Category: Stock Market News

Home furniture and decor retailer RH , formerly Restoration Hardware, announced revised first-quarter guidance. The company now expects revenue in the range of $558 million to $562 million, up from previous guidance of $530 million to $545 million. Adjusted net income is expected to be in the range of $1.1 million to $1.9 million, compared with previous guidance of $0.8 million to $2.4 million. The company said it generated higher outlet sales due to its inventory optimization plan, but the markdowns hurt margins and earnings. Adjusted earnings per share are expected to be in the range of 3 cents to 5 cents compared with previous outlook of 2 cents to 6 cents. RH shares fell 8.3% in Thursday premarket trading, joining a broad retail sector slide after Macy’s Inc. announced first-quarter earnings. RH shares are up 137% for the past three months while the S&P 500 index is up 3.6% for the period.

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Scientific Games Corp. said Thursday that it is launching an instant game, Willy Wonka Golden Ticket, that will offer players the chance to win prizes up to $1 billion. Players “scratch” to win prizes as well as a chance to win a trip to Las Vegas to participate in the Willy Wonka Billion Dollar Challenge where winners will get cash prizes from $1,000 to $1 billion. The Billion Dollar Challenge is planned for May 2018. The game is available in 11 U.S. states, with Texas the first to launch in March, with tickets priced at $10. Georgia, Kentucky and Colorado are among the other states participating. Scientific Games shares are unchanged in premarket trading, but up 164% over the past year. The S&P 500 index is up 16.2% for the last 12 months.

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Delta Air Lines Inc. said at a meeting with analysts Thursday that it will raise its dividend by 50% to an annual rate of $1.22 a share from 81 cents a share, starting the September quarter. At Wednesday’s stock closing price of $49.97, the new dividend would imply a 2.44% dividend yield, compared with the aggregate yield for the S&P 500 of 2.01%, according to FactSet. Delta said it authorized a new $5 billion share repurchase program, to be completed by June 2020, and to begin when the previous $5 billion program started in 2015 is completed. The air carrier it remains committed to capping its 2017 system capacity growth at 1%, and that it expects to resume margin expansion in the second quarter after absorbing all the margin headwinds during the first quarter. The stock, which edged up 0.4% in premarket trade, has ticked up 1.6% year to date through Wednesday, while the NYSE Arca Airline Index has gained 3.8% and the S&P 500 has rallied 7.2%.

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Macy’s Inc. shares sank nearly 10% in Thursday premarket trading reaching the lowest point seen during regular hours since 2011 after the retailer reported first-quarter earnings and sales that missed expectations. Net income was $71.0 million, or 23 cents per share, down from $116.0 million, or 37 cents per share, for the prior year. Adjusted EPS was 24 cents, below the 36-cent FactSet consensus. Sales were $5.3 billion, down from $5.8 billion last year and below the $5.5 billion FactSet consensus. Macy’s said store closures are partly to blame for the sales decline. Same-store sales on an owned basis were down 5.2%, and on an owned-plus-licensed basis same-store sales fell 4.6%. Macy’s reaffirmed its full-year 2017 guidance, forecasting a same-store sales decline between 2.2% and 3.3% on an owned basis, and a decline between 2% and 3% on an owned-plus-licensed basis. Sales are expected to fall between 3.2% and 4.3%. Adjusted EPS is expected to be $3.37 and $3.62. The FactSet consensus is for full-year sales of $24.81 billion, down from $25.78 billion, and adjusted EPS of $3.34. Macy’s shares are down more than 18% for the year to date while the S&P 500 index is up 7.2% for the period.

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Merck & Co. Inc. shares surged 2.4% in premarket trade Thursday after the company’s Keytruda was approved in combination with chemotherapy for first-line lung cancer. The approval is key because the approval applies regardless of patient expression of the PD-L1 biomarker, which “opens up the 1st line market meaningfully for Merck,” said EvercoreISI analyst Umer Raffat. Raffat described the approval as “a very significant opportunity,” and said he expected demand for Keytruda in this wider patient population to grow as new patients are diagnosed. Keytruda and chemotherapy is “a clear positive as it positions the company in a leadership position in this $10bn+ segment of the market,” said J.P. Morgan analyst Chris Schott, who rates the company overweight with a $63.94 price target. The company also has “a distinct time-to-market advantage (9-12 months) over peers in 1L lung, raising the bar for competitors to show differentiation relative to Keytruda/Alimta to gain share in this setting.” The development was an incremental negative for rival Bristol-Myers Squibb , which has been neck-in-neck with Merck in this area of drug development, Schott said. Bristol-Myers Squibb shares declined a scant 0.5% in premarket trade. Merck shares have declined 0.3% over the last three months, compared with a 3.6% rise in the S&P 500 .

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Shares of Vista Outdoor Inc. tumbled 15% in premarket trade Thursday, after the company posted much weaker-than-expected profit for its fiscal fourth quarter and said demand for guns and ammunition has collapsed since the November election. The company, formerly called Smith & Wesson, said it had net income of $857,000, or 2 cents a share, in the quarter, down sharply from $37.3 million, or 61 cents a share, in the year-earlier period. Adjusted per-share earnings came to 3 cents, way below the 18 cents FactSet consensus. Sales fell to $578.8 million from $612.3 million, ahead of the FactSet consensus of $565 million. “We are experiencing unprecedented decline in demand for ammunition and firearms following the presidential election and softness in the retail environment,” Chief Executive Mark DeYoung. “These impacts have manifested themselves in our results.” The company is addressing the issue by expanding its e-commerce capabilities, cutting staff, reducing inventory and streamlining operations, he said. “We have also negotiated a long-term agreement with Orbital ATK for the supply of ammunition products produced at the Lake City Army Ammunition Plant through September 2020,” said DeYoung. “This new agreement sustains our leadership position in providing these products to the shooting sports market.” The company has also amended financial covenants in its credit agreement. Vista Outdoor is expecting fiscal 2018 sales to range from $2.36 billion to $2.42 billion and EPS to range from $1.10 to $1.30. The FactSet consensus is for EPS of $1.74 and sales of $2.43 billion. Shares have fallen 44% in 2017, while the S&P 500 has gained 7%.

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Teva Pharmaceutical Industries Ltd. shares rose 1.6% in premarket trade Thursday after the company reported a first-quarter profit beat and revenue miss. Earnings for the latest quarter rose to $580 million, or 57 cents per share, from $570 million, or 62 cents per share in the year-earlier period. Adjusted earnings-per-share were $1.06, compared with the FactSet consensus of $1.04. Revenue rose to $5.63 billion from $4.81 billion, compared with the FactSet consensus of $5.79 billion. The company reaffirmed its 2017 guidance, which includes full year revenue between $23.8 billion and $24.5 billion and adjusted EPS between $4.90 and $5.30. Teva also said that Michael McClellan will serve as the company’s interim chief financial officer, with the company’s new chief executive expected to have a big role in choosing the permanent CFO. Teva shares have declined 2.6% over the last three months, compared with a 3.6% rise in the S&P 500 .

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The Bank of England on Thursday left its key interest rate at 0.25%, meeting widely held expectations. The vote to hold the rate steady was
7-1, with board member Kristen Forbes backing an increase. The central bank left unchanged the size of its asset purchase program at £435 billion ($562 billion) and its corporate-bond purchase program at £10 billion. The bank in its quarterly inflation report reduced its forecast for 2017 economic growth to 1.9% from 2%. The pound fell to $1.2878 from $1.2925 just ahead of the decision. Sterling bought $1.2931 late Wednesday in New York.

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Kohl’s Corp. reported first quarter net income of $66 million, or 39 cents per share, up from $17 million or 9 cents per share, for the same period last year. Sales were $3.84 billion, down from $3.97 billion last year. The FactSet consensus was for EPS of 29 cents and sales of $3.91 billion. Same-store sales were down 2.7% compared with a FactSet consensus for a 1.2% decline. Kohl’s shares are unchanged in Thursday premarket trading, and down 18.4% for the year so far. The S&P 500 index is up 7.2% for 2017 to date.

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Shares of Straight Path Communications Inc. plunged 21% in premarket trade Thursday, after the company confirmed an agreement to be acquired by Verizon Communications Inc. in a $3.1 billion stock deal that values Straight Path shares at a deep discount to Wednesday’s closing price. The deal was reported earlier by The Wall Street Journal. Under terms of the deal, Verizon will buy Straight Path for $184.00 a share, which is 18% below Wednesday’s closing price of $223.79. Straight Path said it will terminate its previous merger deal with AT&T Inc. , dated April 9, which was valued at $1.6 billion, with Verizon agreeing to pay the $38 million termination fee. Verizon’s per-share bid is five times Straight Path’s closing price on April 7. Straight Path and Verizon expect the deal to close within nine months. Straight Path’s stock has soared more than six fold year to date through Wednesday, while Verizon shares have shed 13%, AT&T’s stock has lost 9.6% and the S&P 500 has gained 7.2%.

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