From Briefing.com: 4:30 pm : Concerted selling sent the S&P 500 and the Nasdaq Composite to their worst single-session losses in almost two months, but the Dow finished only fractionally lower amid support from IBM.
Surprisingly strong earnings propelled shares of IBM (IBM 155.69, +5.04) to their best level on record. The 3% surge propped up the price-weighted Dow Jones Industrial Average for the entire session.
However, action in the S&P 500 and Nasdaq Composite was governed by aggressive selling.
The broad-based S&P 500 saw about 86% of its components close lower. Financials were among the hardest hit; they sank to a 2.2% loss. Marquee investment bank Goldman Sachs (GS 166.49, -8.19) posted better-than-expected earnings, but those were overshadowed by a smaller-than-expected revenue figure. The stock suffered its worst single-session loss in more than eight months and closed below its 50-day moving average.
Northern Trust (NTRS 52.49, -3.15) dropped to a one-month low after its earnings fell short of what had been expected. State Street (STT 48.00, -2.06) also slid, even though its exceeded earnings expectations. Diversified banks Wells Fargo (WFC 31.81, -0.68) and US Bancorp (USB 26.52, -0.79) were caught up in the financial sector's slide, regardless of generally solid reports.
Apple (AAPL 338.84, -1.81) had another blowout quarter and even issued a strong forecast. Given that the firm's forecasts are typically tepid, many wonder whether or not the outlook was intended to offset discontent over yesterday's news that Apple CEO Steve Jobs will take another medical leave of absence. Support for shares of AAPL faded so that the stock settled in the red with several other large-cap tech issues, which were the heaviest drags on the Nasdaq.
Defensive-oriented plays made up the only major sectors that suffered losses of less than 1%. Telecom and utilities were the best performers; they slipped only 0.1%.
Only a small dose of data was released this morning. It did nothing to drive broader market action. According to the latest data, housing starts for December fell 4.3% month over month to an annualized rate of 529,000, which is below the rate of 550,000 that had been expected, on average, among economists polled by Briefing.com. The December sales rate is also the lowest since October 2009. As for building permits, they spiked 16.7% month over month to an annualized rate of 635,000, which is well above the rate of 560,000 that had been widely expected. The December building permit rate is the highest since March 2010.
The dollar succumbed to further selling today. Its 0.5% loss marked its seventh downturn in eight sessions. The Dollar Index now sits near a two-month low.
4:25PM Xilinx beats by $0.06, reports revs in-line; guides Q4 revs in-line (XLNX) 31.02 -0.75 : Reports Q3 (Dec) earnings of $0.58 per share, $0.06 better than the Thomson Reuters consensus of $0.52; revenues rose 10.5% year/year to $567.2 mln vs the $569.7 mln consensus. Co issues in-line guidance for Q4, sees Q4 revs flat to +5% QoQ to ~$567.2-595.6 mln vs. $571.87 mln Thomson Reuters consensus, with gross margin ~64-66% vs. 64.9% consensus. Xilinx reports Q3 gross margin +160 bps YoY to 65.7% vs 65.0% consensus/guidance. "While we did not achieve a fifth consecutive quarter of record sales, I am pleased with the Company's continued focus on cost reduction and financial discipline."
4:08PM F5 Networks beats by $0.05, reports slight miss in revs; guides Q2 EPS in-line, revs below consensus (FFIV) 138.78 -3.00 : Reports Q1 (Dec) earnings of $0.88 per share, excluding non-recurring items, $0.05 better than the Thomson Reuters consensus of $0.83; revenues rose 40.6% year/year to $268.9 mln vs the $270.6 mln consensus. Co issues mixed guidance for Q2, sees EPS of $0.84-0.86, excluding non-recurring items, vs. $0.85 Thomson Reuters consensus; sees Q2 revs of $275-280 vs. $281.13 mln Thomson Reuters consensus. Q1 (Dec) GAAP gross margin 81.8% vs 81-82% prior guidance. "Product revenue was up nearly 44 percent from the first quarter of fiscal 2010, and service revenue grew more than 35 percent during the same period. On a regional basis, all geographies delivered sequential and year-over-year gains, led by Asia Pacific where revenue was up 11 percent from the prior quarter and 62 percent from the first quarter a year ago. Underpinning the continued strength in our service business, deferred revenue grew 10.9 percent to $287.8 million from the previous quarter."
4:06PM Plexus beats by $0.02, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY11 revs in-line (PLXS) 30.65 -0.29 : Reports Q1 (Dec) earnings of $0.61 per share, $0.02 better than the Thomson Reuters consensus of $0.59; revenues rose 31.5% year/year to $565.8 mln vs the $565.6 mln consensus. Co issues in-line guidance for Q2, sees EPS of $0.53-0.58, excluding excluding any restructuring charges, vs. $0.55 Thomson Reuters consensus; sees Q2 revs of $540-570 mln vs. $557.80 mln Thomson Reuters consensus. For FY11, co lowers expected revenue growth in the range of 10-13% over the prior fiscal year, which equates to ~$2.20-2.28 bln vs $2.34 bln consensus from 15% revs growth, which equates to ~2.32 bln. Co said, While this would be strong organic revenue growth, it is below both our enduring goal of 15% revenue growth and our expectations just a quarter ago."
2:13PM Zoran urges stockholders not to sign Ramius' consent solicitation (ZRAN) 5.62 -0.16 : Co responded to the filing of consent solicitation materials by Ramius Value and Opportunity Master Fund Ltd, by which Ramius is attempting to take control of Zoran's Board of Directors by removing all six of the Company's independent directors. The Board strongly advises stockholders not to sign any white Ramius consent card and to discard any materials they have received from Ramius. "We urge all stockholders to reject Ramius' efforts to take control of Zoran's Board and the Company through its consent solicitation... In 2010, in response to challenging market conditions and business-specific issues in the DTV and DVD business segments, Zoran's Board of Directors and management proactively implemented a number of aggressive strategic actions to better position the company for long-term growth and profitability. In the coming weeks, we are committed to updating stockholders on the performance of our business and the reasons to disregard Ramius' consent efforts.
11:00AM Agilent signs agreement to acquire assets of A2 Technologies; deal to expand Agilent's spectroscopy portfolio (A) 43.57 -0.78 : Co and A2 Technologies announces they have signed a definitive agreement for Agilent to acquire specific assets of A2 Technologies. The acquisition includes substantially all of A2 Technologies' intellectual property, technology, employees and its spectroscopy product portfolio. Transaction is expected to be final in mid-February. Financial details were not disclosed.
Diodes Incorporated (DIOD) announced the expansion of its patented Super Barrier Rectifier portfolio with the introduction of 12A and 15A rated devices in the compact PowerDI 5 package.
09:50 am CREE Guides Q3 Below Consensus (CREE)
Cree (CREE $54.12 -8.59) reported second quarter earnings of $0.55 per share, $0.03 worse than the Thomson Reuters consensus of $0.58.
Revenues rose 28.8% year-over-year to $257 million versus the $276.6 million consensus.
CREE reports Q2 operating margins 26.5% vs 27.3% Thomson Reuters consensus; Q1 31.3%. CREE reports Q2 gross margins of 47.1% vs 47.8% Thomson Reuters consensus; Q1 49.0%. Co issues downside guidance for Q3, sees EPS of $0.38-0.45 versus $0.58 Thomson Reuters consensus; sees Q3 revs of $245-265 vs. $288.33 million Thomson Reuters consensus.
CREE said, "Q2 results reflected continued growth in our LED lighting product line, but revenue and earnings were lower than our targets due primarily to lower sales to our LED component distributors in Asia... We are managing through an inventory correction in Asia in the near term, but the opportunity in LED lighting has not changed. Quarterly revenue increased 29% year-over-year and based on the market trends we are seeing, and the success of our own LED lighting business, we are more confident that we will see continued adoption of LED lighting over the next several years."
09:47 am IBM Guides FY11 In-line (IBM)
IBM (IBM $154.60 +3.95) reported fourth quarter earnings of $4.18 per share, $0.10 better than the Thomson Reuters consensus of $4.08.
Revenues rose 6.6% year-over-year to $29.02 billion versus the $28.26 billion consensus.
For the fiscal year 2011, the company expects to see GAAP EPS of at least $12.56 versus the $12.58 Thomson Reuters consensus. IBM said that it expects to deliver full-year 2011 GAAP earnings per share of "at least $12.56; and operating (non-GAAP) earnings per share of at least $13.00, which puts the company on track for the 2015 road map of at least $20 of operating (non-GAAP) earnings per share."
The 2011 operating (non-GAAP) earnings exclude $0.44 per share for the amortization of purchased intangible assets, other acquisition-related charges and certain retirement-related costs that the company has defined as non-operating. IBM's tax rate was 24.4%, down 0.2 points year over year.
Net income margin increased 0.4 points to 18.1 percent. The Americas' fourth-quarter revenues were $12.2 billion, an increase of 9% (9%, adjusting for currency) from the 2009 period. Revenues from Europe/Middle East/Africa were $9.5 billion, down 2 percent (up 4%, adjusting for currency). Asia-Pacific revenues increased 14 percent (7 percent, adjusting for currency) to $6.6 billion. OEM revenues were $784 million, up 21 percent compared with the 2009 fourth quarter.
09:36 am AAPL Guides Q2 Above Consensus (AAPL)
Apple (AAPL $347.04 +6.39) reported first quarter earnings of $6.43 per share, $1.04 better than the Thomson Reuters consensus of $5.39.
Revenues rose 70.5% year-over-year to $26.74 billion versus the $24.42 billion consensus.
AAPL reports first quarter iPod sales of 19.45 million compared to street expectations of approx.17.7 million. AAPL reports first quarter iPad sales of 7.33 million compared to street expectations of ~6.3 million.
AAPL reports first quarter iPhone sales of 16.24 million compared to street expectations of approx.15.6 million.
AAPL reports first quarter Mac sales of 4.13 million compared to street expectations of approx. 4.25 million.
For the second quarter, the company issued earnings guidance of $4.90, well above the $4.46 Thomson Reuters consensus. ON the top line, the company expects to see revenues of $22 billion versus the $20.71 billion Thomson Reuters consensus.
AAPL said, "We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales... We are firing on all cylinders and we've got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can't wait to get their hands on." |
