Apple in after Hours 15.3mil shares traded (~$1.5bil) at an average price of $97.67
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.
- iPhone unit sales were within the company's internal guidance range.
- India iPhone sales were up 56% YoY
- March quarter service revenue was highest ever, up 20%; Apple Music continues to grow with over 13 mln subs.
- Apple Watch unit sales met expectations (co does not disclose specific figures).
- In the upcoming, June quarter, the company expects that it will be the best iPad compare in years.
- The company plans to lower its channel inventory target next quarter in light of the macro-economic environment.
- Company believes it gained market share in Mac.
- Co exited quarter within 5-7 week target change for channel inventory.
- Co sees iPhone, Ipad seasonal QoQ declines in Q3; sees Mac sales rising QoQ
- Co sees iPhone ASP's declining QoQ impacted by introduction of iPhone SE.
Prepared Remarks:
- iPhone unit sales were within the company's internal guidance range.
- India iPhone sales were up 56% YoY
- March quarter service revenue was highest ever, up 20%; Apple Music continues to grow with over 13 mln subs.
- Apple Watch unit sales met expectations (co does not disclose specific figures).
- In the upcoming, June quarter, the company expects that it will be the best iPad compare in years.
- The company plans to lower its channel inventory target next quarter in light of the macro-economic environment.
- Company believes it gained market share in Mac.
- Co exited quarter within 5-7 week target change for channel inventory.
- Co sees iPhone, ipad seasonal QoQ declines in Q3; sees Mac sales rising QoQ
- Co sees iPhone ASP's declining QoQ impacted by introduction of iPhone SE.
Q&A Session:
- In the first half of this year, the company set a record for consumers switching from other platforms.
- Largest growing service business is the App Store.
- Co believes that Apple Music business has bottomed and it should continue growing from here.
- Company continues to expect improvements in the commodity price environment.
Apple shares lowerby 7.6% following earnings. Suppliers are also seeing weakness: SWKS -5.3%, QRVO -4.9%. CRUS -4.1% (also reported its own earnings), AVGO -3.7%, INVN -2.1%, NXPI -2.0%, QCOM -1.3%, TXN -0.9%
Dow+0.07% S&P+0.19% Nasdaq-0.15% Russell+1.11%
US Market closed slightly positive, very close from their flat line. 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. MSFT & GOOG Traded lower ahead of Apple Earnings. IBB-1.6%. Volume were in line with average at 897mil shares. US After Hours 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 lower. Asian equity markets are trading mixed though volumes are still on the light side on the eve of the critical BOJ policy decision and the anticipated ramp-up in hawkish rhetoric from the FOMC statement. Tech-heavy Korea and Taiwan are underperforming however, tracking 1.1% drop in Nasdaq futures in the wake of extremely disappointing results from Apple as it missed on the top and bottom line. In China, March industrial profits continued to recover, growing 11.1% y/y. YTD growth was up 7.4%, also a marked improvement from 4.8% rise last month. China Stats Bureau noted faster profit rise on both sales growth and prices, but also warned that slowing demand, high inventories and financing difficulties are still impacting the industrial sector.
Nikkei -0.22% Hang Seng -0.40% Shanghai +0.09%
Eur$1.1297 CNH 6.5016 CNY 6.4901 JPY 111.16 GBP 1.4562 CHF 0.9738 RUB$65.5140 WTI$ 44.52(+1.09%)
S&P-0.26% EuroStoxx-0.20% Dax-0.22% SMI -0.35%
Macro :
ECB’s Coeure Says Greek Banks in Solid Capital Position: Il Sole
Brevan Howard Investors Said to Seek $1.4 Billion of Cash Back
Weidmann: A Monetary Union Is a Political Decision
Apple Can Add China Trouble to Its Growing List of Woes: Gadfly
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- BB FP : Bic Confirms 2016 Outlook, Says 1Q Sales Slightly Above Target
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- CAP FP : Cap Gemini 1Q Rev. Rises 12%, Confirms 2016 Outlook
- CSGN VX : Credit Suisse Hires 30 Wealth Managers From UBS in Mexico: FT
- DHR US : Third Point Added to Danaher Position After Talks With Co.
- DELB BB : Delhaize Intends to Increase 2016 Revenue, Market Shares
- DWA US : Comcast in Discussions to Buy DreamWorks Animation, WSJ Says
- DSMA NA : DSM considers stake sale in chemicals and pharma JVs, could net EUR 1.5bn-EUR 2.5bn - De Telegraaf
- ENAV IM : Italy Treasury, Advisers Discussed Enav SpA Stake Sale: Official
- EOAN GY : EON’s Uniper Unit Seeks Disposals of at Least EU2b by 2017
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- MC FP : COH Rises to Highest in Year as Turnaround Progresses; Peers Up
- LSE LN : Deutsche Boerse, LSE Deal Rejected by Most Frankfurt Firms: FAZ
- NESN VX : Nestle, R&R to Set Up Ice Cream JV Froneri
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- NYR BB : Nyrstar 1Q Adj. Ebitda Drops 46% to EU37m; Cash at Hand EU240m
- ORA FP : Fernandez Says European Telco Consolidation Remains Necessary
- OSR GY : Osram 2Q Net Rises 3%, EPS Up 7%; Reiterates 2016 Outlook
- UG FP : PSA Confident of Hitting Targets Despite Volatile Environment
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- STL NO : Statoil Sees 2016 Production ‘Somewhat Lower’ vs 2015
- STM FP : STMicro Posts 1Q Loss; Sees 2Q Rev., Gross Margin Improving
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- TEL NO : Telenor 1Q Revenue in Line w/ Ests, Keeps Financial Guidance
- FP FP : Total 1Q Adj. Net Beats Ests.; Div. Matches Forecast
- RCF FP : Teleperformance 1Q Rev. EU844m Vs EU831m; Confirms FY Guidance
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- VOD LN : TPG Telecom could buy Vodafone's entire Australia and New Zealand business
- WDI GY : Wirecard 1Q Sales Rise 32%; Ebitda Up 35%, Confirms 2016 Outlook
DSM considers stake sale in chemicals and pharma JVs, could net EUR 1.5bn-EUR 2.5bn
DSM (AMS:DSM), the Dutch biotech and chemicals company, could sell its stake in three chemicals and pharma JVs signed last year.
Dutch-language De Telegraaf reported this information in an article about the company's quarterly results, citing CEO Feike Sijbesma. The stake sale could fetch the company between EUR 1.5bn and EUR 2.5bn, it added.
Sijbesma reiterated DSM intends to sell its remaining stake in these JVs, the item noted.
The company does not expect further changes in its portfolio until 2018, Sijbesma said.
DSM's EBITDA of EUR 296m for 1Q16 beat market expectations, the item noted.
de Telegraaf
>>> Up
*BIM RAISED TO NEUTRAL VS SELL AT GOLDMAN
*INFORMA RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*MAERSK RAISED TO BUY VS ACCUMULATE AT FEARNLEY
*PORSCHE RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*SWEDBANK RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*WORLDPAY RAISED TO BUY VS NEUTRAL AT UBS
*VOLKSWAGEN RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
>>> Down
*AIR LIQUIDE SA CUT TO UNDERPERFORM AT BERNSTEIN
*BAYER CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*EFES CUT TO SELL VS NEUTRAL AT GOLDMAN
*MILLICOM CUT TO NEUTRAL AT JPMORGAN
*TECHNIP CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*TEKFEN CUT TO NEUTRAL FROM BUY AT GOLDMAN
*TURKIYE VAKIFLAR BANKASI CUT TO SELL VS NEUTRAL AT GOLDMAN
>>> PT Change
>>> Initiation
>>> Call
>> Stock
*EMLAK ADDED TO CEEMEA FOCUS LIST AT GOLDMAN
AMS SW , ARM LN, DLG GY, IFX GY, IMG LN, STM FP,...
- European suppliers include Dialog Semi, AMS, ARM, Imagination Tech, Infineon, STMicro
- Dialog most exposed with ~71% of rev. coming from Apple: Bloomberg data
- Aviate Global says “the end of the Apple super cycle is upon us”
- Risk to suppliers from negative iPhone growth and shipments, Apple passing through their gross margin pressure on to pricing of suppliers, Apple’s inventory reduction
- Poor 3Q guidance signals that iPhone 5 SE can’t mask “extremely poor” iPhone 6S demand dynamics
- Greater China “has gone from hyper growth to falling off a cliff”
- Remains seller of Apple, Skyworks, Dialog, STMicro, Sony, Murata
Asian Market Update: Australia inflation plummets, drastically increasing outlook for more RBA rate cuts
***Economic Data***
- (CN) CHINA MAR INDUSTRIAL PROFITS Y/Y: 11.1% V -4.7% PRIOR
- (CN) China Apr Westpac Consumer Confidence index: 117.8 v 118.1 prior
- (AU) AUSTRALIA Q1 CONSUMER PRICES (CPI) Q/Q: -0.2% (7-year low) V +0.2%E; Y/Y: 1.3% (1-year low) V 1.7%E; TRIMMED MEAN Q/Q: 0.2% (multi-year low) V 0.5%E ; Y/Y: 1.7% V 2.0%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 111.7 v 115.8 prior
- (NZ) NEW ZEALAND MAR TRADE BALANCE (NZD): 117M V 401ME; 3rd straight month of trade surplus; Annualized: -3.84B v -3.69Be (widest deficit in 7 years)
- (KR) SOUTH KOREA APR CONSUMER CONFIDENCE: 101 V 100 PRIOR
***Index Snapshot (as of 04:00 GMT)***
- Nikkei225 -0.6%, S&P/ASX +0.7%, Kospi -0.2%, Shanghai Composite flat, Hang Seng -0.3%, Jun S&P500 -0.3% at 2,083
***Commodities/Fixed Income***
- June gold +0.1% at $1,245/oz, June crude oil +1.1% at $44.51/brl, Jul copper -0.5% at $2.23/lb
- (US) Weekly API Oil Inventories: Crude: -1.1M v +3.1M prior; First draw in 3 weeks
- World Bank raises 2016 oil price forecast to $41/brl from $37/brl; Sees some easing in oversupply
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.4837 V 6.4880 PRIOR; strongest setting since Apr 21st; 2nd straight firmer setting
- (CN) PBOC to inject CNY120B in 7-day reverse repos
- (CN) China MoF sells 3-yr bonds at 2.55%
- JGB: (JP) Japan MoF sells ¥2.11T in 0.1% 2-year JGBs; Avg yield: -0.254% (record low) v -0.183% prior; bid-to-cover 4.20x (multi-month low) v 4.34 prior
***Market Focal Points/FX***
- Asian equity markets are trading mixed though volumes are still on the light side on the eve of the critical BOJ policy decision and the anticipated ramp-up in hawkish rhetoric from the FOMC statement. Australia is outperforming, with the latest set of inflation data significantly raising the likelihood of renewed RBA policy easing. Tech-heavy Korea and Taiwan are underperforming however, tracking 1.1% drop in Nasdaq futures in the wake of extremely disappointing results from Apple as it missed on the top and bottom line while registering its first iPhone shipment decline on record. In FX, AUD/USD fell about 140pips to $0.7620 after a much lower CPI print than expected and NZD/USD was down over 30pips below 0.6870 in sympathy. USD/JPY is consolidating last week's gains for the 3rd straight session, even as expectations build for some sort of combination of additional BOJ easing, whether it be through lower negative rates, expanded asset purchases, or both.
- Australia's Q1 headline CPI hit a 7-year low q/q and 1-year low y/y, with a shockingly negative sequential print that raised fears of deflationary trends in the economy's adjustment away from mining. Gasoline price declines were most pronounces at -10%, though tourism sector was also fairly soft. Going into the decision, fixed income market probability of renewed easing next week was just above 10% - after the release, markers are now pricing in a near 50% chance. JPMorgan has shifted its neutral stance to anticipate 2 rate cuts this year, while RBA watcher Alan Mitchell suggested the latest figures give RBA "the perfect excuse to cut rates further" if it had been hesitant to do so in the past, pointing to the likely retreat from the recent price surge in iron ore and coal. Also of note down under, New Zealand trade remained in a surplus for the 3rd straight month but lower than expected. Shipments to China saw a decline of 4% y/y v prior month's rise of 1.8%, and exports to the US were down nearly 20%. Overall shipments of dairy fell 29% y/y - much worse than the 9% y/y rise in the prior month. RBNZ also holds a policy meeting tomorrow, though expectations are firmly in favor of a rate hold after last month's surprise cut.
- In China, March industrial profits continued to recover, growing 11.1% y/y. YTD growth was up 7.4%, also a marked improvement from 4.8% rise last month. China Stats Bureau noted faster profit rise on both sales growth and prices, but also warned that slowing demand, high inventories and financing difficulties are still impacting the industrial sector. Earlier, China Finance Ministry noted that combined profits of China non-financial SOEs in Q1 fell 13.8% y/y to CNY432B and Rev fell 3%.
- Stateside, Super Tuesday 2 featured primary contests in Connecticut, Delaware, Maryland, Pennsylvania, and Rhode Island. Donald Trump swept all 5 on the Republican side, referring to himself as the "presumptive nominee" to represent the party in November. Hillary Clinton only whiffed on Rhode Island, taking the other 4 states fairly comfortably. Despite speculation to the contrary earlier in US hours, Bernie Sanders vowed to stay in the race.
***Equities***
US equities / ADRs:
- EBAY: Reports Q1 $0.47 v $0.45e, R$2.14B v $2.08Be; +1.1% afterhours
- AYI: To be added to S&P500 and VSAT to enter S&P MidCap 400 effective after close of trading on Monday; +1.0% afterhours
- RHI: Reports Q1 $0.64 v $0.64e, R$1.30B v $1.30Be; +0.7% afterhours
- T: Reports Q1 $0.72 v $0.69e, R$40.5B v $40.5Be; -0.7% afterhours
- AFL: Reports Q1 $1.74 v $1.62e, R$5.45B v $5.29Be; -0.7% afterhours
- COF: Reports Q1 $1.84 v $1.90e, R$6.2B v $6.10Be; -1.6% afterhours
- CMG: Reports Q1 -$0.88 v -$1.06e, R$834.5M v $857Me; -4.6% afterhours
- AAPL: Reports Q2 $1.90 v $1.97e, R$50.6B v $52.2Be; increased share repurchase authorization by $35B (6% of market cap) to $175B; Raises dividend 10% to $0.57 (implied yield 2.2%); -7.9% afterhours
- BWLD: Reports Q1 $1.73 v $1.76e, R$508.3M v $532Me; -12.2% afterhours
- TWTR: Reports Q1 $0.15 v $0.10e, R$595M v $607Me; -13.5% afterhours
Notable movers by sector:
- Consumer discretionary: 361 Degrees International 1361.HK +3.4% (Q1 result); Gome Electrical Appliances Holdings 493.HK -3.8% (Q1 guidance); Galaxy Entertainment Group 27.HK -0.5% (Q1 result); Murray Goulburn MGC.AU +7.1% (guidance)
- Financials: Bank of China 3988.HK +0.3% (Q1 result); Industrial Securities Co 601377.CN -1.0% (Q1 result); Ping An Insurance 2318.HK +1.0% (Q1 result)
- Industrials: Hyundai Mobis 012330.KR +0.6% (Q1 result); Kia Motors Corporation 000270.KR +0.3% (Q1 result); Daihatsu Motor Co 7262.JP -1.5% (FY15/16 result); Kawasaki Heavy Industries 7012.JP +2.7 % (FY15/16 result); JFE Holdings 5411.JP -3.8% (FY15/16 result)
- Technology: LG Display Co 034220.KR -2.3% (Q1 result); Toshiba Corporation 6502.JP -1.1% (revises guidance)
- Materials: Metallurgical Corporation of China 1618.HK -0.8% (Q1 result); Anhui Conch Cement 914.HK -1.0% (Q1 result); Beadell Resources BDR.AU +0.7% (Q1 result); Saracen Mineral Holdings SAR.AU +2.7% (Q3 result); Shin-Etsu Chemical Co 4063.JP +3.6% (FY15/16 result)
- Energy: Tohoku Electric 9506.JP +4.8% (FY15/16 result); Beach Energy BPT.AU +1.5% (raises guidance)
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.