly Y/Y but down modestly Q/Q due to shipment timings for a major heavy equipment OEM customer; shipments are expected to pick up in future quarters. Satellite revenue is expected to be soft in the first half of FY16, and grow in the second half as a key client transitions to next-gen products.
- Wireless datacom revenue rose 23% Y/Y in FQ4 to $60.5M, a pickup from FQ3's 10% growth and driving the FQ4 beat. Satellite revenue fell 18% to $8.7M. Strong demand for mobile resource management (MRM) and fleet management products drove the wireless growth.
- Gross margin rose to 35.5% from FQ3's 35% and the year-ago period's 34.4%. Thanks to lower R&D spend, operating expenses fell by $200K Y/Y to $15.7M.
- Shares have jumped to $18.30 AH.
- FQ4 results, PR
- CREE is guiding for FQ4 revenue of $420M-$440M and EPS of $0.24-$0.28 vs. a consensus of $434.4M and $0.29.
- Gross margin (closely watched) fell to 31.4% in FQ3 from 33.9% in FQ2 and 37.8% a year ago, and missed guidance of ~33.5%. FQ4 GM guidance is at ~32%.
- Segment performance: LED product (chip/component) revenue -23% Y/Y to $154.4M (tough Asian mid-power competition); gross margin -970 bps to 35.9%. Lighting products +27% to $224.1M (strong U.S. retail sales); gross margin -140 bps to 26%. Power/RF products +13% to $31M; gross margin -400 bps to 53.1%.
- GAAP SG&A spend +10% to $71.9M; R&D -6% to $43.8M. Cree ended FQ4 with $782M in cash/short-term investments, and $150M in long-term debt.
- Shares have fallen to $33.94 AH.
- FQ3 results, PR
4:31 PM| Comment!
- Yum Brands (NYSE:YUM) trades higher after beating estimates for Q1 profit.
- China: Sales were off 6% with 8% unit growth outrun by a -12% same-store sales comp vs -14% expected. Restaurant margin -450 bps to 18.9% off of sales deleverage.
- KFC: Sales growth of 8% derived from 2% unit growth and 5% same-store sales growth. Operating margin i+180 bps to 26.3%.
- Pizza Hut: Revenue rose sales 2% led by 2% unit growth. Same-store sales came in flat. Operating margin -150 bps to 30.0%.
- Taco Bell: Sales up 9% on 3% unit growth and a 6% comp. Operating margin +520 bps to 26.6%.
- India: Sales increased 1%. Unit growth +18% offset by an 11% same-store sales decline.
- 294 stores were added to Yum' system during the quarter.
- Previously: YUM! Brands beats by $0.08, revenue in-line
- YUM +4.64% after hours.
- Though iRobot (NASDAQ:IRBT) beat Q1 estimates, it's guiding for Q2 revenue of $143M-$146M and EPS of $0.02-$0.06, well below a consensus of $156.9M and $0.31.
- Full-year guidance is for revenue of $625M-$635M and EPS of $1.25-$1.35; the former is in-line with a $629.4M consensus, but the latter is mostly below a $1.34 consensus. Prior EPS guidance was $1.25-$1.45.
- iRobot states its full-year outlook reflects "our confidence that Home Robot revenue will grow 11-13% driven by growth in the United States and China, and our incremental marketing investments to strengthen awareness and support our international partners."
- Shares have fallen to $31.15 AH.
- Q1 results, PR
- Chipotle (CMG +0.9%) reports comparable-store sales rose 10.4% in Q1 vs. 11.6% expected and 16.1% in Q4.
- Higher menu prices were a factor during the quarter.
- Restaurant level operating margin +90 bps Q/Q and +160 bps Y/Y to 27.5%.
- Food cost ratio -60 bps to 33.9% as price hikes offset higher beef and tortilla costs.
- Store count +49 Q/Q to 1,831.
- Guidance: Chipotle's comp growth outlook for 2015 is for a low to mid-single digit rate increase. 190 to 205 new store openings expected.
- CMG -4.7% after-hours to $667.21.
- "ServiceNow (NYSE:NOW) continues to execute on its massive opportunity, and increasing traction within the enterprise creates an opportunity to be over $4 billion in revenue in 2020," writes Pac Crest following the cloud IT service management (ITSM) software firm's Monday analyst day. "We believe the recent pullback in shares creates an opportunity to buy a disruptive software company with quickly ramping free cash flow."
- Pac Crest note ServiceNow "continues to add over 20 new Global 2000 customers per quarter while also increasing the average annual contract value to $746,000 currently from $555,000 a year ago," and that revenue is expected to reach a $1B/year run rate by year's end.
- Like other bulls, it sees ServiceNow's expansion into non-ITSM markets such as HR service management, field service management, and IT financial management software acting as a catalyst, and is also upbeat about its recently-launched app store for 3rd-party apps that integrate with ServiceNow's offerings (similar to Salesforce's Force.com).
- ServiceNow rallied to $77.50 today, recovering a portion of the big Friday losses seen after the company offered light Q2 guidance to go with a smaller sales/EPS beat than seen in recent quarters.
- Analyst day slides (.pdf)
- Gran Tierra Energy (GTE +4.1%) spikes higher after West Face Capital discloses a 9.78% active stake in the company via a 13D filing, and says it plans to nominate six candidates to replace the company's existng four-member board.
- Toronto-based West Face says GTE should refocus on its core Colombian properties; stop further spending in high-risk, high-cost ventures in Peru and Brazil; and address its bloated cost structure.
- West Face also proposing that Gary Guidry, who has led a number of small Canadian oil and gas companies, become GTE's CEO.
- Oceaneering (OII -4.1%) is downgraded to Underperform from Hold with a $49 price target, down from $52, at Jefferies, citing a weak order outlook and the recent recovery in the stock price.
- The firm is concerned about major project sanctioning over the next two or more years, while saying the regional deepwater cost curve appears attractive mainly in the Gulf of Mexico and Brazil's Santos basin.
- Jefferies also believes the industry "could sanction as few as five large projects in 2015 and 2016 vs. 47 deepwater projects that are currently in construction, yet the resolution of cost woes in the industry appears to be a slow process."
- Israel's Globes reports Comverse (CNSI +6.8%) is in advanced talks to sell its billing services ops to Amdocs (DOX +0.9%) for $300M-$400M.
- The report follows a deal between Comverse and Indian outsourcing firm Tech Mahindra that involves the transfer of hundreds of employees from Comverse's Digital Services unit.
- Comverse has spiked higher on the report; shares jumped 5 days ago following a Q1 beat. JPMorgan argues a deal would make strategic/financial sense for Amdocs, but reiterates a Neutral rating.
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