Early Look

Friday, February 4, 2022

Futures	Up/Down	%	Last
Dow	-114.00	0.33%	34,857
S&P 500	-0.25	0.01%	4,468
Nasdaq	88.25	0.61%	14,580

 

 

S&P futures are trading just off overnight lows at 4,465 (well off the overnight highs of 4,528), erasing strong gains following the positive reaction to AMZN earnings (which pares gains to +11.6% after rising over 18% on results initially) ahead of the monthly jobs report in about 2-hours. The tech heavy Nasdaq however is managing to hold on to solid gains thus far, up 0.55% at 14,575. Jan payroll figures coming up at 8:30 AM (after the surprise ADP miss Wed of -301K jobs vs. est. +207K) – with both the Nonfarm and private payrolls expected to rise +150K and unemployment to hold steady at 3.9%, while wages are expected to increase +0.5% m/m and +5.2% y/y. Treasury 10-year yield rises above 1.84% overnight as global bonds remain under pressure after Thursday’s BOE hike and hawkish ECB pivot – but yields have since slipped to 1.82%. In Asian markets, The Nikkei Index rises nearly 200 points to 27,439, the Shanghai Index remained closed for the week-long Lunar holiday, but the Hang Seng Index reopened, surging 3.24% or 771 points to settle at 24,573. In Europe, the German DAX is much lower, falling over -220 points or 1.45% to 15,145, while the FTSE 100 is up a few points to 7,533.

 

Stocks sunk on Thursday as Meta (FB) loses more than quarter of market cap in its largest ever single day fall in value by U.S. company ($200M in mkt value lost, surpassing AAPL’s $180B one-day decline in Sept ’20), pushing the Nasdaq to its biggest daily loss since October 2020 and sinking other social media, tech names. With yesterday’s losses, both the S&P and Nasdaq snapped their impressive 4-day day winning streaks. Oil prices topped $90 per barrel yesterday and remain on track for its 7^th straight weekly advance, extending sharp gains late Thursday amid persistent supply concerns and as frigid weather sweeps across the United States, threatening to further disrupt fragile oil supplies.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -111.94 points, or 2.44%, to 4,477.44

·     The Dow Jones Industrial Average fell -518.17 points, or 1.45%, to 35,111.16

·     The Nasdaq Composite tumbled -538.73 points, or 3.74%, to 13,878.82

·     The Russell 2000 Index declined -38.48 points, or 1.90% to 1,991.03

 

Events Calendar for Today

·     8:30 AM ET       Nonfarm Payrolls for January…est. 150K

·     8:30 AM ET       Private Payrolls for January…est. 150K

·     8:30 AM ET       Manufacturing Payrolls for January…est. 25K

·     8:30 AM ET       Unemployment rate for January…est. 3.9%

·     8:30 AM ET       Average Hourly Earnings for Jan…est. +0.5%

·     1:00 PM EST     Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: ADNT, AON, APD, BMY, CBOE, ETN, IRMD, JOUR, REGN, ROAD, SPB, TWST, VIVO, VRTS

 

 

Macro	Up/Down	Last
Nymex	1.59	91.85
Brent	1.71	92.82
Gold	7.60	1,811.70
EUR/USD	0.0033	1.1473
JPY/USD	-0.10	114.84
10-Year Note	-0.008	1.819%

 

 

World News

·     The Bank of Japan must keep monetary policy ultra-loose as inflation remains well below that of other economies, Governor Haruhiko Kuroda said. “In Japan, nominal wages haven’t risen much. It’s hard to see inflation sustainably reach our 2% target unless wages rise in tandem with prices,” Kuroda told parliament on Friday. Slow wage growth and weak consumption have kept Japan’s core consumer inflation stuck at 0.5% in Dec.

·     The European Union’s statistics office Eurostat said retail sales in the 19 countries sharing the euro fell 3% month-on-month for a 2.0% year-on-year rise. Economists polled by Reuters had expected a 0.5 monthly fall and a 5.1% annual rise.

 

Sector News Breakdown

Consumer

·     Amazon (AMZN) shares surge 17%; 4Q sales $137.4B vs est. $137.55B, AWS net sales $17.78B; guides 1Q sales $112-117B vs est. $120B; to raise prime membership price to $139/yr from $119; posted $11.8 billion in operating income from its Rivian (RIVN) investment

·     Beacon Roofing (BECN) Q4 EPS $0.76 vs. est. $1.15; Q4 revs rose 11.3% y/y to $1.754B vs. est. $1.72B; guides Q1 net sales up high-single digits and said sees January 2022 sales up double digits; sees Q1 gross margins up roughly 40-60 bps

·     Boyd Gaming (BYD) 4Q adj EPS $1.35 vs est. $1.25 on revs $879.8Mm, reinstates qtrly dividend and raises payout to $0.15/share

·     Clorox (CLX) Q2 adj EPS $0.66 vs. rest. $0.84; Q2 revs $1.7B vs. est. $1.66B; lowers FY22 adj EPS view to $4.25-$4.50 from $5.40-$5.70 (est. $5.41) while sees FY22 net sales decline of 1%-4% as well as same decline for organic sales

·     Columbia Sportwear (COLM) Q4 EPS $2.39 vs. est. $1.79; Q4 revs $1.129B vs. est. $1.07B; raises dividend; supply chain constraints continue to impact operations, causing delayed receipt, delivery of products for fall 2021, spring 2022; sees FY22 EPS $5.50-$5.80 vs. est. $5.50 and guides FY22 revenue $3.63B-$3.69B vs. est. $3.51B

·     Decker’s (DECK) Q3 EPS $8.42 on sales rising 10.2% to $1.18B; Q3 comp store sales rose 10.7%; sees year revs up 19%-20% y/y vs. est. $3.04B; Gross margin was 52.3% compared to 57.0% for the same period last year; UGG net sales +7.9%, Teva net sales +31.4%, Sanuk net sales -13.4% and HOKA net sales +30.3%

·     Ford Motor (F) 4Q adj EPS $0.26 vs est. $0.45, on revs $37.7B vs est. $35.5B; guides FY22 adj EBIT $11.5-12.5B vs est. $10.45B, sees adj FCF $5.5-6.5B

·     Leslie Pools (LESL) 1Q adj EPS ($0.06) vs est. ($0.05) on revs $184.8Mm vs est. $180.7Mm, comps +20.5%; raises FY, sees FY sales $1.495-1.52B vs est. $1.6B, adj EBITDA $300-310Mm vs est. $329.6Mm, adj EPS $0.97-1.03 vs est. $1.10

·     Skecher’s (SKX) shares rise 10%; Q4 adj EPS $0.43 vs est. $0.33 on revenue $1.65B vs est. $1.55B; sees Q1 EPS $0.70-$0.75 vs est. $0.71 on sales $1.675B-$1.725B vs est. $1.59B; authorized a 3-yr buyback authorization of up to $500M

·     SkyWest (SKYW) 4Q EPS $0.09 vs est. ($0.01) on revs $777Mm vs est. $726.4Mm; says anticipate block hours in 2022 may be down approx 10-15% vs 2021 production

·     Fisker (FSR) will debut its Fisker Ocean all-electric SUV to the European market at Mobile World Congress in Barcelona; the five-passenger Fisker Ocean Sport features a range of 250 miles with a starting price of $37,499.

 

Energy, Industrials and Materials

·     Air Products (APD) Q1 adj EPS $2.52 vs. est. $2.51; Q2 revs $2.99B vs. est. $2.74B; backs FY22 adjusted EPS view $10.20-$10.40 vs. est. $10.36; sees FY22 capital expenditures $4.5B-$5B; it benefited from higher energy cost pass-through, higher volumes and higher pricing in the quarter

·     ArcelorMittal (MT) announced a 1.7-billion-euro ($1.94 billion) investment program in decarbonization in France; the investment, supported by the French government, will reduce ArcelorMittal’s carbon emissions by 40% in France by 2030, the steelmaker said

·     Eaton (ETN) Q4 adj EPS $1.72 vs. est. $1.64; Q4 revs rose 2% y/y to $4.8B vs. est. $4.9B; sees FY22 adjusted EPS $7.30-$7.70 vs. est. $7.42 and sees Q1 EPS $1.55-$1.65 vs. est. $1.63; qtrly sales increase consisted of 6% growth in organic sales

·     Mueller Water (MWA) Q1 EPS $0.12 vs. est. $0.08; Q1 sales rise 14.7% y/y to $272.3M vs. est. $253.2M; sees year capex $70M-$80M

·     Werner Enterprises (WERN) Q4 adj EPS $1.13 vs est. $0.96 on revenue $765.2M vs est. $724.9M

·     Union Pacific (UNP) to buy back shares up to 100m

·     NOV Inc. (NOV) Q4 EPS loss (-$0.10) vs. est. loss (-$0.04); Q4 revs $1.52B vs. est. $1.46B; New orders booked during the quarter totaled $495 million, representing a book-to-bill of 159 percent when compared to the $311 million of orders shipped from backlog

 

Financials

·     Camden Property Trust (CPT) Q4 FFO $1.51 vs est. $1.50; sees Q1 FFO $1.45-$1.49, EPS $0.38-$0.42 vs est. $0.42; for full-year, sees FFO $6.09-$6.39, EPS $1.65-$1.95 vs est. $1.92; proposed a qtrly dividend $0.94/shr from $0.83

·     Enova International (ENVA) 4Q adj EPS $1.61 vs est. $1.18 on revs $364Mm vs est. $347.9Mm

·     Hartford Financial (HIG) Q4 core EPS $2.02 vs. est. $1.52; Q4 net income ROE for the trailing 12 months of 13.1% and core earnings ROE for the same period of 12.7%; book value per diluted share of $50.86 as of Dec. 31, 2021, increased 8% from $47.16 at Dec. 31, 2020

·     LPL Financial (LPLA) Q4 EPS $1.32 vs. est. $1.51; Q4 revs $2.1B vs. est. $2.08B; Total advisory and brokerage assets increased 34% y/y to $1.21 trillion; advisory assets increased 39% y/y to $643B; Total organic net new assets were $26 billion, translating to 9% annualized growth

·     Paylocity Holding (PCTY) Q2 EPS $0.17 vs est. $0.40 on revenue $196M vs est. $188M; sees Q3 revenue $239M-$243M vs est. $240.1M, FY revenue $829M-$834M vs est. $818.6M

·     Prudential Financial (PRU) Q4 adjusted EPS $3.18 vs. est. $2.36; raises dividend to $1.20; Book value per Common share of $161.26 versus $167.81 per share for the year-ago; adjusted book value per Common share of $108.72

·     Reinsurance Group of America (RGA) 4Q adj EPS ($0.56) vs est. $0.77, qtrly net premiums $3.407B vs est. $3.38B; says global estimated covid impact of approx $350Mm pre-tax or $3.95/shr in qtr

 

Healthcare

·     Regeneron (REGN) Q4 EPS $23.72 vs. est. $18.35; Q4 revs $4.95B vs. est. $4.51B; Q4 2021 Eylea® U.S. net sales increased 15% to $1.55B y/y; Dupixent® global net sales, which are recorded by Sanofi, increased 51% to $1.77B y/y; sees 2022 capital expenditures $650M-$730M

·     Lanett (LCI) Q2 adj EPS ($0.39) vs est. ($0.32) on sales $86.5M vs est. $92.6M as ongoing and increasing competitive pricing pressure across their product offering negatively impacted net sales and gross margin; cut full-year guidance for sales to $335M-$360M from $370M-$400M, adj EBIDTA to $0-$8M from $22M-$32M, adj gross margin 14-15% from 15-17%

·     Avantor Inc. (AVTR) 4Q adj EPS $0.36 vs est. $0.33 on revs $1.91B vs est. $1.9B

 

Media & Telecom

·     Lions Gate (LGF/A) Q3 adj EPS $0.02 vs. est. $0.01; Q3 revs $885.4M vs. est. $891.92M; adjusted OIBDA was $91.6 Million; global streaming subscribers grew 44% y/y to 19.7M

·     News Corp. (NWSA) Q2 EPS $0.44 vs. est. $0.31; Q2 revs rose 13% to $2.72B vs. est. $2.63B; Digital Real Estate Services segment revenues grew 35% in the quarter; News Media Segment EBITDA in the quarter grew 68%

·     WWE Inc. (WWE) 4Q adj EPS $0.70 vs est. $0.53 on revs $310.3Mm vs est. $325.9Mm; guides 1Q adj OIBDA $90-100Mm and FY22 adj OIBDA $360-375Mm, sees FY CAPEX $280-310Mm

 

Technology

·     Activision Blizzard (ATVI) Q4 adj EPS $1.01 vs est. $1.31 on revenue $2.16B vs est. $2.82B, net bookings fell to $2.49B from $3.05B YoY

·     Bill.com (BILL) shares rise 25%; 2Q adj EPS $0.00 vs est. ($0.18) on revs $156.5Mm vs est. $131.1Mm; guides 3Q adj EPS loss $0.15-0.16 vs est. loss $0.22 and revs $157-158Mm vs est. $140.6Mm; sees FY revs $597-600Mm vs est. $541.5Mm

·     Dolby (DLB) Q1 EPS $1.10 vs. est. $1.06; Q1 revs $351.6M vs. est. $362.22M; guides Q2 EPS $0.72-$0.87 vs. est. $0.98; Q2 revs $315M-$345M vs. est. $355.4M; sees FY22 EPS $3.52-$4.02 vs. est. $3.78

·     Fortinet (FTNT) 4Q adj EPS $1.23 vs est. $1.15 on revs $963.6Mm vs est. $960.5Mm; guides 1Q adj EPS $0.75-0.80 vs est. $0.94 and revs $865-895Mm vs est. $875Mm; sees FY adj EPS $4.85-5.00 vs est. $4.61 and revs $4.275-4.325B vs est. $3.965B

·     GoPro (GPRO) Q4 adj EPS $0.90 vs est. $0.35 on revenue $391M vs est. $382.6M; subscriber count more than doubled YoY to ~1.6M; board approved a $100M stock buyback program; guides Q1 revs $210M-$220M vs. est. $235.5M

·     Microchip (MCHP) Q3 EPS $1.20 vs. est. $1.17; Q3 revs $1.76B vs. est. $1.75B; sees Q4 EPS $1.22-$1.28 vs. est. $1.20; sees Q4 revenue $1.793B-$1.845B vs. est. $1.78B

·     Mimecast (MIME) 3Q adj EPS $0.38 vs est. $0.35 on revs $151.6Mm vs est. $150.2Mm

·     NortonLifeLock Inc. (NLOK) 3Q adj EPS $0.44 vs est. $0.44 on revs $702Mm vs est. $701Mm, op margin 43%; guides FY adj EPS $1.73-1.75 vs est. $1.74 and revs $2.795-2.805B vs est. $2.8B

·     Pinterest (PINS) 4Q revs $847Mm vs est. $827Mm, MAUS -6% to 431Mm, says in 2022 to expand ads business to new geographies including Japan, Argentina, Colombia, and Chile; said Q4 monthly active users declined due to Google’s November algorithm updates, competition

·     Power Integration (POWI) 4Q adj EPS $0.83 vs est. $0.75 on revs $172.7Mm vs est. $170.2Mm; guides 1Q revs about $180Mm vs est. $172.9Mm

·     SNAP Inc. (SNAP) shares surge over 50%; Q4 adj EPS $0.22 vs. est. $0.10; Q4 revs $1.3B vs. est. $1.2B; Q4 DAU up 20% y/y to 319M vs. est. 316M; guides Q1 revs $1.03B-$1.08B vs. est. $1.02B; Q4 Rest of world daily active users 140M up +41% y/y and avg rev per user $4.06, +18% y/y

·     Skyworks Solutions (SWKS) Q1 adj $3.14 vs. est. $3.10; Q1 revs $1.51B vs. est. $1.5B; sees Q2 adj EPS midpoint $2.62 vs. est. $2.60 and revs $1.3B-$1.36B vs. est. $1.32B

·     Synaptics (SYNA) Q2 EPS $3.26 vs. est. $3.10; Q2 revs $420.5M vs. est. $416.08M; guides Q3 revs $450M-$480M vs. est. $397.7M; IoT revenue increased 60% YoY

·     Toshiba Corp is considering splitting in half instead of three and will offload its U.S. air conditioning business for $870 million, the Nikkei said on Friday, to overcome shareholder opposition to its turnaround plan

·     Unity Software (U) Q4 adj EPS ($0.05) vs est. ($0.07) on revenue $315.9M vs est. $295.5M; guides FY22 revenue growth to +34-36% from FY21’s record $1.1B that exceeded its prior guidance; sees Q1 revs $315M-$320M vs est. $313.5M; says company has not been affected by recent Apple privacy rule changes because it relies on data that tracks players’ in-game behavior as opposed to players’ general attributes

·     Viavi Solutions (VIAV) Q2 adj EPS $0.24 vs. est. $0.19; Q2 revs $314.8M vs. est. $304.1M; guides Q3 EPS $0.20-$0.22 vs. est. $0.19 and revs $310M-$315M vs. est. $310.0M; GAAP operating margin of 15.7%, up 160 bps y/y; non-GAAP operating margin of 23.3%, up 100 bps y/y