Category: Stock Market News

Shares of Smith & Wesson Holding Corp. slumped 3.4% in premarket trade Thursday, after the gun maker was downgraded at Wunderlich Securities, which cited signs of weakening consumer demand. Analyst Rommel Dionisio cut his rating to hold, after being at buy for at least the last two years, and slashed his stock price target to $29 from $36. Dionisio said after two sharp spikes in demand for guns, following the terrorism-related incidents in San Bernadino, Calif. and in Paris, federal background checks data has “decelerated meaningfully” in August and September, suggesting checks trends could turn negative in coming months. In addition, recent unseasonably warm weather has led to lower interest in hunting-related products, which should hurt Smith & Wesson’s long gun business. As a result, Dionisio expects promotional activity to increase, which could cut into profit margins. The elimination from a military handgun contract is also a concern. The stock had run up 19% year to date through Wednesday, while the S&P 500 had gained 5.7%.

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Hurricane Matthew is expected to strengthen from a category 3 storm to a category 4 storm as it churns toward the east coast of the Florida peninsula later Thursday and through Friday night, the National Hurricane Center warned in its latest advisory. The storm currently has maximum sustained winds of 125 miles an hour and its outer rainbands are already approaching Florida, said the NHC. A hurricane warning is in effect for the central and northwestern Bahamas, as well as north of Golden Beach Florida to Altamaha Sound Georgia and north to South Santee River South Carolina. “Hurricane conditions are expected to first reach the hurricane
warning area in Florida by late today and will spread northward
within the warning area through Friday,” said the advisory. “Tropical storm conditions are first expected in Florida by late this morning.”

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Shares of Wal-Mart Stores Inc. shed 0.9% in premarket trade Thursday, after the discount retail giant affirmed its earnings per share outlook for the current fiscal year ending January 2017, but provided a downbeat outlook for next year. The company said it still expects adjusted EPS of $4.15 to $4.35, compared with the FactSet consensus of $4.34. Wal-Mart expects fiscal 2018 EPS based on generally accepted accounting principles (GAAP) to be “relatively flat” with its adjusted EPS outlook for fiscal 2017, while the FactSet consensus for next year’s adjusted EPS calls for a rise to $4.46. Fiscal 2019 EPS is expected to rise 5%. Wal-Mart said it has $11.7 billion remaining in its $20 billion stock repurchase program that started in October 2015, and expects the program to be completed by the end of fiscal 2018. Capital expenditures for fiscal 2018 at expected to be $11 billion, with total new Walmart U.S. store openings expected to decline 55 from a projected 130 in fiscal 2017. The stock has soared 17% year to date through Wednesday, while the SPDR S&P Retail ETF has gained 1.7% and the S&P 500 has run up 5.7%.

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Monster Worldwide Inc. said Thursday it expects third-quarter revenue to fall about 14% as it grapples with pressure on its core product offering and weak bookings. The recruitment company said it expects revenue to range from $143 million to $145 million vs. $167.1 million a year ago. The current FactSet consensus is for third-quarter revenue of $153 million. “While we are gaining traction in North America as a result of our new product initiatives and pay per click business, the continued pressure on our core traditional product offerings combined with the weakness in bookings in prior quarters has resulted in a decline in third quarter 2016 revenue in North America of 16% on a year over year basis,” Chief Executive Tim Yates said in a statement. The company, which is being acquired by Randstad for $3.40 a share in cash, is expecting to report third-quarter earnings on Oct. 21. The Randstad deal is expected to close during the fourth quarter. Shares were inactive premarket, but are down 39% in the year so far, while the S&P 500 has gained about 6%.

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Cato Corp. lowered its earnings outlook for fiscal third quarter ending October following September same-store sales that were “well below” expectations. The discount apparel retailer now expects EPS of 7 cents to 11 cents, compared with a previous outlook of 13 cents to 18 cents. Same-store sales for September fell 9%, while total sales for the month declined 8% to $76.2 million. The stock, which was still inactive in premarket trade, has dropped 10% year to date, while the SPDR S&P Retail ETF has gained 1.7% and the S&P 500 has tacked on 5.7%.

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The Walt Disney Co. will not be going ahead with a bid to acquire Twitter Inc. , said Recode, reported Wednesday, citing sources. In a separate report, the publication said Alphabet Inc.’s Google has also dropped out as a suitor, while Apple Inc. was unlikely to make an offer either. Shares of Twitter fell 13.6% in premarket trading on Thursday, while Disney shares were unchanged. Shares of Salesforce.com rose 1.3%, as that company remains in the frame as a possible buyer for the social media company. Neither Disney nor Google could immediately be reached for comment.

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Coupa Software Inc. priced its initial public offering at $18 a share Wednesday evening, the top of an elevated price range, but the software company still saw its valuation decline from a peak of more than $1 billion. The cloud-software company, which helps companies track spending, priced 7.4 million shares at $18, bringing in $133.2 million at an initial market capitalization of roughly $866 million. Coupa had attracted $165 million in venture funding, with the last round of investment valuing the company as a so-called unicorn in June 2015. Underwriting banks have access to an additional 1.1 million shares if demand exists. Coupa is expected to begin trading on the Nasdaq Global Select Market under the ticker symbol COUP on Thursday.

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Samsung Electronics Co. Ltd. announced Wednesday the acquisition of a Silicon Valley startup founded by the co-creators of Siri, Apple Inc.’s voice assistant. The purchase price for San Jose, California-based Viv Labs Inc. , which has developed a new personal assistant akin to Siri, was not disclosed. Samsung said in a news release that it plans to incorporate Viv into a range of its electronics, similar to how Apple deploys Siri and Alphabet Inc. plans to use its Google Assistant in Android products. “Samsung offers us a unique opportunity to deliver a single conversational interface to the world’s apps and services across a diverse range of products, at global scale,” said Viv co-founder and Chief Executive Dag Kittlaus, who helped develop Siri along with fellow Viv co-founder Adam Cheyer. Apple bought Siri in 2010 and introduced it in the iPhone 4S in 2011; the technology has since been introduced across Apple’s suite of products.

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Lam Research Corp. and KLA-Tencor Corp. said late Wednesday they have scuttled a deal to combine companies, citing resistance from the Justice Department. Shares of KLA-Tencor fell 4.5% to $68 after hours, while shares of Lam declined 2.3% to $94. No merger-termination fees will be paid by either company, KLA-Tencor said in a statement. The companies said the deal wasn’t in the best interest of shareholders after the Justice Department said it would not continue with a consent decree the companies had been negotiating. Back in May, the Justice Departmentrequested more information on the deal. The announcement comes nearly a year after Lam announced it planned to buy KLA-Tencor in a $10.6 billion cash-and-stock deal. The Justice Department already helped to squash a planned 2015 merger between Applied Materials Inc. and Tokyo Electron Ltd.

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Mota Group, a maker of drones and drone-related products, has filed for an initial public offering, hoping to sell more than $24 million worth of shares. “Cash constraints” have limited the company’s transition to a focus on drones, Mota said in a filing Wednesday. San Jose, Calif.-based Mota lost $2.4 billion, or 44 cents a share, in the year ended June 30, from a loss of $299,000, or 4 cents a share, in 2015. Risks include competition from other companies with greater resources, Mota said. The company plans to trade on the Nasdaq under the symbol MOTA.

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