(CS) UCG & BMPS - Comment on Press Spec. & Numbers

MONTE DEI PASCHI DI SIENA (UP, TP EUR0.29): Press (Reuters, MF) reported that MPS is preparing a loan book clean-up and launch €5bn capital hike. A €5bn capital hike is more than 5x than the current market cap. Current shareholders would be wiped out. The feasibility of the plan depends on: (i) ECB approval; (ii) the NPL purchase capacity of the potential buyer (eg. Atlante); (iii) the post clean-up and recap profitability prospects. Without the bad loans burden, provisions could fall from 103bp to ~40bp boosting 2017 earnings from €230m to ~€800m, or ~6% RoTE post-capital hike, a profitability level which may raise investors’ interest. Once executed the capital hike, MPS could also be an easier take-out target.

UNICREDIT (N, TP EUR2.28): According to the press (Bloomberg), UCG is considering €5bn capital hike and the sale of the Bank Pekao entire stake (41%). Bloomberg also mentions that, among other actions: (i) the disposal of Fineco (55% stake); (ii) the public list of Pioneer (or a stake sale); and (iii) the sale of a bad loan portfolio in Italy. In our estimates, the execution of the anticipated actions potential actions could take up to 278bp potential CET1 uplift, 101bp RoTNAV negative impact and 59% earnings dilution. The stock is not attractive below 7% RoTE17E post the potential capital management options.

>>> Street Pre-Market Indications

Jeffries
Capita +2% small beat across the board, short interest at recent highs
ITV +1% H1 NAR in line, guidance downbeat, weak yest
LSE +1% DB1 gets min 60% acceptance threshold
Metro Bk +5% growth across the board, credit ok
Rightmove +2% beats ests, strong July trading
Taylor Wimpey +3% figs sl light, but seen no deterioration since Brexit
Airbus +4% EBIT 12% better, FCF big beat, guidance unch. Relief
Air France +1% numbers ok, downbeat outlook, but no further warning
Bayer +2% EBITDA better, raises FY guidance
BASF -2% Q2s light. keep FY outlook
Cap Gem +2% margin outperformance leads to guidance upgrade
Dt Bank unch net better, but irrelevant, capital not improving, well shorted
DIA +1% better lfl, net sl light
Klepiere +2% revs good, raises FY net cash flow guidance
KPN +1% number in line, FY guidance reiterated, relief
LVMH +3% better revs driven by Wines&Spirits, Fashion, weak watches
O2 Dtland +1% numbers in line, trim oulook as well as capex
Peugeot +4% strong no's, beat across the board, cash better, guidance inline
Santander +1% numbers ok , NII light as rumoured, divi guidance supportive
Scor +1% numbers in line, GWP sl better
Statoil -3% upstream weak, headline v weak due to tax chg
Tel Italia +4% first good numbers for a while, upbeat comments

MF
*DBK-Net Inc 18m(-22),PT 408b(61),LLP 259m(280)Rev 7.39b(7.86)......+1% 
*AIRBUS-Ebit Pre 1.18b(1.05),Rev 16.6b(16.5),One-off 1.41b..........+2% 
*OSRAM-Rev 1.44b(1.42),NI 28m(37.7),Divi stable,confirms outlook....-5% 
*BASF-Ebit Ex 1.71b(1.76),Ebitda 2.79b(2.7),Sales 14.5b(15.2).......-1.5% 
*BSCH-Net 1.28b(1.22),NII 7.57B,B/Loans 4.29%,CET1 10.36%...........+1% 
*LVMH-Net 1.71b(1.68),Rev 17.2b(17),ORGR 4%(3),F&L & W/S boh gd.....+3% *AENA-Net 492.3m(486),Rev 1.73b(1.73),Ebitda 931.7m(925)............+1% 
*KION-Confirms prevs figs,Net Pft 64m,Confirms Full Year outlook....+0.5% 
*AIR FRANCE-Rev 6.22b(6.22),OP 317m(258),Sees dwnward pressure......+2% 
*ATOS-Rev 5.697b(5.69),Organic Grth +1.7%,Raises 2016 outlook.......+1% 
*INGENICO-Net 122m(128),Ebitda 244m(251),Rev 1.13b(1.15),o/l ok.....-1% 
*VALEO-Rev 8.1b(8.06),Net 451m(421),Op Margin 647m(614).............+2% 
*M6-Rev 646m(618),Ebitda 136m,Net 83.5m,AD mkt visibility ltd.......-0.5% 
*TEF DEUT-Rev 1.83b(1.86),OIBDA 459m(458),Divi 25c(25)..............+2% 
*CAP GEMINI-Rev 6.257b(6.273),Rasise FY margin guidance.............+1% 
*BAYER-Ebitda Ex 3.05b(2.96),Rev 11.8b(12.1),Rasises forcasts.......+1% 
*DIA-Net 57.5m(59.9),Ebitda 150.4m(150.7),Cash Generation ok........+1% *KPN-Ebitda 592m(584),Rev 1.68b(1.7),Keeps 2016 outlook.............+0.5% 
*PEUGEOT-Rev 27.8b(restated 28),Reits April tgts,Latam 12% dec......+4% 
*BUCHER-Orders 1.09b(1.08),Ebit 107.4m(107),Sales 1.25b(1.27).......-1% 
*EFG-AUM 80.6B(79.4),Op Inc 341.7m(335.1),CET1 18.5%,BSI ok........+1% 
*SHW-Cuts FY16/17 sales outlook,Ebitda 2016 at low end,2020 ok......+0.5% 
*SNAM-Rev 1.64b(1.724),NI 526m(522.8),Vote on buyback 1st August....U/C 
*VOSSLOH-Sales 282.6m(299),Ebit 17m(16.45),PT 13.4m(13),Net 10.9m...-1% 
*PERNOD/REMY-Read across from LVMH Wine and Spirits beat after hrs..+1% 
*STM-Rev 1.7b(1.7),Gross Margin 33.9%(34.2),Q3 Rev to rise 5.5%.....+3% 
*DIALOG-Read across from Apple overnight............................+2%

(CS) LVMH - Numbers

LVMH (OP, TP EUR160.0): LVMH posted group org sales up +4% in 2Q against cons. of +3% (source: Bloomberg). This was driven by a beat for Fashion & Leather Goods org sales up +1%. The overall margin for LV was down 30bps to 27.7%. Considering that DK turned loss making in 1H, this means LV margins should have been flat. We understand that a better gross margin was enough to offset some cost deleverage. The +13% org growth for Wines & Spirits confirms that destocking in China is really over. We continue to favour LVMH in our coverage universe due to its c.60% sales exposure to staples/retail assets, a resilient LV brand and potential share buyback from 2H.

>>> What to look at today - 27th of July 2016

Dow -0.10% S&P +0.03% Nasdaq +0.24% Russell +0.58%
US Market closed on a flat note as investors are waiting for FOMC statemnt & BoJ. Five sectors finished in the green as materials (+0.7%) and industrials (+0.7%) topped the leaderboard. The remaining gainers finished with upticks between 0.2% (financials) and 0.4% (technology). Conversely, defensively-oriented telecom services (-1.5%), utilities (-0.9%), consumer staples (-0.8%), and health care (-0.2%) rounded out the board. For its part, WTI crude ended its pit session lower by 0.5% ($42.91/bbl; -$0.22). Volume were again below average with 803mil shares. US After Hours AAPL +7%, EW +6.4%, X +3% following earnings/guidance, Apple suppliers higher... AKAM -12%, TWTR -10.6%, CHRW -6% following earnings/guidance. Asian equity markets are once again mixed following a flattish session on Wall St. After-market earnings saw some notable upside after hours on Earnings. Japan is at the forefront among the gainers on late-session speculation of a ¥27T fiscal stimulus decision by PM Abe (Fuji News reported PM Abe would announce the details of a ¥27T stimulus package as soon as today, with the cabinet approval for the plans coming next week +US press spec of 50y JGBs issuance as part of stimulus). Conversely, credit concerns (Moody's echoed sentiment from Fitch last week about thge growing size of China shadow banking) in China sent Shanghai Composite lower by over 1.5%.

Nikkei +1.85% Hang Seng -0.18% CSI -2.20% Shanghai -2.40%

Eur$ 1.0995 CNH 6.6747 CNY 6.6705 JPY 105.51 GBP 1.3134 CHF 0.9918 RUB 65.9849 WTI $42.78 (-0.30%)

S&P +0.17% EuroStoxx +0.30% Dax+0.33% SMI +0.25%

Macro :
- Appetite for U.S. Debt Is Weakest Since 2009 in Lead-Up to Fed
- Abe Says Japan Stimulus to Be More Than 28t Yen: Kyodo
- UBS Cuts China CSI 300 Year-End Target to 3,200

Keep an eye on :
- AC FP : AccorHotels in Talks to Buy Concierge Services Co. John Paul
- AIR FP : Airbus 2Q Profit Beats Est; Takes EU1.41b Plane Charges
- AF FP : Air France-KLM 2Q Rev. Matches Est.; Sees Pressure on Unit Rev.
- ARCAD NA : Arcadis 1H Ebita Falls, Sees Tough Conditions Continue in 2H
- ATO FP : Atos 1H Rev. In Line With Estimates; Raises 2016 Outlook
- BAS GY : BASF 2Q Ebit Ex-Items, Sales Miss Ests.; Confirms 2016 Outlook
- BAYN GY : Bayer 2Q Ebitda Ex-Items Beats Estimates; Raises 2016 Outlook
- BMPS IM : Italy Seeks Private Monte Paschi Bailout: FT
- BUCN SW : Bucher 1H Orders -7.2%, Sales -9.4% on FX, M&A Adjusted Basis
- CAP FP : Capgemini 1H Sales In Line; Raises 2016 Operating Margin Outlook
- 1COV GY : Covestro 2Q Adj EBITDA Rises 8.8% to EU542m From Year Ago
- DBK GY : Deutsche Bank Posts 2Q Net Income vs Est. Loss; CET1 Ratio Rises
- DIA SM : Dia 2Q Net Sales, Adj. Ebitda In Line With Ests.
- FCA IM : Fiat Chrysler to Report U.S. Monthly Sales W/Revised Methodology
- ING FP : Ingenico 1H Sales in Line, Ebitda Misses; Confirms 2016 Outlook
- IPS FP : Ipsos 1H Revenue Stable, FY Operating Margin Seen Unchanged
- KGX GY : Kion 2Q Net Rises to EUR63.2m, Confirms 2016 Outlook
- LI FP : Klepierre 1H Net Current Cash Flow Rises, Co. Raises FY Target
- KPN NA : KPN 2Q Adj. Ebitda Beats Ests.; Keeps Outlook Unchanged
- LAT FP : Latecoere Says 1H Rev. Rises, Sees More Restrained FY Growth
- MC FP : LVMH 1H Organic Sales, Profit Recurring Operations In Line
- MC FP : LVMH CFO Says Share Buyback to Be Reviewed in September
- LSE LN : Deutsche Boerse-LSE Merger Acceptance Threshold of 60% Exceeded
- MMT FP : M6-Metropole Television 1H Net Jumps; 2H Visibility Limited
- MELE BB : Melexis Raises 2016 Sales Forecast; Sees Gross Margin at ~45%
- OHL SM : OHL Says in Talks Over Possible Ohl Mexico Share Buy-Back
- ORA FP : France’s Arcep: Orange Must Guarantee Access to Infrastructure
- OSR GY : Osram 3Q Rev. In Line, Net Misses Estimates; Confirms Outlook
- PAL AV : Palfinger 1H Ebit Rises 21% to EU64.9m, Revenue Up 10%
- PQR SM : Parques Reunidos Signs Contract to Manage 2 Parks in Vietnam
- UG FP : PSA 1H Operating Profit EU1.83b; Financial Targets Repeated
- POM FP : Plastic Omnium 1H Net Rises; FY LFL Growth Seen Following Trend
- SGE LN : Sage 3Q Organic Sales Up 6%; Says Confident to Meet FY Guidance
- SAA1V FH : Sanoma 2Q Sales Beats Est.; Keeps Outlook After Raising July 14
- SAN SM : Santander 2Q Net Beats Estimate; CET1 Fully Loaded 10.36%
- SCO FP : Scor Says Continued to Deliver Strong Results in 1H
- STL NO : Statoil Posts Unexpected 2Q Adj. Net Loss; Dividend 22c/Share, Statoil CEO Says Very Important to Maintain Dividend Policy, Statoil Makes Gas/Condensate, Oil Discovery in North Sea
- SSTM FP : STMicro 2Q EPS Beats Ests.; Sees 3Q Rev., Gross Margin Improving
- O2D GY : Telefonica Deutschland Lowers Outlook on Mobile Service Revenue
- UPM1V FH : UPM can afford large acquisition but taking careful stance on M&A - Kauppalehti
- FR FP : Valeo 1H Operating Margin Beats Ests., Co. Confirms FY Targets, Sees ‘Great Growth’ in Europe in 2H Despite Brexit
- VOS GY : Vossloh Revenue Drops on U.S., Delays, Trims 2016 Forecast
- VOW3 GY : Volkswagen $14.7b Diesel-Cheating Settlement Gets Go-Ahead
- VOW3 GY : Volkswagen to Offer Proposal Next Month to Fix 85k Cars: Reuters

>>> Europe : Brokers Upgrades & Downgrades - 27th of July 2016

>>> Up
*DASSAULT SYSTEMES RAISED TO BUY VS HOLD AT SOCGEN
*FAURECIA RAISED TO BUY AT SOCGEN
*MTU AERO ENGINES RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*OHL RAISED TO HOLD VS REDUCE AT KEPLER CHEUVREUX
*OUTOKUMPU RAISED TO REDUCE VS SELL AT ALPHAVALUE
*UPM-KYMMENE RAISED TO BUY AT JEFFERIES

>>> Down
*APPLUS CUT TO HOLD VS BUY AT KEPLER CHEUVREUX
*CEGEDIM CUT TO HOLD VS BUY AT SOCGEN
*EMS-CHEMIE CUT TO REDUCE AT KEPLER CHEUVREUX
*GKN CUT TO NEUTRAL VS BUY AT CITI
*INTERTEK CUT TO SECTOR PERFORM VS OUTPERFORM AT RBC
*JARDINE LLOYD THOMPSON CUT TO MARKET PERFORM AT KBW
*PEKAO RAISED TO HOLD AT HSBC
*PETRA DIAMONDS CUT TO HOLD VS BUY AT INVESTEC
*SARTORIUS CUT TO HOLD AT HSBC

>>> PT Change


>>> Initiation
*DALATA HOTEL GROUP RATED NEW BUY AT BERENBERG; PT 410P
*ENI RESUMED OUTPERFORM AT MEDIOBANCA, PT EU18.5
*NESTE RATED NEW OUTPERFORM AT MACQUARIE; PT EU42
*SARAS RATED NEW OUTPERFORM AT MACQUARIE; PT EU2
*THE GYM GROUP RATED NEW BUY AT BERENBERG; PT 300P
*UBM REINSTATED EQUALWEIGHT AT BARCLAYS; PT 650P

>>> Call

>>> Asian Update

Asian Mid-session Market Update: Yen craters on reports of ¥27T fiscal stimulus announcement from Abe; Australia core inflation top estimates, dampening the case for easing next week

***Economic Data***
- (AU) AUSTRALIA Q2 CONSUMER PRICES (CPI) Q/Q: 0.4% V 0.4%E; Y/Y: 1.0% (multi-year low) V 1.1%E; TRIMMED MEAN Q/Q: 0.5% V 0.4%E; Y/Y: 1.7% V 1.3%E
- (CN) CHINA JUNE INDUSTRIAL PROFITS Y/Y: 5.1% V 3.7% PRIOR
- (CN) China July Westpac Consumer Confidence Index: 114.0 v 115.9 prior

***Index Snapshot (as of 04:00 GMT)***
- Nikkei225 +1.4%, S&P/ASX +0.1%, Kospi -0.1%, Shanghai Composite -1.6%, Hang Seng -0.1%, Sep S&P500 +0.2% at 2,167

***Commodities/Fixed Income***
- Aug gold -0.2% at $1,318/oz, Sep crude oil -0.3% at $42.80/brl, Sep copper flat at $2.22/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 4.5 tonnes to 954.2 tonnes; 3rd straight decline; lowest since July 1st
- (US) Weekly API Oil Inventories: Crude: -0.8M v -2.3M prior; 2nd straight draw
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.6671 V 6.6778 PRIOR; 2nd straight firmer Yuan fix
- (CN) PBOC to inject CNY180B in 7-day reverse repos
- (CN) China MoF sells 3-yr bonds at 2.43%
- JGB: (JP) Japan govt considering issuance of 50-year JGBs as part of a fiscal stimulus plan - longest maturity of postwar era - financial press
- (JP) BOJ offers to buy ¥430B in 5-10yr JGBs, ¥200B in 10-25yr JGBs, and ¥120B in JGBs with maturity over 25-yr

***Market Focal Points/FX***
- Asian equity markets are once again mixed following a flattish session on Wall St. After-market earnings saw some notable upside surprises from Apple, Panera, and US Steel, while Twitter was sharply lower as the company whiffed on top-line results and guidance. Japan is at the forefront among the gainers on late-session speculation of a ¥27T fiscal stimulus decision by PM Abe. Conversely, credit concerns in China sent Shanghai Composite lower by over 1.5%. Among FX majors, USD/JPY spiked up over 100pips above ¥106.40 after stimulus rumors. AUD/USD saw some brief strength on mixed Q2 Australia CPI data that saw core annualized inflation topping expectation, rising over 50pips above 0.7560 before selling off below 0.7470.

- Fuji News reported PM Abe would announce the details of a ¥27T stimulus package as soon as today, with the cabinet approval for the plans coming next week. Accompanying the speculation, US financial press also reported the govt is considering issuance of 50-year JGBs as part of a fiscal stimulus - the longest maturity of postwar era - though Japan Finance Ministry deflected that report. Also late last week, Nikkei speculated the fiscal stimulus may be in ¥20-30T range if it includes govt guarantees and other off-budget measures. Fresh economic measures could also accompany the moves by the BOJ as it begins its 2-day meeting ahead of Friday's policy announcement. Today's Nikkei feature speculated that more BOJ members are inclined to support new monetary actions, even though a separate report forecast Q1 net earnings of Japan's top 3 banks to fall about 30% due to depressed lending amid negative BOJ interest rate policy.

- Australia Q2 CPI report has been billed as one of the key deciding factors on whether RBA would move rates again to new record lows next week. Although the headline y/y figure was a decimal below consensus, the RBA-tracked core CPI was slightly hotter than expected, pushing the probability of a cut below 50% from over 60% before the release. Economists with Barclays, CitiGroup, and TD Securities said they still expect rates to move lower from the current level, but noted that may not happen next week after this latest set of inflation data.

- In China, Moody's echoed sentiment from Fitch last week about the growing size of China shadow banking system, stating the leverage in the economy continues to rise as credit growth outpaces nominal GDP. Economist with UBS advocated for more policy easing by the PBoC, calling for RRR to be cut another 1-2 times this year.


***Equities***
US equities / ADRs:
- LOGM: Announces Merger with Citrix's GoTo Family of Products to Create Billion Dollar Industry Leader in a $1.8B deal; +17.7% afterhours
- UIS: Reports Q2 +$0.36 v -$0.38e, R$748.9M v $692Me; +8.6% afterhours
- AAPL: Reports Q3 $1.42 v $1.39e, R$42.4B v $41.8Be; +6.8% afterhours
- PNRA: Reports Q2 $1.78 v $1.75e, R$699M v $698Me; agrees to sell and refranchise Company-owned bakery-cafes in Canada; +3.9% afterhours
- X: Reports Q2 -$0.31 v -$0.55e, R$2.58B v $2.66Be; +2.7% afterhours
- NCR: Reports Q2 $0.72 v $0.65e, R$1.62B v $1.55Be; +1.7% afterhours
- TSS: Reports Q2 $0.74 v $0.72e, R$1.15B v $1.15Be; -0.2% afterhours
- JNPR: Reports Q2 $0.50 v $0.47e, R$1.22B v $1.19Be; -1.3% afterhours
- ILMN: Reports Q2 $0.86 adj v $0.73e, R$600M v $594Me; Appointed CEO Jay Flatley Executive Chairman; Names Francis deSouza CEO; -3.0% afterhours
- MTCH: Reports Q2 $0.17 adj v $0.16e, R$301.1M v $297Me; -5.0% afterhours
- TWTR: Reports Q2 $0.13 v $0.10e, R$602M v $614Me; -10.8% afterhours
- AKAM: Reports Q2 $0.64 v $0.63e, R$572M v $574Me; -11.7% afterhours


Notable movers by sector:
- Consumer discretionary: Wanda Commercial Properties Group Co 169.HK +1.3% (Glass Lewis recommendation); Shimano Inc 7309.JP +4.8% (H1 result); Asahi Group Holdings 2502.JP +4.5% (raises guidance)
- Financials: SAI Global SAI.AU -4.8% (Canaccord Genuity cuts to Sell)
- Industrials: Mitsui Chemical 4183.JP +13.6% (revises H1 guidance); Dandong Xintai Electric Co 300372.CN +10.0%; Bradken BKN.AU +9.1% (restructuring business model); Nufarm NUF.AU +2.6% (RBC initiates with Outperform); GrainCorp GNC.AU -6.5% (Shareholder withdraws bid); Hyundai Motor Co 005380.KR +0.4% (Q2 result)
- Technology: LG Display Co 034220.KR +2.1% (Q2 result)
- Materials: Itochu Corp 8001.JP -7.1% (Claucus Research publishes negative report); Shin-Etsu Chemical Co 4063.JP +15.5% (Q1 result); Fortescue Metals Group FMG.AU +8.1% (Q4 result)
- Energy: Yanzhou Coal Mining Co.1171.HK -0.8% (Q2 result); China Shenhua Energy Co 1088.HK -0.6% (China govt urges to cut coal capacity)

WSJ : Apple’s New Mantra: Good Enough

Apple’s New Mantra: Good Enough

The new iPhone might boost Apple’s sales, though expectations are low

Apple has never found “good enough” to be acceptable for its products, except maybe for its latest results.

And that is telling. Apple reported another sharp drop in iPhone sales for its fiscal third quarter ended June 25. The company also projected what will be its third consecutive revenue decline for the current quarter—making this slump unprecedented in at least the last 15 years of the company’s operating history.

Apple’s saving grace this time around is that few expected anything better—and many expected worse. The midpoint of company’s revenue forecast for the current quarter ending in September came in ahead of Wall Street’s estimates—an important point, since the period is expected to include the initial launch of the next iPhone model. That set up a relief rally for a stock that has badly lagged behind peers, down 8% so far this year.

But relief will only go so far. Apple’s outlook is the latest indication that the next iPhone will indeed be a modest upgrade—and unlikely to spark a big resurgence in sales. That could put the company’s largest business into a holding pattern for another year. And while the smaller, cheaper iPhone SE appears to be a success, that comes at a cost. The average selling price of the iPhone lineup slipped below the $600 mark for the first time in two years.

Still, at just eight times forward earnings excluding net cash, Apple is chronically undervalued. At the current price, no bad news is good enough.

>>> Apple beats by $0.04, reports revs in-line; guides Q4 rev mostly above estim

Apple beats by $0.04, reports revs in-line; guides Q4 rev mostly above estimates, gross margin a little light
  • Reports Q3 (Jun) earnings of $1.42 per share, $0.04 better than the Capital IQ Consensus of $1.38; revenues fell 14.6% year/year to $42.36 bln vs the $42.1 bln Capital IQ Consensus; gross margins of 38.0% vs 37.9% ests vs 39.7% last year.
  • iPhones 40.4 mln vs 40.2 mln ests vs 47.5 mln last year.
    • iPads 9.95 mln vs 8.7 mln ests vs 10.9 mln last year.
    • Macs 4.2 mln vs 4.6 mln ests vs 4.4 mln last year.
  • Americas rev -11%; Europe -7%; China -33%; Asia/Pac -20%.
  • Co issues upside guidance for Q4, sees Q4 revs of $45.5-47.5 bln vs. $45.8 bln Capital IQ Consensus Estimate; gross margin 37.5-38% vs. 38.3% ests.
Conf Call
  • The company expects September quarter iPhone sell through to improve (June Quarter was -8%)
  • Expects service revs to be size of a Fortune 100 company next year.
  • Encouraged by growth prospects in China & India; co will continue making investments in China
  • Co indicated that 9 month iPhone sales in India were up 51% YoY.
  • Co plans additional store openings in India.
  • 3 million locations are now accepting Apple Pay; service is now live in 9 markets.
  • Half of Apple Pay transaction volume are from international transactions
  • Company had growth in Russia, Turkey, and Canada.
  • Co reduced iPhone channel inventory by 4 mln units; co exited quarter near the low end of 5-7 week range for target inventory.
  • Co expects iPhone ASP's to improve in Q4.
  • Co had double digit iPhone growth in Brazil and India.
  • Mac install base reached all time high in the June quarter
  • iPad Pro helped ASP's; reduced channel inventory by 500K units.
  • Asked about investments: Co said its investing in research and development; looking on the outside for talent and intellectual property. Co will continue to look for acquisitions.
  • Co sees DRAM in an oversupply situation; co expects decline in commodity prices. (-->-ve MU)

>>> US After Hours Summary: AAPL +7%, EW +6.4%, X +3% following earn


After Hours Summary: AAPL +7%, EW +6.4%, X +3% following earnings/guidance, Apple suppliers higher... AKAM -12%, TWTR -10.6%, CHRW -6% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: UIS +8.6%, AAPL +6.8%, EW +6.4%, ZIXI +6.3%, BWLD +5.3%, CAVM +5.2% (light volume - also names Raghib Hussain COO), PNRA +3.8%, MDR +3.6%, (also McDermott and Nakilat-Keppel Offshore Marine announce a MoU for an exclusive cooperation agreement to pursue projects within Qatari waters), X +2.7%, GHL +2.6%, WNC +1.8%, IRBT +1.7%, NCR +1.7%, FSB +1.6%, BXMT +1.3%, TRU +1.1%, AI +1.1% (light volume)

Companies trading higher in after hours in reaction to news: REPH +50.8% (announces its Phase III clinical trial evaluating intravenous (IV) meloxicam (N1539) achieved the primary endpoint), BIND +29% (BIND Therapeutics confirms Pfizer's $40 mln bid is highest and best in 363 auction for substantially all of BIND's assets), LOGM +17.7% (LogMeIn confirms it will merge with Citrix's GoTo family of products in a $1.8 bln deal ; also reported earnings), PTX +9.2% (discloses reorganization of senior management team), ADI +8.4% (Linear Tech confirms deal with Analog Devices, agrees to be acquired for ~$60.00/share, or ~$14.8 bln), FRGI +3.8% (to join the S&P SmallCap 600), ZFGN +2.9% (insider buy disclosures), NSU +0.7% (light volume, 60%-owned subsidiary Bisha Mining Share Co will be increasing its total land package of exploration licenses to 814 square kilometers)

Apple suppliers / related tech names and CAVM peers are trading higher in sympathy:  QRVO +4.8%, INVN +2.9%, SWKS +2.7%, CRUS +2.5%, AVGO +2.1%, MXIM +1.9%, NXPI +1.5%, TXN +0.5%

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: NANO -11.7%, AKAM -11.7%, TWTR -10.6%, RHI -10.3%, RSYS -6.8%, CHRW -5.7%, MTCH -5%, MTSI -4%, UHS -3.8%, ULTI -3.2% (ticking lower), ILMN -3%, BJRI -2.7%, (also expands buyback by $100 mln to $350 mln), ASH -1.7%, JNPR -1.3%

Companies trading lower in after hours in reaction to news: VNOM -3.3% (Viper Energy Partners prices 7,000,000 common units representing limited partner interests at $16/unit), LLTC -1.7% (modestly pulling back from late move higher - Linear Tech confirmed after the close deal with Analog Devices, agrees to be acquired for ~$60.00/share, or ~$14.8 bln), CTXS -1.5% (LogMeIn confirms it will merge with Citrix's GoTo family of products in a $1.8 bln deal ; also reported earnings), WBA -1.3% (Walgreens Boot Alliance announces 15 mln share secondary offering on behalf of selling shareholders)