Avago in $37 B Deal with Broadcom; Abercrombie, Palo Alto Jump

Mukesh Buch
28 May, 2015
New York City

Avago agreed to acquire Broadcom for $37 billion. CA agreed to acquire Rally Software for $480 million. Abercrombie & Fitch net loss widened. Costco profit climbed 9%. Copart net soared 41%. Palo Alto net loss narrowed.

[R]1:10 PM New York – Avago agreed to acquire Broadcom for $37 billion. CA agreed to acquire Rally Software for $480 million. Abercrombie & Fitch net loss widened. Costco profit climbed 9%. Copart net soared 41%. Palo Alto net loss narrowed.[/R]

Tollbooth Index slid 0.2% or 25.79 to 10,764.92.

Earnings Review

Avago Technologies Ltd ((AVGO)) climbed 3.7% or $5.21 to $141.49 after the Singapore-based analog chip maker agreed to acquire Broadcom Corporation in a cash and stock deal worth about $37 billion.

Avago will pay $17 billion in cash and rest 140 million in Avago shares valued $20 billion.

The combined company will be worth about $77 billion and is expected to generate annual revenue of $15 billion.

Separately, the chip maker said net revenues in the second-quarter ending on May 3 dropped 1% to $1.61 billion from a year ago period.

Net income in the quarter surged 117.7% to $344 million or $1.21 per diluted share compared to $158 million or 61 cents from the same quarter last year.

Abercrombie & Fitch Co. ((ANF)) surged 10.2% or $2 to $21.65 after the teen-apparel retailer said net sales in the first-quarter ending on May 2 plunged 11% to $448.9 million from a year ago period.

Comparable store sales in the quarter declined 7%.

Net loss in the quarter widened to $63.2 million or 91 cents per diluted share compared to $23.7 million or 32 cents from the same quarter last year.

Costco Wholesale Corporation ((COST)) fell 58 cents to $144.84 after the discount stores operator reported total revenues in the first-quarter ending on May 10 slipped 1% to $25.52 billion from a year ago period.

Comparable store sales in the quarter decreased 1%.

Net income in the quarter climbed 9% to $516 million or $1.17 per diluted share compared to $473 million or $1.07 from the same quarter last year.

Copart, Inc ((CPRT)) declined 3.9% or $1.38 to $34.19 after the online vehicle auctioneer stated revenues in the third-quarter ending in April dropped 4% to $297.1 million from a year ago period.

Net income in the quarter soared 40.8% to $57.6 million or 44 cents per diluted share compared to $40.9 million or 31 cents from the same quarter last year.

CA, Inc ((CA)) fell 1.7% or 53 cents to $30.64 after the management software and solutions provider agreed to acquire Rally Software Development Corp for $19.50 per share or about $480 million in cash.

Share of Rally Software surged 43.7% to $19.42.

The transaction is expected to close in the second-quarter of CA''s fiscal 2016.

McDonald''s Corporation ((MCD)) slipped 1.1% or $1.11 to $96.70 after the fast food chain operator announced it will stop releasing monthly same-store sales results after June.

McDonald''s will provide same-store sales for June with its second-quarter earnings report on June 8. Same store sales suffered 11 straight months of decline on comparable-store sales.

Popeyes Louisiana Kitchen Inc ((PLKI)) fell 1.9% or 99 cents to $57.05 after the quick-service restaurants operator said total revenues in the first-quarter ending on April 19 climbed 13.4% to $79.5 million from a year ago period.

Total domestic same store sales in the quarter soared 7.1% and global same store sales jumped 7%. International same-store sales advanced 6.1%.

Net income in the quarter surged 22.5% to $13.6 million or 58 cents per diluted share compared to $11.1 million or 46 cents from the same quarter last year.

Palo Alto Networks Inc ((PANW)) soared 4.2% or $6.72 to $167.37 after the enterprise security software provider reported revenues in the third-quarter ending in April jumped 55.4% to $234.2 million from a year ago period.

Net loss in the quarter narrowed to $45.9 million or 56 cents per diluted share compared to $146.4 million or $1.96 from the same quarter last year.

The company forecasted revenues for the fourth-quarter in the range of $252 million to $256 million and adjusted earnings per share between 24 cents and 25 cents.

Separately, the company agreed to acquire a Silicon Valley-based CirroSecure for an undisclosed amount.

Sanderson Farms, Inc ((SAFM)) declined 3.3% or $2.81 to $81.69 after the poultry processing company said revenues in the first-quarter ending in April climbed 8.4% to $716.6 million from a year ago period.

Net income in the quarter soared 39.6% to $71.2 million or $3.13 per diluted share compared to $51 million or $2.21 from the same quarter last year.

Signet Jewelers Ltd ((SIG)) decreased 1.6% or $2.14 to $131.04 after the Bermuda-based specialty retail jeweler reported total revenues in the first-quarter ending on May 2 surged 44.9% to $1.53 billion from a year ago period.

Same-store sales in the quarter jumped 3.6%.

Net income in the quarter climbed 23% to $118.8 million or $1.48 per diluted share compared to $96.6 million or $1.20 from the same quarter last year.