The Daily Call

Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Morning Summary

Jayme Casey, Pat O'Donohue (203) 861-7650 | 4.25.2017

News

Asian markets continued to rally, playing catch up with Europe and the US following the sharp rally yesterday. Hong Kong (+1.3%), Taiwan (+1.3%), Japan (+1.1%) and Korea (+1.1%) led the gains while China (+0.2%) lagged. Markets in Australia and New Zealand were closed for a holiday. Elsewhere in the region volumes were little changed from yesterday, remaining somewhat subdued.

European markets (+0.2%) are trading near session highs on M&A and solid earnings as markets extend gains from yesterday. Volumes are ~110% of the 20 day average, -10% from yesterday. French April Business Confidence 104, in line with estimates and unchanged from March. French April Manufacturing Confidence 108 vs. 105. EUR +10 bps, GBP +15 bps.

US futures are ~25bps higher as investors watch for continued earnings and with economic data that includes FHFA House Price Index and S&P CoreLogic at 9am, and New Home Sales, Richmond Fed and Consumer Confidence at 10am. Markets also show signs of relief on an overnight report that Trump conceded on the border wall timing, reducing the risk of a government shutdown, but setting up a debate with Congress on tax reform after he said he will push for a 15% corporate tax rate that would challenge the revenue-neutral tax reform bill Ryan is hoping to pass. Crude is unchanged with Russia saying it will wait to decide whether to extend cuts until OPEC meets in May. API inventories are due at 4:30pm. In M&A news, Tyson Foods (TSN) will acquire Advancepierre Foods (APFH) for $40.25/sh in cash. Nord Anglia (NORD) will be acquired for $32.50/sh in cash by Bach Finance Limited. Straight Path’s (STRP) board determined an unsolicited all-stock offer from an unidentified multi-national telco company of $104.64/sh is superior to AT&T’s (T) bid. First Potomac (FPO) is reportedly working with an advisor to explore a sale. BioTelemetry (BEAT) offered to acquire LifeWatch (LIFE SW) for cash and stock. KMG Chemical (KMG) will buy Flowchem from Arsenal Capital for $495mm. UPS (UPS) will acquire S. Korean delivery service company, Logen, for ~$240mm. TreeHouse Foods (THS) announced plans to sell its soup and infant food business to Riverbend Foods. Noble Energy (NBL) completed the previously-announced acquisition of Clayton Williams Energy (CWEI). In other news, Bitauto Holdings (BITA) holder, Citic Capital, reported an 11.7% stake. Capricor (CAPR) reported positive study results. Swatch (UHR VX) claimed a victory in a Dutch appeals court in a fight with Tiffany (TIF) over an arbitration payment of more than $400mm from 2013. ABB (ABB) partnered with IBM (IBM) to develop cognitive industrial machines technology. Variety reported that Netflix (NFLX) entered a Chinese licensing deal with IQiyi. Express Scripts (ESRX) said it believes its contract with Anthem (ANTM) is unlikely to be extended beyond 2019. Berkshire Hathaway (BRK/A) filed the purchase of 3.88mm shares of SiriusXM (SIRI) series C shares between April 20-24. GE (GE) will invest ~$168mm in additive manufacturing in Germany. The Ontario Securities Commission has been asked by Coerente Capital to halt Cenovus’ (CVE) proposed sale of assets acquired from ConocoPhillips (COP). UniQure (QURE) received EMA priority medicines status for its hemophilia B drug. CardConnect (CCN) filed 15.6mm shares for sale for holders, Marrone Bio (MBII) and ContraVir (CTRV) filed secondaries of indeterminate size, and Karyopharm (KPTI) announced a $40mm common stock offering. Nielsen (NLSN) raised its dividend. Ameriprise (AMP) raised its dividend and added $2.5bn to its repurchase authorization.

CIT (CIT), Lockheed (LMT), T Rowe (TROW), Xerox (XRX) and Coca-Cola (KO) missed EPS estimates, while McDermott (MDR), Caterpillar (CAT), 3M (MMM), JetBlue (JBLU), Corning Gannett (GCI), (GLW), Tupperware (TUP), Valero (VLO), Eli Lilly (LLY), Masco (MAS), Labcorp (LH), Biogen (BIIB), Baker Hughes (BHI), TransUnion (TRU), Centene (CNC), PulteGroup (PHM), Radware (RDWR), DuPont (DD), Polaris (PII), SuperValu (SVU), Graphic Packaging (GPK) and Fifth Third Bank (FITB) beat expectations.

Later this morning AK Steel (AKS), Freeport (FCX), and McDonald’s (MCD) report earnings. Companies reporting after, the bell include AT&T (T), Capital One (COF), Chipotle (CMG), DDR (DDR), Panera (PNRA), Texas Instruments (TXN), US Steel (X), Universal Health (UHS) and Wynn Resorts (WYNN).

Analyst Actions: Best Buy (BBY) raised to “buy” at BofA, JPMorgan (JPM) and American Express (AXP) raised to “buy” at Guggenheim, ConAgra (CAG) cut to “sell” at UBS

 

Premarket Movers:

·         Nord (NORD) +26.5% to be acquired

·         McDermott (MDR) +15% earnings, guidance

·         Unisys (UIS) +15% earnings

·         Capricor (CAPR) +13% study results

·         Advancepierre (APFH) +9% to be acquired by TSN

·         Gannett (GCI) +7.5% earnings

·         Straight Path (STRP) +6% board affirms superior takeover offer

·         Caterpillar (CAT) +5.25% earnings

·         Emerson (EMR) +5.25% 3mo trailing sales estimates rise

·         ContraVir (CTRV) -25% secondary

·         Express Scripts (ESRX) -12% says contract with ANTM unlikely to be extended

Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

TMT

Jared Mancuso, Sean Greeley (203) 861-7650 | 4.25.2017

News

RMBS  Rambus reports Q1 GAAP EPS $0.03 vs FactSet $0.04 Reports Q1: Revenue $97.4M vs FactSet $95.5MAdjusted EBITDA $34.0M vs FactSet $30.8M -- 2 estimatesQ2 Guidance: GAAP EPS ($0.01)-$0.04 vs FactSet $0.03 Revenue $90M-$96M vs FactSet $94.0M

SANM  Sanmina reports Q2 EPS $0.76 vs FactSet $0.70 Reports Q2: Revenue $1.68B vs FactSet $1.71Q3 Guidance: EPS $0.72-0.77 vs FactSet $0.72

Revenue $1.7-1.8B vs FactSet $1.73B

CDNS  Cadence Design reports Q1 non-GAAP EPS $0.32 vs FactSet $0.32   Reports Q1: Revenue $476.9M vs FactSet $474.3MQ2 Guidance: non-GAAP EPS $0.31-0.33 vs FactSet $0.34

Revenue $470-480M vs FactSet $480.5M


UIS  Unisys reports Q1 GAAP EPS ($0.65) vs FactSet ($0.58)  Reports Q1:  Revenue $665.0M vs FactSet $618.1MAdjusted EBITDA $84.0M vs FactSet $61.0M -- 1 estimate

Services backlog ended the quarter at $3.7B, versus $3.9B last quarter

SAP reports Q1 EPS €0.73 ex-items vs consensus €0.73; reaffirms FY guidance Reports Q1: Revenue €5.29B vs consensus €5.16B

EBIT €1.20B ex-items vs consensus €1.23B

ST Sensata Technologies reports Q1 EPS $0.71 ex-items vs FactSet $0.68 Reports Q1: Revenue $807.3M vs FactSet $796.5M Q2 Guidance:  EPS $0.76-0.80 vs FactSet $0.81 Revenue $820-844M vs FactSet $829.4M FY Guidance (Dec 2017): Reaffirms EPS $3.08-3.20 vs FactSet $3.14 Revenue $3.165-3.265B vs prior guidance $3.15-3.25B and FactSet $3.23B

XRX  Xerox reports Q1 adjusted EPS $0.15 vs FactSet $0.16   Reports Q1:  Revenue $2.45B vs FactSet $2.45B Adjusted operating margin 11.4% vs year-ago 10.5% Operating cash flow of $190M from continuing operationsFY Guidance (Dec 2017): Reaffirms adjusted EPS $0.80-0.88 vs FactSet $0.85

Continues to expect to generate operating cash flow from continuing operations of $700 to $900M and free cash flow from continuing operations of $525 to $725M

STRP Straight Path board determines that unsolicited offer to acquire company for $104.64/share in stock constitutes “superior proposal”

The Straight Path board has determined that an unsolicited offer from a multi-national telecommunications company to acquire 100% of the issued and outstanding shares of Straight Path for $104.64 per share (reflecting an enterprise value of $1.8B), which will be paid in Bidder stock in an all-stock transaction constitutes a “Superior Proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with AT&T (T) and Switchback Merger Sub Inc., dated as of 9-Apr. Under the terms of the AT&T Merger agreement, AT&T agreed to acquire Straight Path in an all-stock transaction in which Straight Path stockholders would receive $95.63 per share (reflecting an enterprise value of $1.6B), which would be paid using AT&T stock

GCI   Gannett reports Q1 EPS ($0.02) ( Reports Q1: GAAP net loss includes $17.8M of after-tax restructuring, acquisition, severance, asset impairment, facility consolidation and other related costs. Approximately $8.8M of these charges were non-cash asset impairments, accelerated depreciation and facility consolidation charges. It is unclear if reported EPS is comparable to FactSet $0.0Revenue $773.5M vs FactSet $768.0MAdjusted EBITDA $69.7M vs FactSet $56.7M

TMUS  T-Mobile US reports Q1 adjusted EBITDA $2.67B vs FactSet $2.46B  Reports Q1: Revenue $9.61B vs FactSet $9.63B EPS $0.80 vs year-ago $0.56 FY Guidance (Dec 2017): Branded postpaid net adds 2.8-3.5M vs prior guidance 2.4-3.4M

Reaffirms adjusted EBITDA $10.4-10.8B vs FactSet $10.69B

ICHR  Ichor Holdings files amended S-1; to offer 4.5M shares for holders through Deutsche Bank and Stifel

 

Upgrades/ Downgrades

RMBS  Rambus reports Q1 GAAP EPS $0.03 vs FactSet $0.04 Reports Q1: Revenue $97.4M vs FactSet $95.5MAdjusted EBITDA $34.0M vs FactSet $30.8M -- 2 estimatesQ2 Guidance: GAAP EPS ($0.01)-$0.04 vs FactSet $0.03 Revenue $90M-$96M vs FactSet $94.0M

SANM  Sanmina reports Q2 EPS $0.76 vs FactSet $0.70 Reports Q2: Revenue $1.68B vs FactSet $1.71Q3 Guidance: EPS $0.72-0.77 vs FactSet $0.72

Revenue $1.7-1.8B vs FactSet $1.73B

CDNS  Cadence Design reports Q1 non-GAAP EPS $0.32 vs FactSet $0.32   Reports Q1: Revenue $476.9M vs FactSet $474.3MQ2 Guidance: non-GAAP EPS $0.31-0.33 vs FactSet $0.34

Revenue $470-480M vs FactSet $480.5M


UIS  Unisys reports Q1 GAAP EPS ($0.65) vs FactSet ($0.58)  Reports Q1:  Revenue $665.0M vs FactSet $618.1MAdjusted EBITDA $84.0M vs FactSet $61.0M -- 1 estimate

Services backlog ended the quarter at $3.7B, versus $3.9B last quarter

SAP reports Q1 EPS €0.73 ex-items vs consensus €0.73; reaffirms FY guidance Reports Q1: Revenue €5.29B vs consensus €5.16B

EBIT €1.20B ex-items vs consensus €1.23B

ST Sensata Technologies reports Q1 EPS $0.71 ex-items vs FactSet $0.68 Reports Q1: Revenue $807.3M vs FactSet $796.5M Q2 Guidance:  EPS $0.76-0.80 vs FactSet $0.81 Revenue $820-844M vs FactSet $829.4M FY Guidance (Dec 2017): Reaffirms EPS $3.08-3.20 vs FactSet $3.14 Revenue $3.165-3.265B vs prior guidance $3.15-3.25B and FactSet $3.23B

XRX  Xerox reports Q1 adjusted EPS $0.15 vs FactSet $0.16   Reports Q1:  Revenue $2.45B vs FactSet $2.45B Adjusted operating margin 11.4% vs year-ago 10.5% Operating cash flow of $190M from continuing operationsFY Guidance (Dec 2017): Reaffirms adjusted EPS $0.80-0.88 vs FactSet $0.85

Continues to expect to generate operating cash flow from continuing operations of $700 to $900M and free cash flow from continuing operations of $525 to $725M

STRP Straight Path board determines that unsolicited offer to acquire company for $104.64/share in stock constitutes “superior proposal”

The Straight Path board has determined that an unsolicited offer from a multi-national telecommunications company to acquire 100% of the issued and outstanding shares of Straight Path for $104.64 per share (reflecting an enterprise value of $1.8B), which will be paid in Bidder stock in an all-stock transaction constitutes a “Superior Proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with AT&T (T) and Switchback Merger Sub Inc., dated as of 9-Apr. Under the terms of the AT&T Merger agreement, AT&T agreed to acquire Straight Path in an all-stock transaction in which Straight Path stockholders would receive $95.63 per share (reflecting an enterprise value of $1.6B), which would be paid using AT&T stock

GCI   Gannett reports Q1 EPS ($0.02) ( Reports Q1: GAAP net loss includes $17.8M of after-tax restructuring, acquisition, severance, asset impairment, facility consolidation and other related costs. Approximately $8.8M of these charges were non-cash asset impairments, accelerated depreciation and facility consolidation charges. It is unclear if reported EPS is comparable to FactSet $0.0Revenue $773.5M vs FactSet $768.0MAdjusted EBITDA $69.7M vs FactSet $56.7M

TMUS  T-Mobile US reports Q1 adjusted EBITDA $2.67B vs FactSet $2.46B  Reports Q1: Revenue $9.61B vs FactSet $9.63B EPS $0.80 vs year-ago $0.56 FY Guidance (Dec 2017): Branded postpaid net adds 2.8-3.5M vs prior guidance 2.4-3.4M

Reaffirms adjusted EBITDA $10.4-10.8B vs FactSet $10.69B

ICHR  Ichor Holdings files amended S-1; to offer 4.5M shares for holders through Deutsche Bank and Stifel

 

Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Energy News

 (203) 861-7650 | 4.25.2017

News

CWEI Noble Energy completes the acquisition of Clayton Williams Energy ($131.90) 

  • Activity and recent well results for Clayton Williams Energy
    • Rig activity on the acquired acreage is planned to accelerate from 1 rig currently to 2 rigs by the end of Q2 2017 and 3 by year-end 2017
      • Including the 3 rigs currently running on Noble Energy’s (NBL) acreage, this will bring the company’s total Delaware rigs to 6 entering 2018
    • Two recent Clayton Williams Energy Wolfcamp A Lower completions commenced production in 2017; cumulative production for each of the wells is performing ~10% higher than the 1.0M Boe EUR Wolfcamp A type curve utilized in Noble Energy’s acquisition assessment; oil comprises 80 percent of the production stream
    • Clayton Williams Energy recently commenced production on two new Delaware Basin wells on its acreage which are in the initial ramp up period
  • Noble Energy’s first central gathering facility within the Delaware Basin, operated by NBLX, is progressing to a mid-year start-up

 


DYN Dynegy enters agreement with AES to acquire DPL's stakes in Miami Fort and Zimmer coal-fired plants for $50M (24-Apr, post-close) ($6.30) 

  • On 21-Apr-17, Dynegy entered into an Asset Purchase agreement with AES Ohio Generation, LLC, and The Dayton Power and Light Company ("DPL"), pursuant to which Dynegy will purchase DPL’s (or, upon receipt of FERC approval of the divestiture by DPL of its Ohio generation assets to AES Ohio, AES Ohio’s) entire 28.1% undivided interest in the Wm. H. Zimmer Generating Station, a coal-fired electric generating plant located in Moscow, Ohio, and 36.0% undivided interest in Miami Fort Unit 7 and Miami Fort Unit 8, a coal-fired electric generating plant located in North Bend, Ohio, approximately 740 megawatts in total (summer capacity), for $50M in cash and the assumption of certain liabilities, including environmental liabilities.
  • The cash purchase price is subject to adjustment at closing based on the amount of certain inventories, pre-paid amounts, employment benefits, insurance premiums, property taxes and other costs prior to closing.
  • The Purchase agreement includes customary representations, warranties and covenants by the parties and customary closing conditions, including approval by FERC under Section 203 of the Federal Power Act, as amended.

 

NGL NGL Energy Partners announces dividend, revises FY17 and FY18 guidance ($21.70) 

  • Dividend:
    • Quarterly dividend of $0.39 per unit. Payable 15-May; record 8-May.
    • In April 2016, the board of NGL’s general partner made the decision to reduce the distribution by 39% in order to focus on strengthening the balance sheet
  • FY17 Guidance:
    • Adjusted EBITDA $380M vs FactSet $457.6M
    • Preliminary results were adversely influenced by the significantly warmer than normal winter resulting in lower propane volumes and pricing, continued pressure in crude marketing and transportation, decreased demand for diesel fuel, lower than expected margins for biodiesel sales and an extended decline in gasoline line space values on the Colonial Pipeline
  • FY18 Guidance:
    • Adjusted EBITDA $500-525M vs FactSet $584.9M
    • DCF $300-325M


DKL Delek Logistics Partners LP increases quarterly distribution by 1.5% to $0.69 from $0.68 ($31.50) 

  • Payable 12-May-17; record 5-May-17.

 

APU AmeriGas Partners increases quarterly distribution by 1.1% to $0.95 from $0.94 ($45.83) 

  • Payable 18-May-17; record 10-May-17.
  • The new annualized dividend yield is 8.29% vs prior annualized dividend yield of 8.20%.


HTM U.S. geothermal announces company will not extend employment agreement for CEO Dennis Gilles beyond 18-Jul 2017 ($4.18) 

  • The board has established an Executive Committee that, in addition to overseeing the search for a new CEO, will guide the company on key strategic initiatives and capital allocation.

 

NWN Northwest Natural Gas elects Frank Burkhartsmeyer to position of SVP and CFO effective 17-May ($60.45) 

  • As previously reported, since 2-Sep-16, Brody J. Wilson has been serving as interim CFO. The board determined that Wilson’s interim service as CFO concludes with Burkhartsmeyer’s appointment.
  • Burkhartsmeyer, 52, joins the company from Avangrid Renewables (Renewables), which is a subsidiary of Avangrid and part of the Iberdrola Group, where he is currently the President and CEO (CEO).

 

AGR Avangrid reports Q1 adjusted EPS $0.73 vs FactSet $0.70 ($43.53) 

  • Reports Q1:
    • Revenue $1.76B vs FactSet $1.72B
  • Affirms FY Guidance (Dec 2017):
    • Adjusted EPS $2.10-2.35 vs FactSet $2.21
      • Networks $1.66 - $1.74
      • Renewables $0.50 - $0.65
      • Corporate $(0.08) - $(0.05)
      • Company notes that although it is not included in the 2017 adjusted consolidated earnings outlook, the Gas Storage business is projected to earn $(0.12)-$(0.08) per share in 2017.

 

MDR McDermott reports Q1 EPS $0.08 vs FactSet $0.00 ($6.33) 

  • Reports Q1:
    • Revenue $519.4M vs FactSet $691.7M
    • Adjusted operating margin 10.8% v. year-ago 10.2%
  • FY Guidance (Dec 2017):
    • EPS ~$0.42 vs prior guidance ~$0.29 and FactSet $0.30
    • Reaffirms revenue ~$3.2B vs FactSet $3.19B
    • EBITDA ~$365M vs prior guidance ~$325M and FactSet $326.3M

 

VLO Valero Energy reports Q1 EPS $0.60 ex-items vs FactSet $0.61 ($66.82) 

  • Reports Q1:
    • Revenue $21.77B vs FactSet $18.52B
  • Strategic update:
    • Valero remains on track to invest $2.7B of total capital this year, consisting of $1.1B for growth projects and $1.6B for sustaining the business. Included in the company’s growth investments are the Diamond Pipeline, the Diamond Green Diesel capacity expansion, the Houston alkylation unit, and the Wilmington cogeneration plant. Sustaining investments include turnarounds and catalyst in addition to Tier 3 gasoline compliance projects.
    • “U.S. refined product inventories have declined and are within their five-year ranges. Demand for gasoline and distillate remains strong both domestically and internationally. Combined with expectations for continued sweet crude oil production growth and relatively low prices for crude and refined products, consumer demand should be robust this year.”
    • The company exported a total of 365,000 barrels per day of gasoline and diesel during Q1.

 

BHI Baker Hughes reports Q1 EPS ($0.04) ex-items vs FactSet ($0.21) ($58.65) 

  • Reports Q1:
    • Revenue $2.26B vs FactSet $2.27B
    • EBITDA $309.0M vs FactSet $254.6M
  • Management comments:
    • Martin Craighead, Chairman and CEO: “While the onshore rig count increase in North America has been more robust than many had expected, the industry is still working to absorb excess service capacity. As this capacity is being consumed, we have seen labor and materials cost inflation in select product lines and basins. For most drilling-related product lines, with the demand growth we experienced this quarter, we believe we are on the cusp of a broader pricing recovery.
    • “Looking forward to the rest of the year, we believe that the North America onshore market will continue to grow and service capacity will continue to be absorbed. For international onshore markets, activity has bottomed and we expect it will remain stable, with a few pockets of modest growth. And, while we expect there to be headwinds offshore throughout the rest of 2017, we are winning in the right places, as evidenced by our recent tender awards."

 

RRC Range Resources reports Q1 EPS $0.25 ex-items vs FactSet $0.20 ($27.23) 

  • Reports Q1:
    • production of 1.93 Bcfe per day, an increase of 40% compared to the prior-year quarter
  • Q2 Guidance:
    • Production 1.93 Bcfe per day with 30% to 32% liquids
  • FY Guidance (Dec 2017):
    • Production growth for the full year of 2017 is unchanged at 33% to 35%.

 

SLCA US Silica reports Q1 EPS $0.09 ex-items vs FactSet $0.06 ($41.55) 

  • Reports Q1:
    • Revenue $244.8M vs FactSet $238.8M
    • EBITDA $42.7M vs FactSet $37.4M
    • Basic EPS of $0.09 excludes negative impact of $1.5M in business development related expenses and $6.3M in costs related to the restructuring of a vendor contract
  • FY Guidance (Dec 2017):
    • Reaffirms capex $125-150M vs FactSet $139.2M

Upgrades/ Downgrades

CWEI Noble Energy completes the acquisition of Clayton Williams Energy ($131.90) 

  • Activity and recent well results for Clayton Williams Energy
    • Rig activity on the acquired acreage is planned to accelerate from 1 rig currently to 2 rigs by the end of Q2 2017 and 3 by year-end 2017
      • Including the 3 rigs currently running on Noble Energy’s (NBL) acreage, this will bring the company’s total Delaware rigs to 6 entering 2018
    • Two recent Clayton Williams Energy Wolfcamp A Lower completions commenced production in 2017; cumulative production for each of the wells is performing ~10% higher than the 1.0M Boe EUR Wolfcamp A type curve utilized in Noble Energy’s acquisition assessment; oil comprises 80 percent of the production stream
    • Clayton Williams Energy recently commenced production on two new Delaware Basin wells on its acreage which are in the initial ramp up period
  • Noble Energy’s first central gathering facility within the Delaware Basin, operated by NBLX, is progressing to a mid-year start-up

 


DYN Dynegy enters agreement with AES to acquire DPL's stakes in Miami Fort and Zimmer coal-fired plants for $50M (24-Apr, post-close) ($6.30) 

  • On 21-Apr-17, Dynegy entered into an Asset Purchase agreement with AES Ohio Generation, LLC, and The Dayton Power and Light Company ("DPL"), pursuant to which Dynegy will purchase DPL’s (or, upon receipt of FERC approval of the divestiture by DPL of its Ohio generation assets to AES Ohio, AES Ohio’s) entire 28.1% undivided interest in the Wm. H. Zimmer Generating Station, a coal-fired electric generating plant located in Moscow, Ohio, and 36.0% undivided interest in Miami Fort Unit 7 and Miami Fort Unit 8, a coal-fired electric generating plant located in North Bend, Ohio, approximately 740 megawatts in total (summer capacity), for $50M in cash and the assumption of certain liabilities, including environmental liabilities.
  • The cash purchase price is subject to adjustment at closing based on the amount of certain inventories, pre-paid amounts, employment benefits, insurance premiums, property taxes and other costs prior to closing.
  • The Purchase agreement includes customary representations, warranties and covenants by the parties and customary closing conditions, including approval by FERC under Section 203 of the Federal Power Act, as amended.

 

NGL NGL Energy Partners announces dividend, revises FY17 and FY18 guidance ($21.70) 

  • Dividend:
    • Quarterly dividend of $0.39 per unit. Payable 15-May; record 8-May.
    • In April 2016, the board of NGL’s general partner made the decision to reduce the distribution by 39% in order to focus on strengthening the balance sheet
  • FY17 Guidance:
    • Adjusted EBITDA $380M vs FactSet $457.6M
    • Preliminary results were adversely influenced by the significantly warmer than normal winter resulting in lower propane volumes and pricing, continued pressure in crude marketing and transportation, decreased demand for diesel fuel, lower than expected margins for biodiesel sales and an extended decline in gasoline line space values on the Colonial Pipeline
  • FY18 Guidance:
    • Adjusted EBITDA $500-525M vs FactSet $584.9M
    • DCF $300-325M


DKL Delek Logistics Partners LP increases quarterly distribution by 1.5% to $0.69 from $0.68 ($31.50) 

  • Payable 12-May-17; record 5-May-17.

 

APU AmeriGas Partners increases quarterly distribution by 1.1% to $0.95 from $0.94 ($45.83) 

  • Payable 18-May-17; record 10-May-17.
  • The new annualized dividend yield is 8.29% vs prior annualized dividend yield of 8.20%.


HTM U.S. geothermal announces company will not extend employment agreement for CEO Dennis Gilles beyond 18-Jul 2017 ($4.18) 

  • The board has established an Executive Committee that, in addition to overseeing the search for a new CEO, will guide the company on key strategic initiatives and capital allocation.

 

NWN Northwest Natural Gas elects Frank Burkhartsmeyer to position of SVP and CFO effective 17-May ($60.45) 

  • As previously reported, since 2-Sep-16, Brody J. Wilson has been serving as interim CFO. The board determined that Wilson’s interim service as CFO concludes with Burkhartsmeyer’s appointment.
  • Burkhartsmeyer, 52, joins the company from Avangrid Renewables (Renewables), which is a subsidiary of Avangrid and part of the Iberdrola Group, where he is currently the President and CEO (CEO).

 

AGR Avangrid reports Q1 adjusted EPS $0.73 vs FactSet $0.70 ($43.53) 

  • Reports Q1:
    • Revenue $1.76B vs FactSet $1.72B
  • Affirms FY Guidance (Dec 2017):
    • Adjusted EPS $2.10-2.35 vs FactSet $2.21
      • Networks $1.66 - $1.74
      • Renewables $0.50 - $0.65
      • Corporate $(0.08) - $(0.05)
      • Company notes that although it is not included in the 2017 adjusted consolidated earnings outlook, the Gas Storage business is projected to earn $(0.12)-$(0.08) per share in 2017.

 

MDR McDermott reports Q1 EPS $0.08 vs FactSet $0.00 ($6.33) 

  • Reports Q1:
    • Revenue $519.4M vs FactSet $691.7M
    • Adjusted operating margin 10.8% v. year-ago 10.2%
  • FY Guidance (Dec 2017):
    • EPS ~$0.42 vs prior guidance ~$0.29 and FactSet $0.30
    • Reaffirms revenue ~$3.2B vs FactSet $3.19B
    • EBITDA ~$365M vs prior guidance ~$325M and FactSet $326.3M

 

VLO Valero Energy reports Q1 EPS $0.60 ex-items vs FactSet $0.61 ($66.82) 

  • Reports Q1:
    • Revenue $21.77B vs FactSet $18.52B
  • Strategic update:
    • Valero remains on track to invest $2.7B of total capital this year, consisting of $1.1B for growth projects and $1.6B for sustaining the business. Included in the company’s growth investments are the Diamond Pipeline, the Diamond Green Diesel capacity expansion, the Houston alkylation unit, and the Wilmington cogeneration plant. Sustaining investments include turnarounds and catalyst in addition to Tier 3 gasoline compliance projects.
    • “U.S. refined product inventories have declined and are within their five-year ranges. Demand for gasoline and distillate remains strong both domestically and internationally. Combined with expectations for continued sweet crude oil production growth and relatively low prices for crude and refined products, consumer demand should be robust this year.”
    • The company exported a total of 365,000 barrels per day of gasoline and diesel during Q1.

 

BHI Baker Hughes reports Q1 EPS ($0.04) ex-items vs FactSet ($0.21) ($58.65) 

  • Reports Q1:
    • Revenue $2.26B vs FactSet $2.27B
    • EBITDA $309.0M vs FactSet $254.6M
  • Management comments:
    • Martin Craighead, Chairman and CEO: “While the onshore rig count increase in North America has been more robust than many had expected, the industry is still working to absorb excess service capacity. As this capacity is being consumed, we have seen labor and materials cost inflation in select product lines and basins. For most drilling-related product lines, with the demand growth we experienced this quarter, we believe we are on the cusp of a broader pricing recovery.
    • “Looking forward to the rest of the year, we believe that the North America onshore market will continue to grow and service capacity will continue to be absorbed. For international onshore markets, activity has bottomed and we expect it will remain stable, with a few pockets of modest growth. And, while we expect there to be headwinds offshore throughout the rest of 2017, we are winning in the right places, as evidenced by our recent tender awards."

 

RRC Range Resources reports Q1 EPS $0.25 ex-items vs FactSet $0.20 ($27.23) 

  • Reports Q1:
    • production of 1.93 Bcfe per day, an increase of 40% compared to the prior-year quarter
  • Q2 Guidance:
    • Production 1.93 Bcfe per day with 30% to 32% liquids
  • FY Guidance (Dec 2017):
    • Production growth for the full year of 2017 is unchanged at 33% to 35%.

 

SLCA US Silica reports Q1 EPS $0.09 ex-items vs FactSet $0.06 ($41.55) 

  • Reports Q1:
    • Revenue $244.8M vs FactSet $238.8M
    • EBITDA $42.7M vs FactSet $37.4M
    • Basic EPS of $0.09 excludes negative impact of $1.5M in business development related expenses and $6.3M in costs related to the restructuring of a vendor contract
  • FY Guidance (Dec 2017):
    • Reaffirms capex $125-150M vs FactSet $139.2M
Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Healthcare News

Patrick O'Donohue, CFA, Jared Mancuso (203) 861-7650 | 4.25.2017

News

ESRX Express Scripts reports Q1 EPS $1.33 ex-items vs FactSet $1.32 ($67.25) 

  • Reports Q1:
    • Revenue $24.65B vs FactSet $25.00B
    • EBITDA $1.50B vs FactSet $1.51B
  • Q2 Guidance:
    • EPS $1.70-1.74 vs FactSet $1.68
    • Total adjusted claims 343M to 353M.
  • FY Guidance (Dec 2017):
    • EPS $6.90-7.04 vs prior guidance $6.82-7.02 and FactSet $6.93 

ESRX Express Scripts provides update on relationship with Anthem (ANTM) ($67.25) 

  • In its earnings press release, ESRX provides the following update:
    • "The company's current long-term PBM contract with Anthem expires on 31-Dec-19, and Anthem is currently engaged in a Request for Proposal (RFP) process for a PBM service provider following the end of its contract with Express Scripts. While the company has not formally participated in the RFP process, in recent months, management for the company and Anthem have had several conversations in which the company proposed providing as much as $1B in annual value ($3B in the aggregate) in the form of price concessions for 2017-2019 in connection with a negotiated contract extension for the period beyond 2019 at prevailing market rates. Although conversations have been ongoing, the company was recently told by Anthem management that Anthem intends to move its business when the company's current contract with Anthem expires on 31-Dec-19, and that Anthem is not interested in continuing discussions regarding pricing concessions for 2017-2019 or in receiving the company's proposed pricing for the period beyond 2019. As a result, today Express Scripts has elected to provide information as to its financial performance with and without Anthem, without any obligation to do so, in order to demonstrate that the company's core PBM business, excluding Anthem, is well positioned for future growth."

VYGR Voyager Therapeutics announces additional results from phase 1B trial of VY-AADC01 for advanced Parkinson’s disease ($10.32) 

  • VYGR announced dose-dependent improvements in functional and quality of life measures from the Phase 1B trial of VY-AADC01 for advanced Parkinson’s disease presented as part of an emerging (late-breaking) oral presentation at the AAN Annual Meeting. In addition, during a separate oral presentation at the AANS Annual Scientific Meeting, investigators presented results for maximizing coverage of the putamen during the surgical procedure for VY-AADC01.

BIIB Biogen reports Q1 EPS $5.20 ex-items vs FactSet $4.97 ($276.86) 

  • Reports Q1:
    • Revenue $2.81B vs FactSet $2.72B
    • Repurchased approximately 2M shares of the company’s common stock for a total value of $584M. Since the end of the quarter, the company has repurchased an additional approximately 2M shares for a total value of $543M. 

LH Laboratory Corp reports Q1 adjusted EPS $2.22 vs FactSet $2.20 ($144.61) 

  • Reports Q1:
    • Revenue $2.41B vs FactSet $2.41B
  • FY Guidance (Dec 2017):
    • EPS $9.20-$9.60 vs prior guidance $9.35-$9.75 and FactSet $9.59
    • Revenue +3.5-5.5% (includes the negative impact from approximately 40 basis points of foreign currency translation and equates to constant currency revenue growth of 3.9% to 5.9%) vs prior year's $9.4M, implying $9.8-10.0M vs FactSet $9.94B 

WAT Waters reports Q1 EPS $1.46 ex-items vs FactSet $1.33 ($160.27) 

  • Reports Q1:
    • Revenue $498.0M vs FactSet $488.8M

LLY Eli Lilly reports Q1 EPS $0.98 vs FactSet $0.96 ($83.42) 

  • Reports Q1:
    • Revenue $5.23B vs FactSet $5.22B
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $4.05-4.15 vs FactSet $4.11
    • Reaffirms revenue $21.8-22.3B vs FactSet $22.15B
    • Reaffirms Marketing, selling and administrative expenses $6.4-6.6B
    • Reaffirms R&D expenses $4.9-5.1B
    • Reaffirms non-GAAP tax rate 22.0% 

CNC Centene reports Q1 EPS $1.12 ex-items vs FactSet $1.04 ($71.99) 

  • Reports Q1:
    • Revenue $11.72B vs FactSet $11.41B
  • FY Guidance (Dec 2017):
    • EPS $4.50-$4.90 vs prior guidance $4.40-4.85 and FactSet $4.70
      • previous annual guidance included $0.20 per diluted share of conservatism associated with lower margins on the Health Insurance Marketplace business. Due to the performance of the marketplace business in Q1 of 2017, $0.04 of the original $0.20 of conservatism was recognized. The company's updated annual GAAP diluted EPS and Adjusted Diluted EPS guidance includes the remaining $0.16 per diluted share of conservatism associated with the 2017 Health Insurance Marketplace margins.
    • Reaffirms revenue $46.0B-$46.8B vs FactSet $46.54B
    • Reaffirms HBR 87.0-87.5% 

ARDX Ardelyx files $250M mixed securities shelf ($12.55)

AKRX Fresenius Kabi (FRE.GR) issues press release confirming acquisition of Akorn (AKRX) ($32.72) 

  • Fresenius Kabi has agreed to acquire Akorn, Inc. a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for approximately $4.3B, or $34 per share, plus approximately $450M of net debt.
  • Akorn reaffirms its previously announced 2017 guidance, excluding any one-time costs related to the transaction.
  • Mid-term, the acquisition is expected to create cost and growth synergies of approximately $100M p.a. before tax.
  • Fresenius expects the acquisition to be accretive to Group net income and EPS in 2018, excluding integration costs, and to contribute positively from 2019 onwards including integration costs. 

OMED OncoMed Pharmaceuticals to reduce workforce by 50% resulting in 64 remaining full-time employees ($3.77)

  • OncoMed Pharmaceuticals Inc. announced a significant reduction in its workforce to focus internal efforts on the advancement of three clinical-stage programs to key milestones and continued immuno-oncology drug discovery and development, while seeking to partner select pipeline assets.
  • Through implementation of the plan announced, OncoMed expects to realize significant cost savings of approximately $60M over the next two years associated with personnel and operating expenses. 

HSTM Healthstream reports Q1 EPS $0.04 vs FactSet $0.02 ($23.62)

  • Reports Q1:
    • Revenue $59.9M vs FactSet $59.3M
    • Adjusted EBITDA $8.7M vs FactSet $7.6M
    • At 31-Mar-17, we had approximately 4,470,000 total subscribers implemented to use and 4,573,000 total subscribers contracted to use our subscription-based solutions. 

HUM Humana reports preliminary Q1 adjusted EPS $2.75 vs FactSet $2.49; raises FY17 guidance ($213.76) 

  • Q1 Guidance:
    • Preliminary GAAP revenue $13.76B vs FactSet $13.60B
      • Revenue ~$13.48B adjusted for revenues associated with the Individual Commercial business
  • FY Guidance (Dec 2017):
    • Adjusted EPS "at least" $11.10 vs prior guidance $10.80-11.00 and FactSet $10.94
  • Medicare Payment Rates
    • On 3-Apr, the CMS issued its announcement of 2018 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (see linked comments)
    • The company expects the Final Rate Notice to result in a 0.45% rate increase for Humana versus CMS’ estimate for the sector of 0.85% on a comparable basis. 

QDEL Quidel Corp reports Q1 EPS $0.45 ex-items vs FactSet $0.29 ($23.50) 

  • Reports Q1:
    • GAAP EPS $0.42
    • Revenue $73.7M vs FactSet $61.9M

KPTI Karyopharm Therapeutics announces $40M common stock offering through Cantor ($11.31) 

  • Karyopharm intends to use the net proceeds of the offering: to support continued clinical development of selinexor (KPT-330) in multiple myeloma, lymphoma and other oncology indications; for early clinical trials of Karyopharm’s two pipeline drug candidates in oncology, KPT-8602 and KPT-9274; to continue preparing to establish the commercial infrastructure for the potential launch of selinexor in North America and Western Europe; and for working capital and other general corporate purposes. 

Upgrades/ Downgrades

ESRX Express Scripts reports Q1 EPS $1.33 ex-items vs FactSet $1.32 ($67.25) 

  • Reports Q1:
    • Revenue $24.65B vs FactSet $25.00B
    • EBITDA $1.50B vs FactSet $1.51B
  • Q2 Guidance:
    • EPS $1.70-1.74 vs FactSet $1.68
    • Total adjusted claims 343M to 353M.
  • FY Guidance (Dec 2017):
    • EPS $6.90-7.04 vs prior guidance $6.82-7.02 and FactSet $6.93 

ESRX Express Scripts provides update on relationship with Anthem (ANTM) ($67.25) 

  • In its earnings press release, ESRX provides the following update:
    • "The company's current long-term PBM contract with Anthem expires on 31-Dec-19, and Anthem is currently engaged in a Request for Proposal (RFP) process for a PBM service provider following the end of its contract with Express Scripts. While the company has not formally participated in the RFP process, in recent months, management for the company and Anthem have had several conversations in which the company proposed providing as much as $1B in annual value ($3B in the aggregate) in the form of price concessions for 2017-2019 in connection with a negotiated contract extension for the period beyond 2019 at prevailing market rates. Although conversations have been ongoing, the company was recently told by Anthem management that Anthem intends to move its business when the company's current contract with Anthem expires on 31-Dec-19, and that Anthem is not interested in continuing discussions regarding pricing concessions for 2017-2019 or in receiving the company's proposed pricing for the period beyond 2019. As a result, today Express Scripts has elected to provide information as to its financial performance with and without Anthem, without any obligation to do so, in order to demonstrate that the company's core PBM business, excluding Anthem, is well positioned for future growth."

VYGR Voyager Therapeutics announces additional results from phase 1B trial of VY-AADC01 for advanced Parkinson’s disease ($10.32) 

  • VYGR announced dose-dependent improvements in functional and quality of life measures from the Phase 1B trial of VY-AADC01 for advanced Parkinson’s disease presented as part of an emerging (late-breaking) oral presentation at the AAN Annual Meeting. In addition, during a separate oral presentation at the AANS Annual Scientific Meeting, investigators presented results for maximizing coverage of the putamen during the surgical procedure for VY-AADC01.

BIIB Biogen reports Q1 EPS $5.20 ex-items vs FactSet $4.97 ($276.86) 

  • Reports Q1:
    • Revenue $2.81B vs FactSet $2.72B
    • Repurchased approximately 2M shares of the company’s common stock for a total value of $584M. Since the end of the quarter, the company has repurchased an additional approximately 2M shares for a total value of $543M. 

LH Laboratory Corp reports Q1 adjusted EPS $2.22 vs FactSet $2.20 ($144.61) 

  • Reports Q1:
    • Revenue $2.41B vs FactSet $2.41B
  • FY Guidance (Dec 2017):
    • EPS $9.20-$9.60 vs prior guidance $9.35-$9.75 and FactSet $9.59
    • Revenue +3.5-5.5% (includes the negative impact from approximately 40 basis points of foreign currency translation and equates to constant currency revenue growth of 3.9% to 5.9%) vs prior year's $9.4M, implying $9.8-10.0M vs FactSet $9.94B 

WAT Waters reports Q1 EPS $1.46 ex-items vs FactSet $1.33 ($160.27) 

  • Reports Q1:
    • Revenue $498.0M vs FactSet $488.8M

LLY Eli Lilly reports Q1 EPS $0.98 vs FactSet $0.96 ($83.42) 

  • Reports Q1:
    • Revenue $5.23B vs FactSet $5.22B
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $4.05-4.15 vs FactSet $4.11
    • Reaffirms revenue $21.8-22.3B vs FactSet $22.15B
    • Reaffirms Marketing, selling and administrative expenses $6.4-6.6B
    • Reaffirms R&D expenses $4.9-5.1B
    • Reaffirms non-GAAP tax rate 22.0% 

CNC Centene reports Q1 EPS $1.12 ex-items vs FactSet $1.04 ($71.99) 

  • Reports Q1:
    • Revenue $11.72B vs FactSet $11.41B
  • FY Guidance (Dec 2017):
    • EPS $4.50-$4.90 vs prior guidance $4.40-4.85 and FactSet $4.70
      • previous annual guidance included $0.20 per diluted share of conservatism associated with lower margins on the Health Insurance Marketplace business. Due to the performance of the marketplace business in Q1 of 2017, $0.04 of the original $0.20 of conservatism was recognized. The company's updated annual GAAP diluted EPS and Adjusted Diluted EPS guidance includes the remaining $0.16 per diluted share of conservatism associated with the 2017 Health Insurance Marketplace margins.
    • Reaffirms revenue $46.0B-$46.8B vs FactSet $46.54B
    • Reaffirms HBR 87.0-87.5% 

ARDX Ardelyx files $250M mixed securities shelf ($12.55)

AKRX Fresenius Kabi (FRE.GR) issues press release confirming acquisition of Akorn (AKRX) ($32.72) 

  • Fresenius Kabi has agreed to acquire Akorn, Inc. a U.S.-based manufacturer and marketer of prescription and over-the-counter pharmaceutical products, for approximately $4.3B, or $34 per share, plus approximately $450M of net debt.
  • Akorn reaffirms its previously announced 2017 guidance, excluding any one-time costs related to the transaction.
  • Mid-term, the acquisition is expected to create cost and growth synergies of approximately $100M p.a. before tax.
  • Fresenius expects the acquisition to be accretive to Group net income and EPS in 2018, excluding integration costs, and to contribute positively from 2019 onwards including integration costs. 

OMED OncoMed Pharmaceuticals to reduce workforce by 50% resulting in 64 remaining full-time employees ($3.77)

  • OncoMed Pharmaceuticals Inc. announced a significant reduction in its workforce to focus internal efforts on the advancement of three clinical-stage programs to key milestones and continued immuno-oncology drug discovery and development, while seeking to partner select pipeline assets.
  • Through implementation of the plan announced, OncoMed expects to realize significant cost savings of approximately $60M over the next two years associated with personnel and operating expenses. 

HSTM Healthstream reports Q1 EPS $0.04 vs FactSet $0.02 ($23.62)

  • Reports Q1:
    • Revenue $59.9M vs FactSet $59.3M
    • Adjusted EBITDA $8.7M vs FactSet $7.6M
    • At 31-Mar-17, we had approximately 4,470,000 total subscribers implemented to use and 4,573,000 total subscribers contracted to use our subscription-based solutions. 

HUM Humana reports preliminary Q1 adjusted EPS $2.75 vs FactSet $2.49; raises FY17 guidance ($213.76) 

  • Q1 Guidance:
    • Preliminary GAAP revenue $13.76B vs FactSet $13.60B
      • Revenue ~$13.48B adjusted for revenues associated with the Individual Commercial business
  • FY Guidance (Dec 2017):
    • Adjusted EPS "at least" $11.10 vs prior guidance $10.80-11.00 and FactSet $10.94
  • Medicare Payment Rates
    • On 3-Apr, the CMS issued its announcement of 2018 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (see linked comments)
    • The company expects the Final Rate Notice to result in a 0.45% rate increase for Humana versus CMS’ estimate for the sector of 0.85% on a comparable basis. 

QDEL Quidel Corp reports Q1 EPS $0.45 ex-items vs FactSet $0.29 ($23.50) 

  • Reports Q1:
    • GAAP EPS $0.42
    • Revenue $73.7M vs FactSet $61.9M

KPTI Karyopharm Therapeutics announces $40M common stock offering through Cantor ($11.31) 

  • Karyopharm intends to use the net proceeds of the offering: to support continued clinical development of selinexor (KPT-330) in multiple myeloma, lymphoma and other oncology indications; for early clinical trials of Karyopharm’s two pipeline drug candidates in oncology, KPT-8602 and KPT-9274; to continue preparing to establish the commercial infrastructure for the potential launch of selinexor in North America and Western Europe; and for working capital and other general corporate purposes. 
Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Consumer News

Josh DiMarzo, Mark Waltos (203) 861-7650 | 4.25.2017

News

SVU Supervalu reports Q4 EPS $0.13 ex-items vs FactSet $0.09 

  • Reports Q4:
    • Revenue $2.91B vs FactSet $2.90B
    • Adjusted EBITDA $124M vs FactSet $114.3M

EAT Brinker reports Q3 EPS $0.94 ex-items vs FactSet $0.85 

  • Reports Q3:
    • Revenue $810.6M vs FactSet $817.6M
    • Total system comps (2.3%)

DFRG Del Frisco's Restaurant reports Q1 adjusted EPS $0.20 vs FactSet $0.21 

  • Reports Q1:
    • Revenue $83.9M vs FactSet $84.1M
    • Comps (0.2%) vs FactSet (0.4%)
  • FY Guidance (Dec 2017):
    • Adjusted EPS $0.82-0.86 vs prior guidance $0.80-0.84 and FactSet $0.84
    • Reaffirms total comps (0.5%) to +0.5%

DRI Darden Restaurants completes acquisition of Cheddar's Scratch Kitchen 

  • DRI announced that it has completed the acquisition of Cheddar's Scratch Kitchen (Cheddar's) for $780M in an all-cash transaction from its stockholders including private equity firms L Catterton and Oak Investment Partners.
  • This follows the agreement that was announced on 27-Mar-17. The transaction price is subject to customary post-closing adjustments.

TSN Tyson Foods explores the sale of three non-protein businesses as part of corporate strategy

  • Tyson Foods announces that, as part of its strategic focus on protein-packed brands, it is exploring the sale of three non-protein businesses.

APFH Tyson Foods (TSN) to acquire AdvancePierre Foods for $40.25/sh in cash; transaction valued at ~$4.2B incl. debt 

NORD Nord Anglia Education to be acquired by CPPIB & Baring-led consortium for $32.50/sh in cash; transaction valued at ~$4.3B 

  • Nord Anglia Education announced it has entered into a definitive agreement and plan of merger with Bach Finance pursuant to which Nord Anglia Education will be acquired by Bach in a transaction valued at ~$4.3B, including the repayment of debt.
    • Immediately following the consummation of the transaction, Bach will be beneficially owned by a consortium led by funds affiliated with Canada Pension Plan Investment board and funds affiliated with Baring Private Equity Asia .
  • Under the terms of the agreement, each ordinary share outstanding immediately prior to the effective time of the merger will be exchanged for the right to receive $32.50 in cash without interest, except for (a) (i) 69,613,389 Shares beneficially owned by Premier Education Holdings and (ii) Shares held by Bach, each of which will be cancelled and cease to exist
    • The merger consideration represents a premium of 18% over Nord Anglia Education's closing share price on 24-Apr
  • The merger agreement provides for a 30 day "go-shop" period, during which the Special Committee will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals
  • The transaction is currently expected to close before the end of Nord Anglia Education's fiscal year ending 31-Aug

CPLA Capella Education reports Q1 EPS $0.94 vs FactSet $0.87 

  • Reports Q1:
    • Revenue $111.8M vs FactSet $111.2M
  • Q2 Guidance:
    • Revenue +2.5-3.5% vs prior year's $106.7M, implying $109.4-110.4M vs FactSet $111.6M
    • Operating margin 13.5-14.5%
    • Capella University new enrollment is expected to be down in the low-single digit percentage range year-over-year and total enrollment is expected to decline about one percent year-over-year.
  • Management comments:
    • CFO Steve Polacek: “We expect quarterly variability in new enrollment growth, and planned investments will drive a different quarterly investment pattern in 2017 compared to 2016. Our focus on delivering our annual performance goals remains unchanged.”

RAD Rite Aid reports Q4 adjusted EBITDA $264.3M vs FactSet $224.4M; provides WBA merger update

  • Reports Q4:
    • EPS ($0.00) vs FactSet ($0.04)
    • Revenue $8.54B vs FactSet $8.27B
  • Merger update:
    • While WBA and Rite Aid continue to be actively engaged in discussions with the Federal Trade Commission regarding the transaction and are working toward a close of the merger by 31-Jul-17, there can be no assurance that the requisite regulatory approvals will be obtained, or that the merger will be completed within the time period contemplated by the merger agreement on the current terms, if at all.
  • Management comments:
    • Chairman and CEO John Standley: “We remain confident that the completion of our proposed merger with Walgreens Boots Alliance is in the best interest of Rite Aid shareholders, customers and associates. However, despite our team’s continued focus on growing our business, the extended duration of the merger process is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward.”

TIF Tiffany & Co provides update on Swatch litigation 

  • As previously disclosed, Tiffany has taken action in the courts of the Netherlands seeking to annul the arbitration award issued on 21-Dec-13 in favor of the Swatch Group Ltd
  • On 4-Mar-15, the District Court of Amsterdam issued a decision in favor of the Tiffany Parties.
  • Under this decision, the Arbitration Award was set aside. However, the Swatch Parties took action in the Dutch courts to appeal the District Court's decision
  • The Appellate Court issued its decision on 25-Apr-17, finding in favor of the Swatch Parties and ordering the Tiffany Parties to reimburse the Swatch Parties €6,340.00 in legal costs
  • However, the Tiffany Parties have a right to appeal the decision of the Appellate Court to the Supreme Court of the Netherlands, and the Arbitration Award may ultimately be set aside by the Supreme Court.
  • If the Tiffany Parties take action to appeal the decision of the Appellate Court, Registrant’s management expects that the annulment action will not be ultimately resolved until, at the earliest, Registrant's fiscal year ending 31-Jan-19.

CTRN Citi Trends sends second letter to holders ahead of annual meeting; criticizes Macellum

PII Polaris Industries reports Q1 EPS $0.75 ex-items vs FactSet $0.70 

  • Reports Q1:
    • Adjusted revenue $1.16B vs FactSet $1.11B
      • Adjusted sales excludes impact from Victory Motorcycles net sales
      • unadjusted sales were $1.15B
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $4.25-4.50 vs FactSet $4.39
    • Reaffirms revenue +10-13% vs prior year's $4.52B, implying $4.97-5.10B vs FactSet $5.06B
  • Management comments:
    • Scott Wine, Chairman and CEO: “While we reported an expected net loss for the quarter, adjusted earnings were slightly ahead of our expectations. We saw continued strong performance from Indian Motorcycle and our ORV business improved its performance in the face of heavy competitive activity and a sluggish powersports environment. Overall, our dealer channel remains healthy with inventories down eight percent, and we continue to diligently work to enhance our dealer engagement.”

JAKK JAKKS Pacific reports Q1 EPS ($1.01) vs FactSet ($0.89) 

  • Reports Q1:
    • Revenue $94.5M vs FactSet $87.7M
    • EBITDA ($10.6M) vs FactSet ($10.4M)
    • Gross margin in Q1 was 31.8%, down slightly from 32.5% last year as a result of pricing pressure on Funnoodle pool toys and higher tooling amortization on increased capital expenditures in 2016 offset in part by lower royalties resulting from a shift in product mix.
  • FY Guidance (Dec 2017):
    • For 2017, the company continues to expect higher net income, EPS and Adjusted EBITDA on lower net sales compared to 2016. The company expects improved profitability in 2017 to result from a continued focus on building our base of evergreen brands and categories, as well as entering new categories, creating a strong portfolio of new and existing licenses and developing owned IP and content.

Stocks mentioned on CNBC's Mad Money with Jim Cramer -- TheStreet 

  • Featured Positive: Cramer talked to the Chairman and CEO of Hasbro (HAS) Brian Goldner. Cramer is positive on the company.
  • Featured Topic: Cramer spent a portion of the show commenting on the market's rally noting the French elections, merger activity and earnings beats. He does not believe Trump's tax cuts announced on Wednesday have anything to do with the move.
  • Brief Mention/Positive: XLNX, ABT, BRK.A, CHK, LUV, AAL, ALK, DAL, UAL, JBLU

WHR Whirlpool reports Q1 ongoing EPS $2.50 vs FactSet $2.65 

  • Reports Q1:
    • Revenue $4.79B vs FactSet $4.75B
  • FY Guidance (Dec 2017):
    • EPS $14.75-15.50 vs prior guidance $15.25-16.25 and FactSet $15.42
      • cites result of temporary integration challenges in the EMEA region
    • Reaffirms cash from operating activities $1.7-1.75B
    • Reaffirms FCF appx $1B
    • Full-year tax rate anticipated at 20% vs prior guidance of 22% given in Q4 release
  • Management comments:
    • Marc Bitzer, president and COO:"While 2017 is the most complex year of our European integration, we remain confident that we will complete key elements of the integration and deliver profitable growth in Europe this year."

GPC Genuine Parts chairman Thomas Gallagher to retire effective 30-Jun-17 

  • Gallagher will continue to serve as Non-Executive Chairman of the board following his retirement.

TUP Tupperware reports Q1 EPS $1.01 vs FactSet $0.94

  • Reports Q1:
    • Reflecting higher than expected sales, particularly in China which had a good contribution margin to profit, lower costs from restructuring actions taken to improve the value chain in Beauticontrol, and a timing benefit from unallocated corporate costs. Versus the February guidance, there was a 2 cent benefit from stronger foreign exchange rates on the diluted EPS comparison, while there was no impact versus 2016.
    • Revenue $554.8M vs FactSet $532.1M
  • Q2 Guidance:
    • EPS $1.17-$1.22 vs FactSet $1.19
    • Local currency sales growth +2%-4%
  • FY Guidance (Dec 2017):
    • EPS $4.67-$4.77 vs prior guidance $4.47-$4.57 and FactSet $4.56
    • Local currency sale growth +2%-4% vs. prior guidance of flat to +2%
    • Fiscal year 2017 includes 52 weeks, while 2016 had 53 weeks. The company estimates this will have a (1) percentage point impact on the year-over-year sales comparison in 2017 versus 2016.
    • Tax rate estimated at 26.1% on a U.S. GAAP basis and 25.5% excluding items.
    • Excludes land sales that may occur.

KO Coca-Cola reports Q1 EPS $0.43 ex-items vs FactSet $0.44 

  • Reports Q1:
    • Revenue $9.12B vs FactSet $8.89B
  • Q2 Guidance:
    • Net revenues: 17% to 18% headwind from acquisitions, divestitures, and structural items; 1% to 2% currency headwind based on the current rates and including the impact of hedged positions
    • Income before income taxes: 3% to 4% structural headwind; 3% currency headwind based on the current rates and including the impact of hedged positions
  • FY Guidance (Dec 2017):
    • Comparable EPS (3%)-(1%) vs. $1.91 in 2016, implying $1.85-1.89, vs prior (4%)-(1%)
    • Reaffirms 3% organic revenue growth
    • Reaffirms 7-8% growth in comparable currency neutral income before income taxes
    • Reaffirms 1-2% headwind in net revenues
    • Guides 3% headwind in pre-tax income vs prior guidance 3-4% headwind
  • FY Guidance (Dec 2018):
    • Reaffirms net revenues: 16% to 17% headwind from acquisitions, divestitures, and structural items
    • Reaffirms Income before income taxes: 1% to 2% structural headwind; low single-digit currency headwind based on the current rates and including the impact of hedged positions
    • Reaffirms Underlying effective tax rate (non-GAAP): 26.0%

THS TreeHouse Foods, Inc. to sell soup and infant feeding business to Insight Equity affiliate; price not disclosed 

  • Entered into a definitive agreement to sell its Soup and Infant Feeding (SIF) business to Riverbend Foods LLC, a newly formed portfolio company of Insight Equity, a private equity firm.
    • The SIF business is based in Pittsburgh, Pa. and is a manufacturer of private label condensed and ready-to-serve soup, baby food and gravy packaged in cans, glass jars and Tetra Recart formats.
    • Sales of the business were approximately $210M in 2016.
    • The transaction will have a negligible impact on the ongoing operating income of TreeHouse Foods.
    • Financial terms of the sale were not disclosed.
    • The transaction is subject to customary closing conditions and is expected to close in the second or Q3 of 2017.

MNST Monster Beverage Corp. discloses resignation of Chief Marketing Officer Mark Hall 

  • Hall has decided to reduce his responsibilities to spend more time with family. As a result, Hall will be relinquishing his position as Chief Marketing Officer of Monster Energy Company and delivered notice of his resignation from such position on 21-Apr-17, effective 1-May-17.
  • Hall will continue to serve as an employee of the company, focusing on ideation, design and development of new products.
  • Hall will also continue to serve as a director of Monster Beverage Corporation.

JJSF J&J Snack Foods reports Q2 EPS $0.85 vs FactSet $0.88 

  • Reports Q2:
    • Revenue $246.5M vs FactSet $243.8M
    • Operating income $24.1M vs year-ago $23.3M

JBLU JetBlue Airways reports Q1 EPS $0.25 vs FactSet $0.22 

  • Reports Q1:
    • Revenue $1.60B vs FactSet $1.62B
  • Q2 Guidance:
    • Capacity is expected to increase between 4% and 6% year over year
    • RASM is expected to increase between 3% and 6% y/y
    • CASM excluding fuel is expected to grow between 4.5% and 6.5% y/y
  • FY Guidance (Dec 2017):
    • Continues to expect capacity to increase between 5.5% and 7.5% y/y
    • Continues to expect year over year CASM excluding fuel to grow between 1.5% and 3.5% y/y

AN AutoNation reports Q1 EPS $0.97 vs FactSet $0.91 

  • Reports Q1:
    • Revenue $5.14B vs FactSet $5.32B
  • Management comments:
    • Chairman, CEO Mike Jackson: "During Q1, we saw increasing used unit volumes as we focused on our One Price strategy, which is now fully rolled out at all AutoNation stores, and worked through the majority of the inventory that was previously on recall hold. We expect to see a sequential increase in Q2 in both used unit volumes and gross profit per vehicle retailed."

Events

SVU Supervalu reports Q4 EPS $0.13 ex-items vs FactSet $0.09 

  • Reports Q4:
    • Revenue $2.91B vs FactSet $2.90B
    • Adjusted EBITDA $124M vs FactSet $114.3M

EAT Brinker reports Q3 EPS $0.94 ex-items vs FactSet $0.85 

  • Reports Q3:
    • Revenue $810.6M vs FactSet $817.6M
    • Total system comps (2.3%)

DFRG Del Frisco's Restaurant reports Q1 adjusted EPS $0.20 vs FactSet $0.21 

  • Reports Q1:
    • Revenue $83.9M vs FactSet $84.1M
    • Comps (0.2%) vs FactSet (0.4%)
  • FY Guidance (Dec 2017):
    • Adjusted EPS $0.82-0.86 vs prior guidance $0.80-0.84 and FactSet $0.84
    • Reaffirms total comps (0.5%) to +0.5%

DRI Darden Restaurants completes acquisition of Cheddar's Scratch Kitchen 

  • DRI announced that it has completed the acquisition of Cheddar's Scratch Kitchen (Cheddar's) for $780M in an all-cash transaction from its stockholders including private equity firms L Catterton and Oak Investment Partners.
  • This follows the agreement that was announced on 27-Mar-17. The transaction price is subject to customary post-closing adjustments.

TSN Tyson Foods explores the sale of three non-protein businesses as part of corporate strategy

  • Tyson Foods announces that, as part of its strategic focus on protein-packed brands, it is exploring the sale of three non-protein businesses.

APFH Tyson Foods (TSN) to acquire AdvancePierre Foods for $40.25/sh in cash; transaction valued at ~$4.2B incl. debt 

NORD Nord Anglia Education to be acquired by CPPIB & Baring-led consortium for $32.50/sh in cash; transaction valued at ~$4.3B 

  • Nord Anglia Education announced it has entered into a definitive agreement and plan of merger with Bach Finance pursuant to which Nord Anglia Education will be acquired by Bach in a transaction valued at ~$4.3B, including the repayment of debt.
    • Immediately following the consummation of the transaction, Bach will be beneficially owned by a consortium led by funds affiliated with Canada Pension Plan Investment board and funds affiliated with Baring Private Equity Asia .
  • Under the terms of the agreement, each ordinary share outstanding immediately prior to the effective time of the merger will be exchanged for the right to receive $32.50 in cash without interest, except for (a) (i) 69,613,389 Shares beneficially owned by Premier Education Holdings and (ii) Shares held by Bach, each of which will be cancelled and cease to exist
    • The merger consideration represents a premium of 18% over Nord Anglia Education's closing share price on 24-Apr
  • The merger agreement provides for a 30 day "go-shop" period, during which the Special Committee will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals
  • The transaction is currently expected to close before the end of Nord Anglia Education's fiscal year ending 31-Aug

CPLA Capella Education reports Q1 EPS $0.94 vs FactSet $0.87 

  • Reports Q1:
    • Revenue $111.8M vs FactSet $111.2M
  • Q2 Guidance:
    • Revenue +2.5-3.5% vs prior year's $106.7M, implying $109.4-110.4M vs FactSet $111.6M
    • Operating margin 13.5-14.5%
    • Capella University new enrollment is expected to be down in the low-single digit percentage range year-over-year and total enrollment is expected to decline about one percent year-over-year.
  • Management comments:
    • CFO Steve Polacek: “We expect quarterly variability in new enrollment growth, and planned investments will drive a different quarterly investment pattern in 2017 compared to 2016. Our focus on delivering our annual performance goals remains unchanged.”

RAD Rite Aid reports Q4 adjusted EBITDA $264.3M vs FactSet $224.4M; provides WBA merger update

  • Reports Q4:
    • EPS ($0.00) vs FactSet ($0.04)
    • Revenue $8.54B vs FactSet $8.27B
  • Merger update:
    • While WBA and Rite Aid continue to be actively engaged in discussions with the Federal Trade Commission regarding the transaction and are working toward a close of the merger by 31-Jul-17, there can be no assurance that the requisite regulatory approvals will be obtained, or that the merger will be completed within the time period contemplated by the merger agreement on the current terms, if at all.
  • Management comments:
    • Chairman and CEO John Standley: “We remain confident that the completion of our proposed merger with Walgreens Boots Alliance is in the best interest of Rite Aid shareholders, customers and associates. However, despite our team’s continued focus on growing our business, the extended duration of the merger process is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward.”

TIF Tiffany & Co provides update on Swatch litigation 

  • As previously disclosed, Tiffany has taken action in the courts of the Netherlands seeking to annul the arbitration award issued on 21-Dec-13 in favor of the Swatch Group Ltd
  • On 4-Mar-15, the District Court of Amsterdam issued a decision in favor of the Tiffany Parties.
  • Under this decision, the Arbitration Award was set aside. However, the Swatch Parties took action in the Dutch courts to appeal the District Court's decision
  • The Appellate Court issued its decision on 25-Apr-17, finding in favor of the Swatch Parties and ordering the Tiffany Parties to reimburse the Swatch Parties €6,340.00 in legal costs
  • However, the Tiffany Parties have a right to appeal the decision of the Appellate Court to the Supreme Court of the Netherlands, and the Arbitration Award may ultimately be set aside by the Supreme Court.
  • If the Tiffany Parties take action to appeal the decision of the Appellate Court, Registrant’s management expects that the annulment action will not be ultimately resolved until, at the earliest, Registrant's fiscal year ending 31-Jan-19.

CTRN Citi Trends sends second letter to holders ahead of annual meeting; criticizes Macellum

PII Polaris Industries reports Q1 EPS $0.75 ex-items vs FactSet $0.70 

  • Reports Q1:
    • Adjusted revenue $1.16B vs FactSet $1.11B
      • Adjusted sales excludes impact from Victory Motorcycles net sales
      • unadjusted sales were $1.15B
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $4.25-4.50 vs FactSet $4.39
    • Reaffirms revenue +10-13% vs prior year's $4.52B, implying $4.97-5.10B vs FactSet $5.06B
  • Management comments:
    • Scott Wine, Chairman and CEO: “While we reported an expected net loss for the quarter, adjusted earnings were slightly ahead of our expectations. We saw continued strong performance from Indian Motorcycle and our ORV business improved its performance in the face of heavy competitive activity and a sluggish powersports environment. Overall, our dealer channel remains healthy with inventories down eight percent, and we continue to diligently work to enhance our dealer engagement.”

JAKK JAKKS Pacific reports Q1 EPS ($1.01) vs FactSet ($0.89) 

  • Reports Q1:
    • Revenue $94.5M vs FactSet $87.7M
    • EBITDA ($10.6M) vs FactSet ($10.4M)
    • Gross margin in Q1 was 31.8%, down slightly from 32.5% last year as a result of pricing pressure on Funnoodle pool toys and higher tooling amortization on increased capital expenditures in 2016 offset in part by lower royalties resulting from a shift in product mix.
  • FY Guidance (Dec 2017):
    • For 2017, the company continues to expect higher net income, EPS and Adjusted EBITDA on lower net sales compared to 2016. The company expects improved profitability in 2017 to result from a continued focus on building our base of evergreen brands and categories, as well as entering new categories, creating a strong portfolio of new and existing licenses and developing owned IP and content.

Stocks mentioned on CNBC's Mad Money with Jim Cramer -- TheStreet 

  • Featured Positive: Cramer talked to the Chairman and CEO of Hasbro (HAS) Brian Goldner. Cramer is positive on the company.
  • Featured Topic: Cramer spent a portion of the show commenting on the market's rally noting the French elections, merger activity and earnings beats. He does not believe Trump's tax cuts announced on Wednesday have anything to do with the move.
  • Brief Mention/Positive: XLNX, ABT, BRK.A, CHK, LUV, AAL, ALK, DAL, UAL, JBLU

WHR Whirlpool reports Q1 ongoing EPS $2.50 vs FactSet $2.65 

  • Reports Q1:
    • Revenue $4.79B vs FactSet $4.75B
  • FY Guidance (Dec 2017):
    • EPS $14.75-15.50 vs prior guidance $15.25-16.25 and FactSet $15.42
      • cites result of temporary integration challenges in the EMEA region
    • Reaffirms cash from operating activities $1.7-1.75B
    • Reaffirms FCF appx $1B
    • Full-year tax rate anticipated at 20% vs prior guidance of 22% given in Q4 release
  • Management comments:
    • Marc Bitzer, president and COO:"While 2017 is the most complex year of our European integration, we remain confident that we will complete key elements of the integration and deliver profitable growth in Europe this year."

GPC Genuine Parts chairman Thomas Gallagher to retire effective 30-Jun-17 

  • Gallagher will continue to serve as Non-Executive Chairman of the board following his retirement.

TUP Tupperware reports Q1 EPS $1.01 vs FactSet $0.94

  • Reports Q1:
    • Reflecting higher than expected sales, particularly in China which had a good contribution margin to profit, lower costs from restructuring actions taken to improve the value chain in Beauticontrol, and a timing benefit from unallocated corporate costs. Versus the February guidance, there was a 2 cent benefit from stronger foreign exchange rates on the diluted EPS comparison, while there was no impact versus 2016.
    • Revenue $554.8M vs FactSet $532.1M
  • Q2 Guidance:
    • EPS $1.17-$1.22 vs FactSet $1.19
    • Local currency sales growth +2%-4%
  • FY Guidance (Dec 2017):
    • EPS $4.67-$4.77 vs prior guidance $4.47-$4.57 and FactSet $4.56
    • Local currency sale growth +2%-4% vs. prior guidance of flat to +2%
    • Fiscal year 2017 includes 52 weeks, while 2016 had 53 weeks. The company estimates this will have a (1) percentage point impact on the year-over-year sales comparison in 2017 versus 2016.
    • Tax rate estimated at 26.1% on a U.S. GAAP basis and 25.5% excluding items.
    • Excludes land sales that may occur.

KO Coca-Cola reports Q1 EPS $0.43 ex-items vs FactSet $0.44 

  • Reports Q1:
    • Revenue $9.12B vs FactSet $8.89B
  • Q2 Guidance:
    • Net revenues: 17% to 18% headwind from acquisitions, divestitures, and structural items; 1% to 2% currency headwind based on the current rates and including the impact of hedged positions
    • Income before income taxes: 3% to 4% structural headwind; 3% currency headwind based on the current rates and including the impact of hedged positions
  • FY Guidance (Dec 2017):
    • Comparable EPS (3%)-(1%) vs. $1.91 in 2016, implying $1.85-1.89, vs prior (4%)-(1%)
    • Reaffirms 3% organic revenue growth
    • Reaffirms 7-8% growth in comparable currency neutral income before income taxes
    • Reaffirms 1-2% headwind in net revenues
    • Guides 3% headwind in pre-tax income vs prior guidance 3-4% headwind
  • FY Guidance (Dec 2018):
    • Reaffirms net revenues: 16% to 17% headwind from acquisitions, divestitures, and structural items
    • Reaffirms Income before income taxes: 1% to 2% structural headwind; low single-digit currency headwind based on the current rates and including the impact of hedged positions
    • Reaffirms Underlying effective tax rate (non-GAAP): 26.0%

THS TreeHouse Foods, Inc. to sell soup and infant feeding business to Insight Equity affiliate; price not disclosed 

  • Entered into a definitive agreement to sell its Soup and Infant Feeding (SIF) business to Riverbend Foods LLC, a newly formed portfolio company of Insight Equity, a private equity firm.
    • The SIF business is based in Pittsburgh, Pa. and is a manufacturer of private label condensed and ready-to-serve soup, baby food and gravy packaged in cans, glass jars and Tetra Recart formats.
    • Sales of the business were approximately $210M in 2016.
    • The transaction will have a negligible impact on the ongoing operating income of TreeHouse Foods.
    • Financial terms of the sale were not disclosed.
    • The transaction is subject to customary closing conditions and is expected to close in the second or Q3 of 2017.

MNST Monster Beverage Corp. discloses resignation of Chief Marketing Officer Mark Hall 

  • Hall has decided to reduce his responsibilities to spend more time with family. As a result, Hall will be relinquishing his position as Chief Marketing Officer of Monster Energy Company and delivered notice of his resignation from such position on 21-Apr-17, effective 1-May-17.
  • Hall will continue to serve as an employee of the company, focusing on ideation, design and development of new products.
  • Hall will also continue to serve as a director of Monster Beverage Corporation.

JJSF J&J Snack Foods reports Q2 EPS $0.85 vs FactSet $0.88 

  • Reports Q2:
    • Revenue $246.5M vs FactSet $243.8M
    • Operating income $24.1M vs year-ago $23.3M

JBLU JetBlue Airways reports Q1 EPS $0.25 vs FactSet $0.22 

  • Reports Q1:
    • Revenue $1.60B vs FactSet $1.62B
  • Q2 Guidance:
    • Capacity is expected to increase between 4% and 6% year over year
    • RASM is expected to increase between 3% and 6% y/y
    • CASM excluding fuel is expected to grow between 4.5% and 6.5% y/y
  • FY Guidance (Dec 2017):
    • Continues to expect capacity to increase between 5.5% and 7.5% y/y
    • Continues to expect year over year CASM excluding fuel to grow between 1.5% and 3.5% y/y

AN AutoNation reports Q1 EPS $0.97 vs FactSet $0.91 

  • Reports Q1:
    • Revenue $5.14B vs FactSet $5.32B
  • Management comments:
    • Chairman, CEO Mike Jackson: "During Q1, we saw increasing used unit volumes as we focused on our One Price strategy, which is now fully rolled out at all AutoNation stores, and worked through the majority of the inventory that was previously on recall hold. We expect to see a sequential increase in Q2 in both used unit volumes and gross profit per vehicle retailed."

Upgrades/ Downgrades

SVU Supervalu reports Q4 EPS $0.13 ex-items vs FactSet $0.09 

  • Reports Q4:
    • Revenue $2.91B vs FactSet $2.90B
    • Adjusted EBITDA $124M vs FactSet $114.3M

EAT Brinker reports Q3 EPS $0.94 ex-items vs FactSet $0.85 

  • Reports Q3:
    • Revenue $810.6M vs FactSet $817.6M
    • Total system comps (2.3%)

DFRG Del Frisco's Restaurant reports Q1 adjusted EPS $0.20 vs FactSet $0.21 

  • Reports Q1:
    • Revenue $83.9M vs FactSet $84.1M
    • Comps (0.2%) vs FactSet (0.4%)
  • FY Guidance (Dec 2017):
    • Adjusted EPS $0.82-0.86 vs prior guidance $0.80-0.84 and FactSet $0.84
    • Reaffirms total comps (0.5%) to +0.5%

DRI Darden Restaurants completes acquisition of Cheddar's Scratch Kitchen 

  • DRI announced that it has completed the acquisition of Cheddar's Scratch Kitchen (Cheddar's) for $780M in an all-cash transaction from its stockholders including private equity firms L Catterton and Oak Investment Partners.
  • This follows the agreement that was announced on 27-Mar-17. The transaction price is subject to customary post-closing adjustments.

TSN Tyson Foods explores the sale of three non-protein businesses as part of corporate strategy

  • Tyson Foods announces that, as part of its strategic focus on protein-packed brands, it is exploring the sale of three non-protein businesses.

APFH Tyson Foods (TSN) to acquire AdvancePierre Foods for $40.25/sh in cash; transaction valued at ~$4.2B incl. debt 

NORD Nord Anglia Education to be acquired by CPPIB & Baring-led consortium for $32.50/sh in cash; transaction valued at ~$4.3B 

  • Nord Anglia Education announced it has entered into a definitive agreement and plan of merger with Bach Finance pursuant to which Nord Anglia Education will be acquired by Bach in a transaction valued at ~$4.3B, including the repayment of debt.
    • Immediately following the consummation of the transaction, Bach will be beneficially owned by a consortium led by funds affiliated with Canada Pension Plan Investment board and funds affiliated with Baring Private Equity Asia .
  • Under the terms of the agreement, each ordinary share outstanding immediately prior to the effective time of the merger will be exchanged for the right to receive $32.50 in cash without interest, except for (a) (i) 69,613,389 Shares beneficially owned by Premier Education Holdings and (ii) Shares held by Bach, each of which will be cancelled and cease to exist
    • The merger consideration represents a premium of 18% over Nord Anglia Education's closing share price on 24-Apr
  • The merger agreement provides for a 30 day "go-shop" period, during which the Special Committee will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals
  • The transaction is currently expected to close before the end of Nord Anglia Education's fiscal year ending 31-Aug

CPLA Capella Education reports Q1 EPS $0.94 vs FactSet $0.87 

  • Reports Q1:
    • Revenue $111.8M vs FactSet $111.2M
  • Q2 Guidance:
    • Revenue +2.5-3.5% vs prior year's $106.7M, implying $109.4-110.4M vs FactSet $111.6M
    • Operating margin 13.5-14.5%
    • Capella University new enrollment is expected to be down in the low-single digit percentage range year-over-year and total enrollment is expected to decline about one percent year-over-year.
  • Management comments:
    • CFO Steve Polacek: “We expect quarterly variability in new enrollment growth, and planned investments will drive a different quarterly investment pattern in 2017 compared to 2016. Our focus on delivering our annual performance goals remains unchanged.”

RAD Rite Aid reports Q4 adjusted EBITDA $264.3M vs FactSet $224.4M; provides WBA merger update

  • Reports Q4:
    • EPS ($0.00) vs FactSet ($0.04)
    • Revenue $8.54B vs FactSet $8.27B
  • Merger update:
    • While WBA and Rite Aid continue to be actively engaged in discussions with the Federal Trade Commission regarding the transaction and are working toward a close of the merger by 31-Jul-17, there can be no assurance that the requisite regulatory approvals will be obtained, or that the merger will be completed within the time period contemplated by the merger agreement on the current terms, if at all.
  • Management comments:
    • Chairman and CEO John Standley: “We remain confident that the completion of our proposed merger with Walgreens Boots Alliance is in the best interest of Rite Aid shareholders, customers and associates. However, despite our team’s continued focus on growing our business, the extended duration of the merger process is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward.”

TIF Tiffany & Co provides update on Swatch litigation 

  • As previously disclosed, Tiffany has taken action in the courts of the Netherlands seeking to annul the arbitration award issued on 21-Dec-13 in favor of the Swatch Group Ltd
  • On 4-Mar-15, the District Court of Amsterdam issued a decision in favor of the Tiffany Parties.
  • Under this decision, the Arbitration Award was set aside. However, the Swatch Parties took action in the Dutch courts to appeal the District Court's decision
  • The Appellate Court issued its decision on 25-Apr-17, finding in favor of the Swatch Parties and ordering the Tiffany Parties to reimburse the Swatch Parties €6,340.00 in legal costs
  • However, the Tiffany Parties have a right to appeal the decision of the Appellate Court to the Supreme Court of the Netherlands, and the Arbitration Award may ultimately be set aside by the Supreme Court.
  • If the Tiffany Parties take action to appeal the decision of the Appellate Court, Registrant’s management expects that the annulment action will not be ultimately resolved until, at the earliest, Registrant's fiscal year ending 31-Jan-19.

CTRN Citi Trends sends second letter to holders ahead of annual meeting; criticizes Macellum

PII Polaris Industries reports Q1 EPS $0.75 ex-items vs FactSet $0.70 

  • Reports Q1:
    • Adjusted revenue $1.16B vs FactSet $1.11B
      • Adjusted sales excludes impact from Victory Motorcycles net sales
      • unadjusted sales were $1.15B
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $4.25-4.50 vs FactSet $4.39
    • Reaffirms revenue +10-13% vs prior year's $4.52B, implying $4.97-5.10B vs FactSet $5.06B
  • Management comments:
    • Scott Wine, Chairman and CEO: “While we reported an expected net loss for the quarter, adjusted earnings were slightly ahead of our expectations. We saw continued strong performance from Indian Motorcycle and our ORV business improved its performance in the face of heavy competitive activity and a sluggish powersports environment. Overall, our dealer channel remains healthy with inventories down eight percent, and we continue to diligently work to enhance our dealer engagement.”

JAKK JAKKS Pacific reports Q1 EPS ($1.01) vs FactSet ($0.89) 

  • Reports Q1:
    • Revenue $94.5M vs FactSet $87.7M
    • EBITDA ($10.6M) vs FactSet ($10.4M)
    • Gross margin in Q1 was 31.8%, down slightly from 32.5% last year as a result of pricing pressure on Funnoodle pool toys and higher tooling amortization on increased capital expenditures in 2016 offset in part by lower royalties resulting from a shift in product mix.
  • FY Guidance (Dec 2017):
    • For 2017, the company continues to expect higher net income, EPS and Adjusted EBITDA on lower net sales compared to 2016. The company expects improved profitability in 2017 to result from a continued focus on building our base of evergreen brands and categories, as well as entering new categories, creating a strong portfolio of new and existing licenses and developing owned IP and content.

Stocks mentioned on CNBC's Mad Money with Jim Cramer -- TheStreet 

  • Featured Positive: Cramer talked to the Chairman and CEO of Hasbro (HAS) Brian Goldner. Cramer is positive on the company.
  • Featured Topic: Cramer spent a portion of the show commenting on the market's rally noting the French elections, merger activity and earnings beats. He does not believe Trump's tax cuts announced on Wednesday have anything to do with the move.
  • Brief Mention/Positive: XLNX, ABT, BRK.A, CHK, LUV, AAL, ALK, DAL, UAL, JBLU

WHR Whirlpool reports Q1 ongoing EPS $2.50 vs FactSet $2.65 

  • Reports Q1:
    • Revenue $4.79B vs FactSet $4.75B
  • FY Guidance (Dec 2017):
    • EPS $14.75-15.50 vs prior guidance $15.25-16.25 and FactSet $15.42
      • cites result of temporary integration challenges in the EMEA region
    • Reaffirms cash from operating activities $1.7-1.75B
    • Reaffirms FCF appx $1B
    • Full-year tax rate anticipated at 20% vs prior guidance of 22% given in Q4 release
  • Management comments:
    • Marc Bitzer, president and COO:"While 2017 is the most complex year of our European integration, we remain confident that we will complete key elements of the integration and deliver profitable growth in Europe this year."

GPC Genuine Parts chairman Thomas Gallagher to retire effective 30-Jun-17 

  • Gallagher will continue to serve as Non-Executive Chairman of the board following his retirement.

TUP Tupperware reports Q1 EPS $1.01 vs FactSet $0.94

  • Reports Q1:
    • Reflecting higher than expected sales, particularly in China which had a good contribution margin to profit, lower costs from restructuring actions taken to improve the value chain in Beauticontrol, and a timing benefit from unallocated corporate costs. Versus the February guidance, there was a 2 cent benefit from stronger foreign exchange rates on the diluted EPS comparison, while there was no impact versus 2016.
    • Revenue $554.8M vs FactSet $532.1M
  • Q2 Guidance:
    • EPS $1.17-$1.22 vs FactSet $1.19
    • Local currency sales growth +2%-4%
  • FY Guidance (Dec 2017):
    • EPS $4.67-$4.77 vs prior guidance $4.47-$4.57 and FactSet $4.56
    • Local currency sale growth +2%-4% vs. prior guidance of flat to +2%
    • Fiscal year 2017 includes 52 weeks, while 2016 had 53 weeks. The company estimates this will have a (1) percentage point impact on the year-over-year sales comparison in 2017 versus 2016.
    • Tax rate estimated at 26.1% on a U.S. GAAP basis and 25.5% excluding items.
    • Excludes land sales that may occur.

KO Coca-Cola reports Q1 EPS $0.43 ex-items vs FactSet $0.44 

  • Reports Q1:
    • Revenue $9.12B vs FactSet $8.89B
  • Q2 Guidance:
    • Net revenues: 17% to 18% headwind from acquisitions, divestitures, and structural items; 1% to 2% currency headwind based on the current rates and including the impact of hedged positions
    • Income before income taxes: 3% to 4% structural headwind; 3% currency headwind based on the current rates and including the impact of hedged positions
  • FY Guidance (Dec 2017):
    • Comparable EPS (3%)-(1%) vs. $1.91 in 2016, implying $1.85-1.89, vs prior (4%)-(1%)
    • Reaffirms 3% organic revenue growth
    • Reaffirms 7-8% growth in comparable currency neutral income before income taxes
    • Reaffirms 1-2% headwind in net revenues
    • Guides 3% headwind in pre-tax income vs prior guidance 3-4% headwind
  • FY Guidance (Dec 2018):
    • Reaffirms net revenues: 16% to 17% headwind from acquisitions, divestitures, and structural items
    • Reaffirms Income before income taxes: 1% to 2% structural headwind; low single-digit currency headwind based on the current rates and including the impact of hedged positions
    • Reaffirms Underlying effective tax rate (non-GAAP): 26.0%

THS TreeHouse Foods, Inc. to sell soup and infant feeding business to Insight Equity affiliate; price not disclosed 

  • Entered into a definitive agreement to sell its Soup and Infant Feeding (SIF) business to Riverbend Foods LLC, a newly formed portfolio company of Insight Equity, a private equity firm.
    • The SIF business is based in Pittsburgh, Pa. and is a manufacturer of private label condensed and ready-to-serve soup, baby food and gravy packaged in cans, glass jars and Tetra Recart formats.
    • Sales of the business were approximately $210M in 2016.
    • The transaction will have a negligible impact on the ongoing operating income of TreeHouse Foods.
    • Financial terms of the sale were not disclosed.
    • The transaction is subject to customary closing conditions and is expected to close in the second or Q3 of 2017.

MNST Monster Beverage Corp. discloses resignation of Chief Marketing Officer Mark Hall 

  • Hall has decided to reduce his responsibilities to spend more time with family. As a result, Hall will be relinquishing his position as Chief Marketing Officer of Monster Energy Company and delivered notice of his resignation from such position on 21-Apr-17, effective 1-May-17.
  • Hall will continue to serve as an employee of the company, focusing on ideation, design and development of new products.
  • Hall will also continue to serve as a director of Monster Beverage Corporation.

JJSF J&J Snack Foods reports Q2 EPS $0.85 vs FactSet $0.88 

  • Reports Q2:
    • Revenue $246.5M vs FactSet $243.8M
    • Operating income $24.1M vs year-ago $23.3M

JBLU JetBlue Airways reports Q1 EPS $0.25 vs FactSet $0.22 

  • Reports Q1:
    • Revenue $1.60B vs FactSet $1.62B
  • Q2 Guidance:
    • Capacity is expected to increase between 4% and 6% year over year
    • RASM is expected to increase between 3% and 6% y/y
    • CASM excluding fuel is expected to grow between 4.5% and 6.5% y/y
  • FY Guidance (Dec 2017):
    • Continues to expect capacity to increase between 5.5% and 7.5% y/y
    • Continues to expect year over year CASM excluding fuel to grow between 1.5% and 3.5% y/y

AN AutoNation reports Q1 EPS $0.97 vs FactSet $0.91 

  • Reports Q1:
    • Revenue $5.14B vs FactSet $5.32B
  • Management comments:
    • Chairman, CEO Mike Jackson: "During Q1, we saw increasing used unit volumes as we focused on our One Price strategy, which is now fully rolled out at all AutoNation stores, and worked through the majority of the inventory that was previously on recall hold. We expect to see a sequential increase in Q2 in both used unit volumes and gross profit per vehicle retailed."
Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Financial News

John Fay, Brad Berger (203) 861-7650 | 4.25.2017

News

Hospitality Props Board votes unamiously to classify, says the decision to adopt a classified board was not taken in response to any known takeover attempt or threat

This action was taken because the Board believed it is in the best interest of the Company to promote its operating stability and clarify that the Board will be properly constituted and able to continue to function despite a persistent campaign by a labor union to disrupt the Company's operations.

B. Riley Financial acquires rights to manage certain hedge funds managed by Dialectic Capital; terms not disclosed

John Fichthorn, a managing member of Dialectic Capital and general partner of Dialectic Capital Management, has been named as the Head of Alternative Investments for B. Riley Asset Management, a division of B. Riley Capital Management, LLC. Founded in 2003 by John Fichthorn, Dialectic Capital Management currently manages several fund strategies and invests in equities across all sectors and market capitalizations.

Condor Hospitality Trust secures commitments from three lenders to increase its current $90 mln senior secured revolving credit facility to $150 mln

The commitments provide for up to a $150 millionrevolving credit facility which includes an accordion feature that would allow the Company to increase the size of the facility to up to $400 million. The facility matures in 2020 and has two one-year extension options following additional capital achievements. Borrowings will continue to bear interest at a rate determined by a leverage-based pricing grid.

Penns Woods Bancorp extends share repurchase plan for an additional year ending April 30, 2018; allows for the repurchase of up to 482,000 shares of which 19% has been already repurchased

Royal Bank of Scotland announces the allotment and issue of 33,376,695 new ordinary shares

  • RBS announces the allotment and issue of 33,376,695 new ordinary shares (the "New Ordinary Shares") of the Company at a subscription price of 239.6882 pence per New Ordinary Share. The shares have been sold in the market. The subscription price was determined by reference to the average market price during a period since the Company's Full Year 2016 results on 24 February 2017.

Wells Fargo confirms Federal Reserve, FDIC revised submission determination; 'pleased with the agencies’ findings and remain committed to sound resolution planning and preparedness as we finalize our July 2017 submission

Uniti Group prices previously offering of $200 mln of 7.125% senior notes due 2024; otes will be issued at an issue price of 100.500%, plus accrued interest from December 15, 2016

President Trump is planning 20% tariff on Canada lumber products

Upgrades/ Downgrades

Hospitality Props Board votes unamiously to classify, says the decision to adopt a classified board was not taken in response to any known takeover attempt or threat

This action was taken because the Board believed it is in the best interest of the Company to promote its operating stability and clarify that the Board will be properly constituted and able to continue to function despite a persistent campaign by a labor union to disrupt the Company's operations.

B. Riley Financial acquires rights to manage certain hedge funds managed by Dialectic Capital; terms not disclosed

John Fichthorn, a managing member of Dialectic Capital and general partner of Dialectic Capital Management, has been named as the Head of Alternative Investments for B. Riley Asset Management, a division of B. Riley Capital Management, LLC. Founded in 2003 by John Fichthorn, Dialectic Capital Management currently manages several fund strategies and invests in equities across all sectors and market capitalizations.

Condor Hospitality Trust secures commitments from three lenders to increase its current $90 mln senior secured revolving credit facility to $150 mln

The commitments provide for up to a $150 millionrevolving credit facility which includes an accordion feature that would allow the Company to increase the size of the facility to up to $400 million. The facility matures in 2020 and has two one-year extension options following additional capital achievements. Borrowings will continue to bear interest at a rate determined by a leverage-based pricing grid.

Penns Woods Bancorp extends share repurchase plan for an additional year ending April 30, 2018; allows for the repurchase of up to 482,000 shares of which 19% has been already repurchased

Royal Bank of Scotland announces the allotment and issue of 33,376,695 new ordinary shares

  • RBS announces the allotment and issue of 33,376,695 new ordinary shares (the "New Ordinary Shares") of the Company at a subscription price of 239.6882 pence per New Ordinary Share. The shares have been sold in the market. The subscription price was determined by reference to the average market price during a period since the Company's Full Year 2016 results on 24 February 2017.

Wells Fargo confirms Federal Reserve, FDIC revised submission determination; 'pleased with the agencies’ findings and remain committed to sound resolution planning and preparedness as we finalize our July 2017 submission

Uniti Group prices previously offering of $200 mln of 7.125% senior notes due 2024; otes will be issued at an issue price of 100.500%, plus accrued interest from December 15, 2016

President Trump is planning 20% tariff on Canada lumber products

Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Industrial News

 (203) 861-7650 | 4.25.2017

News

(SCL) Stepan Company reports Q1 EPS $1.36 ex-items vs FactSet $1.19 ($80.93) 

  • Reports Q1:
    • Revenue $468.3M vs FactSet $461.7M -- 2 estimates
  • Management comments:
    • "After a record Q1, we remain optimistic about the balance of the year. We believe that benefits from our enhanced internal efficiencies, continued growth in our core polymer markets and our product and end-market diversification efforts should positively impact 2017. Conversely, higher raw material costs may pressure margins. Overall, we believe earnings for the year should grow," said F. Quinn Stepan, Jr., Chairman, President and CEO.

(MLI) Mueller Industries reports Q1 EPS $0.52 vs year-ago $0.50 ($34.16) 

  • Reports Q1:
    • Revenue $577.9M vs year-ago $532.8M
  • Management comments on outlook:
    • "The year started where 2016 left off. The primary drivers of the U.S. businesses continue on a path of steady improvement and we remain optimistic that the international markets will improve over time."

(GPK) Graphic Packaging reports Q1 adjusted EPS $0.14 vs FactSet $0.12 ($13.58) 

  • Reports Q1:
    • Revenue $1.06B vs FactSet $1.04B
    • Adjusted EBITDA $160.9M vs FactSet $157.6M

(DD) StreetAccount Metrics Recap - Dupont Q1 Earnings ($79.37) 

  • Key operating metrics:
    • Sales
      • Agriculture $3.93B vs FactSet $3.92B
      • Electronics & Communications $510M vs FS $452.0M
      • Industrial Biosciences $368M vs FS $358.7M
      • Nutrition & Health $789M vs FS $806.0M
      • Performance Materials $1.37B vs FS $1.27B
      • Protection Solutions $747M vs FS $669.7M
    • Operating income
      • Agriculture $1.24B vs consensus $1.15B
      • Electronics & Communications $89M vs FS $77.5M
      • Industrial Biosciences $75M vs FS $64.5M
      • Nutrition & Health $121M vs FS $111.5M
      • Performance Materials $355M vs FS $277.8
      • Protection Solutions $177M vs FS $161.2M

(DD) DuPont reports Q1 operating EPS $1.64 vs FactSet $1.38 ($79.37) 

  • Reports Q1:
    • Revenue $7.74B vs FactSet $7.50B
  • H1 Guidance:
    • First-half operating EPS expected to be ~$2.90
      • Implies operating EPS guidance for Q2 of ~$1.26 vs FactSet $1.31
  • Continues to expect to close the DOW merger in August of this year

(KMG) Follow-up: KMG to Acquire Flowchem; expected to be highly accretive to EBITDA, margin and non-GAAP EPS ($45.09) 

  • Founded in 2001 and based in Waller, Texas, Flowchem is a leading global provider of drag-reducing agents, related support services and equipment to midstream crude oil and refined fuel pipeline operators. Drag reducing agents, also known as DRAs, are specialty chemicals injected into midstream pipelines to reduce friction near the pipeline walls and within the turbulent fluid flowing through the pipeline network. By lessening fluid turbulence in pipelines, DRAs are highly effective in optimizing pipeline flow and lowering pipeline operating costs by increasing throughput capacity and reducing operating pressure.
  • Under the terms of the acquisition agreement, KMG will acquire Flowchem for a purchase price of $495 million in cash, including working capital of approximately $17 million.
  • Over the last twelve months, Flowchem’s adjusted EBITDA was approximately $43M with a free cash flow conversion ratio of more than 95%.
  • Anticipated closing to occur mid-June 2017.
  • Conference Call Information KMG will host a conference call and webcast at 8:00 a.m. ET on Tuesday, 25-Apr to discuss the strategic acquisition of Flowchem.
    • The webcast will be available live and archived on the investor relations section of KMG’s website at www.kmgchemicals.com. To access the conference call live, participants may dial 844-316-8066 or 703-736-7353 with participant passcode 13586016. The webcast link is http://edge.media-server.com/m/p/caxu7M7d.

(KMG) KMG to Acquire Flowchem; expected to be highly accretive to EBITDA, margin and non-GAAP EPS ($45.09)

 

(ABX) Barrick Gold reports Q1 EPS $0.14 ex-items vs FactSet $0.20 ($19.04) 

  • Reports Q1:
    • Revenue $1.99B vs FactSet $2.14B
    • EBITDA $904.0M vs FactSet $1.05B
  • Guidance
    • Full-year gold production is now expected to be 5.3-5.6M ounces, down from our previous range of 5.6-5.9M ounces
    • Expect full-year cost of sales attributable to gold to be $780-$820 per ounce, and all-in sustaining costs3 of $720-$770 per ounce.
    • Copper production guidance for 2017 is unchanged at 400-450M pounds, at a cost of sales applicable to copper between $1.50-1.70 per pound, and all-in sustaining costs6 of $2.10-$2.40 per pound

(CR) Crane reports Q1 EPS $1.05 vs FactSet $1.00 ($77.91)

  • Reports Q1:
    • Revenue $673.0M vs FactSet $655.8M
    • Total Backlog $ 705.8M va year-ago $758.6M
  • FY Guidance (Dec 2017):
    • EPS guidanceof $4.35-$4.55 vs. prior$4.30-$4.55 vs FactSet $4.44

(OI) StreetAccount Metrics Recap – Owens-Illinois Q1 Earnings ($21.34) 

  • Key operating metrics:
    • Net sales
      • Europe $554M vs FactSet $534.8M
      • North America $528M vs FS $534.9M
      • South America $341M vs FS $325.3M
      • Asia Pacific $173M vs FS $163.5M
    • Segment operating profit
      • Europe $59M vs FS $52.5M
      • North America $85M vs FS $80.7M
      • South America $54M vs FS $61.0M
      • Asia Pacific $20M vs FS $18.7M
    • Global volume +2%
      • Europe +4%
      • North America (2%)
      • South America +3%
      • Asia Pacific +4%

(OI) Owens-Illinois reports Q1 adjusted EPS $0.58 vs FactSet $0.53 ($21.34) 

  • Reports Q1:
    • Revenue $1.6B vs FactSet $1.58B
  • FY Guidance (Dec 2017):
    • Reaffirms adjusted EPS $2.40-2.50 vs FactSet $2.43
    • Reaffirms cash provided by cont ops ~$730M
    • Reaffirms adjusted FCF ~$365M

(MAS) StreetAccount Metrics Recap - Masco Q1 Earnings ($35.03)

  • Key operating metrics:
    • Net sales
      • Plumbing $863M vs FactSet $850.7M
      • Decorative Architectural $505M vs FS $500.7M
      • Cabinetry $231M vs FS $221.5M
      • Windows Other Specialty $178M vs FS $179.3M
    • Operating income
      • Plumbing $156M vs FS $139.5M
      • Decorative Architectural $101M vs FS $97.8M
      • Cabinetry $18M vs FS $22.3M
      • Windows and Other Specialty $6M vs FS $4.5M
    • Gross margin 34.3% vs FS 33.2% and year-ago 33.1%
    • Operating margin 14.4% vs FS 13.7% and year-ago 13.8%

(MAS) Masco reports Q1 adjusted EPS $0.41 vs FactSet $0.36 ($35.03)

  • Reports Q1:
    • Revenue $1.78B vs FactSet $1.76B
  • FY Guidance (Dec 2017):
    • EPS $1.90-2.00 vs prior guidance $1.80 and FactSet $1.87

(ASTE) Astec Industries reports Q1 EPS $0.65 vs FactSet $0.66 ($63.34) 

  • Reports Q1:
    • Revenue $318.4M vs FactSet $291.5M
    • The company’s backlog at 31-Mar-17 was $361.8M. Domestic backlog decreased 25% to $290.4M at 31-Mar-17 from $387.9M at 31-Mar-16. The international backlog at 31-Mar-17 was $71.3M compared to $50.8M at 31-Mar-16, an increase of 40%. Total 31-Mar-17 backlog decreased $76.9M or 18% compared to 31-Mar-16. Excluding all pellet plant backlogs, the company’s 31-Mar-17 backlog increased $35.2M or 14% compared to 31-Mar-16. All prior year backlog amounts have been recast to include the backlog of Power Flame Incorporated which was acquired on 1-Aug-16.
  • Management comments:
    • Benjamin G. Brock, CEO, stated: “We are pleased with our results for Q1. We were able to grow revenues and, as expected, our gross margins were lower than usual, mainly due to new products being manufactured in many of our facilities. Our new products normally carry lower margins early on in their product life cycle. Our ConExpo show expense of $4.3M also affected our net income but resulted in the best ConExpo I have ever attended. While our year-over-year backlog is down including pellet plant orders, we were able to grow our 31-Mar-17 backlog 14% excluding all pellet plant orders.”
    • Brock continued, “The domestic market remained strong for our Infrastructure Group’s products targeted at the road construction industry. Our Aggregate and Mining Group continued to see improvement in the domestic market for products targeted at traditional rock quarries. The market for our equipment continues to be slow on the mining side. Our Energy Group product sales for the infrastructure industry were strong while specialized industrial markets remained steady during the quarter. We continue to experience a slight increase in quote and order activity in the oil and gas markets.”
    • Brock concluded, “We remain optimistic about 2017. Our backlog at 31-Mar-17 was historically very good at $361.8M. Still, some of these orders are for new equipment designs that have the potential to carry lower margin and/or higher than normal warranty expense in H1 of this year. However, the introduction of new products is essential for our future. While the increase in order activity is a good sign for the year ahead and we have been able to secure international orders in the face of significant headwinds from the strong U.S. Dollar, we still face challenges on U.S. exports given the continued strength of the U.S. dollar and in products targeted at the cautious mining industry.”

(PHM) StreetAccount Metrics Recap - Pulte Group Q1 Earnings ($23.08)

  • Key operating metrics:
    • Closings
      • Units 4,225 vs consensus 4,360
      • Average closing price $375K vs consensus $392K
    • Net orders
      • Units 6,126 vs consensus 6,196
      • Average order price $399K vs consensus $399K
    • Backlog
      • Units 9,323 vs consensus 9,229
      • Value $3.80B vs consensus $3.70B
    • Home sales gross margin 23.2% vs consensus 23.6%
    • SG&A 14.9% of home sale revenues
    • Pre-tax income
      • Homebuilding $125.8M vs consensus $128.7M
      • Financial Services $13.5M vs consensus $11.9M

(PHM) Pulte Group reports Q1 GAAP EPS $0.28 vs FactSet $0.29 ($23.08) 

  • Reports Q1:
    • Reported EPS inclusive of $0.03 per share of expense associated with the resolution of certain insurance matters
    • Revenue $1.63B vs FactSet $1.75B
    • Repurchased 4.7M common shares for $100M, or an average price of $21.30 per share
  • Management comments:
    • “Buyer interest during the spring selling season of 2017 has been high and points to the ongoing strength in recovery for the housing industry,” added Marshall. “Strong buyer demand continues to be supported by an improving economy and resulting employment and wage gains, high consumer confidence, a low inventory of new and existing homes, and the powerful demographic forces of Millennials and Baby Boomers. Given the strength of our land pipeline and our disciplined investment practices, PulteGroup is well positioned to grow its market presence and improve its financial performance within this operating environment.”

(EMR) Follow-up: Emerson reports total 3-month orders +4% for period ending March -- 8-K ($59.86) 

  • Emerson 3-Month Orders Growth (Percentage change versus prior year; trailing 3-month averages, excluding acquisitions and divestitures, including currency translation):
    • Automation Solutions: 0% to 5% vs Feb 0%
    • Commercial & Residential Solutions: 0% to +5% vs Feb 0% to 5%
    • Total Emerson: 0% to +5% vs Feb 0% to 5%

(EMR) Emerson reports total 3-month orders +4% for period ending March -- 8-K ($59.86) 

  • Underlying trailing three-month orders, up 4%, were positive for the third consecutive period due to improving conditions within the company's markets.
  • Automation Solutions was driven by mid-teens growth in North America reflecting continued strength in oil and gas MRO and solid bookings in downstream turnarounds.
  • Commercial & Residential Solutions reflected broad strength in Asia and Europe and favorable oil and gas and construction related markets in North America.

(PNR) Pentair reports Q1 adjusted EPS $0.65 vs FactSet $0.61 ($63.27) 

  • Reports Q1:
    • Revenue $1.18B vs FactSet $1.14B
  • Q2 Guidance:
    • Adjusted EPS $0.97-0.99 vs FactSet $1.02
    • Revenue ~$1.24B vs FactSet $1.25B
  • FY Guidance (Dec 2017):
    • Reaffirms adjusted EPS $3.45-3.55 vs FactSet $3.48
    • Revenue $4.8B vs prior guidance $4.7B and FactSet $4.76B

(RTN) Raytheon awarded $111.3M US Navy contract for Zumwalt-class destroyer program ($156.03) 

  • The cost-type and fixed-price contract is for total ship activation and engineering services in support of the Zumwalt-Class Destroyer program.
  • This contract will provide production, integration, activation, and testing on Zumwalt-Class ship mission systems and missions systems equipment.
  • This contract includes options which, if exercised, would bring the cumulative value of the contract to $490.2M.
  • Work is expected to be completed by April 2021.

(WAB) StreetAccount Metrics Recap - Wabtec Q1 Earnings ($82.19) 

  • Key operating metrics:
    • Sales
      • Freight $347.9M vs FactSet $367.3M
      • Transit $568.1M vs FS $593.7M
    • Gross margin 29.4% vs FS 29.5%
    • Operating margin 12.5% vs FS 12.9%

(WAB) Wabtec reports Q1 EPS $0.84 ex-items vs FactSet $0.82 ($82.19)

  • Reports Q1:
    • EPS excludes $0.07 related to restructuring and transaction expenses, tax adjustment and non-controlling interest related to the Faiveley acquisition
    • Revenue $916.0M vs FactSet $986.1M
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $3.95-4.15 vs FactSet $4.01
    • Reaffirms revenue ~$4.1B vs FactSet $4.08B

(GWR) UK's CMA clears GWI UK Acquisition Co. Ltd's acquisition of Pentalver Transport ($68.69)

 

(SWFT) Swift Transportation reports Q1 adjusted EPS $0.07 ($25.04) 

  • Reports Q1:
    • On 13-Apr-17, we proposed a tentative settlement arrangement with regard to certain previously disclosed litigation in the Refrigerated Segment, which was originally scheduled to commence arbitration trial the week of 24-Apr-17. As a result, in accordance with GAAP, we increased our legal reserves by $11.7M, or $0.06 per share as of 31-Mar-17. This increase was not known and, therefore, not incorporated in the anticipated earnings range we released on 10-Apr-17 of Diluted EPS of $0.09-$0.10 and Adjusted EPS of $0.11-$0.12 for Q1 2017.
    • Revenue $963.8M
    • FactSet EPS and revenue consensus was $0.12 and $971.4M, respectively

(NMM) Navios Maritime Partners announces acquisition of one Capesize vessel ($2.08) 

  • Navios Maritime Partners announces that it has agreed to acquire one 2010-built Capesize vessel of 178,132 dwt for a purchase price of $27.5M. The vessel is expected to be delivered to Navios Partners' owned fleet during Q3 of 2017.
  • The vessel is expected to generate approximately $3.7M of annual EBITDA based on current rate environment (Clarkson’s 1-year time charter rate for Capesize vessels as of 21-Apr-17), assuming operating expenses approximating current operating costs and 360 revenue days.
  • Navios Partners is expected to finance the acquisition with cash on its balance sheet and bank debt on terms consistent with its existing credit facilities.

Upgrades/ Downgrades

(SCL) Stepan Company reports Q1 EPS $1.36 ex-items vs FactSet $1.19 ($80.93) 

  • Reports Q1:
    • Revenue $468.3M vs FactSet $461.7M -- 2 estimates
  • Management comments:
    • "After a record Q1, we remain optimistic about the balance of the year. We believe that benefits from our enhanced internal efficiencies, continued growth in our core polymer markets and our product and end-market diversification efforts should positively impact 2017. Conversely, higher raw material costs may pressure margins. Overall, we believe earnings for the year should grow," said F. Quinn Stepan, Jr., Chairman, President and CEO.

(MLI) Mueller Industries reports Q1 EPS $0.52 vs year-ago $0.50 ($34.16) 

  • Reports Q1:
    • Revenue $577.9M vs year-ago $532.8M
  • Management comments on outlook:
    • "The year started where 2016 left off. The primary drivers of the U.S. businesses continue on a path of steady improvement and we remain optimistic that the international markets will improve over time."

(GPK) Graphic Packaging reports Q1 adjusted EPS $0.14 vs FactSet $0.12 ($13.58) 

  • Reports Q1:
    • Revenue $1.06B vs FactSet $1.04B
    • Adjusted EBITDA $160.9M vs FactSet $157.6M

(DD) StreetAccount Metrics Recap - Dupont Q1 Earnings ($79.37) 

  • Key operating metrics:
    • Sales
      • Agriculture $3.93B vs FactSet $3.92B
      • Electronics & Communications $510M vs FS $452.0M
      • Industrial Biosciences $368M vs FS $358.7M
      • Nutrition & Health $789M vs FS $806.0M
      • Performance Materials $1.37B vs FS $1.27B
      • Protection Solutions $747M vs FS $669.7M
    • Operating income
      • Agriculture $1.24B vs consensus $1.15B
      • Electronics & Communications $89M vs FS $77.5M
      • Industrial Biosciences $75M vs FS $64.5M
      • Nutrition & Health $121M vs FS $111.5M
      • Performance Materials $355M vs FS $277.8
      • Protection Solutions $177M vs FS $161.2M

(DD) DuPont reports Q1 operating EPS $1.64 vs FactSet $1.38 ($79.37) 

  • Reports Q1:
    • Revenue $7.74B vs FactSet $7.50B
  • H1 Guidance:
    • First-half operating EPS expected to be ~$2.90
      • Implies operating EPS guidance for Q2 of ~$1.26 vs FactSet $1.31
  • Continues to expect to close the DOW merger in August of this year

(KMG) Follow-up: KMG to Acquire Flowchem; expected to be highly accretive to EBITDA, margin and non-GAAP EPS ($45.09) 

  • Founded in 2001 and based in Waller, Texas, Flowchem is a leading global provider of drag-reducing agents, related support services and equipment to midstream crude oil and refined fuel pipeline operators. Drag reducing agents, also known as DRAs, are specialty chemicals injected into midstream pipelines to reduce friction near the pipeline walls and within the turbulent fluid flowing through the pipeline network. By lessening fluid turbulence in pipelines, DRAs are highly effective in optimizing pipeline flow and lowering pipeline operating costs by increasing throughput capacity and reducing operating pressure.
  • Under the terms of the acquisition agreement, KMG will acquire Flowchem for a purchase price of $495 million in cash, including working capital of approximately $17 million.
  • Over the last twelve months, Flowchem’s adjusted EBITDA was approximately $43M with a free cash flow conversion ratio of more than 95%.
  • Anticipated closing to occur mid-June 2017.
  • Conference Call Information KMG will host a conference call and webcast at 8:00 a.m. ET on Tuesday, 25-Apr to discuss the strategic acquisition of Flowchem.
    • The webcast will be available live and archived on the investor relations section of KMG’s website at www.kmgchemicals.com. To access the conference call live, participants may dial 844-316-8066 or 703-736-7353 with participant passcode 13586016. The webcast link is http://edge.media-server.com/m/p/caxu7M7d.

(KMG) KMG to Acquire Flowchem; expected to be highly accretive to EBITDA, margin and non-GAAP EPS ($45.09)

 

(ABX) Barrick Gold reports Q1 EPS $0.14 ex-items vs FactSet $0.20 ($19.04) 

  • Reports Q1:
    • Revenue $1.99B vs FactSet $2.14B
    • EBITDA $904.0M vs FactSet $1.05B
  • Guidance
    • Full-year gold production is now expected to be 5.3-5.6M ounces, down from our previous range of 5.6-5.9M ounces
    • Expect full-year cost of sales attributable to gold to be $780-$820 per ounce, and all-in sustaining costs3 of $720-$770 per ounce.
    • Copper production guidance for 2017 is unchanged at 400-450M pounds, at a cost of sales applicable to copper between $1.50-1.70 per pound, and all-in sustaining costs6 of $2.10-$2.40 per pound

(CR) Crane reports Q1 EPS $1.05 vs FactSet $1.00 ($77.91)

  • Reports Q1:
    • Revenue $673.0M vs FactSet $655.8M
    • Total Backlog $ 705.8M va year-ago $758.6M
  • FY Guidance (Dec 2017):
    • EPS guidanceof $4.35-$4.55 vs. prior$4.30-$4.55 vs FactSet $4.44

(OI) StreetAccount Metrics Recap – Owens-Illinois Q1 Earnings ($21.34) 

  • Key operating metrics:
    • Net sales
      • Europe $554M vs FactSet $534.8M
      • North America $528M vs FS $534.9M
      • South America $341M vs FS $325.3M
      • Asia Pacific $173M vs FS $163.5M
    • Segment operating profit
      • Europe $59M vs FS $52.5M
      • North America $85M vs FS $80.7M
      • South America $54M vs FS $61.0M
      • Asia Pacific $20M vs FS $18.7M
    • Global volume +2%
      • Europe +4%
      • North America (2%)
      • South America +3%
      • Asia Pacific +4%

(OI) Owens-Illinois reports Q1 adjusted EPS $0.58 vs FactSet $0.53 ($21.34) 

  • Reports Q1:
    • Revenue $1.6B vs FactSet $1.58B
  • FY Guidance (Dec 2017):
    • Reaffirms adjusted EPS $2.40-2.50 vs FactSet $2.43
    • Reaffirms cash provided by cont ops ~$730M
    • Reaffirms adjusted FCF ~$365M

(MAS) StreetAccount Metrics Recap - Masco Q1 Earnings ($35.03)

  • Key operating metrics:
    • Net sales
      • Plumbing $863M vs FactSet $850.7M
      • Decorative Architectural $505M vs FS $500.7M
      • Cabinetry $231M vs FS $221.5M
      • Windows Other Specialty $178M vs FS $179.3M
    • Operating income
      • Plumbing $156M vs FS $139.5M
      • Decorative Architectural $101M vs FS $97.8M
      • Cabinetry $18M vs FS $22.3M
      • Windows and Other Specialty $6M vs FS $4.5M
    • Gross margin 34.3% vs FS 33.2% and year-ago 33.1%
    • Operating margin 14.4% vs FS 13.7% and year-ago 13.8%

(MAS) Masco reports Q1 adjusted EPS $0.41 vs FactSet $0.36 ($35.03)

  • Reports Q1:
    • Revenue $1.78B vs FactSet $1.76B
  • FY Guidance (Dec 2017):
    • EPS $1.90-2.00 vs prior guidance $1.80 and FactSet $1.87

(ASTE) Astec Industries reports Q1 EPS $0.65 vs FactSet $0.66 ($63.34) 

  • Reports Q1:
    • Revenue $318.4M vs FactSet $291.5M
    • The company’s backlog at 31-Mar-17 was $361.8M. Domestic backlog decreased 25% to $290.4M at 31-Mar-17 from $387.9M at 31-Mar-16. The international backlog at 31-Mar-17 was $71.3M compared to $50.8M at 31-Mar-16, an increase of 40%. Total 31-Mar-17 backlog decreased $76.9M or 18% compared to 31-Mar-16. Excluding all pellet plant backlogs, the company’s 31-Mar-17 backlog increased $35.2M or 14% compared to 31-Mar-16. All prior year backlog amounts have been recast to include the backlog of Power Flame Incorporated which was acquired on 1-Aug-16.
  • Management comments:
    • Benjamin G. Brock, CEO, stated: “We are pleased with our results for Q1. We were able to grow revenues and, as expected, our gross margins were lower than usual, mainly due to new products being manufactured in many of our facilities. Our new products normally carry lower margins early on in their product life cycle. Our ConExpo show expense of $4.3M also affected our net income but resulted in the best ConExpo I have ever attended. While our year-over-year backlog is down including pellet plant orders, we were able to grow our 31-Mar-17 backlog 14% excluding all pellet plant orders.”
    • Brock continued, “The domestic market remained strong for our Infrastructure Group’s products targeted at the road construction industry. Our Aggregate and Mining Group continued to see improvement in the domestic market for products targeted at traditional rock quarries. The market for our equipment continues to be slow on the mining side. Our Energy Group product sales for the infrastructure industry were strong while specialized industrial markets remained steady during the quarter. We continue to experience a slight increase in quote and order activity in the oil and gas markets.”
    • Brock concluded, “We remain optimistic about 2017. Our backlog at 31-Mar-17 was historically very good at $361.8M. Still, some of these orders are for new equipment designs that have the potential to carry lower margin and/or higher than normal warranty expense in H1 of this year. However, the introduction of new products is essential for our future. While the increase in order activity is a good sign for the year ahead and we have been able to secure international orders in the face of significant headwinds from the strong U.S. Dollar, we still face challenges on U.S. exports given the continued strength of the U.S. dollar and in products targeted at the cautious mining industry.”

(PHM) StreetAccount Metrics Recap - Pulte Group Q1 Earnings ($23.08)

  • Key operating metrics:
    • Closings
      • Units 4,225 vs consensus 4,360
      • Average closing price $375K vs consensus $392K
    • Net orders
      • Units 6,126 vs consensus 6,196
      • Average order price $399K vs consensus $399K
    • Backlog
      • Units 9,323 vs consensus 9,229
      • Value $3.80B vs consensus $3.70B
    • Home sales gross margin 23.2% vs consensus 23.6%
    • SG&A 14.9% of home sale revenues
    • Pre-tax income
      • Homebuilding $125.8M vs consensus $128.7M
      • Financial Services $13.5M vs consensus $11.9M

(PHM) Pulte Group reports Q1 GAAP EPS $0.28 vs FactSet $0.29 ($23.08) 

  • Reports Q1:
    • Reported EPS inclusive of $0.03 per share of expense associated with the resolution of certain insurance matters
    • Revenue $1.63B vs FactSet $1.75B
    • Repurchased 4.7M common shares for $100M, or an average price of $21.30 per share
  • Management comments:
    • “Buyer interest during the spring selling season of 2017 has been high and points to the ongoing strength in recovery for the housing industry,” added Marshall. “Strong buyer demand continues to be supported by an improving economy and resulting employment and wage gains, high consumer confidence, a low inventory of new and existing homes, and the powerful demographic forces of Millennials and Baby Boomers. Given the strength of our land pipeline and our disciplined investment practices, PulteGroup is well positioned to grow its market presence and improve its financial performance within this operating environment.”

(EMR) Follow-up: Emerson reports total 3-month orders +4% for period ending March -- 8-K ($59.86) 

  • Emerson 3-Month Orders Growth (Percentage change versus prior year; trailing 3-month averages, excluding acquisitions and divestitures, including currency translation):
    • Automation Solutions: 0% to 5% vs Feb 0%
    • Commercial & Residential Solutions: 0% to +5% vs Feb 0% to 5%
    • Total Emerson: 0% to +5% vs Feb 0% to 5%

(EMR) Emerson reports total 3-month orders +4% for period ending March -- 8-K ($59.86) 

  • Underlying trailing three-month orders, up 4%, were positive for the third consecutive period due to improving conditions within the company's markets.
  • Automation Solutions was driven by mid-teens growth in North America reflecting continued strength in oil and gas MRO and solid bookings in downstream turnarounds.
  • Commercial & Residential Solutions reflected broad strength in Asia and Europe and favorable oil and gas and construction related markets in North America.

(PNR) Pentair reports Q1 adjusted EPS $0.65 vs FactSet $0.61 ($63.27) 

  • Reports Q1:
    • Revenue $1.18B vs FactSet $1.14B
  • Q2 Guidance:
    • Adjusted EPS $0.97-0.99 vs FactSet $1.02
    • Revenue ~$1.24B vs FactSet $1.25B
  • FY Guidance (Dec 2017):
    • Reaffirms adjusted EPS $3.45-3.55 vs FactSet $3.48
    • Revenue $4.8B vs prior guidance $4.7B and FactSet $4.76B

(RTN) Raytheon awarded $111.3M US Navy contract for Zumwalt-class destroyer program ($156.03) 

  • The cost-type and fixed-price contract is for total ship activation and engineering services in support of the Zumwalt-Class Destroyer program.
  • This contract will provide production, integration, activation, and testing on Zumwalt-Class ship mission systems and missions systems equipment.
  • This contract includes options which, if exercised, would bring the cumulative value of the contract to $490.2M.
  • Work is expected to be completed by April 2021.

(WAB) StreetAccount Metrics Recap - Wabtec Q1 Earnings ($82.19) 

  • Key operating metrics:
    • Sales
      • Freight $347.9M vs FactSet $367.3M
      • Transit $568.1M vs FS $593.7M
    • Gross margin 29.4% vs FS 29.5%
    • Operating margin 12.5% vs FS 12.9%

(WAB) Wabtec reports Q1 EPS $0.84 ex-items vs FactSet $0.82 ($82.19)

  • Reports Q1:
    • EPS excludes $0.07 related to restructuring and transaction expenses, tax adjustment and non-controlling interest related to the Faiveley acquisition
    • Revenue $916.0M vs FactSet $986.1M
  • FY Guidance (Dec 2017):
    • Reaffirms EPS $3.95-4.15 vs FactSet $4.01
    • Reaffirms revenue ~$4.1B vs FactSet $4.08B

(GWR) UK's CMA clears GWI UK Acquisition Co. Ltd's acquisition of Pentalver Transport ($68.69)

 

(SWFT) Swift Transportation reports Q1 adjusted EPS $0.07 ($25.04) 

  • Reports Q1:
    • On 13-Apr-17, we proposed a tentative settlement arrangement with regard to certain previously disclosed litigation in the Refrigerated Segment, which was originally scheduled to commence arbitration trial the week of 24-Apr-17. As a result, in accordance with GAAP, we increased our legal reserves by $11.7M, or $0.06 per share as of 31-Mar-17. This increase was not known and, therefore, not incorporated in the anticipated earnings range we released on 10-Apr-17 of Diluted EPS of $0.09-$0.10 and Adjusted EPS of $0.11-$0.12 for Q1 2017.
    • Revenue $963.8M
    • FactSet EPS and revenue consensus was $0.12 and $971.4M, respectively

(NMM) Navios Maritime Partners announces acquisition of one Capesize vessel ($2.08) 

  • Navios Maritime Partners announces that it has agreed to acquire one 2010-built Capesize vessel of 178,132 dwt for a purchase price of $27.5M. The vessel is expected to be delivered to Navios Partners' owned fleet during Q3 of 2017.
  • The vessel is expected to generate approximately $3.7M of annual EBITDA based on current rate environment (Clarkson’s 1-year time charter rate for Capesize vessels as of 21-Apr-17), assuming operating expenses approximating current operating costs and 360 revenue days.
  • Navios Partners is expected to finance the acquisition with cash on its balance sheet and bank debt on terms consistent with its existing credit facilities.
Morning Summary | TMT | Energy  | Healthcare  | Consumer  | Financial  | Industrial  | Global Trading Summary

Global Trading Summary

Chris Baggio, Ralph Mak, Mark Huttmann (203) 861-7650 | 4.25.2017

News

Asia

Last

Actual

%change

 

Mtd

Ytd

Nikkei 225

19,079.33

203.45

1.08%

 

0.90%

-0.18%

Shanghai

3,134.57

5.04

0.16%

 

-2.73%

1.00%

Hang Seng

24,455.94

316.46

1.31%

 

1.43%

11.16%

Australia

5,871.78

Closed

Closed

 

0.12%

3.64%

 

 

 

 

 

 

 

Europe

Last

Actual

%change

 

Mtd

Ytd

EuroStoxx 50

3,587.82

10.33

0.29%

 

2.48%

9.03%

Germany

12,460.32

5.47

0.04%

 

1.20%

8.53%

UK

7,283.69

19.13

0.26%

 

-0.53%

1.97%

France

5,290.37

21.02

0.40%

 

3.27%

8.79%

 

Market Holidays: Australia, New Zealand

 

Market commentary:

Asian markets continued to rally, playing catch up with Europe and the US following the sharp rally from yesterday. Hong Kong (+1.3%), Taiwan (+1.3%), Japan (+1.1%) and Korea (+1.1%) led the gains while China (+0.2%) lagged. Markets in Australia and New Zealand were closed for a holiday. Elsewhere in the region volumes were little changed from yesterday, remaining somewhat subdued.

Financials, technology, autos, energy and industrials led markets higher. Telcos, materials and foods were mixed.

 

European markets (+0.3%) are trading near session highs on M&A and solid earnings as markets extend gains from yesterday. Volumes are ~110% of the 20 day average, -10% from yesterday.

French April Business Confidence 104, in line with estimates and unchanged from March. French April Manufacturing Confidence 108 vs. 105. EUR +10 bps, GBP +15 bps.

Apparel, autos, technology, healthcare and industrials are leading markets higher.

Travel, foods, utilities, transports and insurers are lower.

 

Japan’s NKY index finished higher by 1.1% as risk sentiment improved after U.S. markets advanced overnight and the yen extended losses vs the USD.   Financials and technology sectors led the rally on the gauge as shares of major insurers including Daiichi Life, Sony Financial and T&D Holdings rose more than 3% apiece.  The big three megabanks including MUFG, SMFG and Mizuho Financial advanced 1.2% to 2.2% while brokers Nomura Holdings and Daiwa Secs. Group added 2.3% to 2.9%.  Tech shares also gained as NEC Corp climbed 3.5% after preliminary FY net income topped co. forecasts. Chip makers also contributed to the rally in the sector with share of Tokyo Electron higher by 2.2% while peers including Sumco Corp and Renesas Electronics rose 3.7% and 4.3%, respectively.  Steel makers and chemical cos finished on firm footing with shares of JFE Holdings climbing 3.4% while rivals NSSMC and Kobe Steel Ltd added 2.1% to 2.4%.  Chemicals were paced by shares of Shin-Etsu Chem, up 2.5% while JSR Corp added 1.5% after prelim. Full year oper. profits beat co. forecast.  Home improvements co. Lixil Group fell 3.7% after posting weaker preliminary FY operating profits.  Telecommunications were among the laggards as wireless operators NTT Docomo fell more than 2% amid a Nikkei report profit growth will slow in FY2017 while FY oper. profits will fall short of estimates. Meanwhile Nippon Telegraph fell 1.6% while KDDI Corp slipped 1.6% after a CANT downgrade. Exporters were mostly higher as earnings abroad benefit from the weaker yen. Automakers including Nissan, Honda and Toyota Motors added 0.8% to 2.1% while major consumer electronics makers including Nintendo Co. Ltd and Panasonic Corp added more than 2% apiece while Sharp Corp gained 1.7% amid Nikkei reports it will likely post a narrower than expected FY net loss. Market turnover was little changed vs the 20 day avg., up 20% from yesterday.

Stocks in Hong Kong rallied for a second day as regional markets played “catch up” with their European and US counterparts. The Hang Seng Index gained 1.3%, led higher by technology, industrials, financials, real estate and energy as all groups with the exception of consumer staples finished in positive territory. Technology stocks were the best performers with Tencent Holdings (700 HK, +2%) leading the advance on hopes for a q1 beat. Lenovo Group (992, +1%) and AAC Technologies (2018, +0.7%) were also higher. Banks were strong across the board, led by The Bank of East Asia (23, +3.1%), Bank of Communications (3328, +2.9%) and ICBC (1398, +2.2%). Food stocks lagged with China Mengniu Dairy (2319, -0.8%) and Want Want China (151, -0.4%) leading the declines. Market volumes were healthy at ~110% of the 20 day average, +25% from yesterday.

So Korea’s Kospi index rallied 1.1% as stocks finished on its intraday highs, tracking regional and overnight gains as French election results eased concerns France will unlikely leave the Euro currency bloc. Shares of tech giant Samsung Electronics surged 3.5% as pre-orders for the S8 and S8+ beat earlier records set by its predecessors S7 and S7 edge. Battery making affiliate Samsung SDI added 1.1% while shares of LG Display jumped 3.3%. Shares of major chipmaker SK Hynix ended little changed after Q1 oper. profits beat ests.  Energy producers also rallied amid better than expected earnings from SK Innovation as the shares rallied 3.3%. Rivals including S-Oil and GS Holdings jumped 2.6% - 3%.  Telecommunications lagged after shares of SK Telecom and LG Uplus lost 0.8% and 2.1%, respectively while fixed line operator KT Corp slipped 0.6%.  Financials saw a mixed picture as shares of KB Financial and Woori Bank rose 1% to 1.6% while insurers Samsung Fire & Marine and Hanwha Life fell 1.3% and 1.9%, respectively.  Materials lagged as shares of Posco and Hyundai Steel fell 0.7% to 1.5% while chemical shares including LG Chem and Kumho Petrochem lost 0.7% to 1.2%.  Shares of LG Household and Amorepacific Corp weighed on consumer staples, dropping 2.2% and 4.4%, respectively following broker downgrades.  South Korea’s April consumer confidence rose to 101.2 from 96.7 in March, Bank of Korea says.  Market turnover was light, falling 34% vs the 20 day avg., -25% from Monday.

Taiwan’s Taiex index gained 1.3% as risk appetite improved amid an overnight rally on Wall St. after the French vote eased concerns that the country will leave the Euro currency bloc. Stocks rallied as financials and technology paced gains on the broad measure. Shares of LCD panel maker Innolux surged more than 7% following an upgrade to Buy@ Sinopac Taiwan while rival AU Optronics added 3.7%. PC makers were also firm. Asustek Computer rose 2.9% while shares of contract manufacturers Pegatron and Wistron Corp gained 1.8% and 2.2%, respectively. Chip heavyweights including TSMC and Advanced Semiconductor Engineering advanced 1.1% to 1.5%. Gains in financials were supported by strength in banks as the group tracked the outperformance in U.S. counterparts. Shares of Fubon and Yuanta Financial each climbed 1.6% while insurers Cathay Financial and China Life Insurance gained 2.5% and 2.8%, respectively. Transportation stocks led gains in industrials as marine transportation cos. U-Ming Marine and Evergreen Marine jumped 1% to 3.9% while airline cos. EVA Airways and China Airlines added 1.7% to 2.1%. Defensive groups including drug makers and telecommunications underperformed on a relative basis as shares of Far Eastone Telecom fell 0.4% while sector peers Taiwan Mobile and Chunghwa Telecom gained 0.5% to 1.4%.  Market volumes fell 10% vs the 20 day avg.

 

 

 

 


Disclaimer:
This publication is prepared by Weeden & Co. LP’s (“Weeden”) trading department, not its research department, and is for informational purposes only. It is not intended to form the basis of any investment decision and should not be considered a recommendation by Weeden or its associates and/or affiliates. The material herein is based on data from sources considered to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. It is not to be construed as a representation by us or as on offer or the solicitation of an offer to sell or buy any security. Any calculations and valuations presented herein are intended as a basis for discussion. Any opinions or estimates given may change. Weeden undertakes no obligation to provide recipients with any additional information or any update to or correction of the information contained herein. No liability is accepted by Weeden for any loss that may arise from any use of the information contained herein or derived here from.

From time to time, Weeden, its affiliates, and/or its individual officers and/or members of their families may have a position in the subject securities which may be consistent with or contrary to the recommendations contained herein; and may make purchases and/or sales of those securities in the open market or otherwise. This publication is intended solely for Weeden’s institutional customers/broker-dealers. Use by other than the intended recipients is prohibited. This publication may not be reproduced or redistributed outside the recipient’s organization.

Sources:
Bloomberg L.P., Briefing.com, Street Account, DigiTimes, DrameXchange, .E.E Times, Fly on the Wall, Barron’s, Reuters, Thomson Financial, The Wall Street Journal, Dow Jones, Financial Times, Wall Street Source, NY Times, CBS Marketwatch, Smartmoney.com, Boston Globe, 24/7 WallSt, RealClearMarkets, Yahoo Financial, Los Angeles Times, Washington Post, CNN, Bloomberg Radio, Cable News Network LP, LLP. A Time Warner Company.