From Briefing.com: 5:13PM Jabil Circuit announces restructuring plan; to take $65 mln in pre-tax restructuring and impairment costs (JBL) 6.36 +0.24 : The co announces plans to cut its manufacturing capacity in certain geographies and to shrink its worldwide workforce of 85,000 by approximately 3,000. Jabil said the restructuring will appropriately align its manufacturing sites with the Company's current customer demand outlook and increase operational efficiencies. Approximately ten global plant sites will be impacted, and approximately ten percent of the headcount reductions will take place in the United States. Jabil said that as a result of the restructuring, the Company currently expects to realize $55 million in annualized cost savings. The co currently expects to recognize approximately $65 million in pre-tax restructuring and impairment costs over the course of fiscal years 2009 and 2010. The majority of these costs are currently expected to be recorded in the Company's operating results for the fiscal quarter ending February 28, 2009. The cash cost of such charges is currently estimated to be $54 million incurred over the course of fiscal years 2009 and 2010.
4:20PM Qualcomm misses by $0.16, beats on revs; guides Q2 revs in-line; guides FY09 revs below consensus (QCOM) 36.82 +1.19 : Reports Q1 (Dec) earnings of $0.31 per share, excluding non-recurring items, $0.16 worse than the First Call consensus of $0.47; revenues rose 3.0% year/year to $2.51 bln vs the $2.42 bln consensus. Co issues in-line guidance for Q2, sees Q2 revs of $2.25-2.45 bln vs. $2.41 bln consensus. Co issues downside guidance for FY09, sees FY09 revs of $9.3-9.8 bln vs. $10.25 bln consensus, down from $10.2-10.8 bln previously. "Net income and diluted EPS for the quarter were adversely impacted by other-than-temporary impairments to its marketable securities portfolio... The CDMA inventory channel has contracted as we expected, and the business environment continues to remain uncertain. Reduced visibility in the marketplace makes it difficult to forecast future inventory levels or predict when a recovery will begin. As a result, while we continue to estimate healthy growth in the CDMA-device market, we have lowered our shipment estimate for calendar year 2009."
4:19PM Western Digital beats by $0.24, beats on revs (WDC) 14.40 +0.85 : Reports Q2 (Dec) earnings of $0.55 per share, excluding restructuring charges, $0.24 better than the First Call consensus of $0.31; revenues fell 17.3% year/year to $1.82 bln vs the $1.75 bln consensus. Co says, "Against a backdrop of unprecedented global economic turmoil and a rapid intra-quarter fall off in demand for hard drives, WD acted swiftly to align production and operating expenses with significantly lower-than-originally planned unit volumes... With a strong balance sheet and competitive cost structure, we plan to continue investing in next-generation product platforms and technologies during this downturn. We are focused on maintaining our leadership in technology deployment, ease-of-use features, and availability of the right products for our diversified customer base. We remain enthused about our long-term prospects as a full-line storage supplier in addressing the demands of both the commercial and consumer markets as the digitization of content continues to grow."
4:15PM Lam Research misses by $0.04, beats on revs (LRCX) 23.89 +1.47 : Reports Q2 (Dec) loss of $0.09 per share, $0.04 worse than the First Call consensus of ($0.05); revenues fell 53.6% year/year to $283.4 mln vs the $277.5 mln consensus. "The global semiconductor industry has entered one of the most difficult periods in its history, one that is presenting severe challenges to our customers and thus severely limiting investment in wafer fab equipment."
4:06PM Cirrus Logic beats by $0.03, beats on revs; guides Q4 revs below consensus; co announces $20 mln share repurchase program (CRUS) 2.70 -0.06 : Reports Q3 (Dec) earnings of $0.07 per share, $0.03 better than the First Call consensus of $0.04; revenues fell 10.4% year/year to $43.8 mln vs the $42.8 mln consensus. Co issues downside guidance for Q4, sees Q4 revs of $31-36 mln vs. $37.90 mln consensus. "Our third quarter financial results reflect the sudden decrease in the bookings rate midway through the quarter as a result of the global economic downturn."
4:05PM Plexus beats by $0.04, misses on revs; guides Q2 EPS below consensus, revs below consensus (PLXS) 16.37 +1.00 : Reports Q1 (Dec) earnings of $0.43 per share, $0.04 better than the First Call consensus of $0.39; revenues fell 0.5% year/year to $456.1 mln vs the $462.1 mln consensus. Co issues downside guidance for Q2, sees EPS of $0.17-$0.24, ex items, vs. $0.34 consensus; sees Q2 revs of $375-$405 mln vs. $442.11 mln consensus. "This sequential reduction in revenue reflects significant softness in our customers' end-markets, channel inventory reductions and a seasonal decline driven largely by a significant Medical sector account. While we are ramping a number of new programs won in recent quarters, this incremental business is not sufficient to overcome the difficult end-market environment. The second fiscal quarter will be challenging and while we currently anticipate it will be the trough quarter for the fiscal year, the reduced outlook for the entire fiscal year prompts us to take immediate action on further cost reduction initiatives."
4:04PM Dell announces anticipated Q4 expense toward $3 billion in cost reductions by end of fiscal 2011 (DELL) 10.88 +0.81 : Separately, Dell will incur a pretax, noncash expense of an estimated $145 million related to stock-based compensation, including $106 million for accelerated vesting of previously awarded options. The acceleration, effective Jan. 23, covers 20.9 million shares with a weighted-average exercise price of $22.03. The action means Dell will recognize all expenses associated with these options in Q4, rather than over time. The remaining stock expense is for the annual true-up of full-year, stock-based compensation forfeitures.
4:04PM LSI Logic beats by $0.02, beats on revs; guides Q1 EPS below consensus, revs below consensus (LSI) 3.61 +0.20 : Reports Q4 (Dec) earnings of $0.06 per share, excluding items, $0.02 better than the First Call consensus of $0.04; revenues fell 17.7% year/year to $610 mln vs the $588.1 mln consensus. Co issues downside guidance for Q1, sees EPS of 0.00-($0.07) vs. $0.00 consensus; sees Q1 revs of $440-$500 mln vs. $508.00 mln consensus.
4:03PM Flextronics misses by $0.03, beats on revs; guides Q4 EPS below consensus, revs below consensus (FLEX) 2.72 +0.10 : Reports Q3 (Dec) earnings of $0.16 per share, $0.03 worse than the First Call consensus of $0.19; revenues fell 10.1% year/year to $8.15 bln vs the $7.99 bln consensus. Co issues downside guidance for Q4, sees EPS of $0.02-0.07 vs. $0.14 consensus; sees Q4 revs of $5.5-6.5 bln vs. $7.17 bln consensus. Guidance reflects the unusually low levels of visibility that many of its customers have in the current environment.
4:02PM Celestica beats by $0.08, beats on revs; guides Q1 EPS in-line, revs in-line (CLS) 4.34 -0.01 : Reports Q4 (Dec) earnings of $0.26 per share, including a $0.07 per share benefit resulting from a lower adjusted tax rate, $0.08 better than the First Call consensus of $0.18; revenues fell 12.5% year/year to $1.94 bln vs the $1.83 bln consensus. Co issues in-line guidance for Q1, sees EPS of $0.07-0.13 vs. $0.12 consensus; sees Q1 revs of $1.4-1.6 bln vs. $1.63 bln consensus.
4:30 pm : Market participants spent the session focusing on word the government may be close to creating a "bad bank" that will purchase risky assets from existing banks. Divesting risky assets would help banks protect against further asset write-downs, and increase cash on their books. That would help limit the need to raise additional capital, which can be dilutive to shareholders.
Helping financial companies restore their health is largely seen as the first step in repairing the financial system and the broader economy. The financial sector responded by gaining 13%, leading the broader market more than 3% higher.
Wells Fargo (WFC 21.19, +5.00) provided the most support to the financial sector and the broader market. It gained 31%, marking its best single-session performance in months. Wells Fargo won kudos after announcing it is maintaining its dividend, and has no plans to ask for additional TARP capital. Wells Fargo reported a loss of $0.79 per share including items, but a profit of $0.41 per share after excluding the items. The consensus called for earnings of $0.33 per share.
Dow components Boeing (BA 43.24, +0.02) and AT&T (T 25.91, -0.02) traded as laggards after reporting unimpressive quarterly results. WellPoint's (WLP 44.50, +1.88) latest earnings were in-line with expectations. Yahoo! (YHOO 12.24, +0.90) and ConocoPhillips (COP 50.16, +0.65) both topped earnings estimates. Yahoo, along with other large-cap tech names, helped drive gains in the Nasdaq. ConocoPhillips provided leadership to the energy sector, which was also helped by a modest rebound in crude oil prices.
Crude finished the session roughly 1% higher, just above $42.00 per barrel. Crude was actually down 2.4% in the wake of a larger-than-expected build in weekly inventories. That marked the fifth straight build for weekly inventories.
In its first session of the new year, the Federal Open Market Committee left its fed funds target rate unchanged at 0.00% to 0.25%, as expected. The target rate is likely to remain at exceptionally low levels and reflects the FOMC's view that the economy remains weak. In turn, the Fed says its focus is to support financial markets through open market operations and other measures.
The Fed also stated it continues to purchase large quantities of agency debt and mortgage-backed securities. Such a move helps put cash back into the system, and helps support the mortgage and housing markets. The FOMC stated it is prepared to purchase longer term securities if evolving circumstances indicate that it would be effective in improving conditions in credit markets.
Statements from the FOMC and word that a bad bank plan may be in order helped drive the stock market to its fourth straight gain. Stocks are up roughly 5.5% during that time.DJ30 +200.72 NASDAQ +53.44 SP500 +28.38 NASDAQ Adv/Vol/Dec 2114/2.16 bln/590 NYSE Adv/Vol/Dec 2686/1.55 bln/408
09:40 am Altera resumed with a Hold at Stifel Nicolaus: . Stifel Nicolaus resumes Altera with a Hold, as they believe the secular potential of the PLD industry remains intact with a number of catalysts long term; however, visibility remains limited in the current environment. Firm believes resumption of PLD growth rates exceeding the overall semi market is still likely several quarters away
08:23 am Sun Microsystems (JAVA)
Sun Microsystems (JAVA 3.99) reported a big earnings beat in its fiscal second quarter, but troubles remain for the server maker.
Sun reported earnings of $0.15 per share, excluding a restructuring charge. Sun's results easily topped the First Call consensus that called for a loss of $0.10 per share.
The company was hit by a $222 million restructuring charge primarily related to 5,000 layoffs announced in mid-November. Including the restructuring charge, Sun posted a net loss of $209 million, or $0.28 per share.
Sun said the restructuring would save it $700 million to $800 million annually.
Revenues fell 10.9% year-over-year to $3.22 billion, but managed to top the $3.16 billion consensus.
Total gross margins fell sharply to 41.9% from 48.5% in the same period last year.
Shares of JAVA are up nearly 8% in premarket trading.
08:17 am Yahoo! (YHOO)
Yahoo! (YHOO 11.34) surprised with a better-than-expected fourth quarter report, but the company gave downside guidance for the current quarter as rumors of a deal with Microsoft (MSFT 17.66) continue to swirl.
Yahoo reported earnings of $0.17 per share, $0.04 better than the First Call consensus of $0.13.
Revenues fell 2% year-over-year to $1.38 billion, excluding traffic acquisition costs, in-line with the $1.37 billion consensus.
Yahoo projects first quarter revenues between $1.525 billion and $1.725 billion, excluding any restructuring charges. Given the uncertainty in the market, Yahoo elected not to give more specific guidance.
Forecasts from Yahoo remain clouded by talk of a deal with Microsoft. Yahoo's new CEO didn't rule out the possibility on the company's conference call, so speculation is sure to increase.
(Disclosure: Briefing.com has a business relationship with Yahoo and Microsoft.) |
