It was another profitable day for most major U.S. indices as crude oil fell 0.3% and defensive telecoms surged 1.1%. The S&P 500 Index and Nasdaq Composite wafted up 0.2% apiece, while the Dow Jones Industrial Average hiked 0.4% higher by day’s end.
Here’s what you should know:
Ford Motor Company (F)
Ford announced plans to cut costs aggressively late yesterday.
The automaker’s CEO Jim Hackett and the rest of the company’s executives are seeking to help boost its profits and revenue on its most valuable products, including trucks and SUVs.
Simultaneously, Ford will move away from cars, one of its weakest spots. The company will cost more on resources for electric and autonomous driving technology, but it will have to cut costs to do so.
“When you’re a long-lived company that has had success over multiple decades, the decision to change is not easy — culturally or operationally,” Hackett said. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”
Ford said it will reallocated roughly $7 billion to bolster the company’s development and production of trucks and SUVs, reducing expenses for less profitable cars and sedans.
F stock edged 0.4% higher after hours Tuesday.
Office Depot Inc (ODP)
Office Depot shares crashed late yesterday following the company’s acquisition announcement.
The office supplies retailer said it will buy CompuCom Systems Inc. for roughly $1 billion. The move is the first step towards a shift that will see Office Depot move “from a traditional office products retailer to a broader business services and technology products platform.”
Private-equity firm Thomas H. Lee Partners LP was the owner of CompuCom, and the acquisition will force Office Depot to pay down CompuCom’s debt, while also issuing new Office Depot shares.
The deal will be a profitable one for Office Depot as it will add $1.1 billion of revenue and more than $40 million within two years in cost synergies. The move forced the company to lower its 2017 outlook as adjusted operating income will be between $400 million and $425 million, down from an estimate of $500 million.
The downgrade came as a result of sales hurt by hurricanes, weaker back-to-school sales and store traffic, as well as a temporary hike in supply-chain costs, Office Depot said.
ODP stock plummeted 8.5% after the bell Tuesday.
Verizon Communications Inc. (VZ)
Verizon Communications announced just how widespread the 2013 Yahoo hack was.
The carrier — which recently acquired Yahoo — said that the hack from four years ago in which hackers entered into Yahoo’s network actually affected all Yahoo accounts.
This amounts to roughly 3 billion accounts affected by the breach, which is a considerable hike considering previous announcements estimated only 1 billion accounts were affected.
VZ stock was trading flat after Tuesday’s market close.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.