Tag Archives: earnings

Agilent Hits 15-Year High As Q2 Earnings Point To Revived Growth

Shares of scientific-instrument maker Agilent Technologies ( A ) popped to a 15-year high above 45 in early trading Tuesday after the company beat fiscal Q2 estimates and raised guidance late Monday. The 16% earnings growth and 6% top-line growth were the highest since Q1 2012, and a vindication of CEO Michael McMullen’s strategy since he attained his position just over a year ago, according to Evercore ISI analyst Ross Muken. “We see Mike’s vision of superior top-line growth, an inflection in operating margins and improved free cash flow/deployment as a differentiating factor vs. LST (life-science tools) peers going forward,” Muken wrote in a research note, raising his price target to 48 from 43 while affirming a buy rating. Agilent’s peers include Thermo Fisher Scientific ( TMO ) and Danaher ( DHR ). Leerink analyst Dan Leonard raised his price target to 51 from 44 while keeping an outperform rating. He noted that in addition to lifting its organic-growth guidance for this year to 4.5%, the company had offered a glimpse into next year. “Management offered an initial view of fiscal 2017, projecting 4.5% organic revenue growth, and reiterated its commitment to target 22% operating margins,” Leonard wrote. “Assumptions for growth include continued momentum in biopharma and China, which are expected to sustain throughout the second half of 2016 and full-year 2017, and the C&E (chemical & energy) market bottoming out by year-end.” Agilent stock early Tuesday hit its highest point since January 2001, at 45.34, though in afternoon trading it was up just 2.5%, near 44. The move broke the stock out of a consolidation that had been going for over a year. The stock’s Relative Strength and Accumulation/Distribution ratings have both been improving over the last couple of weeks, reaching 82 and B, respectively, both well above average.

Apple iPhone 7 Ramp To Slug Analog Devices On Declining Q2 Sales

Apple ‘s ( AAPL ) lukewarm iPhone 7 ramp may slug Analog Devices ( ADI ) early Wednesday, when the chipmaker is expected to report a 5% year-over-year revenue dip on a 40% sequential plunge in sales to Apple. But a “bright spot” of industrial and automotive sales will show a seasonal boost, outplaying rival Xilinx ( XLNX ), and wireless communication revenue will come off a trough to top competitors Nokia ( NOK ) and Cavium ( CAVM ), MKM analyst Ian Ing said Tuesday. In morning trading on the stock market today , Analog Devices stock was up a fraction, near 55.50. Shares are flat for the year vs. a 6% fall in IBD’s 38-company Electronic Semiconductor-Manufacturing industry group. Analog Devices stock hit a 2016 high on April 27 at 59.87, but it’s down 7% in the three weeks since then. In late April, Apple reported its first-ever year-over-year decline in iPhone shipments, in its March-quarter results. Analog Devices is expected to post $777.6 million in sales and 62 cents earnings per share ex items, down a respective 5% and 15% vs. the year-earlier quarter, for its fiscal Q2 ended on or near April 30, according to the consensus of 29 analysts polled by Thomson Reuters. That would follow flat Q1 sales and Analog Devices’ first EPS decline in 11 quarters. Wall Street expects typically strong Q3 and Q4 sales to also decline — by 2% and 6%, respectively. Over the past two years, Q3 had risen an average 13.5%, and Q4 sales had gained an average 20%. Recent reports indicate Apple suppliers are getting fewer orders compared with the year-ago period. Credit Suisse analyst John Pitzer expects Analog Devices to report $30 million in Q2 sales to Apple, down 40% sequentially. For Q3, he models $80 million in sales to Apple vs. consensus views for $110 million. “We suspect modest downside to our Apple revenue estimate for (the second half of the year) offset by upside to (industrial, automotive and communications),” he wrote in a research report. Apple accounts for about 10% of Analog Devices’ sales, Pitzer estimated. Views for $200 million in Apple sales for the latter half of 2016 would be down 15% year over year, but they still “might be $20 million to $30 million too high,” he said. But $1.33 billion views for automotive, industrial and communications sales, up 2% vs. the year-earlier period, doesn’t reflect accelerating advanced driver assistance systems (ADAS) and communications infrastructure opportunities, he wrote. Pitzer retained his outperform rating and 72 price target on Analog Devices stock. Ing kept his neutral rating and 56 price target. Analog Devices’ messaging has tilted in favor of “analog utility” investors vs. momentum growth investors, Ing wrote in a report. Analog utility investors prefer business-to-business ventures over “volatile” portables exposure.

Cisco Pressured By Enterprise Trends Ahead Of Fiscal Q3 Earnings

Negative trends in the enterprise market — large companies and government agencies — are lowering expectations ahead of Cisco Systems ‘ ( CSCO ) fiscal Q3 earnings, due out Wednesday after the market close. Many large companies are outsourcing business computing workloads to cloud computing service providers such as Amazon Web Services, part of Amazon.com ( AMZN ), lessening their need for the routers, switches and other networking gear sold by Cisco and others. Analysts polled by Thomson Reuters estimate Cisco earnings minus items will rise 2% to 55 cents, though they see revenue falling 1% to $11.97 billion. “We see three major issues into this earnings release, including weak IT data points, all signaling industrywide IT spending weakness, less visibility around service provider spending, and global macro exposure,” Kulbinder Garcha, a Credit Suisse analyst, said in a research report. “Year to date, we have seen weak IT spending indications from large bellwethers including IBM ( IBM ), EMC ( EMC ), Juniper ( JNPR ), Brocade ( BRCD ) and SAP ( SAP ),” added Garcha, who has an underperform rating on the stock. JPMorgan analyst Rod Hall, in a research report, cited negative enterprise market commentary from Intel ( INTC ), Oracle ( ORCL ) and Hewlett Packard Enterprise ( HPE ). Reports of slower tech spending was a factor in the stock market’s plunge early in the year. With many tech companies struggling to meet expectations recently, an in-line quarter for Cisco might be good enough to move shares higher, said Citigroup analyst Jim Suva. RW Baird’s Jayson Noland was another analyst citing slower spending of late. “Our partner survey results indicate a softer-than-expected April quarter, with improved prospects for growth for the remainder of calendar 2016,” Noland wrote in a research note. Cisco stock, up 1% near 27 in early trading in the stock market today , is about even in 2016. Cisco stock is up 20% since touching a two-year low in early February.