Gapping down
In reaction to disappointing earnings/guidance:
- ANET -15.1%, FND -14.6%, SRCL -14.5%, TWI -12%, RBBN -10.5%, EPAY -9.7%, APPN -9.4%, TDC -8.5%, GMED -8%, CTSH -7.7% (after selling off in late trade following the early release of its earnings), LOCO -6.6%, LGND -5.7%, NPTN -5.5%, KLIC -5.4%, BGS -5.2%, FTNT -5.2%, PLNT -5%, ACIA -4.9%, APPF -4.8%, UIS -4.6%, ATVI -4.5%, BL -4.5%, CC -4%, IMGN -4%, HLF -3.8%, MDRX -3.4%, BZH -3.4%, ARCB -3.2%, OEC -3.1%, UPLD -3.1%, GDDY -2.7%, USX -2.7%, EXPE -2.4%, CPSI -2.2%, TRUP -2.1%, SWKS -1.5%, TSLX -1.2%, ITUB -1.2%, D -1.2%, VIRT -1.1%, ATUS -1%, WTR -1%
Other news:
- SRC -3.5% (prices upsized public offering of 10 mln shares of its common stock at a public offering price of $41.00 per share)
- CORT -1.5% (European Medicines Agency recommends orphan drug designation for relacorilant to treat Cushing's Syndrome)
- CHD -1.2% (names CEO Matthew Farrell Chairman of the Board; also downgraded to Sell from Neutral at Citigroup)
- CSCO -1.1% (following ANET earnings/guidance)
- MSON -0.9% (to acquire Solsys Medical)
Analyst comments:
- ACHN -1.7% (downgraded to Underweight from Equal Weight at Barclays)
- EA -1.6% (downgraded to Neutral from Buy at MKM Partners)
- YETI -0.6% (downgraded to Neutral from Buy at Goldman)
Gapping up
In reaction to strong earnings/guidance:
- WW +15%, MELI +12.8%, OLED +12.7%, ZIXI +9.5%, UCTT +9.1%, MNST +8.2%, CRC +7.6%, SHAK +6.5%, FNKO +6.2%, CBLK +6.1%, MTZ +6%, RMD +5.9%, PVG +5.8% (ticking higher; also Executive Chairman and founding shareholder, Robert Quartermain, will be retiring), DATA +5.2%, X +4.9%, XRAY +4.9%, BTE +4.3%, BLDR +4.2%, CUB +4%, LPLA +3.9%, VRAY +3.4%, NSA +3.1%, MSI +2.9%, BRKR +2.9%, NWL +2.9%, AMKR +2.7%, GSHD +2.7%, VST +2.7%, MPWR +2.5%, RUTH +2.4%, HTGC +2.2% (increases quarterly distribution to $0.32/share from $0.31/share and announces supplemental cash distribution of $0.01/share for the first quarter of 2019), G +2.2%, HSBC +2.2%, RPD +2.1%, CARB +2%, FSLR +1.9%, FCAU +1.7%, ERII +1.6%, PODD +1.1%, BIP +1%
Other news:
- BYND +9.1% (continued momentum)
- OBSV +2.4% (reports follow-up results from Phase 2b EDELWEISS clinical trial of linzagolix for the treatment of endometriosis-associated pelvic pain)
- AMZN +2.4% (Warren Buffett says Berkshire (BRK.B) has been purchasing shares of AMZN, according to CNBC)
- CHRS +2.3% (Coherus BioSciences and Amgen settle trade secrets action)
- DBD +1.5% (Director Anton bought 25K shares worth ~$225K, SVP of Services disclosed the purchase of ~20K shares worth ~$180K)
- TSLA +1.4% (boosts offering of common stock to 3.09 mln shares (at $243.00/share), says Musk may purchase up to $25 mln of the offering, boosts offering of 2.00% convertible senior notes due 2024 to $1.60 bln)
- ZLAB +1% (prices offering of 7,843,138 ADS's of $25.50 per ADS)
- AZN +0.8% (Qternmet XR approved in the US for the treatment of type-2 diabetes)
Analyst comments:
- MGNX +6.7% (upgraded to Outperform from Neutral at Wedbush)
- ICPT +2.1% (upgraded to Outperform from Market Perform at Wells Fargo)
- BMY +1% (upgraded to Overweight from Equal Weight at Barclays)
Arista Networks defended at Needham following earnings (310.85)
Needham notes Arista reported another solid quarter of strong growth against the last of the tough 50% Revenue growth comparisons. They also sustained their rich Margins at 64.5% GMs and 37.5% Operating Margins. But that's where the good news ends. Arista offered a soft guide for the June quarter citing a halt in purchases at one large Web 2.0 Titan and slow demand at two others. The Revenue guidance of $600-$610 is below Street estimates of $639 million and represents only a 16%-17% growth rate at the mid-point, well below the nromal mid-20's growth. Arista stated business slowed sharply in late March and persisted through April leading to the lowered outlook. Arista stated they didnt know how long it would last as they didn't have enough data. They think its likely a temporary lull. With ANET indicating down 15% to $260, they are a buyer on this weakness.
ANET -16% premarket.
Early premarket gappersGapping up:
- WW +16%, OLED +14.9%, ZIXI +14.2%, BYND +14%, MELI +13%, CARB +9.7%, UCTT +8.2%, CRC +7.6%, CBLK +7.2%, SHAK +7%, MNST +6.5%, FNKO +6.2%, MTZ +6%, BTE +4.3%, BLDR +4.2%, RPD +4.2%, RMD +4%, CUB +4%, DATA +3.9%, LPLA +3.9%, VRAY +3.4%, NSA +3.1%, XRAY +3.1%, MSI +2.9%, PVG +2.8%, AMKR +2.7%, GSHD +2.7%, NWL +2.7%, MPWR +2.5%, X +2.4%, CHRS +2.3%, G +2.2%, GPOR +1.9%, ERII +1.6%, DBD +1.5%, PODD +1.1%, BIP +1.1%, FCAU +1%, GILD +0.9%, HTGC +0.9%, ASIX +0.9%, VST +0.9%, DWDP +0.8%, WMT +0.6%, NVS +0.5%
Gapping down:
- FND -14.6%, SRCL -14.4%, ANET -13.8%, APPN -12.8%, EPAY -10.7%, TDC -8.5%, GMED -8%, RBBN -7.9%, LOCO -6.6%, CTSH -6.6%, NPTN -5.8%, LGND -5.7%, KLIC -5.4%, BGS -5.2%, PLNT -5%, ACIA -4.9%, APPF -4.8%, FSLR -4.8%, UIS -4.6%, BL -4.5%, ATVI -4.3%, LPSN -4.3%, HLF -4.1%, IMGN -4%, FTNT -3.9%, TTOO -3.6%, SRC -3.5%, MDRX -3.4%, BZH -3.4%, ARCB -3.2%, OEC -3.1%, UPLD -3.1%, GDDY -2.7%, USX -2.7%, SWKS -2.6%, CC -2.5%, CPSI -2.2%, TRUP -2.1%, CHD -1.8%, EXPE -1.8%, CORT -1.5%, CSCO -1.2%, TSLX -1.2%, ATUS -1%, MSON -0.9%, CSLT -0.8%, SIMO -0.8%, CS -0.7%, TGT -0.5%
DISH Network reports EPS in-line, revs in-line -- Net pay-TV subscribers declined approximately 259k subscribers (33.60)
- Reports Q1 (Mar) earnings of $0.65 per share, in-line with the S&P Capital IQ Consensus of $0.65; revenues fell 7.8% year/year to $3.19 bln vs the $3.19 bln S&P Capital IQ Consensus.
- The company closed the first quarter with 12.063 million total Pay-TV subscribers, including 9.639 million DISH TV subscribers and 2.424 million Sling TV subscribers.
- Net pay-TV subscribers declined approximately 259,000 subscribers in the first quarter, compared to a decline of approximately 94,000 in the first quarter 2018
Boeing’s Own Test Pilots Lacked Key Details of 737 MAX Flight-Control System
A culture of close collaboration between test pilots, engineering staff deteriorated in later stages of aircraft’s development
Boeing limited the role of its own pilots in the final stages of developing the 737 MAX flight-control system implicated in two fatal crashes, departing from a longstanding practice of seeking their detailed input, people familiar with the matter said.
As a result, Boeing test pilots and senior pilots involved in the MAX’s development didn’t receive detailed briefings about how fast or steeply the automated system known as MCAS could push down a plane’s nose, these people said. Nor were they informed that the system relied on a single sensor—rather than two—to verify the accuracy of incoming data about the angle of a plane’s nose, they added.
Investigators have linked faulty sensor data to the flight-control system’s misfire, which led to crashes in Indonesia and Ethiopia that took 346 lives.
The extent of pilots’ lack of involvement hasn’t been previously reported and could bring fresh scrutiny from investigators and regulators already looking into Boeing’s design and engineering practices. It isn’t clear whether greater pilot participation would have altered the ultimate design of the flight-control system. But the scaling back of pilots’ involvement and their lack of detailed knowledge about the plane’s system add to the list of questions about engineering and design practices facing the Chicago-based aerospace giant.
A Boeing spokesman said test pilots and senior pilots didn’t have less of a role in the design, briefing and testing of the final version of MCAS when compared with their counterparts who worked on previous models featuring important new systems.
“Listening to pilots is an important aspect of our work,” the spokesman said. “Their experienced input is front and center in our mind when we develop airplanes. We share a common priority—safety—and we listen to them carefully.”
The MAX fleet has been grounded world-wide since the second crash in March, while Boeing and the Federal Aviation Administration complete a software fix to make MCAS less potent and have it rely on dual sensors. Chief Executive Dennis Muilenburg recently told investors Boeing would examine how it could improve the process of developing airplanes.
Boeing’s test pilots are an elite full-time crew, usually consisting of former military aviators, who try out systems on new aircraft before engineering specifics are locked in. Such test flights occur before the final version of the airplane is produced, cockpit procedures are set and the aircraft is delivered to customers.
Boeing’s management has long prided itself on close collaboration between test pilots and engineering staff. For decades, and particularly through the development of the first version of the wide-body 777 in the early 1990s, Boeing talked up how its roster of pilots and commercial aviators specifically recruited for feedback provided suggestions about the model’s cockpit design and function.
“The test pilots have to be fully aware of what those capabilities are, and how the airplane will respond in those situations because they are ultimately the judge and jury,” a senior Boeing executive said recently.
After Boeing decided to develop the MAX in 2011, executives overseeing the program welcomed and acted upon pilots’ suggestions, including adding larger cockpit displays, a senior pilot involved in the process said. Any suggestions that touched on safety got full attention, this pilot said.
But over time, an internal restructuring that began in 2009 introduced changes in that process, eventually reducing pilots’ clout, according to people familiar with pilots’ role in the process. Boeing had consolidated its testing and evaluation teams into a companywide group of pilots and labs to streamline operations as it kept a lid on costs. The teams had previously worked independently within Boeing’s commercial and defense divisions.
About midway through the MAX’s development, the senior pilot recalls warning a Boeing executive about taking pilots out of the loop: “Something is going to get by, and it’s not going to be pretty.”
The senior Boeing executive said he hadn’t heard such concerns and defended the consolidated testing group. The restructuring added no additional cost pressure for testing, he said, and instead strengthened the group by making more resources available across the company.
The MCAS system was a new addition to Boeing’s 737 series, meant to kick in automatically and operate in the background to prevent a plane from stalling. A stall can occur when a plane is flying too slowly and its nose is too high to maintain lift. In the MAX, MCAS uses sensor data about the plane’s angle to push down its nose and keep it from stalling.
One former Boeing pilot who participated in some later-stage MAX test flights recalls hearing about MCAS in a general way, but wasn’t given further details. For instance, this pilot never learned about the system’s reliance on a single sensor transmitting data about the angle of a plane’s nose, or how far MCAS would be able to move a plane’s adjustable tail fin known as a “horizontal stabilizer,” which controls the up-and-down movement of a jet’s nose.
Test pilots did have the opportunity to try out the MAX and its automated system under various scenarios, but those didn’t include testing the full force of MCAS, some of these people said. Looking back, some pilots contend Boeing could have missed design flaws given their cohort’s at times limited involvement in the craft’s development.
n 2016, a year before the MAX began commercial service, some test pilots suggested adapting MCAS, initially designed to operate at high speeds, to also work when the plane was traveling at slower speeds, according to one of the people familiar with the matter. By then, test pilots had less say in how design revisions were implemented. They also weren’t told explicitly that in its final iteration, MCAS commands would be four times as powerful than in earlier versions, according to people familiar with the matter. That change was earlier reported by the Seattle Times.
In hindsight, test pilots “had no real input” into the ultimate MCAS design, one of the people said.
Senior Boeing pilots at times found themselves excluded from meetings involving engineers, prompting them to sometimes invite themselves or show up unannounced, according to this person. The senior Boeing executive said last week that current development programs aren’t characterized by such friction.
Aids breakthrough as study finds drugs stop HIV transmission
Virus cannot be passed on through sexual contact if infected partner takes antiretroviral drugs
Treatment with antiretroviral drugs reduced the risk of sexual transmission of the virus that causes Aids to zero, a groundbreaking study of nearly 1,000 gay male couples showed.
The finding has been hailed as signalling a prospective end to the Aids pandemic, suggesting the disease, which has killed more than 35m people since it was first identified in the early 1980s, can no longer be passed on through unprotected sexual contact provided the infected partner is taking medicine to suppress HIV.
The researchers said their results provided a similar level of evidence on viral suppression and HIV transmission risk for gay men to that previously generated for heterosexual couples, and suggested that the risk of HIV transmission in gay couples through condomless sex when the viral load is suppressed by the drugs is effectively zero.
The observational study, which is the largest of its kind and published in The Lancet on Thursday, provides “conclusive evidence” that proper antiretroviral treatment will ensure the virus is “untransmittible”, the researchers said.
The effectiveness of HIV medication means that many people with the virus are already living lives at least as long as peers who do not suffer from it, a sharp medical and societal shift from the era in which it was seen as a near-certain death sentence.
Alison Rodger, a professor at University College London who co-led the research, said: “Our findings provide conclusive evidence for gay men that the risk of HIV transmission with suppressive ART [antiretroviral therapy] is zero.”
She added: “This powerful message can help end the HIV pandemic by preventing HIV transmission, and tackling the stigma and discrimination that many people with HIV face.
“Increased efforts must now focus on wider dissemination of this powerful message and ensuring that all HIV-positive people have access to testing, effective treatment, adherence support and linkage to care to help maintain an undetectable viral load.”
Over eight years of follow-up in the study, 15 HIV-negative men became infected with HIV, but none of the viruses screened in the newly infected partner was genetically linked to the HIV virus that had infected their main partners, ruling out any within-couple HIV transmissions.
Underlining the human impact of the study’s findings, the researchers estimate that effective antiretroviral therapy prevented about 472 HIV transmissions during the eight years of the study.
The authors emphasise the importance of those infected with the virus being regularly monitored and supported to stick to their therapy over many years. They also cautioned that the effectiveness of antiretroviral treatment in preventing HIV transmission is dependent on ensuring that the virus remains undetectable in the blood.