|From Briefing.com: 4:30 pm : 4:35PM Apple beats by $2.26, beats on revs; guides Q3 EPS, revs (traditionally conservative) below consensus (AAPL) 560.28 -11.42 : Reports Q2 (Mar) earnings of $12.30 per share, $2.26 better than the Capital IQ Consensus Estimate of $10.04; revenues rose 58.9% year/year to $39.19 bln vs the $36.76 bln consensus. Co issues downside guidance for Q3, sees EPS of ~$8.68 vs. $9.95 Capital IQ Consensus Estimate; sees Q3 revs of ~$34 bln vs. $37.42 bln Capital IQ Consensus Estimate -- AAPL typically issues conservative guidance. Co reports 35.1 mln iPhones sold in Q2 vs Street est of ~30.5 mln; 11.8 mln iPads sold in Q2 vs Street est of ~12 mln; 4.0 mln Macs sold in Q2 vs Street est of ~4.5 mln; Q2 gross margins of 47.4% vs Street est of 42.7% and 42% guidance. "The new iPad is off to a great start, and across the year you're going to see a lot more of the kind of innovation that only Apple can deliver. Our record March quarter results drove $14 billion in cash flow from operations."|
4:25PM Super Micro Computer misses by $0.03, misses on revs; guides Q4 EPS in-line, revs above consensus (SMCI) 17.81 +0.52 : Reports Q3 (Mar) earnings of $0.19 per share, $0.03 worse than the Capital IQ Consensus Estimate of $0.22; revenues rose 2.5% year/year to $240.2 mln vs the $251.74 mln consensus. Co issues mixed guidance for Q4, sees EPS of $0.27-0.32 vs. $0.29 Capital IQ Consensus Estimate; sees Q4 revs of $280-310 mln vs. $274.88 mln Capital IQ Consensus Estimate.
4:23PM Tessera Tech subsidiary DigitalOptics announced it has licensed its Face Tracker facial tracking technology to Cammsys Co, a camera module maker focused on the mobile phone market (TSRA) 16.30 +0.02 :
4:03PM RF Micro Device misses by $0.01, beats on revs; guides Q1 EPS below consensus, revs in-line (RFMD) : Reports Q4 (Mar) loss of $0.02 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of ($0.01); revenues fell 11.9% year/year to $187.9 mln vs the $185.26 mln consensus. Co issues mixed guidance for Q1, sees EPS of $0.00-0.02 vs. $0.03 Capital IQ Consensus Estimate; sees Q1 revs of $202 mln vs. $202.39 mln Capital IQ Consensus Estimate.
The Dow and S&P 500 booked solid gains today, but the Nasdaq faltered amid weakness in Tech stocks and heavyweight Apple.
The tone of trade ahead of the open was generally positive, thanks to renewed buying interest in Europe. However, when Europe's bourses began to give back their gains, sentiment softened at home. Confidence was further undermined by news that there was a drop in the number of Apple (AAPL 560.28, -11.42) products connected to the AT&T (T 31.72, +1.11) network. That news put pressure on shares of AAPL ahead of its quarterly report, but shares of T were able to score strong gains on the back of their better-than-expected earnings results.
Shares of AAPL hampered the Nasdaq since the open. Weakness in the Tech-rich Index was exacerbated by Symantec (SYMC 16.01, -2.06), which issued a disappointing forecast. Netflix (NFLX 87.68, -14.16) was also a source of weakness amid disappontment over its latest quarterly report and outlook.
A positive response to the latest dose of data helped the broad market bounce in mid-morning trade. Participants were generally pleased to learn that new home sales for March hit an annualized pace of 328,000, which is greater than the clip of 318,000 that had been broadly anticipated. Moreover, prior month numbers were revised upward to reflect an annualized pace of 353,000.
The Consumer Confidence Index eased back in April to 69.2 from 70.2 in the prior month. A reading of 69.5 had been generally expected.
Stocks encountered some selling in afternoon trade, but Financials and Energy helped prop up the broad market. They booked gains of 1.1% and 0.7%, respectively. Strength among blue chips helped the Dow maintain a lead over its counterparts for the better part of the day. In addition to AT&T, 3M (MMM 88.49, +1.36) and United Technologies (UTX 79.85, +0.10) reported upside earnings surprises of their own. Coach (COH 71.87, -3.25) and Texas Instruments (TXN 31.36, -0.53) also reported earnings that exceeded what had been widely anticipated, but neither settled in positive territory.
Advancing Sectors: Telecom +2.8%, Industrials +1.2%, Financials +1.1%, Utilities +0.8%, Energy +0.7%, Health Care +0.4%
Unchanged: Consumer Staples, Materials
Declining Sectors: Tech -0.6%, Consumer Discretionary -0.3%DJ30 +74.39 NASDAQ -8.85 NQ100 -0.6% R2K +0.8% SP400 +0.3% SP500 +5.03 NASDAQ Adv/Vol/Dec 1639/1.68 bln/893 NYSE Adv/Vol/Dec 2037/752 mln/985
3:38PM Juniper Networks (halted) beats by $0.03, beats on revs; guides Q2 EPS below consensus, revs in-line (JNPR) 22.21 +2.04 : Reports Q1 (Mar) earnings of $0.16 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.13; revenues fell 6.3% year/year to $1.03 bln vs the $977.76 mln consensus. Non-GAAP operating margin for Q1 was 12.0% compared to 18.6% in 4Q11, and 22.3% in the prior year first quarter. Co issues guidance for Q2, sees EPS of $0.15-0.17, excluding non-recurring items, vs. $0.20 Capital IQ Consensus Estimate; sees Q2 revs of $1.03-1.06 bln vs. $1.05 bln Capital IQ Consensus Estimate. Juniper estimates that its non-GAAP gross margin will be roughly in line compared to Q1. Juniper expects its non-GAAP operating margin for Q2 to be in the range of 12% and 14%. "Looking ahead, we will manage the business assuming the near-term environment requires continued caution." JNPR popped ~10% as upside Q1 results leaked but the stock is now halted and Q2 EPS was below consensus.
11:05AM Texas Instruments - - Earnings Mover (TXN) 31.54 -0.35 : Slides lower to a fresh 13-week low this morning in as it gives up its initial higher opening in response to last night's earnings. Note the 200-day exponential moving average (31.45) and the mid-January bullish gap along 31.38 area in play. Next level of interest below is $31 followed by its 200-day simple moving average around 30.33.
9:37AM IBM confirms $7.0 bln for stock repurchase program and 13% quarterly dividend increase (IBM) 199.98 +1.34 : Co also confirmed a quarterly dividend increase to $0.85/share from $0.75/share. The board today also authorized $7 billion in additional funds for use in the company's stock repurchase program. This amount is in addition to ~$5.7 bln remaining at the end of March from a prior authorization.
9:04AM Riverbed Technology appoints David Greene as Chief Marketing Officer (RVBD) 19.21 : Prior to joining Riverbed, Greene served as vice president of worldwide marketing for BMC Software's $2B portfolio of IT management software businesses.
AMD (AMD) announced a collaboration with Adobe Systems (ADBE) to optimize a new set of GPU-accelerated features for Adobe products including the newly announced Adobe Photoshop CS6.
7:07AM Celestica beats by $0.04, beats on revs; guides Q2 EPS in-line, revs below consensus (CLS) 8.41 : Reports Q1 (Mar) earnings of $0.25 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $0.21; revenues fell 6.1% year/year to $1.69 bln vs the $1.67 bln consensus. Co issues mixed guidance for Q2, sees EPS of $0.20-0.26, excluding non-recurring items, vs. $0.25 Capital IQ Consensus Estimate; sees Q2 revs of 1.65-1.75 bln vs. $1.76 bln Capital IQ Consensus Estimate. "Consistent with our strategy, we continued to invest to support the growth of existing and new customers and we made further progress on our revenue diversification. We also returned value to shareholders through our share repurchase program. Although visibility remains limited, customer demand is stabilizing. Our focus continues to be on delivering innovative supply chain solutions to our customers while delivering strong and consistent financial returns for our shareholders." The company expects a negative $0.04 to $0.06 per share (pre-tax) aggregate impact on an IFRS basis for the following items: stock-based compensation and amortization of intangible assets.
Lattice Semiconductor (LSCC) announced the immediate availability of its low cost, low power MachXO2 family of programmable logic devices in a new 32 QFN package.
2:30AM ARM Holdings reports EPS in-line, beats on revs (ARMH) 27.58 : Reports Q1 (Mar) earnings of GBP0.03 per share, in-line with the Capital IQ Consensus Estimate consensus of GBP0.03; revenues rose 14.2% year/year to GBP132.5 mln vs the GBP129.59 mln consensus. Co states while Q1 industry shipments declined sequentially, most analysts expect the industry to recover in the second half. In that context, co expects that group dollar revenues for the full-year 2012 will be in line with current market expectations.
Sanmina-SCI (SANM $9.30 -0.95) reported first quarter earnings of $0.27 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.27, while revenues fell 6.8% year/year to $1.46 billion versus the $1.51 billion consensus. The company issued downside guidance for the third quarter with EPS of $0.26-0.32, excluding non-recurring items, versus the $0.36 Capital IQ Consensus, with revenues of $1.475-1.525 billion versus the $1.57 billion consensus. "As we expected, our second quarter continued to be challenged by relatively flat demand across most of our markets and a decline in the multimedia segment.."Based on our outlook for the third quarter and feedback from our customers, we remain encouraged that we should see improvements in the second half of the calendar year."
Ultra Clean Holdings (UCTT $7.21 -0.04) reported first quarter earnings of $0.20 per share, $0.03 better than the Capital IQ Consensus of $0.17, while revenues fell 12.7% year/year to $110.6 million versus the $107.1 million consensus. The company issued mixed guidance for the second quarter with EPS of $0.16-0.19 versus the $0.18 consensus with revenues of $100-105 million versus the $106.84 million consensus. Semiconductor revenue was 85.1% of total revenue for the first quarter of 2012 compared to 79.6% in the previous quarter and revenue outside the U.S. accounted for 32% of the total revenue for the first quarter of 2012 compared to 29% for the previous quarter. Gross margin for the first quarter of 2012 was 14.2%, compared to 11.0% for the fourth quarter of 2011 and 13.9% for the first quarter of 2011.
Texas Instruments (TXN $32.21 +0.32) reported first quarter earnings of $0.32 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.29, while revenues fell 8.0% year/year to $3.12 billion versus the $3.05 bln consensus. The company issued in-line guidance for the second quarter with EPS of $0.36-0.44, excluding non-recurring items, versus the $0.40 consensus with revenues of $3.22-3.48 billion versus the $3.29 billion consensus. For the full year of 2012, TI continues to expect approximately the following: R&D expense: $2.0 billion; Capital expenditures: $0.7 billion; Depreciation: $1.0 billion; Annual effective tax rate: 28%. "As we expected, our business cycle bottomed in the first quarter, and early signs of growth began to emerge... Orders were up 13 percent, and backlog is growing again. Particularly encouraging is the breadth of increased orders across geographical regions and markets, including the industrial sector. "Sales in our Analog segment were about level with the prior quarter. We continue to make progress with Silicon Valley Analog, formerly National Semiconductor, as this product line gains traction with customers and holds a strong position in the important industrial market. Sales in Embedded Processing were up 7 percent led by growth in the automotive and communications infrastructure markets. Sales in our Wireless segment declined sharply as we entered the final phase of our exit from baseband products, which were less than 3 percent of total sales in the quarter. We are expanding the reach of our Wireless segment into multiple markets and experiencing strong diversity in our design-ins."
Netflix (NFLX $86.91 -14.93) reported a first quarter loss of $0.08 per share, $0.19 better than the Capital IQ consensus of ($0.27), while revenues rose 21.0% year/year to $870 million versus the $866.72 million consensus. NetFlix reports Q1 Total Domestic Streaming Total Subs of 23.41 million, guidance was 22.8-23.6 million. The company issued mixed guidance for the second quarter with EPS of -0.10-0.14, excluding non-recurring items, versus the ($0.18) consensus and revenues of $873-895 million versus the $891.04 million consensus. Sees Q2 Domestic streaming total subs in the range of 23.6-24.2 mln. Domestic Streaming: Added 1.7 million total net additions (and 1.9 million paid net additions) in the quarter, and reaching 23.4 million total streaming members. The domestic streaming segment delivered $67 million of contribution profit, equivalent to a 13% contribution margin. We exceeded our domestic streaming contribution margin target of around 11%, due to slightly lower than expected content, delivery, and customer service expenses. Outlook -- Increased Seasonality in Net Adds: We anticipate that U.S. streaming contribution margin will expand in Q2 to about 15%. For Q3 onward, we are targeting 100 bps of average margin expansion per quarter, consistent with our January guidance. We think our 2012 domestic streaming net adds will be about the same as in 2010 (about 7 million), and that gross adds will approximately follow the 2010 seasonal pattern. Due to this increased net add quarterly seasonality, Q2 net adds will be below those of 2010, despite Q2 gross adds following the traditional seasonal pattern, and despite us expecting to match 2010 in annual net additions. The Starz deal for 15 Disney Pay TV 1 output titles, plus some catalog films, ended in February. There was no discernible change in churn or viewing levels. Instead, the trend towards watching episodic TV. Even with our continued content investment, we anticipate a small contribution profit in Canada in Q2 and will remain profitable in this market going forward. This is a quarter earlier than our January expectations for Canadian profitability... expect Latin America and the UK and Ireland to take longer than 8 quarters to reach sustained profits as we build membership and invest in content improvements. Given our expected return to global profitability in Q2, and how well we've been received in the UK, we've decided to open an additional attractive European market in Q4 of this year. DVD members declined this quarter to 10.1 million, slightly better than our expectations. About 7 million of these 10 million also subscribe to our streaming service. Going forward, we believe DVD will continue to decline but at a slower pace than the past few quarters. Looking forward to Q2, sequential growth in domestic streaming contribution profit will offset the decline in DVD contribution profit from Q1, while improvements in profitability in each of the international markets will reduce the international losses by approximately $11 million (based on the midpoint of guidance). As a result, we are forecasting a much earlier return to global profitability than anticipated on a Q2 net income / (loss) range of ($6) to $8 million. The improvement in the outlook is a result of continued member growth (both domestically and internationally), as well as increased efficiency of our content and marketing spending.
09:40 am F5 Networks upgraded to Buy at Wunderlich; tgt raised to $145: . Wunderlich upgrades FFIV to Buy from Hold and raises their tgt to $145 from $120 following earnings. Firm says accelerating product revenue growth, record gross margin, and book/bill of more than one made F5 Networks' 2Q12 a significant milestone. None of these metrics represented dramatic change, but were all positive in terms of direction.
10:21 am Technology sector trading higher today along with market
The tech sector is trading just higher today, trailing gains in the broader market. Semiconductors are showing relative weakness with the Philly Semi Index trading 0.1% only higher. SPRD (+4.4%) is showing strength in the chip index, while RBCN (-2.0%) in under pressure. Among other major indices, the SPY is trading 0.5% higher today, while the QQQ is up 0.1% and the NASDAQ is trading 0.2% higher on the session. Among tech bellwethers, T (+3.5%) is showing notable strength, while AAPL (-1.2%) lags.
In earnings last night, TXN (-0.1%) reported a Q1 beat and offered inline Q2 guidance, while SANM (-11.2%) posted a slight miss and guided lower. Elsewhere, VLTR (+0.1%) posted a beat but gave a cautious outlook and STM (-1.3%) reported an earnings miss. This morning, T (+3.5%) reported a mixed quarter with upside EPS and roughly inline revs and SYMC (-8.9%) lowered guidance. Also, ARMH (-5.3%) reported a slight beat, while CLS (+9.8%) and LXK (-5.5%) posted quarterly beats but guided below consensus.
In news, IBM (+1.6%) announced a $7 bln stock repurchase and 13% quarterly dividend increase. Among notable analyst upgrades this morning, RMBS (+5.4%) was upgraded to Overweight at JP Morgan. While in downgrades, CSOD (-5.3%) was downgraded to Equal Weight at Barclays and CSGS (-1.5%) was downgraded to Sector Perform at RBC Capital. AAPL (-1.2%), BIDU (-1.4%), JNPR (+1.0%) and WIT (+1.9%) are a few notable names in tech scheduled to report quarterly results today after the close.