Today - Tuesday, July 7, 2015
- NovaGold (NYSEMKT:NG) slid 8.2% today ahead of a Q2 report where it posted a loss flat from the year-ago quarter, as it pursues permitting for its Donlin Gold project and technical studies on its Galore Creek project (each 50%-owned).
- The company reported cash and term deposits of $134.7M, down from $165.3M on Nov. 30, mainly due to repayment of $15.8M in convertible notes.
- NovaGold says that's sufficient capital to cover its share of funding for its Donlin Gold (Alaska) and Galore Creek (Northern Alberta) projects. It expects to spend $44.8M in 2015, including the $15.8M repayment. Some $30.6M of the planned $44.8M amount was spent by May 31.
- Shares are up 35% from a November's 52-week low, but are down 21.5% over the past month.
- Conference call tomorrow at 11 a.m. ET.
- Press release
- 10-Q filing
- After trading down much of the day, broadcast company TEGNA (NYSE:TGNA) finished up 3% following a boosted price target from Evercore ISI.
- The analysts bumped the target slightly, to $33 from a previous $32. After closing yesterday at $30.60, shares rose to close at $31.52 today.
- Shares were downgraded last week by Jefferies Group, to Hold, just three days after it initiated coverage at Buy.
- Previously: Gannett completes split into print, broadcast firms (Jun. 29 2015)
- Bloomberg reports Symantec (NASDAQ:SYMC) is "nearing a deal" to sell its Veritas storage software unit (currently set to be spun off) to P-E firm Carlyle (NASDAQ:CG) for $7B-$8B. For reference, Symantec closed today with a $15.4B market cap.
- Deal terms are still being negotiated. Symantec hasn't been shy about its willingness to field offers for Veritas, which was acquired for $13B+ in 2005. Reuters reported in April tax concerns had hurt buyout interest.
- Symantec has risen to $23.40 AH. The company's Information Management ops had FY15 (ended in March) revenue of $2.56B (+1% Y/Y).
- VimpelCom (NASDAQ:VIP) is among top postmarket decliners, off 3.7% after hours on a big block that came through in the past hour.
- Shares gained 1.2% in the regular session today, bucking regional industry peers including Mobile Telesystems (MBT -2.5%) and MiMES Rostelekom (OTCQX:ROSYY -3.5%).
- The Amsterdam-based company noted today that it's joined Nederland ICT, a trade organization for more than 550 info-tech, telecom and Internet companies in the Netherlands. The move should foster better relationships with in-country peers and help develop home-grown talent for the sectors.
- Previously: U.S. piles in to bribery probe of Russian phone firms (Jun. 30 2015)
- As it awaits the first ratings from Shark Week -- also known as "Discovery Christmas" -- Discovery Communications (DISCA +2.2%) is supplying investors with red meat via some encouraging numbers in a tough overall ratings environment.
- The company's flagship station, Discovery Channel, logged its best Q2 in viewers and men in its target demo of adults 25-54, and overall viewers. Combined with a its strong Q1, it's Discovery's best first-half primetime in the demo.
- Nomura's Anthony DiClemente is now "increasingly confident" about a 1% gain in domestic ad sales for Q2.
- The company's made a point this year that all Shark Week programming is true, despite the fact that its best ratings came from the fictional Megalodon: The Monster Shark Lives.
- A carriage fight with Comcast was likely made more tense by Discovery's aggressive opposition to the now-aborted Comcast/Time Warner Cable merger.
- Previously: Discovery Communications up as Nomura boosts target (Jul. 07 2015)
- Walt Disney (NYSE:DIS) is giving in-store demos of its technology-laced Playmation toy line in North American stores this week, and has begun accepting preorders for the toys.
- The toys -- developed along with partner Hasbro (NASDAQ:HAS), and designed to interact with one another using infrared, Bluetooth and motion sensors and to encourage active play -- launch on Oct. 4 with a line based on Marvel's Avengers.
- The demos will be available through launch in Disney stores, including reserved 30-minute slots for a heavier orientation with the toys.
- Disney shares rose 1.2% today to reach a record high of $117.19. Earlier today, Atlantic Securities upgraded Disney stock to Overweight.
- And in Star Wars news, a spinoff film focused on a young Han Solo is planned for May 25, 2018, with Christopher Miller and Phil Lord (the directing team behind The Lego Movie and the 21 Jump Street films) attached to direct.
- Previously: Disney unveils high-tech, active-play Playmation toys (Jun. 02 2015)
- Electronic Arts (NASDAQ:EA) says it has appointed Samantha Ryan head of EA Mobile.
- Ryan is a recent addition to the company, having joined just a few months ago. Previously she had served as senior VP of production and development at Warner Bros. Interactive.
- In its last earnings report (fiscal Q4), EA noted that mobile revenue set a new record, contributing $524 million for the fiscal year. Monthly active users for mobile titles averaged more than 165M in Q4.
- The company's shares rose 2.7% today and hit an all-time high heading into the close, following this morning's upgrade from UBS to Buy.
- The Container Store Group (NYSE:TCS) is up 6.4% after hours, following a Q1 report where net loss widened from the previous year, but beat expectations.
- Comparable-store sale slipped just 0.9%, vs. a forecast decline of 3-4%. The company says revenues that declined 2.1% Y/Y would have been up 0.9% at least year's Swedish krona-dollar exchange rate, due to Elfa net sales. Gross margin was 58.5%, up 40 bps Y/Y.
- Average ticket on its new custom closet offering, TCS Closets, exceeds $10K.
- Opened its Tucson, Ariz., store May 30, and its first opening for Q2 in Overland Park, Kan., on June 27. It plans to open eight more new stores (one relocation) in the full year.
- The company reiterated its outlook for the full year, saying it expects net sales of $800M-$815M (vs. a consensus of $815M) considering comparable-store sales growth of -2% to flat. It sees EPS of $0.30-$0.38, in line with expectations, and adjusted EBITDA of $85M-$91M vs. consensus of $76.8M.
- Conference call at 4:30 p.m. ET.
- Press Release
- Ubiquiti (NASDAQ:UBNT) was one of the best tech performers on a day the Nasdaq rose 0.1%, gradually rallying on volume of 836K shares (above a 3-month daily average of 745K).
- With 10M shares (37% of the float) shorted as of June 15, short-covering likely helped out. The wireless broadband/enterprise Wi-Fi hardware vendor currently trades for 16x an FY16 (ends June '16) EPS consensus of $2.02.
- Potash Corp. (POT -2.2%) reportedly would be open to raising its $8.6B bid for K+S (OTCQX:KPLUY) if the German company could reveal more value not currently seen by the Canadian company.
- POT's €41/share bid represents a 43% premium to the average weighted price of K+S shares over the past six months, but K+S CEO Norbert Steiner has said the Legacy project alone is worth at least €21/share on top of €29 for the German company’s existing operations.
- The market may be factoring in a better than 50-50 probability that a deal happens, but J.P. Morgan Ben Scarlett sees only a one-in-three chance of success, believing a deal would face substantial execution risk and anti-trust or other concessions.
- The firm thinks European and North American anti-trust authorities will examine the impact of a deal in their own regions, and perhaps invoke conditions that require approval from authorities in places such as Brazil, China and India.
- Mostly silent as the Germans played the "bad cop" during 2015's version of the Greek crisis, things have gotten serious enough for France to get involved, with chatter of a French official saying the ECB could provide emergency funding support for Greek banks as long as some sort of deal is in the works.
- Always being in favor of stock market charts headed upward and to the right, the U.S. gets involved as well, with President Obama - after earlier speaking with Greek PM Tsipras - placing a call to Angela Merkel, pressuring the German Chancellor to get a deal done.
- Down more than 1% earlier, the U.S. averages are in the green less than 30 minutes before the bell: S&P 500 (SPY +0.6%), DJIA (DIA +0.5%), Nasdaq 100 (QQQ +0.3%).
- Gannett (GCI -1.5%) has reached a deal to sell its headquarters in Tysons Corner, Va., to London-based Tamares Group for about $270M.
- The two office towers that Gannett called home were visible from the Washington Beltway and total about 785K square feet. The complex cost about $300M to build back in 2001.
- Divesting its headquarters offers some room for cost savings as Gannett recently performed a split into its print operations and a broadcast-focused company, TEGNA (TGNA +2.3%).
- Gannett will stay in the D.C. area; it's leasing back part of the complex on a long-term basis, but most of the building will be left to Tamares to rework.
- Previously: After the spinoff: Gannett off 7.3%, TEGNA -3.5% after downgrade (Jul. 02 2015)
- Previously: Gannett completes split into print, broadcast firms (Jun. 29 2015)
- A raised bid for the real estate assets of Pinnacle Entertainment (PNK +5.6%) by Gaming and Leisure Properties (GLPI -2.9%) is putting pressure on Boyd Gaming (BYD +2.9%) to think about its possibilities, says Union Gaming analyst Christopher Jones.
- In addition, it could mean "considerable" value adjustment for MGM's regional assets, he notes.
- MGM is now up 4.3% this afternoon. Jones rates Boyd Gaming and MGM as Buys, along with GLPI.
- Previously: MGM, LVS, Wynn up sharply as Credit Suisse says "worst is over" for Macau (Jul. 07 2015)
- The Macau casino sector is defended at Credit Suisse, which says the "worst is over" for the sector as it sees a fundamental shift towards supportive policy from both Macau and the central government, and seasonally stronger months are ahead.
- "Negatives are well-known," the firm says, noting that with fixed cost's contribution increasing, the earnings upside from a recovery should be strong; long-term investors should find the sector attractive when gross gaming revenue stops falling, which will put an end to Wall Street's earnings cut and allow investors to "refocus on the structural story" of Macau.
- MGM +2.8%, LVS +2.8%, WYNN +5.5%, MPEL +5.3%.
- The ruble has fallen to 57 against the dollar amid a steep selloff in oil prices - WTI crude is now at $52.45/barrel. The decline has fueled speculation Russia's central bank will curb foreign currency purchases.
- QIWI is now down 29% from a May high of $35.45. The Russian online payments leader remains up 26% YTD.
- Kandi (NASDAQ:KNDI) hasn't been left out as U.S.-traded Chinese stocks post massive losses (see Internet stocks and solar stocks). The selloff follows fresh declines for mainland exchanges in the wake of an early-2015 run-up that stoked memories of the Dot.com bubble.
- The EV maker is now down 47% YTD. Yesterday, Kandi announced its EV JV with Geely has inked a contract for the sale of 4K cars - 2,500 Kandi K10 and 1,500 K11 units. The deal is worth over RMB540M ($89M); delivery is expected to be finished by year's end.
- Stone Energy (SGY +5.9%) says operations at its Cardona #6 development well in the deepwater Gulf of Mexico have been proceeding ahead of schedule and below budget, and drilling has been completed through the targeted zones.
- SGY expects Q2 production to come in at or above the high end of previous guidance of 246MM-258MM cfe/day, the result of reduced scheduled third-party pipeline downtime in the deepwater Gulf and flatter than expected production declines in Appalachia.
- SGY says it may realize additional upward revisions in Appalachian production in Q2 earnings pending participation elections by SGY's operating partners.
- Dex Media (DXM -1.1%) says it's been notified by Nasdaq of noncompliance with its listing standard, due to its market value falling below $15M for the last 30 days.
- The company has until Dec. 28 (180 calendar days) to regain compliance by holding $15M in public market value for 10 straight business days in that period, or face delisting.
- The company has about 15M shares in public float and the share price fell under $1.00 after June 1. Shares had been over $3 in the first week of May. Today Dex Media is trading at $0.782.
- While most major North American solar names are down moderately or trading higher, Chinese firms are seeing heavy losses as a domestic rout in equities continues. Many Chinese Web and mobile stocks are seeing similar drops; margin calls and general panic selling appear to be contributing.
- Major decliners include Trina (TSL -9.1%), Yingli (YGE -10.2%), Daqo (DQ -14.6%), China Sunergy (CSUN -13.8%), JA Solar (JASO -7.7%), JinkoSolar (JKS -7%), and ReneSola (SOL -6.6%).
- Solar ETFs have felt the impact. TAN -2.7%. KWT -4%.
- Yesterday: Solar stocks off sharply after oil plunge, Greek "no" vote, Chinese tech selloff
- RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.1%), and Avago (AVGO -3.2%) are posting 3%+ declines on what's proving a rough day for many high-beta tech stocks.
- With Chinese equities plunging, Skyworks, Qorvo, and Avago's Chinese exposure could be contributing to their selloff. The Nasdaq is down 0.7%, and the Philadelphia Semi Index 1.7%.
- Avago's decline comes as Oppenheimer's Rick Schafer downgrades merger partner Broadcom (BRCM -2%) to Market Perform. Curiously, he also declares Avago (along with Skyworks) to be a top wireless chip pick.
- Schafer: "Rising RF complexity (and content) remains one of our favorite thematic plays heading into 2H15 ... We see incremental RF content opportunities for both Avago and Skyworks on the forthcoming iPhone 6S ... Skyworks further benefits from 50 percent plus 4G reference design share with China's major baseband suppliers."
- Broadcom shareholders are set to receive either $54.50/share in cash, 0.4378 Avago shares for each Broadcom share, or some combination thereof, with the cash portion of the deal totaling $17B. Broadcom currently trades 7% below the cash payout price, and (based on Avago's current trading levels) 11% below an equity payout price of $56.87.
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) shares have dropped nearly 8% today after the French oil industry engineering and construction group repositions itself for a long slowdown with a restructuring plan in a cost-cutting program aimed at saving ~€830M ($914M), of which €700M is expected to be delivered in 2016.
- Technip's overhaul bodes ill for oilfield services companies, Heard On The Street's Helen Thomas writes, as questions linger about the chances for an imminent pickup in work for the industry.
- Technip's €650M of one-off restructuring charges is an unspecified amount related to standoffs with clients over payments on existing projects, which will spark existing worries about clients becoming more combative on pricing and raising doubts about how robust backlogs will prove, Thomas writes.
- OmniVision (NASDAQ:OVTI) has sold off yet again, leaving shares even further below the $29.75/share buyout price it agreed to with a Chinese investor group in April. Fears U.S. regulators will reject the deal have weighed on shares, as have shareholder suits attempting to stop it on the grounds it undervalued OmniVision.
- Yesterday morning, OmniVision announced it's rescheduling a special meeting to vote on the deal to July 23 to "provide additional time for court resolution" of a shareholder motion to prevent the company's sale under certain "corrective actions" are taken. Shareholders on record as of June 9 will be able to vote.
- Today's drop comes as many U.S.-traded Chinese tech stocks nosedive. SA author Vince Martin argued today OmniVision has limited downside even if the buyout unravels.
- Fixed wireless provider Towerstream (NASDAQ:TWER) is bucking a down market today, up 2.8% with nearly every industry peer trading lower today.
- The company has recently begun deployment of its non-line-of-sight technology for backhaul operations, with an eye to using a 3.5 GHz band that the FCC recently decided to free up.
- It's told FierceWirelessTech that without requiring direct line of sight, it'll be able to deploy Wi-Fi and other services into hard-to-reach locations.
- Aside from its interest in the 3.5 GHz band -- formerly reserved for the Department of Defense -- it's already working in "E Band" between 60 GHz and 80 GHz as a cost-effective way to carry heavy bandwidth.
- Silicon Motion (NASDAQ:SIMO) has sold off after pre-announcing it now expects 7%-9% Q/Q Q2 sales growth vs. prior guidance of 5%-10%. 793K shares have been traded, topping a 3-month daily average of 659K.
- The selloff comes amid a 1.2% drop for the Nasdaq, and a 2.2% drop for the Philadelphia Semi Index. Shares now go for 13x a 2016 EPS consensus of $2.36.
- Vale (VALE -4.2%) shares extend their three-day slide and touches their lowest levels in 10 years, as iron ore drops below $50/metric ton for the first time since April on concern low-cost supplies from producers including Brazil will expand further while demand falls in China.
- Iron ore prices are lower by 5.1% to $49.60, according to a price index compiled by Metal Bulletin, down more than 20% from a June high and capping a nine-day losing streak, the longest losing streak since last August.
- Bloomberg reports that inventories at Chinese ports rose 2.8% last week to 81.55M tons; as trade seems to pick up, analysts say iron ore prices could slump to $40.
- Earlier: China's stock turmoil whacks Freeport McMoRan, copper producers
- Mattersight (NASDAQ:MATR) now expects 33%-38% Y/Y Q2 sales growth, up from prior guidance of 30%-35% and above a 30.8% 2-analyst consensus. Subscription growth guidance has been hiked to 38%-43% from 35%-40%.
- Q2 bookings annual contract value (ACV) totaled $5.8M, the second-highest quarterly figure in the company's history. ACV bookings over the last 4 quarters total $19M (+46% Y/Y).
- The customer service/sales analytics software vendor has named Sheau-ming Ross, formerly the CFO of cloud/SaaS workforce software vendor EPAY Systems, its new CFO. She replaces interim CFO David Gustafson. Meanwhile, former employee Frank Suljic has returned to Mattersight as SVP of SVP of strategic sales. He reports to sales chief Richard Dresden.
- Full Q2 results arrive on Aug. 5.
- It's not just Greece, where that country's government officials arrived in Brussels today with no new proposal to save its EMU membership (one is now promised for tomorrow), but China's stock market bubble is in the midst of a spectacular collapse. This even as Beijing's efforts to prop up share prices make the Federal Reserve look like the Ayn Rand Institute.
- The 10-year U.S. Treasury yield is lower by nine basis points to 2.20%, the U.K. 10-year yield is down 16 bps to 1.86%, and the German 10-year yield is down 12 bps to 0.65%. Copper is leading across the board declines in commodity prices.
- European stocks closed down another 2.1%, and the S&P 500 is down 1%. The Utilities SPDR (NYSEARCA:XLU), however, is up 1.6%, and the iShares Real Estate ETF (NYSEARCA:IYR) is up 0.7%. A mortgage REIT ETF (NYSEARCA:REM) is up 0.7%.
- Realty Income (O +0.6%), Omega Healthcare (OHI +1.3%), HCP (HCP +1.7%), Equity Residential (EQR +1.4%), Simon Property (SPG +1.2%), Kimco (KIM +1.3%), Public Storage (PSA +1.5%), Boston Properties (BXP +1.6%), Strategic Hotels (BEE +1.2%), First Industrial Realty (FR +1.1%).
- ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
- ETFs: XLU, UTG, IDU, VPU, GUT, BUI, FUTY, RYU, UPW, FXU, PUI, SDP, PSCU, FUGAX
- Though the Nasdaq is down 1.5% and many solar stocks are seeing bigger losses, TerraForm (NASDAQ:TERP) is up strongly after announcing a deal to buy 930MW of wind plants from Invenergy for $2B.
- The SunEdison solar/wind project YieldCo is now up 29% YTD. Its dividend yield is currently at 3.3%; based on a 2016 target of $1.70/share, the forward yield is 4.3%.
- Though not seeing the 10%+ declines witnessed by many U.S.-traded Chinese tech peers, Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) are down sharply following fresh overnight losses for the Shanghai and Shenzhen exchanges.
- Yahoo (NASDAQ:YHOO), whose 384M-share Alibaba stake is currently worth $29.4B, is once more following in Alibaba's footsteps. The Nasdaq is down 1.5%.
- Alibaba has made fresh post-IPO lows. Baidu is less than $7 away from a 52-week low of $176.69. Alibaba now trades for 21x an FY17 (ends March '17) EPS consensus of $3.72. Baidu trades for 20x a 2016 EPS consensus of $9.29.
- Adaptive Medias (OTCQB:ADTM +4.7%) says in an 8-K that it has removed director Norman Brodeur for cause.
- The filing says Brodeur has been ousted for violating fiduciary duties. Company bylaws say that directors can't be removed without 80% of voting power in agreement.
- "However, the Chairman of the Company's Board of Directors has determined to remove Mr. Brodeur as a Director nonetheless because he considers Mr. Brodeur's actions to be detrimental and deems his removal to be in the best interests of the Company," the filing states.
- UIL Holdings (UIL +2.9%) pops after an SEC filing shows it and Iberdrola (OTCPK:IBDSF, OTCPK:IBDRY) will submit a new application to Connecticut's Public Utilities Regulatory Authority regarding their merger.
- The companies say they will file a new application for a change of control of UIL in a manner they believe addresses the points and guidance included in the state's rejection of their proposed merger.
- In its decision, the regulator had said a lack of certain corporate safeguards could "weaken" the Connecticut utilities.
- Greek government officials arrived at today's meeting of European finance ministers without a new proposal, according to the FT, shocking the group and angering some in the room.
- One Eurogroup source says Greece instead will present its latest gambit tomorrow directly to the Troika. Another source says the Greek officials presented an outline of a plan to the Eurogroup, but written materials were still being worked on. A Greek official says his government presented the same plan from last week that's already been rejected.
- In any case, the eurocrats don't seem pleased. Europe has taken a new leg down, led by France's (NYSEARCA:EWQ) 1.5% decline. Germany (NYSEARCA:EWG) is off 1.4%, Italy (NYSEARCA:EWI) and Spain (NYSEARCA:EWP) 1.3%. The Stoxx 50 (FEZ -2.4%). Greece ETF (GREK -4.6%), National Bank of Greece (NBG -7.8%).
- The euro (NYSEARCA:FXE) is lower by 1% to $1.0942.
- Previously: Europe can't hold gains (July 7)
- The selloff in Chinese equities refuses to let up: Shanghai fell 1.3% overnight, Shenzhen fell 5.3%, and Hong Kong fell 2.7%. The declines come amid a backdrop of frantic government efforts to halt the plunge, and requests by hundreds of Chinese companies for trading halts.
- The lion's share of U.S.-traded Chinese Web and mobile firms are down at least 5%, and many are down more than twice that. In alphabetical order by ticker, major decliners include Autohome (ATHM -10.6%), Bitauto (BITA -18.7%), Baozun (BZUN -22.7%), ChinaCache (CCIH -14.6%), Cheetah Mobile (CMCM -15.2%), China Mobile Games (CMGE -13.2%), Ctrip (CTRP -10.1%), Changyou (CYOU -12.6%), Dangdang (DANG -13.8%), iDreamSky (DSKY -15.4%), E-House (EJ -15.9%), Jumei (JMEI -20.2%), Leju (LEJU -12.1%), eLong (LONG -12.6%), Momo (MOMO -9.4%), NQ Mobile (NQ -16.7%), NetEase (NTES -12.2%), Qihoo (QIHU -10.3%), Qunar (QUNR -14.2%), Renren (RENN -17.8%), SouFun (SFUN -16.3%), Sohu (SOHU -10.9%), Taomee (TAOM -15.1%), Vipshop (VIPS -9.7%), Weibo (WB -10.9%), 500.com (WBAI -26.2%), Wowo (WOWO -26.7%), 58.com (WUBA -17.3%), Xunlei (XNET -14%), Youku (YOKU -12.2%), and YY (YY -9.4%).
- The plunge seen over the last two months (aided by panic selling and margin calls?) has led multiples for U.S.-traded Chinese tech names to compress dramatically, with forward P/E and P/S ratios often below those of U.S. peers sporting similar growth profiles. The Guggenheim China Tech ETF (CQQQ -9.3%) is down 29% from a May peak of $45.64.
- ETFs: KWEB, QQQC, EMQQ
- Yesterday: Chinese tech stocks tumble again in spite of fresh government support
- Earlier today: Chinese phone firms decline as country's markets sink
- Update: The group pared its losses a bit in afternoon trading. CQQQ closed down 5.8%.
- Down 1.8% on the session, gold is within a couple of dollars of its lowest price the year as the bulls get no leverage from a teetering Greece and the bursting of China's stock bubble.
- The yellow metal isn't the only commodity getting whacked: Oil has tumbled to $51 per barrel, its lowest price in three months.
- Perhaps the best indicator of trouble in China, copper's descent has quickened over the past couple of sessions and it's hit a 2015-low of $2.41 per pound.
- ETFs: GLD, USO, OIL, IAU, UCO, PHYS, UWTI, SCO, SGOL, BNO, DBO, UGL, DWTI, DGP, GTU, GLL, DTO, UGA, UGLD, DZZ, USL, GLDI, OUNZ, DGL, DNO, DGZ, DGLD, AGOL, DBP, UHN, OLO, SZO, TBAR, GEUR, JJP, UBG, GYEN, TWTI, OLEM, RGRP, BLNG, QGLDX
- Frontier Communications (FTR -1.4%) has hired Kathleen Weslock to serve as its chief people officer and executive VP, effective next Monday.
- She'll play a key role in integrating 11,000 employees coming on board early next year, as Frontier assumes control of Verizon wireline assets in California, Florida and Texas.
- Frontier currently has about 17,800 employees.
- Most recently, Weslock was senior VP and chief human resources officer at Cisco Systems. She began her career at GTE (now Verizon).
- Previously: Frontier sets transition plans for Verizon wireline takeover (Jul. 06 2015)
- Freeport McMoRan (FCX -7.3%) is the S&P 500's worst performer in early trading as copper prices retreat to five-month lows.
- Other global miners of copper, iron ore and other metals also are posting sharp losses: VALE -6.1%, BHP -3.8%, RIO -3.9%, SCCO -4.4%, TCK -6.4%.
- China’s stock market swoon is magnifying investor fears about weaker demand from one of the world’s largest consumers of raw materials.
- Overnight, the S&P, Goldman Sachs and the Bloomberg commodity indexes fell the most since November, and analysts say the worst is yet to come.
- "China's demand stumble comes at an awkward time, just when more and more supply of raw materials is coming on stream in many sectors. No quick fix in sight," says HSBC co-head of Asian economic research Frederic Neumann.
- ETFs: JJC, CPER, CUPM
- BofA/Merrill's Heather Balsky: "We are downgrading Dillard's (NYSE:DDS) to Underperform (from Neutral) as we believe sales and margin expansion opportunities are played out due to sector pressures, and we expect the company to miss consensus EPS estimates."
- Balsky's 2015 EPS estimate has been cut by $0.59 to $7.54 (8% below consensus), and she now forecasts flat 2015-2017 comps. The sales forecast is said to reflect "ongoing pressures, including the mid-cycle environment with consumers shifting from big ticket purchases and out of apparel, the lack of a strong apparel fashion cycle, Dillard's not offering free shipping online, and weakness in the home category."
- Higher inventories, weaker comps, wage growth, fewer cost cut options, and weakening credit income are expected to lead op. margin to fall 70bps in 2015 to 7.7%. Shares are now less than $4 above a 52-week low of $100.00.
- A. Schulman (SHLM -12.1%) plunges in early trading after reporting FQ3 earnings and revenues below expectations, including a 13% Y/Y revenue decline to $561M.
- SHLM does most of its business outside the U.S. and has been hit hard by falling demand in Europe and a weaker euro; FQ3 revenue from Europe, the Middle East and Africa fell 21% Y/Y, which would have been only 1.9% without currency fluctuations.
- Sales rose 4.1% in the U.S. and Canada and by 4.3% in the Asia Pacific region, bolstered by recent acquisitions.
- SHLM issues downside guidance for FY 2015, seeing EPS of $2.37-$2.42 vs. $2.46 analyst consensus estimate, lowered from $2.50-$2.55, citing its recent HGGC Citadel Plastics Holdings acquisition and the effect of a capital restructuring.
- A continuing rout in China is pressing the country's mobile providers.
- In U.S. trade, China Telecom (NYSE:CHA) is off 5.6%; China Unicom (NYSE:CHU) down 4.9% and China Mobile (NYSE:CHL) down 2.9%.
- Hong Kong's PCCW (OTCPK:PCCWY) is off 6.2% in over-the-counter trading as well.
- The Shanghai Composite is back to a selloff despite a rash of support measures from Beijing. Several hundred companies have taken the risky move of filing for a trading halt in Shanghai and Shenzhen in an attempt to escape the downdraft.
- Australia's New South Wales state proposes changing its mining approval process to give greater consideration to environmental concerns, potentially threatening Rio Tinto's (RIO -3.2%) planned expansion of its Mount Thorley Warkworth coal mine.
- The New South Wales planning minister says he wants to alter the state's mining approval policy to reflect "careful deliberation of environmental, economic and social issues," shifting away from prioritizing the extraction of resources.
- Rio says it already has made extensive changes to its plans to accommodate community concerns regarding the mine, which is awaiting final clearance after an approval process that has taken several years.
- Among the changes expected to save about $500K annually: The disbanding of the Strategic Planning and Finance Committee, not renewing the NYC office space lease with Hyde Park Real Estate, cutting the number of directors to five from six, paying director compensation half in stock and half in cash (rather than all cash). Bill Fox has been elected to chair both the Nominating and Governance Committee and the Compensation Committee.
- After checking the market for interest, Essex (NASDAQ:ESSX) has decided not to pursue a sale of Essex Crane Rental or the company as a whole.
- Source: Press Release
- The stock's lower by 4% in thin, early trading.
- Previously: Essex Rental tumbles after receiving notice of default (June 24)
- Previously: Essex Rental: Dissidents win board spots (June 9)
- Grupo Televisa (NYSE:TV) is down 6.5% out of the open as JPMorgan Chase downgrades the stock to Neutral.
- The firm had upgraded Televisa from Neutral to Overweight on May 7, with a $42 target. Shares are trading currently at $35.84.
- Recently, Citigroup had upgrades shares to Buy as well. A consensus price target of $40.50 implies more than 10% upside at the moment.
- Previously: As Univision pursues IPO, Televisa firms its partnership (Jul. 02 2015)
- Following checks, Chardan Capital thinks Himax (NASDAQ:HIMX) is supplying LCoS microdisplays for Microsoft's HoloLens augmented reality headset, with 2x as much content as it has for Google Glass. It also states checks indicate Microsoft (NASDAQ:MSFT) will announce HoloLens' availability later this month; no formal launch date has been given yet.
- The firm has upgraded Himax to Buy from Sell - it downgraded to Sell on May 29, when Himax was at $6.30 - and hiked its target all the way to $13 from $4.
- Himax has risen to $8.15 premarket. Shares jumped in January when Microsoft originally unveiled HoloLens. The headset's display tech hasn't yet been officially announced.
- Update: More details here. Chardan's Jay Srivatsa: "If the timeline of MSFT's [HoloLens] introduction is consistent with our checks, we could expect HIMX to begin modest ramp in Q3:15 and more so in Q4:15 with full production in FY:2016." He sees a $20M-$30M 2H15 revenue opportunity, and an $80M-$120M 2016 opportunity.
- Ballard Power (NASDAQ:BLDP) has closed its previously announced underwritten offering of 9,343,750 common shares for gross proceeds of approximately $15M.
- The company expects to use the net proceeds from the offering (which are expected to be $13.6M) for working capital and other general corporate purposes.
- BLDP +3.1% premarket
- Previously: Ballard announces proposed U.S. offering (Jul. 01 2015)
- Discovery Communications (NASDAQ:DISCA) is up 1.1% premarket as Nomura boosts its price target to $34, from $31.
- Shares closed yesterday at $33.09.
- The stock has been the subject of neutral coverage of late. More than a dozen firms have ratings equivalent to Hold, with price targets implying about a 25% upside (just over $41).
- Discovery shares are down 4% YTD.
- Previously: Comcast, Discovery negotiating carriage as 'Shark Week' looms (Jul. 01 2015)
- Electronic Arts (NASDAQ:EA) is up 1.8% premarket as UBS upgrades shares to Buy.
- The analysts set a price target of $80, raised from $65. Shares closed yesterday at $68.01.
- UBS has raised fiscal year estimates for the game maker, putting its non-GAAP revenues at $4.63B (up from $4.48B) and EPS to $3.01 (from $2.84). Consensus estimates for revenues are at $4.49B and for EPS of $2.86.
- UBS also expects adjusted fiscal 2016 EBITDA of $1.5B, up from $1.43B and vs. a consensus of $1.38B.
- The firm says there's "continued runway for outperformance" considering factors including a continuing shift to digital sales and a title slate that will get a boost from Star Wars: Battlefront.
- Thinly traded nano cap Oramed Pharmaceuticals (NASDAQ:ORMP) is up 9% premarket on increased volume in response to its announcement that it has signed a non-binding Letter of Intent for an investment and license agreement in China with Sinopharm Capital Management and Hefei Life Science & Technology Park Investments and Development Co. valued at $50M plus royalties. Oramed will receive $500K in exchange for exclusively negotiating with Sinopharm/Hefei for 60 days to finalize the deal.
- The transaction will allow Sinopharm/Hefei to acquire a 10% stake in Oramed via the purchase of 1,155,367 shares of common stock for ~$12M and obtain the rights to Oramed's oral insulin in China for $38M, $18M of which will be paid when the license agreement is signed and $20M after the current Phase 2b trial ends in the U.S. Oramed will also receive royalties of 10% on commercial sales.
- Cardtronics (NASDAQ:CATM) -12.7% premarket on news that 7-Eleven will not renew its ATM placement agreement with the company upon the mid-2017 expiration of the current deal.
- 7-Eleven is the largest merchant customer in CATM's portfolio, representing 17.5% of revenues for 2014; no other merchant customer generated in excess of 5% of pro forma revenues.
- Separately, CATM acquires ATM and payment card transaction processor Columbus Data Services for ~$80M.
- Tesla (NASDAQ:TSLA) -1.6% premarket after Deutsche Bank downgrades shares to Hold from Buy, citing valuation and an "insufficient" risk/reward at current levels.
- The firm thinks the electric vehicle market should increase dramatically from current levels, and TSLA could become the dominant player in the space, but the company's opportunity looks priced into the stock at current levels.
- Despite the downgrade, the firm raises its 2020 EPS to $22.20 from $20 and raises its stock price target to $280 from $245.
- "Expensive Any Way You Shake It," goes the title of Morgan Stanley's downgrade of Shake Shack (NYSE:SHAK) to Underweight. The $38 price target stays the same.
- "While a powerful emerging brand executing on all its early commitments to its investors, stock is overpriced in our view, potentially reflecting both technical market dynamics as well as "brand"-related optimism that is not supported by fundamentals."
- Shares -5.6% premarket to $55.64, and now down nearly 40% from late May.
- Plug Power (NASDAQ:PLUG) +11.6% premarket after announcing Q2 was a record revenue quarter, citing strong fuel cell and hydrogen infrastructure shipments and installations.
- PLUG forecasts Q2 revenues of $100M vs. $99.9M analyst consensus estimate, and projects full-year 2015 bookings of more than $200M, with ~75% coming from repeat customers.
- The company will release its full Q2 earnings report in early August.
- An attempt at a bounce has failed in Europe, and the major market averages are now down about 1%.
- The Greek government is submitting new proposals to the eurozone as its banks run out of time to stay solvent after the ECB yesterday kept in place a cap on ELA funding and boosted the haircut on collateral.
- Rates are headed south, not just in the U.S. and Germany, but in the periphery as well. The U.S. 10-year yield is lower by six basis points to 2.23% and the German 10-year Bund yield is down nine bps at 0.68%. Italy down 11 bps to 2.28%, Spain down three bps to 2.30%.
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8:04 AM| Comment!
- "While valuation has gotten stretched following strength since the IPO, we believe estimates could prove conservative and expect operating momentum to push the shares higher," says Baird analyst William Power, starting Fitbit (NYSE:FIT) with an Outperform and $52 price target - about 24% above yesterday's close.
- "Our proprietary fitness band survey and other retail channel checks suggest strong ongoing sales momentum."
- Shares +6.3% premarket to $42.25.
- Silver Wheaton (NYSE:SLW) -1.9% premarket after saying it received a proposal letter from the Canada Revenue Agency to reassess the company under various income tax rules.
- The CRA is seeking to tax streaming income earned by the company's foreign units, and says SLW's taxable income should be increased by ~C$715M for the 2005-10 period.
- SLW estimates it would be subject to federal and provincial tax of ~C$150M for the relevant taxation years if it would be assessed taxes on income from foreign subsidiaries on the same basis as its Canadian income.
- SLW says it is not required to make any payment to the CRA at this time and that it intends to vigorously defend its tax filing positions.
- Horizon Pharma (NASDAQ:HZNP) proposes to acquire all the outstanding shares of Depomed (NASDAQ:DEPO) for $29.25 per share or ~$3B. According to Horizon, the deal would generate significant revenue and operating synergies and would be immediately accretive to earnings. Projected full-year pro forma revenues and non-GAAP EBITDA would be ~$950M and ~$350M, respectively.
- Horizon will host a conference call this morning at 8:30 am ET to discuss its proposal.
7:08 AM| 1 Comment
- Aetna (NYSE:AET) shares tumbled over 6% yesterday, after Humana (NYSE:HUM) (which recently agreed to be acquired by the former for $37B) prompted investor concerns by lowering its forecasts for the year.
- Stating inpatient hospital admissions were not performing in line with what it had expected, the company slashed its anticipated 2015 operating profits by more than 8%.
- "If you take the downgrade of their earnings and roll that through, that makes what Aetna paid pretty expensive," said Tareo Capital's Joel Emery.
- Previously: Humana and Aetna to host conference call this am to discuss merger; Humana lowers 2015 EPS guidance (Jul. 06 2015)
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