Emerson Lifts Rockwell Bid, Wal-Mart Soars on Guidance

Mukesh Buch
16 Nov, 2017
New York City

Best Buy profit forecast disappointed Wall Street. Cato plunged on earnings woes. Emerson revised its bid to $29 billion for Rockwell. Smucker lowered earnings forecast. Wal-Mart comparable sales beat estimates.

[R]1:35 PM New York – Best Buy profit forecast disappointed Wall Street. Cato plunged on earnings woes. Emerson revised its bid to $29 billion for Rockwell. Smucker lowered earnings forecast. Wal-Mart comparable sales beat estimates.[/R]

Tollbooth Index surged 153.18 or 1.2% to 13,314.42.

Earnings Review

Best Buy Co Inc ((BBY)) plunged 7.2% or $4.12 to $53.18 after the technology products retailer reported net sales in the third-quarter ending on October 29 jumped 4.5% from a year ago to $9.3 billion.

Comparable store sales in the quarter jumped 4.4%. Domestic comparable sales increased 4.5% but comparable online sales growth declined to 22.3% from 24.1% in a year ago period. International comparable sales advanced 3.8%.

Net income in the quarter surged 23.2% to $239 million or 78 cents per diluted share from $194 million or 61 cents in the same quarter last year.

The retailer forecasted fiscal 2018 revenues growth between $41 billion and $41.3 billion, or increase of 4% to 4.8% and operating income growth rate of 3% to 6.5%.

The Cato Corporation ((CATO)) soared 8.5% or $1.13 to $14.40 after the apparel and accessories retailer said sales in the third-quarter ending on October 28 declined 9% from a year ago to $188.4 million.

Same store sales in the quarter plunged 9%.

Net income in the quarter tumbled 67.5% to $2.7 million or 11 cents per diluted share from $8.3 million or 30 cents in the same quarter last year.

""The negative sales trends are below our expectations and, consequently, we continue to expect our full year earnings to be significantly below last year,"" said chairman, president and chief executive officer John Cato.

Emerson Electric Co ((EMR)) fell 47 cents to $59.13 after the electrical components maker lifted its offer to acquire Rockwell Automation Inc for $225 per share, comprising $135 in cash and $90 of in Emerson stock.

The third revised offer valued the company at about $29 billion. Earlier in October, Rockwell rejected a $215 per share offer from Emerson.

Rockwell Automation stock jumped 4.4% to $197.18.

Griffon Corporation ((GFF)) surged 16% or $3.30 to $23.90 after the construction and fixtures supplier said revenues in the fourth-quarter ending in September jumped 15% from a year ago to $430.8 million.

Net in the quarter swung to profit $12 million or 29 cents per diluted share from a loss of $5.5 million or 13 cents in the same quarter last year.

Helmerich & Payne, Inc ((HP)) gained 1.7% or 89 cents to $54.63 after the oil and gas drilling services provider stated revenues in the fourth-quarter ending in September advanced 6.8% from a year ago to $532.3 million.

Net loss in the quarter widened to $22.5 million from $21.8 million and diluted earnings per share were flat at 21 cents in the same quarter last year.

Time Inc ((TIME)) surged 24.1% or $3.05 to $15.70 on report that the publisher is in talk with the digital and mobile media publisher Meredith Corporation in a deal backed by billionaire Koch brothers.

Meredith Corporation stock soared 9.8% to $59.50.

J M Smucker Co ((SJM)) jumped 9.7% or $10.41 to $116.87 after the branded food and beverage products maker reported net sales in the second-quarter ending in October rose 1% from a year ago to $1.92 billion.

Net income in the quarter soared 9.8% to $194.6 million or $1.71 per diluted share from $177.3 million or $1.52 in the same quarter last year.

Smucker forecasted fiscal 2018 net sales to be flat or down slightly compared to a year ago period and lowered earnings per share forecast between $7.75 and $7.90 from the earlier estimate of $7.75 to $7.95.

Wal-Mart Stores Inc ((WMT)) jumped 8.4% or $7.57 to $97.40 after the supermarkets and convenience stores operator reported total revenues in the third-quarter ending in October jumped 4.2% from a year ago to $123.2 billion.

Wal-Mart U.S. comparable sales increased 2.7%, comparable traffic increased 1.5% and international sales advanced 4.1% to $29.5 billion.

Net income in the quarter tumbled 42.4% to $1.7 billion or 58 cents per diluted share from $3 billion or 98 cents in the same quarter last year.

The retailer benefited from the recent hurricanes in Florida and Texas as online purchases as well as consumer products, food and building materials sales soared.

“Food delivered its strongest quarterly performance in 6 years,” said chief executive officer Greg Foran.

“Momentum in the business is really strong,” said chief financial officer Brett Biggs.