>>> Skyworks (halted) raises Q3 EPS and rev guidance

Skyworks (halted) raises Q3 EPS and rev guidance

Co issues upside guidance for Q3 (Jun), raises EPS to $0.80, excluding non-recurring items, from $0.73 vs. $0.73 Capital IQ Consensus; raises Q3 (Jun) revs to $570 mln from $535 mln vs. $535.33 mln Capital IQ Consensus.

"As our upwardly revised outlook reflects, Skyworks is capitalizing on the growing opportunity within the Internet of Things as well as increasing analog complexity associated with higher data rate connectivity standards, both of which are enabling us to substantially outpace the growth of the broader semiconductor market. These macro trends continue to validate our investments in highly differentiated, custom solutions that are facilitating an expanding set of end markets. Based on our design win traction and order visibility, we anticipate continued strength beyond the June quarter as our products continue to gain momentum."

"We also expect our recently announced joint venture with Panasonic to further enrich our systems capabilities, broaden our technology portfolio and enhance our financial returns," said Donald W. Palette, executive vice president and chief financial officer of Skyworks. "In fact, we anticipate the Panasonic transaction will provide at least 100 basis points of gross margin accretion in fiscal 2015, paving the way for continued top- and bottom-line outperformance for the foreseeable future."

>>> Quicksilver shares plunge 36% following miss on earnings

Quicksilver shares plunge 36% following miss on earnings
  • Quiksilver (ZQK $3.66 -2.13) reported second quarter loss of $0.15 per share, which is worse than expected, while revenues fell 10.5% year/year to $408 million which is worse than expected.
  • "During the second quarter, we again reduced our expense structure, increased sales in our direct to consumer channels and emerging markets, and drove improvements in gross margins. These improvements were offset by decreased net revenues in our wholesale channel, especially in the developed markets in North America and Europe. Consequently, pro-forma adjusted EBITDA decreased versus the prior year." Americas net revenues decreased 18% to $186 million from $226 million, and were down 16% in constant currency. EMEA net revenues decreased 2% to $162 million from $165 million, and were down 5% in constant currency. APAC net revenues decreased 6% to $60 million from $64 million, but were up 3% in constant currency. Gross margin increased to 48.7% from 45.9%. The 280 basis point improvement in gross margin reflects the sales growth in our direct to consumer channels, reduced clearance activity in the wholesale channel of certain regions and benefits of licensing activities.
  • Guidance: The Company anticipates that the general sales trends of recent quarters compared to the same prior year period will continue into the second half of fiscal 2014 with continued net revenue declines in the North America and Europe wholesale channels being partially offset by net revenue growth in emerging markets and e-commerce. The Company also anticipates some continued year-over-year gross margin improvements in the second half of fiscal 2014, and that pro-forma adjusted EBITDA for fiscal 2014 will be below the $118 million achieved in fiscal 2013. The Company said that it has revised the timing for achieving its Profit Improvement Plan adjusted EBITDA target to the end of fiscal 2017.

>>> Krispy Kreme shares fall 11% following miss on revenues

Krispy Kreme shares fall 11% following miss on revenues
  • Krispy Kreme (KKD $16.88 -2.12) reported first quarter earnings of $0.23 per share, which is line with estimates, while revenues rose 0.8% year/year to $121.6 million which is lower than expected. Excluding the effects of refranchising three stores in Kansas and Missouri and three stores in Dallas in February and July of 2013, respectively, revenues rose 2.1%. "Today we reported our highest quarterly pretax earnings for a single quarter in over ten years, a remarkable achievement that reflects the collective efforts of our team members and franchise partners. We note, however, that severe winter weather adversely affected both on-premises and wholesale sales throughout our Company store base in the Southeast, and contributed to a 1.5% decline in same store sales at Company shops against a very tough 12.2% same store sales gain in the first quarter last year.
  • Our domestic franchisees, however, who were less affected by weather, posted a gain in same store sales of 4.5% on top of an 11.8% rise in the first quarter last year." The company issued guidance for the fiscal year 2015 with lowered EPS to $0.69-0.74 from $0.73-0.79 which is below estimates. This reflects, among other things, an increase in estimated costs related to implementation of new technology systems, higher compensation costs related to management succession, an unfavorable variance to expected results in the first quarter, partially offset by lower forecasted current income tax expense.

>>> Wells Fargo upgrades Materials Sector to Overweight from Market Weight, Ener


Wells Fargo upgrades Materials Sector to Overweight from Market Weight, Energy Sector to Market Weight from Underweight; Downgrades Consumer Discretionary and Financials Sectors to Underweight from Market Weight

- Firm upgraded their expectations for materials sector EPS growth in March, primarily due to improving chemicals production and buyback acceleration, and they continue to expect materials sector earnings growth to exceed S&P 500 growth, matching consensus expectations. They continue to recommend an overweight on chemicals and underweight on metals and mining. 
- Firm notes Energy sector top-line pressures appear to be easing with the bounceback in commodity prices so far this year. Meanwhile, production growth is expanding as capital spending growth is finally slowing down a bit. Their 2014 estimate for energy sector EPS growth is now 3%, up from their former estimate of 0%, and their 2015 estimate of 5% energy sector EPS growth is now near consensus expectations for 7%. 
- A slower pace of housing activity will likely result in a slower pace of broader discretionary spending this year. As a result, they expect just 5% EPS growth for the discretionary sector this year and 6% EPS growth for the sector next year, versus the consensus expectation for 9% growth in 2014 and 15% growth in 2015. At the industry level, they prefer services (such as media and hotels) over goods industries (such as retail), consistent with a shift toward later cycle exposure in the index. 
- Consistent with a flattening yield curve and dampened trading activity, they reduce their expectation for financials sector 2014 EPS growth from 10% to 6% and their 2015 EPS growth estimate from 8% to 5%. With consensus expectations for sector EPS growth at 9% and 12%, respectively, estimate achievability for financials appears rather low. Consumer finance is the only industry they recommend as an overweight, and they suggest underweighting capital markets and thrifts & mortgages. > 
- While we are edging into commodity-sensitive segments, they are not fully embracing a late-cycle positioning, as an inflation breakout still seems distant. Instead, they are generally focused on midcycle, quasi-defensive segments of the market with high estimate achievability, steady price momentum, and relatively strong estimate revisions. Their overweight sectors are now technology, health care, and materials.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: SPEX +12.7%, HSH +8.1%, GWRE +3.2%, FBHS +2.5%, NVTL +2.4%, HLF +1.9%, RAD +1.6%, SUNE +1.1%, GIII +0.8%

Gapping down: ZQK -33.2%, KKD -11.6%, COMM -5.6%, WAIR -3.9%, GOOD -3.1%, CLVS -2.8%, YGE -2.5%, DRL -1.7%, NPSP -1.5%, ALU -1.5%, BHP -1.5%, RIO -1.5%, DG -1.5%, NOK -1.4%, DB -1.4%, NLSN -1.3%, CMCM -1.2%, HSBC -1%, BTH -0.9%, BCS -0.8%, MT -0.7%

>>> AT&T Corp Raises FY14 Rev guidance --> T US +0.90% in Pre market


AT&T Corp Raises FY14 Rev guidance to +5% y/y implies $135B v $133.6Be(prior +4% or greater)

- AT&T Inc. (NYSE:T) reported continued progress in the second full year of its Project VIP network investment plan, strong second-quarter wireless trends and an increase in its full-year 2014 revenue guidance, while reaffirming its full-year guidance for consolidated margins, EPS growth, capital spending and free cash flow. 

- AT&Ts Project VIP network transformation plan, announced in 2012, is ahead of schedule: AT&Ts 4G LTE network now covers nearly 290 million people; and 

The companys Project VIP broadband build is expected to take fiber to more than 400,000 new business customer locations by the end of the second quarter. In Mobility, AT&T expects to report second-quarter results that include: 

Postpaid subscriber net adds exceeding 800,000; 

Postpaid churn of 0.95 percent or lower; 

Approximately 3.2 million AT&T Next smartphone sales, which have risen throughout the quarter and now are expected to be approximately 50 percent of total sales; and 

Approximately one-half of the companys postpaid smartphone customer base on no-device-subsidy Mobile Share Value pricing plans, growing to approximately two-thirds by year-end. 

AT&T Next and Mobile Share Value plans are driving a shift in the companys wireless revenue components resulting in higher equipment revenues and lower service revenues and ARPU, with no service revenue growth expected in the second quarter. The company expects second-quarter wireless service EBITDA margins to be pressured year over year due to the increased sales activity and strong customer movement to the no-device-subsidy Mobile Share Value plans. Wireless service EBITDA margins are expected to be over 40 percent in each of the three remaining quarters of 2014. 

Wireline expectations for the second quarter include: 
U-verse video additions bundled with broadband will continue to perform well. U-verse broadband to be solid even with second-quarter seasonality and fewer migrations from DSL. Growing consumer preference for buying broadband and pay TV services bundled together reinforces the strategic rationale of AT&Ts proposed acquisition of DIRECTV. 

Continued growth in business high speed broadband adds; 
Strategic business services revenue growth in the mid-teens, with continued economic pressures; and Wireline margins continue under pressure, reflecting content cost increases, fiber expansion and high-speed broadband subscriber growth. Based on all of these trends, the company raised its full-year 2014 guidance for revenue growth to be in the 5 percent range and reaffirmed its full-year 2014 guidance for stable consolidated margins, adjusted earnings per share growth at the low-end of the mid-single digit range, capital expenditures in the $21 billion range and free cash flow in the $11 billion range. AT&T is scheduled to release its full second-quarter 2014 financial results after market close on July 23, 2014.

>>> Hillshire Brands Board Authorizes Discussions with Pilgrim’s Pride and Tyson

Hillshire Brands Board Authorizes Discussions with Pilgrim’s Pride and Tyson Foods; Confirms Pilgrim's Pride increased its offer to $55.00 per share in cash

- Announced that its Board of Directors, after consultation with its independent legal and financial advisors, has made the requisite determination under Hillshire Brands merger agreement with Pinnacle Foods Inc. (NYSE: PF) to provide information to, and conduct separate discussions with Pilgrims Pride Corporation (NASDAQ: PPC) and Tyson Foods, Inc. (NYSE: TSN) with regard to their recent unsolicited proposals. 
- As announced on Tuesday May 27, Pilgrims Pride proposed to acquire all of Hillshire Brands outstanding common stock for $45.00 per share in cash. On June 1, Pilgrim's Pride increased its offer to $55.00 per share in cash. On May 29, Tyson Foods announced its proposal to acquire Hillshire Brands for $50.00 per share in cash. Hillshire Brands is party to a merger agreement with Pinnacle Foods pursuant to which Hillshire Brands agreed to acquire Pinnacle Foods for per share consideration of $18.00 in cash and 0.5 shares of Hillshire Brands common stock. Both the Pilgrims Pride and Tyson Foods proposals are conditioned on the termination of the Pinnacle Foods merger agreement. Hillshire Brands does not have the right to terminate the Pinnacle Foods merger agreement on the basis of either of these proposals or enter into an alternative acquisition agreement with either of these parties prior to termination. There can be no assurance that any transaction will result from these proposals. 
- The Hillshire Brands Board of Directors is not withdrawing, modifying, withholding or qualifying its recommendation with respect to the Pinnacle merger agreement and the merger, or proposing to do so, and is not making any recommendation with respect to either the Pilgrims Pride or Tyson Foods proposals.
- Centerview Partners and Goldman, Sachs & Co. are acting as financial advisors to Hillshire Brands, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal advisor.

(BFW) Sanofi’s Viehbacher Has Relocated to Boston, Le Monde Says

 BN 06/03 09:33 *SANOFI'S VIEHBACHER HAS RELOCATED TO BOSTON, LE MONDE SAYS
Sanofi’s Viehbacher Has Relocated to Boston, Le Monde Says
2014-06-03 09:36:39.419 GMT


By Steve Rhinds
     June 3 (Bloomberg) -- The Sanofi CEO has moved “close to
Boston” in the U.S., French daily newspaper Le Monde reports,
without saying where it got the information.


Link to Company News:{SAN FP <Equity> CN <GO>}

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To contact the editor responsible for this story:
Steve Rhinds at +33-1-5365-5072 or
srhinds@bloomberg.net