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News Breaks
April 3, 2014
11:04 EDTLQDTLiquidity Services continues slide, confirms withdrawal from DoD auction
Shares of surplus and salvage asset marketplace operator Liquidity Services (LQDT) are sliding again after the company confirmed it's withdrawal from auction bidding for a U.S. Department of Defense contract and said it will need to reset its adjusted earnings expectations. WHAT'S NEW: Liquidity Services announced that it will reset its outlook for earnings before interest, taxes, depreciation, and amortization, or EBITDA, for fiscal year 2015 after withdrawing from the bidding process for one defense contract and due to higher costs for another. Liquidity said that it remains the high bidder for a contract to purchase, manage and sell non-rolling stock surplus assets for the DoD with a bid equal to 4.35% of the department's original acquisition value, which is up from 1.8% previously. The company also confirmed it withdrew from an auction for a rolling stock contract due to the fact that bidding reached a level that it determined would be "economically unsustainable." The company said that if it agreed to the contract, the result would be significantly higher costs of goods sold in FY15 and beyond. Liquidity Services said it will continue to operate its current DoD surplus contract to sell all usable surplus assets including rolling stock and non-rolling stock assets for a base term ending in December, with two additional one-month renewal options. Accordingly, the company expects the bid results from the last two days to not affect its results for fiscal year 2014. ANALYST OPINION: Following today's news, Liquidity Services was downgraded to Neutral from Outperform at RW Baird, which cited the "unfavorable" auction results. The firm lowered its price target for shares to $19 from $30. Baird analyst Colin Sebastian said the firm is lowering its FY15 EBITDA estimate by $40M and sees few near-term positive catalysts outside of potential short covering on the stock. WHAT'S NOTABLE: Yesterday, Liquidity Services shares were down after the company announced that it was the highest bidder for the DoD non-rolling stock surplus contract. Baird stated in a separate note yesterday that Liquidity's high bid for the non-rolling liquidation contract was "quite a bit" higher than the firm had anticipated. The firm said then that its Outperform rating was under review pending the full contract results. PRICE ACTION: During morning trading, shares of Liquidity Services fell $2.85, or 13.66%, to $18.01. The stock had declined about 6.7% yesterday and over the last month shares have lost over 18.5%.
News For LQDT From The Last 14 Days
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November 20, 2014
12:46 EDTLQDTOn The Fly: Midday Wrap
Stocks on Wall Street were higher at midday despite disappointing purchasing managers' index readings in both China and Europe. The market took its early lead from Europe and opened lower, though the major averages moved into positive territory following a trio of better than expected domestic economic reports, as the leading economic indicators, Philadelphia Fed survey, and existing home sales all beat consensus forecasts. ECONOMIC EVENTS: In the U.S., initial jobless claims fell 2K to 291K in the week ended November 15, versus expectations for 280K first-time claims. The Consumer Prices Index was unchanged in October, versus expectations for a drop of 0.1%. The core CPI reading, which excludes food and energy, rose 0.2%, versus expectations for an increase of 0.1%. Markit's flash manufacturing PMI slipped 1.2 points to 54.7 in November, versus the consensus forecast for a 56.5 reading. Existing home sales rose 1.5% to a 5.26M rate in October, which beat expectations for a decline to a 5.15M unit rate. The index of leading indicators climbed 0.9% to 105.2 in October, beating expectations for a 0.5% increase. The Philadelphia Fed manufacturing index surged to 40.8 in November, easily topping the consensus expectation for a 18.0 reading. In Asia, the HSBC/Markit manufacturing PMI for China fell to a six-month low of 50.0 in the flash reading for November, which is down from a final reading of 50.4 in October and below the 50.3 consensus forecast. In Europe, Markit's flash eurozone PMI composite output index, which tracks surveys from both the manufacturing and services sectors, came in at 51.4 for November, which was down from 52.1 in October and represents the measure's lowest level in 16 months. COMPANY NEWS: Shares of Best Buy (BBY) advanced 7% after its third quarter profit beat estimates and it reported that its domestic same-store sales grew 3.2%. The electronics retailer also said the sales trends it is seeing as its enters the critical fourth quarter are "encouraging from a top-line perspective." MAJOR MOVERS: Among the notable gainers was Williams-Sonoma (WSM), which rose nearly 10% after the home goods retailer's third quarter results surpassed analystsí consensus estimates and the company raised its fiscal 2014 outlook. Also higher following its own "beat and raise" quarterly report was Kirkland's (KIRK), which advanced 18%. Among the noteworthy losers was Liquidity Services (LQDT), which dropped 9% after its fourth quarter earnings missed expectations and the company said it will no longer give yearly guidance. Also lower was Keurig Green Mountain (GMCR), which dropped 6% after its first quarter profit outlook fell short of analystsí consensus estimates and the company's Chief Financial Officer announced plans to depart. INDEXES: Near midday, the Dow was up 7.84, or 0.04%, to 17,693.57, the Nasdaq was up 22.08, or 0.47%, to 4,697.80, and the S&P 500 was up 3.01, or 0.15%, to 2,051.73.
07:02 EDTLQDTLiquidity Services suspends yearly guidance
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06:59 EDTLQDTLiquidity Services sees 1Q15 adjusted EPS 16c-22c, consensus 25c
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06:56 EDTLQDTLiquidity Services reports Q4 adjusted EPS 13c, consensus 15c
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