After Hours Summary: FTNT +9.7%, CUDA +9.1% higher on earnings/guidance, AYI +1.5% following S&P 500 addition news.... TWTR -13.6%, AAPL -8.3%, CMG -4.2%, CRUS -4.2%, T -1.3% on earnings/guidance, chip/AAPL suppliers lowerAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: WNC +13%, FTNT +9.7%, CUDA +9.1%, HUBG +5%, MKTO +4.4%, TSS +4%, NUVA +3.1%, CREE +2.9%, VNTV +2.2% (also promotes Stephanie Ferris to CFO), PNRA +2.1%, FE +1.9%, TRU +1.6%, EBAY +0.9%, MRCY +0.7%, EW +0.7%, AXS +0.5%, TMK +0.3% (ticking higher), AKAM +0.2% (modestly higher after seeing volatile moves in after hours)
Companies trading higher in after hours in reaction to news: EQC +4.6% (light volume; confirms is under contract to sell its leasehold interest in Hoboken property with gross sale price of $235 mln), ACUR +3.6% (has been issued U.S. Patent No. 9,320,796 by the USPTO pertaining to its Limitx Technology platform), OPB +2.5% (ticking higher; to join S&P SmallCap 600), AYI +1.5% (to join the S&P 500), VSAT +1.3% (light volume; to join S&P MidCap 400), LRCX +0.3% (KLA-Tencor beats by $0.18, misses on revs; KLAC is being acquired by LRCX)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: TWTR -13.6%, BWLD -12.6%, AAPL -8.3%, HRB -6.6% (reports U.S. tax results through April 19 - now expects 2016 adjusted EBITDA margins of ~28%; to streamline operations), CHRW -4.6%, CMG -4.2%, CRUS -4.2%, ZIXI -3.7% (light volume), ARAY -3.3% (also submits 510(k) premarket notification to FDA for its Radixact treatment delivery system ), SLCA -2.8%, BYD -2.4%, ARI -1.9% (ticking lower), COF -1.6%, HAWK -1.5% (light volume), T -1.3%, KLAC -1.2%, AFL -0.7%
Companies trading lower in after hours in reaction to news: MNKD -12.3% (following analyst call after the close; also Mannkind enters into an At Market Issuance Sales Agreement with FBR Capital Markets to issue and sell shares of its common stock having an aggregate offering price of up to $50 mln), MEMP -1.3% (declared Q1 cash distribution of $0.03 per unit, represents $0.07 per unit reduction from MEMP's fourth quarter 2015 distribution)
Semi/chip names (in particular Apple Suppliers) are under pressure following AAPL/CRUS earnings: SWKS -5.2%, QRVO -5%, AVGO -3.7%, QCOM -2.2%, INVN -2.1%, NXPI -2%, MU -1%, TXN -0.9%
--> -5,5%
Apple misses by $0.10, misses on revs; guides Q3 revs, gross margin below consensus; raises dividend 10%; raises buyback 25% to $175 bln
Reports Q2 (Mar) earnings of $1.90 per share, $0.10 worse than the Capital IQ Consensus of $2.00; revenues fell 12.8% year/year to $50.56 bln vs the $51.98 bln Capital IQ Consensus; gross margins of 39.4% vs 39.6% ests vs 40.8% last year (guidance 39-40%).
iPhones 51.2 mln vs 51.5 mln ests vs 61.2 mln last year.
iPads 10.2 mln vs 9.9 mln ests vs 12.6 mln last year.
Macs 4.0 mln vs 4.6 mln ests vs 4.5 mln last year.
Co issues downside guidance for Q3, sees Q3 revs of $41-43 bln vs. $47.35 bln Capital IQ Consensus; gross margin 37.5-38.0% vs 39.2% ests vs 39.7% last year
The Board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. The Company also expects to continue to net-share-settle vesting restricted stock units.
The Board has approved an increase of 10% to the Company's quarterly dividend, and has declared a dividend of $0.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.
2.3% dividend yield at after hours price of $99/share.
eBay beats by $0.02, beats on revs; guides Q2 EPS below consensus, revs above consensus; guides FY16 revs in-line
* Reports Q1 (Mar) earnings of $0.47 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.45; revenues rose 3.7% year/year to $2.14 bln vs the $2.08 bln Capital IQ Consensus.
* Co issues mixed guidance for Q2, sees EPS of $0.40-0.42, excluding non-recurring items, vs. $0.44 Capital IQ Consensus Estimate; sees Q2 revs of $2.14-2.19 bln vs. $2.14 bln Capital IQ Consensus Estimate.
* Co issues in-line guidance for FY16, sees FY16 revs of $8.6-8.8 bln from $8.5-8.8 bln vs. $8.73 bln Capital IQ Consensus Estimate.
* Underlying total eBay Inc. performance, the Marketplace platforms delivered $19.6 billion of GMV and $1.8 billion in revenue for the first quarter. Marketplace revenue was up 3% on an FX-Neutral basis and flat year over year on an as-reported basis, driven by stable GMV growth and strong performance in Marketing Services & Other. StubHub had another quarter of strong performance, driving GMV of $869 million and revenue of $177 million, up 34%, aided by strength in sports and concerts in addition to a number of product innovations. The Classifieds platforms delivered another quarter of accelerating growth with revenue of $186 million, up 17% on an FX-Neutral basis and up 15% on an as-reported basis, primarily driven by strong performance in Germany and the United Kingdom. In Q1, eBay continued to increase the amount of inventory on its platforms, with over 900 million live listings available at any time.
Twitter beats by $0.05, misses on revs; guides Q2 revs below consensus; Reaffirms FY16 EBITDA Margin guidance
* Reports Q1 (Mar) earnings of $0.15 per share, $0.05 better than the Capital IQ Consensus of $0.10; revenues rose 36.5% year/year to $595 mln vs the $607.55 mln Capital IQ Consensus.
- MAUs comes in at 310 mln, street expectations were for 308 mln
- Advertising revenue totaled $531 million, an increase of 37% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased 39%.
Mobile advertising revenue was 88% of total advertising revenue.
- Data licensing and other revenue totaled $64 million, an increase of 34% year-over-year.
- U.S. revenue totaled $390 million, an increase of 35% year-over-year.
- International revenue totaled $204 million, an increase of 39% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, international revenue would have increased 46%.
* Co issues downside guidance for Q2, sees Q2 revs of $590-610 mln vs. $677.39 mln Capital IQ Consensus Estimate; Adjusted EBITDA is expected to be in the range of $145-155 mln.
* Co reaffirms FY16 Capital expenditures guidance to be $300 to $425 million; Adjusted EBITDA margin in the range of 25-27%.
TPG Telecom could buy Vodafone's entire Australia and New Zealand business
TPG Telecom [ASX: TPM] could buy Vodafone’s entire Australia and New Zealand operation, the Australian Financial Review reported. According to the unsourced report in the paper’s Street Talk column TPG has been mentioned as a possible buyer for Vodafone's New Zealand business, but it could now be interested in Vodafone’s entire operation.
The item noted that Vodafone Australia’s UK parent, Vodafone [LON: VOD], may be eager to exit the Australian joint venture. Hutchison Telecoms Australia owns the other half of Vodafone Australia..
The paper also noted that TPG’s relationship with Vodafone has been expanding. The companies entered an AUD 1bn (USD 770m) agreement last year under which thousands of mobile customers were moved from TPG to Vodafone’s mobile network.
Australian Financial Review
Closing Market Summary: Energy Leads Ahead of Central Bank DecisionsThe major averages ended their day little changed as investors evaluated a slew of quarterly earnings results against the potential implications of tomorrow's policy statement from the Fed. Additional focal points of today's trade included a rally in crude oil, weaker-than-expected economic data, and the underperformance of the heavily-weighted technology (-0.4%) and health care (-0.4%) sectors. The Nasdaq Composite (-0.2%) ended behind both the Dow Jones Industrial Average (+0.1%) and the S&P 500 (+0.2%).
Equity indices began the day modestly higher as investors weighed the effects of below-consensus March Durable Goods Orders (+0.8%; consensus +1.7%). The reading added another disappointing piece of economic news to the recent string of weaker-than-expected data. This in turn helped support the belief that the Fed is likely to hold off on hiking interest rates. Currently, the fed funds futures market calculates the odds of a rate hike resulting from the April meeting at zero percent.
The major averages trimmed their initial gain after April Consumer Confidence (94.2; consensus 96.7) also disappointed investors. Furthermore, this downturn in the major indices also corresponded to a leg lower in the heavyweight technology (-0.7%) and health care (-0.6%) sectors. The stock market ended on mixed a mixed note while five sectors ended in the red. Heavily-weighted technology (-0.4%) and health care (-0.4%) finished with the largest losses while energy (+1.4%), materials (+1.1%), industrials (+0.9%), and financials (+0.7%) topped the leaderboard.
In the technology space (-0.4%), large cap names demonstrated relative weakness as Microsoft (MSFT 51.44, -0.67) and Alphabet (GOOG 708.14, -15.01) traded lower ahead of Apple's (AAPL 104.35, -0.73) earnings report. Conversely, the high-beta chipmakers outperformed as the group moved higher with Micron Technology (MU 11.51, +0.96). Micron gained 9.1% after Mizuho released a research note that stated the company will likely benefit from its competitors' capital expenditure cuts.
Biotechnology underperformed in the health care space (-0.4%), evidenced by a loss of 1.6% in the iShares Nasdaq Biotechnology ETF (IBB 281.40, -4.55). The sub-group is pulling back from larger monthly gains, as the ETF trims its April advance to 7.9%. This compares to a gain of 5.2% in the broader sector over that period. Separately, Eli Lilly (LLY 76.27, -1.67) slipped 2.1% after its bottom-line missed analysts' estimates in the first quarter.
The energy space (+1.4%) outperformed as crude gained 2.9% ($43.94) ahead of this week's inventory data. In the group, independent oil and gas names outperformed as they moved higher in sympathy with BP (BP 33.49, +1.70). BP jumped 5.4% after beating bottom-line estimates on light revenue in the first quarter. Additionally, the company left its dividend unchanged at $0.10 per share. Dow component Exxon Mobil (XOM 87.63, +0.30) ended near its flat line after Standard & Poor's lowered its credit rating to "AA+" from "AAA." The ratings agency maintained a stable outlook for the energy company.
The U.S. Dollar Index (94.59, -0.25) finished its session off its low as traders shifted their attention back towards central bank meetings at the Fed and Bank of Japan. The euro/dollar pair ended higher by 0.2% at 1.1287 while the dollar finished lower by 0.2% against the yen (111.42).
The Treasury complex fell throughout the session as the yield on the 10-yr note rose three basis points to 1.94%.
Today's participation was above the recent average as more than 897 million shares changed hands on the NYSE floor.
Today's data included March Durable Goods Orders, February Case-Schiller 20-city Index, and April Consumer Confidence:
- The Durable Goods Orders report for March this morning certainly validated the view that the FOMC isn't going to act at this week's meeting.
- Specifically, durable goods orders increased 0.8% in March (consensus +1.7%) after declining a downwardly revised 3.1% (from -2.8%) in February.
- Excluding transportation, orders declined 0.2% (consensus +0.5%) after declining a downwardly revised 1.3% (from -1.0%) in February.
- New order activity in March was helped by a 65.7% increase in defense aircraft and parts, yet that increase was offset to a large extent by a 5.7% decline in nondefense aircraft and parts orders, a 3.0% decline in motor vehicle and parts orders, and a 1.6% decline in orders for fabricated metal products.
- Machinery orders rose 0.5% after a 3.5% decline in February and primary metals orders jumped 0.8% on the back of a 0.2% decline in the prior month.
- Nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- were unchanged after declining 2.7% in February and are down 1.1% year-over-year.
- Shipments of these same goods, which will count in the forecast for first quarter GDP, were up 0.3% after declining 1.8% in February and 1.4% in January.
- Case-Shiller 20-city Home Price Index for February rose 5.4%, which fell below the consensus of 5.6%. This followed the previous month's unrevised reading of 5.7%.
- The Conference Board's Consumer Confidence Index registered a 94.2 reading for April (consensus 96.7) versus a downwardly revised 96.1 reading (from 96.2) for March. The cause of the dip was all about the outlook.
- The Present Situation Index actually increased in April to 116.4 from 114.9 in March. The Expectations Index, however, fell to 79.3 from 83.6.
- Comments from the Conference Board indicate the consumer's outlook has moderated. That moderation was attributed in part to feeling less optimistic about business conditions improving over the next six months, anticipating there will be fewer jobs, and not expecting, as much as before, that their incomes will increase.
- The April reading was roughly flat with the 94.3 reading seen in April 2015.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index. Meanwhile, Pending Home Sales (consensus +0.3%) and the latest FOMC Rate Decision (consensus 0.5%) will be released at 10:00 ET and 14:00 ET, respectively.
- Dow Jones +3.2% YTD
- S&P 500 +2.3% YTD
- Russell 2000 +1.3% YTD
- Nasdaq Composite -2.4% YTD
Google, Uber, Lyft join automakers in self-driving car lobby
Google, Uber and Lyft have joined forces with automakers Volvo and Ford, creating a coalition to influence lawmakers, regulators and the public, Automotive News reported on Tuesday.
The new lobby, dubbed The Self-Driving Coalition for Safer Streets, will be led by David Strickland, long-time safety watchdog who was formerly the head of the U.S. National Highway Traffic Safety Administration (NHTSA).
Strickland, who is currently a Partner in the regulatory group at D.C.-based law firm Venable LLP, was not immediately available for comment.
In 2014, the most recent available numbers from the NHTSA, there were 6.1 million reported crashes on U.S. roads, resulting in 2.3 million injuries and 32,675 fatalities.
The Self-Driving Coalition for Safe Streets will basically aim to influence regulations that will, of course, keep safety in mind but allow for rapid penetration of autonomous vehicle technology into the market.
Warren Buffett, Philip Green and a tale of two billionaires
One is probably not as angelic as portrayed; the other likely not as diabolical, writes Andrew Hill
Sir Philip Green and Warren Buffett — the permanently tanned, ostentatious rag-trade entrepreneur and the soft-spoken, frugal Sage of Omaha — could not be more different.
Yet they share a fierce desire to protect their reputations and bear the scars of having held on to certain investments for too long.
When Mr Buffett took control of Berkshire Hathaway in 1965 it was an ailing owner of textile mills in New Bedford, Massachusetts. Now, it is best known as a highly successful listed holding company. For two decades, though, the declining mills were a thorn in his side that he refused to excise.
Sir Philip’s purchase and turnround of BHS in 2000 confirmed his talent as an entrepreneur and owner, but as he told me and my colleague Andrea Felsted last year, a few months after finally offloading the BHS stores to a consortium of little-known buyers for £1: “I wish I’d have sold it a long, long time back . . . I should have sold it, but didn’t.”
Reputational risk motivated both investors. Sir Philip’s words may ring hollow for BHS’s 11,000 staff now it is tumbling into administration, but he told us he had been reluctant to cut his longstanding ties to the business: “At the end of the day, I’ve got people here who have been with me from the beginning . . . I don’t want to just close the door. You do your best to ensure that the people there are OK.”
Mr Buffett, who had been appalled by the adverse reaction when he quit an earlier investment in a Nebraska windmill manufacturer, was afraid of the local backlash that might occur if he closed Berkshire down with the loss of jobs. Justifying his continued ownership of the textile mills to his partners in 1969, he wrote: “I have no desire to trade severe human dislocations for a few percentage points [of] additional return per annum.”
Nevertheless, in 1985, he finally had to close the last remnants of the original Berkshire, granting the 400 workers he laid off only “a couple of months’ extra pay”, according to The Snowball, Alice Schroeder’s biography. Spending 20 years trying to revive the business was one of his biggest mistakes, he admitted in 2001, even though by the time he sold it, it was, in Ms Schroeder’s words, “a flyspeck” on the holding company.
Since those early days, Mr Buffett’s fear of public opprobrium has led him on the whole, to choose discretion over publicity, and to promote an avuncular niceness. The policy has turned him into an acceptable face of capitalism.
Sir Philip’s well-publicised tabloid lifestyle and belligerent relationship with the press have instead made him a high-profile hate figure. Mr Buffett is probably not as angelic as he is portrayed; Sir Philip is probably not as diabolical. But there are lessons there for would-be billionaires everywhere.