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Shares of companies across the health care industry, from health insurers to distributors, pharmacy-benefit managers and drugmakers, dropped in premarket trade on Tuesday after Amazon , Berkshire Hathaway and JPMorgan Chase announced plans for a new company to improve their employees’ health care. The news hit pharmacy-benefit managers, pharmacy chains and drug distributors among the hardest, with CVS Health Corp. shares dropping 7.6%, Walgreens Boots Alliance shares dropping 5.7%, Express Scripts Holding Company dropping 4.8% and Cardinal Health Inc. shares dropping 4.3%. Several health insurers’ shares also fell significantly, including UnitedHealth Group , which dropped 7.2%, Anthem Inc. , which dropped 7%, as well as Aetna Inc. and Humana Inc. . The moves reflect investor concerns that the Amazon, Berkshire Hathaway and JPMorgan initiative could shake up the status quo, especially given the three companies’ large size and influential nature, and the potential interest of other employers in joining them. U.S. health care costs continue to rise year over year despite efforts to curb them, and many experts believe the fault lies with too-high prices. The SPDR S&P Biotech ETF declined 1% in premarket trade, as did the Health Care Select Sector SPDR . Shares of the ETFs have surged 15.5% and 12.3% respectively over the last three months, compared with a 10.9% increase in the S&P 500 and a 13.2% rise in the Dow Jones Industrial Average .

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From:: Stock Market News

Shares of Harley-Davidson Inc. fell more than 7% in premarket trade on Tuesday after the motorcycle company reported down fourth-quarter profit that declined sharply. Harley-Davidson reported net income of $8.3 million, or 5 cents per share, compared with $47.2 million, or 27 cents per share during the same quarter a year ago. The company said net income and per-share earnings were adversely impacted by a $53.1 million income tax charge related to the Tax Cuts and Jobs Act, as well as a $29.4 million charge for product recall. FactSet’s earnings consensus was 45 cents per share. The company reported revenue was $1.05 billion, up from $933.02 million during the same period a year ago, and just above FactSet’s $1.03 billion consensus. Harley-Davidson said that worldwide retail motorcycle sales declined 9.6% in the fourth quarter, while the U.S. sales were down 11.1%. Harley-Davidson is planning to restructure and consolidate some operations, incurring costs in the range of $170 million to $200 million over the next two years. The company expects motorcycle shipments for the full year 2018 to be 231,000 to 236,000. FactSet’s consensus on shipments is 243,842. Shares of Harley-Davidson are down roughly 5% in the last 12 months, while the S&P 500 index is up more than 25% and the Dow Jones Industrial Average is up more than 32%.

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From:: Stock Market News

Amazon.com Inc. , Berkshire Hathaway Inc. [S: brk.b] and JPMorgan Chase & Co. , three of the biggest companies in the U.S., announced plans on Tuesday to start a separate company with the goal of improving health care for their U.S. employees. The company will be “free from profit-making incentives and constraints,” focusing in the beginning on technology solutions, and will initially be led by Todd Combs, an investment officer at Berkshire Hathaway, Marvelle Sullivan Berchtold, a managing director at JPMorgan Chase; and Beth Galetti, a senior vice president at Amazon. Berkshire Hathaway Chairman and Chief Executive Warren Buffet described increasing health care costs as “a hungry tapeworm on the American economy” in a statement, adding that the three companies do “not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.” Amazon shares have surged 27.6% over the last three months, Berkshire Hathaway Class A shares have surged 8.7% and JPMorgan shares have surged 14.6%, compared with a 10.9% rise in the S&P 500 and a 13.2% rise in the Dow Jones Industrial Average .

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From:: Stock Market News

Chip maker Maxim Integrated Products Inc. fell in the extended session Monday after Japan-based Renesas Electronics Corp. denied that is in discussions to buy Maxim for close to $20 billion. Maxim stock closed up 12.3% in the regular session, but fell 8.3% after hours to $60.75, following Renesas’ denial. Earlier Monday, CNBC reported that Renesas was in talks with Maxim. Maxim stock is up 62% this year, as the S&P 500 index has gained 25%.

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A “key engineer” involved in the company’s battery design has left Tesla Inc. , according to a CNBC report late Monday. Ernesto Villanueva, who holds “numerous” patents and helped design the battery modules that power all Tesla vehicles, left the company last year, CNBC said, citing a person familiar with what occurred. Tesla has declined to comment and Villanueva could not be reached for comment, the report said. Tesla last week filed to tap the asset-backed market for the first time amid concerns about its ability to churn out Model 3 sedans at the rate it has targeted. Tesla shares fell 0.5% in late trading after ending the regular session up 2%.

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MetLife Inc. shares tanked late Monday after the company released unaudited fourth-quarter results and delayed the release of official numbers, saying it has had to revise some of its reserve estimates. The company estimated net income between $2 billion and $2.1 billion for the quarter, or $1.91 a share and $1.96 a share, including a $1.2 billion after-tax benefit from the U.S. tax overhaul. Adjusted for one-time items, the company said it expects earnings of $650 million to $700 million, or 61 cents a share to 66 cents a share, in the quarter. The company said it will report on Feb. 13. Analysts polled by FactSet expect MetLife to report adjusted earnings of $1.08 a share. The company also disclosed that state and federal regulators have questioned the company’s handling of the reserve estimates in question. The prior release of group annuity reserves resulted from a “material weakness in internal control over financial reporting,” Metlife said. It expects to increase reserves in total between $525 million and $575 million pre-tax, to adjust for reserves previously released as well as accrued interest and other related liabilities, it said. The total amount expected to impact fourth quarter 2017 net income is between $135 million and $165 million pre-tax, “the majority of which represents a current period strengthening of reserves” and will be reflected in adjusted earnings, the company said. Shares had ended the regular trading day down 0.7%.

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Revlon Inc. said Monday afternoon that Chief Executive and President Fabian Garcia had stepped down “to pursue other opportunities,” and gave an early look at fourth-quarter earnings numbers that show revenue higher than expectations. Revlon said Paul Meister, a member of the board, would oversee day-to-day operations until a replacement could be found, and that Garcia would stay on until the end of February to assist with the transition. “This has been a difficult year for us balancing the successful integration of Elizabeth Arden with the rise of e-commerce and specialty beauty stores,” board chairman Ronald Perelman said in Monday’s announcement. “We are aggressively catching up to that rapid transformation and I want to thank Fabian for his leadership through this challenging and dynamic period.” Revlon also said that it now expects fourth-quarter revenue of $785 million, higher than analysts’ average expectations of $743 million. Revlon expects a net loss of $60 million to $80 million for the quarter, due to a charge related to the recent tax cuts. The cosmetics company said it expects adjusted EBITDA to be $110 million to $115 million; analysts on average expected that profit figure to be $115 million, according to FactSet. “We’re encouraged by our fourth quarter results, which represent a sequential improvement from the first nine months of the year,” said Chief Financial Officer Chris Peterson said. Peterson also denied rumors that the company was considering a material-asset transfer that would shield the assets from lenders. Revlon shares gained about 2% in after-hours trading following the announcement; the company plans to divulge full quarterly-earnings information March 2.

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Rambus Inc. shares dropped in the extended session Monday after the chipmaker’s quarterly results were in-line but its outlook under new accounting rules fell shy of estimates. Rambus shares declined 4.2% to $13.60 after hours. The company reported fourth-quarter loss of $18.5 million, or 17 cents a share, compared with $6.8 million, or 6 cents a share, in the year-ago period. Adjusted earnings were 19 cents a share. Revenue rose to $101.9 million from $97.6 million in the year-ago period. Analysts surveyed by FactSet had estimated 19 cents a share on revenue of $100.9 million. For the first quarter, Rambus said new accounting rules like ASC 606 and ASC 605 will impact reported revenue, and exclude results from its lighting products. Using ASVC 606, Rambus estimates an adjusted loss of 19 cents a share to 12 cents a share on revenue of $41 million to $47 million for the first quarter, and using ASC 605, the company sees adjusted earnings of 17 cents to 23 cents a share on revenue of $94 million to $100 million. Analysts expect earnings of 20 cents a share on revenue of $100.8 million.

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From:: Stock Market News

Japan-based Renesas Electronics Corp. is in discussions to buy Maxim Integrated Products Inc. for what could be near $20 billion, CNBC reported late Monday. Maxim stock rose 12.6% to $66.43 during the regular session and was up nearly 1% to $67 after hours. Citing anonymous sources CNBC reported the talks aren’t close to completion and a deal may not fall into place. Investors value Maxim at $16.61 billion by market capitalization. Maxim stock is up 62% this year, as the S&P 500 index has gained 25%.

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From:: Stock Market News