Tempur Sealy Plunges 23%, Fitbit Lowers Outlook Again

Mukesh Buch
30 Jan, 2017
New York City

Affiliated Managers net rose 2% but revenues declined 7%. Booz Allen net tumbled 49% and the engineering consultant lifted revenues forecast but lowered earnings estimate. Enterprise Products net dropped 4%. Fitbit tumbled after weak revenues forecast.

[R]12:30 PM New York – Affiliated Managers net rose 2% but revenues declined 7%. Booz Allen net tumbled 49% and the engineering consultant lifted revenues forecast but lowered earnings estimate. Enterprise Products net dropped 4%. Fitbit tumbled after weak revenues forecast.[/R]

Tollbooth Index slumped 142.48 or 1.3% to 11,249.81.

Earnings Review

Affiliated Managers Group, Inc ((AMG)) gained 1.7% or $2.45 to $146.90 after the investment manager reported revenues in the fourth-quarter ending in December declined 6.7% from a year ago to $550.3 million.

Net income in the quarter rose 1.8% to $150.2 million compared to the $147.5 million and diluted earnings per share were flat at $2.67 in the same quarter last year.

At the end of 2016, assets under management were approximately $727 billion.

Booz Allen Hamilton Holding Corporation ((BAH)) declined 8.9% or $3.22 to $33.04 after the consulting and engineering services provider said revenues in the third-quarter ending in December jumped 7.4% from a year ago to $1.4 billion.

Net income in the quarter tumbled 48.6% to $55.6 million or 37 cents per diluted share compared to the $108.1 million or 71 cents per share in the same quarter last year.

The consulting services provider lifted fiscal 2017 revenues to increase between 4% and 6% but lowered diluted earnings per share estimate to between $1.65 and $1.69.

Enterprise Products Partners L.P ((EPD)) slipped 1% or 29 cents to $28.82 after the energy services provider reported revenues in the fourth-quarter ending in December soared 6.6% from a year ago to $6.5 billion.

Net income in the quarter dropped 3.8% to $658.8 million or 31 cents per diluted share compared to $684.8 million or 34 cents per share in the same quarter last year.

Fitbit Inc ((FIT)) plunged 15.8% or $1.14 to $7.21 after the fitness tracking devices maker announced lower than expected fourth quarter results.

The devices maker missed the earnings outlook for the second quarter in a row and said it sold 6.5 million devices and lowered revenue forecast in the fourth-quarter in the range of $572 million to $580 million from the previous range of $725 million to $750 million.

Fitbit also lowered revenue growth estimate in the year to 17% from the previous forecasted growth between 25% and 26%.

Opus Bank ((OPB)) plunged 22.6% or $6.15 to $21.10 after the banking services provider stated total interest income in the fourth-quarter ending in December jumped 9.3% from a year ago to $69.3 million.

Net in the quarter swung to a loss of $19 million or 55 cents per diluted share compared to the profit $16.7 million or 50 cents per share in the same quarter last year.

Keysight Technologies Inc ((KEYS)) fell 35 cents to $36.66 after the electronic testing software and equipment maker said it may buy smaller rival Ixia for about $19.65 per share or $1.6 billion, a premium of about 8% to its Friday’s close.

Ixia stock soared 6.8% to $19.45.

Tempur Sealy International Inc ((TPX)) tumbled 26.3% or $16.59 to $46.60 after the mattress maker terminated the contracts with Mattress Firm Holdings Corp.

Tempur stock fell sharply as Mattress Firm generates about 21% or $750 million of total sales. Mattress Firm was recently acquired by South Africa based Steinhoff International Holdings NV

Both companies could not agree on sales incentives and supply terms and the mattress maker will cease doing business with Mattress Firm during the first quarter.

Tempur forecasted net sales in the fourth-quarter of about $770 million, a slight increase from a year ago and net income between $61 million and $63 million.

In the year, the premium mattress leader estimated total net sales may fell 1% to $3.13 billion and net income between $200 million to $202 million.

""Ultimately, we concluded that it was in the long-term interest of our stakeholders to terminate the contracts with Mattress Firm,"" chief executive officer Scott Thompson said.