Category: Stock Market News

Phillips 66 Partners LP said Tuesday it has agreed with Phillips 66 to acquire 30 crude, refined products and natural gas liquids logistics assets for $1.3 billion. The partnership said it will fund the deal with debt and $197 million in new units to be issued to Phillips 66. The deal is expected to close this month and to be immediately accretive to unitholders. “As our largest dropdown acquisition to date, this represents a milestone for the Partnership and will provide additional fee-based income and diversity to our already strong midstream portfolio,” Chief Executive Greg Garland said in a statement. Shares were not active in premarket trade, but are down 23% in the year to date, while the S&P 500 has gained 6%.

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Altria Group Inc. said Tuesday that it owns a 9.6% economic and voting interest in Anheuser-Busch InBev S.A. ADR , or 185,115,417 restricted shares, now that the merger with SABMiller plc is complete. Altria will use the equity method of accounting for its AB InBev stake, with the results reported at a one-quarter lag due to a later recording time for AB InBev results. The timing lag won’t impact Altria’s cash flows or quarterly dividend, the company said, but will have an effect on year-over-year comparisons of reported and adjusted EPS in the short term. The tobacco company is expanding its current $1 billion share repurchase program to $3 billion, expected to be completed by the end of the second quarter of 2018. Altria is receiving $5.3 billion in pre-tax cash from the AB InBev deal and expects to record a pre-tax gain in reported earnings of $13.7 billion, or $4.55 per share, with all of it recorded in the fourth quarter of 2016. Altria is expecting full-year 2016 adjusted EPS in the range of $2.98 to $3.04, from $3.01 to $3.07. The company maintains its goal of an adjusted annual EPS growth rate of 7% to 9%. Altria’s Chief Executive, Marty Barrington, and its Chief Financial Officer, Billy Giffords, have been appointed to the AB InBev board of directors. Altria shares are up 0.3% in premarket trading and up 6.1% for 2016 so far. The S&P 500 Index is up 5.9% for the year to date.

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Atlas Air Worldwide Holdings and Boeing Co. announced Tuesday a deal to convert nine 767 wide-body passenger planes into converted freighters, up from an order of four planes previously-announced in July. In May, Atlas Air had announced a deal to provide air cargo services to Amazon.com Inc. , including the operation of 20 767 freighters. Atlas Air’s stock, which was still inactive in premarket trade, has gained 3.8% year to date, while the NYSE Arca Airline Index has climbed 6.9% and the S&P 500 has gained 5.9%.

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Leon Cooperman, the hedge-fund manager who in September was charged with insider trading by the Securities and Exchange Commission, on Tuesday defended himself, saying he “always followed the law.”
“I’m not going to let them unfairly destroy my legacy,” Cooperman said in a CNBC interview, adding that he was offered the opportunity to settle the charges for “far less than I donate to charity on an annual basis,” but that he turned down the deal “because I acted appropriately.”
“Money is not an issue,” he said of his defense.
The charges stem from Cooperman’s purchase of Atlas Pipeline Partners securities. It was alleged that Cooperman’s Omega Advisors gained access to nonpublic information from a company executive about the sale of a natural gas processing facility. News of the allegations resulted in a jump of more than 30% in Atlas shares.
“Information is not a crime,” Cooperman told CNBC, adding that he was never given material, confidential information by a company’s management, though if he was, he would ask them to issue a press release disclosing the information.
Cooperman deemed the charges “a mild distraction,” saying, there was “absolutely no case here.”

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Shares of Seagate Technology PLC climbed 1.6% in premarket trade Tuesday, after the data storage company raised its fiscal first-quarter revenue outlook. The company said it now expects revenue of about $2.8 billion, compared with its previous outlook of “at least” $2.7 billion, and the FactSet consensus of $2.74 billion. The gross margin outlook is now 29%, up from its previous outlook of “at least” 27%. The stock has tacked on 3.6% year to date through Monday, while the S&P 500 has gained 5.9%.

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ConAgra Foods Inc. announced an increase to its share repurchase program Tuesday as well as a Nov. 9, 2016 distribution date for the spin-off of its Lamb Weston Business. The record date is Nov. 1, 2016. The holders of ConAgra Foods’ common shares will receive 100 percent of the common shares of Lamb Weston in the spin-off. The distribution is still subject to closing conditions. ConAgra Foods Inc. will be renamed Conagra Brands Inc. upon completion of the spin-off. The company’s board of directors also increased the existing share buyback program to $1.25 billion, which is dependent on the completion of the spin-off. The shares are expected to be repurchased “periodically” and the spin-off has no expiration date. Shares of ConAgra were inactive in premarket trade Tuesday.

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Yum Brands Inc. on Tuesday outlined plans to drive growth at its KFC, Pizza Hut and Taco Bell chains once the separation of its China business is complete, which is expected after the close of business on Oct. 31. “As a ‘pure play’ franchisor, the transformed Yum! Brands will become more efficient and capital light with an optimized capital structure, improved cash flow and laser-like focus on our key strategies to drive same-store sales and new unit growth worldwide,” Chief Executive Greg Creed said in a statement. Among the moves planned, Yum will increase franchise restaurant ownership to 93% by end October from 77% currently, and to 98% by the of fiscal 2018. It will cut capex to $100 million by fiscal 2019 from a pro forma $500 million in 2015. It is planning to return $13.5 billion to shareholders through 2019 in the form of buybacks and dividends. Shares rose 0.7% premarket, and are up 20% in the year so far, while the S7P 500 has gained 6%.

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General Electric Co. said Tuesday that it plans to buy Denmark-based LM Wind Power for $1.65 billion, as the company looks to add wind turbine blade design and manufacturing into its renewable energy business. GE expects the deal to close in the first half of 2017, and add to earnings in 2018. “This combination will help sustain growth in the wind power industry,” said Jerome Pecresse, chief executive of GE Renewable Energy. “Simply stated, we’ll be more local, have more flexibility and knowledge in turbine design and supply, and more ability to innovate and reduce product costs, while improving turbine performance.” GE’s stock, which was little changed in premarket trade, has lost 7.4% year to date through Monday, while the Dow Jones Industrial Average has gained 5.2%.

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Rent-A-Center Inc. said Tuesday it expects third-quarter earnings per share, on both a GAAP and adjusted basis, of 5 cents to 15 cents. That’s well below the FactSet EPS consensus of 39 cents. U.S. same-store sales are expected to be down about 12%, while same-store sales for its Acceptance Now brand stores are expected to be flat. “Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on core sales,” said Chief Executive Robert Davis. The company is scheduled to report Q3 results on Oct. 27. Separately, the rent-to-own company said it amended its credit agreement, reducing the fixed charge coverage ratio from 1.50 to 1.00 from 1.75 to 1.00. The stock, which was still inactive in premarket trade, has tumbled 14% year to date through Monday, while the S&P 500 has gained 5.9%.

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Samsung urged all phone carriers and retail outlets to stop selling and exchanging its Galaxy Note 7 smartphone and advised current users to turn their phones off, even if they have already exchanged their phone for a replacement. Samsung said it is working with the Consumer Product Safety Commission in its investigation of fresh incidents of phone batteries overheating and catching on fire. “We remain committed to working diligently with the CPSC, carriers and our retail partners to take all necessary steps to resolve the situation. Consumers with an original Galaxy Note 7 or replacement Galaxy Note 7 should power down and take advantage of the remedies available, including a refund at their place of purchase,” Samsung said in a statement. On Sunday, Samsung reportedly halted production of the phone. In mid-September, Samsung issued a recall of the phone after dozens of reports of the phone’s battery overheating.

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