Today - Friday, May 22, 2015
- Orange SA ADRs (NYSE:ORAN) have opened to the downside in the U.S., down 3%, as France's economy minister says the time's not right to consolidate France's telecoms, and its CEO Stephane Richard was placed under formal investigation for complicity in misuse of public funds.
- Emmanuel Macron, France's economy minister, told Les Echos: "In France the sector has reached a point of equilibrium. Time is not right for a consolidation between operators but for investment. Consolidation means less equipment, less networks and less jobs."
- Consolidation talk was spurred by the entry of low-cost player Iliad to the French market, with focus on Bouygues Telecom (OTCPK:BOUYY), though Martin Bouygues has said he doesn't intend to sell despite losses since Iliad's arrival.
- Meantime, Richard denied wrongdoing as a long-running probe over his role as head of cabinet to former finmin Christine Lagarde went formal. The investigation relates to the award of €403M to Bernard Tapie in settling a dispute with Credit Lyonnais in 2008.
- "Stephane Richard firmly denies all the allegations ... Also, this affair does not concern Orange, therefore it has no consequences on the operations of our group," an Orange spokeswoman told Reuters.
- With a healthy FQ1 beat on the books, Mentor Graphics (MENT +0.5%) is guiding for FY16 (ends Jan. '16) revenue of $1.282B and EPS of $1.88, slightly better than a consensus of $1.28B and $1.86. However, FQ2 guidance is soft: Revenue of $250M and EPS of $0.14 vs. a consensus of $269.6M and $0.24.
- The EDA software vendor notes bookings rose over 50% Y/Y in FQ1 in 3 of its 4 product categories, and its "automotive business was very strong, driven by a major win with a leading automotive OEM."
- Boosting EPS: Operating expenses only rose 2% Y/Y to $182M, thanks in part to the company's retirement program. In addition, gross margin rose 490 bps Y/Y to 82.9%.
- After opening up over 2%, shares have quickly pared their gains.
- FQ1 results, PR
9:28 AM| Comment!
- Otonomy (NASDAQ:OTIC) -19.5% premarket after reporting that its OTO-104 experimental drug did not meet the main goal of reducing the incidence of vertigo in a mid-stage trial in patients suffering from Ménière's disease.
- OTIC says the results narrowly missed the primary endpoint during the third month following treatment compared to a one month baseline period.
- OTIC says the data provides a strong enough basis to move forward with two parallel late-stage trials, with the first expected to start by the end of the year.
- Ctrip (NASDAQ:CTRP) has jumped to $76.00 (its 52-week high) in premarket trading following news it's part of an investor group that has bought a 62.4% stake in smaller/struggling rival eLong from Expedia, and that it's partnering with Expedia in "specified geographic markets." In a PR about the move, Ctrip states it spent $400M to buy a 37.6% stake.
- Archrival Qunar (NASDAQ:QUNR), whose shares were up 86% YTD going into today with the help of good earnings news, has fallen to $50.50.
- Ctrip's alliance with Expedia might not sit well with Priceline (NASDAQ:PCLN), which last year struck a deal to buy up to a 10% stake in Ctrip.
- Core CPI gained 0.3% in April - the fastest pace since January 2013 - and coming against expectations for a 0.1% rise. Core CPI was up 1.8% Y/Y in April, the same as March.
- Headline CPI rose 0.1% in April, and fell 0.2% Y/Y.
- Lower by two basis points ahead of the number, the 10-year Treasury yield is now higher by two bps to 2.21%. TLT -0.35%, TBT +0.7%
- ETFs: TBT, TLT, TMV, IEF, TBF, EDV, TMF, PST, TTT, ZROZ, TLH, SBND, VGLT, IEI, TYO, UBT, DLBS, DTYS, UST, TLO, VGIT, TBX, SCHR, TENZ, GSY, TYD, LBND, ITE, DTYL, DLBL, TYBS, DFVL, FIVZ, VUSTX, TBZ, DFVS, TYNS, SYTL
- Core CPI rose 0.3% in April, the fastest pace since January 2013. Forecasts had been for just a 0.1% gain. Over the last 12 months, core CPI was up 1.8% in April, the same as March.
- The overall CPI was higher by 0.1% in April and lower by 0.2% year-over-year.
- The dollar bull ETF (NYSEARCA:UUP) is up 0.4% after the news. Against individual currencies, the greenback jumped about 100 pips vs. the euro (NYSEARCA:FXE), with similarly-sized moves vs. the aussie (NYSEARCA:FXA), loonie (NYSEARCA:FXC), swissie (NYSEARCA:FXF), yen (NYSEARCA:FXY), and cable (NYSEARCA:FXB).
- ETFs: UUP, UDN, UUPT, UDNT, FORX, USDU
- Ann (NYSE:ANN) reports comparable-store sales fell 1.5% in Q1.
- The company says sales were weak in February before improving in March and April.
- Comp growth by brand: Ann Taylor -2.6%, Ann Taylor Factory -14.5%, LOFT -0.7%, LOFT Outlet -0.2%.
- Gross margin rate -110 bps to 52.3%.
- SG&A expense rate -140 bps to 47.5%.
- Total inventory per square foot +3% Y/Y.
- Store count +2 Y/Y to 1,034.
- Ann was acquired by Ascena Retail (NASDAQ:ASNA) last week.
- Previously: ANN beats by $0.04, misses on revenue
- Net income of $690.5M, or $2.03 per share vs. $980.7M, or $2.65 per share, for the same period of 2014.
- Net sales decreased 20% Y/Y to $7.4B from $9.2B in the same quarter a year ago. Segment Sales: Agriculture & Turf. -25%; Construction & Forestry +2%.
- For fiscal 2015, the company now anticipates equipment sales to decrease 19%, and to be down 17% for the third quarter compared with year-ago periods. Net income, however, is expected to be about $1.9B, up from a February projection of $1.8B.
- "John Deere (NYSE:DE) expects to be solidly profitable in 2015, with the year ranking among our stronger ones in sales and earnings despite the pullback in the farm sector," said CEO Samuel Allen.
- FQ2 results
- DE +1.7% premarket
- Foot Locker (NYSE:FL) says Q1 sales rose 7.9% if foreign currency swings are backed out.
- Comparable-store sales increased 7.8% during the period.
- Gross margin rate +40 bps to 35.0%.
- SG&A expense ratio -100 bps to 18.0%.
- Merchandise inventories -2.7% to $1.234B.
- Store count -4 Q/Q to 3,419.
- Previously: Foot Locker beats by $0.06, beats on revenue
- FL +0.78% premarket to $64.50.
- Gross profit rate declined 50 bps to 37%.
- Store operating, selling, and administrative expenses rate grew 50 bps to 19.2%.
- Operating margin rate -121 bps to 16.23%.
- Inventory +13.1% Y/Y to $233.36M.
- Store count +62 Y/Y to 1,001.
- FY2016 Guidance:Comparable-store sales: low single-digit range; Product gross margin rate: flat to slightly negative; Diluted EPS: $2.95 to $3.04.
- HIBB -1.70% premarket.
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