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Market Update

IBM Net Plunges and Sells Chip Unit, Macquarie Buys Cleco for $4.7 B


Author: Mukesh Buch
ticker.com
Last Update: 10:32 AM ET October 20 2014

12:30 PM New York – GLOBALFOUNDRIES agreed to acquire microelectronics business from IBM. Halliburton net surged 70%. Hasbro profit soared 43%. IBM net tumbled 99.6%. Macquarie Infra agreed to buy Cleco Corp for $4.7 billion. Valeant Pharma net swung to profit. VF Corp net jumped 8%.

Tollbooth Index increased 0.6% or 50.80 to 8,962.42.

Earnings Review

Genuine Parts Company (GPC) slipped 40 cents to $88.15 after the automobile parts distributor said sales in the third-quarter ending in September climbed 8% to $4 billion from a year ago period.

Net income in the quarter jumped 9.7% to $190.5 million or $1.24 a diluted share compared to $173.7 million or $1.12 from a same quarter last year.

GLOBALFOUNDRIES U.S. Inc, the chip-maker plans to acquire IBM''s global commercial semiconductor technology business, including intellectual property and technologies.

IBM plans to take pre-tax charge of $4.7 billion in its recent financial results for the third-quarter. GLOBALFOUNDRIES agreed to $1.5 billion to payment over the next three years. The deal is expected to close in the next year.

Halliburton Company (HAL) slipped 32 cents to $52.28 after the oilfield service provider stated total revenue in the third-quarter ending in September soared 8% to $8.70 billion from a year ago period.

Net income in the quarter surged 70% to $1.20 billion or $1.41 a diluted share compared to $706 million or 79 cents from a same quarter last year.

Hasbro, Inc (HAS) jumped 3.9% or $2.10 to $55.93 after the entertainment products maker said net revenue in the third-quarter ending in September increased 7% to $1.47 billion from a year ago period.

Net income in the quarter soared 42.6% to $180.5 million or $1.40 a diluted share compared to $126.6 billion or 96 cents from a same quarter last year.

International Business Machines Corp (IBM) plunged 6.8% or $12.33 to $169.72 after the information technology reported total revenue in the third-quarter ending in September declined 4% to $22.40 billion from a year ago period.

Net income in the quarter tumbled 99.6% to $18 million or 2 cents a diluted share compared to $4.04 billion or $3.68 from a same quarter last year.

The company said software revenue in the quarter slipped 2% to $5.7 billion and global financing revenue dropped 3% to $487 million.

The company reported revenue from the Americas slid 2% to $10.1 billion and from Europe, the Middle East and Africa also fell 2% to $7.2 billion. Revenues from the Asia Pacific revenue fell 9% to $5 billion.

In Brazil, Russia, India and China, revenue plunged 7%.

Macquarie Infrastructure Company LLC (MIC) rose 11 cents to $67.37 after the diversified infrastructure developer agreed to acquire Cleco Corporation, an electric utility provider, for cash and debt deal of about $4.7 billion, including $1.3 billion of assumed debt.

The Australian investment’s cash of $55.37 represents 14.7% premium on Cleco''s closing price of October 17.

The deal is expected to close in the second half of 2015.

Valeant Pharmaceuticals Intl Inc (VRX) climbed 3.6% or $4.39 to $124.60 after the pharmaceutical company said total revenue in the third-quarter ending in September surged 33% to $2.1 billion from a year ago period. Same-store sales in the quarter climbed 19%.

Net in the quarter swung to profit $275.4 million or 81 cents a diluted share compared to a loss of $973.2 million or $2.92 from a same quarter last year.

VF Corporation (VFC) slumped 45 cents to $63.31 after the apparel and accessories maker reported revenue in the third-quarter ending in September jumped 7% to $3.5 billion from a year ago period. Same-store sales in the quarter climbed 19%.

Net income in the quarter jumped 8% to $470.5 million or $1.08 a diluted share compared to $433.8 million or 97 cents from a same quarter last year.

The company forecasted revenues for the year to jump 8% to $12.3 billion and earnings per share rose 2 cents to $3.08, an increase of 14% from a year ago.

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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