From Briefing.com: 4:43PM Amkor reports EPS in-line, revs in-line; guides Q3 revs (AMKR) 8.23 +0.14 : Reports Q2 (Jun) earnings of $0.28 per share, excluding gain, in-line with the First Call consensus of $0.28. Co says "... As we look ahead, we are cautious about increasing softness in the consumer markets and global economic uncertainty. For the third quarter of 2008, we expect revenues to grow sequentially by 4% to 6%, which is below the level of historical seasonality due to uncertainty around consumer demand..." this calculate to roughly Q3 revs of $718.64-732.46 mln vs. $740.28 mln consensus. The co also sees gross margin -- between 23% ?Euro? 24%. The co also sees Q3 EPS of $0.24 to $0.28 vs $0.35 consensus.
4:37PM Ixys beats by $0.01, beats on revs (IXYS) 12.02 -0.12 : Reports Q2 (Jun) earnings of $0.17 per share, $0.01 better than the First Call dual-analyst est of $0.16; revenues rose 4.5% year/year to $79.3 mln vs the $78.0 mln single-analyst est.
4:34PM Multi-Fineline misses by $0.02, beats on revs (MFLX) : Reports Q3 (Jun) earnings of $0.34 per share, $0.02 worse than the First Call consensus of $0.36; revenues rose 61.0% year/year to $167.6 mln vs the $165.3 mln consensus. For Q4, MFLEX expects net sales to be significantly higher than Q3, while gross profit as a percentage of net sales is expected to be similar q/q. The sequential quarter growth in net sales is primarily expected to come from the ramp-up of new programs for smartphones. Gross margin during tQ3 increased to 13.8%, from 4.6% for the same period in the prior year. The increase in gross margin is primarily attributable to a favorable product mix, improved yields and the higher volume favorably impacting overhead absorption, offset by pricing impacts. Sequentially, gross margin declined from 17.6% in Q2. The sequential decline was primarily due to costs associated with expansion of the Company's production capacity in anticipation of an expected increase in sales in future quarters, as well as temporary inefficiencies resulting from the addition and transfer of manufacturing personnel to programs that are ramping in volume.
4:12PM Cisco Systems beats by $0.01, reports revs in-line (CSCO) 22.45 +0.46 : Reports Q4 (Jul) earnings of $0.40 per share, excluding non-recurring items, $0.01 better than the First Call consensus of $0.39; revenues rose 9.9% year/year to $10.36 bln vs the $10.31 bln consensus. "Cisco delivered solid quarterly and annual results as network-enabled business process changes and productivity increases gain traction on a global basis. Today's strong results demonstrate the company's ability to execute. The market is clearly in transition, and we will use this time as an opportunity to expand our share of customer spend and to aggressively move into market adjacencies. Our focus is on our portfolio approach to technology innovation, a broad global footprint, and management dedicated to sustainable differentiation and execution. We believe we are entering the next phase of the Internet as growth and productivity will center on collaboration enabled by networked Web 2.0 technologies."
4:25 pm : The stock market posted its largest percent gain in four months on Tuesday in a broad-based rally that was aided by favorable wording in the Fed's latest directive, a drop in crude prices and a better-than-expected economic reading on the services sector.
All ten of the economic sectors posted a gain, with seven sectors advancing more than 2%. The S&P 500 surged 2.9%, with 91% of its components ending the session in positive territory.
The FOMC left the fed funds rate at 2.00%, and the discount rate at 2.25%, as expected. The Fed noted that there are both risks to inflation and growth. The FOMC said that although the economy grew in the second quarter, labor markets have "softened further" and financial markets remain under "considerable stress."
Most of the directive was very similar to June, when the Fed also kept rates unchanged. However, there were some subtle changes in the final paragraph.
In June the Fed said downside risks to growth remain, although they have "diminished somewhat" and that upside inflation risks have "increased." In the latest directive, the Fed said downside risks to growth remain, and inflation is a significant concern -- removing the comments related to diminishing downside risks and increasing upside inflation risks.
Traders took this as a sign that a Fed rate hike is not imminent, causing stocks to soar to their session highs in late afternoon trade. The FOMC decision does not deserve all the credit for the market's rally this session, as stocks were already up 1.9% prior to the announcement.
A portion of the buying interest this session was due to a 2.3% drop in the price of crude oil to $118.64 per barrel, which follows the previous session's drop of 3.0%. The drop in crude prices aided oil-cost sensitive areas, with consumer discretionary rallying 4.4% as retailers spiked 5.3%. Airlines got a large 9.4% boost, and transportation as a whole rose 4.9%. Conversely, the energy sector underperformed on a relative basis with a gain of 1.1%.
The financial sector (+5.1%) provided leadership throughout the session, indirectly benefiting from a healthy advance in European banks after Paris-based Societe Generale reported better-than-feared earnings. AIG (AIG 29.89, +3.20) led the surge higher with a gain of 12% after being upgraded to Buy from Neutral at UBS.
Earnings news was mixed as Procter & Gamble (PG 67.97, +2.15) topped expectations, while MGM Mirage (MGM 35.85, +4.85), Molson Coors Brewing (TAP 48.18, -6.25) and Archer Daniels Midland (ADM 25.88, -1.52) fell short of analyst estimates.
In terms of economic news, the July ISM Services report indicates business conditions aren't as weak as widely reported, although conditions are still not ideal. The reading rose to 49.5 from 48.2 in June, which topped the average estimate of 48.8. Since the reading is below 50, it reflects contraction in the services sector, although the number is moving in the right direction. DJ30 +331.62 NASDAQ +64.27 NQ100 +3.6% R2K +2.4% SP400 +2.1% SP500 +35.87 NASDAQ Adv/Vol/Dec 1937/2.39 bln/884 NYSE Adv/Vol/Dec 2377/1.41 bln/752
2:16PM FOMC statement: Although downside risks to growth remain, the upside risks to inflation are also of significant concern (ECONX) : The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent. Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth. Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain. Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in the target for the federal funds rate at this meeting.
7:31AM Trina Solar announces sales and marketing collaboration agreement with Spanish Premier League football team RCD Espanyol (TSL) 26.23 : Co announces an agreement to supply photovoltaic modules for a new stadium being built by the Spanish Premier League football team Real Club Deportivo Espanyol de Barcelona. Under this agreement, TSL will supply Espanyol with 500 kW of PV modules for the construction of a roof-top PV installation for the club's new stadium in Barcelona, which is scheduled for completion in late 2008.
3:21AM Advanced Semiconductor Engineering reports Q208 results (ASX) 4.11 : Reports Q2 (Jun) earnings of $0.07 per ADS, $0.01 better than the single-analyst estimate of $0.06.
09:43 am Apple: . Target $195. UBS initiated AAPL with a Buy and a $195 saying they think the Apple "experience," driven by its ownership of the entire software ecosystem, creates a "sticky" user base that will drive recurring hardware revenue. The firm also says Apple's unique direct billing relationship with users provides long-term opportunities to enable transactions between consumers and end products. Firm also says low international market share also presents future growth opportunities.
09:42 am STEC Inc: . Target $18. Needham upgrades STEC to Strong Buy from Buy and sets tgt price at $18 based on increased confidence in new Tier 1 O.E.M wins driving revenue over next 4 qtrs; competitive offerings still focused on smaller notebook/server opportunities rather than storage-a STEC strength; acquisition attractiveness increases with each incremental design win; and significant upside to their $18 tgt.
09:42 am Rudolph Tech: . Target $16 to $13. Stifel notes on Monday RTEC reported 2Q08 results. Firm reminds investors that RTEC positively preannounced an upside to the quarter a few weeks ago; thus, results were not a major surprise. In total, firm believes that RTEC's commentary was generally consistent with current industry trends (weak capex market), but the co was outperforming on certain fronts (continued sequential growth in revenues) due to co-specific reasons. Firm believes the co's foray into the back end macro defect inspection market, as well as into new areas like probe card inspection, are paying dividends and positively impacting the business model.
09:42 am Dell: . Target $27. UBS initiates DELL with a Neutral and price target of $27 saying longer-term bias is generally positive given their expectations for new PC product lines focused on design and user experience, which they believe should stabilize Dell's market share. The firm also says despite a number of positives, new products may result in increased marketing costs, while a bigger shift to the indirect markets could negatively impact ASPs and margins.
09:41 am Hewlett-Packard: . Target $49. UBS initiates HPQ with a Neutral and price target of $49 saying they expect HPQ to be a relative safe haven against the backdrop of a volatile macro economy, as they believe downside risk to earnings estimates is limited. However, the firm says with tougher year-over-year comparisons, potential currency headwinds, intensifying competition in key segments, and less restructuring synergies, they think meaningful upside may be limited until new investments bear fruit. |
