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Market Update

Linde, Praxair in $65 B Merger; Walgreens and RiteAid Inch Closer to Merge


Author: Mukesh Buch
ticker.com
Last Update: 12:27 PM ET December 20 2016

12:20 PM New York – BlackBerry net loss widened on 47% decline in revenues but the mobile phone maker lifted adjusted profit outlook. CarMax net jumped. Darden net surged 84%. FactSet profit tumbled 33%. General Mills net plunged 9%. Praxair and Linde agreed to merge. Rite Aid agrees to sell stores to Fred’s.

Tollbooth Index rose 18 or 0.2% to 11,289.14.

Earnings Review

BlackBerry Ltd (BBRY) gained 1.8% or 14 cents to $7.85 after Canada-based mobile communication services provider said revenues in the third-quarter ending in November plunged 47.3% from a year ago to $289 million.

Net loss in the quarter widened to $117 million or 22 cents per diluted share compared to $89 million or 17 cents per share from the same quarter a year ago.

BlackBerry said net loss narrowed compared to the previous quarter loss of $372 million.

The mobile services provider lifted adjusted profit forecast in the fiscal year from the prior estimated range of breakeven to a loss of 5 cent.

CarMax, Inc (KMX) slid 3 cents to $62.36 after the used vehicles retailer reported revenues in the third-quarter ending in November rose 4.4% from a year ago to $3.7 billion.

Used unit sales at comparable stores advanced 5.4% and total used unit sales rose 9.1% while total wholesale unit sales declined 2.2%.

Net income in the quarter jumped 6.6% to $136.6 million or 72 cents per diluted share compared to the $128.2 million or 63 cents per share from the same quarter last year.

Darden Restaurants, Inc (DRI) increased 1.2% or 91 cents to $76.59 after the full-service restaurant operator said revenues in the second-quarter ending on November 27 gained 1.9% from a year ago to $1.64 billion.

Same restaurant sales in the quarter jumped 2.6% and 2.1% increase in the month of November.

Net income in the quarter surged 84% to $79.5 million or 64 cents per diluted share compared to the $43.2 million or 33 cents per share from the same quarter last year.

The restaurant operator reaffirmed diluted net earnings per share in the fiscal year in the range of $3.87 to $3.97 and same-restaurant sales to grow between 1% and 2%.

FactSet Research Systems Inc (FDS) slumped 2.5% or $4.18 to $161.15 after the financial and data analytical services provider revenues in the first-quarter ending in November soared 6.5% from a year ago to $288.1 million.

Net income in the quarter tumbled 33.3% to $66.6 million or $1.66 per diluted share compared to the $60 million or $1.43 per share from the same quarter last year.

FactSet estimated revenues in the second-quarter between $293 million and $298 million and operating margin in the range of 31% to 32% and diluted earnings per share in the range of $1.70 and $1.74.

General Mills, Inc (GIS) dropped 3.1% or $1.96 to $61.10 after the branded consumer foods maker said revenues in the second-quarter ending on November 27 declined 7.1% from a year ago to $4.1 billion.

Net income in the quarter plunged 9% to $481.8 million or 80 cents per diluted share compared to the $529.5 million or 87 cents per share from the same quarter last year.

General Mills lowered net sales growth forecast in the fiscal 2017 between 3% and 4% from the previous range of flat to a 2% decline but said diluted earnings per share is expected to grow in the range of 6% to 8% from $2.92 in fiscal 2016.

Navistar International Corp (NAV) slipped 1.9% or 56 cents to $29.13 after the heavy machinery and vehicles maker stated revenues in the fourth-quarter ending in October plummeted 17% from a year ago to $2.1 billion.

Net loss in the quarter narrowed to $34 million or 42 cents per diluted share compared to the $50 million or 61 cents per share from the same quarter last year.

The trucks, buses and military vehicles maker said despite costs and expenses fell by 17% from a year earlier, truck sales in the quarter declined 20% to $1.4 billion and parts revenue dropped 5.5% to $613 million.

Navistar said retail deliveries in 2017 of class 6-8 trucks and buses in the United States and Canada are estimated in the range of 305,000 units to 335,000 units but revenue are likely to match in the year 2016.

Praxair, Inc (PX) declined 4.5% or $5.50 to $117.50 after the industrial gas supplier and Germany-based rival Linde AG agreed to merge for about $65 billion.

The groups said transaction is “expected to create considerable value resulting in approx $1 billion or €0.9 billion in annual synergies.”

""We consider this to be a true strategic merger” and “creating a unique and compelling opportunity for all of our stakeholders,"" chairman and chief executive officer Steve Angel of Praxair said.

The Valspar Corp (VAL) fell 46 cents to $103.18 after the coatings and paints products maker reported revenues in the fourth-quarter ending on October 28 slumped 4% from a year ago to $1.1 billion.

Net income in the quarter rose 1% to $103.6 million or $1.27 per diluted share compared to the $102.4 million or $1.26 per share from the same quarter last year.

Walgreens Boots Alliance (WBA) rose 15 cents to $86.21 after the drugs retailer said the rival Rite Aid Corporation agreed to sell 865 stores of Rite Aid and certain related assets to the small rival Fred’s, Inc for about $950 million in cash.

Walgreen said the company is in talks with the regulator FTC and expects the merger with Rite Aid to close in the early 2017.

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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