Category: Stock Market News

A day after hedge fund Elliott Management disclosed a 15.3% stake in networking hardware company Gigamon Inc. , another shareholder has come forward urging the company to conduct a strategic review of its operations. Foglamp Capital said it believes Gigamon is “significantly undervalued,” and urged it to take measures to unlock value. Foglamp says it first bought shares in January, after the company said it would miss fourth-quarter guidance. “Foglamp has since built a significant position in the stock, and as of May 5, 2017, GIMO stock comprised 14.9% of Foglamp Fund, LP’s unaudited NAV,” it said in a statement. Foglamp said talks with customers in a wide range of sectors had convinced it that Gigamon has a strong reputation for its technology, which is deeply integrated into the network systems of big companies. But its existing structure is impeding shareholder returns. It urged the company to improve corporate governance and make other changes. Gigamon shares rose 1.2% premarket, but are down 9.6% in 2017, while the S&P 500 has gained 7%.

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Shares of aircraft parts maker TransDigm Group Inc. fell 3% in premarket trade, after the company missed sales estimates for its fiscal second quarter. Cleveland, Oh.-based TransDigm said it had net income of $155.5 million, or $2.78 a share, in the quarter, up from $141.7 million, or $2.52 a share, in the year-earlier period. Adjusted per-share earnings came to $3.02, ahead of the FactSet consensus of $3.01. Sales rose to $873.2 million from $796.8 million, missing the FactSet consensus of $893 million. “Commercial aftermarket revenues for the current fiscal second quarter compared slightly unfavorably to a very difficult comparison in the prior year quarter,” Chief Executive W. Nicholas Howley said in a statement. “On a positive note, most of our commercial aftermarket businesses had higher revenues versus the prior year quarter.” The company is now expecting fiscal 2017 sales of $3.53 billion to $3.57 billion, up from $3.17 billion in fiscal 2016. EPS is expected to range from $9.16 to $9.40, and adjusted EPS is expected to range from $12.09 to $12.33. The current FactSet consensus is for EPS of $12.25 and sales of $3.56 billion. Shares have gained 2.4% in 2017, while the S&P 500 has gained 7%.

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Taco Bell, the Yum Brands Inc. fast-food Mexican chain, said Tuesday that it will fill 3,500 newly-created jobs in May, and seeks to fill 50,000 more jobs by the end of the summer. The hiring spree is part of a previously-announced plan to create about 100,000 U.S. jobs over the next five years through an additional 8,000 U.S. locations. Yum Brands shares are unchanged in premarket trading, and up 17.4% for the past year compared with a 16.6% rise in the S&P 500 index .

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Dean Foods Co. shares fell 3.1% in Tuesday premarket trading after the company reported first-quarter earnings that missed estimates. Net loss was $9.8 million, or 11 cents per share, compared with income of $39.2 million, or 43 cents per share, year-over-year. Adjusted EPS was 13 cents, falling short of the 17-cent FactSet consensus. Revenue was $2.00 billion, up from $1.89 billion last year, and ahead of the $1.97 billion FactSet consensus. The company reaffirmed its full-year adjusted EPS guidance of $1.35 to $1.55. The FactSet estimate is $1.40. Dean Foods believes its recent DairyPure sour cream launch, and an investment in and distribution deal with Good Karma, a producer of flax-based milk and yogurt products, are growth opportunities. Dean Foods shares are down 12.3% for the year so far while the S&P 500 index is up 7.2% for the period.

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Shares of American Airlines Group Inc. ran up 2.1% in premarket trade Tuesday, after the air carrier reported April traffic that rose to record levels. Traffic for the month increased 3.1% from a year ago to 18.6 billion revenue passenger miles, as a 0.8% decline in domestic traffic was offset by 12% jump in international. Capacity grew 0.8% to 22.6 billion available seat miles. That pushed April load factor up to 82.2% from 80.4%. The company said it expects second-quarter total revenue per available seat mile (TRASM) to increase 3.5% to 5.5% from a year ago, while the FactSet consensus implies growth of 4.1%. The stock has shed 3.8% year to date through Monday, while the NYSE Arca Airline Index has gained 2.8% and the S&P 500 has tacked on 7.2%.

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Discovery Communications Inc. reported earnings for the first quarter before the market opened on Tuesday that fell shy of Wall Street expectations. The media company reported net income of $215 million, or 37 cents, for the quarter, down from $263 million, or 42 cents during the year-earlier period. Adjusted per-share earnings came in at 41 cents, below FactSet’s consensus of 50 cents. Discovery said total revenue hit $1.61 billion during the quarter, an improvement compared with $1.56 billion in revenue, but just below FactSet’s $1.63 billion revenue consensus. The media sector has been hit recently by softer advertising revenues and renewed fears of cord-cutting across the board. Discovery’s advertising revenue was flat year-over-year. The company said advertising revenue at its U.S. networks rose 1% due primarily to higher pricing. And while distribution revenue at Discovery’s U.S. networks grew 5%, it was partly offset by a decline in subscribers. Shares of Discovery were inactive in premarket trade, but have declined less than 1% in the year to date and more than 3% in the prior 12-month period. By comparison, the S&P 500 index has gained more than 7% in the year and almost 17% in the last 12 months.

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Botox-maker Allergan Plc said Tuesday it had a GAAP operating loss from continuing operations of $906 million, or $7.85 a share, in the first quarter, after a loss of $171.5 million, or 41 cents a share, in the year-earlier period. On a non-GAAP basis, it had per-share earnings of $3.35, ahead of the FactSet consensus of $3.31. Sales climbed to $3.57 billion from $3.39 billion, also ahead of the FactSet consensus of $3.53 billion. Revenue growth was driven by a strong performance from facial aesthetics, Botox therapeutic, eye care products, and others. The GAAP operating loss from continuing operations was mostly due to amortization, research and development-related charges and in-process research and development impairments, the company said. Looking ahead, Allergan is expecting full-year revenue of $15.8 billion to $16.0 billion. It is expecting a full-year loss per share of $9.70 to $10.20, and an adjusted EPS of $15.85 to $16.35. The current FactSet consensus is for sales of $15.9 billion and EPS of $16.03. Shares were not yet active in premarket trade, but have gained 15% in 2017, while the S&P 500 has gained 7%.

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Wayfair Inc. shares fell 0.3% in Tuesday premarket trading after the online home retailer reported steeper year-over-year first-quarter losses. Net loss was $56.5 million, or 66 cents per share, compared with a loss of $41.2 million, or 49 cents per share, last year. Adjusted loss per share was 48 cents, ahead of the FactSet consensus of a 57-cent loss. Revenue was $960.8 million, up from $747.3 million last year and ahead of the $935.0 million FactSet consensus. Active customers for the company’s direct retail business reached 8.9 million as of March 31, up 45.8% over last year, with repeat customers placing 60.4% of first-quarter orders. Average order value was $223, down from $238 last year. Wayfair shares are up nearly 46% for the year so far, while the S&P 500 index is up 7.2% for the period.

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Shares of Valeant Pharmaceuticals International Inc. soared 11% in premarket trade Tuesday, after the drug maker beat first-quarter profit expectations, although revenue came up shy. The company swung to a net profit of $628 million, or $1.79 a share, from a loss of $374 million, or $1.08 a share, in the same period a year ago. The FactSet consensus was for earnings per share of 87 cents. Revenue fell to $2.11 billion from $2.37 billion, missing the FactSet consensus of $2.18 billion, as product sales of $2.08 billion was below expectations of $2.13 billion. The company said lower volumes in U.S. diversified products and branded Rx segments resulted from a loss of exclusivity for a number of products and “challenging” market dynamics. Valeant raised its outlook for 2017 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to a range of $3.60 billion to $3.75 billion from $3.55 billion to $3.70 billion. The stock has plunged 33% year to date through Monday, while the SPDR S&P Pharmaceuticals ETF has gained 5.6% and the S&P 500 has advanced 7.2%.

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Office Depot, Inc. reported first-quarter net income Tuesday of $116 million, or 22 cents per share, up from $46 million, or 11 cents per share, in the year-earlier period. It reported adjusted earnings per share of 16 cents, above the FactSet consensus of 12 cents. It reported sales of $2.7 billion, in line with the FactSet consensus of $2.7 billion, but down from $2.9 billion in the year-earlier period. Office Depot still expects its total company sales to be lower in 2017 due to planned store closures, as well as challenging market conditions. It expects an adjusted operating income of about $500 million in 2017. Shares of Office Depot have gained 15.6% in the past three months, compared to the S&P 500’s gain of 4%.

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