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January 24, 2014
10:56 EDTNSC, UNP, CP, KSURailroads sink after Kansas City Southern results miss expectations
Shares of railroad operators are falling after one of the companies in the sector, Kansas City Southern (KSU), reported weaker than expected results earlier today. WHAT'S NEW: Kansas City Southern's fourth quarter earnings per share came in at $1.03, well below the consensus estimate of $1.10. The company's revenue was slightly below expectations. Kansas City Southern identified weak coal volumes and challenging weather as the main causes of its miss. WHAT'S NOTABLE: Yesterday the NTSB recommended that the government impose stricter regulations on the transportation of crude oil by trains. The agency said it was concerned that accidents involving trains transporting crude oil could cause "major loss of life, property damage and environmental consequences." Also yesterday, another railroad operator, Union Pacific (UNP), reported stronger than expected fourth quarter results. The company noted that its overall freight volume had increased 7% last quarter, driven by core pricing gains. Union Pacific did, however, report that its coal revenue had dropped 1% in the fourth quarter, compared with the same period in 2012. PRICE ACTION: In mid-morning trading, Kansas City Southern tumbled 14.7% to $100, Union Pacific lost 0.7% to $173, Norfolk Southern (NSC) dropped 2.5% to $91.30, and Canadian Pacific (CP) declined 2.4% to $144.50.
News For KSU;UNP;NSC;CP From The Last 14 Days
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November 18, 2015
12:33 EDTNSC, CPOn The Fly: Top stock stories at midday
Stocks on Wall Street began the session in positive territory and have moved higher throughout the morning. All eyes continue to be fixed on Paris and successful police action in a raid of the dwellings of suspects from the bombing over the weekend may have added to today's positive sentiment. There was little help from the day's economic data, however, as the housing starts report for October came in with the lowest reading in seven months and the energy inventories data showed another buildup in crude. ECONOMIC EVENTS: In the U.S., housing starts fell 11.0% to a 1.06M pace in October, weaker than the expected rate of 1.16M. Building permits, however, rose 4.1% to a 1.15M rate, versus an expected rise of 3.8%. The day's big economic event may be yet to come, as investors await the minutes from the Fed's last FOMC meeting, which are scheduled for release at 2:00 pm ET. COMPANY NEWS: Shares of Target (TGT) fell more than 5% after the retailer reported in-line quarterly sales and profits and narrowed the range of its fiscal year earnings view. Target, which guided for same-store sales in its holiday quarter to be up 1%-2%, added that it sees "indications of heavy inventory levels" at some competitors into the holiday season... Shares of railroad operator Norfolk Southern (NSC) spiked in the after-hours trading after rival Canadian Pacific (CP) announced that it had sent an offer letter proposing a business combination, but failed to outline the details of its proposal. Norfolk Southern then confirmed Canadian Pacific to acquire the company for $46.72 in cash and a fixed exchange ratio of 0.348 Canadian Pacific shares per Norfolk share, calling the indication of interest "unsolicited, low-premium, non-binding and highly conditional." CNBC's David Faber, citing sources, subsequently reported that Norfolk Southern has no interest in pursuing a merger, but Norfolk shares remain up more than 6% early this afternoon, while Canadian Pacific is up nearly 6% as well... Shares of Apple (AAPL) climbed about 3% after Goldman Sachs added the stock to its Conviction Buy List, predicting that investors should begin to focus on the company's monetization and recurring revenue opportunities over the next year, which would be a boon to its valuation. MAJOR MOVERS: Among the notable gainers was Aramark (ARMK), which rallied 8% after it reported upbeat quarterly earnings and guided for fiscal 2016. Also higher was Fairchild Semicondcutor (FCS), which gained 8.5% after it agreed to be acquired for approximately $2.4B by ON Semiconductor (ON), which fell 8% following the deal announcement. Another noteworthy losers was Qualcomm (QCOM), which fell nearly 10% after it said that allegations from Korea's FTC that the company did not properly negotiate "aspects" of its licenses are "not supported by the facts." Also lower was Staples (SPLS), which was down 4% after it reported Q3 earnings and provided an earnings outlook for Q4. INDEXES: Near midday, the Dow was up 132.98, or 0.76%, to 17,622.48, the Nasdaq was up 43.00, or 0.86%, to 5,029.01, and the S&P 500 was up 15.62, or 0.76%, to 2,066.06.
09:38 EDTCP, NSCNorfolk Southern has no interest in pursuing deal, CNBC's Faber says
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09:22 EDTNSCOn The Fly: Pre-market Movers
UP AFTER EARNINGS: Vipshop (VIPS), up 8%. ALSO HIGHER: Anavex Life Sciences (AVXL), up 27.5% after announcing preparation of regulatory filings based on guidance from FDA... Universal Insurance (UVE), up 7.7% after issuing a statement saying that Lakewood Capital Management's statement was misleading... Actinium Pharmaceuticals (ATNM), up 14.9% after submitting an Investigational New Drug application with the FDA for Iomab-B... Fairchild Semiconductor (FCS), up 8.8% after being acquired by ON Semiconductor (ON)... Norfolk Southern (NSC), up 5% after confirming a merger offer from Canadian Pacific (CP). DOWN AFTER EARNINGS: SouFun (SFUN), down 2.9%... Staples (SPLS), down marginally. ALSO LOWER: GoPro (GPRO), down 4.4% after price target lowered to $15 from $20 at Piper Jaffray... Citrix Systems (CTXS), down 3.5% after announcing operational review and the spin off of its GoTo family of products.
07:24 EDTCP, NSCCP offer for Norfolk Southern a starting point, says Citi
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07:04 EDTNSC, CPCanadian Pacific discloses details of offer letter to Norfolk Southern
Canadian Pacific (CP) disclosed the contents of the offer letter it sent to Norfolk Southern (NSC) on November 17, 2015 to clarify the details of a proposal that would result in the creation of a pro-competitive, pro-customer, coast-to-coast transportation solution. CP also announced it wishes to correct any misconceptions about the sizable premium offered to NS shareholders. In the letter, Canadian Pacific commented, "We propose a 50% cash 50% stock transaction based on Friday's closing stock price for both CP and NSC in which NSC shareholders would receive $46.72 in cash and 0.348 shares of stock in a new company which would own CP and NSC. The new company would be listed on both the New York and Toronto Stock Exchanges, and maintain a strong investment grade credit rating. Our proposal represents a substantial initial 23.0% premium to NSC's 45-day VWAP of $79.14.1 In addition to providing NSC shareholders with a significant cash payment, the proposed transaction will provide NSC shareholders with an opportunity for meaningful upside appreciation in the future as synergies are realized as NSC shareholders will own 41% of the new company. Our advisors at J.P. Morgan have assisted us in valuing the newly merged company by taking into account future operating performance, synergies, expected earnings power and anticipated trading multiples. In light of the substantial synergies created by the combination, we believe that the fair value of the new company would be approximately $270.68 per share at the time of transaction closure-which is assumed to occur on December 31, 2017. As a result, NSC shareholders will receive at that time $46.72 in cash plus $94.16 in market value of the stock of the combined company which on a present value basis at the time of the anticipated announcement is expected to represent total value of $126.18 per share-which is a 59.4% premium to NSC's 45-day VWAP of $79.14. In addition, NSC shareholders would continue to receive a dividend of $0.59 per quarter during the pendency of the regulatory review of the transaction."
November 17, 2015
19:25 EDTNSCOn The Fly: After Hours Movers
UP AFTER EARNINGS: Jack in the Box (JACK), up 3.7%... Vipshop Holdings (VIPS), up 2.2%. ALSO HIGHER: Universal Insurance (UVE), up 5.3% after issuing a statement saying that Lakewood Capital Management's statement was misleading... Norfolk Southern (NSC), up 2% after confirming a merger offer from Canadian Pacific (CP). LOWER: Citrix Systems (CTXS), down 1.8% after announcing operational review and the spin off of its GoTo family of products.
18:31 EDTCP, NSCNorfolk Southern confirms 'low-premium' merger offer from Canadian Pacific
Norfolk Southern (NSC) confirmed it has received an "unsolicited, low-premium, non-binding and highly conditional indication of interest" from Canadian Pacific (CP) to acquire the company for $46.72 in cash and a fixed exchange ratio of 0.348 Canadian Pacific shares per Norfolk Southern share, "representing a premium of less than 10% based on closing prices today." The company noted its board of directors "will carefully evaluate and consider this indication of interest in the context of Norfolk Southern's strategic plans, and its ongoing review of opportunities to enhance stockholder value... Notably, any consolidation among Class I railroads in North America would face significant regulatory hurdles."
17:32 EDTKSU, NSC, UNP, CPNorfolk Southern spikes after Canadian Pacific proposes merger
Shares of railroad operator Norfolk Southern (NSC) are spiking in the after-hours after rival Canadian Pacific (CP) announced that it has sent an offer letter to Norfolk Southern proposing a business combination. WHAT'S NEW: After the close of trading on Tuesday, Canadian Pacific proposed a business combination with Norfolk Southern "that would create a transcontinental railroad with the scale and reach to deliver improved levels of service to customers and communities while enhancing competition and creating significant shareholder value." Canadian Pacific noted that the proposal reflects a "sizable premium in cash and stock offered to NS shareholders." The combined company would have a potential for faster earnings growth than either of the companies independently, CP noted, while offering unparalleled customer service and competitive rates to shippers." The combined company would innovate a new approach to terminal access that would allow another carrier to operate from a point of connection in the event the combined company failed to provide adequate service or competitive rates. The combination of NS and CP would provide a solution to "bottleneck pricing" and alleviate congestion in Chicago by channeling rail traffic away from Chicago. WHAT'S NOTABLE: According to a Globe and Mail report from earlier Tuesday, Keith Creel the COO of Canadian Pacific, who was speaking at a transportation conference, said rail mergers are inevitable but the executive "refused" to confirm past reports that the railroad operator was in talks to acquire rival Norfolk Southern. ANALYST VIEW: ON November 12, research firm BB&T said it believes there are many scenarios in which a merger between Canadian Pacific and Norfolk Southern would benefit both companies. The firm said that Norfolk Southern shareholders would get a 20%-30% premium above the stock's current level, while Canadian Pacific's potential revenue growth issues would be solved and its 2018 EPS would be boosted by 20% plus. PRICE ACTION: Shares of Norfolk Southern are up 6.9% to $93.00, while Canadian Pacific shares are unchanged. OTHERS: Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Genesee & Wyoming (GWR), Kansas City Southern (KSU) and Union Pacific (UNP).
16:22 EDTCP, NSCNorfolk Southern jumps 6% in after-hours trading following merger proposal
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16:21 EDTCP, NSCCanadian Pacific proposes Norfolk Southern merger with 'sizable' premium
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16:17 EDTCP, NSCCanadian Pacific proposes business combination with Norfolk Southern
13:55 EDTNSC, CPCanadian Pacific COO won't confirm Norfolk Southern talks, Globe and Mail says
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08:18 EDTCPScotiabank to hold a conference
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November 15, 2015
12:42 EDTNSC, CPGenesee & Wyoming shares could gain 20% or more in a year, Barron's says
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November 13, 2015
19:33 EDTNSC, CPCanadian Pacific, Norfolk Southern CEO's meet to discuss merger, WSJ says
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19:02 EDTNSC, CPCanadian Pacific, Norfolk Southern CEO's met Friday, Dow Jones says
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November 12, 2015
09:19 EDTNSC, CPCanadian Pacific Norfolk Southern merger makes sense, says BB&T
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November 11, 2015
10:54 EDTCP, NSC, UNPUnion Pacific doesn't see benefits of industry M&A
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10:45 EDTUNPUnion Pacific says automotive sector continues to be positive
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10:37 EDTUNPUnion Pacific says will fall short of Q4 and full year 2014 EPS records
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