From Briefing.com: 4:30PM Intersil lowers Q4 EPS and revenue guidance below consensus (ISIL) 9.08 +0.39 : Co issues downside guidance, sees Q4 EPS of $0.09-$0.12 vs $0.22 First Call consensus, on revs of $125-$135 mln vs $168.3 mln consensus. Co states, " As a result of the deteriorating global economy, we are revising our fourth quarter guidance. Approximately five percentage points of this reduction is due to our own actions to reduce distributor inventory in the PC channel, and the balance is the result of a very broad-based reduction in bookings during the quarter..."
4:06PM Intersil announces the resignation of CFO (ISIL) 9.08 +0.39 : Co announces that David Zinsner has resigned from his position as Sr. Vice President and Chief Financial Officer to pursue another opportunity. Effective immediately, Jonathan Kennedy has been appointed interim Chief Financial Officer.
4:24PM Analog Devices names David Zinsner Vice President and Chief Financial Officer (ADI) 17.30 +1.15 : Co announced that David Zinsner has been appointed vice president of finance and chief financial officer, effective January 12, 2009. Mr. Zinsner will succeed Joseph McDonough, who will retire after serving as ADI's chief financial officer since 1991, in accordance with his previously announced intentions.
4:10PM Cirrus Logic lowers Q3 rev guidance (CRUS) 4.23 -0.05 : Co issues downside guidance, sees Q3 revs of $42-45 mln vs $52.90 mln First Call consensus, down from $51-55 mln previously. In-line with previous expectations, gross margin is expected to be between 54 percent and 56 percent and combined R&D and SG&A expenses are expected to range between $22 million and $24 million, which include approximately $2 million in share-based compensation and amortization of acquisition-related intangibles expenses.
5:10PM Market Internals (MKTIN) : The Dow increased 2.05% closing at 8591.69, the Nasdaq was up 2.94% to finish at 1492.38, and the S&P was up 2.58% to finish at 870.74... Leading Sectors: Home Furnishing +14.34%, Broadcasting +14.04%, Real Estate Services +13.84%, Health Care Facility +11.67%, Homebuilding +11.04%... Lagging sectors included: Diversified Metals and Mining -15.94%, Gold Index -9.06%, Aluminum -4.82%, Agriculture Products -3.91%, Tires and Rubber -3.52%... Today's movement came from higher than avg. volume in NYSE, but lower than avg. volume in Nasdaq (NYSE 1551, vs. closing avg of 1512.4; Nasdaq 2279, vs. 2426), with advances outpacing decliners (NYSE 2548/1297; Nasdaq 1736/1112), and with NYSE new lows outpacing new highs (NYSE 30/165, Nasdaq 6/108).
4:15 pm : Stocks managed to post a strong gain after a solid e-commerce sales report and encouraging news out of the financial sector helped offset dour private employment and services industry economic reports.
Trade was volatile, as has been the case of late. Stocks quickly recovered from opening losses, only to fall back into the red shortly before 2:00 PM ET. Then, a surge in buying interest sent the S&P 500 to a 2.6% gain to settle at session highs.
The Fed's Beige Book, a collection of anecdotal economic information, painted a bleak economic picture, which was widely expected. The small portion of good news -- the Philadelphia Fed said it saw loan volumes rise and the Dallas Fed said the government's capital investments have helped larger institutions feel less constrained in their lending -- helped the financial sector (+5.6%) lift the market out of the red and lead a late-session rally.
Homebuilders (+11.0%) exhibited strength on signs that the government's plan to utilize up to $500 billion to support the mortgage market is having a positive effect. The 30-year fixed rate mortgage dropped to 5.65% yesterday, according Bankrate.com, and the Mortgage Bankers Association said that mortgage applications rose by a record 112% last week.
Retailers (+6.3%) outperformed throughout the session. Shares of Amazon.com (AMZN 45.20, +4.01) spiked after comScore said e-commerce spending jumped 15% on Cyber Monday to $846 million, which marks the second highest online spending day on record. The four-day period from Black Friday to Cyber Monday saw e-commerce spending increase 13%. Since the start of November, $12.0 billion has been spent online, which is a 2% year-over-year decline, according to comScore.
In economic news, ADP reported that private nonfarm employment decreased 250,000 in November, which follows a downwardly revised reading of -179,000 in October. This was worse than the expected decline of 205,000. The ADP report has had a spotty record compared to the government's employment report. The government data, set for release on Friday, include both nonfarm private and public employment and is expected to show a decrease of 325,000 jobs.
November ISM services, a national nonmanufacturing survey, dropped to 37.3 from October's reading of 44.4. This marks the lowest level since the report started in 1997 and is well below the expected reading of 42.0. A number below 50 indicates contraction in the services industry.
In commodity trading, crude oil futures fell 0.2% to $46.86 per barrel despite the government's weekly energy report showing unexpected declines in both crude and gasoline stockpiles.
The S&P 500 has now gained in seven of the last eight sessions and is up 17.50% from its multi-year low reached on Nov. 21.DJ30 +172.60 NASDAQ +42.58 NQ100 +3.2% R2K +2.7% SP400 +2.5% SP500 +21.93 NASDAQ Dec/Adv/Vol 1075/1669/2.28 bln NYSE Dec/Adv/Vol 1048/2084/1.55 bln
3:30 pm : The stock market continues to trade in a choppy manner. It is posting a gain after finding support at the unchanged mark.
In international news, the Reserve Bank of New Zealand cut its benchmark lending rate by 150 basis points to 5.00%, as expected.DJ30 +38.08 NASDAQ +16.71 SP500 +5.01 NASDAQ Dec/Adv/Vol 1275/1436/1.82 bln NYSE Dec/Adv/Vol 1515/1592/1.13 bln
1:08PM Microsemi's CEO Peterson denies misrepresenting degrees from BYU (MSCC) 16.81 -1.52 : Co announces that its President and CEO, James Peterson, categorically denies published reports that he has misrepresented his degrees from Brigham Young University. "I am working directly with the University to clarify this situation. It appears that the background check there may have mistakenly been made with the name 'James J. Patterson,' not mine, as stated in a Seeking Alpha report."
9:04AM PC market will slow as financial turmoil spreads, according to IDC : As the economic crisis continues to evolve - constraining GDP, consumer and commercial confidence, capital and credit availability, and creating other challenges - demand for personal computers is expected to slow quickly. IDC expects worldwide PC shipments to grow just 3.8% in 2009 with shipment value falling by 5.3%. This is considerably slower than second quarter projections of 13.7% growth in units and 4.5% in shipment value. The outlook for full year 2008 and 2010 have each been lowered a couple percent to 12.4% and 10.9%, respectively, with growth above 12% for 2011 and 2012. Emerging markets in Latin America, Central Europe, the Middle East and Africa are among the most significantly affected in the short term. Now Latin America and Central/Eastern Europe are expecting volume to fall through the third quarter of 2009. Volume will continue to expand in the Middle East and Africa, but at a slower pace than in recent years. More mature regions are also expecting slower growth. Although the credit crunch will have a significant impact on spending in these regions too, a larger portion of the market will be able to weather the storm. Volume growth in these regions has been lowered by 4% to 9% for 2009.
8:46AM Virage Logic proposes to acquire LogicVision for $1.05 per share in cash (LGVN) 0.49 : VIRL announces that they sent a proposal late afternoon on December 2nd to the Board of Directors of LogicVision Inc (LGVN) to acquire LogicVision for $1.05 per share in cash. The proposal provides a premium of 114% to LogicVision's closing price of $0.49 on December 1, 2008, and values LogicVision at approximately $10.0 mln.
8:02AM Research In Motion to offer CAD $1.50 per share in cash for Certicom (RIMM) 37.32 : The co announces its intention to make an offer to acquire all of the issued and outstanding shares of Certicom at a price of CAD $1.50 cash per Certicom Share. The Offer price represents a premium of approximately 76.5% over the closing price of Certicom Shares on December 2, 2008 and a premium of approximately 76.1% over the volume weighted average trading price of Certicom Shares for the previous 20 trading days. The total acquisition cost is expected to be approximately CAD $66 million.
12:05AM Research In Motion lowers Q309 revenue and EPS guidance (RIMM) 37.32 : Co issues downside guidance for Q3 (Nov), sees EPS of $0.81-0.83, excluding non-recurring items, vs. $0.91 First Call consensus; sees Q3 (Nov) revs of $2.75-2.78 bln vs. $2.96 bln consensus. Preliminary revenue is lower than the previously forecasted revenue range of $2.95-$3.10 bln. Co notes approx one third of the difference between forecasted and preliminary revenue is expected to be a result of the depreciation of certain foreign currencies relative to the U.S. dollar in the quarter. The remaining difference is primarily due to lower than estimated unit shipments of existing products, which RIMM believes is a reflection of general economic weakness in the U.S. and shifts in product launch dates within the quarter. Subject to final review, gross margin in the quarter is expected to be between 45-46%. The lower than expected gross margin is due primarily to product revenue mix and foreign exchange impacts within the quarter. EPS is anticipated lower due to lower-than-estimated revenue and the unfavorable impact of the strengthening U.S. dollar. Co expects the number of net new BlackBerry subscriber accounts added in the quarter to be approx 2.6 mln, which is lower than the 2.9 mln previously forecasted and reflects a 57% increase over the same quarter of last year.
09:17 am Research In Motion (RIMM)
The maker of the popular mobile smart phone BlackBerry, Research In Motion (RIMM 37.32), issued downside guidance for the third quarter earlier this morning.
The company expects earnings to range from $0.81 to $0.83 per share, excluding nonrecurring items, but that falls short of the $0.91 per share that many analysts were expecting.
Revenue is also expected to come in below Wall Street's consensus estimate. The company projects third quarter revenue will range from $2.75 billion to $2.78 billion. The consensus forecast calls for $2.96 billion for the top line, which was actually in-line with the company's previously forecasted revenue range of between $2.95 billion and $3.10 billion.
The strengthening of the U.S. dollar has created an unfavorable impact on results. However, general economic weakness has been the primary cause of the difference between the company's preliminary forecast and revised forecast. Strong economic headwinds are weakening consumer and business appetites, causing them to postpone new phone purchases or model upgrades.
That has the company making lower-than-estimated unit shipments. It stated it expects the number of net new BlackBerry subscriber accounts added in the quarter to be approximately 2.6 million, which is lower than the 2.9 million net new accounts previously forecasted. Adverse economic conditions and consumer headwinds already led global handset leader Nokia (NOK 13.64) to lower its global industry volume forecast just last month.
Stiff headwinds certainly have the potential to hobble near-term prospects, but there is still room for growth. Specific to Research In Motion, the company's downwardly revised net new BlackBerry subscriber forecast still reflects a 57% increase over the third quarter of last year.
Such robust growth has made investors fervently chase shares of RIMM higher in the past; roughly one year ago the stock traded for as much as 83x trailing earnings. With shares down nearly 70% year-to-date, the stock now trades at roughly 12x trailing earnings.
We do not disagree that Research In Motion markets a strong product and that compelling opportunities exist for the company to further penetrate targeted markets. However, its narrow focus could present some problems in the near term. In turn, investors interested in a global mobile device maker with a leading market position and a healthy dividend secured by strong fundamentals should consider global leader Nokia.
08:41 am Marvell Technology (MRVL)
Semiconductor provider Marvell Technology (MRVL 5.09) posted upbeat third quarter results following Tuesday's close. The company reported earnings of $0.23 per share on revenue of $791 million. That translates to year-over-year earnings per share growth of 64% and year-over-year revenue growth of 4%.
Earnings per share results exceeded the consensus estimate of $0.21 per share, while revenue results were in-line with the consensus forecast of $793 million.
The company noted its results were in-line with revised expectations, but there is still limited visibility into the near term. The limited visibility, which stems from softer demand amid slower global economic conditions, has weighed heavily on semiconductor companies. Shares of industry bellwether Intel (INTC 13.28) have been halved this year. Meanwhile, shares of Broadcom (BRCM 14.24) have slid 45% year-to-date. Shares of MRVL have performed the worst, falling more than 60% this year.
Still, the company stated during its conference call that it expects fourth quarter earnings to range from $0.14 to $0.20 per share, which brackets the consensus earnings estimate of $0.17 per share. The company expects fourth quarter revenue to range from $690 million to $730 million, though that is actually a bit short of the $737 million that analysts are forecasting for the top line. |
