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Market Update

Kraft Foods Agrees to $48 B Deal with Heinz, Apollo Education Plunges


Author: Mukesh Buch
ticker.com
Last Update: 1:02 PM ET March 25 2015

12:45 PM New York – Apollo Education net swung to a loss on 14% decline in revenues. Kraft Foods agreed to merge with H.J. Heinz backed by 3G Capital and Berkshire Hathaway. Christopher & Banks net tumbled 22%. Lindsay profit plunged 33%. Lexmark plans to acquire Kofax for $1 billion. Paychex Net Jumped.

Tollbooth Index declined 1.1% or 121.61 to 10,477.70.

Earnings Review

Apollo Education Group Inc (APOL) tumbled 24.2% or $6.78 to $21.24 after the educational services provider said revenues in the second-quarter ending in February declined 14% to $578.6 million from a year ago period.

Net in the quarter swung to a loss of $33.6 million or 31 cents per diluted share compared to profit of $14.6 million or 13 cents from the same quarter last year.

The company forecasted net revenue for the fiscal 2015 in the range of $2.63 billion to $2.68 billion from previous guidance between $2.74 billion and $2.80 billion.

Kraft Foods Group Inc (KRFT) surged 38.2% or $23.02 to $84.48 after the packaged food and beverage maker agreed to merge with H.J. Heinz Co.

The merged company will be called The Kraft Heinz Co.

The merger was financed with $10 billion by Brazil based private equity firm 3G Capital Partners and Warren Buffett controlled Berkshire Hathaway. The deal did not involve any bankers as the merger did not require any debt or financing from banks.

Under the terms, Kraft shareholders will control 49% in the combined company and a special cash dividend of $16.50 per share and valued the company at $48 billion.

The deal is expected to close in the second-half of this year.

Christopher & Banks Corporation (CBK) plummeted 8.9% or 52 cents to $5.34 after the women’s apparel retailer stated net sales in the first-quarter ending in January slumped 6.6% to $98 million from a year ago period.

Net income in the quarter tumbled 22% to $32.2 million or 86 cents per diluted share compared to $41.3 million or $1.10 from the same quarter last year.

Lindsay Corporation (LNN) declined 3.7% or $2.94 to $77.03 after the agricultural equipment maker said revenues in the second-quarter ending in February dropped 7.7% to $141.1 million from a year ago period.

Net income in the quarter plunged 33.3% to $9 million or 75 cents per diluted share compared to $13.5 million or $1.04 from the same quarter last year.

Lexmark International Inc (LXK) climbed 5.2% or $2.11 to $42.92 after the printing and imaging products distributor plans to acquire privately held Kofax Ltd, applications software provider for about $1 billion.

Paychex, Inc (PAYX) dropped 3.8% or $1.93 to $49.37 after the payroll services provider reported total revenues in the third-quarter ending in February climbed 8% to $704.3 million from a year ago period.

Net income in the quarter jumped 4% to $169.4 million or 46 cents per diluted share compared to $160.1 million or 44 cents from the same quarter last year.

The company forecasted total service revenue for the fiscal 2015 to increase between 8% and 10% and net income to grow in the range of 6% to 8%.

Steelcase Inc (SCS) slipped 1.5% or 29 cents to $19.63 after the office furniture maker stated revenues in the fourth-quarter ending on February 27 dropped 3.8% to $749.9 million from a year ago period.

Net income in the quarter declined 4.6% to $22.8 million or 18 cents per diluted share compared to $23.9 million or 19 cents from the same quarter last year.

For the fiscal first-quarter, the company forecasted revenues in the range of $690 million to $715 million and adjusted earnings per share between 13 cents and 17 cents.

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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