From Briefing.com: Weekly Recap - Week ending 13-Apr-12Dow -136.99 at 12849.52, Nasdaq -44.22 at 3011.33, S&P -17.30 at 1370.27.
The S&P 500 closed down 2.0% for the week and saw its biggest weekly decline in 2012 as European sovereign debt fears and disappointing U.S. data weighed. Worries over the health of Spain came to a head on Friday after it was reported net borrowing by Spanish banks from the European Central Bank surged to EUR228 billion in March from EUR152 billion in February.
That news sent Spanish CDS up to a record high near 500 basis points, and caused its 10-yr yield to climb back above 6.00%. Economic data here in the U.S. also disappointed as claims data and Michigan Sentiment fell short of estimates.
This week's losses came despite a two-day rally in the middle of the week that saw equities climb more than 2.0% on the possibility of more quantitative easing following a speech from Fed Vice Chairman Janet Yellen who suggested the Fed could hold rates low through 2015 if necessary.
Earnings season got started on the right foot as Alcoa, Google, JP Morgan Chase, and Wells Fargo all reported better than expected results.
Index Started Week Ended Week Change % Change YTD %
DJIA 13060.14 12849.59 -210.55 -1.6 5.2
Nasdaq 3080.50 3011.33 -69.17 -2.2 15.6
S&P 500 1398.08 1370.26 -27.82 -2.0 9.0
Russell 2000 818.18 796.29 -21.89 -2.7 7.5
3:40PM Earnings Preview for the week of April 16th-20th (SUMRX) : Of the hundreds of companies reporting earnings the week of April 16th-20th some of the bigger names include:
Monday: C, MTB, BRO, ICUI.
Tuesday: KO, CMA, FRX, GS, JNJ, NTRS, STT, AMTD, USB, CREE, IBM, INTC, ISRG, STX, and YHOO.
Wednesday: ABT, BLK, FCFS, HAL, PJC, PII, STJ, TXT, AXP, CBST, EBAY, FFIV, MAR, QCOM, VMW, and YUM.
Thursday: BAC, BX, DD, EMC, FITB, KEY, MS, NOK, NUE, BTU, PM, LUV, VZ, ALTR, CMG, CB, ETFC, FSL, MBFI, MSFT, SNDK, and TPX
Friday: AEP, CP, GE, HON, KCI, and SLB
8:01AM Micron announces pricing of convertible senior notes offerings (MU) 7.12 : Co announced the pricing of an offering of $480.0 mln aggregate principal amount of its 2.375% convertible senior notes due 2032 and $390.0 mln aggregate principal amount of its 3.125% convertible senior notes due 2032.
Maxthon announced its collaboration with Intel (INTC). Though this partnership, Maxthon will work closely with Intel to optimize its browser-based GPU acceleration technology with Intel's next generation of chips.
Google (GOOG $635.00 -16.01) reported first quarter earnings of $10.08 per share, excluding non-recurring items, $0.44 better than the Capital IQ Consensus of $9.64; net revenues rose 24.5% year/year to $8.14 billion versus the $8.15 bln consensus. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approxmately 39% over the first quarter of 2011 and increased approxmately 7% over the fourth quarter of 2011. Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approxmately 12% over the first quarter of 2011 and decreased ~6% over the fourth quarter of 2011. Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, in the first quarter of 2011. Operating expenses, other than cost of revenues, were $3.47 billion in the first quarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues. As of March 31, 2012, cash, cash equivalents, and short-term marketable securities were $49.3 billion. Operating expenses, other than cost of revenues, were $3.47 billion in the first quarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues. Google announced that its Board of Directors unanimously approved a stock dividend proposal designed to preserve the corporate structure that has allowed Google to remain focused on the long term. Proposal would effectively implement 2-for-1 stock split while preserving long-term governance structure.
Powerwave (PWAV $1.42 -0.73) issued downside guidance for the frist quarter with revenues of $40-45 mln versus the $62.30 million consensus. For the first quarter, the company continued to encounter weakness in several of its markets, as network operators continued to be conservative in their spending plans and several markets continued to delay capital spending plans.
Infosys (INFY $49.09 -7.68) reported fourth quarter earnings of INR40.54 per share, INR0.72 worse than the consensus of INR41.26, while revenues rose 22.1% year/year to INR88.52 billion but may not compare to the INR92.15 bln consensus. The company issued guidance for the first quarter with EPS of INR36.89, may not be comparable to INR40.29 consensus and revenues of INR90110-91000, may not be comparable to INR94.47 billion consensus The company issued guidance for fuscak year 2013 with EPS of INR158.76-161.41, may not be comparable to INR169.08 consensus and revenues of INR384310-391360, may not be comparable to INR397.08 bln consensus.
10:21 am CPI gain in line with expectations
Consumer prices increased 0.3% in March, down from 0.4% in February and exactly in-line with the Briefing.com consensus expectation. Gasoline prices increased 1.7% in March after increasing 5.7% in February. The gain in gasoline more than offset a 0.4% decline in household energy services and led the overall energy index up 0.9%. This was in direct contrast to the March PPI, where the seasonal adjustments deflated the gasoline prices by such a large extent that overall energy prices were down on a month-to-month basis.
Food prices increased 0.2%. Year-over-year, headline inflation declined to 2.7%. That is the sixth consecutive monthly decline. Excluding food and energy, core prices increased 0.2% in March, up from 0.1% in February and also in-line with expectations. All of the major sub-indices showed positive price growth in March. Strong price increases for used vehicles (1.3%) and shelter (0.2%) provided the bulk of the gain in core prices. Year-over-year, core prices continued its steady upward trend and increased to 2.3%.
10:20 am Weak employment growth weighs down consumer sentiment
The preliminary reading of the University of Michigan Consumer Sentiment Index for April decreased from 76.2 in March to 75.7. The Briefing.com consensus expected the index to hold fairly stable at 76.1.
Consumer sentiment generally trends with changes in oil/gasoline prices, unemployment, the stock market, and media reports. With gasoline prices holding pretty steady over the past few weeks, the slight decline in sentiment is most likely a response to the sudden deceleration in employment growth announced in the March employment report. That likely led the Present Conditions Index down from 86.2. in March to 80.7 in April.
Consumers seem to believe, however, that the weakness in the economic situation is temporary. The Future Expectations Index increased from 69.8 to 72.5. That its highest level since reaching 73.5 in September 2009. The drop in sentiment does not affect our consumption outlook. Consumption growth is reliant upon income growth. As long as the employment numbers return to an upward moving track, consumption growth will follow suit regardless of the performance of the Consumer Sentiment Index.
10:05 am Well Fargo shares fall by 2% despite beat on earnings
Wells Fargo (WFC +33.43 -0.59) reported first quarter earnings of $0.75 per share, $0.03 better than the consensus of $0.72, while revenues rose 5.0% year/year to $21.64 billion versus the $20.5 bln consensus. Revenue increased $1 billion from fourth quarter 2011, to $21.6 billion. Total revenue increased due to growth in noninterest income, including strong mortgage banking and market sensitive revenues, while net interest income remained stable. Businesses generating linked-quarter revenue growth included asset-backed finance, brokerage services, capital finance, capital markets, commercial banking, corporate banking, corporate trust, dealer services, equity funds, global remittance, insurance, international, mortgage banking, personal credit management, real estate capital markets, retail sales finance, private student lending, and wealth management.
Net interest income was $10.9 billion, in line with fourth quarter 2011. Average earning assets were essentially unchanged from the prior quarter. The net interest margin increased to 3.91 percent from 3.89 percent in fourth quarter 2011 as the benefit of disciplined deposit pricing and redeployment of short-term investments into long-term securities offset the runoff of higher yielding loans and investments.
09:53 am JP Morgan shares decline by nearly 2% despite beat on earnings
JPMorgan (JPM $43.93 -0.91) reported first quarter GAAP earnings of $1.31 per share, $0.16 better than the Capital IQ GAAP Consensus Estimate of $1.15; revenues rose 5.9% year/year to $26.71 billion versus the $24.6 billion consensus. Net income was $5.4 billion, down by $172 million, or 3%, from the prior year. The decrease in earnings was driven by higher noninterest expense, largely offset by higher net revenue. Noninterest revenue was $15.6 bln, up by $1.8 bln, or 13%, from the prior year.
The increase was driven by higher mortgage fees and related income and a $1.1 bln benefit from the Washington Mutual bankruptcy settlement, partially offset by lower principal transaction revenue, driven by a $907 mln loss from DVA. Net interest income was $11.8 bln, down by $187 mln, or 2%, compared with the prior year. Credit: The provision for credit losses was $726 mln, down $443 mln, or 38%, from the prior year. The total consumer provision for credit losses was $637 mln, down $918 mln from the prior year. The decrease in the consumer provision reflected improved delinquency trends across most consumer portfolios compared with the prior year, partially offset by the effect of a lower net reduction in the allowance for loan losses compared with the prior year. Consumer net charge-offs1 were $2.4 bln, compared with $3.6 bln in the prior year, resulting in net charge-off rates of 2.60% and 3.77%, respectively. The Firm's allowance for loan losses to end-of-period loans retained was 3.11%, compared with 4.10% in the prior year.
The Firm's nonperforming assets totaled $11.7 bln at March 31, 2012, down from the prior-year level of $15.0 bln and up from the prior-quarter level of $11.0 bln... Noninterest expense was $18.3 bln, up 15% from the prior year, driven by higher compensation and noncompensation expense, including $2.5 bln of additional litigation reserves, predominantly for mortgage-related matters.
09:50 am Google shares decline by 2% following miss on revenues and declines in cost per click
Google (GOOG $638.16 -12.86) reported first quarter earnings of $10.08 per share, excluding non-recurring items, $0.44 better than the Capital IQ Consensus of $9.64; net revenues rose 24.5% year/year to $8.14 billion versus the $8.15 bln consensus. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 39% over the first quarter of 2011 and increased approximately 7% over the fourth quarter of 2011. Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 12% over the first quarter of 2011 and decreased ~6% over the fourth quarter of 2011.
Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, in the first quarter of 2011. Operating expenses, other than cost of revenues, were $3.47 billion in the first quarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues. As of March 31, 2012, cash, cash equivalents, and short-term marketable securities were $49.3 billion. Operating expenses, other than cost of revenues, were $3.47 billion in the first quarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues. Google announced that its Board of Directors unanimously approved a stock dividend proposal designed to preserve the corporate structure that has allowed Google to remain focused on the long term. Proposal would effectively implement 2-for-1 stock split while preserving long-term governance structure. |
