Early Look

Tuesday, August 3, 2021

Futures	Up/Down	%	Last
Dow	171.00	0.49%	34,892
S&P 500	17.25	0.39%	4,397
Nasdaq	22.50	0.15%	14,975

 

 

Following yesterday’s late day slide which erased market gains, U.S. futures are looking modestly higher as investors await another round of earnings results. Another precipitous slide in Treasury yields (10-year hitting 1.15%) weighed on sentiment Monday, along with increasing masking restrictions due to the Delta variant spread and soft U.S. manufacturing growth for a second month. Meanwhile, Senate negotiators announced they had finished drafting a 2,702-page infrastructure bill, paving the way for the debate of amendments. In Asian markets, The Nikkei Index fell -139 points to 27,641, the Shanghai Index dropped -16 points to 3,447 and the Hang Seng Index slid 40 points to 26,194. In Europe, the German DAX is up about 20 points to 15,590, while the FTSE 100 is up around 25 points to 7,105. Yesterday’s big non earnings news was in the payment space as Square said it will acquire Afterpay Ltd for $29 billion, while overnight in the biotech space, Sanofi (SNY) agreed to acquire Translate Bio Inc. (TBIO) in a deal that gives the mRNA-therapeutics company a total equity value of around $3.2 billion.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -8.10 points, or 0.18%, to 4,387.16

·     The Dow Jones Industrial Average fell -97.31 points, or 0.28%, to 34,838.16

·     The Nasdaq Composite edged higher 8.39 points, or 0.06%, to 14,681.07

·     The Russell 2000 Index declined -10.75 points, or 0.48% to 2,215.50

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     10:00 AM ET      Durable Goods Orders MoM for June

·     10:00 AM ET      Factory Orders MoM for June

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ALNY, AME, APRN, AQUA, ARNC, ATI, BEN, BHC, BLD, CLX, CMI, COP, CWEN, CWH, DD, DEA, DISCA, DNB, ETN, ETRN, EXPD, FIS, FNMA, GLT, HEES, HEP, HLI, HSC, HSIC, HZN, IGT, IAA, IGT, INCY, IPGP, IT, J, KKR, LCII, LDOS, LHX, LLY, LPX, MAR, MYGN, NKLA, NNN, OMI, PBI, PEG, PCRX, PSX, PSXP, RHP, RL, SAGE, SEE, SUN, SWI, UAA, VAL, WBT, WEC, WLK, XHR, XYL, ZBH, ZBRA

·     Earnings After the Close: AIZ, AKAM, AMGN, APAM, ARC, ATVI, AVID, AYX, BGFV, BHG, BKH, BLKB, BNFT, BXC, CAR, CDEV, CDLX, CEIX, COUR, CPE, CRIS, CRK, CSLT, CVGI, CW, CZR, DCPH, DENN, DK, DVA, DVN, ET, FICO, FMC, FNF, GDOT, GHL, GLAD, GNW, H, HLF, HST, INFN, INN, INSP, KAR, KTOS, LONE, LSCC, LSPN, LSI, LUNG, LYFT, LYV, MANT, MCHP, MDXG, MTCH, NBIX, NCR, NDLS, NE, NEWR, NPTN, NSA, NVTA, OI, OKE, OXY, PAA, PAYC, PRO, PRU, PSA, PUMP, RDN, RNG, RRD, SHO, SKLZ, SKT, SKY, SPT, SPWR, TALO, UNM, VRSK, WK, WMC, WTTR, XPER

 

Other Key Events:

·     China Caixin Services PMI for July

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

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

 

 

Macro	Up/Down	Last
Nymex	0.38	71.64
Brent	0.39	73.28
Gold	-2.20	1,811.25
EUR/USD	0.0019	1.1889
JPY/USD	-0.16	109.15
10-Year Note	+0.022	1.194%

 

 

World News

·     U.S. Treasury Secretary Janet Yellen on Monday took additional steps to preserve the federal government’s borrowing capacity under a reinstated debt limit, suspending some investments in government employee retirement and health benefits funds

 

Sector News Breakdown

Consumer

·     Columbia Sportswear (COLM) Q2 EPS $0.61 vs. est. loss (-$0.08); Q2 sales $566.4M vs. est. $497.6M; sees FY EPS $4.30-$4.55 vs. est. $4.44; sees FY sales $3.13B-$3.16B vs. est. $3.09B; Exited the quarter with $820.9 million in cash and short-term investments and no borrowings

·     Freshpet Inc. (FRPT) Q2 EPS loss (-$0.17) vs. est. loss (-$0.04); Q2 revs $108.62M vs. est. $106.08M; raises FY21 revenue view to at least $445M from at least $430M (est. $433M); sees FY21 adjusted EBITDA $61M

·     Horace Mann (HMN) 2q core eps $1.02 vs. est. $1.03; Q2 revs $347.1M vs. est. $336.3M; reaffirming updated 2021 core eps guidance of $3.50 to $3.70, with roe above 10%

·     Insperity (NSP) 2Q adj EPS $0.91 vs est. $0.66 on revs $1.2B vs est. $1.1B; guides 3Q adj EPS $0.74-0.93 vs est. $0.86; guides FY adj EPS $4.00-4.59 vs est. $4.11

·     Leggett & Platt (LEG) Q2 adj EPS $0.66 vs. est. $0.54; Q2 revs $1.27B vs. est. $1.23B; 2Q EBIT was $172 million, an increase of $149 million vs 2Q20; sees FY EPS $2.70-$2.90 vs. est. $2.72; sees FY sales $4.9B-$5.1B vs. est. $4.91B

·     PepsiCo, Inc. (PEP) entered into an agreement with PAI Partners to sell Tropicana, Naked and other select juice brands across North America, and an irrevocable option to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of about $3.3B

·     Trex Company (TREX) Q2 EPS $0.53 vs. est. $0.53; Q2 revenue $312M vs. est. $302.23M; Q2 EBITDA increased 36% to $92 million; EBITDA margin of 29.4%; sees Q3 rev $320M-$330M or 40% YoY growth vs. est. $323.3M; Consolidated gross margin for Q2 was 38.0%

·     Li Auto (LI) files to sell 100M shares of common stock

 

Energy

·     American Water (AWK) 2Q EPS $1.14 vs est. $1.08 on revs $999Mm vs est. $1.0B; says affirms FY EPS guide of $4.18-4.28 vs est. $4.24

·     BP PLC (BP) increased the dividend for its second quarter and launched a $1.4 billion share buyback; reported a net profit of $3.12 billion for the three months to June, down from $4.67 billion for the first quarter; underlying profit on a replacement cost basis increased to $2.80 billion from $2.63B in the first quarter, and was well above the market consensus of $2.15 billion

·     Continental Resources (CLR) Q2 EPS $0.79 vs. est. $0.53; Q2 revs $1.24B vs. est. $1.14B; Q2 total production averaged 338.7 MBoed; Q2 oil production averaged 166.8 MBoed; Q2 natural gas production averaged 1,031.6 MMcf; increased its 2021 annual natural gas production guidance to 900 to 1,000 MMcf; now sees generating $3.8 bln of cash flow from operations, $2.4 bln of free cash flow for 2021 at current strip prices

·     Diamondback Energy (FANG) Q2 adj EPS $2.40 vs. est. $2.18; Q2 revs $1.68B vs. est. $1.36B; Increasing annual dividend by 12.5% to $1.80 per share; Increasing full year 2021 oil production guidance to 219 – 222 MBO/d (363 – 370 MBOE/d), up from 212 – 216 MBO/d (350 – 360 MBOE/d) previously; lowering full year 2021 cash CAPEX guidance to $1.525 – $1.625 billion, down 6% at the midpoint from $1.60 – $1.75 billion previously; initiating Q3 2021 oil production guidance of 233 – 239 MBO/d (388 – 398 MBOE/d)

·     Pioneer Resources (PXD) Q2 adj EPS $2.55 vs. est. $2.61; Q2 revs $3.42B vs. est. $2.26B; Averaged Q2 oil production of 363 thousand barrels of oil per day (MBOPD), in the upper half of guidance; averaged Q2 production of 629 thousand barrels of oil equivalent per day (MBOEPD), near the top end of guidance; expects its 2021 drilling, completions and facilities capital budget to range between $2.95 billion to $3.25 billion.

·     SolarEdge Technologies (SEDG) 2Q adj EPS $1.28 vs est. $1.12 on revs $480.1Mm vs est. $455.5Mm; guides 3Q revs $520-540Mm vs est. $504.6Mm, sees 3Q revs from solar segment $460-480Mm and adj gr margin from solar segment 32-34%

·     Transocean (RIG) Q2 EPS loss (-$0.18) on revs $713M; qtrly revenue efficiency was 98.0%, compared with 97.4% in prior quarter; contract backlog was $7.3 bln as of July 2021 fleet status report; contract drilling revenues for qtr increased sequentially by $3 mln to $656 mln

·     Williams (WMB) Q2 adj EPS $0.27 vs. est. $0.28; Q2 revs $2.28B vs. est. $1.96B; cash flow from operations, or CFFO, of $1.1B, down $86M or 8% from 2Q 2020; sees 2021 adj Ebitda at higher end of previous guidance range of $5.2 bln to $5.4 bln and available FFO between $3.7B-$3.9B

 

Financials

·     EverQuote (EVER) 2Q EPS ($0.07) vs est. ($0.10) on revs $105.1Mm vs est. $102.3Mm; guides 3Q revs $109-111Mm vs est. $111.6Mm, sees FY revs $440-446Mm vs est. $439.9Mm

·     Simon Property Group (SPG) 2Q FFO $3.24 vs est. $2.38; US malls and premium outlets occupancy was 91.8% at June 30; guides FY FFO $10.70-10.80 vs est. $9.86, sees FY net inc per share $5.47-5.57 vs est. $4.44; declared qtrly common stock cash dividend of $1.50 for 3Q +7.1% vs 2Q

·     Vornado Realty (VNO) 2Q adj FFO $0.80 vs est. $0.71, qtrly same-store NOI at share up 13.6%

 

Healthcare

·     Sanofi (SNY) has agreed to acquire Translate Bio Inc. (TBIO) in a deal that gives the mRNA-therapeutics company a total equity value of around $3.2 billion; SNY to pay $38.00 a share in cash, confirming prior reports overnight

·     Eli Lilly (LLY) Q2 EPS $1.87 vs. est. $1.92; Q2 revs $6.74B vs. est. $6.65B; backs FY21 EPS view $7.80-$8.00 vs. est. $7.90; narrows FY21 revenue view to $26.8B-$27.4B from $26.6B-$27.6B (est. $27.22B)

·     Pfizer (PFE) said the U.S. Army has awarded the co a contract valued at $3.5B to manufacture 500M doses of the vaccine developed by the company in partnership with BioNTech (BNTX), New York Post reports. https://bit.ly/3xlCWzi

·     Novartis (NVS) announces lift of partial clinical trial hold and plans to initiate a new pivotal Phase 3 study of intrathecal OAV-101 in older patients with SMA

·     Bruker Corp. (BRKR) Q2 Non-GAAP EPS $0.44, in-line with estimates; Q2 revs $570.8M vs. est. $538.7M; raises FY21 EPS outlook to $1.88-$1.93 (est. $1.89); raises FY21 revenue growth outlook to 17%-19% and organic revs 14%-16%

·     Ultragenyx (RARE) Q2 EPS loss ($1.81) vs. est. loss ($1.36); Q2 revs $87M vs. est. $85.03M; says 2021 Crysvita revenue in Ultragenyx territories guidance of $180 mln to $190 mln reaffirmed

 

Industrials & Materials

·     Boise Cascade (BCC) 2Q EPS $7.62 vs est. $4.83 on revs $2.4B vs est. $2.05B; sees FY CAPEX approx $90-100Mm

·     DuPont de Nemours Inc. (DD) Q2 earnings that beat expectations, amid an ongoing recovery in markets hurt by the COVID-19 pandemic a year ago, and raised its full-year outlook; Q2 adj EPS $1.06 vs. est. $0.95; Q2 revs $4.14B vs. est. $4B; raised its adjusted EPS guidance range to $4.24-$4.30 from $3.60-$3.75 and listed its sales guidance to $16.45B-$16.55B from $15.7B-$15.9B

·     Leidos (LDOS) Q2 EPS $1.52 vs. est. $1.58; Q2 revs $3.45B vs. est. $3.38B; Q2 net bookings of $3.8B with a book-to-bill ratio of 1.1; backlog growth to $33.5B; backs both year EPS and revenue outlooks

·     Eastman Chemical (EMN) 2Q adj EPS $2.46 vs est. $2.33, adj EBIT $454Mm vs est. $432.3Mm on revs $2.65B vs est. $2.4B; guides FY adj EPS $8.80-9.20 vs est. $8.69, raising FY FCF target to greater than $1.1B

·     Douglas Dynamics (PLOW) Q2 adj EPS $0.91 vs. est. $0.63; Q2 revs $157.5M vs. est. $141.53M; raises FY21 EPS view to $1.40-$2.20 from $1.20-$2.00 and boosts FY21 revenue view to $520M-$580M from $505M-$565M

·     Fluor Corporation (FLR) joint venture was selected by the Texas Department of Transportation (TxDOT) to design, construct and maintain Phase 2 of the Interstate 35E (I-35E) project from I-635 in Dallas to the Denton County line in Carrollton, Texas. Fluor will book its share of the approximately $640 million contract value in the third quarter of 2021.

·     Kennametal Inc. (KMT) Q4 adj EPS $0.53 vs. est. $0.40; Q4 revs $516M vs. est. $514.21M; sees Q1 revenue up 17%-22% yoy vs. est. $1.83B; sees FY22 CapEx $110M-$130M

·     Mosaic Inc. (MOS) 2Q adj EPS $1.17 vs est. $0.98 on revs $2.8B vs est. $2.85B; potash sales volume 2.3Mm tons -9% yr/yr; says 3Q average realized prices expected to be $90-100/ton higher than realized in 2Q, says 3Q phosphate and potash segment sales are approx 90% committed and priced

·     Woodward Inc. (WWD) Q3 EPS $0.74 vs. est. $0.97; Q3 revs $556.68M vs. est. $617.09M; said not providing more detailed guidance

·     W.R. Grace (GRA) 2Q adj EPS $1.01 vs est. $0.95 on sales $512.9Mm vs est. $484.6Mm; says weather-related costs recorded in 2Q were $10.3Mm, or $0.12/share

 

Technology, Media & Telecom

·     Arista Networks (ANET) Q2 EPS $2.72 vs. est. $2.54; Q2 revs $707.3M vs. est. $687.32M; sees Q3 revs $725M-$745M above est. $697.45M; sees Q3 non-GAAP gross margin of 63% to 65%; GAAP gross margin of 64.2%, compared to GAAP gross margin of 63.7% in the first quarter of 2021 and 63.7% in the second quarter of 2020

·     NXP Semiconductor (NXPI) Q2 EPS $1.42 vs est. $1.28 on revs $2.6B vs est. $2.58B; continue to be very positive about long-term demand trends across all end markets, though supply environment will remain challenging in near term and have taken actions to increase supply which underpin confidence to drive very robust growth for remainder of 2021; sees Q3 revenue $2.775B-$2.925B vs est. $2.7B, have executed an additional $1B in buybacks since Jul 5

·     Rambus Inc. (RMBS) 2Q EPS $0.31 vs est. $0.31 on revs $84.9Mm vs est. $106.9Mm; initiated $100Mm accelerated share repurchase

·     Sanmina Corp. (SANM) 3Q adj EPS $0.99 vs est. $0.91 on revs $1.66B vs est. $1.73B; guides 4Q adj EPS $0.93-1.03 vs est. $0.97, sees 4Q revs $1.65-1.75B vs est. $1.78B

·     SBA Communications (SBAC) 2Q adj FFO $2.64 vs est. $2.58 on revs $575.5Mm vs est. $559.3Mm; guides FY AFFO $10.32-10.72 vs est. $10.47, sees FY revs $2.26-2.3B vs est. $2.25B

·     Take-Two (TTWO) 1Q EPS $1.30 vs. est. $0.89 on revs $813Mm vs est. $687.6Mm; guides 2Q revs $740-790Mm vs est. $890.9Mm, sees 2Q EPS $0.35-0.45 vs est. $1.25; reiterates FY22 outlook, says believe will achieve sequential growth in FY23; says it’s delaying two games until later in FY22

·     Tencent Holdings (TCEHY) says it would curb minors’ access to its flagship video game after China’s state media refers to online games as “spiritual opium”, stoking fears of tighter regulation (also watch shares of other Chinese online gaming platforms HUYA, BILI, DOYU)

·     Twilio Inc. (TWLO) files for resale of up to 1.18 mln class a common share by the selling stockholders

·     Ultra Clean Holdings (UCTT) Q2 adj EPS $0.99 vs. est. $0.96; Q2 revs $515.2M vs. est. $505.44M; On a non-GAAP basis, gross margin was 21.2%, operating margin was 11.7%, and net income was $43.7M or $0.99 per diluted share; expects revenue in the range of $520M-$560M

·     ZoomInfo Technologies (ZI) Q2 adj EPS 14c vs est. 12c on revs $174M vs est. $162.9M; raised FY adj EPS view to 50c-51c from 49c-50c, revs to $703M-707M (est. $676.5M) from $670M-676M; sees Q3 EPS 11c-12c on revs $182M-$184M