Home Depot Net Jumps, AIG Sells to United Guaranty for $3.4 B

Mukesh Buch
16 Aug, 2016
New York City

Aetna plans to severely cut number of states it offers health plan under Affordable Care Act. AIG agreed to sell United Guaranty for $3.4 billion. Cintas plans to buy G&K Services for $2.2 billion. Coty net swung to a loss. Dicks Sporting net rose. Home Depot net jumped. TJX net rose.

[R]2:00 PM New York – Aetna plans to severely cut number of states it offers health plan under Affordable Care Act. AIG agreed to sell United Guaranty for $3.4 billion. Cintas plans to buy G&K Services for $2.2 billion. Coty net swung to a loss. Dicks Sporting net rose. Home Depot net jumped. TJX net rose.[/R]

Tollbooth Index slipped 37.22 or 0.3% to 11,161.93.

Earnings Review

Aetna Inc ((AET)) fell 29 cents to $118.88 after the diversified healthcare benefits provider said it will stop selling individual Obamacare plans from 2017 in 11 states.

On August 2, Aetna booked $200 million in pre-tax losses related to Affordable Care Act and from next year insurance giant will only offer its plans in 242 counties from 780 in the current year.

American International Group Inc slid 4 cents to $59.14 after the insurance services provider agreed to sell mortgage insurer United Guaranty Corp. to Arch Capital Group Ltd for about $3.4 billion, $2.2 billion in cash and $1.2 billion in newly issued stock of Arch Capital.

Concho Resources Inc ((CXO)) declined 3.9% or $5.31 to $131.10 after the oil and gas explorer agreed to acquire approx 40,000 net acres in the Midland Basin from a privately held Reliance Energy for about $1.63 billion in cash and stock.

The transaction is expected to close in October 2016.

Cintas Corporation ((CTAS)) surged 7.3% or $7.85 to $115.27 after the uniforms and cleaning services provider intends to acquire outstanding shares of G&K Services for $97.50 per share in cash for about $2.2 billion.

The transaction is expected to close on or before February 2017.

Coty Inc ((COTY)) plunged 5.8% or $1.72 to $28.03 after the beauty products maker stated net revenues in the fourth-quarter ending in June increased 6% from a year ago to $1.1 billion.

Net in the quarter swung to a loss of $31 million or 9 cents per diluted share compared to the profit of $21 million or 5 cents per share from the same quarter last year.

Dicks Sporting Goods Inc ((DKS)) jumped 7.2% or $3.95 to $58.84 after the sporting goods retailer reported net sales in the fourth-quarter ending in July advanced 7.9% from a year ago to $2 billion.

Same store sales in the quarter increased 2.8% and same store sales in DICK''S Sporting Goods segment jump 3% while Golf Galaxy declined 4.3%.

Net income in the quarter rose 0.7% to $91.4 million or 82 cents per diluted share compared to the $90.8 million or 77 cents per share from the same quarter last year.

G&K Services Inc ((GK)) soared 18.4% or $15.13 to $97.26 after the branded uniform and facility services provider said revenues in the fourth-quarter ending on July 2 jumped 9.3% from a year ago to $258.5 million.

Net income in the quarter surged 40.4% to $19.8 million or $1 per diluted share compared to the $14.1 million or 71 cents per share from the same quarter last year.

Home Depot Inc ((HD)) decreased 4 cents to $137.02 after the home improvement retailer reported sales in the second-quarter ending in July jumped 6.6% from a year ago to $26.5 billion.

Comparable store sales in the quarter advanced 4.7% and comparable store sales in U.S. stores soared 5.4%.

Net income in the quarter surged 9.1% to $2.2 billion or $1.97 per diluted share compared to the $2.2 billion or $1.73 per share from the same quarter last year.

The retailer reaffirmed sales in the fiscal 2016 to jump approx 6.3% and comparable store sales to increase about 4.9% and diluted earnings per share to soar 15.6% from $6.31 reported in fiscal 2015.

TJX Companies Inc ((TJX)) declined 5.3% or $4.38 to $78.34 after the off-price apparel and home fashions retailer reported net sales in the fourth-quarter ending in July soared 7% from a year ago to $7.9 billion.

Comparable store sales in the quarter jumped 4%.

Net income in the quarter rose 2.3% to $562.2 million or 84 cents per diluted share compared to the $549.3 million or 80 cents per share from the same quarter last year.

TPG Capital, the private equity group agreed to buy cable-television providers RCN and Grande Communications for about $2.25 billion including debt in separate a transactions from ABRY Partners for $1.6 billion and $650 million respectively.

The transaction is expected to close in the first-quarter of 2017.