>>> CREE : Color on Quarter --> +2.5% in Pre-Mkt

--> CREE is +2.5% in the premarket.

Cree: Color on Quarter

  • Stifel notes Cree reported largely in-line results for the quarter when we back out a one-time tax gain. Guidance for the March quarter was wide with the mid-point below consensus. They see minimal near-term leverage and they need to see June play out (new bulb customers, lower ASPs introduced, heavy marketing spend and no seasonal impacts) to get more comfortable with the story, thus they reiterate their Hold rating.
  • Needham notes Cree delivered a strong F2Q14 report but provided seasonally softer guidance that is below consensus. Given the strong secular trend coupled with its momentum in light bulbs and fixtures, they have no reason to believe Cree will not deliver another year of strong growth. On the other hand, capacity constraints are limiting sales of higher-margin LED components, and they believe a mix shift toward more bulbs will continue to prevent gross margin expansion in the next few quarters. They are incrementally more constructive on Cree based on its strong business momentum in LED lighting, but view the stock as fairly valued trading at a CY15E P/E of 29x.
  • DA Davidson is raising their tg to $66 from $65; although they expect CREE will maintain its dominant position in the growing LED general lighting market, they are concerned that muted margins will offset top line improvements. With margin concerns overshadowing unit growth we continue to remain on the sidelines.

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: AMD -8.9%, COH -6.8%, IBKR -4.6%, ABB -4.4%, BOBE -4.3%, PH -3.8%, XLNX -3.7%, IBM -3.4%, FNB -2.7% (light volume), TEL -2.3%, FCX -1.9%, GD -1.8% (light volume), VMW -1.6% (will acquire AirWatch for ~$1.175 bln in cash and ~$365 mln of installment payments and assumed unvested equity; sees Q4 revs slightly above consensus), FE -1.4% (also cuts dividend), TXN -1%, USB -0.7% (light volume), NSC -0.6%, ZION -0.5% ( Updates Effects Of Volcker Rule; The combined impact of the Volcker Rule and the IFR, and Zions' decision to sell certain CDOs, is expected to result in pre-tax securities impairment charges of between $135 million and $145 million), ATI -0.5% .

Financial related names showing weakness: SID -5%, IRE -3.3%, NBG -2.6%, BBVA -2.3%, ING -2.1%, PUK -2%, DB -1.5%, RBS -1.4%, SAN -1.2%.

Select metals/mining stocks trading lower: GFI -2%, AU -1.8%, EGO -1.2% ABX -0.8% (downgraded to Underweight from Neutral at HSBC Securities), BHP -0.3% (downgraded to Neutral from Overweight at HSBC Securities) .

A few European telecom names are lower: PT -1.7%, ORAN -1.4%

Other news: ABIO -12.7% (still checking), AMAG -8.5% (receives Complete Response Letter from U.S. Food and Drug Administration for the Supplemental New Drug Application for Feraheme for the Broader IDA Indication), KERX -5.1% (commences a $90 mln underwritten public offering of shares of its common stock), NKTR -4.8% (files for shelf offering, announces public offering of 8,500,000 shares of common stock), GRPN -2.7% (still checking), CTIC -2.6% (modestly pulling back), SPLK -1.8% (Splunk files for 6,000,000 share common stock shelf offering), ONVO -1.2% ( trading lower after Citron confirmed ONVO short position on CNBC after the close), HPQ -1% (down with IBM), JE -0.9% (announces proposed convertible bond offering and intention to redeem 6.0% convertible debentures due September 30, 2014), MTW -0.9% (sells interest in Manitowoc Dong Yue Heavy Machinery Co; expected to result in loss of $36 mln), SYNA -0.5% (files for ~1.95 mln share common stock offering by selling shareholders).

Analyst comments: MOS -2.7% (downgraded to Sell from Neutral at Goldman ), VZ -0.8% (downgraded to Sector Perform from Outperform at Pacific Crest ), ORCL -0.8% (downgraded to Perform from Outperform at Oppenheimer), TRGP -0.7% (downgraded to Hold from Buy at Jefferies), TRV -0.5% (downgraded to Outperform at RBC Capital Mkts)

>>> Freeport-McMoRan beats by $0.06, misses on revs-->-2.3% Pre-Mkt

Freeport-McMoRan beats by $0.06, misses on revs

Reports Q4 (Dec) earnings of $0.86 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of $0.80; revenues rose 30.4% year/year to $5.88 bln vs the $6.4 bln consensus.
  • Fourth-quarter 2013 consolidated copper sales of 1.14 billion pounds were higher than fourth-quarter 2012 sales of 972 million pounds reflecting improved volumes throughout FCX's global mining operations.
  • Fourth-quarter 2013 consolidated gold sales of 512 thousand ounces were higher than fourth-quarter 2012 sales of 254 thousand ounces and the October 2013 estimate of 390 thousand ounces reflecting higher ore grades and improved operating performance in Indonesia.
  • Fourth-quarter 2013 consolidated molybdenum sales of 22 million pounds were higher than fourth-quarter 2012 sales of 21 million pounds and the October 2013 estimate of 21 million pounds.
  • Fourth-quarter 2013 sales from oil and gas operations of 16.6 MMBOE, including 11.7 million barrels (MMBbls) of crude oil, 22.9 billion cubic feet (Bcf) of natural gas and 1.1 MMBbls of natural gas liquids (NGLs), were higher than the October 2013 estimate of 16 MMBOE primarily reflecting higher Eagle Ford production.
  • Consolidated sales for the year 2014 are expected to approximate 4.4 billion pounds of copper, 1.7 million ounces of gold, 95 million pounds of molybdenum and 60.7 MMBOE, including 1.0 billion pounds of copper, 325 thousand ounces of gold, 25 million pounds of molybdenum and 15.3 MMBOE in first-quarter 2014.
  • Mining Unit Net Cash Costs- Consolidated average unit net cash costs (net of by-product credits) for FCX's copper mines of $1.16 per pound of copper in fourth-quarter 2013 were significantly lower than unit net cash costs of $1.54 per pound in fourth-quarter 2012 and the previous estimate of $1.46 per pound primarily reflecting higher copper and gold sales volumes and ongoing cost control efforts. For the year 2013, consolidated unit net cash costs (net of by-product credits) averaged $1.49 per pound of copper compared with the year 2012 average of $1.48 per pound. Assuming average prices of $1,200 per ounce of gold and $9.50 per pound of molybdenum and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for FCX's copper mining operations are expected to average $1.45 per pound of copper for the year 2014.
  • FCX's preliminary estimated consolidated recoverable proven and probable reserves from its mines at December 31, 2013, include 111.2 billion pounds of copper, 31.3 million ounces of gold and 3.26 billion pounds of molybdenum, which were determined using long-term average prices of $2.00 per pound for copper, $1,000 per ounce for gold and $10.00 per pound for molybdenum.
  • Operating Cash Flows- FCX generated operating cash flows of $2.3 billion in fourth-quarter 2013 and $6.1 billion for the year 2013. FCX's consolidated operating cash flows are estimated to approximate $9 billion for the year 2014..

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: SMCI +15.7% (also target raised to $23 at Needham), NUAN +8.1% (also appointed Bill Robbins as executive vice president, Worldwide Sales), XRS +8%, EAT +5% (ticking higher), ASML +4.4%, HURN +4.2%, TPLM +3.1%, CA +3%, WWD +2.6%, CREE +1.9%, ABT +1.2%, UTX +0.4%.

M&A news: NOVB +23.8% (North Valley Bancorp and TriCo Bancshares announce agreement to merge), MKTG +0.2% (has acquired Push IO; financial terms not disclosed).

Other news: VISN +43.8% (announces exclusive strategic cooperation with Baidu Games (BIDU) to promote the Baidu Games brand and Baidu's gaming products across VISN's digital television advertising networks nationwide), DRWI +22.6% (has been selected as a microwave solutions provider for backhaul connectivity as part of Gogo's (GOGO) ongoing expansion efforts), LPTN +7.1% (Granted Key U.S. Patent Related to Ocular Drug Program, Isonep), GERN +6.9% (still checking), PSTI +5.5% (still checking), PRAN +5.1% (disclosed that it plans to commence US investor roadshow), KOOL +4.3% (continued strength), ZLCS +4.2% (following late move higher), IDRA +3.9% (announces publication of new data demonstrating impact of inhibiting TLRs 7, 8, and 9 in a Preclinical Model of Autoimmune Disease; Gene expression analyses showed that treatment with either antagonist normalized expression of IL-17-induced genes), YRCW +3.1% ( Teamster local unions recommend approval of tentative agreement with YRCW), TWI +2.6% (Titan Intl: MHR Fund Management discloses 10.9% active stake in 13D filing; intend to seek to engage in discussions with management), LEDS +2.5% (up with CREE), GTE +2.4% (confirms significant reserves at the Breana Oil Field, Peru), HIMX +2.3% (continued strength following late BofA/Merrill price tgt increase), ARMH +2.1% (boosted by ASML and NUAN), GOLD +1.3% (still checking for anything specific), GOGO +1.6% (still checking), TA +1.5% (settles previously disclosed antitrust case), AA+1.4% (favorable commentary on Mad Money), BBRY +1.2% ( announces plans to divest Canadian Real Estate Holdings; will not comment on potential value of a sale), TSLA +1.1% (continued strength; Regulators say Elon Musk has a point regarding use of the word 'recall' to discuss TSLA fixes), RNO +1.1% (provided Q4 operational update; Pennyrile production remains on target for mid-2014), STM +0.9% (still checking for anything specific, several tech names reported earnings/guidance), SBAC +0.2% ( Lone Pine Capital discloses 6.4% passive stake in 13G filing).

Analyst comments: ICPT +2.7% (fair value tgt increased to $449 from $72 at Wedbush; suggests name as 'likely acquisition' ), CERN +0.7% (upgraded to Strong Buy from Neutral at ISI Group), DEO +0.2% (added to most preferred consumer staples/luxury list at BofA/Merrill)

>>> Abbott reports EPS in-line, misses on revs; guides FY14 EPS in-line

Abbott Labs reports EPS in-line, misses on revs; guides FY14 EPS in-line; plans to repurchase $2 bln in stock this year

Reports Q4 (Dec) earnings of $0.58 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.58; revenues rose 0.4% year/year to $5.66 bln vs the $5.72 bln consensus. Ex-FX, Q4 worldwide sales increased 3.3 percent on an operational basis. Reported sales increased 0.4 percent, including an unfavorable 2.9 percent effect of foreign exchange. The previously reported sales disruption in International Nutrition that occurred in August is estimated to have reduced Abbott's total worldwide sales growth by ~1.5 percentage points.

Co issues in-line guidance for FY14, sees EPS of 2.21-2.26 vs. $2.21 Capital IQ Consensus. In 2014, Abbott projects an increase in its share repurchases to more than $2 billion.

>>> IBM : Color on quarter - Stock -3% in Pre-Mkt 75k shares traded

--> IBM is trading ~3% lower in pre market at $182.30.

IBM: Color on qtr
  • Stifel notes 4Q EPS of $6.13 beat consensus ($5.99) on lower revenue ($27.7bn down 3% cc, consensus $28.0bn) and tax rate (11%). The lower tax rate contributed $0.62 to EPS, although IBM has always viewed the tax rate as an operational lever and telegraphed the lower rate. Core issues were continued weakness in the Growth Markets (GMU's down 6% versus -5% in September), China remained particularly weak (down 23% y/y), hardware was down 25% as expected due to the anniversary of the mainframe product cycle and known product transitions. Software grew in its target range (+4%); Services was consistent with 3Q, which was modestly below their expectations as cyclical and perhaps some customer specific issues continue to impact GTS growth.
  • ISI notes the Dec-13 again highlighted challenges IBM is facing to revive its business (e.g., Software only up ~3% y/y, Services down y/y and systems down 26% y/y). In its view, the core of IBM's old playbook has been based primarily on: 1) large share buybacks, 2) highly disciplined expense management, 3) portfolio rationalization with a focus on services/software, and 4) tuck-in m&a. While this strategy historically produced consistent double-digit EPS growth, ISI believes a new strategy is required as large portions of IBM's highly profitable software/services business is under threat from SaaS and cloud migration. Maintaining relevance in large accounts will require bigger/bolder m&a in ISI's view, even if dilutive to EPS in the early years.
  • RBC notes IBM was able to beat Street EPS expectations during the quarter largely due to a lower tax rate and share buyback benefits. RBC believes EPS guidance for FY14 is achievable and positions the firm well toward achieving its $20 EPS target by FY15.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: SMCI +16.8%, NUAN +9.1%, GERN +6.9%, PSTI +5.5%, ASML +4.4%, KOOL +4.3%, ZLCS +4.2%, HURN +4.2%, NOVB +3.9%, GALE +3.4%, YRCW +3.1%, TPLM +3.1%, CA +3%, TWI +2.6%, WWD +2.6%, LEDS +2.5%, GTE +2.4%, HIMX +2.3%, GOLD +1.9%, CREE +1.9%, TA +1.5%, RIO +1.5%, RNO +1.1%, STM +0.9%

Gapping down: AMD -11.3%, KERX -5.1%, NKTR -4.8%, IBKR -4.6%, BOBE -4.3%, XLNX -3.7%, IBM -3.4%, FNB -2.7%, NBG -2.6%, TEL -2.3%, ING -2.1%, SPLK -1.8%, AU -1.8%, VMW -1.6%, DB -1.5%, FE -1.4%, ONVO -1.2%, HPQ -1%, TXN -1%, JE -0.9%, MTW -0.9%, EMC -0.7%

(BFW) Shire Has Scope for More M&A, Barclays Says

+------------------------------------------------------------------------------+

Shire Has Scope for More M&A, Barclays Says 2014-01-22 10:24:01.314 GMT

By Sheela Sharma Jan. 22 (Bloomberg) -- Shire has scope for more M&A; expect additional corporate activity, most likely Rare Disease pipeline strengthening, to be announced during 2014, Barclays (overweight, PT 3,275p vs 2,800p previously) writes in note. * Acquisition of Viropharma limits size of future near-term deals, though with strong free cash flow generation (>$2b pa) this can be paid off within 2-3 yrs * Viropharma will add ~12% to 2015 EPS, divestment of loss- making Dermagraft adds 3%-5% to EPS; * Leaves stk on ~14x PE in 2015, 11% discount to mid-cap peers despite superior long-term EPS growth * Yday: JPMorgan said bolt-ons seen as main use of cash for EU large pharma; highlights Shire * Nov. 11: Shire announced plan to buy Viropharma for $50-shr * Jan. 17: Shire sells Dermagraft, sees impairement of ~$650m in 4Q * NOTE: Shire cash, near cash items at Sept. 30 was $1.7b: Bloomberg data

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

--Editor: James Ludden

To contact the reporter on this story: Sheela Sharma in London at +44-20-7392-0395 or ssharma145@bloomberg.net

To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

SKY Deutschland lower - see Cbk comment on Ebitda

Sky Deutschland May Forecast 2014 Ebitda Down ~25%: Commerzbank

Sky Deutschland expected to guide the market ~25% lower regarding 2014 Ebitda amid start of Vodafone’s SNAP platform and too-high ARPU expectations, Commerzbank says in note.
  • Commerzbank says 4Q results, due Feb. 6, expected to be “rather subdued”
    • While subscriber gains likely to accelerate due to shift of DT customers in 2H, this seems already taken fully into account
    • Doesn’t see any positive catalysts for the stock in S/T
    • Reiterates hold
  • 12 buys, 9 holds, 7 sells; avg. PT EU7.6 implies upside of 5.7%: data compiled by Bloomberg
    • Shares up as much as 0.7% today; down 10% since start of Jan., up 94% in 2014
  • NOTE: Co. said Nov. 5 3Q Ebitda rose 19% to EU29.2m, said expects FY 2013 Ebitda to be positive, to grow strongly thereafter
  • NOTE: Current estimates have 2014 Ebitda at EU116.7m:

(Manager.de) Vodafone Germany chief urges protection against hedge funds

Vodafone Germany chief urges protection against hedge funds

Link to translation : {http://bit.ly/1mroPxg}
Link to original in German : {http://bit.ly/1mroPxg}

The head of Vodafone Germany, Jens Schulte-Bockum, calls for new laws to better protect businesses in this country against activist hedge funds. Thus, the U.S. fund Elliott can prevent about to squeeze out the remaining shareholders of the acquired cable Germany.

Hamburg - "maximizing profits for hedge funds without regard to business and economic damage is generally a very questionable business model," Jens Schulte-Bockum said in an interview with the Hamburg business newspaper manager magazin (Release date: January 24). "This should be stopped," demanded the boss of Vodafone Germany, which is currently under attack by the U.S. hedge fund Elliott.

AD

The British telecom giant Vodafone Show Charthas in the past year the majority of the competitors cable Germany acquired (KDG). 11.09 percent of KDG holds but still a major investor Elliott. In order that this may prevent squeeze out the remaining shareholders.
Elliott is known to participate in company to drive in a takeover, the purchase price in the amount. Recently, only the Americans had the takeover of the pharmaceutical producers torpedoed Celesio .

Vodafone is expected to award proceedings, will be at the decision on compensation to minority shareholders. The fact that Elliott could act so aggressively in Germany, was "in any case, the result of a loophole in the German stock corporation law," criticized Schulte-Bockum.