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GE makes EPS guidance language simpler, but stock tumbles toward 5 1/2-year low

General Electric Co.’s stock plunged 3.7% in morning trade Monday, putting it on track to close at a 5 1/2-year low, after its presentation to investors. As part of GE’s pledge to become simpler, and given some urging by the Securities and Exchange Commission, the company changed how it changed how it refers to earnings-per-share that is comparable to analyst expectations to something investors (and reporters) are more accustomed. GE still said in its presentation to investors Monday it expected “industrial operating + vertical EPS” of $1.05 to $1.10, but also added an “adjusted EPS” outlook of $1.04 to $1.12, which compares with the FactSet consensus of $1.10. For 2018, GE only referred to its profit outlook as “adjusted EPS,” of $1.00 to $1.07, which was below the FactSet consensus of $1.15. In a comment letter sent to GE, the SEC requested some explanation of “industrial operating + verticals EPS.” The stock has tumbled 37.6% year to date, while the Dow Jones Industrial Average has climbed 18.3%.

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Nektar Therapeutics’ stock rockets toward near 17-year high after upbeat trial data

Shares of Nektar Therapeutics soared 26% in premarket trade Monday, putting them on track to open at the highest level seen since January 2001, after the biopharmaceutical company announced over the weekend positive data from a trial of its cancer treatment. The company said Saturday that data from the Pivot-02 phase 1/2 study, designed to evaluate the combination of Bristol-Myers Squibb Co.’s Opdivo with its investigational medicine NKTR-214, demonstrated “important” response rates across the three types of tumors tested. The company said it and Bristol-Myers are now actively enrolling patients in the phase 2 expansion part of the study in five tumor types. Nektar’s stock has rocketed 165% year to date through Friday, while Bristol-Myers shares have tacked on 4.1%, the iShares Nasdaq Biotechnology ETF has climbed 18% and the S&P 500 has gained 15%.

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GGP shares jump after Brookfield mounts an acquisition bid

GGP Inc. shares surged nearly 6% Monday morning after Brookfield Property Partners L.P. offered to buy the retail real estate company. Brookfield presented the offer to GGP’s board on Saturday. Under the deal, which values the company at $21.8 billion, Brookfield would pay $23 a share, a 3.6% premium to Friday’s closing price, in a combination of cash and units. The combined company would be owned about 30% by existing GGP shareholders. GGP shares are down 11.1% in the year to date, reflecting a difficult environment for retail. The S&P 500 , in contrast, is up 15.3%.

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TiVo names Enrique Rodriguez CEO

TiVo Corp. said Monday it has named Enrique Rodriguez as president and chief executive, replacing Thomas Carson who said earlier this year he would retire. Rodriguez was EVP and chief technical officer at AT&T’s entertainment group, and has also done stints at Sirius XM , Cisco and Microsoft . TiVo shares were not yet active premarket, but are down 19% in 2017, while the S&P 500 has gained 15%.

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Teva’s stock drops after J.P. Morgan downgrades to rare bearish rating

Shares of Teva Pharmaceutical Industries Ltd. shed 2.2% in premarket trade Monday, after the generic drug maker was downgraded at J.P. Morgan to a rare bearish rating, citing concerns over the U.S. generics business and growing debt levels. Analyst Chris Schott cut his rating to underweight, after being at neutral the past 10 months. Only 6% of companies covered by J.P. Morgan analysts have an underweight rating. “While admittedly Teva shares have been under pressure (down 68% in 2017 and 16% since 3Q results), we see an extended road to recovery and no clear fundamental inflection in sight given ongoing challenges in the company’s U.S. generics business (which we do not see growing until 2019), Copaxone generic competition, and growing levels of leverage (>5x in 2018 based on our estimates). Last week, Fitch Ratings downgraded Teva’s credit rating in “junk” territory. Teva’s stock has underperformed its peers and the broader market by a wide margin, as the SPDR S&P Pharmaceuticals ETF has gained 5.7% year to date and the S&P 500 has climbed 15%.

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Valeant issues $750 million in debt to pay down debt

Valeant Pharmaceuticals International Inc. said Monday it was launching a private offering of $750 million worth of notes due 2025, paying 5.500%. The drug maker plans to use the proceeds from the debt offering to repay a portion of term loan facilities due 2022. In comparison, 7-year Treasury notes yielded 2.27% on Friday. Valeant’s long-term credit rating is B3 at Moody’s, which is in junk territory. Valeant said last week that it was on track to pay down more than $5 billion in debt ahead of its previous February 2018 goal. Valeant’s stock slipped 0.5% in premarket trade. It has gained 5.9% year to date through Friday, while the SPDR S&P Pharmaceuticals ETF has tacked on 5.7% and the S&P 500 has climbed 15%.

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Tyson shares rise after earnings and sales beat

Tyson Foods Inc. shares rose 3.9% in Monday premarket trading after the company reported fourth-quarter earnings and sales beat estimates. Net income totaled $394.0 million, or $1.07 per share, up from $391.0 million, or $1.03 per share, for the same period last year. Adjusted EPS was $1.43, beating the $1.35 FactSet consensus. Revenue was $10.1 billion, up from $9.2 billion last year and beating the $9.9 billion FactSet estimate. Tyson brands include Jimmy Dean, Hillshire Farm, Ball Park and its namesake. The company began to divest itself of non-protein businesses during the quarter, part of an effort to focus on protein brands. And the company is integrating AdvancePierre Foods, a recent acquisition, that will provide manufacturing capabilities for sandwiches and prepared foods and increase Tyson’s presence at convenience stores, according to a statement from Chief Executive Tom Hayes. The company expects $200 million in savings in fiscal 2018, fiscal year capital expenditures of $1.4 billion, and doesn’t plan to repurchase shares until it a net debt of around twice EBITDA (earnings before interest, taxes, depreciation and amortization). Tyson shares are up 13.1% for the last three months, and up 20.2% for the year so far. The S&P 500 index is up 15.3% for 2017 to date.

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Allergan wins FDA approval for use of Vraylar in maintenance treatment of schizophrenia

Allergan plc said Monday it has won U.S. Food and Drug Administration approval for use of Vraylar in the maintenance treatment of schizophrenia. The FDA approved the company’s supplemental new drug application for the substance, an antipsychotic that is already approved for the acute treatment of adult patients with manic or mixed episodes stemming from bipolar I disorder and for the treatment of schizophrenia. “Schizophrenia is one of the most challenging mental health disorders to manage — particularly due to the complexity of patient symptoms, varying response to treatment and high rates of relapse,” said Dr. Herbert Meltzer, professor of psychiatry and behavioral sciences at Northwestern Feinberg School of Medicine. “The goal of clinicians is to minimize relapses, which can cause significant personal distress, and can often have serious implications for a patient’s health.” Up to 70% of patients can experience relapse within one year of treatment without maintenance treatment, he said. Schizophrenia affects about 2.4 million American adults and symptoms include hallucinations, delusions, thought disorders and movement disorders. Allergan shares were flat premarket, but have fallen 18% in 2017, while the S&P 500 has gained 15%.

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GE’s dividend yield stays above the Dow, industrial peers

General Electric Co.’s stock surged 2% in premarket trade Monday, after the dividend cut announced earlier kept its dividend yield above its peers and the broader market. At the new quarterly dividend rate of 12 cents a share, and based on Friday’s stock closing price of $20.49, the new annual dividend rate implies a yield of 2.34%. That’s above the implied yield for the SPDR Industrial Select Sector ETF of 1.86% and for the Dow Jones Industrial Average of 2.19%. GE is hosting an investor meeting Monday, in which the company is expected to announce a new business focus. The dividend cut was expected. GE’s stock has tumbled 35.2% year to date through Friday, while the industrial ETF has climbed 14.2% and the Dow has run up 18.5%.

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GE plans to slash dividend by 50%

General Electric Co. plans to cut its dividend by half, with the conglomerate on Monday saying the move will help its effort to drive up growth and value for shareholders. The dividend would be reduced to 12 cents a share from 24 cents a share, effective with the expected declaration of GE’s next dividend in December. “We understand the importance of this decision to our shareowners and we have not made it lightly,” said GE Chief Executive John Flannery in a statement. “We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation.” GE was expected to outline plans to focus on three of its biggest business lines, but stop short of a breakup or more radical restructuring.

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