TheChek News Flow

Apple beats by $0.16, beats on revs; guides Q4 revs above consensus

• Reports Q3 (Jun) earnings of $2.34 per share, $0.16 better than the Capital IQ Consensus of $2.18; revenues rose 17.3% year/year to $53.27 bln vs the $52.43 bln Capital IQ Consensus; gross margins 38.3% vs 38.3% ests and 38.5% last year (guidance 38.0-38.5%). 
• iPhone shipments 41.3 mln vs 42 mln ests vs 41 mln last year, ASP $724 vs. $694 ests
• iPad of 11.5 mln vs 11.2 mln ests vs 11.4 mln last year; Macs of 3.7 mln vs 4.3 mln ests vs 4.3 mln units last year.
• Service rev +31% to $9.55 bln vs. $9.2 bln ests.
• Americas rev +20% to $24.5 bln; Europe +14% to $12.1 bln; China +19% to $9.55 bln; Japan +7% to $3.9 bln, A-Pac +16% to $3.2 bln
• Co issues upside guidance for Q4, sees Q4 revs of $60-62 bln vs. $59.4 bln Capital IQ Consensus; gross margins of 38.0-38.5% vs 38.2% ests and 37.9% last year. 
• "We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth," said Tim Cook, Apple's CEO. "Our Q3 results were driven by continued strong sales of iPhone, Services and Wearables, and we are very excited about the products and services in our pipeline." "Our strong business performance drove revenue growth in each of our geographic segments, net income of $11.5 billion, and operating cash flow of $14.5 billion," said Luca Maestri, Apple's CFO. "We returned almost $25 billion to investors through our capital return program during the quarter, including $20 billion in share repurchases."

Anadarko Petroleum misses by $0.04, beats on revs (73.09   -0.63)

• Reports Q2 (Jun) earnings of $0.54 per share, $0.04 worse than the Capital IQ Consensus of $0.58; revenues rose 21.2% year/year to $3.29 bln vs the $3.08 bln Capital IQ Consensus.
• Net cash provided by operating activities in 2Q18 was $1.23 billion.
• Sales volumes of oil, natural gas and natural gas liquids (NGLs) totaled 58 million barrels of oil equivalent (BOE), or an average of 637,000 BOE per day, which was at the high end of the company's second-quarter guidance.
• Capital investments, excluding Western Gas Partners, were approximately $1.5 billion, and the company closed the quarter with $2.3 billion of cash on hand.

After Hours Summary: MOH +19%, P +12%, AAPL +3.8% are higher, while CAKE -8%, MB -6%, AKAM / WLL -4% are lower following earnings/guidance:

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: MOH +19.1%, TCS +12.7%, P +12.2%, GLUU +9.8%, ZEN +9.2%, PAYC +8.9%, IQ +7.9%, SEND +7.7%, WIRE +6.3%, MTSI +4.7%, NANO +4.2%, AAPL +3.8%, NBIX +3.5% (light volume), OLN +3.4%, MDR +3.3%, BAND +3.1%, COHR +3.1%, VRSK +2.6% (ticking higher), STAG +1.9% (ticking higher), CACC +1.7% (light volume), GNW +1.5%, LADR +1.3% (light volume), NFX +1%

Companies trading higher in after hours in reaction to news: CPB +4.3% (WSJ reporting that activist Third Point has built stake), DOCU +1.9% (to acquire SpringCM for approx. $220 mln in cash), PII +1.6% (CEO disclosed the purchase of ~3K shares worth ~$312K and 3 Directors purchased of ~9K shares worth ~$966K)

Apple (AAPL) earnings/guidance is lifting suppliers in after hours trade: LITE +2.6%, CRUS +2.4%, FNSR +2.4%, IIVI +2%, SWKS +1.5%, AVGO +1%

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BGFV -15.5%, FTR -9.2%, CAKE -8.4%, ENPH -8.4%, ZAGG -8.4%, MB -5.6%, AKAM -3.7%, WLL -3.5%, DVN -3.4%, QUOT -1.7% (light volume), NBR -1.3%

Companies trading lower in after hours in reaction to news: SYNA -13.2% (Dialog Semiconductor terminates discussions regarding a potential acquisition of Synaptics), TORC -5.8% (downgraded to In-line at Evercore ISI), AGNC -1.7% (announces public offering of 38 mln shares of its common stock), BXMT -1.3% (commences underwritten public offering of $6mln shares of class A common stock), ACER -1.1% (to offer and sell shares of its common stock in an underwritten public offering), VNOM -0.6% (Viper Energy Partners commences underwritten public offering of 9 mln common units, increases quarterly dividend and reports Q2 update)

Closing Market Summary: Stocks End Losing Streak Ahead of Apple Earnings, Fed Decision

Stocks broke a three-session losing streak on Wednesday, with industrial shares leading the charge. The major averages extended modest opening gains throughout the morning, but slipped a bit in the final stretch, closing a step below their session highs. The S&P 500 added 0.5%; the Dow climbed 0.4%; the Nasdaq rose 0.6%; and the small-cap Russell 2000 jumped 1.1%.

Reports that the U.S. and China are trying to restart trade talks helped underpin the broader market, especially the trade-sensitive industrial sector (+2.1%), which closed atop the sector standings. Investors were also paying close attention to the information technology sector (+0.3%), which was a bit erratic after tumbling for three sessions in a row, trading between -0.4% and +1.0%.

Apple's (AAPL 190.29, +0.38) earnings, which were scheduled to be released after the close, also likely contributed to tech's fickle behavior. Investors were hoping that Apple, which is the largest company in the world by market cap, can get the tech sector back on track following last week's disappointing results and guidance from social media giant Facebook (FB 172.58, +1.52).

In total, eight of eleven sectors finished in the green. The health care group (+1.0%) was a notable outperformer, helped by Pfizer (PFE 39.93, +1.34), which rallied 3.5% after reporting better-than-expected earnings and guidance. Meanwhile, in the consumer staples sector (+0.5%), Procter & Gamble (PG 80.88, +0.68) finished higher by 0.9% after also beating bottom-line estimates.

On the downside, the financial sector (-0.7%) struggled on Tuesday, cutting its July gain to 5.2% -- still much better than the S&P 500 (+3.6%). The energy sector (-0.3%) dropped amid a decline in crude prices -- WTI crude -2.0% to $68.70/bbl -- and the lightly-weighted telecom services group (-0.8%) also lagged.

In other news, Chipotle Mexican Grill (CMG 433.66, -31.81) dropped 6.8% after reports of another food-borne illness incident in Powell, Ohio; the Bank of Japan decided to leave its ultra-loose monetary policy intact; and the Fed kicked off a two-day policy meeting in Washington.

Reviewing Tuesday's big batch of economic data, which included Personal Income, Personal Spending, and PCE Prices for June, the Employment Cost Index for Q2, the Chicago PMI for July, the Conference Board's Consumer Confidence Index for July, the S&P Case-Shiller Home Price Index for May:

• Personal income climbed 0.4% in June (consensus +0.4%) following an unrevised increase of 0.4% in May. Meanwhile, personal spending rose 0.4% in June (Briefing.com consensus +0.5%) following a revised increase of 0.5% in May (from 0.2%). The PCE Price Index rose 0.1% in June (consensus +0.1%), and the core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.9%, unchanged from the last reading.
  • The key takeaway from the Personal Income and Spending Report for June is that it didn't produce any real surprises. That means it is the type of report that should keep the Federal Reserve inclined to think that it can continue to raise interest rates.
• The second quarter Employment Cost Index rose 0.6%, while the consensus expected an increase of 0.7%.
  • The key takeaway from the report is that wages and salaries, and benefit costs, are trending higher. That will support an inflation narrative and the thinking that the Federal Reserve will remain inclined to keep gradually raising interest rates.
• The Chicago PMI for July hit 65.5 (consensus 62.0), up from an unrevised 64.1 in June.
  • The key takeaway from the report is the understanding that the Prices Paid Indicator hit its highest level (82.1) since September 2008, which is indicative of pipeline inflation.
• The consumer confidence reading for July increased to 127.4 ( consensus 126.6) from the prior month's revised reading of 127.1 (from 126.4).
  • The key takeaway from the report is the Conference Board's indication that a back-to-back decline in the Expectations Index suggests consumers do not anticipate growth accelerating.
• The Case-Shiller 20-City Index increased 6.5% in May (consensus +6.5%), and the April increase was revised to 6.7% from 6.6%.

Looking ahead, investors will receive on Wednesday the ADP Employment Change report for July, the Construction Spending report for June, the ISM Index for July, and the weekly MBA Mortgage Applications Index. In addition, the Fed will release its latest policy directive (2:00 PM ET), and July auto sales will be released throughout the day.

• Nasdaq Composite +11.1% YTD
• Russell 2000 +8.8% YTD
• S&P 500 +5.3% YTD
• Dow Jones Industrial Average +2.8% YTD