Amazon Acquires Middle East Rival, Darden Buys Southern Chain Cheddar

Mukesh Buch
28 Mar, 2017
New York City

Amazon agreed to buy Dubai-based Souq.com for $800 million. At Home net tumbled. Carnival lifted fiscal outlook. Darden agreed to acquire Cheddar

[R]2:10 PM New York – Amazon agreed to buy Dubai-based Souq.com for $800 million. At Home net tumbled. Carnival lifted fiscal outlook. Darden agreed to acquire Cheddar’s Scratch Kitchen for $780 million. Ford plans to invest $1.2 billion in Michigan. FactSet net fell.[/R]

Tollbooth Index edged up 6.28 to 11,544.62.

Earnings Review

Amazon.com, Inc ((AMZN)) increased $8.19 to $854.96 after the online market-place operator agreed to acquire Dubai-based online retailer Souq.com without disclosing the price. However, local banking sources estimated deal price of $800 million.

The transaction is expected to close in 2017.

American Airlines Group Inc ((AAL)) rose 15 cents to $41.90 after the airline services provider agreed to acquire a minority stake in China Southern Airlines Co. for $200 million and issue 270.6 million shares at a price of HK$5.74 or worth HK$1.55 billion.

At Home Group Inc ((HOME)) slipped 1.6% or 25 cents to $15.35 after the home decor superstore operator said net sales in the fourth-quarter ending on January 28 soared 26.4% from a year ago to $234.5 million.

Comparable store sales in the quarter jumped 7.1%.

Net income in the quarter tumbled 98% to $15.3 million or 25 cents per diluted share from profit of $58.8 million or $1.12 in the same quarter last year.

The home furnisher lifted revenue forecast in fiscal 2017 to between 18% and 19% and net income in the range of 43% to 51% and pro forma net income growth of 25% to 30%.

Carnival Corp ((CCL)) gained 1.3% or 76 cents to $59.63 after the cruise operator reported revenues in the first-quarter ending in February advanced 2.7% from a year ago to $3.8 billion.

Net income in the quarter surged 147.9% to $352 million or 48 cents per diluted share from $142 million or 18 cents in the same quarter last year.

In the second-quarter, the Carnival lifted revenue growth forecast in the range of 2.5% to 3.5% and earnings per share between 43 cents and 47 cents.

The travel services provider lifted revenues estimate in fiscal 2017 to jump 3% compared to the prior year and better than December forecast of 2.5% and earnings per share in the range of $3.50 to $3.70 compared to December estimate of $3.30 to $3.60.

Darden Restaurants, Inc ((DRI)) jumped 8.2% or $6.18 to $81.78 after the full-service restaurant operator said revenues in the third-quarter ending on February 26 increased 1.7% from a year ago to $1.9 billion.

U.S. same restaurant sales in the quarter rose 1.4%.

Net income in the quarter surged 56.5% to $165.6 million or $1.32 per diluted share from $105.8 million or 82 cents in the same quarter last year.

The Darden lifted diluted earnings per share forecast to between $3.95 and $4.

Separately today, the restaurant operator agreed to acquire Cheddar’s Scratch Kitchen for $780 million in cash from its stockholders including private equity firms L Catterton and Oak Investment Partners.

The transaction is expected to complete in the fourth-quarter of fiscal 2017.

FactSet Research Systems Inc ((FDS)) declined 4.7% or $8.19 to $166.36 after the professional information services provider said reported revenues in the second-quarter ending in February jumped 4.5% from a year ago to $294.4 million.

Net income in the quarter fell 1.6% to $66.7 million or $1.68 per diluted share from $67.8 million or $1.63 in the same quarter last year.

On March 17, FactSet completed the acquisition of BISAM Technologies S.A for about $205.2 million in cash

FactSet forecasted revenues in the third-quarter in the range of $301 million and $307 million and operating margin between 30% and 31% and diluted earnings per share in the range of $1.68 to $1.74.

Ford Motor Company ((F)) gained 1.4% or 16 cents to $11.62 after the automobile maker said it will invest $1.2 billion to upgrade the three facilities in Michigan where it plans to assemble a mid-size pickup truck and SUVs and to store consumer data.

McCormick & Company, Inc ((MKC)) dropped 2.3% or $2.32 to $99.04 after the spices, seasoning maker reported revenues in the first-quarter ending in February rose 1% from a year ago to $1.04 billion.

Net income in the quarter slid 0.1% to $93.5 million or 74 cents per diluted share from $93.4 million or 73 cents in the same quarter last year.

The spices maker lifted diluted earnings per share forecast in the year between $4.05 and $4.13 from reported $3.78 in the same period a year ago.

Red Hat Inc ((RHT)) jumped 5.2% or $4.23 to $86.41 after the open source software provider said revenues in the fourth-quarter ending in February soared 16% from a year ago to $628.8 million.

Net income in the quarter jumped 24.5% to $65.8 million or 36 cents per diluted share from $53 million or 29 cents in the same quarter last year.

The open source software provider estimated revenues in the first-quarter in the range of $643 million to $650 million and diluted earnings per share between 34 cents and 35 cents.

In the full-year, Red Hat forecasted revenues in the range of $2.72 billion to $2.76 billion and diluted earnings per share in the range of $1.69 to $1.73.