Ackman Sells Valeant at $3 B Loss, HD Supply Confident of Outlook

Mukesh Buch
14 Mar, 2017
New York City

Ackman controlled Pershing Square sold its 10% stake in Valeant Pharma at $3 billion loss. Bon-Ton net declined on 6% drop in revenues. DSW lifted annual sales outlook. HD Supply net tumbled 94%. RadNet net surged more than four-fold. Veritiv net plunged 58%.

[R]2:10 PM New York – Ackman controlled Pershing Square sold its 10% stake in Valeant Pharma at $3 billion loss. Bon-Ton net declined on 6% drop in revenues. DSW lifted annual sales outlook. HD Supply net tumbled 94%. RadNet net surged more than four-fold. Veritiv net plunged 58%.[/R]

Tollbooth Index slumped 45.90 or 0.4% to 11,567.07.

Earnings Review

Pershing Square Capital Management LP, the hedge fund managed by Bill Ackman sold its 10% stake or 27.2 million shares in Valeant Pharmaceuticals International Inc at $11 per share.

Pershing Square lost approx $4 billion after two years of investment in Valeant Pharma.

""One very big mistake,"" said Bill Ackman.

Ackman also plans to step down from the board of Valeant and not seek to re-elect in the upcoming annual meeting scheduled in June.

Valeant stock tumbled 12.2% to $10.63.

Bon-Ton Stores Inc ((BONT)) increased 3.7% or 4 cents to $1.12 after the department store operator said total sales in the fourth-quarter ending on January 28 dropped 5.5% from a year ago to $877.3 million.

Comparable store sales in the quarter slumped 4.7%.

Net income in the quarter declined 11.7% to $44.7 million or $2.09 per diluted share from $50.6 million or $2.42 per share in the same quarter last year.

The retailer estimated comparable store sales in the full-year to decrease between 2% to 3% and diluted loss per share to range between $2.08 and $2.59.

DSW Inc ((DSW)) advanced 3.2% or 64 cents to $20.47 after the footwear retailer reported net sales in the fourth-quarter ending in December rose 0.4% from a year ago to $674.6 million.

Comparable store sales in the quarter declined 7%.

Net income in the quarter surged 159% to $30.5 million or 38 cents per diluted share from $11.8 million or 14 cents per share in the same quarter last year.

DSW forecasted net sales the fifty-three week ending on February 3, 2018 to grow between 3% and 5% and comparable sales to range from a flat to low single digit decline and diluted earnings per share in the range of $1.45 to $1.55.

HD Supply Holdings Inc ((HDS)) slumped 4.3% or $1.83 to $40.85 after the industrial products distributor reported net sales in the fourth-quarter ending in December advanced 3.2% from a year ago to $1.6 billion.

Net income in the quarter tumbled 94% to $52 million or 26 cents per diluted share from $867 million or $4.33 per share in the same quarter last year.

The industrial distributor said net income in the fourth quarter of fiscal 2015 included $1.01 billion tax benefit from the reversal of deferred tax asset valuation allowance.

In the first-quarter, HD Supply estimated net sales in the range of $1.84 billion to $1.89 billion and operating profit between $205 million and $220 million and diluted earnings per share in the range of 60 cents to 68 cents.

HD Supply forecasted sales growth in the fiscal 2017 of about 300 basis points.

RadNet Inc ((RDNT)) declined 6.9% or 40 cents to $5.35 after the diagnostic services provider said total net revenues in the fourth-quarter ending in December jumped 4.3% from a year ago to $224.9 million.

Net income in the quarter surged 311% to $3.7 million or 8 cents per diluted share from $0.9 million or 2 cents per share in the same quarter last year.

RadNet forecasted revenues in the fiscal 2017 between $895 million and $925 million operating profit in the range of $135 million to $145 million.

Veritiv Corporation ((VRTV)) jumped 2.7% or $1.45 to $55.40 after the print, publishing, packaging and logistics solutions provider said net sales in the fourth-quarter ending in December slumped 3.7% from a year ago to $2.1 billion.

Net income in the quarter plunged 58.4% to $4.2 million or 26 cents per diluted share from $10.1 million or 63 cents per share in the same quarter last year.

""We had improved revenue performance in 2016 and operating profit came in high end of guidance range, despite a year-over-year decrease in the fourth quarter,"" senior vice president and chief financial officer Stephen Smith said.