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Market Update

Darden Restaurants, Red Hat Jump; CarMax Plunges 8%


Author: Mukesh Buch
ticker.com
Last Update: 11:21 AM ET December 18 2015

11:15 AM New York – Bristol-Myers agreed to sell its investigational HIV medicines for $1.5 billion to GlaxoSmithKline unit. AAR net tumbled 47%. BlackBerry net swung to a loss. CarMax profit fell 4%. Darden Restaurants net swung to profit. Lennar net soared 15%. Red Hat net slid 2%.

Tollbooth Index dropped 140.98 or 1.3% to 10,639.62.

Earnings Review

AAR Corp (AIR) rose 2 cents to $23.03 after the diversified aviation company said sales in the second-quarter ending in November jumped 5.1% from a year ago to $423.8 million.

Net income in the quarter tumbled 47.4% to $8 million or 23 cents per diluted share compared to $15.2 million or 38 cents per share from the same quarter last year.

BlackBerry Ltd (BBRY) gained 2.9% or 23 cents to $8.03 after the mobile services provider reported revenues in the third-quarter ending on November 28 soared 11.8% from a year ago to $548 million.

Net in the quarter swung to a loss of $89 million or 17 cents per diluted share compared to profit of $51 million or 24 cents per share from the same quarter last year.

Bristol-Myers Squibb Co (BMY) slipped 62 cents to $68.80 after the biopharmaceutical products maker signed two separate deals with ViiV Healthcare, a global HIV company of GlaxoSmithKline Plc, to divest its pipeline of investigational HIV medicines for about $1.5 billion.

The both the transactions are expected to close during the first-half of next year.

CarMax, Inc (KMX) plunged 7.7% or $4.43 to $52.73 after the used vehicles dealer said revenues in the third-quarter ending in November soared 4.1% from a year ago to $3.54 billion.

CarMax stock plunged after the company missed earnings outlook of 65 cents a share and revenues expectations of $3.63 billion.

Used unit sales in comparable stores fell 0.8%, total wholesale unit sales jumped 3.4% and total used unit sales advanced 3.2%.

Net income in the quarter dropped 3.6% to $128.2 million or 63 cents per diluted share compared to $130 million or 60 cents per share from the same quarter last year.

“We had a challenging sales quarter, which together with higher advertising expenses”, said chief executive officer Tom Folliard.

Darden Restaurants, Inc (DRI) soared 4.8% or $2.82 to $61.20 after the full service restaurant operator stated sales in the second-quarter ending on November 29 increased 3.2% from a year ago to $1.61 billion.

Net in the quarter swung to profit to $43.2 million or 33 cents per diluted share compared to a loss of $32.8 million or 26 cents per share from the same quarter last year.

Lennar Corporation (LEN) slumped 3.3% or $1.59 to $47.08 after the home builder reported revenues in the fourth-quarter ending in November surged 14% from a year ago to $2.9 billion.

Net income in the quarter soared 14.8% to $281.6 million or $1.21 per diluted share compared to $245.3 million or $1.07 per share from the same quarter last year.

Qihoo 360 Technology Co Ltd (QIHU) increased 1.6% or $1.19 to $73.03 after the China-based internet and mobile security services provider agreed to be acquired by a consortium of investors for about $9.3 billion in cash.

The transaction is expected to close in the first-half of 2016.

Red Hat Inc (RHT) soared 4.2% or $3.29 to $82.25 after the open source software provider stated revenues in the third-quarter ending in November advanced 15.9% from a year ago to $457.5 million.

Net income in the quarter slipped 2.3% to $46.8 million or 25 cents per diluted share compared to $47.9 million or 26 cents per share from the same quarter last year.

For the fourth quarter, the company forecasted revenues in the range of $535 million to $539 million and earnings per share of about 47 cents.

For the year, the software developer lifted revenues forecast between revenues of $2.04 billion to $2.05 billion from earlier estimated range of $2.03 billion to $2.04 billion and earnings per share of about $1.86.

Wells Fargo & Co (WFC) decreased 1.5% or 83 cents to $54.64 after the financial services provider agreed to sell its crop insurance business, Rural Community Insurance Services to the subsidiary of Zurich Insurance Group, Zurich American Insurance Company.

The financial details was not disclosed by Wells Fargo but industry analysts estimated the deal size between $670 million and $1 billion.

The transaction is expected to close by the end of the first-quarter of next year.

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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