Category: Stock Market News

Shares of Viacom Inc. Class B non-voting stock, which is available to invest in for the general public, dropped 1.5% in early trade on Wednesday, with its Class A controlling stock sliding 1% after the beleaguered company issued a profit warning, forecasting adjusted earnings per share for the fourth quarter will be in the range of 65 cents to 70 cents. The FactSet consensus on earnings is 91 cents. Viacom also said it would cut its quarterly dividend in half to 20 cents per share while tapping debt markets as well, in hopes of improving financial flexibility. The media and entertainment company confirmed it’s ended the process of seeking a minority investor for its Paramount Pictures film business and said it will consider all options available. Interim Chief Executive Tom Dooley, who took the reins from the ousted Philippe Dauman, will step down Nov 15 as the board looks to conduct a proper succession process. Shares of Viacom’s non-voting stock are down 13% in the year to date, underperforming the S&P 500 Index , which is up more than 5%.

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U.S. stocks on Wednesday began trade tentatively higher as a key decision from the Federal Reserve, scheduled for 2 p.m. Eastern Time, looms. The expected Fed policy update comes as the Bank of Japan announced Wednesday that it was refocusing its monetary-policy efforts to concentrate on keeping 10-year Japanese government-bond yield at zero in its latest initiative to juice its sluggish economy. Rising crude-oil prices also helped give an early lift to U.S. equity benchmarks, boosting energy-related shares. The Dow Jones Industrial Average was up 84 points, or 0.5%, at 18,211, the S&P 500 index rose 10 points, or 0.4%, at 2,149, while the Nasdaq Composite Index advanced 21 points, or 0.4%, at 5,262. In corporate news, Viacom Inc. said Wednesday that it was ending its pursuit of a minority investor in Paramount Pictures and that its interim CEO Tom Dooley was set to leave the company Nov. 15.

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Eleven Biotherapeutics Inc. shares surged 24.6% in pre-market trade Wednesday after the company said it had entered into and completed an acquisition of Viventia Bio Inc. The company will continue to be named Eleven Biotherapeutics, focusing on developing new oncology treatments in areas of unmet need, and will be led by Viventia’s chief executive officer, Stephen Hurly, who will become president and CEO of Eleven. Eleven’s former president and CEO, Abbie Celniker, will remain a company director. Under the agreement, Eleven purchased Viventia’s outstanding capital stock in exchange for Eleven shares representing about 19.9% of the company’s voting power. Viventia’s lead product candidates are Vicinium, a bladder cancer treatment that is in late-stage clinical trials, and Proxinium, a head and neck cancer treatment that is expected to enter mid-stage development next year. Eleven Biotherapeutics shares rose 44.6% over the last three months, compared with a 2.4% rise in the S&P 500 .

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B&G Foods Inc. has announced an agreement to acquire ACH Food Companies Inc.’s spice business for about $365 million in cash. The brands involved include Spice Islands, Tone’s and Durkee, as well as the Weber brand of sauces and seasonings, which are sold under license. B&G will also get a manufacturing facility in Ankeny, Ia. B&G expects the deal to close during the fourth quarter of 2016, and projects that the acquired business will generate net sales in the range of $220 million to $225 million on an annual basis starting in 2017. Adjusted earnings per share are expected to be in the range of 26 cents to 28 cents. And B&G expects $83 million in tax benefits. B&G shares are inactive in premarket trading, but up 34.4% for 2016 so far. The S&P 500 Index is up 4.7% for the year to date.

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Wells Fargo & Co.’s stock slipped 0.3% in premarket trade Wednesday, bucking the early gains seen in the financial sector and the broader stock market, after the banking giant was downgraded at J.P. Morgan, citing mounting public and regulatory scrutiny over fraudulent accounts following “tough” Senate hearings. Analyst Vivek Jeneja cut his rating to neutral, after being at overweight since October 2015, and trimmed his stock price target to $48 from $53.50. That follows upgrades the past two sessions, at Morgan Stanley and R.W. Baird. Wells Chief Executive John Stumpf testified Tuesday in front of the Senate Banking Committee, with Senator Elizabeth Warren calling him “gutless” for not taking full responsibility for the opening of fraudulent accounts. Juneja said he believes Wells will have to spend a lot more on litigation, revenue growth will probably slow, the reputational hit on the bank will be “material” and it could push the bank to move to grow earnings more in areas which carry a lower valuation multiple. “We expect management to turn this around but it will likely take some time and expense–hence the downgrade,” Juneja wrote. The stock has tumbled 8.4% so far this month, while the SPDR Financial Select Sector ETF has lost 3.1% and the S&P 500 has slipped 1.4%.

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Wal-Mart Stores Inc. said Wednesday that it had awarded more than $200 million in cash bonuses during the second quarter to more than 900,000 hourly workers. Wal-Mart employs more than 1.5 million associates in the U.S., according to the company’s website. The bonuses are part of an incentive plan, based on store performance from May to July. The bonuses are available four times per year. Wal-Mart announced a two-year, $2.7 billion investment in associate training, wages and more in 2015. The bonuses are not part of that commitment, the company said. Wal-Mart shares are up 0.2% in premarket trading. The retail giant’s stock is up 17.4% for the calendar year so far while the S&P 500 Index is up 4.7% for the same period.

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Wal-Mart Stores Inc. said Wednesday that it had awarded more than $200 million in cash bonuses during the second quarter to more than 900,000 hourly workers. Wal-Mart employs more than 1.5 million associates in the U.S., according to the company’s website. The bonuses are part of an incentive plan, based on store performance from May to July. The bonuses are available four times per year. Wal-Mart announced a two-year, $2.7 billion investment in associate training, wages and more in 2015. The bonuses are not part of that commitment, the company said. Wal-Mart shares are up 0.2% in premarket trading. The retail giant’s stock is up 17.4% for the calendar year so far while the S&P 500 Index is up 4.7% for the same period.

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Shares of CarMax Inc. tumbled 5.5% in premarket trade Wednesday, after the used car seller reported disappointing fiscal second-quarter results. Net earnings for the quarter ended Aug. 31 were $162.4 million, or 84 cents a share, compared with $172.2 million, or 82 cents a share, in the same period a year ago. Earnings per share were reduced by 4 cents for the modification of equity awards held by the company’s retired chief executive officer. The FactSet EPS consensus was 88 cents. Sales rose to $4.00 billion from $3.88 billion, but missed the FactSet consensus of $4.11 billion, while same-store used unit sales increased 3.1% as a decline in store traffic was offset by improved conversion rates. Used vehicle unit sales increased 7.0%, beating the FactSet consensus of 2.9%. The stock had gained 3.3% year to date through Tuesday, while the S&P 500 had advanced 4.7%.

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Panera Bread Co. said Wednesday that it will begin serving bacon that’s free of artifical preservatives, flavors, sweeteners and colors from artifical sources. The company will also source its bacon from pigs that meet the company’s standards for reduced confinement and antibiotics. This “clean” bacon is made with six ingredients – pork, water, sea salt, sugar, celery powder and thyme extract – and will be used in salads and sandwiches. Panera shares are inactive in premarket trading, but up 6.2% for the past year. The S&P 500 Index is up 8.8% for the last 12 months.

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General Mills Inc. said Wednesday it had net income of $409 million, or 67 cents a share, in its first fiscal quarter to Aug. 28, down from $435 million, or 69 cents a share, in the year-earlier period. Adjusted per-share earnings came to 78 cents, ahead of the FactSet consensus of 76 cents. Sales fell to $3.9 billion from $4.2 billion, matching the FactSet consensus. However, “our net sales performance did not meet our expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses,” Chief Executive Ken Powell said in a statement. The company is planning actions to improve its sales performance, but is expecting to achieve its profit goals for fiscal 2017 and its target of 20% adjusted operating profit margin by fiscal 2018. Shares were indicating higher in light premarket trade, and are up 12% in the year so far, while the S&P 500 has gained about 5%.

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