Morning Preview: February 22, 2019

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Early Look

Friday, February 22, 2019





DJ Industrials




S&P 500










Stock futures are pointing to early gains, looking to rebound after equities fell on Thursday, snapping the 8-day winning streak for both the Nasdaq Composite and SmallCap Russell 2000 index after weaker economic data allowed investors to lock in recent profits amid worries about the economy. As has been the case the last few weeks, U.S. futures are edging higher on trade hopes after reports overnight President Trump will meet with China’s top trade negotiator today (Liu He) to help push a preliminary deal that would avert his March 1st threatened tariff hikes on some Chinese imports next month. According to a survey from Bloomberg, the U.S. won’t raise the tariffs on March 1, said all 29 China-watching analysts surveyed by Bloomberg. But 18 of them predict they’ll rise later, as the two sides are unlikely to agree permanently on trade and industrial policy. In corporate news, Kraft Heinz (KHC) shares plunged 20% pre-market after writing down the value of some of its best-known brands by $15.4 billion missing earnings and announced an accounting subpoena from the SEC. In Asian markets, The Nikkei Index fell -38 points to 21,425, the Shanghai Index jumped 52 points (1.91%) to settle at 2,804, and the Hang Seng Index rose 186 points to 28,816. In Europe, the German DAX is higher by about 60 points shy of the 11,500 level, while the FTSE 100 is up about 25 points just under the 7,200 level.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -9.82 points, or 0.35%, to 2,774.88

·     The Dow Jones Industrial Average fell -103.81 points, or 0.40%, to 25,850.63

·     The Nasdaq Composite slumped -29.36 points, or 0.39%, to 7,459.71

·     The Russell 2000 Index declined -6.11 points, or 0.39% to 1,575.55


Events Calendar for Today

·     10:15 AM EST    Fed’s Williams discusses inflation at Policy Forum in NY

·     12:30 PM EST    NY Fed Potter discusses quantitative tools

·     1:30 PM EST       Fed’s Bullard to speak on balance sheet in NY

·     1:30 PM EST       Fed’s Harker takes part in panel discussion on balance sheet

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     5:30 PM EST       Fed’s Williams closing remarks at Fed event


Earnings Calendar:

·     Earnings Before the Open: AN, B, CNK, COG, ETM, INSM, ITT, MNTA, PNW, RUTH, SNR, W, WPC


Other Key Events:

·     Consumer Analyst Group of New York (CAGNY) Conference, 2/18-2/22, in New York






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10-Year Note





World News

·     German business sentiment hit a four-year low in February, as the Ifo Institute said Friday that its business-climate index fell to 98.5 in February from a revised 99.3 points in January. The outcome marks the lowest level since January 2015

·     China Dec Average New Home Prices Rise 10.8% on Year vs. 10.6% in November and China Dec Average New Home Prices Rise 0.6% on Month vs. 0.8% in November


Sector News Breakdown


·     Kraft Heinz (KHC) shares fell -20%; Q4 EPS 84c/$6.89B vs. est. 94c/$6.94B; 4Q organic revenue +2.4%; says SEC probing procurement accounting policies; also cut its dividend

·     BJ’s Restaurants (BJRI) Q4 EPS 49c/$280.5M vs. est. 51c/$278.31M; 4Q comparable sales +4.5%, estimate +4.6%

·     Boyd Gaming (BYD) Q4 adjusted EPS 20c/$791.62M vs. est. 32c/$774.25M; 4Q adjusted Ebitda $188.0M; sees 2019 total Adjusted EBITDAR of $885M-$910M

·     Caesars (CZR) Q4 EPS 25c/$2.12B vs. est. loss (7c)/$2.11B; Q4 Enterprise-wide Las Vegas net revenues up 7.8%; enterprise-wide Las Vegas fourth quarter net revenues increased 7.8%, or $69M, from $880M to $949M. Enterprise-wide Las Vegas fourth quarter adjusted EBITDAR increased 18.2%, or $54M, from $297M to $351M, while Enterprise-wide Las Vegas fourth quarter adjusted EBITDAR margin increased 320 basis points to 37.0%

·     Roku (ROKU) Q4 EPS 5c/$275.74M vs. est. 3c/$262.11M; sees Q1 revenue $185M-$190M vs. est. $188.12M and sees Q1 adjusted EBITDA ($12M)-($8M); sees FY19 revenue $1B-$1.025B vs. est. $965.24M

·     Magna (MGA) Q4 adjusted EPS $1.63/$10.14B vs. est. $1.60/$10.2B; said posted a number of records in 2018 including sales that surpassed $40 billion; backs FY19 revenue view of $40.2B-$42.4B vs. est. $41.17B and backs FY19 net income attributable to Magna view of $2.1B-$2.3B; backs FY19 EBIT margin guidance of 7.3%-7.6%



·     First Solar (FSLR) shares fell -5%; Q4 EPS 49c/$691M vs. est. 64c/$803.61M; backs FY19 revenue $3.25B to $3.45B vs. est. $3.27B; also keeps its outlook for 2019 total shipments of 5.4-5.6 GW and capital spending of $650M-$750M but trims guidance for gross margin to 19.5%-20.5% from 20%-21% previously, citing higher expected ramp costs

·     Cabot Oil (COG) Q4 EPS 55c vs. est. 58c; Q4 production 2.243MMCFE vs. 2.280 est.; sees Q1 production 2.25-2.275MMCFE

·     Halcon Resources (HK) says Floyd Wilson has resigned from his role as chairman, CEO and president to pursue other interests.

·     World Fuel (INT) Q4 EPS 50c/$9.99B vs. est. 45c/$10.40B



·     Envestnet (ENV) Q4 adjusted EPS 61c/$210.1M vs. est. 59c/$210.58M; sees Q1 adjusted EPS 38c on revs $200M-$202M vs. est. 41c/$208.54M

·     Intuit (INTU) Q2 adjusted EPS 72c/$1.5B vs. est. 87c/$1.47B; sees Q3 adjusted EPS $5.35-$5.40 vs. est. $6.51 and sees Q3 revenue growth 10%-12%; backs FY19 adjusted EPS view $6.40-$6.50 on revs $6.53B-$6.63B vs. est. $6.51/$6.63B



·     Acamar Partners (ACAMY) 30M share IPO priced at $10.00

·     Allscripts (MDRX) shares fell -10%; Q4 EPS 20c/$538M vs. est. 21c/$563.83M; sees FY19 EPS 65c-70c vs. est. 81c; sees FY19 bookings between $900M-$1B; sees Q1 revenue $430M-$440M vs. est. $513.95M; sees FY19 EPS 65c-70c vs. est. 81c

·     BioMarin (BMRN) Q4 EPS loss (3c)/$353.2M vs. est. loss (24c)/$377.35M; sees FY19 revenue $1.68B-$1.75B vs. consensus $1.73B; 4Q Kuvan revenue $112.2 million

·     Calithera Biosciences (CALA) announced that it has initiated a Phase 1 clinical trial with CB-280, a novel, orally dosed arginase inhibitor being developed for the treatment of cystic fibrosis

·     DexCom (DXCM) Q4 adjusted EPS 54c/$338M vs. est. 17c/$307.52M; unveiled a restructuring plan as expects the restructuring to affect about 350 full time employees, or 13% of its total full-time workforce; backs FY19 revenue view $1.175B-$1.225B vs. est. $1.2B

·     eHealth (EHTH) Q4 EPS $1.61/$134.9M vs. est. $1.98/$134.5M; 4Q total estimated membership 952,926; 4Q submitted applications for Medicare Advantage products +64%; sees 2019 revenue $290M-$310M vs. est. $302.0M and sees FY19 adjusted EPS $1.22-$1.33 vs. est. $1.71

·     Exact Sciences (EXAS) Q4 EPS loss (44c)/$143M vs. est. loss (50c)/$138M; sees FY19 revenue $710M-$730M vs. est. $704.35M; 292,000 Cologuard tests were completed during 4Q, up 66% y/y; cash and cash equivalents were $1.1B at the end of the quarter

·     Opiant Pharmaceuticals (OPNT) announced that its Phase 2 clinical trial evaluating OPNT001, a naloxone nasal spray for the treatment of bulimia nervosa, did not meet the primary endpoint of reducing the number of binging days from baseline to week 8


Industrials & Materials

·     Barrick Gold (GOLD) has studied a bid for Newmont Mining (NEM) as it looks for ways to boost production, Bloomberg reports, citing people familiar with the matter. Barrick has “looked on and off” at the feasibility of an offer for Newmont for some time, including in recent months, sources told Bloomberg

·     Advanced Disposal Services (ADSW) Q4 adjusted EPS 13c/$394.8M vs. est. 13c/$386.69M

·     Casella Waste (CWST) Q4 adjusted EPS 9c/$174.7M vs. est. 11c/$170.28M; sees FY19 revenue $710M-$725M vs. est. $718.62M; sees FY19 net income between $34M-$38M and sees FY10 adjusted EBITDA between $152M-$156M

·     Century Aluminum (CENX) Q4 EPS loss (43c)/$486.9M vs. est. loss (53c)/$489.2M; 4Q adjusted Ebitda loss $18.1M

·     Fluor (FLR) Q4 adjusted EPS 77c/$4.80B vs. est. 61c/$4.86B; sees 2019 EPS $2.50-$3.00 vs. estimate $2.97; 4Q results include a pre-tax charge of $72 million for a gas-fired power project and a downstream project, both now online, and an offshore project

·     Matson (MATX) Q4 EPS 48c/$564.9M vs. est. 47c/$555.33M

·     The Department of Agriculture releases six weeks of export sales data today that will show the volumes of China’s soybean purchases


Media & Telecom

·     Altice USA (ATUS) Q4 EPS 30c/$2.45B vs. est. 10c/$2.46B; Q4 Adjusted EBITDA grew 7.8% from last year

·     National CineMedia (NCMI) Q4 EPS 21c/$137.4M vs. est. 19c/$139.48M; sees FY19 revenue $450M-$465M vs. est. $453.2M

·     SBA Communications (SBAC) Q4 FFO $2.00/$483.8M vs. est. $1.92/$472.75M; reports Q4 adjusted EBITDA $339.3M vs. $310.1M last year



·     Applied Optoelectronics (AAOI) shares fell -9%; Q4 EPS loss (2c)/$58M vs. est. loss (4c)/$60.28M; sees Q1 EPS (18c)-(29c) on revs $50M-$55M vs. est. (7c)/$64.63M; that some inventory build-up has occurred in datacenter supply chain as customers transitioned to 100G; gross margin (GAAP basis) was 18.2%, significantly off from last year’s 40.3% and last quarter’s 31.1%

·     Baidu (BIDU) Q4 EPS $1.92/$3.96B vs. est. $1.74/$3.89B; sees Q1 revs $3.42B-$3.6B vs. est. $3.57B

·     Dropbox (DBX) reports Q4 EPS 10c/$375.9M vs. est. 8c/$370.01M; Q4 paying users totaled 12.7 million, as compared to 11.0 million for the same period last year; average revenue per paying user was $119.61, as compared to $113.39 for the same period last year; Q4 gross margin was 75.7% vs. 70.9% YoY

·     HP Enterprise (HPE) Q1 EPS 42c/$7.6B vs. est. 35c/$7.6B; raises FY19 EPS view to $1.56-$1.66 from prior $1.51-$1.61 (est. $1.58); reiterates FY19 free cash flow guidance of $1.4B-$1.6B; reiterating free cash flow guidance of $1.4 billion to $1.6 billion

·     Infinera (INFN) Q4 EPS loss (25c)/$336.6M vs. est. loss (25c)/$324.8M; 4Q adjusted gross margin 31.9% vs. Bloomberg est. 30.1%; sees 1Q Adj revs $300M – $320M vs. est. $327.5M and sees 1Q Non-GAAP gross margin is expected to be 31% +/- 200 bps

·     iQIYI (IQ) Q4 EPS loss (70c)/$1.0B vs. est. loss (71c)/$982.96M; said delivered another quarter of solid growth and closed out the year on a strong footing with over 87 million total subscribing members; sees Q1 revenue $989.6M-$1B vs. est. $972.94M

·     Keysight Technologies (KEYS) Q1 adjusted EPS 93c/$1.01B vs. est. 80c/$983.18M; sees Q2 EPS 93c-99c on revs $1.06B-$1.08B vs. est. 92c/$1.04B

· (STMP) Q4 adjusted EPS $3.73/$170.2M vs. est. $2.90/$160.0M; Q4 adjusted EBITDA was $71.3M, up 11% from last year; sees FY19 EPS $5.15-$6.15, vs. est. $10.79 and sees FY19 adjusted EBITDA $145M-$165M; sees year revs $540M-$570M vs. est. $689M

·     Trade Desk (TTD) shares rise 10%; Q4 EPS $1.09/$160.5M vs. est. 80c/$147.65M; 2018 gross spend on the platform was over $2.35B, a 51% increase from a year ago; customer retention remained over 95% during the quarter; sees Q1 revenue $116M vs. est. $115.36M; sees Q1 adjusted EBITDA $18.3M; sees 2019 revenue at least $637M vs. est. $616.73M

·     Universal Display (OLED) Q4 EPS 40c/$70.1M vs. est. 31c/$70.17M; sees 2019 revenue $325M-$350M vs. est. $335.2M

·     Zillow (ZG) announced Rich Barton, who co-founded Zillow in 2005 and served as the company’s CEO until 2010, has been named CEO. Barton has been executive chairman since stepping down as CEO; Q4 revenue $365.3M vs. est. $351.42M; sees Q1 revenue $417M-$443M vs. est. $403.95M; says 157M average monthly unique users visited mobile apps in Q4


Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P. Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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