Hammerstone’s Early Look

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Thursday, February 13, 2020

FuturesUp/Down%Last
DJ Industrials-212.000.72%29,311
S&P 500-23.500.70%3,357
Nasdaq-81.500.85%9,544

 

 

Global stocks are pulling back off all-time record highs, as China reported 254 new deaths and 15,152 new cases of the coronavirus, as a different methodology was applied in the hard-hit Hubei province, the fastest rise in the daily count since it started. The International Energy Agency lowered its oil demand growth outlook to the lowest since 2011 due to the impact of the virus. Defensive and safe haven assets are once again on the rise in a rotation out of riskier assets as Treasuries and gold prices advance while stocks pull back broadly a day after major averages in the U.S. and many in Europe closed at new all-time bests on strong earnings, data, and central bank intervention. In Asian markets, The Nikkei Index slipped -33 points to 23,827, the Shanghai Index declined -20 points to 2,906 and the Hang Seng Index dropped -93 points to 27,730. In Europe, the German DAX is lower by about -140 points to 13,600, while the FTSE 100 is down over 100 points to 7,420. Another busy morning of earnings expected while the virus outbreak grabs headlines sending stocks lower.

Market Closing Prices Yesterday

  • The S&P 500 Index jumped 21.70 points, or 0.65%, to 3,379.45
  • The Dow Jones Industrial Average rose 275.08 points, or 0.94%, to 29,551.42
  • The Nasdaq Composite surged 87.02 points, or 0.90%, to 9,725.96
  • The Russell 2000 Index advanced 11.86 points, or 0.71% to 1,689.38

 

Events Calendar for Today

  • 8:30 AM EST       Weekly Jobless Claims…est. 210K
  • 8:30 AM EST       Continuing Claims…est. 1.734M
  • 8:30 AM EST       Consumer Price Index (CPI) MoM for January…est. 0.2%
  • 8:30 AM EST       CPI: Ex: Food & Energy MoM for Jan…est. 0.2%
  • 8:30 AM EST       Consumer Prices YoY for January…est. 2.4%
  • 8:30 AM EST       CPI Ex: Food & Energy YoY for Jan…est. 2.2%
  • 10:30 AM EST     Weekly EIA Natural Gas Inventory Data

 

Earnings Calendar:

  • Earnings Before the Open: ACOR, AGIO, AIG, AIMC, ALE, ARES, AYR, BWA, CBB, DAN, DUK, FAF, FET, FIS, GNRC, HE, HII, HUN, INCY, IPGP, IRM, IRWD, KELYA, KHC, LECO, LH, NLY, PBF, PEP, POOL, R, SON, THS, TPX, WEX, WM, WSO, WST, YETI, ZBRA, ZTS
  • Earnings After the Close: ANET, AYX, BFAM, BIO, BKI, BL, CARG, CC, CGNX, CRY, CXP, DDOG, DLR, DXCM, EXPE, FNF, GDDY, HTA, MAT, MHK, NET, NVDA, ROKU, RSG, SVMK, SWAV, TLND, TNET, TRUP, VECO, WRE, YELP

 

Other Key Events:

  • American Society of Clinical Oncology 2/13-2/15, in San Francisco
  • Annual WORLD Symposium 2020, 2/10-2/13, in Orlando, FL
  • Baird 5th Annual Private Company & Tech Conference, 2/12-2/13, in New York
  • Cowen 41st Annual Aerospace & Defense Industrials Conference, 2/12-2/13, in New York
  • Goldman Sachs Technology & Internet Conference, 2/11-2/13, in San Francisco
  • KBW Inc. Financial Services Conference, 2/13-2/14, in Miami, FL
  • Loop Capital Transportation and Material Conference, 2/12-2/13, in Florida
  • Morgan Stanley Chemicals, Agriculture & Packaging Day, in New York

 

 

MacroUp/DownLast
WTI Crude-0.3050.86
Brent-0.5955.20
Gold6.101,577.60
EUR/USD-0.00061.0868
JPY/USD-0.42109.67
10-Year Note-0.0581.574%

 

 

World News

  • Health officials in China reported 254 new deaths and 15,152 new cases of the coronavirus, as a different methodology was applied in the hard-hit Hubei province
  • Oil demand this year will see the slowest rate of growth since 2011 as the coronavirus outbreak hits Chinese consumption and its impact spreads across the global economy, the International Energy Agency (IEA) said
  • France’s government calculates that the deadly virus outbreak in China will shave at least 1 percentage point off the growth this year of the world’s second largest economy, hurting global economic growth too

 

Sector News Breakdown

Consumer

  • Pepsi (PEP) Q4 core EPS $1.45 on sales $20.6B vs. est. $1.44 and $20.2B; sees year organic revenue growth up 4%; Q4 organic rev growth was 4.3% vs. est. 3.72%; sees 2020 core EPS $5.88 vs. est. $5.95 and raises its dividend by 7%
  • MGM Resorts (MGM) Q4 adj EPS 8c missed the consensus 26c with in-line revenue $3.19B; CEO Jim Murren to step down and company announces new $3B share repurchase program while raising its dividend; says Q4 results below expectations and withdraws FY20 guidance
  • United Airlines (UAL) said it is extending China flight suspension until Apr 24th
  • Tesla (TSLA) is recalling 15,000 Model X SUVs because of a potential issue that can lead to a loss of power steering assist that could make steering harder and increase the risk of a crash.
  • Chefs’ Warehouse (CHEF) Q4 adj. EPS 39c/$426.51M vs. est. 38c/$429.06M; sees FY20 adj. EPS 91c-$1.00 vs. est. $1.07 and raises FY20 revenue view to $1.85B-$1.91B from $1.65B-$1.7B (est. $1.7B)
  • International Flavors (IFF) 4Q adj EPS ex amort $1.46 vs. est. $1.44 on net sales $1.28B vs. est. $1.27B; guides 2020 sales $5.15-5.35B vs. est. $5.31B, sees 2020 adj EPS ex amort $6.20-6.45 vs. est. $6.53, sees modest impact from coronavirus
  • Nu Skin (NUS) 4Q EPS $0.72 vs. est. $0.72; guides 1Q EPS $0.23-0.33 vs. est. $0.74, sees 2020 revs $2.17-2.30B vs. est. $2.47B, sees 2020 EPS $2.00-2.40 vs. est. $3.32; raises quarterly dividend to 37.5c per share from 37c
  • Turtle Beach (HEAR) prelim 4Q adj EPS $0.67-0.78 below est. $0.85 on revs $100-102Mm vs. est. $106.6Mm
  • TripAdvisor (TRIP) 4Q adj EPS $0.38 vs. est. $0.34 on revs $335Mm vs. est. $334.7Mm

 

Energy

  • Antero Resources (AR) 4Q adjusted loss per share 2c vs. est. loss (9c); 4Q production 3,185 mmcfe/d, -0.9% YoY; 4Q avg nat gas production 2,223 mmcf/d, -31% YoY; sees 2020 CapEx $300M-$325M
  • Bloom Energy (BE) shares plunge 23%; said it will restate nearly four years of financial statements due to accounting errors related to its managed services agreement; says revenues for the transactions will now be recognized over the duration of the contract instead of upfront; the adjustment has no impact on the company’s total cash or cash flows and does not impact the economic terms or substance of the MSAs.
  • Marathon Oil (MRO) 4Q revenue, other income $1.22B, down -31% YoY vs. est. $1.26B; 4Q adjusted EPS 7c vs. est. 10c; 4Q production 413 mboe/d, -3.1% QoQ and 4Q U.S. production 328,000 boe/d, +7.2% YoY; 2020 total capital budget of $2.4 billion, down 11% from 2019; 4Q U.S. oil production averaged 196,000 net bpd, up 9% from prior year
  • SunPower (SPWR) Q4 adj EPS 23c on revs $607M vs. est. 19c and $648.2M; sees 1Q adjusted gross margin 9% to 12% and sees 1Q adjusted revenue $435M-$470M vs. est. $413M; sees 2020 adjusted revenue $2.1B-$2.3B vs. est. $2.09B
  • Centrica (CPYYY) shares plunged 16% as the U.K. electricity and gas provider said 2020 adjusted operating cash flow is likely to fall to the bottom end of a range of £1.6 billion to £1.8 billion if current commodity prices are maintained, after it fell 18% to £1.83 billion in 2019. Its adjusted operating profit last year fell 35% to £901 million

 

Financials

  • AIG (AIG) Q4 adjusted EPS $1.03 vs. est. 99c; Q4 combined ratio 99.8%
  • Barclays (BCS) CEO Jes Staley is being probed by British regulators over his relationship with Jeffrey Epstein. The bank said he had the full backing of its board as it reported earnings; CIB revenue missed in the quarter while Barclays retained its profit target for 2020
  • Credit Suisse’s (CS) investment bank had a worse-than-expected pretax loss but revenue beat
  • Manning & Napier (MN) reports preliminary AUM $19.4B as of January 31 compared with $19.5B at December 31, 2019
  • Regency Centers (REG) Q4 FFO $1.00 vs. est. 98c; sees 2020 FFO $3.90-$3.93 vs. est. $3.92; sees 2020 same property NOI change flat

 

Healthcare

  • Change Healthcare (CHNG) Q3 adjusted EPS 33c/$808.2M vs. est. 31c/$814.17M; sees Q4 revenue $775M-$785M and sees Q4 adjusted EBITDA $260M-$270M; continues to expect Solutions revenue growth of 1% to 2% excluding the revenue from the sale of our extended care business in fiscal year 2019 and including the impact of planned contract exits
  • Quidel (QDEL) Q4 adjusted EPS $1.00/$152.2M vs. est. 82c/$145.2M
  • Revolution Medicines (RVMD) 14M share IPO priced at $17.00

 

Industrials & Materials

  • CF Industries (CF) Q4 adj EPS 25c vs. est. 26c; Q4 sales $1.05B vs. est. $1.03B; 4Q cash and cash equivalents $287M
  • Waste Connections (WCN) Q4 adjusted EPS 69/$1.362B vs. est. 62c/$1.34B; sees FY20 revenue $5.725B vs. est. $5.83B; sees FY20 net income $653M-$668M

 

Media & Telecom

  • Altice USA (ATUS) Q4 revs $2.475B vs. est. $2.51B; sees FY20 revenue growth 2%-2.5% and sees FY20 CapEx $1.3B-$1.4B
  • CenturyLink (CTL) Q4 adjusted EPS 33c/$5.57B vs. est. 33c/$5.55B; expect full year Adjusted EBITDA of $9.0B-$9.2B cap-ex of $3.6B-$3.9B and Free Cash Flow of $3.1B-$3.4B
  • Perspecta (PRSP) Q3 adjusted EPS 55c/$1.13B vs. est. 53c/$1.11B; raises FY20 adj. EPS view to $2.12-$2.18 from $2.10-$2.18 (est. $1.98) and raises FY20 revenue view to $4.45B-$4.5B from $4.425B-$4.5B (est. $4.3B)

 

Technology

  • Cisco (CSCO) Q2 adj EPS 77c on revs $12B vs. est. 76c and $11.98B; 2Q adjusted gross margin 66.4% vs. 64.1% YoY; sees Q3 adjusted EPS 79c-81c vs. est. 80c and sees Q3 revenue down 1.5%-3.5% YoY, consensus $12.62B; gross margin rose to 66.4% from 64.1%; operating expenses fell 1% on a non-GAAP basis to $3.9B, and operating income rose 1% to $4B.
  • Applied Materials (AMAT) Q1 adj EPS $0.98 vs. est. $0.93 on net sales $4.16B vs. est. $4.11B; guides 2Q net sales about $4.34B, sees 2Q adj EPS $0.98-$1.10 vs. est. $0.92 and sales about $4.34B
  • ASGN Inc. (ASGN) 4Q adj EPS $1.28 on revs $1.0B vs. est. $1B; guides 1Q adj EPS $1.02-1.09 vs. est. $1.03, sees 1Q revs $990Mm to $1B vs. est. $997.4Mm
  • NetApp (NTAP) 3Q adj EPS $1.16 vs. est. $1.18 on revs $1.40B below est. $1.46B; says CFO to retire by end of FY; guides 4Q net revs $1.46-1.61B vs. est. $1.57B, sees 4Q adj EPS $1.28-1.36 vs. est. $1.40; cuts FY net revs to about -10% (was -8%)
  • Qualys (QLYS) sees 2020 adjusted EPS $2.57 to $2.62 vs. est. $2.47; reports 4Q revenue $84.7M (in-line) and 4Q adjusted EPS 64c vs. est. 58c
  • Cadence Design (CDNS) Q4 EPS 54c vs. est. 53c and revs $599.6M vs. est. $595.42M; sees Q1 EPS 53c-55c on revs $610M-$620M vs. est. 57/$608.99M
  • Pegasystems (PEGA) Q4 adj EPS $0.19 vs. est. $0.37 on revs $276.5Mm vs. est. $290.3Mm; guides 2020 revs $1.1B vs. est. $1.04B, sees 2020 adj EPS $0.20 vs. est. $0.24
  • Pluralsight Inc. (PS) 4Q adj EPS loss (9c) vs. est. loss (14c) on revs $88.8Mm vs. est. $87.2Mm; guides 1Q revs $88-89Mm vs. est. $88.1Mm, sees 1Q adj loss (13-14c) vs. est. loss (13c); guides 2020 revs $390-400Mm vs. est. $396.5Mm, sees 2020 adj loss (45-50c) vs. est. loss (50c)
  • TechTarget (TTGT) guides 1Q revs $31.5-32.5Mm vs. est. $32.7Mm, sees 1Q adj EBITDA $8.4-9.2Mm vs. est. $8.3Mm; guides 2020 revs $146-148Mm vs. est. $146.8Mm, sees 2020 adj EBITDA $48-49mM vs. est. $45.5Mm
  • Tyler Tech (TYL) 4Q adj EPS $1.43 vs. est. $1.43 on revs $287.4Mm vs. est. $290.4Mm; guides 2020 adj revs $1.21-1.23B, sees 2020 adj EPS $5.60-5.72 vs. est. $5.90

 

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