Early Look

Wednesday, August 4, 2021

Futures	Up/Down	%	Last
Dow	-25.00	0.07%	34,973
S&P 500	-1.25	0.04%	4,413
Nasdaq	11.50	0.08%	15,058

 

 

U.S. S&P futures are flat heading into the trading day, looking to build on record highs from Tuesday as positive earnings boost U.S and European stocks while worries over China’s gaming and technology crackdown ease, helping lift those markets. Risk sentiment improves across Asia as Chinese and Hong Kong stocks push higher on tech recovery and solid Caixin PMI data. In Asian markets, The Nikkei Index fell -57 points to 27,854, the Shanghai Index rose 29 points to 3,477 and the Hang Seng Index jumped 231 points to settle at 26,426. In Europe, the German DAX is climbing around 125 points to 15,680, while the FTSE 100 is up 0.4% to 7,135. Chinese Jul Caixin Services PMI beat: 54.9 vs 50.6 consensus. Some also see the spread of the Covid-19 delta variant as delaying rather than stopping the economic recovery. The New York Times reported overnight that the FDA plans to give full approval to Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine by the start of the next month. Earnings season has been strong with about 87% of S&P 500 companies reporting earnings and revenue beats, according to FactSet. Just under 70% of the S&P 500 now has reported earnings. The S&P 500 closed at record highs with gains in Apple and healthcare stocks, as concerns over a surge in the Delta variant of the coronavirus was put to the back-burner, overshadowed by continued upbeat corporate earnings. Ten of the 11 S&P indexes traded higher, with energy stocks rebounding after getting hit by a dip in oil prices.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 35.99 points, or 0.82%, to 4,423.15

·     The Dow Jones Industrial Average rose 278.24 points, or 0.80%, to 35,116.40

·     The Nasdaq Composite climbed 80.23 points, or 0.55%, to 14,761.29

·     The Russell 2000 Index advanced 8.09 points, or 0.36% to 2,223.58

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:15 AM ET         ADP Employment Change for July…est. 695K

·     9:45 AM ET         Markit Composite PMI, July-F

·     9:45 AM ET         Markit Services PMI, July-F

·     10:00 AM ET      ISM Non-Manufacturing Services PMI for July…est. 60.5

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ABC, AEIS, ALE, APO, ASTE, BCOR, BDC, BGCP, BWA, CDW, CLVS, CLH, CLW, CMLS, CRL, CSII, DNOW, DOC, EDIT, EMR, ETR, EXC, FLOW, FUN, GEL, GM, HDSN, HFC, HZNP, IONS, JLL, KHC, LL, MAC, MKL, MPC, MPLX, MTOR, NI, NYT, ODP, RCL, SBGI, SGRY, SITE, SMG, SPR, SUP, TGI, TUP, TXMD, UTHR, VCEL, VMC, WLL

·     Earnings After the Close: ACAD, ACLS, ADPT, ADTN, AGL, ALB, ALL, AMED, ANGI, ANSS, APA, ATO, AXGN, BBSI, BE, BFAM, BKNG, BOOT, CCMP, CDAY, CENX, CHNG, CMP, CPS, DGII, DOX, DVAX, DXC, EA, EGHT, ELF, EMKR, EOG, ETSY, EVH, FLT, FOXA, FSLY, FTDR, GDDY, GNK, HI, HUBS, IAC, INGN, IVR, JACK, LESL, LNC, LPI, LUMN, MAXR, MBI, MCK, MED, MET, MGM, MOD, MRO, MTG, NUS, NVRO, ONEM, PARR, PDCE, PING, PLYA, QRVO, QTWO, RCII, REGI, RGR, RMAX, RNWK, EOKU, RPD, RVLV, RYN, SBRA, SMSI, SUM, TNDM, TPC, TTGT, TVTY, TWNK, TWO, TXG, UBER, UHAL, VVV, VZIO, WDC, WU, YELL

 

Other Key Events:

·     Jefferies Industrials Conference (virtual), 8/3-8/4

·     Piper Wealth Management Forum (virtual), 8/3-8/6

 

 

Macro	Up/Down	Last
Nymex	-0.34	70.22
Brent	-0.18	72.23
Gold	3.30	1,813.75
EUR/USD	-0.0008	1.1856
JPY/USD	0.13	109.17
10-Year Note	+0.008	1.182%

 

 

Sector News Breakdown

Consumer

·     Caesar’s Entertainment (CZR) Q2 EPS $0.34 vs. est. loss (-$0.26); Q2 revs $2.5B vs. est. $2.27B; Q2 same-store Adjusted EBITDA was $1B versus (-$131M) for the comparable prior-year period; Company posted all-time records in quarterly Adjusted EBITDA and Adjusted EBITDA margin.

·     Denny’s (DENN) Q2 adj EPS $0.18 vs. est. $0.11; Q2 revs $106.2M vs. est. $98.1M; Q2 domestic system-wide same-store sales decreased 1.2% compared to the equivalent fiscal period in 2019, including a 1.5% decrease at domestic franchised restaurants and a 1.9% increase at company restaurants.

·     Herbalife (HLF) Q2 adj EPS $1.52 vs. est. $1.29; Q2 revs $1.55B vs. est. $1.57B; Q2 adjusted EBITDA of $262.1M; raises FY21 EPS view to $4.70-$5.10 from $4.65-$5.05 (est. $4.93); sees FY net sales growth to be in a range of 8.5% to 12.5%, lowering the midpoint by 150 basis points compared to prior full year 2021 guidance.

·     Host Hotels (HST) Q2 adj FFO $0.12 vs. est. $0.04; Q2 revs $649M vs. est. $606.58M; said RevPAR reached nearly $100 for the quarter, which dramatically outperformed consensus RevPAR, with average room rates only 8.4% below our 2019 second quarter rates; not providing year guidance

·     Hyatt (H) 2Q adj EPS ($1.15) vs est. ($0.85) on comparable system-wide REVPAR $72.47, qtrly total revs $663Mm vs est. $686.9Mm; guides FY net rooms growth more than +6%, sees FY adj SG&A about $240Mm, sees FY CAPEX about $110Mm

 

Energy

·     Devon Energy (DVN) Q2 adj EPS $0.60 vs est. $0.52 on revs $2.42B vs est. $2.35B, operating cash flow $1.1B, production for the quarter averaged 291k barrels/day; will pay total dividend of 49c/shr (11c fixed + 38c variable), a 44% increase from Q1; sees 3q production 566-594 mboe/d vs est. 564.80 mboe/d

·     Occidental Petroleum (OXY) Q2 adj EPS 32c vs est. 1c on revs $5.96B vs est. $5.92B, FCF $2B, cash flow from continuing operations $3.3B; said oil and gas results improved from Q1 due to higher commodity prices and sales volumes; executed debt tender offer and repaid over $3B of long-term debt in July

·     ONEOK (OKE) Q2 EPS $0.77 vs. est. $0.75; Q2 revs $3.39B vs. est. $3.03B; sees 2021 net income, adj earnings before interest, taxes, depreciation, amortization to be above midpoints of ranges provided on April 27, 2021

·     SunPower (SPWR) Q2 adj EPS $0.06 vs. est. $0.04; Q2 revs $308.9M vs. est. $327.31M; guides Q3 revs $325M-$375M vs. est. $400.83M; sees Q3 GAAP net loss of $10 to $0 million and MW recognized of 125 MW to 150 MW; Q2 added 13,000 residential customers – residential bookings up 16 percent sequentially, 67 percent year-over-year (YoY)

·     The American Petroleum Institute (API) showed a draw of 879K barrels of oil for the latest week; gasoline inventories show a draw of 5.75M barrels, distillate inventories show a draw of 717K barrels and Cushing inventories show a build of 659K barrels

·     W&T Offshore (WTI) Q2 EPS $0.02 vs. est. $0.07; Q2 revs $132.8M vs. est. $122.38M; Q2 Production was 40,888 Boe/d or 3.7 MMBoe, an increase of 3% compared to 39,657 Boe/d in Q1 and down 3% versus 42,037 Boe/d in Q2 of 2020

 

Financials

·     Assurant Inc. (AIZ) Q2 operating EPS $2.99 vs. est. $2.45; Q2 revs $2.54B vs. est. $2.39B; continue to expect to grow eps, ex. catastrophes, by 10 to 14 percent for 2021

·     Fair Isaac (FICO) Q3 non-GAAP EPS $3.38 vs. est. $2.76; Q3 revs $338M vs. est. $328.3M; Applications revenues, which include the company’s decision management applications and associated professional services, were $133.2 million in the third quarter, compared to $141.5 million in the prior year period, a decrease of 6%

·     Genworth Financial (GNW) Q2 adj EPS $0.38 vs. est. $0.22; Q2 revs $2.04B vs. est. $1.9B; planned IPO of Enact remains a key strategic objective for Genworth and is subject to market and other conditions, however because the company is in registration and subject to applicable publicity restrictions, is unable to comment further or provide any additional detail at this time.

·     Green Dot (GDOT) Q2 adj EPS $0.68 vs est. $0.43 on revs $369.4M vs est. $313.2M; sees FY21 adj EPS $2.13-$2.27 vs prev. $2.06-$2.15, revs $1.33B-$1.35B vs est. $1.28B

·     Prudential (PRU) Q2 adj EPS $3.79 vs. est. $3.02; qtrly book value per common share of $160.31 versus $165.53 per share for year-ago; qtrly adjusted book value per common share of $104.39 versus $92.07 per share for year-ago; qtr end assets under management of $1.730 trillion versus $1.605 trillion for year-ago; now expect to return a total of $11.0B to holders from $10.5B prior

·     Tanger Outlets (SKT) 2Q core FFO/shr $0.43 vs est. $0.28, portfolio occupancy was 93% on June 30 vs 91.7% on March 31, avg tenant sales productivity was $424/sq ft for 12 months ended June 30 +7.3% yr/yr; guides FY FFO/shr $1.52-1.59 vs est. $1.46

·     Unum Group (UNM) Q2 adj EPS $1.39 vs. est. $1.11; Q2 revs $2.99B vs. est. $2.96B; Full-year 2021 outlook increased; after-tax adjusted operating income per share now expected to decline 1%-3% relative to full-year 2020, compared to an expected decline of 5%-6% prior

·     Verisk Analytics (VRSK) Q2 adj EPS $1.17 vs. est. $1.33; Q2 revs $747.5M vs. est. $737.3M; Net cash provided by operating activities was $233.2 million, down 6.5% for the second quarter of 2021. Free cash flow, a non-GAAP measure, was $170.7 million, down 11.5%

 

Healthcare

·     Change Healthcare (CHNG) shares fell over 7% on a report that the U.S. Dept. of Justice is considering a lawsuit to block the company’s $8B sale to UnitedHealth (UNH) https://bit.ly/3yA4Etu

·     Option Care Health (OPCH) 18M share Spot Secondary priced at $20.25

·     Amgen Inc. (AMGN) Q2 adj EPS $4.38 vs. est. $4.06; Q2 revs $6.5B vs. est. $6.43B; backs FY21 adj EPS view $16.00-$17.00 vs. est. $16.34; backs FY21 revenue view $25.8B-$26.6B vs. est. $26.04B

·     Amid surge in new COVID-19 infections across U.S., the FDA plans to give full approval to Pfizer (PFE) – BioNTech (BNTX) coronavirus vaccine by the start of the next month, The New York Times reports

·     The FDA classified the recent recall of some of Philips’ (PHG) ventilators as Class 1, or the most serious type of recall, saying the use of these devices may cause serious injuries or death – Reuters

·     CVS Health (CVS) Q2 adj EPS $2.42 vs. est. $2.06; Q2 revs $72.62B vs. est. $70.11B; raises FY21 adjusted EPS view to $7.70-$7.80 from $7.56-$7.68 (est. $7.66); sees FY21 cash flow from operations $12.5B-$13B

·     DaVita Inc. (DVA) 2Q EPS $2.64 vs est. $2.17; says total US dialysis treatments for 2Q were 7,413497 (avg 95,045/day); guides FY adj EPS $8.80-9.40 vs est. $8.63, sees FY adj op income $1.8-1.875B vs est. $1.816B

·     Inspire Medical (INSP) 2Q EPS ($0.48) vs est. ($0.64) on revs $53Mm vs est. $43.9Mm; guides FY revs $210-213Mm vs est. $195.9Mm, sees FY gr mgn 85-86%, sees opening 48-52 new US medical centers per qtr for 2H

·     Jazz Pharma (JAZZ) Q2 adj EPS $3.90 vs. est. $3.42; Q2 revs $751.8M vs. est. $735.62M; reaffirms FY21 non-GAAP EPS view $13.40-$14.70 (est. $14.45) and also back FY21 revenue view $3.020B-$3.180B vs. est. $3.11B; as of June 30, cash, cash equivalents were $891.4 mln, and outstanding principal balance of co’s long-term debt was $7.1 bln

 

Industrials & Materials

·     Avis Car Rental (CAR) Q2 adj EPS $5.90 vs. est. $1.21; Q2 revs $2.37B vs. est. $1.86B; Adjusted EBITDA in the Americas was $634 million for second quarter 2021 driven by continued sequential revenue growth and sustained cost discipline; liquidity position at the end of the quarter was approximately $1.8 billion with an additional $3.4 billion of fleet funding capacity

·     Lyft Inc. (LYFT) 2Q revs $765Mm vs est. $696.9Mm, adj net loss $18Mm, grew active riders in 2Q more than 3.6Mm sequentially, qtrly revs per active rider $44.63, says company would be able to keep costs down when ridership returns to pre-covid levels

·     Curtis-Wright (CW) 2Q adj EPS $1.56 vs est. $1.54 on sales $621.5Mm vs est. $593.1Mm; guides FY adj EPS $7.15-7.35 vs est. $7.30, sees FY sales $2.465-2.515B vs est. $2.495B; increased qtrly dividend by 6% to $0.18

·     Kratos Defense (KTOS) 2Q adj EPS $0.06 vs est. $0.06 on revs $205.1Mm vs est. $198.9Mm; guides 3Q revs $195-205Mm vs est. $215.95Mm; reaffirms previous FY guide for revs, adj EBITDA and FCF

·     Lockheed Martin (LMT) cut its full-year earnings forecast due to its purchase of group annuity contracts from Athene Holding (ATH) to transfer $4.9B in pension obligations and related plan assets for ~18K U.S. retirees and beneficiaries.

·     FMC Corp. (FMC) Q2 adj EPS $1.81 vs. est. $1.78; Q2 revs $1.2B vs. est. $1.23B; cuts FY21 adjusted EPS view to $6.54-$6.94 from $6.70-$7.40 (est. $7.12); backs rev outlook of $4.9B-$5.1B; cuts FY21 adjusted EBITDA view to $1.29B-$1.35B from $1.32B-$1.42B

·     Innospec (IOSP) 2Q adj EPS $1.30 vs est. $0.89 on revs $354.5Mm vs est. $340.35Mm

·     O-I Glass (OI) Q2 adj EPS $0.54 vs. est. $0.47; Q2 revs $1.7B vs. est. $1.55B; sees FY21 EPS $1.65-$1.75 vs. est. $1.68; now expects sales volume in tons should increase 4%-5% compared to 2020; says anticipates cash provided by operating activities of around $660M and approximately $260M in free cash flow

 

Media & Telecom

·     Lumen (LUMN) to sell local incumbent carrier operations in 20 states to Apollo funds for $7.5 billion; transaction will sharpen lumen’s enterprise focus, accelerate the quantum fiber deployment, and drive growth on the lumen platform

·     Match.com (MTCH) 2Q adj EPS $0.46 vs est. $0.52 on revs $708Mm vs est. $691.1Mm; qtrly payers +15% to 15Mm, qtrly tinder direct revs +26% (payers +17% to 9.6Mm); says seeing strong recovery in US and improvement in Europe; says rising vaccination rates helping tinder direct rev growth; guides 2H total match group revs more than +25%; sees FY revs over $3B vs est. $2.92B; guides 3Q EBITDA $275-280Mm vs est. $287.5Mm; sees FY EBITDA $1.045-1.06B vs est. $1.075B

 

Technology

·     Activision (ATVI) Q2 adj EPS $1.20 vs. est. $0.75; Q2 net bookings $1.92B vs. est. $1.89B; raises FY21 adjusted EPS view to $3.54 from $3.42 (est. $3.77) and boosts FY21 net bookings view to $8.65B from $8.6B (est. $8.77B); for qtr ended June 30, 2021, overall Activision blizzard monthly active users were 408 mln

·     Akami (AKAM) Q2 non-GAAP EPS $1.42 vs. est. $1.38; Q2 revs $853M vs. est. $845.36M; q2 security technology group revenue of $325 mln, up 25% year-over-year; Q2 edge technology group revenue of $528 mln, down 1% year-over-year; sees Q3 EPS $1.37-$1.41 vs. est. $1.35

·     Alteryx Inc. (AYX) Q2 EPS loss (-$0.08) vs. est. loss (-$0.25); Q2 revs $120.1M vs. est. $113.04M; sees FY21 non-GAAP EPS loss (26c)-(12c), vs. consensus loss (1c); sees FY21 revenue $520.0M-$530.0M below consensus $571.48M; sees FY21 ARR $635.0M; Ended the second quarter of 2021 with 7,405 customers, a 10% increase from the second quarter of 2020

·     Blackbaud (BLKB) 2Q adj EPS $0.82 vs est. $0.72 on revs $229.4Mm vs est. $225.4Mm

·     Infinera (INFN) Q2 EPS loss (-$0.03) vs. est. loss (-$0.05); Q2 revs $338.23M vs. est. $344.87M; sees Q3 revenue $354M plus/minus $15M, vs. est. $362.32M

·     Lattice Semiconductor (LSCC) Q2 adj EPS $0.25 vs. est. $0.22; Q2 revs $125.9M vs. est. $120.25M; sees Q3 revs $124M-$132M vs. est. $121.42M; said drove 25% year-over-year revenue growth, with a 49% expansion in non-GAAP net income year-over-year

·     LivePerson (LPSN) 2Q EPS ($0.31) vs est. ($0.13) on revs $119.6Mm vs est. $113.3Mm; guides 3Q revs $117-119Mm vs est. $117.9Mm, sees 3Q loss $0.49-0.55 vs est. loss $0.11; guides FY revs $464-471Mm vs est. $465.7Mm

·     McAfee (MCFE) declares special dividend of $4.50 per share

·     Microchip (MCHP) 1Q adj EPS $1.98 vs est. $1.91 on sales $1.569B vs est. $1.55B; guides 2Q revs $1.616-1.679B vs est. $1.594B, sees 2Q adj EPS $2.05-2.17 vs est. $1.99

·     Paycom Software (PAYC) 2Q adj EPS $0.97 vs est. $0.84 on revs $242.1Mm vs est. $232.1Mm; guides 3Q revs $249-251Mm vs est. $242.6Mm; guides FY revs $1.036-1.038B vs est. $1.018B

·     RingCentral (RNG) 2Q adj EPS $0.32 vs est. $0.28 on revs $379Mm vs est. $359.9Mm; guides 3Q adj EPS $0.33-0.34 vs est. $0.31, sees 3Q revs $390.5-393.5Mm vs est. $384.5Mm; guides FY revs $1.539-1.545B vs est. $1.508B

·     Skillz, Inc. (SKLZ) Q2 EPS loss (-$0.21) vs. est. loss (-$0.10); Q2 revs $89.5M vs. est. $88.2M

·     Veeco Instruments (VECO) 2Q adj EPS $0.35 vs est. $0.27 on revs $146.3Mm vs est. $136Mm; guides 3Q revs $135-155Mm vs est. $141Mm, sees 3Q adj EPS $0.25-0.44 vs est. $0.32

·     Vivint Smart Home (VVNT) 2Q revs $355.2Mm vs est. $340.7Mm, new subs +12.6% to 121,599; guides FY revs $1.38-1.42B vs est. $1.416B, sees FY total subs 1.80-1.85Mm