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Market Update

Alibaba to Expand Global Logistic Network; Red Hat Net Soars


Author: Mukesh Buch
ticker.com
Last Update: 12:22 PM EDT September 26 2017

12:15 PM New York – Alibaba plans to increase its stake in Cainiao and expand its global logistic network. Ascena Retail net swung to a loss and lowered fiscal outlook. Darden reaffirmed fiscal forecast. FactSet net tumbled but revenues surged. Red Hat net soared. SYNNEX net jumped.

Tollbooth Index increased 60.79 or 0.5% to 12,507.50.

Earnings Review

Alibaba Group Holding Ltd (BABA) fell $1.62 to $168 after the China-focused online and mobile market place said it will increase its stake to 51% from 47% and will invest $807 million in the China-based logistics services provider Cainiao Smart Logistics Network Ltd.

The retailer plans to spend more than $15 billion over the next five years to strengthen its logistics network in its global logistics network.

The transaction is expected to be completed in October.

“Our goal with this investment is to provide comprehensive, first-class experience for consumers globally,” said chief executive officer of Alibaba Group Daniel Zhang.

Ascena Retail Group Inc (ASNA) soared 5.5% or 12 cents to $2.29 after the specialty retailer said net sales in the fourth-quarter ending on July 29 slumped 8.3% from a year ago to $1.7 billion.

Comparable store sales in the quarter declined 4%, which was driven by mid-single digit decline in average selling price and store traffic.

Net in the quarter swung to a loss of $15.8 million or 8 cents per diluted share from profit of $13.8 million or 7 cents in the same quarter last year.

The retailer forecasted fiscal first-quarter net sales in the range of $1.58 billion to $1.62 billion and comparable sales to decline between 4% and 5% and operating income in the range of $55 million to $70 million while gross margin in the range of 60.8% to 61.3%.

Darden Restaurants, Inc (DRI) plunged 6.4% or $5.35 to $77.79 after the full-service restaurant operator reported total sales in the first-quarter ending on August 27 soared 12.9% from a year ago to $1.9 billion.

Same-restaurant sales for Cheddar''s Scratch Kitchen decreased 1.4% while blended same-restaurant sales from Darden''s legacy brands increased 1.7%.

Net income in the quarter jumped 7.9% to $119 million or 93 cents per diluted share from $110.2 million or 87 cents in the same quarter last year.

The restaurant operator reaffirmed total sales to increase between 11.5% and 13%, driven by the addition of Cheddar''s Scratch Kitchen and other new restaurant openings and diluted earnings per share in the range of $4.38 to $4.50.

FactSet Research Systems Inc (FDS) jumped 3.1% or $5.36 to $176.05 after the analytical financial information provider revenues in the fourth-quarter ending in August surged 13.7% from a year ago to $326.6 million.

Net income in the quarter tumbled 58.7% to $59.6 million or $1.52 per diluted share from $144.3 million or $3.55 in the same quarter last year.

FactSet estimated fiscal first-quarter revenues between $327 million to $333 million, operating margin in the range of 28% and 29% and diluted earnings per share in the range of $1.75 and $1.81.

Red Hat Inc (RHT) advanced 2.7% or $2.80 to $108.56 after the open source software provider reported total revenues in the second-quarter ending in August jumped 21% from a year ago to $723.4 million.

Net income in the quarter soared 64.4% to $96.9 million or 53 cents per diluted share from $58.8 million or 32 cents in the same quarter last year.

Red Hat said subscription revenue in the quarter jumped 20% to $638 million and operating income for the quarter surged 64% to $135 million.

In the full-year, Red Hat forecasted revenues in the range of $2.88 billion to $2.90 billion and operating margin of about 15.9% and diluted earnings per share in the range of $1.89 to $1.91.

SYNNEX Corporation (SNX) surged 5.8% or $6.74 to $123.20 after the business process services provider said revenues in the third-quarter ending in August soared 16.5% from a year ago to $4.3 billion.

Net income in the quarter jumped 28% to $75.2 million or $1.87 per diluted share from $58.7 million or $1.47 in the same quarter last year.

The outsourcing services provider forecasted fourth-quarter revenues in the range of $4.75 billion to $4.95 billion and net income in the range of $85.2 million to $89.1 million and diluted earnings per share in the range of $2.11 to $2.21.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc