From Briefing.com: 4:10 pm : Equity indices finished the Wednesday session on a mixed note as high-growth names weighed on the Russell 2000 (+0.1%) and the Nasdaq (-0.3%), while the Dow Jones Industrial Average (+0.7%) and S&P 500 (+0.6%) outperformed thanks to strength in blue chip listings.
The stock market opened the trading day with modest gains amid headlines indicating Russia's President Vladimir Putin has reached out to OSCE chief and Swiss President Didier Burkhalter, attempting to de-escalate the Ukraine crisis through diplomatic avenues. Initially, the reports boosted overall risk appetite, sending Treasuries and the yen to lows, but those moves were retraced not long after. The yen returned into the middle of its trading range, while Treasuries reclaimed their losses and spent the afternoon near their flat lines. The benchmark 10-yr yield ended unchanged at 2.59%.
Stock indices, meanwhile, surrendered their opening gains during the first hour of action, but only the Nasdaq Composite spent the remainder of the session in the red, while the Dow and S&P 500 rebounded swiftly.
The S&P 500 tested its 50-day moving average (1865), spring-boarding off its early low with help from a handful of large sectors. Consumer staples (+1.0%), energy (+0.8%), and industrials (+0.9%) contributed to the recovery, while financials (+1.3%) finished ahead of the remaining cyclical groups following yesterday's underperformance.
Even though the financial sector posted a solid gain, it was unable to turn positive for the year, trimming its year-to-date loss to 0.01%. Meanwhile, the only other sector that holds a year-to-date loss-consumer discretionary (-0.2%)-joined health care (+0.2%) and technology (-0.2%) among today's laggards.
All three sectors contain a fair share of momentum names, which were the source of the relative weakness within the Nasdaq. Most notably, shares of FireEye (FEYE 28.65, -8.48) plunged 22.8% after the company reported in-line earnings, but issued disappointing guidance. Other momentum names fared a bit better, but Facebook (FB 57.39, -1.14) and Twitter (TWTR 30.66, -1.19) lost 2.0% and 3.7% respectively, while Tesla (TSLA 201.35, -5.93) slid 2.9% ahead of its after-hours quarterly report. Similarly, Priceline.com (PCLN 1131.74, -36.62) sank 3.1% prior to its report, which is due out tomorrow.
Elsewhere, biotechnology also factored into the underperformance of the Nasdaq. The iShares Nasdaq Biotechnology ETF (IBB 227.48, -1.85) fell 0.8%, while the broader health care sector (+0.2%) returned to its early high into the close.
The other countercyclical sectors ended among the leaders with the utilities sector (+1.6%) widening its year-to-date gain to 13.8%. For its part, consumer staples (+1.0%) overcame a disappointing quarterly report from Whole Foods (WFM 38.93, -9.02) that pressured the stock back to levels not seen since early 2012.
Participation was above average as roughly 750 million shares changed hands at the NYSE.
Economic data was limited to Q1 productivity and unit labor costs and the Consumer Credit report for March:
- Nonfarm business labor productivity declined 1.7% in the first quarter after increasing an upwardly revised 2.3% (from 1.8%) in Q4 2013. The Briefing.com consensus expected the reading to decline 1.2%. This was the first decline in productivity since Q1 2013 when it declined 1.8%. With a 0.1% increase in Q1 2014 GDP, there was no doubt that productivity declined during the first quarter. Output levels managed to increase a minimal 0.3% in the first quarter, but that was dwarfed by a 2.0% increase in hours worked. Hours growth had not exceeded 2% since Q4 2012.
- Hourly compensation increased 2.4%, up from a 1.9% gain in Q4 2013. That was the largest increase since Q4 2012 when it rose 10.2%. Given the flat wage data in the April Employment Report, compensation growth is unlikely to remain at its first quarter pace. The combination of higher hours and compensation along with weak output growth caused unit labor costs to increase 4.2% in the first quarter.
- Consumer credit increased by $17.50 billion in March, which was higher than the Briefing.com consensus estimate of $16.10 billion. The prior month's credit growth was revised lower to $13.30 billion from $16.50 billion.
Tomorrow, weekly initial claims (Briefing.com consensus 325,000) will be announced at 8:30 ET.
- S&P 500 +1.6% YTD
- Dow Jones Industrial Average -0.4% YTD
- Nasdaq Composite -2.6% YTD
- Russell 2000 -4.5% YTD
DJ30 +117.52 NASDAQ -13.09 SP500 +10.49 NASDAQ Adv/Vol/Dec 1178/2.15 bln/1527 NYSE Adv/Vol/Dec 1991/749.1 mln/1078 3:30 pm :
- Precious metals trended lower in negative territory today as the dollar index traded slightly higher
- Fed Chair Yellen appeared before the Joint Economic Committee and noted that she expects economic activity will expand at a "somewhat faster pace" this year than it did in 2013
- June gold pulled back from its session high of $1305.50 per ounce set moments after pit trade opened and settled with a 1.5% loss at $1288.90 per ounce
- July silver retreated from its session high of $19.59 per ounce in early morning action. Unable to gain momentum, it settled at $19.34 per ounce, or 1.5% lower
- June natural gas fell into negative territory after it pulled back from its session high of $4.81 per MMBtu set at floor trade open. It touched a session low of $4.71 per MMBtu and settled with a 1.3% loss at $4.74 per MMbtu.
- June crude oil, on the other hand, traded higher following better-than-anticipated inventory data. The EIA reported that for the week ending May 2, crude oil inventories had a draw of 1.78 mln barrels when consensus called for a build of 1.25-1.4 mln barrels
- The energy component rose from a session low of $99.79 per barrel and touched a session high of $101.09 per barrel. It eventually settled with a 1.3% gain at $4.74 per MMBtu.
4:36PM Amtech Systems misses by $0.22, beats on revs ( ASYS) 9.34 -0.20 : Reports Q2 (Mar) loss of $0.39 per share, $0.22 worse than the Capital IQ Consensus Estimate of ($0.17); revenues rose 56.6% year/year to $12.7 mln vs the $11.8 mln consensus.
Gross margin in the second quarter of fiscal 2014 was 23%, compared to 30% in the second quarter of fiscal 2013. The lower margin resulted primarily from lower recognition of previously-deferred profit which was a high percentage of net revenue in the second quarter of fiscal 2013.4:08PM Amtech Systems announces $10.5 mln in new solar orders ( ASYS) 9.34 -0.20 : ASYS announced it has received approximately $10.5 million in new solar orders, including orders for its market leading diffusion systems from Asian based solar companies.
The orders were received subsequent to March 31, 2014, and are expected to ship within the next six to twelve months. Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "We are very pleased to announce these new solar orders early in our fiscal third quarter. This progress adds to the healthy bookings we had in the second quarter of fiscal 2014. We are engaged in ongoing discussions with current and prospective customers regarding their near and longer-term technology objectives and future capacity requirements."
4:21PM SolarCity beats by $0.46, beats on revs; guides Q2 EPS below consensus, revs in-line ( SCTY) 47.71 -4.75 : Reports Q1 (Mar) loss of $0.26 per share, $0.46 better than the Capital IQ Consensus Estimate of ($0.72); revenues rose 111.9% year/year to $63.54 mln vs the $53.38 mln consensus.
MW Deployed of 82 MW as residential MWs Deployed grew 107% year-over-year to 67 MW.
Total cumulative MWs Deployed reached 649 MW as of March 31, 2014. MW Booked totaled 136 MW, up 34% as compared to Q4 2013. Cumulative Energy Contracts increased to 100,609, up 97% since the end of the first quarter of 2013 (and 21% since the end of 2013). Cumulative Customers grew to 110,662, up 84% since the end of the first quarter of 2013 (and 19% since the end of 2013).Estimated Nominal Contracted Payments Remaining increased to $2,501 million at March 31, 2014, up 97% year-over-year and 21% since the end of the 2013. Retained Value forecast increased to $1,291 million, equating to retained value per watt forecast of $1.56/W, at March 31, 2014.... Added 17,664 customers-the largest quarterly gain in our history-to end Q1 2014 with over 110,000 customers and remain firmly on track to meet our one million customer target by mid-2018.
Guidance
Increasing 2014 guidance to 500-550 MW Deployed from previous guidance of 475-525 MW, and establishing initial guidance for 2015 MW Deployed of between 900 MW and 1 gigawatt (GW). At the midpoint of guidance, estimate it would exit next year with more than 2 GW of cumulative MW deployed and annualized electricity production of ~ 2.8 terawatt-hours (TWh).
Co sees EPS of ($1.00) to ($0.91), excluding non-recurring items, vs. ($0.61) Capital IQ Consensus Estimate; sees Q2 revs of $56-64 mln vs. $63.97 mln Capital IQ Consensus Estimate.
Based on current trends in demand and operations, have increased confidence in outlook for the year and in turn increase our 2014 guidance to 500 MW -- 550 MW Deployed from prior guidance of between 475 MW and 525 MW Deployed. Continue to expect to generate positive cash flow for the full year 2014. For 2015, establishing guidance of 900 -- 1,000 MW Deployed, representing growth of 81% year-over-year at the midpoint. For Q2 2014, we expect MW deployed of between 105 MW -- 110 MW, up 103% year-over-year at the midpoint of both 2014 and 2015 guidance. For Q2 2014, also expect: GAAP Operating Lease and Solar Energy Systems Incentive Revenue: $39 million - $43 million GAAP Solar Energy Systems Sale Revenue: $17 million - $21 million GAAP Operating Lease and Solar Energy Systems Incentive Gross Margin: 50%-55% (including the impact of $2 million in amortization of intangibles) GAAP Operating Expenses: $100 million - $110 million (including $3 million in amortization of intangibles) 4:05PM SanDisk increases quarterly dividend 33% to $0.30 from $0.225 per share ( SNDK) 86.96 +0.70 :
4:03PM Flextronics partners with Ichor Medical Systems to provide supply chain solutions, including design and manufacturing services ( FLEX) 9.43 -0.03 : FLEX announced that its Medical Group will provide design and manufacturing services to Ichor Medical Systems for the development of its next generation TriGrid DNA Delivery System, an electroporation device used to deliver DNA vaccines and treatments addressing a broad spectrum of disease indications. The TriGrid technology has recently been licensed by Pfizer for the intracellular delivery of their DNA-based cancer vaccines.
Supply chain services for this next generation TriGrid system will be performed at Flextronics facilities in Texas. Flextronics engineers will work with Ichor staff to develop and build the electronic and mechanical components of the device. Ichor's patented TriGrid Delivery System is the first integrated and fully automated device for electroporation-mediated DNA administration in humans. Electroporation is a potent method for enhancing DNA vaccine delivery with the application of electrical fields at the site of DNA administration, resulting in increased antigen expression and enhanced immune responses to the encoded antigen.1:33PM Anadigics announced its ProEficient and ProVantage power amplifiers have been selected by multiple Chinese OEMs to enable wireless connectivity in new smartphone designs ( ANAD) 1.09 -0.02 : "We anticipate that these new design wins for our ProEficient and ProVantage power amplifiers should enable a significant increase in our mobile products revenue at Chinese OEMs."
12:06PM Notable movers of interest ( SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).
Large Cap Gainers
XEC (131 +9.17%): Beat on EPS by $0.15, beat on revs; announced acquisition of Cana-Woodford Shale Acreage for $249 mln in cash; co to acquire Cana-Woodford assets for $249 mln. MDLZ (37.85 +7.48%): Beat on EPS by $0.04, reported revs in-line; lowered FY14 EPS; co is merging its coffee business with D.E Master Blenders, to be called Jacobs Douwe Egberts; announced new restructuring program. ATVI (20.64 +6.86%): Beat on EPS by $0.09, beat on revs; guided Q2 EPS below consensus, revs above consensus; guided FY14 EPS below consensus, revs in-line. Large Cap Losers WFM (38.61 -19.48%): Missed on EPS by $0.03, reported revs in-line; lowered FY14 EPS, comps, rev guidance; downgraded at BMO Capital Mkts; tgt lowered to $40 from $65; downgraded at Deutsche Bank; downgraded at Cantor Fitzgerald; tgt lowered to $38 from $48; downgraded at Sterne Agee; tgt lowered to $40 from $60; downgraded at Piper Jaffray; downgraded at Jefferies; tgt lowered to $46 from $61; tgt lowered to $55 from $61 at Oppenheimer; upgraded at Argus; tgt lowered to $49 from $63 at Canaccord Genuity; tgt lowered to $47 from $55 at Telsey Advisory Group; downgraded at Prime Executions; tgt lowered to $40 from $62. QIHU (78.19 -6.39%): Weakness in China internet related names (BIDU also lower). PRGO (130.67 -8.62%): Missed on EPS by $0.20, missed on revs; lowered FY14 EPS guidance. Mid Cap Gainers EA (32.86 +17.15%): Beat on EPS by $0.37, beat on revs; guided Q1 EPS above consensus, revs above consensus; guided FY15 EPS above consensus, revs in-line; announced new $750 mln stock repurchase program; upgraded to Outperform from Neutral at Robert W. Baird; Brean Capital raised their EA tgt to $38 from $33; tgt raised to $38 at CRT Capital; tgt raised to $40 from $35 at BMO Capital Mkts; tgt raised to $36 from $27 at MKM Partners. CZR (21.31 +14.82%): Announced comprehensive financing plan designed to position Caesars Entertainment Operating Co for stock listing and significant deleveraging; CEOC launched first lien incremental term loan and refinancing of all 2015 maturities; announced tender offers for Caesars Entertainment Operating's debt securities (co reports earnings after the close). ARRS (28.7 +11.59%): Beat on EPS by $0.02, beat on revs; guided Q2 EPS above consensus, revs above consensus; upgraded to Strong Buy from Outperform at Raymond James; target raised to $33 at RBC Capital Mkts; target raised to $34 from $32 at Needham; target raised to $36 at National Alliance Securities. Mid Cap Losers ZU (32.94 -28.23%): Missed on EPS by $0.02, beat on revs; guided Q2 revs above consensus; guided FY14 revs above consensus; target lowered to $45 at RBC Capital Mkts. FEYE (28.4 -23.51%): Reported EPS in-line; beat on revs; guided Q2 EPS below consensus, revs above consensus; lowered FY14 EPS below consensus, raised FY14 revs in-line. AOL (34.38 -21.69%): Missed on EPS by $0.12, beat on revs; extended programmatic leadership with attribution modeling in deal to acquire Convertro for ~$101 mln. 11:44AM Stocks/ETFs that traded to new 52 week highs/lows this session - New lows (216) outpacing new highs (113) ( SCANX) : Stocks that traded to 52 week highs: AER, AHGP, AIRI, ALL, AMT, ASH, ATSG, AVA, AVGO, AWK, BAH, BAM, BFR, BHI, BRK.A, BXE, CHK, CJES, CLR, COP, CPN, CRZO, CXO, DEG, DPS, DTE, DTV, DYN, E, EA, ECA, ECOL, ELS, EMES, ENB, EQR, ESRT, ESS, ETE, ETP, ETR, EXAM, EXC, FISV, FRT, GGP, GIS, GMK, GSAT, HNT, HOLX, HSP, IDXX, IHG, IMO, IRS, ITUB, JFBI, KED, KEP, LYB, MDLZ, MKL, MMP, MPET, NGG, NGLS, NLS, NOA, NRG, NTI, NVS, OILT, OKE, OPB, ORM, PAC, POM, PPC, PPL, PQ, PSIX, QTS, RDS.B, RNR, SJT, SLG, SOFO, SQBG, SRE, STO, SUSS, SXI, TAP, TEO, TI, TOO, TOT, TQNT, TRGP, UNTY, UTSI, VNO, VSEC, WES, WFT, WLK, WLP, WMB, XEC, XOM, YONG, ZBRA
Stocks that traded to 52 week lows: AAME, ACAT, ACFN, ACTS, AEGR, AEO, AHS, AMBR, AMBT, AMRC, AMSC, AMWD, ANAD, ANGI, ANTH, ARCO, ARQL, ASCMA, ATEN, AUY, AVEO, AVNW, AXR, BANC, BBBY, BBOX, BBSI, BGFV, BLFS, BNFT, BNNY, BRDR, BSET, BTX, BV, BXC, CCCR, CDE, CHS, CIX, CNAT, CNSI, COCO, COH, CPIX, CRCM, CREE, CRIS, CRMB, CRRC, CSLT, CVT, CYTK, CZNC, DARA, DCTH, DMD, DRL, DSW, DTLK, DWSN, EDMC, EGAN, ELNK, ELRC, END, ENTR, ESIO, EVRY, EXPR, FCBC, FCSC, FEYE, FIO, FMD, FRAN, FUEL, FWM, GBDC, GENE, GEOS, GHDX, GLMD, GNC, GORO, GWRE, GYRO, HEAR, HGR, HIVE, HMST, HTCH, HWCC, IIVI, IKAN, IMGN, IMI, IMPV, INFI, ISNS, JDSU, JOEZ, KANG, KBR, KEYW, KOPN, LEJU, LNKD, LOV, LUB, LULU, MCGC, MCP, MDSO, MEIP, MELI, MFLX, MLNX, MM, MOVE, MRIN, MSG, NGPC, NGVC, NIHD, NILE, NMBL, NMIH, NPBC, NPTN, NSPH, NSR, NTAP, NTLS, NTWK, OCN, OGXI, OPLK, OPWR, ORIT, OSTK, OVRL, PBPB, PBY, PENN, PFSI, PIKE, PLCE, PLPC, PRAN, PRO, QNST, QTM, QUAD, RAX, RELL, RKUS, RLOC, RM, RNF, RSE, RTEC, RTI, RUBI, SEAC, SEB, SFLY, SFM, SGI, SIGM, SINA, SOQ, SPAR, SPEX, SSNI, STNR, SUSQ, SZMK, TBNK, TCCO, TCRD, TCS, TEAR, TFM, TGE, THLD, THRX, TIGR, TLMR, TNDM, TOPS, TR, TTMI, TWER, TWGP, TWTR, TXTR, UEC, UNXL, UTIW, VEEV, VGGL, VIVO, VLGEA, VSTM, VTUS, WFM, WLT, WPCS, XNPT, XON, XXIA, ZEUS, ZIXI, ZNH, ZU
ETFs that traded to 52 week highs: AMJ, DIG, EWC, EWK, EWP, EWU, IEO, IGE, IXC, IYE, XLE
ETFs that traded to 52 week lows: none
SanDisk (SNDK) and Arrow Electronics (ARW) have signed an expanded distribution agreement, under which Arrow will offer a wide variety of SanDisk commercial flash storage solutions to its more than 100,000 customers worldwide
At EMC World, Riverbed Technology (RVBD) announced Riverbed SteelFusion validation with the EMC VSPEX Proven Infrastructure, which offers an open integration approach that brings together technologies to create and deliver flexible IT solutions for customers.
AEIS +0.2% (upgraded to Strong Buy from Outperform at Raymond James),
7:31AM Aeroflex beats by $0.04, misses on revs; guides Q4 EPS above consensus, revs above consensus ( ARX) 7.77 : Reports Q3 (Mar) earnings of $0.17 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.13; revenues fell 1.0% year/year to $155.5 mln vs the $158.33 mln consensus.
Co issues upside guidance for Q4, sees EPS of $0.28-0.31 vs. $0.25 Capital IQ Consensus Estimate; sees Q4 revs of $186-196 mln vs. $183.00 mln Capital IQ Consensus Estimate.
4:25AM Lumos Networks beats by $0.01, reports revs in-line; guides FY14 revs below consensus ( LMOS) 13.82 : Reports Q1 (Mar) earnings of $0.18 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.17; revenues fell 4.6% year/year to $50.1 mln vs the $50.51 mln consensus.
The Company ended the first quarter of 2014 with 633 FTTC sites connected, up 25 sequentially, which represents a year-over-year increase in total FTTC sites of 56%. Lumos Networks reiterates its guidance of reaching 825 FTTC sites by year-end and reiterates its target of selling 500 to 700 unique and second FTTC circuits during 2014. Lumos Networks also maintains its target for 1,500 FTTC sites within the next few years. Lumos Networks raised its target for connected data centers from 20 by the middle of 2015 to 20 by the end of 2014. As Enterprise bandwidth traffic moves increasingly into the Cloud, the Company believes that this segment will constitute an increasingly large percentage of total Enterprise revenue. In the first quarter of 2014, the Company added 53 fiber route miles and now has a fiber route mile network of 7,467. Additionally, the Company added 43 on-net buildings in the quarter to reach 1,387. Guidance
Co issues downside guidance for FY14, sees FY14 revs of ~$200 mln vs. $202.95 mln Capital IQ Consensus Estimate, down from $200-204 mln prior
HP (HPQ) introduced HP Helion, a portfolio of cloud products and services that enable organizations to build, manage and consume workloads in hybrid IT environments. HP plans to invest more than $1 billion over the next two years on cloud-related product and engineering initiatives, professional services and expanding HP Helion's global reach.
Activision Blizzard (ATVI) reported first quarter earnings of $0.19 per share, excluding non-recurring items, which is higeher than expected, while revenues fell 4.0% year/year to $772 million which is higher than expected. The co mpany issued guidance for the second quarter with EPS of $0.01, excluding non-recurring items which is below estimates & revenues of $600 mln mililon which is above estimates. The company issued guidance for the fiscal year 2014 with EPS of $1.27, excluding non-recurring items which is below estimates and revenues of $4.675 bililon which is higher than expected.FireEye (FEYE) reported first quarter loss of $0.53 per share, excluding non-recurring items, which is in line with estimates, while revenues rose 160.6% year/year to $74 million which is higher than expected. The company issued guidance for the second quarter with EPS of ($0.63) - ($0.58) which is below estimates and revenues of $89-91 mln which is above estimates. Q2 Guidance: Total billings in the range of $108 to $112 million. Gross margin in the range of 68 to 70 percent. The company issued guidance for the fiscal year 2014 with EPS to ($2.30) - ($2.10), from ($2.20) - ($2.00) excluding non-recurring items which is below estimates and raised fiscal year 2014 revenues to $405-415 million from $400-410 million which is line with estimates. FY14 Guidance: Total billings in the range of $550 to $570 million. Gross margin in the range of 70 to 73 percent. First quarter billings were $99.2 million, compared with the previously issued guidance range of $84 to $88 million. Total billings included $26.1 million in product billings, $39.4 million in product subscription billings, $18.0 million in professional services billings and $15.7 million in support and maintenance billings. In a separate release, FireEye announced the execution of a definitive agreement to acquire privately-held nPulse Technologies, the performance leader in network forensics. As consideration for the acquisition, FireEye will pay approximately $60 million in cash, and issue approximately $10 million stock consideration that is subject to the achievement of certain milestones.Electronic Arts (EA) reported first quarter earnings of $0.14 per share, which is higher than expected, while revenues rose 5.4% year/year to $79.13 million which is higher than expected. "Our Laser Products segment was up 10%, our Precision Motion segment was up 12%, and our Medical Technologies segment was down (5%). Medical Technologies was down as a result of a single customer's dual sourcing decision that reduced NDS volume beginning in April 2013." The company issued guidance for the revenues of $90-95 million which is in line with estimates. On a reported basis, revenue is expected to increase 13% to 19%, compared to the second quarter of 2013. The Company expects Adjusted EBITDA to be in the range of $13 million to $15 million for the second quarter of 2014. |
