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Market Update

Dow, Du Pont Explore Merger; Yahoo! to Spin-off Core Business


Author: Mukesh Buch
ticker.com
Last Update: 11:09 AM ET December 09 2015

11:05 AM New York Dow Chemical and Du Pont are in advance merger talks. Yahoo! plans to spin-off its core business into a separate company. Costco net fell 3%. Korn/Ferry net tumbled 29%. Lululemon net plunged 12%. Vera Bradley net soared 49%.

Tollbooth Index gained 31.51 or 0.3% to 10,060.90.

Earnings Review

Costco Wholesale Corporation (COST) plunged 6.1% or $10.36 to $158.51 after the discount stores operator reported revenues in the first-quarter ending on November 22 rose 1% from a year ago to $26.63 billion.

Comparable store sales in the quarter fell 1%.

Net income in the quarter slipped 3.2% to $480 million or $1.09 per diluted share compared to $496 million or $1.12 per share from the same quarter last year.

Dow Chemical Company (DOW) soared 10.3% or $5.29 to $56.14 after the Wall Street Journal reported that the diversified chemical maker and E I Du Pont De Nemours and Co are in preliminary merger talks with a market value of more than $120 billion.

As of Tuesday''s closing, Dow had a market valuation of $58.97 billion, while DuPont was valued at $58.37 billion.

E I Du Pont De Nemours and Co stock surged 9.6% to $73.

Ferrellgas Partners, L.P (FGP) dropped 2.5% or 45 cents to $17.50 after the propane and related equipment distributor said revenues in the fourth-quarter ending in October advanced 6.2% from a year ago to $471.1 million.

Net loss in the quarter widened to $79 million or 79 cents per diluted share compared to $32.5 million or 40 cents per share from the same quarter last year.

Francesca''s Holdings Corp (FRAN) jumped 6.4% or 98 cents to $16.36 after the boutiques operator said revenues in the third-quarter ending in October soared 19% from a year ago to $103.7 million.

Comparable store sales in the quarter increased 4%.

Net income in the quarter jumped 6.7% to $6.9 million or 16 cents per diluted share compared to $7.3 million or 17 cents per share from the same quarter last year.

For the fourth-quarter, the boutiques operator net sales are estimated in the range of $127 million to $130 million and diluted earnings per share between 31 cents and 33 cents.

For the full year, the company forecasted net sales between $432 million and $435 million and diluted in the range of 86 cents to 88 cents.

Korn/Ferry International (KFY) slumped 2.5% or 91 cents to $36 after the recruitment company stated revenues in the second-quarter ending in October advanced 10.1% from a year ago to $291.4 million.

Net income in the quarter plunged 29.1% to $18 million or 35 cents per diluted share compared to $25.4 million or 51 cents per share from the same quarter last year.

Lululemon Athletica Inc (LULU) declined 5.2% or $2.66 to $49.52 after the athletic apparel and accessories retailer said revenues in the third-quarter ending on November 1 jumped 14% from a year ago to $479.7 million.

Comparable store sales in the quarter soared 6%.

Net income in the quarter plunged 12% to $53.2 million or 38 cents per diluted share compared to $60.5 million or 42 cents per share from the same quarter last year.

Lululemon forecasted net revenue for the fourth-quarter in the range of $670 million to $685 million and diluted earnings per share between 75 cents and 78 cents.

For the year, the company estimated net revenues between $2.03 billion to $2.04 billion and diluted earnings per share in the range of $1.81 to $1.84.

Vera Bradley, Inc (VRA) surged 31.6% or $3.70 to $15.39 after the women''s handbags, accessories designer said revenues in the third-quarter ending in October rose 1.2% from a year ago to $126.7 million.

Net income in the quarter soared 49.3% to $10.3 million or 27 cents per diluted share compared to $6.9 million or 17 cents per share from the same quarter last year.

Yahoo! Inc (YHOO) rose 17 cents to $35.02 after the internet content services provider said its plans to spin-off its core business into a separate, publicly traded company and abandoning a previous plan to spin-off its valuable stake in Alibaba.

Yahoo has been under pressure from the activist hedge fund Starboard Value LP and asked the company to drop its plans and sell its core search and display ad businesses.

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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