Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- WINT +16.9%, TIVO +13.6%, CSLT +12.7%, SNPS +7.6%, NTES +7.3%, KATE +6.8%, (also announce it is reviewing strategic alternatives) NTAP +5.3%
- QUIK +4.2%, CRY +4.1%, SRCL +4%, NGD +3.9%, TPX +3.9%, ALXN +3.4%, LBTYA +3.3%, CIR +3.3%, GNCA +2.4%, NMIH +2.1%, GG +2%, ABX +2%
- CHH +1.7%, CSCO +1.6%, SHPG +1.6%, EQIX +1.4%, AMAT +1.4%, SSNC +1.3%, PBFX +1.2%, GFI +1.2%, CVA +1%, TRP +1%
M&A news:
- HGG +17.5% (HHGregg confirms plans to explore strategic alternatives)
- RAD +2.6% (Walgreens (WBA) is optimistic regarding FTC approval for RAD M&A deal due to divesture package, according to NY Post)
- BIDU +0.5% (acquired digital assistant startup Raven Tech, according to TechCrunch)
Other news:
- XTLB +58.4% (continued strength), SCON +42.6% (receives a U.S. Patent enabled by STI's proprietary superconducting wire manufacturing method)
- MDGS +37.4% (announces tha tthe China FDA has approved the commencement of the first multi-center MUSE Clinical Study in China)
- CVRS +22.7% (Corindus Vascular Robotics announces a distribution agreement w/ a subsidiary of Mitsubishi (MSBHY); includes an initial order for 12 CorPath GRX Systems accompanied by an advance of $2 million toward the purchase price), RUBI +11% (still checking), BLDP +7.6% (receives 5-year, $25 mln deal Broad-Ocean Motor Co)
- PGNX +5.6% (to join S&P SmallCap 600), SFLY +3.1% (to join S&P SmallCap 600)
- VRX +2.6% (FDA approves Siliq to treat adults with moderate-to-severe plaque psoriasis)
- TTM +2.3% (Tata Motors and and Microsoft (MSFT) India confirm that cos will collaborate on connected cars)
- FOLD +2.1% (presents additional positive preliminary Phase 1/2 Data; demonstrates improving trends in majority of patients)
- FL +1.3% (increases quarterly dividend to $0.31/share from $0.28/share; approves a new 3-year $1.2 bln share repurchase program extending through January 2020, replacing the previous $1 bln program; approves $277 mln capital expenditure program for 2017)
- GSK +1% (in sympathy with SHPG earnings)
- ALGN +0.9% (announces it has prevailed in proceedings initiated by ClearCorrect Operating that challenged the validity of three of its U.S. patents)
Analyst comments:
- MDCA +4.6% (upgraded to Buy from Hold at Jefferies)
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- CFMS -38.6%, GNC -20.4%, BBW -17.6%, MOH -16.7%, CLD -14.8%, (Cloud Peak Energy replaces its throughput agreement with Westshore Terminals Limited Partnership)
- OMCL -10.8%, HAWK -9%, CAR -8.1%, AVP -6.1%, DF -6.1%, TRIP -5.8%, GDDY -5.8%, HOS -5%, MGM -4.7%, SPWR -4.6%, GEL -4%, CF -3.6%
- CAB -3.3%, MZOR -3.2%, LSCC -2.8%, MMLP -2.7%, (commences 2.6 mln common units offering), CNNX -2.7%, CYS -2.5%, AEM -2.4%, KHC -2.2%
- HIMX -1.9%, WM -1.8%, KGC -1.3%, CBS -1.1%, NCI -1.1%, QTWO -1%, NICE -1%, BCOR -1%, CSV -0.9%,CSV -0.9%, DUK -0.9%
Other news:
- ACUR -32.8% (to be delisted from the Nasdaq; will begin to trade on the OTCQB on February 23)
- EVOK -10.3% (intends to offer and sell shares of its common stock in a 'firm commitment' underwritten public offering)
- NGL -6% (upsizes offering by 800K units and prices 8.8 mln common units for gross proceeds of $198 mln)
- CRSP -5.7% (CRISPR Therapeutics to host call to provide update on the CRISPR/Cas9 U.S. patent interference proceedings and corresponding U.K. patents tomorrow February 16 at 11am ET)
- MMLP -2.7% (commences 2.6 mln common units offering)
- ATKR -2.4% (commences 8 mln common stock offering by selling stockholder CD&R Allied Holdings, L.P., an affiliate of Clayton, Dubilier & Rice)
- TRU -2.1% (prices secondary offering by certain of its stockholders of 19.85 mln shares of common stock)
- CNC -2% (MOH earnings/guidance sympathy)
- HTZ -1.4% (CAR sympathy)
- FRSH -0.9% (announces a strategic realignment of resources aimed at better supporting franchise-owners and field staff while reducing overall SG&A expenses; expects to achieve annual cost savings of $1.5 million)
Analyst comments:
- OZM -3.1% (downgraded to Neutral from Overweight at JP Morgan)
- GRPN -2.4% (downgraded to Neutral from Outperform at Wedbush)
- WFC -0.6% (downgraded to Neutral from Outperform at Credit Suisse)
In Central Europe, Germany’s Renewable Revolution Causes Friction
The country’s surplus power, a byproduct of its shift to green energy, is spilling over into Poland and Czech Republic, straining their electrical grids
BERLIN—A battle is raging in Central Europe over the balance of power—the electrical kind.
Poland and the Czech Republic see Germany as an aggressor, overproducing electricity and dumping it across the border. Germany sees itself as a green-energy pioneer under unfair attacks from less innovative neighbors.
As part of Chancellor Angela Merkel’s Energiewende , or energy revolution, Germany will shut its nuclear power plants by 2022 and replace them with its rapidly expanding wind and solar power.
But the volatile renewables don’t always perform, and the Germans are also relying on coal- and gas-powered plants to keep the lights on.
That creates problems on windy and sunny days when Germany produces far more electricity than it needs. Excess power spills over the border into Polish and Czech territory, threatening their electrical grids with collapse, companies and governments there say.
It is “collateral damage of a purely political decision of the German government,” said Barbora Peterova, the spokeswoman for CEPS A.S., the Czech national grid. There has been “no consultation and no discussion about the impact.”
German companies don’t deny that erratic power flows are a problem, but they argue that overloads are largely due to outdated grids on both sides of the border.
“A chain is only as strong as its weakest link,” said Gert Schwarzbach, the head of interconnectors at 50Hertz Transmission GmbH, a grid operator responsible for power lines that cross into Poland and the Czech Republic in northeastern Germany.
But the problem has been aggravated by Germany’s decadelong struggle to build high-voltage power lines that can carry energy from windmills in its gale-battered north to its industrial power gluttons in the south. That delay has forced it to use its neighbors’ grids to shuttle power southward, putting their local networks under heavy stress and at risk of blackouts.
“It has clogged all of the interconnections,” said Grzegorz Wilinski, a senior official at the Polish Electricity Association and deputy director of strategy at Polska Grupa Energetyczna SA, Poland’s biggest energy company.
To bear the weight of German power, Prague and Warsaw are now investing millions in higher voltage wires and installing transformers at the border to redirect the power back to German turf.
CEPS and Polish grid-operator Polskie Sieci Elektroenergetyczne SA have spent about €115 million ($122 million) for the massive transformers, known as phase-shifters. Poland has invested $300 million last year to update its grid and substations, according to a spokeswoman for the country’s national grid.
German grid operators aren’t standing still. 50Hertz is adding its own transformers in two locations on the German side of the border to help tame the overflow. But the installation of one transformer has been delayed by three years and costs have ballooned to about €100 million because of a court case, according to 50Hertz’s Mr. Schwarzbach.
“It’s clear that rebuilding our energy supply is a long-term process where further steps are needed,” said a spokeswoman for Germany’s economics ministry.
Meanwhile, Czech and Polish customers have been left covering the costs. The fallout has become acute for Polish and Czech coal power companies. Because the grids are clogged up by German electricity, the companies’ ability to trade the power they produce has been impaired, in the same way that a congested tunnel prevents more cars from entering.
Vladimir Budinsky, head of foreign affairs at a mining subsidiary of CEZ Group, the Czech Republic’s biggest power company, said the group can’t trade electricity across its border to Poland, where megawatt-hours are €6 more expensive, because there is no space on the grid.
“At this moment there is no capacity,” he said. “We can’t do this business.”
Polish power plants, according to Mr. Wilinski, are now burning four million tons less coal a year—the equivalent of closing one large power station—than they did before 2008 when Germany’s wind and solar capacity began to surge.
The Polish government has sought compensation from Germany during discussions over the past seven years, but it has struggled to demonstrate that German grid activity is causing the congestion, according to Waldemar Lagoda, head of international communication in the energy department at Poland’s economics ministry.
“Portions of electricity are not marked [in the grid] so that phenomenon was not so easy to prove,” he said.
And for companies, the cost of resolving grid imbalances has to be split in half between the two parties involved, under European Union rules. When it comes to the bigger damages like lost business or equipment upgrades, “that’s just part of the business,” said Mr. Wilinski.
Andreas Jahn, a senior researcher at the Regulatory Assistance Project in Berlin, said that until Germany can finish outfitting its own network of power lines, its neighbors have few choices but to cope with the whims of Germany’s energy revolution.
“The only other option left,” he said, “would be to close the border.”
Russia, Iran Need Each Other, Despite Disagreements
Trump would be hard-pressed to deliver a deal that could persuade Moscow to upend its deepening ties with Iran
BEIRUT—Iran and Russia aren’t often on the same page in the Middle East. But if President Donald Trump’s administration attempts to drive a wedge between the two, there is precious little incentive it can offer Moscow to abandon its crucial partner.
Confronting Iran while also improving relations with Russia and turning it into an ally against “radical Islam” have emerged as two early foreign-policy priorities for the new U.S. administration.
Those goals are difficult to reconcile for the simple reason that Russia and Iran increasingly need each other. Over the past year and a half, Moscow and Tehran have put their strategic differences aside as they took advantage of the shrinking American influence in the Middle East.
Their joint effort reversed the tide of the Syrian conflict, shoring up President Bashar al-Assad’s regime, and gave Moscow new sway across the region, from Libya to Iraq.
U.S. officials have recently spoken of their desire to woo Russia away from Iran. Yet, viewed from the Middle East—or for that matter from Russia—it appears highly unlikely that such a “great bargain,” in which President Vladimir Putin cuts the Islamic Republic adrift, is achievable.
Unlike Iran, Russia considers itself as a global superpower, with the Middle East as only one part of its interests. For Moscow, the issue of Ukraine—in particular gaining international recognition for Russia’s 2014 annexation of Crimea and ending Western sanctions imposed that year—is an overwhelming priority.
On this matter, however, any deal that would make it worthwhile for Mr. Putin to upend Moscow’s deepening ties with Iran would be exceedingly hard for President Trump to deliver. That has become particularly so amid the congressional investigations into Russia’s role in the U.S. presidential election and the fallout from former National Security Adviser Michael Flynn’s contacts with the Russian ambassador.
“This kind of trade-off is impossible,” said Dmitri Trenin, director of the Carnegie Moscow Center and a former Russian military officer. “Russia has its own relationship with Iran—a neighbor, a partner, an occasional ally and adversary. Also, there is nothing that the U.S. can give to Russia in Ukraine: Russia has taken Crimea on its own, and the recognition of that will take decades.”
The events of the past year in Syria, meanwhile, have shown the value of collaboration between Iran and Russia.
Russia’s air power was indispensable for the success of Syrian regime advances, especially in recapturing the entire city of Aleppo after a four-year battle. So were the Iranian proxy ground forces participating in the conflict, such as Lebanon’s Hezbollah and Shiite militias from Iraq and Afghanistan. They provided the manpower that the depleted Syrian army was unable to muster.
This common fight has by and large eclipsed the disagreements between Moscow and Tehran on the final political settlement in Syria.
“There are areas of great friction between Russia and Iran on the course of the war in Syria, but there is also a recognition on both sides that they need to work together,” said Ellie Geranmayeh, senior fellow at the European Council on Foreign Relations.
That isn’t to say that Russian and Iranian interests won’t diverge once the fighting subsides and the warring parties move toward a political deal. Russia doesn’t want to be drawn even further into the regional sectarian conflict between the Iranian-led Shiite forces and the Sunni powers such as Saudi Arabia.
In Syria, this means that the Russians are more interested in a political compromise that would satisfy at least a part of the country’s Sunni majority and its patrons, such as Turkey. Iran, meanwhile, is focused on empowering Mr. Assad’s Alawite community, an offshoot of Shiite Islam.
“There is a general understanding in the region that Russia’s policy in Syria is not about Syria itself but about increasing Russia’s role in the region,” said Aniseh Bassiri Tabrizi, an Iran expert at the Royal United Services Institute, a think tank in London. “The fear and concern in Iran is that Russia is very much ready to leave Iran out of the picture.”
Unlike Cold War-era Soviet Union, Russia has also developed an intense relationship with Israel—a relationship that appears to include allowing Israel to strike Hezbollah and Iranian targets in Syria.
“We all know that Russia has the security of Israel as a priority,” said Lebanese lawmaker Ali Bazzi, from the Shiite Amal bloc allied with Hezbollah.
This distance between Moscow’s and Iran’s positions, however, could also be an asset: It allowed Russia to draw Turkey, a member of the North Atlantic Treaty Organization military alliance, into recent negotiations on Syria’s future that marginalized America’s role.
In any case, unless the Trump administration dramatically increases its commitment to the region both politically and militarily, it won’t be able to exploit these potential disagreements and drive Russia and Iran apart, cautioned Imad Salamey, a political scientist at the Lebanese American University.
“Now, Iran and Russia have a strong united front,” Mr. Salamey said. “It is Russia and Iran that have split the U.S. from its allies, brought about a rift between the U.S., Turkey and Saudi Arabia over Iraq and Syria, and managed to divide the West.”
MGM Resorts misses by $0.07, reports revs in-line with LV Strip REVPAR +3%, in-line with guidance; sees Q1 REVPAR +7% (29.60)
- Reports Q4 (Dec) earnings of $0.11 per share, excluding non-recurring items, $0.07 worse than the Capital IQ Consensus of $0.18; revenues rose 12.3% year/year to $2.46 bln vs the $2.45 bln Capital IQ Consensus.
- Net revenues of $1.8 billion at the Company's domestic resorts, a 17% increase over the prior year quarter, and a 2% increase on a same-store basis, excluding contributions from Borgata which the Company began consolidating in August 2016, MGM National Harbor which opened in December of 2016, and Circus Circus Reno, which the Company sold in 2015
- REVPAR growth of 3% vs. +3% guidance at the Company's Las Vegas Strip resorts.
- Operating income of $312 million at the Company's domestic resorts; EBITDA +14% to $589 mln.
- "In the fourth quarter of 2016, we drove growth in REVPAR and EBITDA despite a record convention business fourth quarter in the prior year. Our convention business this year resulted in the second highest fourth quarter in the Company's history, and we also successfully leveraged our database and delivered new entertainment offerings to drive customers to our resorts. We continue to invest in our business and remain encouraged by the opportunities we see in 2017. We expect to achieve Las Vegas Strip REVPAR growth of 7% in the first quarter of 2017."
Hyatt Hotels beats by $0.02, misses on revs; provides FY17 guidance (56.98)
- Reports Q4 (Dec) earnings of $0.29 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.27; revenues fell 2.0% year/year to $1.09 bln vs the $1.11 bln Capital IQ Consensus.
-
FY17 outlook:
- Net income is expected to be approximately $94 million to $129 million, may not compare to the $196.85 mln adj estimate.
- Comparable systemwide RevPAR is expected to increase approximately 0% to 2%, as compared to fiscal year 2016.
- The co expects to open approximately 60 hotels.
*SHIRE CEO DECLINES TO COMMENT ON INTEREST IN RADIUS DEAL
--> Nor Pre market on RDUS
Early premarket gappers
Gapping up: XTLB +44.8%, SCON +33%, CVRS +22.7%, HGG +15.1%, TIVO +13.6%, WINT +9.6%, CSLT +7.9%,SNPS +7.6%, BLDP +6.6%, NTES +5.9%, PGNX +5.5%, NTAP +5.3%, RUBI +5%, QUIK +4.2%, CRY +4.1%, SRCL+4%, CLD +3.9%, NGD +3.9%, RAD +3.5%, SFLY +3.1%, ERIC +3%, TTM +2.9%, MTL +2.7%, AVP +2.4%, NMIH+2.1%, FOLD +2%, WLL +2%, ABX +2%, CHK +1.9%, GG +1.9%, VRX +1.7%, CHH +1.7%, CSCO +1.7%, NOK+1.4%, AG +1.4%, BCOR +1.4%, FL +1.3%, SSNC +1.3%, GSK +1.2%, XEC +1.2%, MYL +1%, AMAT +1%, TECK+0.9%, WMB +0.9%, CHUBA +0.9%, DENN +0.8%, JMP +0.7%, ZTS +0.7%
Gapping down: CFMS -38.6%, ACUR -28.4%, GNC -14.7%, MOH -14%, MOH -14%, BBW -12.6%, OMCL -10.8%,HAWK -9%, EVOK -8.8%, NGL -7.5%, CAR -6.5%, CRSP -6.3%, TRIP -5.9%, MZOR -5%, GDDY -4.4%, HIMX -4.4%,CF -3.6%, GRPN -3.4%, MMLP -2.9%, LSCC -2.8%, EQIX -2.8%, CNNX -2.7%, SPWR -2.5%, KHC -2.5%, AEM -2.4%,ATKR -2.2%, HOS -2.2%, TRU -2%, CNC -2%, FSLR -2%, VSLR -1.5%, CYS -1.5%, KGC -1.5%, HTZ -1.4%, SDRL-1.4%, NCI -1.1%, QTWO -1%, FRSH -0.9%, CBS -0.9%, CSV -0.9%, ANH -0.7%, SLF -0.7%, NICE -0.7%
Gapping down: CFMS -38.6%, ACUR -28.4%, GNC -14.7%, MOH -14%, MOH -14%, BBW -12.6%, OMCL -10.8%,HAWK -9%, EVOK -8.8%, NGL -7.5%, CAR -6.5%, CRSP -6.3%, TRIP -5.9%, MZOR -5%, GDDY -4.4%, HIMX -4.4%,CF -3.6%, GRPN -3.4%, MMLP -2.9%, LSCC -2.8%, EQIX -2.8%, CNNX -2.7%, SPWR -2.5%, KHC -2.5%, AEM -2.4%,ATKR -2.2%, HOS -2.2%, TRU -2%, CNC -2%, FSLR -2%, VSLR -1.5%, CYS -1.5%, KGC -1.5%, HTZ -1.4%, SDRL-1.4%, NCI -1.1%, QTWO -1%, FRSH -0.9%, CBS -0.9%, CSV -0.9%, ANH -0.7%, SLF -0.7%, NICE -0.7%