STOCK MARKET NEWS: Bed Bath & Beyond moves to raise $1B, Spirit Airlines soars, Powerball climbs

LIFESTYLE

Powerball jackpot jumps to estimated $747M

The Powerball jackpot ahead of Monday night's drawing soared to an estimated $747 million, which marks the ninth largest U.S. lottery jackpot to date.

The Powerball® jackpot has grown to an estimated $747 million ($403.1 million cash value) for the Monday, Feb. 6 drawing.

If a player wins Monday’s jackpot, it will rank as the fifth-largest Powerball jackpot and the ninth-largest U.S. lottery jackpot.

The Powerball jackpot rolled after no ticket matched all six numbers drawn Saturday night – white balls 2, 8, 15, 19, 58 and Powerball 10.  

MARKETS

Bed Bath & Beyond stock nearly doubles on short trading

Bed Bath & Beyond shareholders are watching their stock rise even as bankruptcy looms while Wall Street traders short the stock.

Bed Bath & Beyond Inc said on Monday it was planning to raise some $1 billion through an offering of preferred stock and warrants, in a last-ditch effort to stave off bankruptcy.

The move comes just weeks after the retailer said it had defaulted on a loan, raising concerns about its future.

Shares of the retailer, which closed up 92.1% at $5.86 in wild trading session, were down as much as 25% in extended trading.  

Bed Bath said it was planning to raise about $225 million through an offering of Series A convertible preferred stock and raise an additional $800 million by issuing securities that could be used to buy shares of preferred stock in future installments. 

The retailer said in a securities filing it would "likely file for bankruptcy protection" if the transactions are not consummated.

The embattled retailer said it would use the proceeds of the offering to repay outstanding revolving loans under its asset-based lending (ABL) facility.

Separately, the company also appointed Holly Etlin as interim chief financial officer.

Tyson Chicken Nuggets, owned by Tyson Foods, are seen for sale in Queens, New York, Nov. 16, 2021. (Reuters/Andrew Kelly)

Tyson Foods Inc widely missed Wall Street estimates for quarterly profit on Monday and cut its expectations for operating margins this year in the face of falling beef prices and easing demand for pork.

A year earlier Tyson's profits had climbed due to soaring meat prices and strong demand.

MARKETS

Tyson Foods takes profit hit as beef prices fall

Tyson Foods saw profits tumble in its fiscal first quarter after declining beef prices, waning demand for pork and higher costs took a toll on earnings.

Facing high inflation, some consumers have since reduced their spending and switched to cheaper types of meat, such as buying hamburger instead of steaks.

Sales rose 2.5% to $13.26 billion in the three months ended Dec. 31, missing analysts' average estimate of $13.52 billion, according to IBES data from Refinitiv. Adjusted earnings of 85 cents per share were much lower than expectations of $1.34 per share.

In Tyson's beef business, its largest segment, operating margins shrank to 3.5% from 19.1% a year earlier. Average beef prices fell by 8.5%, compared to a surge of nearly 32% a year earlier, according to the company.

Tyson's average pork prices rose 1.4% in the latest quarter, while sales volumes declined 7.4%. The company cut its outlook for adjusted operating margins in pork to 0% to 2% for fiscal 2023 from a previous forecast of 2% to 4%.

Tyson lowered its outlook for operating margins in its chicken business to 2% to 4% from 6% to 8%, though prices rose 7.1% in the latest quarter.

Spirit Airlines jet taxis from Newark Liberty International Airport in Newark, N.J., Dec. 6, 2019. (Reuters/Chris Helgren)

Ultra low-cost carrier Spirit Airlines Inc posted better-than-expected quarterly results on Monday, fueled by strong demand for air travel despite ongoing economic concerns.

Shares of Spirit rose over 7% to $21 in aftermarket trade.

U.S. airlines have been trying to cash in on strong demand for air travel, undeterred by rising interest rates and a looming recession, as pandemic restrictions ease.

"Leisure demand has remained strong," said Spirit's chief executive Ted Christie.

However, adverse weather, worker shortages and technical glitches have snarled operations over the past year.

Spirit earned $0.12 per share on an adjusted basis, above analyst estimates of $0.04 per share, according to Refinitiv data.

The Miramar, Florida-based airline's total operating revenue in the quarter rose nearly 41% to $1.39 billion, compared with analysts' estimates of $1.38 billion.

Small toy figure and imitation gold are seen in front of the Newcrest logo in this illustration taken Nov. 19, 2021. (Reuters/Dado Ruvic/Illustration)

Top gold producer Newmont Corp said it had made a $16.9 billion offer for Australian peer Newcrest Mining Ltd to build a global gold behemoth, although investors and analysts said it undervalued the target amid a leadership change.

Newcrest is seeking a new boss, with previous chief executive Sandeep Biswas having stepped down in December, while global interest rates are expected to peak this year and turn down, improving the outlook for gold prices.

MARKETS

Newmont makes $16.9B bid for Australia gold producer

The Newmont Corporation has made an indicative $16.9 billion takeover offer for Australia's top goldminer Newcrest Mining to combine the goldmining companies’ assets in China and Australia.

If successful, the all-share deal would be the largest mining takeover and the third largest corporate buyout in Australian history, according to Refinitiv data.

The Australian gold miner said that it was considering the proposal. Newmont, the world's biggest gold producer by market value and ounces produced, described the combination as "a powerful value proposition".

However, the initial feedback from shareholders is that they want a higher price, according to a person familiar with Newcrest's deliberations.

"A good litmus test for a reasonably-priced deal is one where both seller and buyer feel somewhat aggrieved by selling out too low or by paying too much," said Simon Mawhinney, chief investment officer at Allan Gray, Newcrest's largest shareholder with a 7.36% stake. "It's not clear to me that this kind of symmetry exists with these deal terms."

Activision booth at the E3 2017 Electronic Entertainment Expo in Los Angeles, Calif., June 13, 2017. (Reuters/ Mike Blake)

Videogame publisher Activision Blizzard beat Wall Street estimates for fourth-quarter adjusted sales on Monday, thanks to the success of the latest game in its "Call of Duty" franchise.

A string of launches in October and November, including "Call of Duty: Modern Warfare II," "Warzone 2.0" and "World of Warcraft: Dragonflight" from the fantastical world of "Azeroth," helped the company hold the attention of the gaming community.

As inflation squeezes budgets of American households, more gamers are expected to stick to their favorite gaming franchises, instead of experimenting with newer titles from other studios, helping companies such as Activision, analysts have said.

"Modern Warfare II" delivered the highest opening-quarter sell-through in the franchise's history and crossed the $1 billion mark within 10 days of its late-October launch, the company said.

The company expects its full-year adjusted sales to grow at least in high-single digits, bolstered by the launch of games including "Diablo IV."

Adjusted sales in the quarter ended Dec. 31 came in at $3.57 billion, compared with analysts' average estimate of $3.16 billion, according to Refinitiv data.

Pinterest app is seen on a smartphone in this illustration taken, July 13, 2021. (Reuters/Dado Ruvic/Illustration)

Pinterest Inc missed quarterly revenue estimates on Monday as user growth slowed on the image-sharing platform and businesses cut advertising spending in a turbulent economy.

The company's revenue grew 4% to $877 million. Analysts on average had expected $886.3 million, according to Refinitiv data.

Global Monthly Active Users (MAUs) increased 4% year over year to 450 million.

GAAP net income was $17 million for Q4. GAAP net loss was $96 million for 2022. Adjusted EBITDA was $196 million and $442 million for Q4 and 2022, respectively.

Pinterest also announced that its board of directors has authorized a stock repurchase program of up to $500 million of its Class A common stock over the next 12 months.

Separately, Pinterest today announced that Todd Morgenfeld, Chief Financial Officer and Head of Business Operations, will transition from Pinterest to pursue new career opportunities on July 1, 2023.Reuters contributed to this report.

(Photo by Axel Heimken/picture alliance via Getty Images)

With oil prices on track to deliver their lowest close since December, diesel engine builder Cummins is reporting strong fourth quarter and full year 2022 results.

The Columbus, Indiana-based company announced $7.8 billion in fourth quarter revenue. Excluding the acquisition of Meritor, Inc., on Aug. 3, revenues were $6.6 billion to notch a 13% improvement from the same quarter in 2021.

Also excluding Meritor, sales in North America increased 25% while international revenues slipped 1% compared to fourth quarter 2021, Cummins announced.

Meanwhile, net income attributable to Cummins in the fourth quarter was $631 million, or $4.43 per diluted share, as income attributable for the full year reached $2.2 billion, or $15.12 per diluted share.

Full year results also include $0.72 per diluted share of costs related to the indefinite suspension of operations in Russia and $0.45 per diluted share for the separation of the Filtration business, the company release stated.

Cummins is also a manufacturer of alternative fuel engines and generators.

Despite the recent downward trend, oil prices are up on Monday, moving roughly 0.56% higher to $73.80 a barrel after falling around 5% the last five days and approximately 20% the last three months. 

United Airlines passenger jet takes off with New York City as a backdrop, at Newark Liberty International Airport, N.J., U.S. Dec. 6, 2019. (Reuters/Chris Helgren)

The Federal Aviation Administration (FAA) on Monday said it is proposing to fine United Airlines UAL.O $1.1 million for allegedly conducting Boeing 777 flights without making required preflight fire system warning checks.

The FAA said Chicago-based United is believed to have flown more than 102,000 flights of its Boeing 777 aircraft between June 2018 and April 2021 that did not meet U.S. airworthiness requirements.

During that period United "removed the fire system warning check from its Boeing 777 preflight check list. The inspection is required in the maintenance specifications manual. Removal of the check resulted in United’s failure to perform the required check." United Airlines has 30 days to respond to the FAA's civil penalty letter.

Street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, July 19, 2021. (Reuters/Andrew Kelly)

Catalent has reportedly attracted the interest of Danaher. People familiar with the matter told Bloomberg that Danaher has made overtures in recent months that values Catalent at a significant premium.

Catalent enables pharma, biotech, and consumer health partners to optimize product development, launch, and full life-cycle supply for patients around the world. 

Automotive startup Canoo is selling $52.5 million of shares and warrants to institutional investors. The sale includes 50,000,000 shares of the Company's common stock together with warrants to purchase up to 50,000,000 shares of common stock at a combined purchase price of $1.05 per share and accompanying warrant, pursuant to a registered direct offering.

The Company intends to use the net proceeds from the offering for general working capital purposes. 

Apple phone supplier Foxconn reported monthly revenue rose 48.15% year-over-year to $660.4 Taiwan dollars ($21.34 million) as operations return to normal and product shipments increase at the Zhengzhou campus,

“Thanks to better components supply and stronger customers’ pull-in, revenue in January demonstrated strong double-digit growth YoY and significant growth MoM,” the company said.

Energizer Bunny at the Macy's Thankgiving Parade

Energizer Holdings Inc. on Monday reported fiscal first-quarter net income of $49 million.

The St. Louis-based company said it had profit of 68 cents per share. Earnings, adjusted for one-time gains and costs, were 72 cents per share.

The results fell short of Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 73 cents per share.

The battery and personal care products company posted revenue of $765.1 million in the period, which also missed Street forecasts. Five analysts surveyed by Zacks expected $786.1 million.

Energizer expects full-year earnings in the range of $3 to $3.30 per share.

Carlyle Group logo at the company's office in Tokyo, Japan, Oct. 17, 2018. (Reuters/Issei Kato)

Private equity firm Carlyle Group Inc on Monday appointed former Goldman Sachs Inc executive Harvey Schwartz as chief executive officer, effective Feb. 15.The Wall Street veteran will replace co-founder and interim CEO Bill Conway, who will remain co-chairman of the board, Carlyle said.

Schwartz retired from Goldman Sachs in 2018 after a 20 year-career at the investment banking giant.

MARKETS

Carlyle names former Goldman exec Harvey Schwartz new CEO

The private equity firm, The Carlyle Group, has officially announced former Goldman Sachs Inc executive Harvey Schwartz as the company’s new CEO and will replace co-founder and interim CEO Bill Conway.

He was the president and co-chief operating officer at the time of his retirement. Prior to that, he was the bank's chief financial officer and was once considered a frontrunner to replace former CEO Lloyd Blankfein.

Investors will be examining the direction the company, which is viewed as having underperformed some of its rivals, takes under Schwartz after the sudden departure of former CEO Kewsong Lee.

Lee left the firm last August after a clash with the company's board over a new contract, a person familiar with the matter told Reuters.

Schwartz is taking the helm at a crucial juncture for private equity companies, when a stock market rout triggered by fears of an economic downturn has made it tougher to cash out on investments.

On the other hand, buyout firms sitting on billions of dollars of unused capital have also been snapping up publicly listed companies, taking advantage of cheaper valuations."We would view the conclusion of this (CEO) search as a positive," Jefferies analysts wrote in a note.

Children’s Place expects to report a loss of $52 million to $57 million for the fourth quarter.

The largest pure-play children’s specialty apparel retailer in North America said 2022 operating results were negatively impacted by approximately $125 million versus 2021 due to three input costs:

• An approximate $65 million incremental impact to 2022 operating results due to the spike in cotton prices, the company’s largest product input cost,

• An approximate $30 million incremental impact to 2022 operating results due to having to utilize airfreight amidst the worldwide supply chain delays caused by the COVID-19 pandemic; and

• An approximate $30 million incremental impact to our 2022 operating results from the spike in  container costs, also due to the COVID-19 pandemic.

Net sales are expected to be approximately $454 million to $456 million, versus prior guidance of $460 million at the low end, and down approximately $52 million to $54 million, or down approximately 10.2% to 10.6%, versus last year.

Gold market prices (iStock)

Gold , like other commodities including oil and silver, is a haven for traders during times of economic downturn, and particularly inflation, where the strength of the U.S. dollar is weakened, and investors begin looking for material wealth.

Already, the price of the gold has reached roughly $1,932 per ounce in 2023 and is up approximately 18% the last three months.

A Kitco News' online survey showed investors could see gold top out at a record $2,100 an ounce this year, while data compiled by the World Gold Council showed annual central bank demand more than doubled in 2022 to hit a new 55-year record high.

Often considered recession or inflation-proof, gold outpaced the three major U.S. stock averages in 2022. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all finished lower last year.

An illustration of the U.S. dollar. (iStock)

The U.S. greenback is gaining some ground it lost on the Euro following the Federal Reserve’s decision to slow its rate of aggressive interest rate hikes.

On Monday, the U.S. dollar is at $0.93 of the of the European currency after falling to as low as $0.88 in recent trading.

U.S. currency is gaining strength after Fed chair Jerome Powell announced last week the central bank would only raise interest rates by 25 basis points.

The price of gold has taken a hit since the decision as well, slipping around 5% the last week.

Meanwhile, the U.S. dollar equals $0.83 of the Pound sterling and $132.07 of the Japanese Yen.

ON Semiconductor Corp. on Monday reported fourth-quarter net income of $604.3 million.

The Phoenix-based company said it had profit of $1.35 per share. Earnings, adjusted for one-time gains and costs, came to $1.32 per share.

The results surpassed Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.27 per share.

The semiconductor components maker posted revenue of $2.1 billion in the period, also beating Street forecasts. Twelve analysts surveyed by Zacks expected $2.08 billion.

For the year, the company reported profit of $1.9 billion, or $4.24 per share. Revenue was reported as $8.33 billion.

For the current quarter ending in March, ON Semiconductor Corp. expects its per-share earnings to range from $1.02 to $1.14.The company said it expects revenue in the range of $1.87 billion to $1.97 billion for the fiscal first quarter.

TECHNOLOGY

Elon Musk says Twitter is 'trending to breakeven,' last three months were 'extremely tough'

Elon Musk said on Sunday that he "had to save Twitter from bankruptcy," but the platform is "now trending to breakeven" after his purchase last October.

Twitter CEO Elon Musk disclosed details on Twitter's financial struggles.

PayPal logo seen on a smartphone in front of the same logo displayed in this illustration taken Sept. 8, 2021. (Reuters/Dado Ruvic/Illustration)

A U.S. appeals court has revived a U.S. Consumer Financial Protection Bureau rule governing how providers of digital wallets disclose commonly used fees to prepaid customers.

The U.S. Court of Appeals for the D.C. Circuit rejected an argument by PayPal Inc, one of the largest digital wallet providers, that the CFPB overstepped its authority by making fee disclosures mandatory, not optional.

Friday's decision reversed a Dec. 2020 ruling by U.S. District Judge Richard Leon in Washington, D.C., who said the CFPB lacked power under the federal Electronic Funds Transfer Act or the 2010 Dodd-Frank financial reforms to impose a mandatory "model clause" for the fees.

ECONOMY

Dell to cut 6,650 jobs amid diminishing demand for company's computers

Dell Technologies Inc. will eliminate about 6,650 jobs due to a decline in demand for the company's personal computers. This is about 5% of Dell's global workforce.

Dell is the latest tech giant to announce sizeable layoffs following the likes of Google, Amazon and Microsoft to name a few.