Allegheny Technologies (ATI -3.8%) reports Q3 sales increase 17% to $1.02B, with High Performance Materials & Components sales +14.2% to $585M and Flat Rolled Products revenues increase 22% to $435M
Gross margin expands ~360bps to 15.7%; operating margin improves from 6.3% to 10.3%.
For HPMC segment, the company reaffirms FY18 segment operating profit margin improvement of ~300 bps Y/Y.
Amid price declines in several key raw materials, resulting in short-term mismatch between input costs and surcharge index pricing mechanism, ATI expects weaker Q4 FRP segment results; however, anticipates operating margin improvement of 150 to 300bps Y/Y.
Expects to generate at least $150M of free cash flow for FY18, as well as anticipates to end 2018 with zero borrowings under ABL revolving credit facility.
JPMorgan is “a bit more cautious” ahead of Amazon’s (AMZN -3.3%) earnings results happening after the market closes on Thursday.
The firm cites potential headwinds from Amazon’s recent $15/hour minimum wage increase and the prospect for higher shipping costs under a proposed U.S. Postal Service rate change, which could put pressure on margins.
Positive trends include growth in advertising and web services, opportunities from grocery and healthcare, and Prime subscriber adds despite price increases.
Firm reiterates an Overweight rating with a “top pick” status and a $2,200 price target.
Investors are showing some anxiety with U.S.-focused casino stocks ahead of earnings reports from the group.
They may be taking their cues from Telsey Advisory analyst Brian McGill, who warned today in a note that channel checks imply weakness in Las Vegas.
Notable decliners: Eldorado Resorts (NASDAQ:ERI) -5.0%, Golden Entertainment (NASDAQ:GDEN) -4.9%, Penn National Gaming (NASDAQ:PENN) -4.5%, MGM Resorts (NYSE:MGM) -4.0%, Caesars Entertainment (NASDAQ:CZR) -2.9%, Century Casinos (NASDAQ:CNTY) -2.3%.
More than 7.48M shares are registered for a maximum offering price of $143.06M.
Prominent among the selling holders are entities affiliated with FMR (who hold about 3.3%), those affiliated with General Catalyst (just over 2%), those affiliated with Highland Capital Partners (with 1.8%) and Revolution Growth II (just over 1.8%).
After the offering, FMR would trim its stake to 1.53% while the rest would exit.
Wells Fargo (WFC -0.4%) says it will commit more than $1.6B in lending and philanthropy over five years to Washington, DC, neighborhoods.
The bank, in collaboration with the National Community Reinvestment Coaltion and local organizations, creates the Where We Live campaign to increase economic opportunity across the city.
The program will triple Wells Fargo's community giving and concentrate resources on the biggest needs identified by community leaders--affordable housing, small business, and job skills, the company said.
Iamgold (IAG +3.9%) says a new feasibility study for its Boto gold project in Senegal shows significant economic and operational improvement compared to results from February's pre-feasibility study.
IAG says the study outlines an economically “robust” project, which would produce 140K oz./year on average for nearly 13 years, at a life-of-mine cash cost of $714/oz. and all-in sustaining costs of $753/oz.
IAG says Boto's proven and probable reserves have increased by 510K oz. to 1.93M oz. compared with the February pre-feasibility study, grading 1.71% gold.
The new feasibility study would be used to support an application for a mining concession to be submitted in Q4, with approval expected in H1 2019.
Lyft (LYFT) will acquire London-based AR startup Blue Vision Labs for about $72M with an additional $30M on the table for milestones, according to TechCrunch.
Blue Vision tech uses street-level images using basic smartphone cameras to build collaborative, interactive AR layers. The startup raised $17M in private funding with backers including GV, Accel, and Horizons Ventures.
The Blue Vision tech and team will join Lyft’s Level 5 autonomous car division. *In other Level 5 news, the ride-hail company will also launch its first Ford (NYSE:F) car from the self-driving imitative. The Ford Fusion Hybrid will hit city streets “soon.”
Lyft (and competitor Uber) plans to go public sometime next year.
GATX (GATX -7.4%) reported Q3 revenue of $349.7M, a decrease of 2.8% Y/Y.
Revenues by Segments: Rail North America $233M (-3.7% Y/Y); Rail International $54.1M (+3.4% Y/Y); Portfolio Management $3.4M (-27.7% Y/Y) and American Steamship company $58.8M (-2.3% Y/Y).
Rail North America fleet utilization was 99.2% at end of Q3; Lease Price Index was negative 11%; avg. lease renewal term was 33 months and investment volume was $129.1M. Fleet of ~119,000 railcars, including ~16,000 boxcars.
Rail International: GRE’s fleet consisted of ~23,000 railcars and fleet utilization was 98.4% at end of Q3.
ASC carried 8.7M net tons of cargo in the third quarter of 2018, compared to 9.8M net tons in the prior year period.
eXp World Holdings' (EXPI -1.3%) residential real estate brokerage unit agrees to acquire ShowMeNow, an on-demand home tour app that allows home shoppers to request immediate access to properties they're interested in.
The new ShowMeNow mobile app will be able available for beta testing in the Q1 2019 in select markets, exclusively for eXp Realty agents.
Centene (CNC -8.2%) slumps on more than 50% higher volume following its Q3 results released this morning. Revenue and non-GAAP EPS beat consensus, but GAAP EPS fell short.
The company updated its 2018 guidance, modestly raising its outlook for revenue but lowering the upper ranges for GAAP and non-GAAP EPS.
Another factor pressuring shares was its health benefit ratio of 86.3%, within its previously announced range for the year (85.9 - 86.4%) but above Q2's 85.7% and Q1's 84.3%, implying a negative trend.
Las Vegas Sands (LVS -3%) reports earnings tomorrow after the closing bell.
Analysts expect the casino operator to report revenue of $3.41B, consisting of $2.1B out of Macau, $774M from the Marina Bay Sands property and $411M from Vegas operations.
Property EBITDA of $1.29B and EPS of $0.81 is also anticipated.
Options trading on LVS implies a 5% move for shares up or down after the report drops, a bigger move than average. LVS is down 29% since the last time the casino operator reported earnings amid a broad downturn in the Macau casino sector. As one of the first Macau-focused names to report, the numbers from Las Vegas Sands could impact Wynn Resorts (NASDAQ:WYNN) and Melco Resorts & Entertainment (NASDAQ:MLCO) as well.
B2Gold (BTG +4%) is higher after reporting positive results from an expansion study of its El Limon Mine in Nicaragua and is considering a $35M investment to increase production at the mine.
BTG says the expansion study indicates that increasing plant capacity to 600K metric tons/year from 485K and adding a third stage of milling to achieve a fine grind would result in a much longer mine life with significantly higher gold production and lower operating costs.
The study estimates yearly production would increase to ~75K oz./year in 10 years of underground and open pit mining with 18K oz./year of gold that could be processed from tailings thereafter; combined, El Limon would deliver 985K oz. of gold over 21 years.
Wheeler REIT (NASDAQ:WHLR) climbs 2.7% after selling two non-core assets for about $7.46M and using the proceeds to pay down $4.5M of property-level debt and $1.6M of a loan.
Earlier this month, the REIT fended off a proxy fight by Stilwell Group, an activist investor which sought to replace three of Wheeler's eight directors.
Wheeler sold Eagle Harbor, a 23,303-square-foot strip center in Carrollton, VA, for $5.7M at an 8% capitalization rate and Chartway Federal Credit Union building, a 3,620-square-foot single-tenant net leased asset in Virginia Beach, VA, for $1.75M at a 6.9% capitalization rate.
Balance on Revere loan has been cut to $1.3M from $6.8M at the beginning of the year.
Quest Diagnostics (DGX -7.1%) is down on modestly higher volume following its Q3 report that featured a $60M revenue miss and lowered 2018 revenue guidance.
Sell-side bull Ross Muken of Evercore (OUTPERFORM/$118), in typical after-the-fact fashion, says the selloff is merely a hiccup considering M&A potential and its contract with UnitedHealthcare, adding that management believes they will have a strong 2019. He also cites the $100M in repurchased shares in Q3.
Jefferies' Brian Tanquilut (HOLD/$110): revenue miss and lowered guidance will "prove disappointing to investors."
Amazon (NASDAQ:AMZN) employees met with Immigration and Customs Enforcement officials this past summer in an attempt to sell controversial facial recognition technology Rekognition.
The news comes from internal emails obtained by The Daily Beast. There’s no indication that ICE purchased or used Rekognition.
Amazon was specifically pitching to Homeland Security Investigations, which focuses on customs violations and is mostly separate from the Enforcement and Removal Operations. But the two sides share resources.
The technology came under fire earlier this year after an ACLU report showed its use among some law enforcement agencies.
Arch Capital's (ACGL -0.9%) U.S. mortgage insurance operation gets $506.1M of indemnity reinsurances from Bellemeade Re 2018-3 Ltd., a special purpose reinsurer.
The transaction covers a portfolio of mortgage insurance policies issued by Arch MI and affiliates primarily during H1 2018.
Bellemeade Re 2018-3 Ltd. is funding its reinsurance obligations through the issuance of four classes of amortizing notes with 10-year legal final maturities. This insurance-linked security transaction provides Arch MI with collateralized coverage from Bellemeade Re 2018-3 Ltd. for potential losses on a portion of its MI portfolio.
YTD, Arch MI accessed capital markets three times for risk-transfer transactions involving its MI portfolio, gaining $1.53B of reinsurance protection for loans representing more than $136Bof unpaid principal balance.
Ten more attorneys general are seeking access to the docket on the proposed Sprint/T-Mobile Merger, the FCC says.
Those officials (in Alabama, Connecticut, Florida, Hawaii, Mississippi, Tennessee, Virginia, Washington, and Wisconsin, along with the District of Columbia) would join New York and California in looking into information about mobile carrier records.
The notice gives the two carriers the chance to contact the AGs on the matter.
Amid a down market, Sprint (NYSE:S) is down 1.9% today; T-Mobile (NASDAQ:TMUS) is down 2%.
RH (NYSE:RH) is up 1.0% on a down market day after catching an initiation from Wedbush at an Outperform rating.
Wedbush jumped in with its bullish call after seeing RH fall off 11% yesterday without any major catalyst in sight. The firm's analyst team points to RH's "powerful" membership model and "strong" pricing power.
The four companies - XOM, Rosneft, Japan’s SODECO and India’s ONGC Videsh - are partners in the Sakhalin-1 group of fields that would supply the gas, but XOM and Rosneft initially had planned to build the LNG plant without the other consortium members.
As well as spreading the costs among more stakeholders, the broader involvement of the participants may mitigate sanctions risk, according to the report.
Leading the rouged-up homebuilders today is Pulte Group (PHM +5.3%), which topped Q3 estimates. New orders were shy of official Street expectations, but - amid growing concerns of a rate-related housing slowdown - probably topped the whisper numbers.
Speaking of rates, they're down big today - the 10-year Treasury yield off seven basis points to 3.127%.
Toll Brothers (TOL +0.6%), Lennar (LEN +1%), D.R. Horton (DHI +0.4%), LGI Homes (LGIH +2.7%), M/I Homes (MHO +1.9%), KB Home (KBH)
A Phase 2 clinical trial evaluating BeyondSpring's (BYSI -4%) Plinabulin, combined with Amgen's (AMGN -1.9%) Neulasta (pegfilgrastim), for the prevention of chemo-induced neutropenia (CIN) low and bone pain demonstrated a treatment effect.
50% of patients receiving high-risk TAC (docetaxel, doxorubicin and cyclophosphamide) chemo who also received Plinabulin + Neulasta experienced grade 3 (serious) or grade 4 (life-threatening) neutropenia compared to 81% who received Neulasta only (p=0.0456). Duration of grade 3/4 neutropenia was 0.94 days in the Plinabulin group compared to 1.38 days for the Neulasta-only group.
6% of patients receiving Plinabulin + Neulasta experienced at least one day of bone pain compared to 95% who received Neulasta alone (p<0.0001).
Plinabulin is a marine-derived small molecule that contributes to the prevention of neutropenia by activating a protein called GEF-H1 that plays a key role in signaling pathways affecting the levels of neutrophils.
Neutropenia is an abnormally low level of neutrophils (a type of white blood cell that plays a key role in fighting infections) in the blood.
The current standard of care for treating CIN is G-CSF agents like Neulasta or Neupogen (filgrastim), but they are associated with bone pain and do not eliminate the risk of grade 3/4 neutropenia.
Fifth Third Bancorp (NASDAQ:FITB) gains 0.8% in midmorning trading as the broader market sags.
"Although market dynamics remained challenging during the quarter, our net interest margin increased and we generated solid loan, deposit, and household growth," says Chairman, CEO and President Greg D. Carmichael.
The bank posts Q3 non-GAAP EPS of 64 cents, beating consensus by a penny, and says it's on track to achieve long-term financial targets for ROTCE, ROA, and efficiency ratio under its Project NorthStar.
Q3 fully taxable-equivalent net interest income of $1.05B increases from $1.02B in Q2 and $977M a year ago; FTE net interest margin 3.23%, up 2 basis points from Q2 and up 16 bps from Q3 2017.
Q3 average portfolio of loans and leases increases to $93.2B from $92.6B in Q2 and $91.9B in Q3 2017; average deposits of $104.7B compares with $103.9B in Q2 and $101.8B in Q3 2017.
Q3 net charge-off ratio of 0.30% compares with 0.41% in Q2 and 0.29% in the year-ago quarter.
Q3 efficiency on FTE basis 62.6% vs. 58.7% in Q2 and 38.4% in Q3 2017.
FITB has received necessary shareholder approvals for its MB Financial (NASDAQ:MBFI) acquisition and still sees completing the transaction in Q1 2019.
Saudi Energy Minister Khalid al-Falih told a conference in Riyadh that the oil market was in a “good place” and the kingdom would "continue with the mindset we have now, which is to meet any demand that materializes to ensure customers are satisfied."
"Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex," quipped PVM Oil analyst Stephen Brennock.
Falih said he would not rule out the possibility that Saudi Arabia would produce 1M-2M bbl/day more than current levels in future, and Saudi Aramco head Amin Nasser said it would take only three months to reach maximum production capacity of 12M bbl/day if needed.
Superior Energy (SPN -6.1%) reports Q3 sales +13.2% to $573M primarily driven by Drilling, as well as Onshore & production segments, which was partially offset by Technical division.
Sales by segments: Drilling Products & Services: $99M (+28.5%); Onshore:$294.9M (+%); Production Services: $105.8M (+8.8%); Technical Solutions: $73.1M (-12%)
The company says demand from US land customers has grown steadily since 2H 2016, resulting in expansion in oil field service industry capacity; however growth in the Permian Basin paused, resulting in near-term oversupply of hydraulic fracturing capacity impacting pricing and fleet utilization.
EBITDA margin expanded ~490bps to 17.4%; operating loss narrowed to $0.11M as compared to $45.3M
In an update to their push for monetizing mid-band satellite spectrum, the C-Band Alliance suggests some 200 MHz of airwaves might be cleared for use by others.
That's more than previously expected.
The group, which includes Intelsat (I -1.5%), Eutelsat (EUTLY +0.5%), SES (SGBAF -1.1%), Telesat and Intel (INTC -2.4%), has been promoting taking the spectrum and repurposing it for 5G terrestrial use by wireless carriers.
The airwaves could be cleared within 18-36 months of a final FCC order, assuming full adoption of its proposal, the Alliance says.
Tesla (NASDAQ:TSLA) is up 6.4% on the day and traded as high as $278.96 earlier.
Underpinning the rally, Citron Research has rattled some cages with a reversal to a long view on Tesla for this quarter.
The firm, which by the way is still suing Tesla over Musk's tweets, thinks demand for Tesla vehicles is "pulling directly" from competitors, including the likes of Honda and Toyota. Citron also observes that there is no Tesla killer out there that it can clearly see.
Finally, there's that bit about Tesla moving up their earnings day to October 24 (tomorrow). "Does anybody think that Tesla decided to move up its earnings release date because of bad news?," asks Citron.
While it's been a harsh month for stocks, junk bonds are outpacing the S&P 500 this half, Bloomberg First Word reports.
Overall junk bond supply has been soft, even with big issues by Netflix (NFLX -3%) and Uber (UBER). High-yield index is the smallest in more than years.
On total return basis, CCC-rated have performed the best, with CCC-rated dollar junk bonds returning 4.4% this year, almost matching the dividend-reinvestment performance of the S&P 500, according to Bloomberg.
Stocks plunge following disappointing earnings from some blue-chip companies and renewed selling in China's stock market; Dow -2%, S&P -2.1%, Nasdaq -2.5%.
Caterpillar -9.2% despite narrowly beating earnings estimates and reaffirming guidance, as investors were spooked by its outlook for rising costs; CAT already was more than 15% for the month.
Meanwhile, 3M -7.7% after reporting below-consensus top and bottom lines and lowering its earnings guidance as sales growth receded across most of its business lines.
Looking abroad, China's Shanghai Composite surrendered some of its recent rally, closing -2.3%, and Japan's Nikkei ended -2.7%; major European markets are sharply lower, with Germany's DAX -2.1%, France's CAC -1.5% and U.K.'s FTSE -0.9%.
"We just look like we're getting further away from a deal with China," says Art Hogan, chief market strategist at B. Riley FBR. "The ramifications of a prolonged trade ware are really seeping into investors' minds right now. I think we're coming to a capitulation point."
The energy sector (-2.4%) leads the broad-based retreat, with industrials (-2.6%), tech (-2.2%) and materials (-1.9%) also lagging; only utilities (+0.3%) is in positive territory.
U.S. WTI crude oil -2.7% at $67.46/bbl, and gold +1.2% at ~$1,240/oz., its highest level since July.
Meanwhile, the demand for U.S. Treasurys has pushed yields lower, with the benchmark 10-year yield dropping 6 bps to 3.13%.
The European Commission clears HP’s (NYSE:HPQ) acquisition of UK-based print service management company Apogee, finding that the companies had “very limited” overlap and strong players would remain in the market after the merger.
The £380M acquisition was announced in August. The deal is expected to close by the end of the year. After the close, Apogee will operate as an independent subsidiary.
HP shares are down 3.2% today amid general hardware weakness following Susquehanna downgrades.
Canada Jetlines (OTCQB:JETMF +1.4%) has announced an exclusive Airbus A320 pilot training agreement with global aviation training leader CAE (CAE -1.4%).
Starting in the first half of 2019, CAE instructors will train Jetlines' pilots at CAE’s training center in Montreal using the latest training equipment suite.
In addition, the airline’s pilots will have access, on-site and remotely, to the most advanced training material, leveraging Pelesys, a CAE company, for Airbus A320 comprehensive ground-school training solutions
The FDA accepts for review Xeris Pharmaceuticals' (XERS -0.3%) marketing application seeking approval for a ready-to-use, room temperature-stable liquid glucagon auto-injector for the treatment of severe hypoglycemia (low blood sugar).
Ping An Insurance (OTCPK:PNGAY -1.4%) and Merian Global Investors (NASDAQ:UK) sign an MOU in an effort to explore business development opportunities in fund distribution, marketing, and investment advisory, including knowledge sharing and trading.
The MOU follows an earlier agreement under which management of Merian China Equity Fund was outsourced to Ping An Asset Management (Hong Kong).
Lion Point Capital discloses a 16.9% active stake including swap agreements in Resolute Energy (REN -3.3%) and says it has engaged in discussions with the company on strategies to enhance shareholder value, including a potential sale.
Lion Point says REN "should promptly and fulsomely explore strategic interest, rescind the shareholder rights plan, engage in a comprehensive strategic review and begin discussions with shareholders over changes in the size and composition" of the company's board.
Kimmeridge Energy, which owns 9.7% of REN shares, last week called on the company to explore a sale or merger and threatened to seek new board members.
Tesla (NASDAQ:TSLA) is up 4.1% in early trading on a round of positive comments from Wall Street analysts just ahead of earnings.
Baird recommends buying shares into the report on the view that a new chairman or board announcement could be a catalyst. A favorable report on production targets is also seen stoking shares.
New Street Research reiterates a Buy rating on Tesla, pointing to the potential for a "major" free cash flow beat in Q3.
Tesla also landed on the list of 11 "high conviction" stocks put out by Morgan Stanley with a view toward upcoming earnings.
Finally there is Citron Research wading into the debate again, but on the long side. "Citron is long Tesla as the Model 3 is a proven hit and many of the TSLA warning signs have proven not to be significant," writes the firm known for short selling. "While the media has been focused on Elon Musk’s eccentric, outlandish and at times offensive behavior, it has failed to notice the legitimate disruption of the auto industry that is currently being DOMINATED by Tesla," adds CR.
Tesla's share price jump today comes against a market bleeding off around 1.5% on broad China and earnings concerns.
Tune in tomorrow for some interesting action after the earnings report drops and Elon Musk jumps on the conference call.
Zymeworks (ZYME -1.9%) will collaborate with Danish outfit LEO Pharma A/S to discover and develop bispecific antibodies, leveraging ZYME's Azymetric and EFECT platforms, for potential indications in dermatology, inflammation and autoimmune disorders.
LEO will retain the rights to develop two candidates for dermatology applications while ZYME will retain the rights for all other indications.
Under the terms of the partnership, ZYME is eligible to receive an upfront payment of $5M and up to $231M in milestone payments for the first candidate and up to $244M for the second. It will also receive research funding and royalties on net sales.
Arch Coal (NYSE:ARCH) opens ~1% higher after easily beating analyst expectations for Q3 earnings and revenues, generating its highest level of revenues, net income and EBITDA since its emergence from Chapter 11.
Arch says Q3 Powder River Basin sales volumes rose 14% Q/Q as its mines benefited from the usual seasonal pick-up in summer demand along with accelerated shipments to several customers; the higher volumes, coupled with effective cost control, helped drive down per-ton costs by 8% Q/Q to $9.76, and average per-ton cash margin for the segment surged 61% Q/Q.
Also, the company says it is in the process of finalizing a revision to the mining and reclamation plan at its Black Thunder mine that could result in a $90M-$110M reduction on a discounted basis in the asset retirement obligation on its balance sheet.
Arch says it expects to sell 6.3M-6.7M tons of coking coal and 83M-87N tons of thermal coal for the year.
Ingredion (NYSE:INGR) opens down 11% after the company says it expects Q3 EPS of $1.70. The mark falls well below the consensus estimate of $1.95.
The company cites "significant" FX headwinds caused by weakening foreign currencies in Argentina, Brazil and Pakistan. Several unplanned power outages in North America during the quarter led to higher manufacturing and supply chain costs.
Uber (UBER) wants London to be the first city with its all-electric taxi fleet by 2025. The company will add a “clean air fee” to rides to help drivers offset the cost of the switch.
Uber recently regained its license in the city though the new license has a shorter timeframe than usual. Local transportation regulators had objected to some of Uber’s business practices and wanted more transparency and safety measures.