Broadcom to Acquire Brocade for $5.9 B, Estee Lauder Net Falls

Mukesh Buch
02 Nov, 2016
New York City

Alibaba revenues jumped on the domestic sales surge. Anthem lowered earnings forecast. Broadcom agreed to acquire network gear maker Brocade for $5.9 billion. Estee Lauder net fell. L Brands lowered earnings outlook. Time Warner net surged and lifted forecast.

[R]2:10 PM New York – Alibaba revenues jumped on the domestic sales surge. Anthem lowered earnings forecast. Broadcom agreed to acquire network gear maker Brocade for $5.9 billion. Estee Lauder net fell. L Brands lowered earnings outlook. Time Warner net surged and lifted forecast.[/R]

Tollbooth Index edged down 2.48 to 10,692.50.

Earnings Review

Alibaba Group Holding Ltd ((BABA)) dropped 2.4% or $2.47 to $98.66 after the China-focused online retailer reported revenues in the third-quarter ending in September jumped 3% from a year ago to $5 billion.

Net income in the quarter plunged to $1.1 billion or 45 cents per diluted share compared to the 79 cents per share from the same quarter last year

Alibaba said revenue in the core commerce segment soared 41% to $4.3 billion and revenues in the digital media and entertainment business surged 302% to $541 million.

The retailer said domestic mobile monthly active users in retail marketplaces in third-quarter increased 23 million to 450 million from second quarter and number of active annual buyers in China jumped 5 million to 439 million.

Anthem Inc ((ANTM)) soared 4.9% or $5.76 to $123.18 after the health benefit services provider said total revenues in the third-quarter ending in September jumped 6.8% from a year ago to $21.1 billion.

Net income in the quarter declined 5.7% to $617.8 million or $2.30 per diluted share compared to the $654.8 million or $2.43 per share from the same quarter last year.

Anthem lowered earnings per share forecast in the year of about $9.28 from earlier estimated of about $9.34.

The health benefit services provider raised forecast for the medical membership in the range of 39.65 million to 39.85 million compared to the earlier range of 39.6 million to 39.8 million.

Broadcom Corporation, the chip makers close to acquire network gear maker Brocade Communications Systems Inc for about $12.75 per share in cash or $5.9 billion, including debt to expand its fibre channel and data storage businesses.

Under the terms, offer represents a premium of 46.7% to Brocade''s close on October 28. The transaction is expected to close before March 2017.

Shares Brocade''s of surged 10% to $12.36.

Estee Lauder Companies Inc ((EL)) plunged 5.7% or $4.92 to $81.38 after the skin care and hair care, and fragrance products maker reported revenues in the third-quarter ending in September rose 1% from a year ago to $2.9 billion.

Net income in the quarter dropped 5% to $294 million or 79 cents per diluted share compared to the $309 million or 82 cents per share from the same quarter last year.

L Brands Inc ((LB)) slipped 56 cents to $65.94 after the specialty retailer said comparable sales in October are expected to increase 1%.

However, the apparel, personal care and beauty products retailer lowered earnings per share forecast in the third-quarter to about 40 cents compared to the previous guidance of 40 cents to 45 cents and reported result of 55 cents in the same period a year ago.

Time Warner Inc ((TWX)) fell 65 cents to $87.60 after the media and entertainment group reported revenues in the third-quarter ending in September jumped 9% from a year ago to $7.2 billion.

Net income in the quarter surged 44.2% to $1.5 billion or $1.86 per diluted share compared to the $1.04 billion or $1.26 per share from the same quarter last year.

The media group lifted earnings per share forecast in the year to between $5.73 and $5.83 compared to the earlier estimated range between $5.35 and $5.45.