Today - Friday, January 30, 2015
- Though it had previously struck a deal to use TubeMogul's (NASDAQ:TUBE) video ad-buying platform, snack food giant Mondelez partly opted to use Google's rival DoubleClick Bid Manager platform to run YouTube campaigns following "contentious behind-the-scenes negotiations," TheStreetSweeper reports. Google is believed to have used YouTube's TrueView ad system as leverage.
- An analyst talking with TheStreetSweeper: "It’s clear Tube’s technology is nothing special, since Google did this. And besides Google, there’s a lot of other companies that could do the same."
- TubeMogul CEO Brett Wilson has argued the Google/Mondelez deal is a positive for the online video ad industry at-large, and stated TubeMogul still thinks it "will continue to be used as Mondelez's software for brand advertising and will be the pipes, if you well, to facilitate any of their publisher buys Google or otherwise."
- In addition to the Mondelez deal, TheStreetSweeper cites strong insider selling from CTO Adam Rose (through an automatic trading plan) and steep multiples relative to peers Rocket Fuel and YuMe as reasons to be bearish on TubeMogul. Worth noting: TubeMogul's Y/Y sales growth (112% in Q3) is much stronger than either of the cited peers.
- Shares fell 4.5% in regular trading. Q4 results arrive on Feb. 26.
- Though Aviat (NASDAQ:AVNW) beat FQ2 estimates, it's guiding for FQ3 revenue of $75M-$80M, well below a three-analyst $92.2M consensus. That led shares to drop 7.9% today to $1.28.
- The RF backhaul hardware vendor says it expects "lower revenue in North America following higher than anticipated revenue contribution in the second quarter of fiscal 2015," and doesn't expect an African recovery until later in FY15.
- North American revenue rose 31% Y/Y in FQ2 to $44.2M; international revenue fell 7% to $48.3M. Aviat's cash balance fell by $3.7M Q/Q to $38.7M.
- Peers followed Aviat lower: DragonWave (NASDAQ:DRWI) fell 4.7% to $0.80 and Ceragon (NASDAQ:CRNT) fell 5.1% to $0.88. Both companies made new 52-week lows.
- Acacia (NASDAQ:ACTG) sold off hard to end what was already a rough month. Shares have closed less than $0.50 away from the IP licensing services firm's 52-week low of $12.11, set on Jan. 21 following news of adverse summary judgments in a suit against Apple, AT&T, Verizon, and HTC.
- This morning Acacia disclosed its In-Depth Test subsidiary had reached a settlement/licensing deal with analog chipmaker Intersil, thereby ending a patent suit against the latter.
- The joint CME Group/GFI Group (NYSE:GFIG) management bid of $5.85 per share in cash and stock has lost a in a shareholder vote, reports Bloomberg, paving the way for BGC Partners' (BGCP -2.6%) $6.10 all-cash offer.
- GFI management had warned shareholders there was nothing stopping BGC Partners from pulling its offer, and - for now - the stock price is behaving as if this could be so. GFIG is lower by 1.1% to $5.62 per share.
- Previously: GFI Group's Gooch makes another plea (Jan. 29)
- In what could be an attempt to capture the city in northern Iraq, or to divert Kurdish troops fighting the militants elsewhere, ISIS has launched an attack on the center of Kirkuk, reports CNN.
- Kirkuk is particularly important as one of the few notable cities in northern Iraq that hasn't yet fallen to ISIS, and from its oil reserves totaling nearly as much as those in southern Iraq.
- Previously: Crude oil soars nearly 8% (Jan. 30)
- ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
- Shares of Advanced Emissions Solutions (ADES -47.7%) are nearly cut in half after the developer of clean coal technology said late yesterday that KPMG had resigned as its accounting firm.
- ADES says it is seeking a new accountant but expects to have its shares delisted from the Nasdaq because it does not believe it can make the required financial filings and regain compliance.
- Cowen analyst Jeff Osborne downgrades shares to Market Perform, saying that "while we believe the company has compelling technology solutions, the lack of transparency in financial statements” and ongoing accounting issues “gives us pause."
- The broad averages are moderately in the red, and would be even more so if it wasn't for energy (XLE +1%), solidly higher as oil flies upward by nearly 8% into the close.
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, FENY, PXJ, RYE, FXN, DDG
- What's doing worse than energy this year? That would be financials, and the XLF is lower by another 0.95% in today's session. Also faring poorly are utilities (XLU -1.3%), health care (XLV -0.8%), and consumer staples (XLP -1.2%).
- Though execution issues and foreign exchange woes are the story of the day at Deckers Outdoor (DECK -19%), the glass is either half full or half empty depending upon the investment firm pounding the table.
- "Though Ugg sales came in below expectations, we are encouraged by strong full-price selling of casual, weather and specialty boots," writes Jefferies analyst Randal Konik.
- Jefferies has a Buy rating and $110 PT on Deckers.
- Sterne Agee thinks the company will correct its inventory misfire this year with the Uggs brand.
- Telsey Advisory Group cut its rating to Market Perform and set an $80 price target.
- Canaccord Genuity slashed its PT to $84 from $108.
- Previously: Deckers -13.5% on FQ3 miss, weak guidance (Jan. 29 2015)
- Optical networking/carrier Ethernet hardware vendor Ciena (CIEN -4%), optical component suppliers Finisar (FNSR -2.4%) and Oclaro (OCLR -2%), and telecom chipmakers AppliedMicro (AMCC -5.9%) and Cavium (CAVM -4.4%) are all off after component vendor JDS Uniphase (JDSU -7.4%) missed FQ2 estimates and provided soft FQ3 guidance.
- On its CC (transcript), JDS observed its FQ2 network enablement (test equipment) and service enablement (telecom software/services) revenue fell a combined 8% Y/Y due to "weaker carrier spending and no budget flush in historically stronger December quarter." Network enablement is expected to remain soft in seasonally weak FQ3 as customers weigh their 2015 spending plans. Service enablement is expected to grow ~24%, after growing 16.6% in FQ2.
- AppliedMicro is down 10% since providing a soft FQ4 EPS guidance (-$0.09 vs. a -$0.07 pre-earnings consensus) on Tuesday afternoon to go with an FQ3 beat. Cavium is giving back the gains it saw yesterday after beating Q4 estimates and providing strong Q1 guidance.
- Below $44 per barrel about 24 hours ago, crude oil soars nearly 8% on today's session to more than $48, with most interesting part of the move the fact that about all of it came in the last 90 minutes.
- Other than the continuing decline in the U.S. rig count, there's no particular news of note out there. It appears to be a case of too may leaning short, and deciding/needing to cover headed into the weekend.
- USO +6.2%
- ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
- India's largest private-bank ICICI Bank (IBN -4.5%) reported FQ3 profit short of expectations after gross non-performing assets rose 35 basis points from a year ago to 3.4%. Net non-performing assets rose 18 bps from last quarter and 33 bps from a year ago to 1.27%.
- The country's 2nd largest bank by assets, Bank of Baroda (OTC:BBKQY) fell 11% in Mumbai after Q3 profit slumped 68% to 3.34B rupees vs. analyst estimates of 12.5B.
- The S&P BSE Bankex Index fell 3.1%, it's worst performance in a year, and the Sensex fell 1.7%.
- HDFC Bank (HDB -3.8%)
- ETFs: EPI, INDY, SCIF, PIN, INDL, INP, INXX, INDA, SCIN, SMIN, INCO
- Devon Energy (DVN +2.9%) is upgraded to Buy from Hold at Deutsche Bank, which views DVN as particularly well positioned relative to large-cap E&Ps to again grow production into a firming commodity price environment.
- The firm believes DVN's 2014 asset transactions reposition the portfolio to highlight underlying growth potential, high-grade the portfolio towards fewer and key plays, and improve the cost of capital via the EnLink transaction; it also cites DVN's best-in-class hedge position.
- On the other hand, Deutsche Bank lowers Encana (ECA +1.8%) to Hold from Buy, saying ECA is more dependent than peers on the broader commodity price outlook again returning to growth; the firm believes the move to fund the Athlon acquisition with cash on the balance sheet has left ECA with significantly reduced financial flexibility.
- Amazon's (AMZN +14.8%) Q4 North American op. margin of 5.4% was its highest in three years, notes SunTrust's Robert Peck, reiterating a Buy and upping his target to $370. Peck is also pleased gross margin rose Q/Q in spite of seasonality, even if one backs out Other (i.e. AWS) revenue. Third-party seller and fulfillment service growth drove the gains, as did improved efficiency.
- Topeka's Victor Anthony likes the fact Prime memberships rose 53% in 2014 (no precise subscriber number has been given, as usual) in spite of Amazon's $20 price hike. Benchmark's Daniel Kurnos observes the bulk of Amazon's Q4 revenue miss was due to its international ops, where the company took an $895M forex hit.
- B. Riley's Scott Tilghman (Neutral) is more cautious. "We aren’t convinced the company has the same leverage opportunity in non-holiday quarters, and this seems to be captured in its 1Q guidance, which assumes bigger FX headwinds and lower Y/Y profit." On SA, Paulo Santos is as bearish as ever, citing (among other things) the top-line miss and a 4% drop in Media revenue.
- During the CC (transcript), CFO Tom Szkutak stated Amazon would begin breaking out AWS revenue for the first time in Q1. He also mentioned (giving encouragement to bulls) Amazon is "putting even more energy and attention on driving what we would call fixed expense and variable expense productivity as well as other efficiency projects."
- Also disclosed: Third-party seller units made up 43% of Q4 unit sales, up from Q3's 42%. Annual paid unit growth slipped to 20% from Q3's 21%.
- Prior Amazon earnings coverage
- Harmonic (NASDAQ:HLIT) has soared to new 52-week highs after beating Q4 estimates and guiding for Q1 revenue of $100M-$110M, mostly above a $101.5M consensus.
- The Backlog and deferred revenue balance rose 10% Q/Q in Q4 to $128.7M. By contrast, the balance had fallen 12% in Q3. Strong video hardware demand from service providers drove the growth.
- Gross margin fell 20 bps Y/Y to 54.1%, and op. margin 270 bps to 6.2%. $6.7M was spent on buybacks.
- Q4 results, PR
- xG Technology (NASDAQ:XGTI) has returned a sizable chunk of the big gains it saw yesterday afternoon after announcing the FCC had cleared the use of xG's CN1300 Wi-Fi access point. 510K shares have been traded, well above a 3-month daily average of 187K.
- The wireless hardware/tech developer is down 50% from where it traded before Feltl downgraded to Sell on Dec. 29.
- Following 16% Q/Q growth in Q3 (driven by iPhone-related orders), Broadcom's (BRCM +4.3%) broadband/connectivity chip sales only fell 2% Q/Q in Q4 to $1.475B, less than expected and driving the company's Q4 beat. Infrastructure/networking chip sales fell 4% Q/Q to $625M, in-line with expectations.
- On the CC (transcript), CEO Scott McGregor stated broadband/connectivity upside was "across the board, including set-top box, broadband access and particularly wireless connectivity." Wireless benefited not only from new phone launches, but also a growing mix of higher-ASP 802.11ac and 2x2 MIMO Wi-Fi combo chips.
- McGregor added Broadcom is "seeing significant customer interest in our 4x4 multiuser MIMO 5G WiFi chip targeted for retail routers, broadband access gateways and set-top boxes," and has scored its first wireless charging IC design win. Q1 broadband/connectivity segment sales are expected to be down Q/Q, in-line with seasonality.
- In infrastructure/networking, data center sales were stronger than enterprise (campus LAN) and carrier sales. Strong design win activity is claimed for both Broadcom's new 3.2Tbps StrataXGS Tomahawk switching chip. Segment sales are expected to be flat Q/Q in Q1.
- Q4 gross margin was 54.7%, +60 bps Q/Q and +240 bps Y/Y, even with a guidance midpoint of 55% after factoring stock compensation. Thanks to job cuts and the baseband wind-down, R&D spend fell 18% Y/Y to $530M, and SG&A spend rose by just $1M to $173M. $104M was spent on buybacks.
- Q4 results/guidance, PR
- "Management offered a slightly-more-friendly rhetoric around the pace of investment in 2015, stating that it plans to “balance growth and discipline, and throttle back," writes Deutsche's Ross Sandler, pleased with Google's (NASDAQ:GOOG) CC commentary (transcript) and reiterating a Buy. "At 14x 2016 consensus EPS, we see 5% downside and 40%+ upside from current levels"
- Sandler adds the tone of Google's call felt "a little more shareholder-friendly" than usual. "We suspect there is an effort underway to improve employee morale through a higher stock price."
- Credit Suisse: "[T]his is the second quarter in a row in which we are seeing signs the CapEx step up is starting to slow down ... Google is approaching a harvest cycle following what has now been a multi-year period of investment ... we are paying particular attention to its quickly growing Play and Display businesses to provide the next leg of revenue growth."
- SunTrust notes revenue would've beat consensus if not for forex, and that hardware sales were hurt by sourcing constraints. "Net-net, a noisy but solid quarter and certainly better than feared."
- Morgan Stanley, however, remains worried about a mature PC search market and a mix shift to lower-margin (read: non-search) revenue streams. "[W]e remain [Equal Weight] until valuation comes in further or we see a path towards higher growth and/or moderating investment levels.”
- Prior Google earnings coverage
- Valero Energy Partners (VLP +1.7%) is upgraded to Outperform from Neutral with a $57 price target at Credit Suisse, which notes that parent Valero Energy (VLO +0.9%) plans to drop down $1B worth of assets into VLP, perhaps carrying EBITDA of ~$100M.
- Credit Suisse says the total is well above the level of dropdowns it had expected; the firm now expects VLP to grow distributions 25% in 2015, with similar growth continuing through 2017 and at 20% through 2020.
- VimpelCom (NASDAQ:VIP) subsidiary Global Telecom Holding closed out its sale of a majority interest in Omnium Telecom Algeria, drawing $2.6B from the Algerian National Investment Fund.
- GTH will continue to hold operational control over the Algerian telecom, creating a public-private partnership.
- The deal makes room for VimpelCom pay down some gross debt and settles disputes the company filed against Algeria, following the payment of a $1.1B fine.
- VIP Shares are up 3.2%, swimming against the tide of ruble-relevant telecoms suffering today in the aftermath of a Russian interest-rate cut.
- Today's Russian interest rate cut has taken its toll on the long-suffering ruble -- and therefore on ruble-related telecom firms.
- The ruble's made up a bit of ground from earlier, now at 70.12 vs. the dollar.
- Mobile TeleSystems (NYSE:MBT) is down 2.8%; MiMES Rostelekom (OTCQX:ROSYY) down 4.2%; Turkcell (NYSE:TKC) down 1.8%.
- The interest-rate cut to 15% today followed a hike to 17% last month and points to more volatility ahead for the currency and for firms in ruble-related markets.
- Previously: Russia central bank cuts key rate (Jan. 30 2015)
- With shares having gone into trading near their 52-week low of $53.76, Coherent's (NASDAQ:COHR) FQ1 beat is easily overshadowing light FQ2 guidance: Revenue of $195M-$205M vs. a $209.2M consensus.
- Also helping: The industrial laser vendor has launched a new $25M buyback (good through Jan. 2016), and stated on its CC (transcript) it expects fiscal 2H revenue to be up ~10% from 1H levels. A $25M buyback launched last July has been used up.
- With OEM order timings and soft European sales weighing on results, FQ1 bookings fell 19% Y/Y to $162.5M, and book-to-bill was 0.81. Strong Asian life sciences demand is boosting sales of Coherent's Chameleon lasers.
- FQ1 results, PR
- Cameron International (CAM +2.2%) is higher despite a downgrade from RBC to Sector Perform from Outperform, which includes a price target cut to $50 from $60.
- RBC believes CAM faces headwinds across all of its business segments in 2015, including immediate pressure in its short cycle businesses and declining backlogs in its longer cycle businesses, adding that Street estimates are too high.
- CAM CEO Jack Moore reassured investors yesterday that he expects the company will be able to sell more products to its key customers.
12:02 PM| Comment!
- Shares of Mattel (MAT +0.3%) have made an unexpected comeback following a weak Q4 earnings report.
- Shares of the toy maker were down 5% before the bell after the report first hit.
- It appears that interim Mattel CEO Chris Sinclair used the right set of adjectives when describing the plan for the company during the earnings call this morning.
- Sinclair said Mattel was approaching strategy with a "heightened" sense of urgency and will be "laser-focused" on results.
- Earnings call webcast
- Salesforce (CRM -2.2%), ServiceNow (NOW -2.2%), Paylocity (PCTY -5.8%), Castlight (CSLT -4.1%), Cornerstone OnDemand (CSOD -3.6%), InContact (SAAS -2.2%), and Zendesk (ZEN -2.1%) are selling off after cloud ERP/HR/e-commerce software vendor NetSuite (N -11.7%) offered light Q1 and 2015 sales guidance to go with a Q4 beat. The Nasdaq is down 0.4%.
- As one would expect, NetSuite states forex has much to do with its guidance. On the CC (transcript), CFO Ronald Gill noted "the weighted average value of the foreign currencies in which we recognize international revenue has fallen more than 8% against the dollar." However, it's worth noting only 27% of NetSuite's Q4 revenue was international.
- NetSuite's Q4 numbers were solid: Subscription/support revenue grew 34%, and billings rose 34% to $201M (well above revenue of $157.9M). 54 customers were added for NetSuite's SuiteCommerce e-commerce software platform - CEO Zach Nelson humbly observes that was more than 3x the 17 customer adds rival Demandware (DWRE -1.6%) reported for Q3 (a seasonally weaker quarter).
- ServiceNow, the top player in the cloud IT service desk software market, provided above-consensus guidance on Wednesday.
- Chevron (CVX -2.9%) turns sharply lower after saying during its earnings conference call that it is suspending its share buyback program for 2015 given the change in market conditions.
- The company also says it is reviewing staff levels around the world.
- Other oil majors also turn lower: XOM -1%, COP -1.7%, BP -0.9%, RDS.A -2.1%.
- FBR Capital is putting the brakes on with Visa (V +4.9%).
- The investment firm downgrades shares to Market Perform from Outperform on a valuation call after catching the post-earning rally.
- Shares of Visa are still about $9 short of their 52-week high of $269.32.
- Previously: Visa beats by $0.04, beats on revenue
- Previously: Visa +4.2% on strong Q4 growth, 4-for-1 split on the way
- When asked on Unisys' (NYSE:UIS) Q4 CC (transcript) if the company is aiming for "somewhere around flat" 2015 growth for its Technology (hardware) segment, CFO Janet Haugen responded with cautious remarks. "We've got a 6 percentage point negative impact on currency in the quarter ... we've got two headwinds in that technology revenues, one is the currency impact on year-over-year basis and second a lower renewal opportunity than we would have had previously."
- Unisys' 2015 total revenue growth consensus is at 3%. In Q4, the company's Technology revenue rose 1% Y/Y to $184.9M, and its services revenue (driven in part by past hardware sales) fell 11% to $720.9M.
- Services margins also received attention: Unisys' services gross margin fell to 17.5% in Q4 from 21.9% a year ago, and services op. margin to 3.9% from 9.8%. When asked if Unisys can expand services margins in the event of declining revenue, new CEO Peter Altabef said he doesn't "want to have to face that choice."
- Services backlog was flat Y/Y in Q4 at $4.8B. Unisys expects $635M and $2B of its services backlog to respectively convert into Q1 and 2015 revenue. Total revenue consensus estimates for Q1 and 2015 are respectively at $767.1M and $3.46B.
- Q4 results, PR
- Greece's new government says it is strongly opposed to a planned gold mine to be operated by Eldorado Gold (EGO -19.9%) that is among the biggest foreign investment projects in the country, the energy minister tells Reuters.
- The mine in northern Greece was the flagship project of the last government's foreign investment drive and considered a test case that would reveal whether Greece could protect foreign investors despite local opposition.
- Petrobras (PBR -5.9%) bonds plunged the most on record after Moody’s late yesterday downgraded the oil company's debt ratings to the edge of junk status - the agency's third downgrade of PBR in four months - and said the ratings remain on review for a further cut.
- Moody’s said it downgraded PBR’s unsecured debt to Baa3 from Baa2 and cut the baseline credit assessment to ba2 from ba1, based on “concerns about corruption investigations” and "uncertainty about the timely delivery of audited financial statements [that] could lead to significant liquidity pressures.”
- The ratings agency also cited PBR's lack of progress in disclosing writedowns related to the ongoing corruption probe as "not an encouraging sign for the timely release of audited year-end financial statements."
- Gigamon (NYSE:GIMO) guided on its Q4 CC (transcript) for Q1 revenue of $40M-$43M and EPS of $0.01-$0.05, well above a consensus of $35.5M and -$0.03.
- The network visibility hardware vendor saw a 16% Y/Y Q4 increase in product revenue to $36.8M, and a 27% increase in services revenue to $14.5M. Enterprises accounted for 73% of revenue, service providers 14%, and federal 13%.
- Notably, enterprise bookings rose 68% Y/Y, and federal bookings 261%. Service providers bookings were up 17%. Customer count rose by 94 to 1,649, and the deferred service revenue balance rose by $11M Q/Q to $51.7M.
- The mid-range GigaVUE-HC2 appliance was a strong seller, with HC2 product family bookings doubling Q/Q. H-Series GigaSMART software licenses also saw strong growth.
- Q4 results, PR
- Southern Co. (SO -1.7%) says the firms building its new nuclear power plant in Georgia estimate the project will be delayed 18 months, potentially costing it $720M in new charges.
- Westinghouse Electric and Chicago Bridge & Iron (CBI -12.2%) expect the first reactor at Plant Vogtle will be complete in mid-2019, and the second reactor will come online in mid-2020, SO says in an SEC filing; SO already has been in litigation with the two companies over previous delays and cost increases.
- SO does not tally its total costs in the filing but says each month of a delay would cost $40M in new capital and financing charges; if the project stretched an additional 18 months, the total could grow to $720M.
- Deutsche Bank comments that the further delay to be particularly negative for CBI shares and potentially remain an overhang over the near term, given that it may take more than a year to resolve the dispute.
- After meeting with Brazil's communications minister, Telecom Italia (NYSE:TI) CEO Marco Patuano says TI will invest "much more" in the country.
- Slowing user growth means Brazil is headed for the same intense mobile competition other countries are experiencing, though Patuano says he didn't talk about consolidation in his meeting.
- TI's board did begin investigating a merger of its Brazilian subsidiary Tim Participacoes with Oi (NYSE:OIBR) -- even as Oi tries to assemble a joint bid along with competitors like America Movil (AMX -2%) to buy (and break up) Tim.
- OIBR is off 8.3%; Telefonica Brasil (NYSE:VIV) is down 4.8%.
- QLogic (QLGC +4.8%) has jumped to new 52-week highs after beating FQ3 estimates and issuing strong FQ4 guidance on its CC: Revenue of $132M-$138M and EPS of $0.24-$0.28 vs. a consensus of $133.1M and $0.25 (transcript).
- Archrival Emulex (ELX -8.1%), however, is off sharply after providing in-line FQ3 guidance - revenue of $97M-$103M and EPS of $0.11-$0.15 vs. a consensus of $100.1M and $0.13 - to go with an FQ2 beat.
- QLogic CEO Prasad Rmapalli asserts his company has been gaining share in the Fibre Channel adapter card market (59% estimated revenue share over the first three quarters of calendar 2014), and has seen "significant share gains" in the high-end 16G Gen 5 segment.
- He added strong Q/Q growth was seen for QLogic's 10G Ethernet adapters and ASICs - the company bought Broadcom's Ethernet controller business a year ago - aided by major design wins for servers running Intel's recently-launched Grantley Xeon CPUs. 25G Ethernet adoption is forecast to be "a disruptive force in the Ethernet ecosystem."
- Likely hurting Emulex: CFO Kyle Wescoat stated on the CC (transcript) "sequential [FQ3] growth in our Ethernet products is offset by Fibre Channel seasonality that could be more pronounced than usual, given the stronger-than-expected December quarter performance."
- A BMO analyst pressed Emulex about its 10G Ethernet share during the Grantley server cycle, and an RBC analyst asked if IBM's recent woes are hurting the company. CEO Jeff Benck declared Emulex is confident it can gain share during the Grantley cycle, and noted a weak UNIX server market (where IBM is a major player) can have an impact.
- Ashford Hospitality Trust (AHT -3.7%) sells 9.5M shares at $10.65 each. The underwriters have the option to buy another 1.425M shares at that price.
- Source: Press Release
- Previously: Ashford Hospitality Trust announces 9.5M share secondary (Jan. 29)
- Gulf Resources (GURE +46.6%) soars at the open after announcing it has found natural gas under its bromine well in China's Sichuan province.
- In 2014, CNPC discovered 440B cm of proven geological natural gas reserves, of which 308B cm was technically recoverable in the Moxi block of the An'yue field; GURE says the area is very close to where it is exploring for bromine.
- Xerox (NYSE:XRX) reports Services revenue $2.73B (+1.45%) and Document technology revenue $2.35B (-8.17%).
- Equipment sales declined 11.25% to $860M; Annuity revenue fell 1.53% to $4.17B.
- Gross margin rate +10 bps to 32.1%.
- SG&A ratio declined 90 bps to 18.7%.
- Operating margin rate +100 bps to 10.4%.
- FQ1 Guidance: Diluted EPS: $0.16 to $0.18; Adjusted EPS: $0.20 to $0.22.
- FY2015 Guidance: Diluted EPS: $0.83 to $0.89; Adjusted EPS: $1.00 to $1.06; Cash flow from operations: $1.7B to $1.9B; Free cash flow: $1.3B to $1.5B.
- Q4 results
- Shares of Shake Shack (Pending:SHAK) are indicated to open between $34 and $36.
- The company repriced its IPO at $21 a share last night.
- Most analysts think the fast-casual buzz stock is going on wild ride during its first few days of trading.
- Previously: Buzz builds over Shake Shack IPO (Jan. 29 2015)
- Wells Fargo uses the occasion of the big jump in PulteHomes (PHM -2.2%) yesterday post-earnings to get out - downgrading to Market Perform from Outperform.
- Previously: Homebuilders on the rise after Pulte and Ryland results (Jan. 29)
- Citing the effect on business from falling oil prices and noting the Bank of Canada's worry over growth, Barclays downgrades TD Bank (TD -2.8%), RBC (RY -3.2%), BMO (BMO -3.3%), and Laurentian Bank (OTCPK:LRCDF) - all to Underweight from Equal Weight.
- Not downgraded, but also continuing to feel the chill in Canada's economy are Scotiabank (BNS -3.7%) and CIBC (CM -3.1%).
- Previously: Canadian GDP unexpectedly slips in November (Jan. 30)
- In addition to topping Q4 estimates, Proofpoint (NASDAQ:PFPT) has guided for Q1 revenue of $56M-$57M (above a $54.3M consensus) and full-year revenue of $245M-$247M (above a $242.5M consensus). Q1 EPS guidance of -$0.08 to -$0.09 is above a -$0.11 consensus, but (due to aggressive spending) full-year guidance is at -$0.36 to -$0.38 (below a -$0.29 consensus).
- Q1 and full-year billings guidance is respectively at $61M-$63M and $288M-$292M. Q4 billings totaled $74.9M, +53% Y/Y and well above guidance of $63M-$64M. Full-year free cash flow guidance is at $20M-$25M.
- GAAP operating expenses rose 31% Y/Y in Q4 to $51.2M. The deferred revenue balance at quarter's end stood at $162.7M (+31%).
- Shares are making new 52-week highs in early trading.
- Q4 results, PR
- SunPower (NASDAQ:SPWR), JA Solar (NASDAQ:JASO), and Trina (NYSE:TSL) have each received upgrades to Outperform from RBC in the wake of the huge solar rout seen over the last few months. The firm's cites optimism about solar growth and SunPower's plans to build a 700MW+ module plant.
- SPWR +1.3% in spite of lower Nasdaq futures. JASO +2.5%. TSL +0.8%. SunPower reports on Feb. 24.
9:12 AM| 2 Comments
- As backward-looking a report as you'll get, but nevertheless moving markets, Canadian GDP declined 0.2% in November vs. expectations for a flat read, and October's 0.3% gain.
- The loonie (NYSEARCA:FXC) is taking the news hard, down nearly 1% vs. the greenback to $0.7846.
- ETFs: EWC, CNDA, EWCS, FCAN, QCAN
- The 10-year Treasury yield has ducked under 1.70% for the first time in nearly two years following the softer-than-hoped preliminary read on GDP growth (2.6% vs. 5% in Q3, and forecasts for 3%). It's now off six basis points to 1.69%.
- In Germany, 30-year government paper now carries a yield of less than 1% for the first time ever. The 10-year Bund is at 0.30%.
- TLT +1%, TBT -2% premarket
- ETFs: TBT, TLT, TMV, TBF, EDV, TMF, TTT, ZROZ, SBND, TLH, VGLT, DLBS, UBT, TLO, TENZ, LBND, TYBS, DLBL, BUNL, GGOV, BUNT
- Foot Locker (NYSE:FL) is upgraded by Barclays to an Overweight rating from Equal Weight.
- The investment firm increases its price target on the retail chain to $70 from $60.
- Barclays sees long-term potential for Foot Locker to hit $10B in revenue and predicts a pop after the company's upcoming Analyst Day meeting on fresh initiatives announced at the event.
- FL +1.2% premarket.
- Tyson Foods (NYSE:TSN) reports gross margin rate rose 102 bps to 8.84% in FQ1.
- Segment Sales: Chicken: $2.78B (+4.67%); Beef: $4.39B (+17.60%); Pork: $1.54B (+8.15%); Prepared Foods: $2.13B (+135.17%); International: $305M (-6.73%).
- Segment Volume change: Chicken +3.1%; Beef -2.7%; Pork +1.1%; Prepared Foods +89.5%; International -3.8%.
- Segment Average Price change: Chicken +1.5%; Beef +20.9%; Pork +7%; Prepared Foods +24.1%; International -2.9%.
- Adjusted operating margin rate +50 bps to 5.2%.
- The company achieved $60M in synergies during the quarter & confident about exceeding $225M synergy target for the year.
- The company expects to complete the sale of its Mexico chicken production operation in FQ2.
- The company expects overall domestic protein production to increase 1% (Y/Y) in FY2015.
- FY2015 Guidance: Sales: ~$42B; International sales: decreasy by ~$600M - $650M; Pork operating margin: normalized range of 6% - 8%; Prepared Foods Operating margin: excess of 6%; Adjusted EPS: $3.30 - $3.40; Capital expenditure: ~900M; Net interest expense: ~$280M.
- TSN +4.30% premarket.
- MasterCard (NYSE:MA) reports net income rose 21% in Q4, adjusted for currency swings.
- Acquisitions had a $0.03 dilutive impact on EPS during the quarter.
- Gross dollar volume +13% to $1.2T.
- Cross-border volume +19%.
- Processed transactions +11% to 11.6B.
- A standout from the quarter was the effective tax rate paid by the company of 20.3% vs. 32.0% a year ago.
- MA +3.83% premarket.
- Intercept Pharmaceuticals (NASDAQ:ICPT) is up 32% premarket on light volume in response to its announcement that the FDA has designated its investigational product obeticholic acid (OCA) a Breakthrough Therapy for the treatment of nonalcoholic steatohepatitis (NASH).
- OCA is a bile acid analogue in development as a treatment for several liver diseases. NASH is the "next big thing" for drug makers after HCV.
- Breakthrough Therapy status enables a shorter approval timeline by involving more senior managers at the FDA and a rolling review of the New Drug Application (NDA).
- P-E firms are uninterested in a takeover of Dick's Sporting Goods (NYSE:DKS), sources tell the New York Post.
- A demand by CEO Edward Stack to keep his family highly involved in the business after a sale is choking off interest.
- Shares of Dick's spiked earlier this month off of takeover buzz.
- Previously: Dick's surges on going-private speculation (Jan. 07 2015)
- DKS -5.7% premarket.
- Altria (NYSE:MO) reports cigarette volume fell 1.7% to 31.342B in Q4.
- Volume for the Marlboro brand was down 1.9% to 26.947B, while market share remained level at 43.8%.
- Cigar volume +3.9% to 319M.
- Altria's smokeless products segment saw revenue rise 4.3% off of higher volume and pricing.
- 2015 guidance: Full-year EPS expected to grow 7%-9% to $2.75-$2.80.
- MO -1.5% premarket.
- Tyco (NYSE:TYC) reports organic revenue growth of 2%, led by Global products segment with organic growth of 10%.
- Segment revenue: North America Installation & Services: $951M (-1%); Rest of World Installation & Services: $917M (-6%); Global Products: $611M (+8%).
- Segment operating income: North America Installation & Services: $131M (+30 bps to 13.8%); Rest of World Installation & Services: $90M (-80 bps to 9.8%); Global Products: $105M (+130 bps to 17.2%).
- FQ2 Guidance: Adjusted EPS: $0.48 to $0.50.
- FY2015 Guidance: Adjusted EPS: $2.30 to $2.40.
- Mattel (NASDAQ:MAT) reports North American region gross sales down 2%.
- International region gross sales fell 5% (unfavourable currency exchange rate impact 8%).
- Brand revenue growth: Barbie -12%, Hot Wheels +5%, Fisher-Price -11%, American Girl -4%.
- Gross margin decreased 410 bps to 50.4%.
- SG&A ratio increased 390 bps to 22.3%.
- Operating margin rate declined 1080 bps to 11.9%.
- MAT -4.83% premarket.
- Q4 results
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