>>> Lockheed Martin beats by $0.04, beats on revs

Lockheed Martin beats by $0.04, beats on revs; sees FY15 at high end of range; sees FY16 sales comparable to FY15, below estimates

  • Reports Q3 (Sep) earnings of $2.76 per share, $0.04 better than the Capital IQ Consensus of $2.72; revenues rose 3.1% year/year to $11.46 bln vs the $11.12 bln Capital IQ Consensus.
  • Co issues guidance for FY15, sees EPS of ~$11.30 from $11.00-11.30 vs. $11.36 Capital IQ Consensus; sees FY15 revs of ~$45 bln from $13.5-45.0 bln vs. $44.82 bln Capital IQ Consensus.
  • Co issues downside guidance for FY16, sees FY16 revs of comparable with 2015 vs. $46.57 bln Capital IQ Consensus, total business segment operating margin will be in the 11.0 percent to 11.5 percent range. The Corporation also expects its 2016 cash from operations will be comparable with 2015. The Corporation's preliminary outlook for 2016 does not reflect any impacts from the ongoing strategic review or its pending acquisition of Sikorsky. The Corporation's outlook for 2016 will be updated at the conclusion of its strategic review, and when the acquisition of Sikorsky closes.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: RMBS -16.5%, HOG -8.6%, HXL -8.3%, VAR -5.7%, IBM -4.4%, IEX -2.2%, WIBC -1.4%, WWW -1.2%, ETN -1.1%, SIX -0.8%, ELS -0.6%, LMT -0.5%

M&A news: WDC -1.9% (Bloomberg reporting co is in discussion to acquire SNDK)

Select oil/gas related names showing early weakness: TOT -1.2%, BP -1%, RDS.A -0.8%

Other news: NEOS -13.7% (received notification that the FDA has identified deficiencies that preclude discussion of labeling & postmarketing requirements/commitments for Cotempla XR-ODT), ZGNX -7.4% (co received a request from the FDA for additional information related to the proposed Phase 3 program for ZX008 prior to the FDA declaring the Investigational New Drug Application effective), MSB -4.9% (reported that due to a delay in the reporting of Cliffs Natural Resources (CLF) regarding shipments of iron ore products, no distribution will be paid in November 2015), SGY -1.4% (filed mixed securities shelf offering), SNY -1.1% (may be in symp with AZN dg), AMD -1% (in symp with RMBS), ESI -0.9% (issues statement has received a letter from the U.S. Department of Education identifying certain past procedural deficiencies and requiring certain additional reporting, procedures and remedial actions)

Analyst comments: ENPH -7.2% (downgraded to Sell from Hold at Deutsche Bank), AZN -1.7% (downgraded to Underperform at Credit Suisse), VRX -2.2% (downgraded to Sector Perform from Sector Outperform at CIBC), CALM -1.1% (downgraded to Equal Weight from Overweight at a boutique firm), TS -0.8% (downgraded to Neutral from Buy at Citigroup), DO -0.8% (initiated with a Sell at Citigroup), PH -0.7% (downgraded to Neutral from Buy at Citigroup
)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: TACO +13.6%, TTS +10.7%, SONC +5.7%, IHG +5.5%, GIG +4.3%, HSTM +3.7%, FLEX +3.1%, CE +1.6%, VZ +1.6%, SAP +1.5%, VLRS +0.8%, TRV +0.6%

M&A news: TMH +21.9% (AmSurg (AMSG) confirms proposal to acquire TeamHealth for $71.47/share, or ~$7.8 bln), SNDK +8.7% (Bloomberg reporting co is in discussion to be acquired by Western Digital (WDC)), YUM +6% (to separate into two publicly traded companies; China Division to become independent company focused on growth in Mainland China)

Select metals/mining stocks trading higher: AU +3.1%, IAG +2.1%, GOLD +2%, ABX +1.6%, GDX +1.4%, GG +1.3%, SLW +1.1%

Other news: ERII +135% (signed 15-year license with Schlumberger (SLB) to provide exclusive rights to its VorTeq hydraulic fracturing technology; deal includes $125 mln in upfront payments paid in stages), ONE +42.5% (sold its Campus Labs data analytics business to Leeds Equity Partners, for $91 mln in cash), CRBP +34.1% (confirms the FDA has granted a Fast Track development program and Orphan Drug Designation for Resunab, to treat cystic fibrosis), RXII +10.8% (reports positive results with its RNAi platform, showing it demonstrated robust and potent reduction of the levels of lncRNAs in a target specific manner), KITE +3.5% (enters into an exclusive, worldwide license with the National Institutes of Health, related to T Cell Receptor-based product candidates), ATRA +1.9% (confirms Orphan Drug Designation from the FDA, for STM 434 to treat ovarian cancer), SKX +1.7% (still checking), MPAA +1.6% (to replace OMG in the S&P SmallCap 600)

Analyst comments: RCPI +8.4% (initiated with a Buy at Maxim Group; tgt $4), WTW +6.1% (upgraded to Equal Weight from Underweight at Barclays), TSEM +5.1% (initiated with a Buy at Drexel Hamilton), RESN +3.1% (initiated with a Buy at Drexel Hamilton), BLUE +2.3% (initiated with an Outperform at Oppenheimer; $162 tgt), GOLD +2% (upgraded to Buy from Hold at Deutsche Bank), CPE +1.7% (initiated with a Buy at Canaccord Genuity), ADRO +0.7% (initiated with an Outperform at Oppenheimer), PFE +0.7% (upgraded to Outperform from Market Perform at Cowen
)

>>> Pfizer Upgraded at Cowen Ahead of Possible M&A--> Glaxo

Pfizer Upgraded at Cowen Ahead of Possible M&A; Roche Downgraded

  • Sees only a few targets as meeting PFE’s criteria to bolster GIP business; Glaxo may be most attractive given shared ViiV asset, strong vaccines ops, large number of drugs in development
  • Says investors have been overly focused on potential breakup of PFE, though could be “second parachute"; sees PFE shrs undervalued by 3%-9% based on sum of the parts
  • Raises PFE to outperform from market perform, PT to $43 from $35
    • PFE has 17 buys, 5 holds, 2 sells; avg PT $39: Bloomberg data
  • Cowen also cut Roche to market perform from outperform, PT to $35 from $42; sees increased risk to immuno-oncology/chemotherapy combinations
  • NOTE: May 20, Pfizer Bid for Glaxo Would Draw More Scrutiny vs Astra: Citi {NSN NONCU56K50XT<Go>}

>>> Verizon beats by $0.02, reports revs in-line; reaffirms expectation for full

Verizon beats by $0.02, reports revs in-line; reaffirms expectation for full year rev growth of at least 3%

  • Reports Q3 (Sep) earnings of $1.04 per share, $0.02 better than the Capital IQ Consensus of $1.02; revenues rose 5.0% year/year to $33.16 bln vs the $32.98 bln Capital IQ Consensus.
    • Reported 1.3 million net retail postpaid connections added in the quarter; low retail postpaid churn of 0.93 percent; 110.8 million total retail connections; 105.0 million total retail postpaid connections.
    • Wireless operating income margin was 33.3%, up from 31.9% in 3Q14.
  • Reaffirms expectation for consolidated revenue growth of at least 3% for full-year 2015, in-line with expectations.


Read more: http://www.briefing.com/InPlayEq/InPlay/InPlayDual.htm#ixzz3p6izsOH9


--> *VERIZON SEES FUTURE REV. GROWTH FROM MOBILE OVER-THE-TOP VIDEO
--> *VERIZON SEES FUTURE REV. GROWTH FROM 'INTERNET OF THINGS'

>>> United Technology joins big league on share buybacks

United Technology is upping the size of its share buyback programme.

The US company, which makes industrial products ranging from plane engines to fire control systems, said it was increasing the size of its share repurchase programme from the $8.3bn announced just three months ago to $12bn.

The new figure will make this the sixth biggest share buyback announced by a US company so far this year.

Gregory Hayes, UTC President and chief executive, argued:

United Technologies' shares are an attractive investment opportunity which we are going to take advantage of in order to increase value for our shareholders.

Including the $4 billion in repurchases made to date in 2015, we now expect to complete $16 billion of share repurchases through 2017.

Part of the repurchases will be funded by proceeds from UTX's sale of its Sikorsky aircraft business. The deal, announced in July, is expected to be completed in the fourth quarter.

News of the buyback comes as UTX reported a drop in sales and profits for the third quarter.

The strong dollar continues to weigh on the company's results, with sales down 5.6 per cent at $13.8bn and net income down by more than a quarter at $1.36bn.

UTX shares, having fallen 20 per cent so far this year, was up 0.4 per cent in pre-market trading

FT : Volkswagen plans first securitisation since scandal

Volkswagen Financial Services is launching its first new auto securitisation transaction since the company was mired in an emissions scandal.

The benchmark euro-denominated issue, the size of which is yet to be disclosed, will be backed by German lease contracts, according to the company, writes Thomas Hale, capital markets reporter.

Securitisation is a process by which loans and leases are packaged into a special vehicle, which issues bonds to investors.

It is a key source of funding for Volkswagen's financial services arm, which provides customers and companies with credit, and had total assets of €137bn as of the end of 2014.

The deal is the first Volkswagen Financial Services has announced since late September - and will be closely watched by markets.

The company has previously stated its "frequent issuance pattern" would continue unchanged in the wake of the scandal.

Volkswagen's last ABS issue was an €816m Spanish transaction which priced the day after news of the emissions scandal broke.

Volkswagen is the largest issuer of auto asset-backed securities in Europe.

Rating agencies have been closely scrutinising risks associated with the securities, including the danger that secondhand car prices might fall sharply, and that customers might renege on their contracts.

Auto asset-backed securities are typically treated as a cash equivalent, and trade at extremely low spreads over euribor.

Volkswagen's ABS spreads have doubled over recent weeks to around 60 basis points over euribor, according to market participants.

The European Central Bank has also suspended its purchase of Volkswagen's ABS, which it was buying under its ABS asset purchase programme, as a result of the scandal.

>>> Harley-Davidson misses by $0.08, misses on rev, shipment guidance; lowers FY

Harley-Davidson misses by $0.08, misses on rev, shipment guidance; lowers FY15 shipment, margin guidance; co will increase invesmtents

  • Reports Q3 (Sep) earnings of $0.69 per share, $0.08 worse than the Capital IQ Consensus of $0.77; revenues rose 0.9% year/year to $1.14 bln vs the $1.21 bln Capital IQ Consensus.
    • 53472 shipments vs. 54-59K guidance.
  • Dealer new motorcycle sales were down 1.4% worldwide for the third quarter compared to the year-ago period, with sales down 2.5 percent in the U.S. and up 0.9 percent internationally.
  • "We expect a heightened competitive environment to continue for the foreseeable future, and now is the time for us to dial things up with significant additional investments in marketing and product development."
  • Harley-Davidson is revising its full-year guidance for motorcycle shipments, reflecting its commitment to managing supply in line with demand and now expects to ship 265,000 to 270,000 motorcycles to dealers and distributors worldwide in 2015, which is ~flat to down 2 percent from 2014; from 276,000 to 281,000 motorcycles.
  • In the fourth quarter, the co expects to ship 47,000 to 52,000 motorcycles compared to 47,157 motorcycles shipped in the year-ago period. The company now expects full-year 2015 operating margin of ~16 percent to 17 percent for the motorcycles segment, from 18-19%.
  • In 2016, Harley-Davidson will increase its investment in customer-facing marketing by approximately 65 percent above 2015 levels. The company also plans to increase its investment in new product development by approximately 35 percent from 2015 levels. These changes represent an approximate $70 million increase in investment to drive demand compared to 2015.

>>> Lockheed Martin beats by $0.04, beats on revs

Lockheed Martin beats by $0.04, beats on revs; sees FY15 at high end of range; sees FY16 sales comparable to FY15, below estimates

  • Reports Q3 (Sep) earnings of $2.76 per share, $0.04 better than the Capital IQ Consensus of $2.72; revenues rose 3.1% year/year to $11.46 bln vs the $11.12 bln Capital IQ Consensus.
  • Co issues guidance for FY15, sees EPS of ~$11.30 from $11.00-11.30 vs. $11.36 Capital IQ Consensus; sees FY15 revs of ~$45 bln from $13.5-45.0 bln vs. $44.82 bln Capital IQ Consensus.
  • Co issues downside guidance for FY16, sees FY16 revs of comparable with 2015 vs. $46.57 bln Capital IQ Consensus, total business segment operating margin will be in the 11.0 percent to 11.5 percent range. The Corporation also expects its 2016 cash from operations will be comparable with 2015. The Corporation's preliminary outlook for 2016 does not reflect any impacts from the ongoing strategic review or its pending acquisition of Sikorsky. The Corporation's outlook for 2016 will be updated at the conclusion of its strategic review, and when the acquisition of Sikorsky closes.