Hammerstone’s Early Look

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Tuesday, February 11, 2020

FuturesUp/Down%Last
DJ Industrials73.000.25%29,318
S&P 5007.500.22%3,360
Nasdaq32.500.34%9,560

 

 

Stock are pointing to a higher open in the U.S., tracking gains in Europe and Asia yet again, as major averages look to build on their record setting levels on Monday. The S&P 500 and Nasdaq Composite each posted a record finish, adding on to last week’s strong gains as corporate earnings offset concerns about the spread of the coronavirus that has seen the death toll in China now top 1,000. The Nasdaq Composite Index jumped more than 1.1%, adding about 108 points to close near 9,628. In politics, today marks the New Hampshire primary, while economic data is very light (after none yesterday). In Asian markets, The Nikkei Index was closed, the Shanghai Index gained 11-points to 2,901 and the Hang Seng Index gained 342 points to 27,583. In Europe, the German DAX rises over 100-points to 13,600, while the FTSE 100 is up over 60 points to move above the 7,500 level. There were 2,478 new confirmed coronavirus cases on the mainland China by Monday, down from 3,062 the previous day, bringing the total to 42,638. It was the second time in two weeks that authorities recorded a daily drop in new cases. The National Health Commission said earlier another 108 people had died on Tuesday, a daily record, taking to 1,016 the total of those killed in China.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 24.38 points, or 0.73%, to 3,352.09
  • The Dow Jones Industrial Average rose 174.31 points, or 0.60%, to 29,276.82
  • The Nasdaq Composite surged 107.88 points, or 1.13%, to 9,628.39
  • The Russell 2000 Index advanced 10.89 points, or 0.66% to 1,667.67

 

Events Calendar for Today

  • 6:00 AM EST       NFIB Small Business Optimism for January…est. 103.5
  • 7:45 AM EST       ICSC Weekly Retail Sales
  • 8:55 AM EST       Johnson/Redbook Weekly Sales
  • 10:00 AM EST     JOLTs Job Openings for December…est. 6925
  • 4:30 PM EST        API Weekly Inventory Data

 

Earnings Calendar:

  • Earnings Before the Open: AN, CCR, CEIX, CRL, CRNC, D, DBD, EEFT, EXC, FLOW, HAS, HLT, INGR, JLL, LCII, LPX, MAS, MLM, NNN, OMC, ONDK, SEE, ST, TGNA, UAA, USFD, VIRT
  • Earnings After the Close: AAT, ACCO, AKAM, ATEN, BLKB, CNO, CPSI, DCP, DEI, DENN, DIOD, EXAS, GT, LSCC, LYFT, NCR, NSP, PRI, UDR, WU

 

Other Key Events:

  • Annual WORLD Symposium 2020, 2/10-2/13, in Orlando, FL
  • Biotech Innovation Organization, 2/10-2/11, in New York
  • EnerCom Dallas 2020, 2/11-2/12, in Dallas, TX
  • Goldman Sachs Technology & Internet Conference, 2/11-2/13, in San Francisco
  • Stifel Transportation and Logistics Conference, 2/11-2/12, in Miami, FL

 

 

MacroUp/DownLast
WTI Crude0.9950.56
Brent1.2054.47
Gold-7.301,572.20
EUR/USD0.00051.1091
JPY/USD0.08109.85
10-Year Note+0.0131.583%

 

 

World News

  • The U.K. economy grew4% in 2019, according to a preliminary estimate by the Office for National Statistics published Tuesday. That was faster than the 1.3% pace recorded in 2018 and the 1.3% average
  • The Eurozone expanded by 1.2% in 2019, according to an official estimate. France similarly grew by 1.2%, though Germany’s economy grew by just 0.6%. The U.S. expanded 2.3%.
  • The National Federation of Independent Business (NFIB) said its index of small-business optimism rebounded from a small dip in at the end of last year, rising to 104.3 points in January from 102.7 in December

 

Sector News Breakdown

Consumer

  • Burlington (BURL) prelim 4Q comps +3.9% (had seen +2-3%), prelim 4Q adj EPS $3.21-3.23 vs. est. $3.17, 4Q prelim sales +10.5%; sees FY20 EPS 7.37-$7.39, versus previous view $7.28-7.33 (est. $7.34) and sees FY20 revenue to increase 9.3% vs. previous guidance of 8.8% to 9.1%
  • Calloway (ELY) 4Q adj loss 26c vs. est. loss 23c on net sales $311.9Mm vs. est. $305.5Mm; guides 2020 net sales $1.75-1.78B vs. est. $1.78B; sees 2020 adj EBITDA $190-205Mm; guides 1Q net sales $501-516Mm vs. est. $542.6Mm
  • Chegg (CHGG) Q4 adj EPS 35c on revs $125.5M vs. est. 29c and $123.1M; guides Q1 revs $122M-$125M vs. est. $1208.M and Ebitda $27.5M-$28.5M vs. est. $29.1M; sees FY20 revenue $522M-$527M vs. est. $520.25M; sees FY20 Chegg Services revs range of $435M-$437M and GM’s between 71% and 72%
  • Daimler (DDAIF) is considering up to 15,000 layoffs, according to Handelsblatt newspaper; the German automaker had previously announced it would eliminate at least 10,000 jobs by 2022
  • Hasbro (HAS) Q4 adjusted EPS $1.24/$1.43B vs. est. 91c/$1.44B; Q4 adjusted Ebitda $275.7M vs. est. $225M; says Q4, FY19 results do not included results of eOne acquisition
  • Hilton (HLT) Q4 adjusted EPS $1.00/$2.37B vs. est. 96c/$2.36B; sees FY20 adjusted EPS $4.08-$4.21 vs. est. $4.28; FY20 system-wide comparable RevPAR is expected to be flat to 1% growth on a currency neutral basis compared to 2019

 

Energy, Industrials and Materials

  • TechnipFMC (FTI) said it sees FY19 revenue ‘approaching midpoint’ of $13.5B vs. est. $13.52B and sees FY19 adjusted EBITDA margin for all segments to meet or exceed guidance of at least 11.5% for Subsea, 16.5% for Onshore/Offshore, and 10% for Surface Technologies
  • US Silica (SLCA) cuts dividend to 2c from 6.25c
  • Radiant Logistics (RLGT) 2Q adj EPS $0.12 vs. est. $0.12, 2Q adj EBITDA $9.4Mm vs. est. $11.2Mm, 2Q revs $201.9Mm vs. est. $214.5Mm
  • Watts Water (WTS) Q4 adjusted EPS $1.00 vs. est. 99c on sales $400.3M vs. est. $397M
  • XPO Logistics (XPO) 4Q adj EPS $1.12 vs. est. $1.02; guides 2020 adj EBITDA $1.79-1.84B vs. est. $1.79B

 

Financials

  • Brighthouse Financial (BHF) Q4 adjusted EPS $2.46 vs. est. $2.33; said ended Q4 with common stockholders’ equity of $15.8B, or $148.64 per common share, and book value, excluding accumulated other comprehensive income of $12.5B, or $118.08 per common share; announces $500M stock repurchase program; said 4Q loss primarily reflects net derivative mark-to-market losses
  • Everest Re (RE) Q4 operating EPS $3.20 vs. est. $2.58; 4Q net investment income $146.1 million, +4.2% YoY and 4Q combined ratio reported 101.5% vs. 134.1% YoY
  • Franklin Resources, Inc. (BEN) reported preliminary month-end assets under management of $688.0 billion at January 31, 2020, compared to $698.3 billion at December 31, 2019. Assets under management declined as net new outflows moderated and market returns were negative.
  • New York Mortgage (NYMT) files to offer 40M shares of common stock

 

Healthcare

  • DaVita (DVA) Q4 EPS $1.86/$2.899B vs. est. $1.66/$2.92B; raises FY20 adjusted cont ops EPS view to $5.75-$6.25 from $5.25-$5.75 and sees FY20 revenue $11.5B-$11.7B vs. consensus $11.56B
  • Fluidigm (FLDM) Q4 EPS loss (3c) on revs $32.4M vs. est. loss (19c) and $30.84M; sees 2020 non-GAAP operating loss $21M-$24M and rev growth up 8%-11% for the year
  • J&J’s (JNJ) Janssen unit says it submitted a supplemental Biologics License Application to the FDA for approval of Darzalex (daratumumab).
  • LogicBio Therapeutics (LOGC) said the FDA placed clinical hold on the Investigational New Drug submission for LB-001 for the treatment of methylmalonic acidemia pending the resolution of certain clinical and nonclinical questions
  • Moderna (MRNA) files to offer $500M in common stock
  • Molina Healthcare (MOH) Q4 adj EPS $2.73 on revs $4.27B vs. est. $2.64 and $4.28B; sees 2020 revs about $18.3B vs. est. $18.01B and EPS $11.20-$11.70 vs. est. $11.82; reported Q4 adj Ebitda $263M; sees total Medicare and Medicaid membership ~3.1M, with Marketplace membership ~310,000
  • NMC Health (NMC.LN) slides as Kohlberg Kravis Roberts (KKR) said it’s not made a proposal to buy the Middle Eastern hospital operator and that it doesn’t intend to make one. GK Investment Holding Group earlier on Tuesday had stated it’s in the preliminary stages of considering a bid. https://on.mktw.net/2SgsuYy
  • Revance (RVNC) offers $200M in convertible senior notes
  • Rexahn Pharma (REXN) rises as the company said it has entered into an exclusive license agreement with Chinese biotech co, Zhejiang HaiChang Biotechnology Co Ltd. Under deal, REXN grants Zhejiang the license to develop and sell products comprising of its cancer drugs
  • Steris (STE) Q3 adj EPS $1.45 on revs $774.3M vs. est. $1.42 and $748.4M; Healthcare Products revenue as reported grew 8% in the quarter to $365.4 million compared with $338.3 million in the third quarter of fiscal 2019, driven by 13% growth in consumable revenue, 9% growth in service revenue and 3% growth in capital equipment revenue; raises year revs view to 9% from prior view up 7.5%-8.5%)
  • Theravance Biopharma (TBPH) files to offer $150M in common stock
  • Xeris Pharmaceuticals (XERS) files to offer 6M shares of common stock

 

Technology, Media & Telecom

  • Sprint Corp. (S) shares soared more than 60% in after-hours trading Monday after the Wall Street Journal reported its pending merger with T-Mobile U.S. Inc. (TMUS) is expected to be approved by a federal judge. The Journal said the judge’s ruling, which would clear the way for the $26 billion merger https://on.mktw.net/31KS9f3
  • Amkor Technology (AMKR) Q4 EPS 41c/$1.18B vs. est. 22c/$1.1B; Q4 revenue grew 9% sequentially to a new record of $1.18B; sees Q1 EPS 9c-24c on revs $1.08B-$1.16B vs. est. 8c/$1.01B; said expect first quarter 2020 revenue to be up approximately 25% year-on-year and down about 5% sequentially
  • Blackbaud (BLKB) Q4 adj EPS 51c on revs $238.1M vs. est. 50c and $232.3M; sees 2020 adj EPS $2.20-$2.35 on revs $930M-$955M vs. est. $937.7M
  • II-VI (IIVI) 2Q adj EPS $0.36 vs. est. $0.36 on revs $666.3Mm vs. est. $610.3Mm; guides 3Q revs $550-600Mm vs. est. $616.2Mm, sees 3Q adj EPS $0.02-0.32 vs. est. $0.38
  • MercadoLibre (MELI) 4Q adjusted loss per share $1.11 vs. est. loss 76c; 4Q gross margin 45.7% vs. 47.8% YoY; 4Q payment volume $8.7 billion, +64% YoY and 4Q gross merchandise vol. $3.9 billion, +21% YoY
  • Mimecast (MIME) 3Q adj EPS $0.14 vs. est. $0.11 on revs $110.2Mm vs. est. $108.1Mm; guides FY adj revs $425.6-426.7Mm vs. prior $420.8-425.3Mm, sees FY adj EBITDA $74.3-75.3Mm vs. prior $72.9-74.4Mm
  • Omnicom (OMC) Q4 EPS $1.89 on revs $4.14B vs. est. $.07B; said Q4 revs cut -0.9% by forex; Q4 organic rev growth 3.5%
  • Rapid7 (RPD) Q4 EPS 3c vs. est. loss (1c) and revs $91.6M vs. est. $87.7M; Q4 annualized recurring revenue (ARR) of $338.7M; an increase of 35% year-over-year; sees 2020 ARR year-over-year growth between 24% to 26% and year-over-year revenue growth between 21% and 24%; guides year EPS 11c-18c vs. est. 25c and revs $420M-$426.8M vs. est. $397.8M
  • RingCentral (RNG) said Q4 revenues rose by more than a third, to $253M; subscription revenue rose 33% to $229M; annualized Exit Monthly Recurring Subscriptions also rose 32%, to $960M; RingCentral Office ARR rose 36% to $877M; Mid-market and Enterprise ARR rose 59%, Enterprise ARR rose 71%, and Channel ARR rose 63%; guiding to revenues of $257M-$259M (28-29% growth, and above consensus for $249.2M), and EPS of $0.18-$0.19 (vs. expected $0.18).
  • Slack Technologies Inc. (WORK) shares fell over 7% late Monday rebuffed a news report saying International Business Machines Corp. (IBM) had bought its service for its employees worldwide, turning into Slack’s largest customer. “IBM has been Slack’s largest customer for several years and has expanded its usage of Slack over that time

 

 

 

 

 

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