11:05 am Technology sector
The tech sector is trading just lower today, ahead of larger lossess in the broader market. Semiconductors are showing weakness as well with the SOX trading 0.4% lower. Within the chip index, HITT (-4.0%) is a notable standout. Among other major indices, the SPY is trading 0.6% lower today, while the QQQ is down 0.3% and the NASDAQ is trading 0.4% lower on the session. Among tech bellwethers, AAPL (+0.7%) is showing notable strength, while VZ (-1.1%) is under pressure.
This morning in tech earnings, ADSK (+2.6%) reaffirmed its Q3 guidance and guided Q4 below consensus. In news, PFPT (-3.5%) acquired Sendmail for ~ $23 mln in cash. PFPT co expects Sendmail to have an immaterial impact on rev while widening the co's non-GAAP net loss by ~ $2 mln or $0.06 per share. Also, BBRY (-3.9%) disclosed a $400 mln charge following recent workforce reduction announcement, up from its previous expectation of $100 million.
Among M&A in the tech space, TI (0.0%) and OIBR (+9.3%) announced a MOU for merger of activities. In rumors, MSFT (-0.1%) investors want Chairman Bill Gates to step down, according to reports.
Among notable analyst upgrades in tech this morning, STX (+1.5%) was upgraded to Outperform at Pacific Crest. In downgrades, ARMH (-1.2%) was downgraded to Neutral at Natixis, and SPLK (-0.1%) and FARO (-3.4%) were downgraded to Hold at Needham. There are no notable names in tech scheduled to report after the close.
8:21 am ADP Employment Report slightly misses expectations
Total U.S. Nonfarm Private Employment: 166,000 versus 170,000 Briefing.com consensus
By Sector
- Goods-producing 19,000
- Service-providing 147,000
- Construction 16,000
- Manufacturing 1,000
- Trade/transportation/utilities 54,000
- Financial activities -4,000
- Professional/business services 27,000
- Goods-producing employment rose by 19,000 jobs in September, a slight increase over its August growth rate. Construction payrolls added 16,000 jobs, while manufacturing payrolls increased by 1,000. Service-providing industries added 147,000 jobs in September, down from 152,000 in August. Among the service industries reported by the ADP National Employment Report, trade/transportation/utilities added the most jobs with 54,000 over the month. Professional/business services employment rose by 27,000, while financial activities shed 4,000 jobs.
Mark Zandi, chief economist of Moody's Analytics, said, "The job market appears to have softened in recent months. Fiscal austerity has begun to take a toll on job creation. The run-up in interest rates may also be doing some damage to jobs in the financial services industry. While job growth has slowed, there remains a general resilience in the market. Job creation continues to be consistent with a slowly declining unemployment rate."
8:16 am Monsanto shares fall 3% following miss on earnings
Monsanto (MON $102.50 -2.98) reported fourth quarter loss of $0.47 per share, which is below expectations, while revenues rose 5.0% year/year to $2.2 billion which is line with expectations. the company issued guidance for fiscal year 2014 with EPS of $5.00-5.20, which includes $0.14 dilution from $930 million the Climate Corp acquisition. (Note: Mid-point of guidance, whether the dilution was incl or excl is still below consensus). Seeds segment sales rise..
For the fiscal year, Monsanto realized Seeds and Genomics segment sales of $10.3 bln, led by its global corn portfolio that achieved a 13% increase over the prior year. Segment sales in the fourth quarter were approximately $1.2 billion. The company expects continued growth in its Seeds and Genomics segment in fiscal year 2014, reflecting the opportunity in both the core U.S. and accelerating international businesses. The total company gross profit is expected in the range of $8.4 to $8.7 bln in 2014, representing double-digit year-over-year growth.
The biggest driver of the growth is expected to be from the Seeds and Genomics segment in which the company expects to achieve mid-teens gross-profit growth in fiscal year 2014 as it significantly expands gross-profit margins in the segment.
7:29 am Star Bulk Carriers shares fall 12% following common stock offering
Star Bulk Carriers (SBLK $8.90 -1.32) announced an underwritten public offering of common shares. The Company intends to use the net proceeds of this offering to partially fund the acquisition of nine identified newbuilding vessels, future vessel acquisitions and general corporate purposes, including working capital. Morgan Stanley is acting as the sole book-running manager for the offering.
7:28 am GTX shares plunge 17% following disclosure of workforce reductions and CFO resignation
GTX (GTXI $1.55 -0.33) disclosed that on September 27, 2013, the Compensation Committee of the Board of Directors committed to implementing a workforce reduction of 53 non-executive employees, constituting approximately 60% of the Company's workforce. The Company notified employees affected by the workforce reduction on October 1, 2013. All affected employees will be eligible to receive, among other things, specified severance payments based on the applicable employee's level and years of service with the Company and the continuation of group health insurance coverage through October 31, 2013. In addition, the affected employees will also be eligible for the partial acceleration of vesting of their outstanding unvested stock options and an extension of the post-termination exercise period for their outstanding vested stock options.
As a result of the workforce reduction, the Company estimates that it will record in the fourth quarter of 2013, a one-time severance-related charge totaling approximately $1.3 million. The Company does not expect to record a non-cash charge related to the modification of outstanding stock options in connection with the workforce reduction. The severance-related charge, which is expected to represent cash expenditures that the Company expects to incur in connection with the workforce reduction, is subject to a number of assumptions, and actual results may differ materially.
The Company may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the workforce reduction. The company also disclosed that Mark E. Mosteller, the Company's Vice President, Chief Financial Officer and Treasurer, notified GTx of his intent to resign from the Company, effective December 31, 2013, to pursue other interests.
7:26 am Team shares plunge 10% following miss on earnings and lowered guidance
Team (TISI $35.75 -4.25) reported first quarter earnings of $0.23 per share, excluding non-recurring items, which is below expectations, while revenues rose 7.9% year/year to $174.3 million which is also below expectations. The company issued lowered guidance for fiscal year 2014 with EPS of $1.55-1.85 from prior guidance of $1.90-2.05 which is below expectations, with lowered fiscal year 2014 with EPS to $765-790 million from prior guidance of $775-800 million which is also below expectations.
The adjusted net income available to shareholders for the current year quarter excludes $0.7 million in pre-tax, non-routine severance costs associated with the business unit realignment previously announced. Including these costs, net income available to shareholders in accordance with generally accepted accounting principles was $4.5 million, or $0.21 per diluted share. Team's Board of Directors has authorized the repurchase, in open market transactions, of up to an initial $25 million of Team common stock effective immediately. Based upon the current market share price, the stock repurchase plan represents approximately 3% of Team's issued and outstanding shares.
7:25 am Global Payment shares spike 7% following better than expected earnings
Global Payment (GPN $54.14 +3.44) reported first quarter earnings of $1.00 per share, excluding non-recurring items, which is better than expected, while revenues rose 6.7% year/year to $629.7 million which is higher than expected. The company issued guidance for fiscal year 2014 with raised EPS to $0.05 to $3.98-4.05 (from $3.93-4.00), excluding non-recurring items which is above estimates with reaffirmed revenues of $2.51-2.56 billion which is in line with expectations. Global Payments intends to enter into an accelerated share repurchase (ASR) plan this month to repurchase up to $100 million of the co's common stock. The ASR is part of the Board authorized program to repurchase up to $250 million of the co's common stock. Jeffrey Sloan, currently Global Payments' President, has been named by the Board of Directors to also serve as the co's Chief Executive Officer, effective immediately.
