From Briefing.com: 5:48PM Thursday After Hours prices levels vs. 4 pm ET: Stocks are a bit weaker in the after hours as selling in technology prevails. Like they were with Cisco's (CSCO) report on Tuesday, investors are dissatisfied with Dell's (DELL) Q1 (Apr) results despite in-line to marginally higher numbers. Buyers remain skittish of committing new money in this technically-deteriorating market. Presently, the S&P futures, at 1095, are 1 point below fair value and the Nasdaq 100 futures, at 1411, are 7 points below fair value.
The below table outlines Dell's report, as well as the other relevant news items of the night.
After Hours Mover % Change Move Reason for Move
Advanced Digital (ADIC) -26% Storage company misses the Reuters Research top and bottom-line estimates by a wide margin in its Q1 (Apr) report; Company's marketing blitz did not help spur sales, and ended up contributing to the net loss; News of management's additional 5 mln share repurchase program did not help cushion the blow
Analog Devices (ADI) +3% After issuing better than expected Q2 (Apr) guidance on Feb 12, large-cap semiconductor name exceeds the consensus EPS estimate by $0.04 at $0.35; Revenues also showed upside, rising 12% to $678.5 mln, and gross margins hit a new peak at 59.2%; Citing the 20% sequential increase in its backlog, Analog set Q3 (July) EPS and sales targets that were ahead of market expectations
BEA Systems (BEAS) -15% Application software provider matches the Q1 (Apr) consensus EPS estimate of $0.08, but misses the Street's revenue estimate; Sales rose a slim 11% to $262.6 mln versus the consensus of $266.1 mln; License revenues were down 2% to $120.2 mln, short of management's guidance of $127-132 mln; On its call, management puts Q2 (July) EPS at $0.08 and revenues at $265-275 mln, both below the consensus estimates
Dell Inc (00C0) -3% After increasing its Q1 (Apr) sales forecast on Apr 7, computer hardware name reports a 22% rise in EPS to $0.28 (consensus of $0.28) and a 21% increase in revenues to $11.54 bln (consensus of $11.35 bln); Dell also says it sees Q2 (July) EPS of $0.29 and revenues of $11.7 bln, vs the Reuters Research estimates of $0.29 and $11.56 bln, respectively; Stock takes a hit, though, off the lack of Q1 upside surprise and a sequential decline in gross margin
Kohl's (KSS) +1% Mid-tier retailer meets the Q1 (Apr) consensus expectation of $0.33 but falls shy of the consensus top-line estimate; Sales rose 12% to $2.38 bln (consensus of $2.41 bln) as same store sales decreased 0.1%; KSS gets a bit of a pop anyway, after falling 19% since mid-March and slipping below its 200-day moving average
Tomorrow, a slew of economic reports meets investors at the start of trading. March Business Inventories, April CPI, April Industrial Production, April Capacity Utilization, and the preliminary May Consumer Sentiment figure are all due out before 10 ET.
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com
Close Dow -34.42 at 10,010.74, S&P -0.81 at 1,096.47, Nasdaq +0.44 at 1,926.03: Today's session was nothing to write home about as the major averages spent the entirety of the day trading in a rather spiritless, trendless fashion... As the market got rolling, it looked like it was likely to extend yesterday's afternoon rally... Yet, participants were hesitant and showed little conviction, as exhibited by the light volume totals and a lack of consistent sector leadership to the upside or to the downside...
With respect to the latter, while influential sectors including technology and financial were among the biggest gainers at certain points in the session, the market closed with the bulk of the groups little changed for the day... Similarly, while the market chopped around through the entirety of the session, the S&P 500 and the Nasdaq closed the session basically flat, while the Dow posted only mild losses... The market's lack of conviction was rooted in participants' reluctance to commit to the view that stocks may now be fairly priced for the risk of rising interest rates on the heels of today's economic data, which included the PPI report at 0.7% (consensus 0.3%) and evoked fears that inflation is accelerating...
Granted, the higher than expected PPI report was largely the result of higher energy prices, which are hardly surprising in view of the continued rise in the price of crude oil, which closed at a new high of $41.05/bbl... Core CPI, in the meantime, was in-line with consensus of 0.2%... The Retail Sales report at -0.5% was below the consensus of -0.2%, but came on the heels of a strong 2.0% gain in March and excluding autos was better than expected at -0.1% (consensus -0.2%)... Finally, the Initial Claims report checked in at 331K (consensus 325K)...
Elsewhere, the bond market closed with losses across the yield curve and the 10-year note down 10/32, bringing its yield up to 4.85%...NYSE Adv/Dec 1559/1760, Nasdaq Adv/Dec 1363/1767
2:41PM Aeroflex (ARXX) 12.27 -0.59: Aeroflex provides microelectronics for the aerospace/defense market, and test and measurement solutions for the broadband communications market. The company is the world leader in custom and standard radiation hardened semiconductors, a high margin market segment with substantial barriers to entry that grew through the downturn.
The company reported Q3 results after the close on Wednesday. Pro-forma EPS was $0.11 on revenue of $116.846MM (+61.1% Y/Y) vs. Reuters Research consensus at $0.11 on $113.85MM. Results benefited from Celerity Systems acquisition but company has been growing organically at 10% Q/Q for several quarters.
ATS (test and measurement) revenue increased 54.4% Y/Y to $67.8MM (58% of sales). AMS (microelectronics) revenue increased 86.1% Y/Y to $45.4MM (39% of sales). Aerospace/defense accounts for approximately 60% of sales. Commercial/broadband accounts for approximately 40% of sales. U.S. accounts for approximately 66% of sales; international 34%.
Backlog totaled $181.7MM, of which $85MM will ship over the next three months. Approximately $120MM is in Aerospace/Defense and $60MM in commercial.
Gross margin increased 555 bps Y/Y to 46.3% due to sales mix within the microelectronics division in favor of standard products. Operating margin, excluding amortization, increased 436 bps Y/Y to 12.7% due to scale efficiencies and cost cutting. Test and measurement operating margin improved from the 2% posted in Q2, and microelectronics from the reported 20.6%.
Guided for Q4 pro-forma EPS of $0.13 (GAAP of $0.11) on $128.5MM (+63.4% Y/Y) vs. consensus at $0.12 on $122.68MM. Gross margin is expected to be 45%; SG&A to be 22%; R&D to be 11%; and amortization of acquired intangibles to be approximately $0.02 cents per diluted share.
The following table shows price multiples and Y/Y growth rates for ARXX compared against industry comps within the electronic instruments & controls, semiconductor capital equipment, semiconductor and communications equipment groups. Company *P/SG **P/OPG P/S Revenue Growth
TTM 2005E 2005E TTM 2004E 2005E
Aeroflex (ARXX) 1.3 90.1 2.3 2.0 1.7 37.0% 44.5% 19.8%
Agilent (A) 1.4 (32.9) 2.0 1.8 1.6 4.9% 13.7% 11.8%
Kyocera (KYO) 1.1 13.7 1.4 n/a 6.6% n/a
Spirent (SPM) 1.3 34.5 1.3 (31.6%)
Texas Instruments (TXN) 2.5 26.2 4.3 3.5 3.0 20.9% 32.1% 15.5%
Electronic Instruments & Controls 0.7 265.8 0.9 n/a 7.2% n/a
Semiconductor Capital Equipment 2.4 532.4 3.0 (3.7%)
Semiconductors 2.5 31.0 4.2 18.1%
Communications Equipment 1.5 31.3 2.0 (2.8%)
Blended 1.6 131.8 2.2 4.3%
*P/SG Ratio: Normalized Trailing 12 month (Price / Sales) / Growth ratio as of May 7, 2004.
**P/OPG Ratio: Normalized Trailing 12 month (Price / Operating Income) / Growth ratio as of May 7, 2004.
Shares trade at a discount to peer group and are, based on our inverted EVA/DCF model, priced for sustained 20-21% revenue growth from F06 assuming 20% operating margin. Implied growth rate falls to lower teens assuming 25% operating margin.
We think there is upside to expectations. ARXX is positioned in two sizeable markets with a total addressable market opportunity of approximately $10B. Management's near-term target is 15% annual revenue growth to over $600MM in revenue within two years, and operating margin in the upper teens to 20% range. Over the long-term, management is driving growth and margins expansion by integrating up the value chain from ICs to multichip modules to board level products to systems level products, and through acquisitions and geographic expansion.
Management is looking at a number of accretive acquisitions, including several firms within the mixed-signal and ASIC space. Targets are $10-15MM revenue, 10% operating margin businesses within larger firms. Company would pay approximately 1x sales. Sees opportunity to improve operating margin to 20-25% within one quarter on operational synergies. Also looking to expand test and measurement portfolio within Asia/Pacific.--Ping Yu, Briefing.com
9:39AM Openwave recent weakness provides solid entry point - Wedbush (OPWV) 9.40 -0.04: Wedbush reiterates their Buy/Focus List ratings on Openwave (OPWV), as they believe that the co's business model is nearing an inflection point; firm believes product pricing has stabilized (except for email), minimal excess WAP gateway inventory remains in the mkt, and new products such as MMS, Download Manager, and Provisioning Manager are experiencing solid demand. Firm is also becoming increasingly confident that OPWV can deliver breakeven results in the June qtr, and cites the stock's very attractive valuation. Target is $22
9:14AM Nortel selected by BellSouth for packet voice tandom switches (NT) 3.93: Co has been selected by BellSouth to provide packet voice tandem switches for its core network under an agreement announced today. BLS expects to roll-out its first voice tandem solution in Memphis, Tenn. Network testing is planned for Q2 and deployment is expected during the 2H04. The agreement includes Nortel Networks Succession Communication Server 2000 softswitch and Succession Multiservice Gateway 4000 products.
9:09AM Lucent selected by BellSouth to accelerate expansion of VoIP services (LU) 3.37: Co announced a three-year agreement with BellSouth (BLS) that will significantly accelerate the expansion of BellSouth's Voice over IP(VoIP) services throughout BellSouth's nine-state territory. No terms were disclosed.
finance.yahoo.com
EGLS? Story of my investment life. I preach timing and instead of a $2000.00 profit I take a $200.00 profit a day too early. Usually it's worse than that!
RtS |
