Today - Friday, July 31, 2015
- Expedia (NASDAQ:EXPE) has surged to fresh highs after beating Q2 EPS estimates (and posting in-line revenue) on the back of a 20% Y/Y increase in gross bookings to $15.1B. Bookings growth was slightly better than Q1's 19%, and better than feared given forex headwinds - a strong dollar respectively had 8% and 10% impacts on bookings and revenue growth.
- On the earnings call (transcript), CFO Mark Okerstrom reiterated full-year guidance for 10%-15% adjusted EBITDA growth (exc. the recently-divested eLong). "Though Q2 came in a bit better than expected, we plan to put that upside back into the business mostly in Q3 to drive continued growth."
- CEO Dara Khosrowshahi noted the core Expedia and Hotels.com platforms continued seeing strong growth, as did Travelocity. He also suggested Expedia could follow up its acquisitions of Travelocity and (pending DOJ approval) Orbitz by acquiring assets in overseas markets, where Priceline (NASDAQ:PCLN) and its Booking.com platform loom large. "[F]or the time being, we've got plenty on our plates ... We want our revenue outside the U.S. to be bigger than our revenue in the U.S."
- U.S. bookings rose 18% Y/Y in Q2 to $9.3B, and international bookings (pressured by forex) 25% to $5.8B. Hotel room nights rose 35% (28% organic) to 50.6M, while revenue/night fell 16%. Air tickets sold rose 26% (20% organic), and revenue/ticket fell 10%. Sales/marketing spend rose 19% Y/Y to $885.5M, but tech/content and cost of revenue growth was more moderate.
- Priceline is following Expedia higher ahead of its Aug. 5 Q2 report.
- Expedia's Q2 results, PR
- China Unicom (NYSE:CHU) is up 1.4% on standard volume after HSBC upgraded shares to Hold, from Reduce.
- Analysts' mean recommendation is inching toward a Buy. Consensus price targets are at $19.40, implying more than 37% upside from here.
- China Unicom has had a choppy year and is down 25.8% over the past three months, but is still up 4.9% YTD.
- Also moving today in U.S. trading: peers China Telecom (CHA +1%) and China Mobile (CHL +2.3%).
- Believing telecom capex is improving, Sterne Agee has upgraded NetScout (NTCT +2.4%) to Buy a day after the company posted mixed results for the last quarter (FQ1) prior to its $2.3B acquisition of Danaher's telecom hardware and software product lines (closed in mid-July). Shares are now up 8.2% from Wednesday's close.
- NetScout used its FQ1 report to guide for FY16 (ends March '16) revenue of $1.05B-$1.1B and EPS of $1.80-$1.95. Consensus, which doesn't account for the Danaher deal, is at $503.1M and $2.18. The company noted demand for its nGenius One network service assurance/traffic analysis platform was strong.
- Lions Gate Entertainment (NYSE:LGF) is up 1.2% after Macquarie's launched coverage at Outperform.
- The firm set a price target of $45; shares closed yesterday at $39.02 and are currently trading at $39.50.
- "Everything changes except great content," Amy Yong wrote in today's report. "As content mercenaries, management has an insatiable appetite for seeking out avenues of growth with a low risk, high return discipline."
- In upcoming film-slate milestones, Yong notes high expectations for The Hunger Games: Mockingjay Part 2, Allegiant (the third film in the Divergent series) and Now You See Me 2.
- Yong sees compound annual growth over the next three years of 8% for revenues, 11% for EBITDA and 20% for free cash flow.
- Up in AH trading yesterday after beating Q2 estimates, offering light Q3 guidance, reiterating full-year sales guidance, and cutting its full-year opex and gross margin guidance, CRAY is heading in the opposite direction today.
- The supercomputer maker made a fresh 52-week low of $23.70 before bouncing a little. Shares now trade for 17x a 2016 EPS consensus of $1.49.
- On the earnings call (transcript), CEO Peter Ungaro noted storage accounted for over 15% of 1H15 revenue, and is set to "grow substantially" Y/Y in 2015. Cray recently hired engineers from Boston-based storage startup Terascala.
- RingCentral (NYSE:RNG) has jumped, +11.3%, as Raymond James upgrades the stock to Strong Buy, from Outperform, following the company's earnings beat yesterday.
- RingCentral grew revenues 34% to $70.7M in moving to an adjusted loss per share of $0.05, $0.03 better than expected. EBITDA of -$200K beat an expected -$1.4M.
- The enterprise market is showing strength, the company said, and subscription gross margins that improved to 75.1% (from year-ago 69.8%) are pointing the way to profitability.
- Shares have moved up 10.2% in the past month and are up 33.8% YTD.
- CenturyLink (NYSE:CTL) is up 2.7% as Jefferies upgrades the stock to Hold, from Underperform.
- The firm lowered its price target, however, to $26 from $30. Shares closed yesterday at $28.16 and have now moved up to $28.92.
- Jefferies is still negative on fundamentals. But the stock is already down 26.8% YTD and "further near-term downside is likely limited," writes Mike McCormack.
- They expect guidance will be lowered on earnings -- the firm now sees fiscal 2015 EPS of $2.56, down from $2.62, and fiscal 2016 EPS of $2.43, down from $2.60 -- but that's probably priced in.
- "Our long-term concerns remain, but with a 7.7% dividend yield and the stock trading at 5.4x 2016E EBITDA, we see limited additional downside," McCormack says.
- YRC Worldwide (YRCW +29.3%) skyrockets after reporting Q2 operating income leaped 185% to $56.9M.
- Though volume fell during the quarter, revenue per shipment was higher.
- The company's debt-to-adjusted EBITDA ratio improved to 3.3 from 3.9 last quarter and 5.4 a year ago.
- Previously: YRC Worldwide beats by $0.55, misses on revenue (Jul. 30 2015)
- Sequential Brands Group (SQBG +12.9%) trades sharply higher after a strong Q2 report.
- Results were boosted by the integration of the Jessica Simpson brand.
- The company is expected to lift guidance after factoring in the addition of the Martha Stewart business.
- Previously: Sequential Brands beats by $0.03, beats on revenue (Jul. 30 2015)
- Liberty Global (LBTYA +0.7%) has boosted its stake in Britain's biggest free-to-air broadcaster, buying 138.7M shares of ITV (OTCPK:ITVPY +3.7%) to increase its ownership to 9.9%.
- Liberty assures regulators it doesn't have plans to take over ITV. Last year, though, when it bought 6.4% of the company, it said it didn't intend to increase that stake.
- “Given ITV's operating and stock price performance, we were able to increase our stake to 9.9% with no incremental investment by hedging our existing equity position,” says Liberty Global CEO Mike Fries.
- ITV shares closed up 3.2% in London trading.
- Previously: Financial Times: Liberty Global discussing purchase of Ireland's TV3 (Jun. 23 2015)
- "Vringo (NASDAQ:VRNG) respectfully requests that this Court order that all responsive documents be produced from all ZTE custodians' electronic and hardcopy files, and from all of ZTE's internal networks, by a date certain." Thus reads the first sentence in the conclusion of a Vringo motion to compel complete document production by ZTE.
- Vringo accuses ZTE of having "a team of more than 115 employees working on the Vringo litigation and asserting 'countermeasures' against Vringo," and of providing these employees with Vringo's NDA material. "Last week ZTE represented that its document production was substantially complete. ZTE now has admitted that it never collected (or even looked for) documents from the vast majority of ZTE employees that received Vringo's NDA material ... based on ZTE's email retention and newly disclosed destruction procedures, it is highly likely that evidence was destroyed."
- Prior Vringo/ZTE coverage
- Ocwen Financial (NYSE:OCN) has plunged, -24.3%, after yesterday's earnings miss that's prompted a downgrade by Bank of America.
- The analysts cut the stock's rating to Underperform, from Neutral.
- Net income slipped 85% after operating income was nearly halved, to $111M. The company's also pursuing a cost-cutting plan to shave $150M in expenses.
- Also in the wake of earnings, Sterne Agee has downgraded Ocwen shares to Neutral, from Buy, with a $12 price target.
- Shares closed at $11.77 yesterday. They're trading currently at $8.94.
- Previously: Ocwen Financial higher following Q2 results, plan to cut expenses (Jul. 30 2015)
- Stratasys (NASDAQ:SSYS) is adding to the big Thursday losses seen after the company provided weak Q3 guidance (while withdrawing full-year guidance) to go with in-line Q2 results. BofA/Merrill and UBS have downgraded to bearish ratings, while Piper has gone contrarian and upgraded to Overweight.
- Piper's Troy Jensen, who has issued several downbeat notes on Stratasys and 3D Systems in recent months, argues bad news is priced in, that the 3D printing industry will return to normalized growth in 2016, and that Stratasys will outgrow the market. UBS, on the other hand, compares 3D printing to an LED industry that has been plagued by excess supply and overinvestment for a long time.
- Yesterday, Needham's James Ricchiuti cut his target by $8 to $38, while reiterating a Buy. "The industry has begun to acknowledge, as SSYS did today, that demand in 2013 and 2014 was inflated unrealistically, resulting in the current painful period of retrenchment as customers digest investments in equipment and capacity. Our view is that the additive manufacturing industry will return to a historical 20%-plus growth rate, we believe as early as next year ... We believe interest in the name will return as SSYS begins to deliver on the growth and profitability that we believe the business is capable of generating, although clearly this will require patience on the part of investors.
- Q2 results, details/Q3 guidance, CC transcript
- Envision Healthcare (EVHC +10.2%) enters a definitive agreement to acquire rival Rural/Metro for $620 million.
- Rural/Metro is expected to generate annualized 2015 revenue of approximately $600 million. Upon closing, the transaction is expected to be accretive to Envision's earnings.
- The pending acquisition is hinged on regulatory approval and closing conditions, and is expected to close 4Q 2015.
- Six after Solar3D (NASDAQ:SLTD) announced it had won a $10M contract to install a 2MW solar project for the Fresno/Clovis Wastewater Reclamation Facility (pending a July 30 hearing), the company has stated an additional hearing on the award will be held on Aug. 20.
- CEO Jim Nelson: "We look forward to working with the City of Fresno and providing the city management and city council with whatever information they need to make the best decision for the City in moving this process forward."
- Zynga (NASDAQ:ZNGA) has moved up 3.2% in the wake of a Fortune report that says four different groups of investors have looked at a takeover bid over the past year -- bids that fell apart after founder Mark Pincus came back to a leadership role in April.
- Two plans involved stripping out costs in a "cash extraction" strategy, Fortune says, involving selling real estate holdings that amount to at least $228M, and growing through acquisitions to boost profit.
- “There is no good reason why it’s still public,” says BTIG's Richard Greenfield. “They don’t need the public’s capital to run their business.”
- The company has $1.1B in cash and draws nearly $700M in revenue, but has a market cap of just $2.3B.
- Pincus has addressed some issues that the takeover plans focused on, including data center shutdowns and (particularly) layoffs of a bloated staff (cutting 364 of 2,000 workers). He may be pursuing a route counter to a private sale, however: making big bets on building mega-hit games.
- ParkerVision (NASDAQ:PRKR) states a federal appeals court (the CAFC) has affirmed a 2014 district court ruling declaring the company didn't prove Qualcomm (NASDAQ:QCOM) infringed its patents.
- The court has also "upheld the district court's decision denying Qualcomm's judgement as a matter of law ("JMOL") motion for invalidity with regard to claim 27 of [ParkerVision's] '518 patent but reversed the district court's decision with regard to Qualcomm's JMOL for invalidity on the remaining claims in the case."
- CEO Jeffrey Parker: "We are highly disappointed with the appellate court's decision both with regard to infringement and validity of certain of our patent claims. Despite this setback, we will consider further options on appeal, and will move forward in our second infringement case against Qualcomm, HTC and Samsung."
- ParkerVision nosedived prior to the company's official announcement, and was subsequently halted. Shares plunged in May after the CAFC heard oral arguments for ParkerVision's appeal.
- Update (11:54AM ET): ParkerVision is down 38% after coming off a halt.
- Molina Healthcare (MOH +10.7%) is trading up sharply on heavy volume after Q2 2015 earnings release on July 30. Stifel upgrades coverage from Hold to Buy, with a price target of $88.00.
- Molina beat EPS estimates by $.09, but missed on revenues by $100 million.
- Previously: Molina Healthcare beats by $.09, misses on revenue (Jul. 30 2015)
10:32 AM| Comment!
- Frontier Communications (NASDAQ:FTR) is up 2.3% as the company says it has a deal with the Communications Workers of America in Texas and Missouri, ahead of its takeover of Verizon wireline assets in Texas.
- Frontier is also assuming wireline operations in California and Florida, and on Monday announced a deal with the CWA in California.
- The CWA represents 2,000 Verizon workers in Texas and Missouri. As in California, Frontier will honor and extend existing agreements for two years, along with wage increases each year.
- It's also adding 60 new union jobs and giving union employees 100 shares of restricted stock on the transaction's closing.
- Previously: Frontier Communications +1.2%, comes to deal with California union (Jul. 27 2015)
- Columbia Sportswear (COLM +16.4%) rallies sharply after smashing earnings estimates with its Q2 report and raising guidance.
- The company was on-trend with its sporty and adventure clothing lines.
- Sales growth by brand: Columbia +12%, Sorel +43%, Mountain Hardwear -3%, prAna +375%.
- Full-year EPS of $2.25-$2.32 is expected by Columbia vs. $2.24 consensus.
- Previously: Columbia Sportswear beats by $0.14, beats on revenue (Jul. 30 2015)
- Though officially missing consensus, QLogic's (NASDAQ:QLGC) FQ1 revenue ($113.4M) was slightly above the guidance ($113M) provided in its July 9 warning. Cost cuts EPS ($0.19) top guidance ($0.16-$0.17).
- However, on its earnings call (transcript), the Fibre Channel/Ethernet connectivity hardware vendor guided for FQ2 revenue of $98M-$106M and EPS of $0.10-$0.16, well below a consensus of $127.1M and $0.23.
- QLogic notes it saw weak demand from several Fibre Channel server and storage OEM customers in FQ1 due to "weaker-than-expected traditional enterprise server and storage system shipments." Cloud storage demand has been weighing on traditional enterprise sales - QLogic plans direct more resources towards cloud opportunities.
- The company also forecasts Ethernet revenue will drop Q/Q in FQ2 thank to a $3M-$4M inventory buildup at a major OEM, and the $3M impact of a transition at an OEM from Ethernet ASICs to adapters. The transition to adapters (higher ASPs) is expected to boost sales in the second half of FY16.
- In response to the top-line pressures, QLogic is planning a restructuring that aims to lower the company's FY16 (ends March '16) operating expenses to $200M. $52.3M was spent on opex in FQ1, below prior guidance of $55M-$56M and down 9% Y/Y.
- BMO, D.A. Davidson, and Summit Research have downgraded. BMO's Keith Bachman: "[W]e have concerns that the growth of x86 servers will remain weak with enterprises and (more importantly) attach rates of [10G Ethernet] will continue to be slow to ramp." He respectively forecasts Fibre Channel and Ethernet revenue will drop 9% and 26% in FY16.
- Telephone & Data Systems (NYSE:TDS) is up 4.2% after strong profits at U.S. Cellular drove its own EPS beat, and revenues grew more than 3% from the prior year.
- A swing to profit at U.S. Cellular (NYSE:USM), of which TDS owns 84%, paced a swing at TDS to $23M profit from a year-ago loss of $22.1M.
- Along with postpaid customer growth at USM, TDS Telecom grew IPTV customers, to 27.9K from Q1's 25.6K and a year-ago 18.2K. Residential voice connections declined Y/Y to 329K from 346.1K, and residential broadband connections declined Y/Y as well, to 231.2K from 232.7K.
- Overall, residential wireline connections were down about 1.5%, to 588,100. Residential revenue per connection was $42.10, up from last year's $41.05. Commercial wireline connections were down about 4%, to 350.6K.
- With U.S. Cellular raising guidance for the second straight quarter, TDS has boosted its own targets. It sees a narrower range of full-year revenues of $5.145B-$5.295B, and EBITDA of $890M-$1.02B, up from $870M-$1B. Guidance for the TDS Telecom business is unchanged (full-year revenues of $1.13B-$1.18B, and EBITDA of $280M-$310M).
- Press Release
- Shares of thinly-traded Pure Bioscience (OTCQB:PURE -8.7%) are falling after the resignation of Peter C. Wulff, CFO and COO. Wulf has accepted a new assignment as CFO for a venture-backed medical device company.
- Mark Elliott, Pure's Controller, will assume Wulff's role in Pure's Finance department as Vice President, Finance and will serve as principal financial and accounting officer.
- Modine Manufacturing (NYSE:MOD) reports sales fell 12% due to negative currency impact (-2% on a constant currency basis).
- Gross margin rate decreased 70 bps to 16.5%.
- Segment sales: America: $159.1M (-10%); Europe: $131.2M (-17%); Asia: $19.3M (-7%); Building HVAC: $41.3M (+1%).
- Adjusted operating margin rate declined 220 bps to 4.1%.
- FY2016 Guidance: Sales: flat to -5% (+1% to +6% on a constant currency basis); Adjusted operating income: $65M to $70M; Adjusted EPS: $0.75 to $0.82.
- The FDA approves Bayer Healthcare's (OTCPK:BAYRY -0.1%) Finacea (azelaic acid) Foam 15% for the topical treatment of the inflammatory papules and pustules of mild-to-moderate rosacea. Papulopustular rosacea is a skin disease that causes inflammatory lesions in the nose, cheeks, chin and forehead.
- Finacea Foam was developed in collaboration with Foamix Pharmaceuticals (FOMX +7.9%). Foamix will earn royalties and milestone payments from Bayer upon the commercialization of Finacea, which utilizes its proprietary foam technology platform. The U.S. launch will commence in September.
- U.S. Cellular (NYSE:USM) has charged higher, up 6.3% after EPS beat expectations and the company boosted its outlook for earnings and cash flow for the full year.
- Revenues missed slightly at $975.7M despite 2% growth. EBITDA of $163.4M beat an expected $156M, and net income swung overall to $19.4M from a year-ago loss of $18.8M.
- Revenue breakout: Service, $824.4M (down 2%); Equipment Sales, $151.3M (up 32%).
- The company added 17K net postpaid subscribers, and net 8K prepaid. Smartphones sold as a percent of total handsets rose to 86.7%.
- "We are focused on continuing to grow our customer base and increasing revenue and operating cash flow in 2015 by offering innovative services and exciting devices that run on our high-quality network," said CEO Kenneth Meyers. "Our 4G LTE network will cover 98 percent of customers by the end of the year."
- For the full year, the company narrowed revenue expectations (to $4B-$4.1B, in line) but raised expected operating cash flow to $440M-$540M, from $400M-$500M, and boosted guidance for EBITDA to $600M-$700M (higher than a consensus $600M) from its previous $580M-$680M.
- Press Release
- Pixelworks (NASDAQ:PXLW) followed up its slight Q2 beat by guiding on its earnings call (transcript) for Q3 revenue of $16M-$18M and EPS of -$0.01 to -$0.10, in-line with a consensus of $17.1M and -$0.04.
- CEO Bruce Walicek stated projector design win activity remained strong for Pixelworks' Topaz video processors, and that mass-production of its Iris mobile video processor is expected to start in Q3. A next-gen Iris chip is sampling.
- Projector-related chip sales rose in Q2, while TV/panel-related chip sales fell. Gross margin fell to 48.3% from Q1's 48.8% and Q2 2014's 51%; Q3 GM guidance is at 48%-50%. Operating expenses fell by $400K Q/Q and rose by $100K Y/Y to $8.8M.
- Q2 results, PR
- BNP Paribas has upgraded Aixtron (NASDAQ:AIXG) to Outperform 3 days after the German LED/chip equipment maker posted a Q2 miss.
- In spite of the miss, Aixtron reiterated full-year revenue guidance of €220M-€250M. The company also reported its order backlog (pressured in recent quarter by soft LED capex) rose 15% Q/Q and 37% Y/Y to €91.2M, and that it's seeing "strong interest" in the OLED manufacturing equipment obtained through the PlasmaSi acquisition.
- MoneyGram (MGI +14%) pops in early trading after a strong Q2 report and announcing a new CEO will take the helm.
- The company reported a 13% rise in U.S. outbound transactions in Q2 and 16% increase is non-U.S. send transactions.
- U.S.-to-U.S. transactions were off 22% vs. -37% in Q1. The impact of Walmart launching its own money service is a significant factor for the domestic business.
- Previously: MoneyGram beats by $0.08, beats on revenue
- Previously: MoneyGram names new CEO
- Cowen has downgraded Zillow (NASDAQ:Z) to Underperform ahead of Tuesday afternoon's Q2 report. Like others, the firm is worried about slowing subscriber and traffic growth. It also cites concerns about valuation and meeting 2016 expectations.
- Shares have fallen to $81.00 premarket, and are now down 24% YTD. Barclays downgraded to Underweight on July 20, while Morgan Stanley launched at Overweight on July 14.
- American Axle & Manufacturing (NYSE:AXL) announces it was selected as a target supplier for axles and driveshafts for next-gen GM trucks,
- The financial impact of the new contract wasn't disclosed.
- Earlier today, the company reported it grew non-GM sales by 15% in Q2.
- Previously: American Axle & Manufacturing beats by $0.04, misses on revenue
- AXL +1.93% premarket.
- Citi's Jeremy David, who had maintained a Neutral rating on GoPro (NASDAQ:GPRO) since July 2014, has upgraded to Buy and set a $90 target.
- Like others, David is upbeat about the potential of drones to expand GoPro's addressable market and boost ASPs. He also praises the company's execution, and calls Q4 estimates achievable.
- Shares have risen to $64.00 premarket. GoPro is 10 days removed from posting a Q2 beat and providing strong Q3 guidance.
- Prior Citi GoPro coverage
- Chevron (NYSE:CVX) is off 1.8% premarket after profits slid in a "weak" Q2 pressed by oil and gas writedowns amid the continuing crude supply glut.
- Earnings of $571M were down from a year-ago $5.7B. Sales and other operating revenues were $36.8B, down from a year-ago $55.6B.
- The upstream business swung to a net loss of $2.22B from a year-ago $5.26B. "Our Upstream businesses were particularly hard hit, as lower prices reduced revenues and triggered impairments and other charges," said CEO John Watson. Net oil-equivalent production was 2.6M barrels/day, up from last year's 2.55M, in part due to project ramp-ups in the U.S., Bangladesh and Argentina.
- Meanwhile, downstream earnings were $2.96B, up from 2014's $721M, boosted by improved margins.
- A heavier oil mix than competitors means that crude declines of the past two months are hitting cash flow hard. Cash flow from operations was $9.5B, down from a year-ago $16.3B.
- Earlier this week, the company said it was targeting $1B in cost reductions by cutting 1,500 jobs.
- Webcast to come at 11 a.m. ET.
- Press Release
- An interim analysis of data from a Phase 3 ring vaccination trial in Guinea shows Merck's (NYSE:MRK) Ebola vaccine candidate, rVSV-ZEBOV, was 100% effective in protecting people from Ebola virus infection within six to 10 days of vaccination (p=0.0036). The preliminary conclusions will be published online today in The Lancet.
- Over 4,000 people have received the vaccine to date. Merck licensed rVSV-ZEBOV from NewLink Genetics (NASDAQ:NLNK) who licensed it from the Public Health Agency of Canada.
- The make the vaccine, a virus similar to the rabies virus called vesicular stomatitis virus is weakened by removing one of its genes which is then replaced with a single Ebola virus gene that, by itself, cannot cause disease.
- Two other trials assessing rVSV-ZEBOV are ongoing: a Phase 3 study, called STRIVE, in Sierra Leone and a Phase 2, called PREVAIL, in Liberia.
- MRK is up a fraction premarket. NLNK is up 9% on light volume.
- Exxon Mobil (NYSE:XOM) is 1.8% lower premarket as it posts its lowest profit in six years, with price pressures holding down Q2 EPS that missed by 10%.
- Net income was halved, to $4.19B from a year-ago $8.78B. Once again, downstream earnings were up significantly, dampened by weak upstream results.
- Production of 4M boe/day was up 3.6%; liquids volumes of 2.3M barrels/day was up 11.9%.
- Downstream earnings of $1.5B were up $795M Y/Y. Stronger margins had a $1.1B positive effect. Upstream earnings of $2B were down $5.9B, hit by lower liquid/gas realizations to the tune of $4.5B.
- With the start of the second oil bear market, the company's still been aggressive on cost cutting: Capex was down 16% to $8.3B. Total costs were down 31%, to $67.2B.
- Cash flow from operations and asset sales of $9.4B.
- Webcast to come at 9:30 a.m. ET.
- Press Release
- Royal Caribbean (NYSE:RCL) reports net yields were down 0.2% in Q2. Net yield was +4.2% on a constant currency basis.
- Passenger ticket revenue +3.6% to $1.507B.
- Onboard revenue +4.9% to $550.84M.
- Hedging levels: Royal Caribbean is 53% hedged for 2015, 65% for 2016, 60% for 2017, 40% for 2018, and 10% for 2019.
- Guidance: Net yields of -0.7% to -0.2% expected for Q3. Net yields of -1.1% to -0.1% seen for full year 2015.
- RCL +3.3% premarket
- According to Reuters, the value of merger and acquisition deals through July 30 was $436.4B, including 14 deals worth over $5B apiece. Although down from June's torrid pace of $546.8B, it still ranks as the seventh busiest month on record. Leading the pack was Teva's $40.5B purchase of Allergan's generic drugs business.
- The top investment bank in terms of the total value of transactions was Goldman Sachs (NYSE:GS), involved in 35 deals worth $148.8B, including half of the top ten. JP Morgan (NYSE:JPM) was second with 30 deals worth $116.1B while Morgan Stanley (NYSE:MS) was third with 33 deals valued at $95.9B.
- Global M&A so far this year is $2.64T, up 41% from last year. The action in the U.S. is up 66%.
- Energy and healthcare are the leading sectors. There have been 1,557 deals in energy worth $407B. Healthcare is close behind with 1,577 deals worth $395B.
- ETFs: UNG, USO, OIL, UGAZ, UCO, DGAZ, UWTI, BIB, SCO, BNO, BOIL, GAZ, DBO, DWTI, DTO, UGA, KOLD, USL, GRX, UNL, IRY, BIS, IXJ, DNO, BME, UHN, DBE, OLO, SZO, DCNG, GRN, RJN, FUE, OLEM, JJE, ONG, UBN
- Tyco (NYSE:TYC) reports organic revenue fell 1% whereas acquisition contributed growth of 2% in FQ3.
- Segment revenue: North America Installation & Services: $972M (flat); Rest of World Installation & Services: $842M (-16%); Global Products: $675M (-3%).
- Segment operating income: North America Installation & Services: $157M (+240 bps to 16.2%); Rest of World Installation & Services: $93M (-30 bps to 11%); Global Products: $119M (-260 bps to 17.6%).
- Adjsuted operating income rate grew 40 bps to 12.8%.
- FQ4 Guidance: Adjusted EPS: $0.60 to $0.62 (+7% to +11%).
- FY2015 Guidance: Adjusted EPS: $2.23 to $2.25 (+12% to +13%).
- Newell Rubbermaid (NYSE:NWL) reports core sales grew 5.1% in Q2.
- Normalized gross margin +10 bps to 40%.
- Normalized operating income rate was flat at 16%.
- Segment revenue growth: Writing: $495.9M (+1.3%); Home Solutions: $438.5M (+14.4%); Tools: $205.2M (-7.7%); Commercial Products: $210.6M (-5.8%); Baby & Parenting: $210.7M (+14.7%).
- FY2015 Guidance: Net sales: +3% to +4%; Core sales: +4% to +5%; Normalized EPS: $2.14 to $2.20.
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