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07/20/17 02:00:01 PM
MARKET MOVERS

Movers: C.H. Robinson Worldwide, Inc., Avista Corporation, Polaris Industries Inc.

C.H. Robinson Worldwide, Inc.(CHRW) : (BZ Newswire) -- Reviewing C.H. Robinson Worldwide Inc (NASDAQ: CHRW)'s second-quarter results, Barclays said the second-quarter earnings miss shouldn't come as a surprise, particularly given the increases in spot truckload rates. Q2 Misses Analyst Brandon Oglenski noted that the company reported second-quarter earnings per share of $0.78, missing his $0.88 estimate and the consensus estimate of $0.90. EBIT also missed expectations due to a margin-driven net revenue miss and higher operating expenditure associated with headcount increases, the analyst said. See also: Drones, Distribution And The State Of Shipping Barclays indicated that ocean and air segments experienced volume and pricing increases, contributing to 12 percent net revenue growth, excluding APC Logistics a company acquired in the fourth quarter of 2016. Going by global forwarding results, the firm sees more positive outcomes for freight forwarder Expeditors International of Washington (NASDAQ: EXPD). Margins A Concern The firm believes C.H. Robinson's ambitious hiring plans are compounding cyclical margin challenges, with the management's long-term focus on gaining market share driving costs higher. Barclays said finding a cheap or absolute entry point in C.H. Robinson's shares will be difficult at least in the near term, given investor concern about structural margin compression from disruptive technology based new entrant brokers. Lowering Estimates, Price Target As such, Barclays lowered its estimates for C.H. Robinson, with earnings per share estimate for 2017 trimmed to $3.35 and 2018 estimate to $3.60. The firm also lowered its price target to $67, while remaining Equal Weight on the stock. The reduction in the price target was based on the firm's view that there is limited near-term opportunity for alpha in the shares. At the time of writing, shares of C.H. Robinson were sliding 5.25 percent to $64.93. Copyright Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com).



Avista Corporation(AVA) : SPOKANE, Wash. (AP) The sale of Spokane-based Avista Corp. to a Canadian energy company must still win approval from shareholders and regulators. Hydro One, based in Toronto, Canada, announced Wednesday that it would pay $5.3 billion cash to buy Avista, which supplies electricity and natural gas to customers in five Northwestern states. The deal, expected to close next year, is subject to approval from shareholders and regulators in the various states Avista operates in, as well as the federal government. The Washington Utilities and Transportation Commission says the utilities have not yet filed for approval, but they will need to prove a net benefit for customers. Few changes are expected in Avista operations. The sale price amounts to $53 per Avista share, a 24 percent premium over the company's closing stock price Tuesday.



Polaris Industries Inc.(PII) : July 20--Polaris Industries beat expectations for the second quarter and bolstered its earnings guidance Thursday after reporting that second quarter sales rose considerably, even as profits were pinched by the wind down of the Victory motorcycle line and the integration of the recently purchased TransAmerican Auto Parts (TAP). Polaris, the Medina-based maker of off-road four-wheelers, snowmobiles, and motorcycles, increased the bottom range of its 2017 profit forecast, noting increased margins, an uptick in off-road vehicle sales and a stepped up share buyback plan. For the quarter, Polaris sales rose 21 percent to $1.365 billion. Excluding Victory, sales rose 20 percent to $1.359 billion, which beat analysts expectations by $99 million. Including Victory and TAP costs, profits fell 13 percent to $62 million, or 97 cents a share. Excluding Victory, TAP and factory realignment costs, adjusted income was $1.16 per share, which beat analysts expectations by 8 cents a share. The decision to exit the lackluster Victory brand and increase its fast growing Indian Motorcycle business was made earlier this year as officials looked to drive growth in the face of massive product recalls. Polaris recalled more than 400,000 off-road vehicles over two years due to fire and other risks. Earlier this week, Polaris recalled another 26,700 vehicles after receiving 30 customer complaints of fuel leaking into headlights, one fire and after finding a separate brake problem on RZR 570 four wheelers. No injuries were reported. In reviewing the quarter, officials said they were pleased with results. "Performance improved in many parts of our business during the quarter, particularly within our international and parts, garments and accessories businesses. The powersports industry remained very competitive and headwinds persist, but we were encouraged by the return to growth in our Side-by-Side [vehicle] business and continued strength and aggressive share gains for Indian Motorcycles," said CEO Scott Wine in a statement. "We still have a lot of work to do, but we are seeing results from the strong and sustainable improvements we are making to the fundamentals of our business, as we establish the foundation of a renewed growth platform," he said. For full year 2017, Polaris increased its sales forecast, noting that non-Victory revenues should rise 12 to 14 percent. Adjusted earnings in 2017 should range from $4.35 to $4.50 per share, up from the prior forecast of $4.25 to $4.50 per share ___ (c)2017 the Star Tribune (Minneapolis) Visit the Star Tribune (Minneapolis) at www.startribune.com Distributed by Tribune Content Agency, LLC.



United Continental Holdings, Inc.(UAL) : CORRECTION APPENDEDSo much for the outrage directed at United Airlines. On Tuesday, the carrier released its first financial statement that included the period after security officers forcibly removed a 69-year-old passenger, Dr. David Dao, from a plane. The incident left him bloodied and disheveled and left United facing widespread calls for a boycott. Nearly three months later, it appears that all the public anger has not hurt the company's bottom line. United reported a profit of $818 million in the most recent quarter, ending in June, up 39 percent compared with last year. Sales rose, too, as more customers booked flights with the carrier, amid rising demand for air service over all. In a separate report this month, United said that it had more than 71 million passengers during the first half of the year, up 4.2 percent compared with last year. The results point to an underlying principle about the airline business: Passengers, by and large, look for the most convenient and cheapest fares, not which airlines claim to offer the best service. The case of Dr. Dao and the initial public reaction put that principle to the test. A video of airport security officers dragging him off a flight on April 9 ricocheted around the world after another passenger posted it to Twitter. Dr. Dao's lawyer said the removal, to make his seat available to a United employee, had left Dr. Dao with a broken nose, a concussion, two knocked-out teeth and sinus problems. The event became a public-relations nightmare for United, generating weeks of bad news. Elected officials in Washington threatened consequences for United, and customers promised to boycott the carrier. United's chief executive, Oscar Munoz, did not get an expected promotion to board chairman. Dr. Dao later settled with United for an undisclosed amount. Dr. Dao's treatment touched a nerve among fliers, who have been squeezing into smaller seats on crowded aircraft. Air travel has become an increasingly uncomfortable experience for all but the wealthiest passengers. But spurning an airline is challenging, given the waves of consolidation that have put the majority of flights in the United States under the control of four carriers -- United, Delta, American and Southwest. ''It's very difficult at this point in time for consumers to exact a penalty against airlines that have exhibited poor customer service'' or been involved in a high-profile situation like Mr. Dao's removal, said John Kwoka Jr., a Northeastern University economics professor who has advised state attorneys general on airline mergers. Also complicating those calls is the simple fact that for many leisure fliers, price is paramount. United is finding ways to reach those fliers. Like other carriers, United has introduced ''basic economy'' tickets that offer a bare-bones travel experience for the lowest cost possible on any given route. ''What the airlines have learned is the customer cares about low prices more than anything else,'' said Michael J. Mazzeo, an associate professor at Northwestern University who has studied the industry. United has taken steps to prevent incidents like Dr. Dao's removal from happening again, like adding rules about when passengers can be removed from planes and increasing the financial incentives it offers customers aboard overbooked flights. In a statement on Tuesday, Mr. Munoz, the chief executive, said that the ''positive financial and operational performance this past quarter demonstrates that United is firmly on the right path.'' Leaders of the company, including Mr. Munoz, are scheduled to discuss the company's performance with analysts on Wednesday morning. While United seems to have survived the uproar generated by Dr. Dao's removal, the company faces significant challenges. The company earned $914 million in the first half of the year, up just 1.4 percent compared with the same period a year earlier. And the company is still lagging some of its competitors on critical measures. Delta Air Lines' profit for the second quarter came in at $1.2 billion, about 30 percent higher than United's profit. Delta's profit margins are also consistently higher than United's margins, as well as those of other airlines. United's stock fell 1.1 percent in aftermarket trading on Tuesday evening, after the earnings were released. For the year to date, United shares are up 8.5 percent. In its statement Tuesday, United said that in the second quarter it was able to beat its main competitors on some metrics, like on-time arrivals and departure performance. Correction: July 20, 2017, Thursday This article has been revised to reflect the following correction: An article on Wednesday about United Airlines' earnings for the latest quarter referred incorrectly to Delta Air Lines' profit in the second quarter compared with United's profit during the same period. Delta's profit was about 30 percent higher, not twice as high. PHOTO: A United jet at O'Hare International Airport in Chicago. The airline reported a profit of $818 million in the quarter that ended last month, up 39 percent. (PHOTOGRAPH BY KIICHIRO SATO/ASSOCIATED PRESS) July 19, 2017, WednesdayLate Edition - FinalSection: BPage: 3Column: 0Desk: Business/Financial DeskLength: 728 words



McCormick & Company, Incorporated(MKC) : The food industry is undergoing a little more repackaging. The United States spice maker McCormick & Company is making a bet on hot sauce by buying Reckitt Benckiser's foods business, which includes the Frank's RedHot brand, French's Mustard and Cattlemen's barbecue sauces, for $4.2 billion. The acquisition may help McCormick's effort to expand overseas. The company had tried another British target, Premier Foods, but three informal offers were rejected, according to The Financial Times, which first reported the deal with Reckitt. The FT also reported that Unilever and Hormel had come close to bidding, but walked away. Reckitt, for its part, can now focus on its infant nutrition unit after buying Mead Johnson, which makes baby formula, for $16.6 billion. Reckitt, which also makes Durex condoms and Nurofen painkillers, had seen its sales growth damaged by a boycott in South Korea and the weak performance of a new Scholl product. Discovery and Scripps In Merger Talks Again The influence of digital viewing is very much being felt in the cable industry. Discovery Communications and Scripps Networks Interactive are discussing a merger that they hope could help them fend off competition from streaming services, The Wall Street Journal and The Financial Times reported, citing people familiar with the talks. If they join forces, they could strengthen their negotiations with cable providers like Charter Communications and Time Warner Cable, which have been squeezing network owners after their own round of consolidation. Discovery, which owns the Discovery Channel and Animal Planet, is worth about $15 billion. Scripps, worth about $8.8 billion, also specializes in factual cable programming, with brands including HGTV and Food Network. The two discussed a tie-up in 2014, but abandoned those talks because the family that controlled Scripps was not ready to sell. Scripps had also had talks about a sale to Viacom, according to Reuters and Bloomberg, which cited people familiar with the matter. A deal has yet to be reached, but if one goes ahead, it could be the biggest media merger since AT&T's proposed acquisition of Time Warner. A Chinese Powerhouse and a Web of Family Ties HNA Group seemed to come from nowhere, growing quickly from a small airline into one of China's most aggressive global deal makers. And yet it fit a pattern that is beginning to make some people nervous. The company started as Hainan Airlines but has become a conglomerate with worldwide reach, taking stakes in multinationals like Deutsche Bank and Hilton Hotels. As with other big Chinese deal markers, however, its ambitions have been fueled by debt and masked by opaque ownership structures, creating uncertainty over its corporate governance, strategic motivations and financial health. HNA has regularly funneled business to a small group of relatives and associates of its senior executives, according to a review of corporate records by The New York Times. It has also limited disclosure of these dealings to investors in its listed companies or overseas bonds. This has made it difficult for governments and businesses around the world to understand the forces behind the spending they could be making decisions based on an incomplete picture of the conglomerate. The European Central Bank is considering opening an inquiry into whether HNA's stake in Deutsche Bank meets the criteria for large bank shareholders, according to people with knowledge of the discussions. Regulators around the world also closely watch transactions with family and friends to ensure that companies put the interests of investors first. Follow Amie Tsang on Twitter @amietsang.



United Continental Holdings, Inc.(UAL) : Correction Appended So much for the outrage directed at United Airlines. On Tuesday, the carrier released its first financial statement that included the period after security officers forcibly removed a 69-year-old passenger, Dr. David Dao, from a plane. The incident left him bloodied and disheveled and left United facing widespread calls for a boycott. Nearly three months later, it appears that all the public anger has not hurt the company's bottom line. United reported a profit of $818 million in the most recent quarter, ending in June, up 39 percent compared with last year. Sales rose, too, as more customers booked flights with the carrier, amid rising demand for air service over all. In a separate report this month, United said that it had more than 71 million passengers during the first half of the year, up 4.2 percent compared with last year. The results point to an underlying principle about the airline business: Passengers, by and large, look for the most convenient and cheapest fares, not which airlines claim to offer the best service. The case of Dr. Dao and the initial public reaction put that principle to the test. A video of airport security officers dragging him off a flight on April 9 ricocheted around the world after another passenger posted it to Twitter. Dr. Dao's lawyer said the removal, to make his seat available to a United employee, had left Dr. Dao with a broken nose, a concussion, two knocked-out teeth and sinus problems. The event became a public-relations nightmare for United, generating weeks of bad news. Elected officials in Washington threatened consequences for United, and customers promised to boycott the carrier. United's chief executive, Oscar Munoz, did not get an expected promotion to board chairman. Dr. Dao later settled with United for an undisclosed amount. Dr. Dao's treatment touched a nerve among fliers, who have been squeezing into smaller seats on crowded aircraft. Air travel has become an increasingly uncomfortable experience for all but the wealthiest passengers. But spurning an airline is challenging, given the waves of consolidation that have put the majority of flights in the United States under the control of four carriers United, Delta, American and Southwest. "It's very difficult at this point in time for consumers to exact a penalty against airlines that have exhibited poor customer service" or been involved in a high-profile situation like Mr. Dao's removal, said John Kwoka Jr., a Northeastern University economics professor who has advised state attorneys general on airline mergers. Also complicating those calls is the simple fact that for many leisure fliers, price is paramount. United is finding ways to reach those fliers. Like other carriers, United has introduced "basic economy" tickets that offer a bare-bones travel experience for the lowest cost possible on any given route. "What the airlines have learned is the customer cares about low prices more than anything else," said Michael J. Mazzeo, an associate professor at Northwestern University who has studied the industry. United has taken stepshto prevent incidents like Dr. Dao's removal from happening again, like adding rules about when passengers can be removed from planes and increasing the financial incentives it offers customers aboard overbooked flights. In a statement on Tuesday, Mr. Munoz, the chief executive, said that the "positive financial and operational performance this past quarter demonstrates that United is firmly on the right path." Leaders of the company, including Mr. Munoz, are scheduled to discuss the company's performance with analysts on Wednesday morning. While United seems to have survived the uproar generated by Dr. Dao's removal, the company faces significant challenges. The company earned $914 million in the first half of the year, up just 1.4 percent compared with the same period a year earlier. And the company is still lagging some of its competitors on critical measures. Delta Air Lines' profit for the second quarter came in at $1.2 billion, about 30 percent higher than United's profit. Delta's profit margins are also consistently higher than United's margins, as well as those of other airlines. United's stock fell 1.1 percent in aftermarket trading on Tuesday evening, after the earnings were released. For the year to date, United shares are up 8.5 percent. In its statement Tuesday, United said that in the second quarter it was able to beat its main competitors on some metrics, like on-time arrivals and departure performance. Correction: July 20, 2017, Thursday This article has been revised to reflect the following correction: An article on Wednesday about United Airlines' earnings for the latest quarter referred incorrectly to Delta Air Lines' profit in the second quarter compared with United's profit during the same period. Delta's profit was about 30 percent higher, not twice as high. PHOTO: A United jet at O'Hare International Airport in Chicago. The airline reported a profit of $818 million in the quarter that ended last month, up 39 percent. (PHOTOGRAPH BY KIICHIRO SATO/ASSOCIATED PRESS)



McCormick & Company, Incorporated(MKC) : LONDON McCormick & Company will account for more space in American cupboards after agreeing to buy French's mustard and Frank's Red Hot sauce in a deal worth $4.2 billion. The spice maker, which is based in Sparks, Md., near Baltimore, will acquire the food business of Reckitt Benckiser, the British consumer-goods company, and intends to finance the deal through a combination of debt and equity. The business includes the French's, Frank's Red Hot and Cattlemen's brands. The sale, announced late Tuesday, came after Reckitt Benckiser announced a strategic review in April of its food business. The acquisition of Frank's Red Hot, French's mustard and "other beloved products enables McCormick to become a one-stop shop for condiment, spice and seasoning needs, providing our customers and consumers with an even more diverse and complete flavor product offering," Lawrence E. Kurzius, the McCormick chairman, president and chief executive, said in a news release. The transaction is expected to be completed in the third or fourth quarter of McCormick's fiscal year, which ends in November. The deal is subject to regulatory approval. Reckitt Benckiser has moved away from the food business in recent years and increasingly focused on consumer health products, including Durex condoms, Nurofen pain relievers and Scholl foot care. In February, Reckitt Benckiser agreed to buyMead Johnson Nutrition, the maker of Enfamil baby formula, for $16.6 billion. That deal, which was completed in June, significantly expanded its sales in developing countries. The French's transaction "marks another step towards transforming RB into a global leader in consumer health and hygiene, ensuring we continue to deliver for shareholders and give people innovative solutions for healthier lives and happier homes," Rakesh Kapoor, Reckitt Benckiser's chief executive, said in a news release. Other major food brands have become takeover targets in recent years as their owners look to breathe new life into mature brands. Consumers also are increasingly looking for higher-value or more exotic foods to add to their kitchen cabinets. In 2013, 3G Capital, the Brazilian investment firm, and the billionaire investor Warren E. Buffett bought Heinz, the condiment and canned foods giant, and merged it with Kraft Foods two years later to create Kraft Heinz. In February, Kraft Heinzoffered to buyUnilever, the consumer goods giant, for $143 billion, but quickly rethought the deal and withdrew its offer. Then in April, Unilevermade its own deal for Sir Kensington's, a maker of fancy ketchup and other condiments. The Sunday Times of Londonreported this week that Unilever was among the companies bidding for Reckitt Benckiser's food business. Follow Chad Bray on Twitter @Chadbray.



 

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