10:03 am Carrizo Oil & Gas Pulls Back From Near $55/Share, Now Flat Following Earnings
Carrizo Oil & Gas (CRZO 53.47 -0.50) is trading near the unchanged line following quarterly results.
The company reported first quarter earnings of $0.14 per share, easily topping expectations. On the top line, revenues fell 0.9% year/year to $149.1 million, which beat expectations.
The company raises 2015 production guidance: Carrizo is raising its 2015 oil production guidance to 22,100-22,500 Bbls/d from 21,800-22,400 Bbls/d.
Using the midpoint of this range, the Company's 2015 oil production growth guidance increases to 18% from 17% previously. For natural gas and NGLs, Carrizo is increasing its 2015 guidance to 70-76 MMcfe/d from 65-75 MMcfe/d.
For the second quarter of 2015, Carrizo expects oil production to be 21,400-21,800 Bbls/d and natural gas and NGL production to be 68-74 MMcfe/d.
The stock's range today is $53.00-55.05/share.
9:35 am Electronic Arts (EA)
Shares of Electronic Arts (EA 62.32, 3.10, +5.1%) are trading 5% higher shortly after open this morning. Yesterday, the company released Q4 earnings results that beat expectations, including EPS of $0.39, which was $0.13 better than estimates; revenues fell 2.0% year/year to $896 mln vs the $852.93 mln consensus.
Taking a closer look at the results, the company's mobile revenue set a new EA record, contributing $524 million for the fiscal year, with monthly active users for EA's mobile titles averaging more than 165 million in Q4. Additionally, the success of Battlefield Hardline, Dragon Age: Inquisition, FIFA 15, NHL15, Madden NFL 15, Battlefield 4 and FIFA 14, helped secure EA's spot as the #1 publisher on PlayStation4 and Xbox One consoles in the world. Furthermore, the company acheived its goal of 20% GAAP operating margin a full year ahead of schedule.
Following its earnings report, the company announced that its Board of Directors has authorized a new program to repurchase up to $1 billion of EA's common stock.
Looking ahead, EA expects this momentum to continue with the release of a new Need for Speed in addition to Star Wars Battlefront, which are expected later in the year. The company updated its FY16 guidance, forecasting EPS of ~$2.75, excluding non-recurring items, vs. the $2.63 consensus. FY16 revenues are expected to reach ~$4.4 billion, excluding non-recurring items, which is in-line with the $4.49 billion consensus.
However, in the near term, the company is has a more conservative outlook. It forecasts Q1 EPS of ~$0.00, excluding non-recurring items, vs. $0.19 consensus, with Q1 revs reaching ~$640 million, which is below the $772.56 million consensus.
9:25 am GasLog Modestly Lower Following Quarterly Results
GasLog (GLOG 22.29) is initially trading lower this morning following its quarterly results.
The company reported earnings of $0.13 per share, excluding non-recurring items, which came in modestly better than expected.
On the top line, revenues rose 70.4% year/year to $97.3 million, which fell just a bit short of expectations.
The increase in revenues, vessels operating and supervision costs and depreciation of fixed assets was mainly attributable to the increase in operating days from its increased fleet.
However, daily revenue decreased mainly due to the lower daily charter rate of the vessels acquired in 2014. In addition, daily operating costs decreased mainly due to the main engine overhauling of three vessels in the first quarter of 2014 and the decrease of the bunkers consumed by a vessel trading in the spot market.
GasLog's contracted charter revenues are estimated to increase from $321.0 million for the fiscal 2014 to $483.8 million for the fiscal year 2017, based on contracts in effect as of March 31, 2015 (including the four LNG carriers on order for which we have secured time charters), but without including any extension options.
The total future firm contracted revenue stands at $3.1 billion at March 31, 2015. After giving effect to the agreement with BG Group mentioned above for the chartering of three newbuildings on order and the revision of the charter party agreements of three vessels, future firm contracted revenue increases to $4 billion. These amounts include the five vessels now owned by GasLog Partners.
LNG Market Update:
"We continue to believe the medium- to long-term outlook for LNG shipping demand is positive, despite the decline in prices and spot charter rates over the last six months. There are a number of new projects in progress that have firm off-take agreements, secured financing or are under construction, and we expect a number of these to come online in 2015, which will materially increase global LNG production capacity. The projects that have reached final investment decision stage, but are yet to start production, represent over 120 mln tons per annum of new LNG capacity, and we currently expect that these facilities will come online even if the current low commodity price environment continues. By the end of 2019, we forecast that the number of ships needed for LNG production from new and existing terminals will be greater than the current global on-the-water fleet and orderbook."
8:58 am Virtu Financial (VIRT)
Earlier this morning, Virtu Financial (VIRT 21.79), one of the world's largest High Frequency Trading (:HFT) firms, reported earnings results for the first quarter of FY 2015. Results from the quarter included a 40.2% year/year increase in Adjusted Net Trading Income, its main source of revenue. This increase was driven primarily by increased market volumes and volatility in the Global Commodities and Global Currencies instruments, as well as strong performances by cash equity markets in Asia, Europe and the US.
VIRT makes markets in more than 11,000 financial instruments on more than 225 exchanges in 34 countries around the world. It averages ~5.3 mln trades per day globally. While just 49% of its overall positions are profitable, the company has had only one overall losing trading day during a period of 1,485 trading days (Since Jan 1, 2008). Additionally, its risk management system is designed to "lockdown," or freeze, upon detection of any trading strategy generating revenues in excess of its preset market making limits; this includes the predictive momentum and signal trading strategies many other trading firms engage in.
VIRT generates revenue primarily by performing market making activities, or buying and selling securities and earning small amounts of money on the bid/ask spread of a large volume of trades. All of its transactions are considered "market neutral," meaning they are independent of market direction and are not speculative.
Wrapping up, the company saw tremendous growth during the quarter on both the top and bottom line. Revenue growth was impressive, as previously mentioned, and Adjusted EBITDA Margin increased to 70.5% from 65.4% in 1Q14. However, because it's such a young IPO, analyst's have yet to initiate coverage on it. That said, VIRT's quiet period expires on May 12, so this may be one to keep an eye on is the coming week as analyst's and investors digest today's earnings announcement.
8:15 am Alexion Paying Big Premium to Acquire Synageva
An area that has drawn a lot of attention of late for its underperformance is the biotech sector. It is certain to draw more attention today -- and perhaps for better reasons -- as Alexion Pharmaceuticals (ALXN 168.55) has made an aggressive stock and cash offer to acquire Synageva BioPharma Corp (GEVA 95.87) with the aim of bolstering its treatment therapies for patients with severe and rare diseases.
The transaction is valued at $8.4 billion, net of Synageva's cash, and calls for Synageva shareholders to receive $115 in cash and 0.6581 Alexion shares for each share of Synageva they own.
Based on the nine-day volume-weighted average closing price of Alexion stock through May 5, 2015, the terms of the deal translate into a total per share value of $230 for Synageva shareholders. On Tuesday, Synageva closed at $95.87.
It is a rare occurrence that a company fetches a 140% premium in a buyout offer. That is the good fortune for Synageva shareholders today, however, and it is apt to stir the notion that many other biotech stocks are undervalued. The iShares Nasdaq Biotechnology ETF (IBB 338.00), which has slipped 8.1% since April 23, could be a beneficiary today of that thinking.
As for the ALXN-GEVA deal, it is expected to close mid-2015 and to be accretive to Alexion's non-GAAP earnings per share in 2018. The transaction has been unanimously approved by both companies' Boards of Directors.
If the deal is completed, it will expand Alexion's metabolic franchise with the addition of Synageva's Kanuma treatment for patients suffering from LAL Deficiency (LAL-D). Kanuma is under priority review with the FDA, has been granted accelerated assessment of its marketing authorization application by the European Medicines Agency, and has garnered breakthrough therapy designation by the FDA for LAL-D presenting in infants. It has been stated that regulatory decision in the U.S. and Europe are expected in the second half of 2015.
Alexion anticipates that it will have three transformative therapies -- Soliris, Kanuma, and Stensiq -- serving patients with four devastating and rare diseases in 2015. Its combined pipeline would have eight product candidates in the clinic for eleven indications and its preclinical pipeline would have more than 30 diverse programs across a range of therapeutic modalities.
In conjunction with today's announcement, Alexion also said its Board of Directors increased the size of the company's share repurchase authorization to a total of $1 billion.
GEVA shares are trading 131 % higher in pre-market action while shares of ALXN are down 1.8%.
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