Hammerstone’s Early Look


Friday, February 7, 2020

DJ Industrials-139.000.47%29,189
S&P 500-13.500.41%3,331



Stock futures in the U.S. are pointing to a lower open, but still on track for strong gains on the week following China stimulus measures, better U.S. economic data (with the nonfarm payroll figures later this morning) and well received quarterly earnings, offsetting the scare of the coronavirus that has struck mainland China and spread to several continents. At the end of the day Thursday, China’s National Health Commission reported 31,161 confirmed cases in China, with 636 deaths. Singapore, which has the second-largest number of cases outside China, reported two new infections, including one with no apparent link to China. Another 41 people on a cruise liner off Japan tested positive for coronavirus, bringing the total confirmed from the ship to 61, Japan’s health minister said on Friday. In Asian markets, The Nikkei Index dipped -45 points to 23,827, the Shanghai Index inched higher 9 points to 2,875 and the Hang Seng Index dropped -89 points to 27,404. In Europe, the German DAX is lower by 80 points to around 13,500, while the FTSE 100 is down 50 points to 7,450. Also, overnight, due to the ongoing coronavirus outbreak, China has delayed trade figures for January and said it would combine the data with next month’s release. The epidemic has also led to growth forecasts being cut, with S&P revising its estimation of China’s GDP growth for 2020 from 5.7% before the outbreak to 5%.

Market Closing Prices Yesterday

  • The S&P 500 Index gained 11.09 points, or 0.33%, to 3,345.78
  • The Dow Jones Industrial Average rose 88.92 points, or 0.30%, to 29,379.77
  • The Nasdaq Composite jumped 63.47 points, or 0.67%, to 9,572.15
  • The Russell 2000 Index declined -4.46 points, or 0.27% to 1,677.46


Events Calendar for Today

  • 8:30 AM EST       Change in Nonfarm Payrolls for January…est. 163K
  • 8:30 AM EST       Change in Private Payrolls for January…est. 152K
  • 8:30 AM EST       Change in Manufacturing Payrolls for January…est. (-1K)
  • 8:30 AM EST       Unemployment Rate for January…est. 3.5%
  • 8:30 AM EST       Average Hourly Earnings MoM for January…est. 0.3%
  • 10:00 AM EST     Wholesale Inventories MoM for Dec-F…est. (-0.1%)
  • 1:00 PM EST        Baker Hughes Weekly Rig Count
  • 3:00 PM EST        Consumer Credit for December…est. $15.0B



WTI Crude-0.2350.72
10-Year Note-0.0341.607%



World News

  • China’s National Health Commission reported 31,161 confirmed cases in China, with 636 deaths. Singapore, which has the second-largest number of cases outside China, reported two new infections, including one with no apparent link to China. Another 41 people on a cruise liner off Japan tested positive for coronavirus, bringing the total confirmed from the ship to 61, Japan’s health minister said on Friday
  • German industrial production plunged in December as the total industrial output–comprised of output in manufacturing, energy and construction–fell 3.5% in December from November, in calendar-adjusted terms. Economists had forecast a 0.1% increase
  • The Russian ruble weakened across major currencies after the country’s central bank dropped interest rates 25 basis points to 6% saying risks of a substantial global economic slowdown persist. Disinflationary risks still exceed pro-inflationary risks over the short-term horizon


Sector News Breakdown


  • Uber (UBER) Q4 EPS loss (64c)/$4.07B vs. est. loss (67c)/$4.06B; said Q4 gross bookings grew $4.0B YoY to $18.13B (est. $18.03B), representing 28% YoY growth, or 30% on a constant currency basis, with Rides and Eats growing 20% and 73% YoY, respectively, on a constant currency basis; posts smaller Q4 adjusted Ebitda loss of $615M vs. est. loss $712.9M; said expects profit in Q4 of 2020, a year earlier than expected
  • BellRing Brands (BRBR) Q1 adj. EPS 16c/$244M vs. est. 19c/$239.3M; said Q1 Premier Protein net sales increased 45%, with volumes increasing 38.4%, primarily driven by distribution gains for ready-to-drink, or RTD, protein shakes
  • Columbia Sportswear (COLM) 4Q adj EPS $1.58 vs. est. $1.65; guides 2020 adj EPS $4.75-4.90 vs. est. $5.07, sees 2020 net sales +4.5-6%; edges higher despite setting full-year guidance below expectations; sees FY20 revenue of $3.18B to $3.23B vs. $3.23B
  • Century Communities (CCS) Q4 adjusted EPS $1.50/$792.5M vs. est. $1.27/$743M; reports Q4 home sales revenue $775.67M; introduce our full year outlook for home deliveries to be in the range of 8,500 to 9,500 homes and our home sales revenues to be in the range of $2.6B-$3.0B
  • Lear Corp. (LEA) boosts share buyback authorization to $1.5B
  • Post Holdings (POST) Q1 adjusted EPS 76c/$1.46B, below consensus $1.14 and $1.47B; continues to expect its fiscal year 2020 net sales to range between $1.0-$1.05B, adjusted EBITDA to range between $192-$202M and capital expenditures to be approximately $4M
  • Skechers (SKX) Q4 EPS $0.39 vs. est. $0.39 on net sales $1.33B vs. est. $1.25B, comps +9.9% vs. est. +7.3%; guides 1Q EPS $0.70-0.75 vs. est. $0.76, sees 1Q sales $1.4-1.43B vs. est. $1.42B
  • Wynn Resorts (WYNN) 4Q op revs $1.65B vs. est. $1.71B, 4Q total Macau ops adj EBITDA $347.7Mm; posted lower revenue in its key market of Macau and home base in Las Vegas; also reported a loss of (62c)


Energy, Industrials and Materials

  • Fortive (FTV) 4Q adj EPS cont ops $1.03 vs. est. $0.97 on revs $2B vs. est. $1.97B; guides 2020 adj EPS cont ops $3.68-3.78 vs. est. $3.78, sees 1Q adj EPS cont ops $0.70-0.74 vs. est. $0.79
  • Forward Air (FWRD) Q4 EPS 85c on revs $381.5M misses the 9c and $385.8M estimate; sees 1Q revenue +13% to +17% with EPS 58c-62c vs. est. 70c; said Q4 operating expenses were $348.7M, up +8.4% YoY
  • Manitowoc (MTW) 4Q adj EPS $0.35 vs. est. $0.29 on net sales $463.4Mm vs. est. $493.2Mm; guides 2020 adj EBITDA $85-115Mm vs. est. $134.9Mm, sees 2020 CAPEX about $30Mm vs. est. $35.5Mm



  • Intercontinental Exchange (ICE) said it has decided to cease exploring strategic opportunities with eBay (EBAY) based on investor conversations https://on.mktw.net/2Ox9qmA
  • FGL Holdings (FG) to be acquired by Fidelity National (FNF) for $12.50 per share, representing an equity value of approximately $2.7B https://on.mktw.net/39ehMaF
  • Ocwen’s (OCN) board authorized an up to $5 million open market share repurchase program; co believes it remains on track to achieve pre-tax profitability, excluding income statement notables and amortization of NRZ lump-sum payments, by the third quarter 2020
  • NexPoint Real Estate Finance (NREF) 5M share IPO priced at $19.00



  • Aurora Cannabis (ACB) shares fell after hours after CEO and founder Terry Booth announces retirement as Executive Chairman Michael Singer named interim CEO effective immediately; co has cut close to 500 full-time equivalent staff, including about 25% of corporate positions and to reduce capex for 2H below C$100M; guides Q2 prelim revs C$62m-C$66m, for 3Q sees little to no growth QoQ
  • Myriad Genetics (MYGN) shares fall -30% on miss and cut; 2Q adjusted EPS 23c/$195.1M vs. est. 31c/$209.7M; CEO resigns; lowers FY adjusted EPS view to 45c from prior $1.00-$1.10 (est. $1.06) and lowers year revs to $735M from $800M-$810M view; guides Q3 EPS/revs lower
  • Enanta (ENTA) Q1 EPS 65c/$52.6M vs. est. 55c/$58.07M; said Q1 cash, cash equivalents and short-term and long-term marketable securities totaled $414.7 million at December 31
  • Collegium Pharmaceutical, Inc. (COLL) entered into a definitive agreement to acquire the U.S. rights to the Nucynta Franchise from Assertio Therapeutics, Inc. (ASRT) for $375M in cash
  • Mettler-Toledo (MTD) Q4 adjusted EPS $7.78/$844M vs. est. $7.68/$836.63M; guides Q1 EPS and sales below views but sees year adjusted EPS $24.85-$25.10 vs. est. $25.06 and sees FY20 local currency sales growth approximately 4% (est. $3.11B)
  • Seattle Genetics (SGEN) Q4 EPS 14c/$289.8M vs. est. loss (50c)/$224.5M; said Q4 Adcetris net sales in the U.S. and Canada were $166.2M, a 26% increase over last year; sees 2020 Adcetris net sales $675M-$700M, royalty revenues $105M-$115M
  • Twist Bioscience (TWST) 1Q EPS loss (-$1.69) on revs $17.2Mm vs. est. $16.2Mm; guides FY revs $80-84Mm vs. est. $82.6Mm; confirms settlement with Agilent (A) – speculation yesterday led shares higher on Thursday
  • Zogenix, Inc. (ZGNX) reports its Phase 3 clinical trial of Fintepla, a treatment for childhood-onset epilepsy, met its primary objective, but missed its secondary endpoint
  • ADMA Biologics (ADMA)5M share Spot Secondary priced at $3.50
  • Applied Genetic (AGTC)5M share Spot Secondary priced at $5.00


Media & Telecom

  • Lions Gate (LGF/B) Q3 adjusted EPS 14c on revs $998.5M vs. est. 21c/$922.3M; Q3 adj Oibda $124M vs. est. $118.3M; said profit fell as expenses in the quarter rose around 23%; said reached 28.5M global subs in quarter and 8.6M over-the-top subs
  • News Corp. (NWSA) 2Q adj EPS $0.18 vs. est. $0.16 on revs $2.48B vs. est. $2.51B; revenue breakdown: 2Q news and information services revenue $1.24B, book publishing revenue $442M, and digital real estate services revenue $294M (all three segments down YoY)
  • T-Mobile (TMUS) Q4 EPS 87c/$11.9B vs. est. 83c/$11.83B; reports: 1.9M total net additions in Q4 2019 and 7M in in 2019; 1.3M branded postpaid net additions in Q4 2019, and 1M branded postpaid phone net additions in Q4 2019; sees FY20 adjusted EBITDA $13.7B-$14B and sees FY20 postpaid net additions of 2.6M-3.6M
  • Verizon Communications (VZ) to buy back up to 100M shares
  • Virtusa Corp. (VRTU) Q3 adj EPS $0.78 vs. est. $0.76 on revs $335.1Mm vs. est. $336.7Mm; guides 4Q adj EPS $0.90-0.96 vs. est. $0.87, sees 4Q revs $353.4-361.4Mm vs. est. $356.1Mm; guides FY adj EPS $2.63-2.69



  • Activision Blizzard (ATVI) Q4 adjusted EPS 62c/on bookings $2.71B vs. est. $1.19/$2.67B; sees Q1 adjusted EPS 66c/$1.275B vs. est. 39c/$1.35B; sees FY20 adjusted EPS $2.22 and net bookings $6.725B vs. est. $6.92B
  • Fortinet (FTNT) Q4 EPS 76c/$614.4M vs. est. 70c/$602.57M; sees Q1 EPS 50c-52c on revs $555M-$565M vs. est. 55c/$556.5M and sees FY20 EPS $2.70-$2.73 on revs $2.53B-$2.56B vs. est. $2.72/$2.47B
  • Norton LifeLock (NLOK) 3Q adj EPS $0.25 vs. est. $0.08 on adj revs $618Mm vs. est. $608.1Mm; guides 4Q adj EPS $0.15-0.20 vs. est. $0.05, sees adj revs $595-605Mm vs. est. $609.4Mm
  • Pinterest (PINS) shares rise 15%; 4Q adj EBITDA $77Mm vs. est. $48.5Mm, revs $399.9Mm vs. est. $371.4Mm, MAU FY20 outlook sees up to $1.52B in revenue (vs. est. $1.48B) and adjusted EBITDA margin of flat to slightly up on the 1% margin in 2019; said Q4 global MAUs grew 26% YoY to 335M, above the 331.3M estimate and U.S. MAUs were 88M (+8%) and International increased 35% to 247
  • Synaptics (SYNA) shares jump 15%; Q2 adjusted EPS $2.04/$388.3M vs. est. $1.45/$354.91M; sees Q3 revenue $330M-$350M above est. $299.03M and sees Q3 gross margin 39.5%-41.5%, with Q3 operating expense $115M-$120M
  • Take-Two (TTWO) Q3 EPS $1.43/$930.1M vs. est. $1.75/$922.12M; Q3 total Net Bookings were $888.2M, as compared to $1.569B during last year’s fiscal third quarter, which had benefited from the launch of Red Dead Redemption 2; narrows FY20 EPS view to $3.38-$3.58 from $3.38-$3.63 (est. $4.86) and narrows FY20 net bookings view to $2.8B-$2.85B from $2.75B-$2.85B
  • Zendesk (ZEN) 4Q adj EPS $0.10 vs. est. $0.10 on revs $229.9Mm vs. est. $227.5Mm; guides 1Q adj op income $5-9Mm, sees 1Q revs $237-242Mm vs. est. $237.9Mm; guides 2020 adj op income $43-53Mm, sees 2020 revs $1.05-1.07Mm vs. est. $1.06Mm






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