From Briefing.com: 6:03PM Monday After Hours prices levels vs. 4 pm ET: Consistent with Monday's mixed tone in the cash market, the after hours futures action also reveals a mixed disposition. Presently, the S&P futures, at 1065, are in line with fair value while the Nasdaq 100 futures, at 1322.50, are approximately 3 points above fair value
The table below lists some of the more notable after hours items/movers. For the full rundown of companies reporting their results, and the added detail surrounding those reports, be sure to visit our (Hourly) In Play, Earnings Calendar, and Earnings Guidance pages. Company Stock Move Reason for Move
Pacific Sunwear (PSUN) 18.47 +0.17 (+0.9%) Reports Q2 (Jul) earnings of $0.25 per share, $0.02 better than the Reuters Estimates consensus of $0.23; revenues rose 17.2% year/year to $274.8 mln vs the $276.7 mln consensus. Co states it is comfortable with analyst estimates for Q3 and Q4 ($0.39 and $0.52 respectively). Says Y04 EPS is expected to be approx $1.35; Reuters consensus is $1.32. Co also states that same-store sales guidance for Q3 and Q4 is for same-store sales growth of 5% in each quarter. Good news all around for PSUN. Remains to be seen if buying interest will be sustained in regular trading as apparel retailers are running into a wall of worry these days with respect to concerns surrounding consumer spending and the ability to hit profit forecasts. Related stocks include the likes of ANF, GPS, AEOS and LTD
Symantec (SYMC) 43.80 -1.77 (-3.9%) Co announced that it discovered an error in its calculation of deferred revenue, which represents an accumulated adjustment of $20 mln. Co is revising the Q1 (Jun) financial results that were announced on its earnings call on 7/21 to reflect this correction. The revised results will be reflected in the co's Form 10-Q scheduled to be filed on 8/10. Although the revisions to revenue and earnings are an accumulation of the effect of the error over multiple quarters, the effect of the error was not material to any relevant prior periods. To correct this error, the income statement will reflect a $20 mln reduction in revenue during Q1 with a corresponding $20 mln increase in deferred revenue in the balance sheet as of 7/2. For Q1, non-GAAP earnings are being revised to $0.36, $0.03 lower than previously announced. This error will not impact the co's previously stated full-year guidance. Because the revision increases deferred revenue in Q1, guidance for the co's fiscal Q2 (Sep) will be updated as follows: Revs estimated at $588 mln (previously $580 mln), Reuters consensus is $586 mln. At this revenue guidance, non-GAAP EPS is estimated to be $0.38 (previously $0.37), Reuters consensus is $0.38.
Roxio (00C0) 4.45 +0.31 (+7.5%) Reports Q1 (Jun) loss of $0.08 per share, $0.18 better than the Reuters Estimates consensus of ($0.26); revenues rose 23.6% year/year to $29.9 mln vs the $28.7 mln consensus. Co sees Q2 revs of $25 mln, Reuters consensus is $27.3 mln.... Separately, announced that Sonic Solutions (SNIC 13.60, +0.97, +7.7%) will acquire the consumer software division of ROXI for a total purchase price of $80 mln. Under the terms of the transaction, ROXI will receive $70 mln in cash and shares of SNIC common stock valued at $10 mln... ROXI plans to focus its business on the digital music market and will change its corporate name to "Napster" and trade under the ticker "NAPS" on the Nasdaq, assuming the successful completion of this transaction.
Urologix (ULGX) 8.55 +0.67 (+8.5%) Reports Q4 (Jun) earnings of $0.06 per share, $0.02 better than the Reuters Estimates consensus of $0.04; revenues rose 35.0% year/year to $7.0 mln vs the $7.0 mln consensus. Co also guides: sees Y05 EPS of $0.20-0.26, vs consensus of $0.18 and revenues of $30-32 mln, vs consensus of $31.7 mln.
TLC Vision (TLCV) 8.37 +0.42 (+5.3%) Reports Q2 (Jun) non-GAAP earnings of $0.11 per share, excluding one-time adjustments, $0.02 better than the Reuters Estimates consensus of $0.09; revenues rose 36.2% year/year to $64.7 mln vs the $61.5 mln consensus.... Related competitors include LCAV, NOVA and OCLR
Tomorrow, the FOMC meeting will take center stage. The market is expecting the FOMC to raise the fed funds rate by 25 basis points, which leaves the policy directive the key item of interest. Participants will be looking for hints in the wording, following the disappointing July employment report, that suggest the FOMC will refrain from raising rates at the September 21 FOMC meeting.
When the dust settles from the FOMC decision at 14:15 ET, the market will then turn its attention to Cisco's (CSCO) fiscal Q4 (Jul) earnings report after the close. According to Reuters Estimates, the consensus EPS and revenue estimates for the networking company are $0.20 and $5.89 bln, respectively. For Q1 (Oct) Cisco is expected to deliver a profit of $0.20 on revenue of $6.06 bln. Dow component Disney (DIS) is the other heavyweight scheduled to report its results following Tuesday's close. The fiscal Q3 (Jun) consensus EPS and revenue estimates are $0.27 and $7.08 bln.
As always, oil prices will command added attention as a market driver. On Monday crude futures came within a penny of $45/bbl, setting another record high and fueling speculation that they are on their way to $50/bbl.
-- Patrick J. O'Hare, Briefing.com
5:04PM NVIDIA announces $300 mln stock repurchase program (NVDA) 9.85 +0.42: -- Update -- "Our Board of Directors and management are confident in NVIDIA's ability to achieve long-term growth. We believe that the repurchase program is a good investment of available funds and underscores our commitment to enhancing stockholder value by assisting in offsetting dilution from employee stock plans," said Jen-Hsun Huang, President and Chief Executive Officer." The purchases will be funded from available working capital. As of June 30, 2004 NVIDIA had over $600,000,000 of cash, cash equivalents and marketable securities
5:00PM ADC Telecom announces Q3 preliminary revs and EPS below consensus (ADCT) 2.22 -0.03: At this time, ADCT expects sales from continuing operations in Q3 to be around $235 mln, Reuters consensus is $254 mln and adjusted EPS from continuing operations to be around breakeven, Reuters consensus is $0.01. For Q3, the results of the Cuda, FastFlow and Singl.eView product lines will be removed from continuing operations and accounted for as discontinued operations. Co's previous outlook on 5/19 did not give effect to these recently discontinued operations, which had combined sales of approx $22 mln in Q2.
4:58PM BMC Software adjusts JunQ results (BMC) 14.33 -0.10: Subsequent to co's earnings press release, BMC completed its analysis of its consolidated tax provisions and associated balance sheet accounts including an assessment of potential tax exposures and the realization of its net deferred tax assets. As a result, co's income tax expense for the quarter is $19.6 mln as compared to the previously announced benefit of $21.5 mln. Q1 net earnings on a GAAP basis were $10.7 mln, or $0.05 per share, as compared to the previously announced net earnings on a GAAP basis of $51.8 mln, or $0.23 per share.
1:03PM Sector Watch: Mixed trade as index -SOX- hovers near support : Relatively quiet trade with the index (SOX 386.56 -0.32) currently back hovering near support (last week's low, 50% retrace, bear channel) in the 385 area (session low 385.13). Components on the plus side today include: BRCM +2%, LSI +1.2%, AMAT +0.3%, AMD +0.1%. Weaker performers include: MU -2.4%, NSM -1.4%, LLTC -0.9%, TXN -0.6%. Support for the Semi HOLDRs (SMH 32.90, -0.15, session low 30.39) is at 30.45 (last week's low) and the 30.07/30 area.
12:00PM Maxim Integrated Products (MXIM) 44.24 +0.01: Maxim Integrated Products said orders improved significantly Y/Y across all business units and geographies in Q4 as industrial and information technology spending increased worldwide.
EPS came in at $0.36 on revenue of $420.963MM (+42.7% Y/Y) vs. Reuters Research consensus at $0.36 on $420.59MM. Gross margin rose 16 bps Y/Y to 70.2% due to product mix and manufacturing efficiencies. Operating margin improved 293 bps Y/Y to 43.1%.
Bookings increased 71% Y/Y to $535MM but consumption is estimated at only $439MM (82%). Power management products grew 68% Y/Y, with communications increasing 63%, data converter 72%, and mixed-signal 45%. Notebook orders increased 36% Y/Y and wireless 30%. The Pacific Rim accounted for 41%, U.S. 29%, Europe 17%, and Japan 12%.
Backlog rose 21.1% Q/Q to $529MM, including $428MM (+14.7% Q/Q) to be shipped in Q1. Guided for Q1 revenue of $455MM (+46.7% Y/Y). Consensus is at EPS of $0.41 on $450.97MM.
The following table shows price multiples and Y/Y growth rates for MXIM compared against direct comps and the semiconductor components group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Rev Growth (%)
TTM 2004E 2005E TTM 2004E 2005E
Maxim Integr Cir (MXIM) 6.0 20.2 9.9 7.2 24.8 37.3
Altera (ALTR) 4.0 17.3 8.0 6.9 5.7 23.3 30.7 21.7
Analog Devices (ADI) 3.2 17.7 5.8 4.9 4.0 26.3 36.9 22.3
Linear Tech (LLTC) 6.4 13.5 14.3 10.4 9.1 33.1 82.0 15.3
Microchip Tech (MCHP) 4.5 17.2 7.4 6.1 5.4 14.6 29.4 13.5
National Semi (NSM) 2.6 19.0 2.9 2.3 2.1 (0.5) 23.8 11.7
Texas Instruments (TXN) 1.8 14.6 3.1 2.8 2.3 28.6 31.8 13.1
Semiconductors 2.0 18.7 3.5 n/a 24.0 n/a
*P/SG Ratio: Normalized trailing 12 month (Price / Sales) / Growth ratio as of July 30, 2004.
**P/OPG Ratio: Normalized trailing 12 month (Price / Operating Income) / Growth ratio as of July 30, 2004.
MXIM has declined over 16% since the Q2 review, Story Stocks, February 6, 2004, when we suggested that investors wait for a 10-15% pullback. We commented that growth and operational performance expectations baked into shares were significantly above actual performance. Shares are at fair value assuming sustained upper 20% revenue growth from F06 and lower 40% operating margin.
MXIM has the fab capacity to grow revenue in-line with expectations. The company's production limit is expected to increase from approximately $580MM per quarter in Q1 to $620MM (12.5MM 8-inch equivalents) in Q2. The San Antonio fab is operating at one-third utilization with the capacity to produce an incremental $200MM in wafers; the Beaverton fab is transitioning from 6- to 8-inch capacity; and the new Thailand fab is just ramping production.
But looking at expectations from the demand side of the equation, the slow-down in jobs creation as reflected in Friday's nonfarm payrolls report raises concerns that end-market demand will not be as high as anticipated. MXIM's sizeable backlog slated for shipment in Q1 mitigates near-term demand volatility. With consumption running almost 20% below bookings, a softening of demand will leave MXIM hard-pressed to meet growth and margin expectations in the out-periods.
Upside is limited even if these concerns prove unfounded. Market expectations are in-line with management's goal of growing profits by 30% Y/Y but ahead of the company's seven-year compound annual growth rate in the lower 20% range. We would wait until there is greater clarity into demand and margin trends for Q2 and beyond, and/or for an additional 20-30% pullback before revisiting name.--Ping Yu, Briefing.com
11:52AM Aneren (ANEN) 11.33 +0.43: Anaren reported Q4 results last week. EPS came in at $0.12 on revenue of $24.827MM (+34.3% Y/Y) vs. Reuters Research consensus at $0.11 on $24.04MM. Gross margin increased 776 bps Y/Y to 38.2% due to higher sales of wireless products. Operating margin increased 838 bps Y/Y to 11.6%.
Wireless revenue increased 42% Y/Y to $18.1MM (73% of sales), driven by increased demand for both standard component and custom assembly products. Space and Defense revenue were flat at $6.8MM (27% of sales).
Guided for Q1 EPS of $0.10-0.11 on $23-$25MM (+25.7-36.6% Y/Y) vs. consensus at $0.12 on $24.65MM. Gross margin is expected to be in the 35-38% range for F05. Operating margin is expected to be in the 10-12% range.
Shares trade at a premium to peer group and are at fair value assuming sustained lower 20% revenue growth from F06 and 17-18% operating margin. Revenue expectations are in-line with the company's seven-year compound annual growth rate in the lower 20% range but margin expectations are materially above performance over the past four years. Eight-year peak operating margin is 19.1%. We would wait until the company demonstrates sustainable operating margin in at least the mid-teens range or for a 20-30% pullback before reevaluating name.--Ping Yu, Briefing.com
9:06AM Ratings Briefing - REV : Prudential upgrades Revlon (REV 2.13) to Overweight from Underweight. Says Q4 is the turning point for company's earnings and stock. New products for 1H05 ship in 4Q04, where the firm expects EPS of $0.13 - the company's first profit in 21 qtrs. REV's strategy to improve margins and regain share is almost two years old; results should be more visible in 2005; if it works, EBITDA will grow nearly 20% annually for the next five years. Company has also restructured its balance sheet, reducing debt by over one-third, and annualized interest expense by $75 mln. Price target is $4.
What It Means:
At Prudential an Overweight rating means that firm expects the stock's total return to exceed the average total return of all of the stocks covered by the analyst (or analyst team) over the next 12-18 months.
Why the Call Should Move the Stock
Firm doing a complete about-face in ratings sentiment (to Overweight from Underweight), which should pique the interest of speculative accounts
Shares of REV are down 38% from an interim peak of 3.45 hit on June 18... an upgrade at this juncture should help fuel belief that stock is oversold and due for a bounce
Prudential upgrade is the first ratings change on REV from any firm in nearly a year... with such an extended gap between ratings changes, the Prudential upgrade is likely to be seen as a sentiment inflection point that will drive some speculative buying interest
Sidenote:
On August 3, Reuters reported that REV reiterated its FY04 guidance and expects revenue growth of 3.0% with EBITDA of approximately $190 mln
Company is engaged in a restructuring effort to reduce debt, bolster operating margins, and regain market share
--Patrick J. O'Hare, Briefing.com |
