Optoelectronics and Manufacturing division of OSI Systems (NASDAQ:OSIS) has received an order for ~$10M to provide electronic sub-assemblies for use in devices of a leading medical technology original equipment manufacturer.
OSI Systems’ Chairman and Chief Executive Officer, Deepak Chopra, commented, "We are pleased to receive this order and look forward to continue supporting this customer’s advanced medical devices."
In a note titled "cash poised to flow freely," Piper Jaffray's Blake Fernandez predicts that "energy weightings within the context of the broader markets will begin to improve and prompting relative out performance."
The analyst notes energy sector weighting within the S&P is "toward historic lows, but integrated ROCE metrics are improving and FCF yields are expected to surpass that of the broader market."
Piper considers Chevron (NYSE:CVX) its top idea, anticipating the stock will play "catch-up" vs. peers and free cash flow should expand above most peers over the next two years.
In addition to CVX, the firm also rates BP, Total (NYSE:TOT) and Equinor (NYSE:EQNR) at Overweight.
Pfizer (NYSE:PFE) and Bain Capital, LP announce the creation of Cerevel Therapeutics, LLC, a biopharmaceutical company focused on developing treatments for central nervous system (CNS) disorders.
Pfizer is contributing a portfolio of precommercial assets, including three clinical-stage compounds and several preclinical compounds, to potentially treat Parkinson's, Alzheimer's, epilepsy, schizophrenia and addiction.
Bain-affiliated funds have committed $350M in initial capital. Pfizer will retain a 25% stake in the business.
Two senior Pfizer execs will serve on the board, SVP, CSO of Internal Medicine Morris Birnbaum, M.D., Ph.D., and SVP of Worldwide Business Development Doug Giordano, along with two Bain managing directors.
Cerevel will be headquartered in the Greater Boston area.
One Horizon Group (NASDAQ:OHGI) to acquire a majority interest in Browning Productions & Entertainment, Inc. for available project-based working capital and will be initially issuing 150K shares.
The balance of the payment for majority interest will include the issuance of an additional 150K shares and will otherwise be stock-based on an earn-out tied to two-and-a half times earnings, which will drive substantial value to OHGI shareholders.
The company has entered into a multi-year Employment Agreement with William Browning, CEO of Browning.
“The acquisition of Browning brings OHGI a management team with substantial film, television and digital entertainment experience; we can now confidently state that OHGI is a leader in each of the fastest growing areas of media, content and distribution,” said Mark White, One Horizon Group’s Founder and CEO. “This transaction is an exciting enhancement to our profitability and takes our Company several important large steps forward; we understand fully that our share price is an important measurement of our business performance and we are thankful to our shareholders for their patience as we worked toward this moment.”
PulteGroup (NYSE:PHM) Q3 EPS $1.01 exceeds consensus estimate of 95 cents, and increases from 58 cents in the year-ago quarter.
Q3 home sales revenue of $2.57B, up 25% from $2.06B a year ago.
Q3 net new orders up 1% to 5,350, while value of net new orders rose 1% to $2.3B.
Q3 average sales price increases to $427,000 from $399.000 in the year-ago quarter.
Q3 operating margin at 14.2% improved 190 basis points Y/Y.
“While buyer concerns around affordability and rising mortgage rates appear to have impacted near term market dynamics, traffic trends indicate that buyer interest levels are still high and that the overall housing recovery remains on track," says President and CEO Ryan Marshall.
Unit backlog up 3% to 11,164 homes; backlog value up 5% to $4.9B; average price o homes in backlog increased 2% Y/Y to $440,000.
Maxim Group lifts Chipotle (NYSE:CMG) to a Buy rating from Neutral as it takes its Q3 EPS estimate for the restaurant operator to $2.35 vs. $2.02 consensus and full-year EPS estimate to $13.55 vs. $12.02 consensus.
Chipotle's lack of international exposure is also seen as a positive, as well as the low interest rate risk hanging over the company's bottom line.
Chipotle is due to report earnings on October 25.
Shares of Chipotle are down 0.65% in premarket trading to $428.40.
Verizon (NYSE:VZ) gains 1.4% premarket on Q3 beats with a 3% Y/Y revenue growth. Phone subscribers beat estimates thanks to a sweet iPhone deal, but Oath revenue and Fios subscriptions showed some weakness.
Guidance has full-year consolidated revenue growth at low-to-mid single-digit percentage on a GAAP basis. The company also reaffirms a low single-digit percentage growth in adjusted EPS for the year.
Verizon cuts its capital spending guidance for the year from $16.6B to $17B from $17B to $17.8B.
Key subscriber metrics: Phone subscribers who pay a monthly bill grew by 295K net adds in Q3 (consensus: 161K). Fios video subscribers dropped by 63K compared to the 18K decline in last year’s quarter. Fios internet grew by 54K customers (last year: 66K).
Oath: Revenue from Oath (AOL and Yahoo) was $1.8B, down from $2B in last year’s quarter. Verizon doesn’t expect Oath to reach its target of $10B by 2020.
Verizon says it’s on track to reach its $10B in cumulative cash savings by 2021.
Thinly traded Enanta Pharmaceuticals (NASDAQ:ENTA) is up 4% premarket on light volume on the heels of its announcement that dosing is underway in a Phase 2a clinical trial evaluating orally administered EDP-938 against respiratory syncytial virus infection in a human challenge study. Topline data should be available in Q3 2019.
EDP-938 is an N-protein inhibitor that targets RSV replication. The company says its mechanism of action enables it to have a high barrier of resistance against the virus and may be effective in later stages of infection.
Phase 1 data will be presented on November 1 at the International Respiratory Syncytial Virus Symposium in Asheville, NC. No safety signals were observed. The half-life of EDP-938 was 12. 9 - 17.6 hours.
Graphic Packaging Holding (NYSE:GPK) trades weak after missing on both lines of its Q3 report.
On the bright side, the company's adjusted EBITDA increased 36% during the quarter to $256.3M despite higher commodity input costs and some labor inflation.
GPK on pricing: "We successfully implemented a second open market price increase this year for our CUK and SBS paperboard during the quarter. We expect the successful open market paperboard price increases we achieved across our CRB, CUK, and SBS paperboard grades over the course of 2018 will drive strong pricing momentum as we turn to 2019. Despite the difficult commodity inflation environment, we are well positioned to generate continued profitability improvement driven by our pricing, new product development, and productivity initiatives."
Shares of Graphic Packaging are down 2.60% premarket after a 3.1% decline yesterday in front of the earnings report.
Canada's Justin Trudeau is willing to freeze export permits with Saudi Arabia that allow armored car sales in the kingdom as opposition lawmakers raise questions about human rights abuses over the Khashoggi case.
At risk? General Dynamics Land Systems Canada (NYSE:GD) manufactures armored vehicles under a contract with Saudi Arabia signed by the Canadian government in 2014. The deal is worth up to $13B.
PACCAR (NASDAQ:PCAR) slips in early trading after missing revenue estimates with its Q3 report.
Net income came in at a record $545M for the quarter, up 35% from a year ago.
PACCAR demand update: "Customer demand for Kenworth, Peterbilt and DAF trucks is at record levels. Kenworth and Peterbilt have received more than double the number of U.S. and Canada Class 8 orders in the first nine months of this year, compared to the same period last year. PACCAR truck backlogs are very strong, with Kenworth and Peterbilt production scheduled well into next year."
Gritstone Oncology (NASDAQ:GRTS) initiated with Buy rating and $26 (71% upside) price target at BTIG Research. Initiated with Overweight rating and $25 price target at Barclays. Initiated with Outperform rating at Cowen and Company.
AcelRx Pharmaceuticals (NASDAQ:ACRX) initiated with Buy rating and $9 (140% upside) price target at B. Riley FBR.
Stericycle (NASDAQ:SRCL) resumed with Underperform rating and $53 (2% upside) price target at BofA/Merrill Lynch.
Quidel (NASDAQ:QDEL) resumed with a Strong Buy rating and $80 (24% upside) price target at Raymond James.
OraSure Technologies (NASDAQ:OSUR) resumed with Market Perform rating at Raymond James.
Genomic Health (NASDAQ:GHDX) resumed with Market Perform rating at Raymond James.
Shares of Caesars Entertainment (NASDAQ:CZR) have been very active in the premarket session following a bullish initiation by Morgan Stanley (Overweight rating, $12 price target).
Analyst Thomas Allen sees significant upside for Caesars through M&A potential, sale leasebacks and U.S. sports betting growth. Perhaps most importantly, Allen and team sees a rebound in Las Vegas during Q4.
As for valuation, MS notes that Caesars trades at 9X the 2019 EBITDAR estimate compared to the 12.5X multiple for resort peers.
Shares of Caesars are up 1.2% in premarket trading to $9.60.
Leading pot stocks Tilray (NASDAQ:TLRY) (-12%), Canopy Growth (NYSE:CGC) (-7%) and Cronos Group (NASDAQ:CRON) (-7%) are all down premarket as the selling continues after the start of legal recreational cannabis use in Canada on October 17.
U.S. Silica (NYSE:SLCA) -10.3% pre-market after Q3 earnings and revenues both fall well short of Wall Street expectations, as pipeline bottlenecks and budget constraints limit the number of completed wells and hurt demand for frac sand.
SLCA says revenue in its Oil and Gas sand unit rose 6% Y/Y but fell 7% Q/Q to $302M, while tons sold rose 21% Y/Y and 10% Q/Q to 3.82M.
"While we will likely see more white space on our customer's calendars for the rest of this year, we believe these near-term challenges are transitory," says President and CEO Bryan Shinn. "Budgets will reset in 2019, takeaway capacity will be expanded and the record inventory of [drilled but uncompleted wells] will begin to be completed - all of which should provide positive catalysts for sand and logistics demand."
SLCA also expects to see more higher cost Northern White sand capacity idled in the next few quarters, which would help balance supply and demand and support stable pricing.
Susquehanna downgrades semi-cap stocks after checks signal incremental weakness for cloud and enterprise spending expectations in 1H19.
Analyst Mehdi Hosseini says what was seen as a “digestion period” for spending now looks more alarming with IT budget freezes and increasing executive caution at global cloud providers.
The analyst expects bottoming server builds in Cloud and Enterprise in 2H9, up to three quarters later than the prior expectation.
Semi-cap downgrades: AMAT (NASDAQ:AMAT) target drops from $60 to $38, ASML (NASDAQ:ASML) from $240 to $200, and Lam Research (NASDAQ:LRCX) goes from Positive to Neutral with a target cut from $225 to $165.
Source: Bloomberg First Word.
AMAT trades down 4% premarket to $32.20. ASML is down 5.2% to $167.23 in part due to European tech weakness. Lam Research is down 3.3% to $139.50.
Thinly traded nano cap Regulus Therapeutics (NASDAQ:RGLS) is up 33% premarket on average volume. After the close yesterday, it announced that it will present preclinical data on RGLS4326, in development for the treatment of autosomal dominant polycystic kidney disease, at Kidney Week in San Diego on Thursday, October 25.
McDonald's (NYSE:MCD) reports global comparable-store sales increased 4.2% in Q3 to top the consensus estimate of +3.7%.
Comparable-store sales were up 2.4% in the U.S. to just miss the 2.5% rise expected by analysts. Menu price increases and a higher average check contributed to growth during the quarter.
International Lead Markets segment comparable-store sales were up 5.4%, led by strength in the U.K., Australia and France. Comparable sales increased 4.6% in the High Growth Markets segment vs. +2.8% expected.
The company's operating income for the quarter was $2.42B vs. $2.35B consensus and $3.08B a year ago (included China/Hong Kong business sale). Higher franchised store margins and G&A savings helped to offset lower company-operated store margins.
"We have made substantial progress modernising restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day. We remain confident that our strategy will drive long-term, profitable growth," says CEO Steve Easterbrook.
Eagle Bulk Shipping (NASDAQ:EGLE) has taken delivery of its newly acquired vessel, the M/V Hamburg Eagle, a 2014-built SDARI-64 Ultramax.
The acquisition has been funded by cash on-hand and new debt equating to $12.8M, representing an upsize to the existing Eagle Bulk Ultraco LLC loan facility which carries an interest rate of LIBOR plus 2.95% and has a maturity of October 31, 2022.
Adjusted EPS of $2.58, up 10.7% Y/Y, though foreign currency translation decreased sales by 1.7% Y/Y to $8.2B.
Sales by segment: Industrial flat; Safety and Graphics +7%; Healthcare -2.8%; Electronics and Energy -4.8%; Consumer -3.4%.
Returned $1.9B to shareholders via dividends and gross share repurchases.
Lowered outlook for 2018: Earnings are expected to be in the range of $9.90-$10.00 per share (from $10.20-$10.45) reflecting foreign currency headwinds. Organic local-currency sales growth is expected at 3% (from 3%-4%).
Ford (NYSE:F) says it plans to stop production at it automobile plant in Almussafes, Spain for about nine days during November due to a lower demand for models made at the site.
A company spokesperson says engine production would also be halted for 13 days next month. Part of the Spanish production of Ford engines is sent to Canada for assembly of the Edge model, according to Reuters Morning Call.
Shares of Ford are down 1.07% in premarket trading to $8.32.
The FDA approves Spectrum Pharmaceuticals' (NASDAQ:SPPI) folate analog KHAPZORY (levoleucovorin) for injection for the treatment of patients with metastatic colorectal cancer in combination with fluorouracil, for diminishing the toxicity associated with overdosage of folic acid antagonists or impaired methotrexate elimination and for rescue after high-dose methotrexate therapy in osteosarcoma patients.
The company says it is evaluating strategic options on commercial launch and expects product availability in January.
Stoxx Europe tech sector index (SX8P) drops 3.4% under pressure from Apple supplier AMS falling as much as 32% after a weak margin outlook. French IT group Atos fell 21% after cutting its full-year guidance.
SXBP is about 18% down from its June peak and nearing bear territory. The sector trades at around 17.8x expected earnings, down from 22.4x in June but above the SXXP average of 12.6x.
ASML (NASDAQ:ASML), SAP (NYSE:SAP), and Infineon (OTCQX:IFNNY) are among the decliners moving in sympathy with the index. These companies make up over half of the index.
ASML drops 5.2% premarket to $167.23 on the Nasdaq. SAP drops 1.9% on the NYSE to $106.60.
The Department of Justice is seeking documents from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) about intermediary companies the company has worked with in the Democratic Republic of Congo, Venezuela and Nigeria, Reuters reports.
The investigation apparently is not directed at Glencore’s own activities or its senior executives, according to the report.
Glencore said in early July it had been subpoenaed for documents relating to its business in the three countries since 2007, sending its shares down 13% and leaving investors guessing about the direction of the investigation.
A German district court rules that Edwards Lifesciences' (NYSE:EW) Sapien 3 Ultra device infringes on a patent owned by Boston Scientific (NYSE:BSX) subsidiary Symetis SA. The patent covers the fabric used on the valve seal.
BSX has the right to enjoin EW and its German subsidiary from selling the Sapien 3 there, although EW may appeal the decision.
Excluding restructuring costs and a net tax benefit to adjust deferred tax balances, adjusted profit per share was $2.86, up 47% versus prior year.
Sales by segment: Construction Industries +16%; Resource Industries +35%; Energy & Transportation +15%; Machinery, Energy & Transportation +19%.
During the quarter, the company deployed significant capital, including a discretionary pension contribution of $1B, the repurchase of $750M of Caterpillar common stock and a dividend payment of $511M.
Maintained a 2018 adjusted profit per share outlook range of $11.00-$12.00.
CAT -6% premarket as the Dow points to a triple-digit drop at the open.
Peers are also falling on the news, including CNH Industrial (CNHI -2.5%), Cummins (CMI -1.7%), Deere (DE -2.2%), United Rentals (URI -2.5%), Lindsay (LNN -0.5%) and SiteOne (SITE -1%)
Corning (NYSE:GLW) reports in-line Q3 revenue of $3.01B and an EPS beat by $0.03 to $0.51. FY guide has sales at $11.3B (consensus: $11.27B) and gross margin of 42%.
Q4 guidance expects low-single-digit percentage sequential growth in Display Technologies and Optical Communications. High-single-digit percentage growth expected for Environmental Technologies while Life Sciences is expected to hit more in the middle of the performance range. Specialty Materials growth should be consistent with last year’s quarter.
BNY Mellon (NYSE:BK) and Bank of the West, unit of BNP Paribas (OTCQX:BNPQY), enter a reseller agreement, under which BNY Mellon will provide Bank of the West with capabilities for faster payments for its commercial clients through RTP and Disbursements with Zelle.
Bank of the West plans to offer Account and Alias (email or mobile number) based RTP services for its commercial banking clients by leveraging BNY Mellon's immediate payments product suite.