Intel has raised its second-quarter guidance; Sycamore Partners’ 9.9% stake in Express has sparked a movement in Aeropostale; Finisar has reported disappointing earnings results; and Tesla has freed up its patents as promised and is in talks with BMW over a possible joint venture
The broader market pulled back yesterday, with investors exhibiting conservatism amid the uncertainty following President Barack Obama’s comments on developments in Northern Iraq and the pre-market announcement of new jobless claims, which were higher than estimates. Retail sales data for May also came in below Street expectations. The S&P 500 closed yesterday 0.71% lower, while the Nasdaq declined 0.79% to 4,297.63. The Dow posted its second triple-digit decline yesterday, closing down 109.69 (0.7%) for the day.
Here are the five stocks we will be keeping a close eye on today.
Shares of Intel Corporation (INTC) climbed 5.58% higher in after-hours trading yesterday after the company revised its second-quarter and full-year guidance up for the first time since 2011. The company is expected to report earnings results on July 15.
Buoyed by higher shipments of business PCs, second-quarter revenues are now projected to be $13.7 billion, give or take $300 million. The company had earlier said it was expecting revenues of $13 billion, give or take $500 million.
The company has also raised the bar for second-quarter and full-year gross margins. The estimated mid-point for its second-quarter gross margin range has been moved up 100 basis points to 64%. The full-year gross margin is now expected to land in the upper half of its previously indicated range (61%, give or take a few percentage points).
Analysts’ consensus estimate for second-quarter sales is $13 billion, while per share earnings (EPS) are expected to be $0.50.
After closing 2.29% down at $13.55 in regular trading yesterday, Express, Inc. (EXPR) was catapulted 22% higher in after-hours trading after an SEC filing revealed that investment firm Sycamore Partners had acquired a 9.9% stake in the struggling apparel retailer and is now moving for a takeover.
Express, a mall-based retailer, is struggling with sluggish store traffic and pressured margins as it tries to lure shoppers with cropped price tags.
The company’s same-store sales declined 11% in the latest quarter, and its sales and earnings have been declining for the last two quarters now. Last month, it lowered the high end of its full-year EPS forecast down to $0.9, after previously saying it would be $1.23.
Although Express has adopted a poison pill to thwart a hostile takeover attempt, Sycamore’s strong belief in a possible turnaround has sent the stock flying after market close.
Shares of teen apparel retailer Aeropostale Inc (ARO) rose 4.5% post-market yesterday after closing 2.62% lower at $3.34 in regular trading.
The upswing in its stock price may indicate that investors are reacting positively to reports that Aeropostale’s primary lender, Sycamore Partners, is looking to acquire women’s clothing and accessories retailer Express Inc. Last month, Aeropostale had secured a $150 million financing deal with Sycamore to support its faltering cash reserves, which have declined 83.5% YoY through May this year.
We eagerly await the opening bell today to see if investors will maintain their bullish outlook for Aeropostale.
The stock price of Finisar Corporation (FNSR) – which provides equipment for telecommunication applications – fell as much as 22.46% in after-hours trading yesterday on its disappointing fourth-quarter earnings results.
The company said revenues grew 26% year-over-year (YoY) to $306 million, beating analysts’ estimates of $303 million; but adjusted net earnings came in at 36 cents a share, two cents short of the consensus estimate and on the lower end of the company’s EPS guidance for the quarter.
In the ongoing quarter, Finisar expects sales of $327 million and net adjusted earnings of 32 cents a share. Analysts are projecting revenues of $317 million and EPS of 32 cents a share for the same period.
Tesla Motors Inc
Tesla Motors Inc (TSLA), which leads the US market for all-electric cars mainly due its superior technology, officially announced yesterday that it has freed up its technology patents for all automakers to foster growth and activity in the electric car market.
While Tesla is looking to sell over 50% more electric cars in the country this year compared to the last, other automakers, restrained by outdated technology and an immature market, have not enjoyed the same success. Tesla, which has welcomed competition at every opportunity, is looking to change that by offering its cutting-edge technology to the world to help other automakers expand choices for consumers in the electric car market.
In related news, German luxury automobile company BMW has said it met with Tesla officials this week to discuss a potential collaboration in electric car technology. Last week, BMW delivered its first i8 – a high-tech hybrid sports car which many analysts have compared to Tesla’s Model S.
Investors will likely exhibit a healthy amount of optimism on Tesla today, given Tesla’s move forward and BMW’s plans for a strategic partnership. Joint-ventures with other automakers would make for a nice addition to the company’s growth catalysts.
Tesla closed 0.46% lower yesterday at $203.52, and is currently up 0.11% in pre-market trading.
Which other stocks will you be looking out for today? Let us know, and our analysts will go through them with you.
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