TheChek News Flow

>>> US After Hours Summary: IQ -17.4% falls on SEC investigation;

After Hours Summary: IQ -17.4% falls on SEC investigation; BIDU -7.6% down on earnings; DDS +17.6%, AMAT +2.5% up on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: DDS +17.6%, FTCH +9.6%, AZRE +5.6%, TGH +3.2%, AMAT +2.5%, GLOB +1.5%, MYGN +0.5% (also names new CEO)

Companies trading higher in after hours in reaction to news: TFFP +22.1% (licensing agreement with UNION therapeutics), KMDA +13.9% (three patients treated with passive vaccine released from hospital, according to Jerusalem Post), MESO +3.3% (hearing FDA Advisory Committee voted that data supports efficacy of remestemcel-L), LMNL +2.5% (stock offering), PLXS +2.1% (announces $50 mln share buyback plan), TSLA +1% (hinting at working on a new car model made in China, according to Electrek), LPLA +0.4% (releases monthly activity report for July), AZO +0.1% (to hire more than 20,000 new employees), MLM +0.1% (increases dividend), WEX +0.1% (stock offering), CLB +0.1% (files mixed securities shelf offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PAYS -19.8%, IQ -17.4% (also discloses SEC investigation), PRPL -10.6%, BIDU -7.6% (also increases share repurchase authorization from $1 bln to $3 bln), DUO -4.8%, HOLI -0.1%

Companies trading lower in after hours in reaction to news: EQ -15.6% (stock offering), OPTN -9.4% (stock offering), RMNI -9.1% (stock offering), CACC -6.2% (discloses additional subpoenas from the Attys General of MD and NJ), NOVA -6% (stock offering), IPI -4.1% (1-for-10 reverse stock split), DYAI -2.5% (stock offering), BX -0.4% (commits to invest in up to $300 mln of residential solar loans through Loanpal), AR -0.3% (S&P ratings placed on CreditWatch), JD -0.1% (to acquire controlling interest in Kuayue Express)

(BFW) Fund Flows to Developed Market Stocks Surge as Bonds Cool: Citi

>>> Europe : Brokers Upgrades & Downgrades - 13th of August 2020 V2(+)

>>> Up

* Asos Raised to Hold at Liberum; PT 5,000 pence (+)

* Bunzl PT Raised to 2,900 pence from 2,000 pence at Jefferies

* CNH Industrial Raised to Overweight at JPMorgan; PT $9.50

* Deutsche PBB PT Raised to 5.50 euros at Bankhaus Metzler

* DWS Raised to Buy at Oddo BHF; PT 37.80 euros (+)

* Inter Parfums Raised to Buy at BWS Financial; PT $60

* John Laing Group Raised to Overweight at Barclays; PT 365 pence

* Natixis Raised to Overweight at Barclays; PT 3.40 euros

* Purplebricks Raised to Buy at UBS

>>> Down

* ALK-Abello Cut to Hold at ABG; PT 1,983 kroner

* Aryzta Cut to Add at Baader Helvea; PT 0.66 Swiss francs (+)

* Bechtle Cut to Hold at Bankhaus Metzler; PT 164 euros

* BMW Cut to Hold at Bankhaus Metzler; PT 54 euros

* Corestate Cut to Add at Baader Helvea; PT 20 euros

* Deere Cut to Underweight at JPMorgan; PT $160

* DSV Panalpina Cut to Hold at HSBC; PT 980 kroner

* Eni Cut to Hold at LBBW; PT 9.50 euros

* Freenet Cut to Hold at LBBW; PT 18 euros

* Hamburger Hafen Cut to Sell at LBBW; PT 15 euros

* HolidayCheck Cut to Hold at Berenberg; PT 1 euro

* Leoni Cut to Sell at LBBW; PT 4.80 euros

* MTU Aero Cut to Neutral at Citi; PT 159 euros

* Oshkosh Cut to Neutral at JPMorgan; PT $90

* Softcat Cut to Hold at Berenberg; PT 1,250 pence

* Sunrise Cut to Neutral at Exane; PT 110 Swiss francs

* Sunrise Cut to Hold at Berenberg; PT 110 Swiss francs

* Sunrise Cut to Hold After Liberty Global Offer: Berenberg

* Uniper Cut to Sell at SocGen; PT 22.50 euros (+)

>>> Initiation

* Siemens Gamesa Reinstated Hold at Berenberg; PT 23.50 euros

* Vestas Rated New Buy at Berenberg; PT 1,050 kroner

>>> Call

* BMW Cut to Hold, Results Were Not Fully Convincing: Metzler

* Carlsberg’s Cautious Outlook May Disappoint Initially: Jefferies

* Ceconomy’s Net Cash is Encouraging With In-Line 3Q Results: MS (+)

* Inter Parfums Upgraded to Buy at BWS on Better Demand Trends

* GVC’s FY Guidance Reinforces Top Pick Status, Berenberg Says (+)

* National Express Recovery Hopes Fade After Difficult 1H: Liberum (+)

* Thyssenkrupp Reworking Balance Sheet, Outlook to Weigh: Analysts (+)

>>> TradeGate 600 Pre-Market Indications

DAX:
- RWE (RWE TH) +1.3%
  - RWE Increases Profits On Expanding Renewables Portfolio
- Deutsche Telekom (DTE TH) +0.9%
  - Deutsche Telekom Raises Forecasts After Sprint Deal (Correct)
- MTU Aero (MTX TH) -1.7%
  - MTU Aero Cut to Neutral at Citi; PT 159 euros
- Deutsche Wohnen (DWNI TH) -1.9%
  - Deutsche Wohnen First Half Ebitda EU334.2m
- Wirecard (WDI TH) -5.6%
  - Philippines Seeks Charges Over Ex-Wirecard Exec’s False Trail
  - Wirecard Will Be Removed From Germany’s DAX as Rules Change
MDAX:
- Delivery Hero (DHER TH) +2.3%
  - Stock a potential successor for Wirecard in DAX
- K+S (SDF TH) +1.6%
  - K+S Beats Sales, Earnings Estimates as Outlook is Fine-Tuned
- Stroeer (SAX TH) -1.9%
  - Stroeer First Half Adjusted Ebitda -28% Y/y; Cuts FY Forecast
- Airbus (AIR TH) -3.8%
- Thyssenkrupp (TKA TH) -5.6%
  - Thyssenkrupp Warns Operating Loss Will Widen Amid the Pandemic
SDAX:
- SMA Solar (S92 TH) +4.2%
  - SMA Solar First Half Ebitda EU24 Mln
- Tele Columbus (TC1 TH) +1.2%
- Leoni (LEO TH) +1%
  - Leoni Cut to Sell at LBBW; PT 4.80 euros
- Deutsche PBB (PBB TH) +0.7%
  - Deutsche PBB PT Raised to 5.50 euros at Bankhaus Metzler
- 1&1 Drillisch (DRI TH) +0.2%
  - 1&1 Drillisch First Half Ebitda EU329.6 Mln
- Jungheinrich (JUN3 TH) -1.3%
- Bilfinger (GBF TH) -1.3%
  - Bilfinger Second Quarter Adj Ebita Loss EU35 Mln
- Wacker Neuson (WAC TH) -2.5%
- Nordex (NDX1 TH) -12%
  - Nordex First Half Sales EU2.05 Bln Vs. EU990.8 Mln Y/y

>>> Stoxx 600 Pre-Market Indications

Delivery Hero (DHER TH) +1.9%
- Wirecard Will Be Removed From Germany’s DAX as Rules Change
GVC (6GI TH) +1.8%
- GVC at Non-Deal Roadshow Hosted By Berenberg Today
RWE (RWE TH) +0.8%
- RWE Increases Profits On Expanding Renewables Portfolio
Scout24 (G24 TH) +0.7%
- Scout24 Second Quarter Revenue EU83.9 Mln, -3.5% Y/y
Deutsche Telekom (DTE TH) +0.6%
- Deutsche Telekom Raises Forecasts After Sprint Deal (Correct)
Alstria Office (AOX TH) -1.6%
Deutsche Wohnen (DWNI TH) -1.9%
- CORRECT: Deutsche Wohnen First Half Ebitda EU334.2m
Cancom (COK TH) -2%
- Cancom Second Quarter Ebitda EU20.1 Mln, -29% Y/y
MTU Aero (MTX TH) -2.2%
- MTU’s Cash Rises on Cost-Cutting, Added Debt Amid Virus Squeeze
Airbus (AIR TH) -3.9%
TUI (TUI1 TH) -5%
- TUI Swings to Loss as Tour Operator’s Revenue Declines by 98%
Thyssenkrupp (TKA TH) -5.6%
- Thyssenkrupp Warns Operating Loss Will Widen Amid the Pandemic

FT : Cisco sales warning raises spectre of broad IT spending decline

Cisco sales warning raises spectre of broad IT spending decline

Chief executive points to US failure to mount more effective battle against coronavirus

The failure to mount a more effective battle against Covid-19, particularly in the US, has dented the outlook for a key part of the IT market, networking equipment company Cisco Systems has warned.

“I wouldn’t say that we’re coming out of the coronavirus right now. It feels to me very much how it felt 90 days ago,” Chuck Robbins, chief executive, said on Wednesday.

Speaking in an interview with the Financial Times, he added that he had expected the battle against the pandemic to be showing results by now, but that US lapses had left a cloud over his company’s prospects.

“It sure feels like a coherent, nationwide testing programme would have been welcome,” he said.

Mr Robbins’ comments came as Cisco indicated that its current fiscal quarter, which runs to the end of October, might produce an even bigger drop-off in sales than it experienced during the sharp contraction of the most recent three months.

The downbeat prediction added to growing unease on Wall Street about a broad downturn in IT spending in the second half of this year, and wiped about 6 per cent from Cisco’s share price in after-market trading.

Cisco’s fiscal quarter runs to the end of July, a month later than most tech companies, making its results the most up-to-date window into broader IT market conditions. While demand for online services and software has soared during the pandemic, companies selling hardware such as servers, storage and networking equipment have faced a difficult market.

Mr Robbins suggested countries that have had the most success in controlling Covid-19 were seeing stronger IT demand. Japan, South Korea and Germany had all begun “to show some positives”, with the general outlook in Europe also improving, he said.

That was balanced by the US, where he said efforts to control the pandemic have been more patchy. “America’s really the wild card we’re seeing right now.”

The Americas region, which accounts for about 60 per cent of Cisco’s business, experienced a 12 per cent revenue drop in the latest quarter, compared to declines of 6 and 7 per cent in the European and Asian regions, respectively.

Responding to the prospect of a longer downturn than it had expected, Cisco on Wednesday said it would slice $1bn from its annual cost base — equivalent to about 6 per cent of its operating costs — though it did not say how many jobs were likely to be lost.

It also said it was accelerating plans to sell all its products on a subscription, or “as a service”, basis, something that would reduce its vulnerability to sharp cyclical downturns in one-off product sales.

The company also said Kelly Kramer, chief financial officer, was stepping down after five years in the job, but would continue in the position while it searched for a replacement.

The pandemic hit Cisco’s core routing and switching business hardest, with sales falling 16 per cent in the latest quarter. Mr Robbins said the company was on the lookout for acquisitions to bring more cloud software applications to the company — a market that has been boosted by the pandemic, as many customers have moved more of their operations to the cloud.

For the most recent quarter, to the end of July, Cisco did better than most analysts had expected, though its revenue still dropped 9 per cent from a year before. Its revenue of $12.2bn and pro forma earnings per share of 80 cents were ahead of the $12.08bn and 74 cents that had been forecast.

Net income of $2.6bn was up 19 per cent from the year before, when profits were dented by $667m in one-off tax charges.

For the first quarter of its current fiscal year, Cisco said it was likely to record a further revenue decline of 9 to 11 per cent, pointing to revenue of between $11.7bn and $12bn, with pro forma earnings of 69 to 71 cents a share.

Most analysts had been expecting revenue of $12.25bn and earnings of 76 cents a share.

>>> Europe : Brokers Upgrades & Downgrades - 13th of August 2020