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April 4, 2012
12:10 EDTWBMD, DDIC, YHOO, SNDK, GM, GE, VIAS, PPO, IBMOn The Fly: Mid-Day Wrap
Stocks on Wall Street were sharply lower at mid-day, as the slide that began after yesterday's release of the Federal Open Market Committee minutes deepened. The comments which sank the market revolved around the lack of additional stimulus unless the economy faltered, ruling out at least for the time being any semblance of further quantitative easing. Though Fed Chairman Bernanke said as much last month, the market reacted strongly late yesterday and again today after digesting the implications further. The economic data released today was generally in line with expectations but did little to improve the dour tone of the market... ECONOMIC EVENTS: In the U.S., ADP said the private sector added 209K jobs in March, just exceeding forecasts for the addition of 206K jobs. The ISM non-manufacturing index had a reading of 56.0, versus expectations for 56.8. Crude oil inventories built up by much more than expected, growing by 9M barrels. In Europe, Spain's bond yields rose following the country's first auction after its new austerity budget had been announced. Also, the European Central Bank left its benchmark rate unchanged at 1.0%... COMPANY NEWS: IBM (IBM) shares were downgraded to Neutral from Buy at Bank of America's Merrill Lynch, which cited valuation and limited earnings upside in the near-term, though the firm did raise its price target on the stock to $215 from $205... Moody's downgraded the debt ratings of General Electric (GE) and its finance unit, General Electric Capital Corporation... Yahoo! (YHOO) confirmed that it will cut about 2,000 jobs as part of a restructuring that its new CEO Scott Thompson said will result in a "smaller, nimbler, more profitable" company... MAJOR MOVERS: Among the notable gainers were Polypore (PPO), after William Blair said General Motor's (GM) decision to restart Volt production earlier than planned could be a positive for the battery component supplier, and DDi Corp. (DDIC), on news it will be acquired by Viasystems Group (VIAS) for $13 per share. Noteworthy losers included SanDisk (SNDK), after the company lowered its Q1 revenue guidance, and WebMD (WBMD), after the company said it expects to acquire about 5.77M shares of its common stock at a price of $26.00 per share pursuant to its completed modified "Dutch auction" tender offer... INDICES: Near noon, the Dow was down 145.95, or 1.11%, to 13,053.60; the Nasdaq was down 53.46, or 1.72%, to 3,060.11; and the S&P 500 was down 15.89, or 1.12%, to 1,397.49.
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April 20, 2015
16:11 EDTIBMIBM reports Q1 revenue from Software Segment down 8%
Revenues from the Software segment were down 8% to $5.2B (down 2 percent adjusting for currency) compared with the first quarter of 2014. Software pre-tax income increased 1 percent and pre-tax margin increased to 31.4%. Revenues from IBMís key middleware products, which include WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were $3.5B, down 5% (up 1 percent adjusting for currency) versus the first quarter of 2014. Operating systems revenues of $0.4B were down 15% (down 9 percent adjusting for currency) compared with the prior-year
16:09 EDTIBMIBM reports Q1 Global Services segment revenue down 12%
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16:07 EDTIBMIBM sees FY15 EPS $15.75-$16.50, consensus $15.89
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16:05 EDTIBMIBM reports Q1 EPS $2.91, consensus $2.82
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15:37 EDTIBMNotable companies reporting after market close
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15:37 EDTGEGE Ventures invests in talent acquisition platform Ascendify
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15:16 EDTGMGreenlight starts new GM long position, rolls Lorillard short bet to Reynolds
David Einhorn's Greenlight Capital hedge fund said in its latest quarterly letter to investors that it had established new long positions in General Motors (GM), Chicago Bridge & Iron (CBI) and AerCap Holdings (AER) last quarter. WHAT'S NEW: Greenlight believes GM should benefit from low gas prices, low raw material costs, and its decision to launch share buybacks, Greenlight stated. GM has an excellent chance of beating 2015 EPS expectations, added the firm. Einhorn's group said they found the valuation of Chicago Bridge and Iron, an engineering and construction company with significant exposure to energy, attractive following the stock's decline. Although energy prices may stay low for some time, the company has a significant backlog that should support its earnings for several years, Greenlight stated. Additionally, the market is overestimating how much of the cost overruns for two nuclear energy projects with be shouldered by the company, Greenlight contended. AerCap, the largest publicly traded aircraft leasing company, bought AIG's (AIG) aircraft leasing business last year at a bargain price, Greenlight stated. The combined business will benefit from AerCap's low tax rate, as well as efficiencies, the hedge fund believes. WHAT'S NOTABLE: Greenlight exited its short position in Lorillard (LO). Greenlight noted that it has rolled its short bet on Lorillard into a fresh position in Reynolds American (RAI), since it still believes that the FDA is gearing up to do "something major" in terms of regulation of menthol cigarettes, but is moving "slowly and deliberately" because it anticipates an extremely aggressive industry response. The firm also exited two other short positions because the companies agreed to takeovers: Safeway (SWY) and Freescale Semiconductor (FSL), which has agreed to sell itself to NXP Semicondictors (NXPI).
15:13 EDTIBMIBM April weekly 165 straddle priced for 3.5% movement into Q1
15:05 EDTIBMEarnings Watch: IBM rumored to be concerned about becoming activist target
International Business Machines (IBM) is expected to report first quarter earnings after the close on Monday, April 20, with a conference call scheduled for 4:30 pm ET. IBM, a global information technology services and software company, is a component of the Dow Jones Industrial Average. EXPECTATIONS: Analysts are looking for earnings per share of $2.82 on revenue of $19.73B. The consensus range is $2.57-$3.01 for EPS on revenue of $19.31B-$20.49B, according to First Call. During its investor day meeting on February 26, IBM backed its FY15 EPS view of $15.75-$16.50, which compared to consensus at the time of $16.02 and current consensus of $15.89. Based on February 25 spot rates, the company said it expected currency to impact revenue growth by over 7 points for Q1, and over 6 points for the full year. This was greater than the impact previously provided based on January 16 spot rates. In addition, the company said it continued to expect a 4 point impact to revenue growth in each of the first three quarters of 2015 due to the divestiture of the System x business. LAST QUARTER: IBM reported Q4 EPS of $5.81, topping the consensus estimate of $5.41. Revenue came in at $24.1B, which was below the consensus $24.77B projection. IBM said at that time that it had a services backlog of $128B. NEWS: On February 17, IBM unveiled IBM Spectrum Storage, a new storage software portfolio designed to address data storage inefficiencies, according to the company. To accelerate the development of next-generation storage software, IBM also announced plans to invest more than $1B in its storage software portfolio over the next five years. During its analyst day meeting a bit over a week later, IBM said it was shifting $4B into "strategic initiatives," including Big Data, the Cloud, mobile, social and security. On March 31, IBM announced that it will invest $3B over the next four years to establish a new Internet of Things, or IoT, unit, and that it is building a cloud-based open platform designed to help clients and ecosystem partners build IoT solutions. On April 2, CNBC reported, citing people with knowledge of the matter, that IBM had hired two investment banks to "formulate a defense plan" since the company was concerned about a potential attack by activist hedge funds. The sources also noted that activist investors in IBM had already tried and failed to get Bill Ackman's Pershing Square and Jeffrey Ubben's ValueAct involved in shaking up the company. STREET RESEARCH: On the day after the company's last report, Citigroup cut its price target for IBM shares to $170 from $180. Meanwhile, Jefferies said that day that IBM's cash flow guidance for 2015 was "very weak" and that the company had yet to reach a bottom. The firm continued to believe the risk/reward for shares was skewed negatively and it kept an Underperform rating and $130 price target on IBM shares at that time. On March 2, Atlantic Equities downgraded IBM to Underweight from Neutral. The firm said IBM faces long-term structural issues and it was unconvinced management's strategic plan will change the direction. The firm, which foresees further room for disappointment around consensus expectations of 8% earnings growth in 2016-2017, lowered its price target to $140 from $150 on the stock. On April 15, Credit Suisse lowered its estimates on IBM ahead of the company's Q1 report and reiterated its Underperform rating and $125 price target on the stock. Credit Suisse said then that its concerns remain a weak order book and a reduction in industry-wide deal sizes, margin dilution from the cloud despite any revenue growth, less effective restructuring, and internal turmoil and underinvestment. PRICE ACTION: Shares of IBM fell $4.86, or 3.1%, to $152.09 on the first day of trading after its Q4 report. Despite that drop on the day after the report, IBM shares have risen nearly 5% over the last three months. In afternoon trading ahead of tonight's report, IBM is up 3% to $165.49 per share.
14:16 EDTGMEinhorn lists AerCap, CBI, GM as new longs, Bloomberg reports
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12:57 EDTIBMIBM technical comments ahead of earnings
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12:34 EDTGEGE in discussions to sell $74B U.S. commercial lending unit, WSJ says
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12:03 EDTGEGE in discussions to sell $74B commercial lending business, Dow Jones says
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11:35 EDTGMGeneral Motors ignition switch death claims rise to 87, WSJ reports
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11:10 EDTYHOOStocks with call strike movement; TWC YAHOO
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10:11 EDTSNDKOptions with decreasing implied volatility
Options with decreasing implied volatility: BPT WETF NFLX BMRN SNDK STX TSM MAT FAST INTC
09:04 EDTYHOOYahoo names Sharon Carty as editor-in-chief of Yahoo Autos digital magazine
Yahoo (YHOO) announced that Sharon Carty is the new Editor-in-Chief of the recently launched digital magazine, Yahoo Autos. Sharon will lead a talented group of automotive experts including Managing Editor Justin Hyde, Editor-at-Large Alex Lloyd and Road Test Editor Aki Sugawara. Sharon joins Yahoo Autos from AOLís (AOL) Autoblog where she was the Editor-in-Chief overseeing a staff of reporters and videographers.
06:50 EDTGMTesla price target slashed to $165 at JPMorgan
After lowering its earnings estimates to reflect adverse currency moves, higher operating costs and slower than earlier expected Model X ramp, JPMorgan cut its price target for Tesla shares to $165 from $175. The stock closed Friday up 9c to $206.79. The firm dropped its Q1 earnings estimate to (38c) from (31c) despite the increase in Q1 deliveries preannounced by the electric car maker. JPMorgan keeps an Underweight rating on Tesla, the firm's equivalent to a sell. It maintains Overweight ratings on Ford (F) and General Motors (GM) with price targets of $19 and $46, respectively, ahead of the Q1 reporting season.
06:29 EDTIBMIBM April volatility elevated into Q1 and outlook
IBM April weekly call option implied volatility is at 46, May is at 25, June is at 22; compared to its 26-week average of 20 according to Track Data, suggesting large near term price movement into the expected release of Q1 results after the market close on April 21.
06:08 EDTGEStocks with implied volatility below IV index mean; ALU GE
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