3 Stocks to Watch on Wednesday: Axalta Coating Systems Ltd (AXTA), Guess?, Inc. (GES) and Salesforce.com, Inc. (CRM)

Nippon may buy AXTA, GES posts in-line earnings and CRM profits impress

By Karl Utermohlen, InvestorPlace Writer

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U.S. equities were soaring ahead of Black Friday and the holiday shopping spree, while crude oil gained 0.7%. The S&P 500 Index gained 0.7% Tuesday, reaching a new high, the Dow Jones Industrial Average rose 0.7% and the Nasdaq Composite surged 1.1%.

3 Stocks to Watch on Wednesday: Axalta Coating Systems Ltd (AXTA), Guess?, Inc. (GES) and salesforce.com, inc. (CRM)Several companies posted their latest quarterly earnings results, including Guess?, Inc. (NYSE:GES) and Salesforce.com, Inc. (NYSE:CRM), while Axalta Coating Systems Ltd (NYSE:AXTA) may be bought by a different company than it had originally planned.

Axalta Coating Systems Ltd (AXTA)

Axalta may soon be bought by Nippon Paint Holdings.

The company reportedly made an all-cash offer on Tuesday to buy the U.S. coatings company, combining the company’s paint business with Nippon’s own assets with the industry.

There had previously been talks of Axalta merging with peer Akzo Nobel, but the new offer from Nippon has resulted in these merger talks ending, according to a source close to the matter.

Part of the reason why talks between Axalta and Akzo came to a halt was due to the fact that the companies were looking for a “merger of equals,” with terms that they could not agree on.

Nippon is Japan’s biggest supplier offer, and the offer was made at a premium to where AXTA shares closed on Monday at $33.54.

AXTA stock gained 3.9% after the bell Tuesday.

Guess?, Inc. (GES)

Guess posted earnings that were in line with expectations on Tuesday.

The company posted third-quarter adjusted earnings of 12 cents per share, which were in line with the Wall Street consensus estimate of 12 cents per share for the period.

Revenue was below the mark for Guess at $554.1 million to close out the fall, while analysts were calling for revenue of $569.75 million, falling 13.4% year-over-year.

Retail comparable sales including e-commerce dropped 10% in U.S. dollars and 11% in constant currency. In Europe, revenue was higher by 19%, while sales gained 17% in Asia.

“I expect the profitability in the Americas to continue to benefit from our cost reduction and margin improvement initiatives,” said Guess CEO Victor Guerrero. “Finally, we remain committed to our long-term goal of 7.5% operating margin that we expect to achieve through revenue growth and disciplined cost control.”

For its fourth quarter, Guess projects that it will earn between 48 and 55 cents per share on an adjusted basis, compared to the Wall Street prediction of 52 cents per share.

GES stock plummeted 12.2% after hours.

Salesforce.com, Inc. (CRM)

Salesforce shares took a hit despite the company’s positive quarter.

For its third quarter of fiscal 2018, the website earned 39 cents per share on an adjusted basis, topping the consensus estimate of 37 cents per share, according to Thomson Reuters.

The company’s revenue came in at $2.68 billion, growing 25% year-over-year. Analysts polled by Thomson Reuters had expected slightly lower revenue at $2.65 billion.

Most of Salesforce’s revenue comes from its subscriptions and support, which are part of its business segment. This area brought in revenue of $2.49 billion, beating the $2.45 billion that analysts polled by FactSet had forecast.

The company fell short in its professional services segment as Salesforce only brought in $193.7 million in this area, below the estimate of $201.4 million, per FactSet.

For its fourth quarter, the company posted a guidance of 32 to 33 cents per share on an adjusted basis, below analysts’ consensus estimate of 34 cents per share, according to Thomson Reuters. Revenue is expected to be stronger at $2.80 billion to $2.81 billion, compared to Wall Street’s $2.79 billion.

For its full-year 2018 results, Salesforce unveiled an outlook of $10.43 billion to $10.44 billion in revenue. Analysts were calling for $10.39 billion in revenue for fiscal 2018.

CRM stock fell 1.6% Tuesday.

As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/11/stocks-watch-wednesday-axalta-coating-systems-ltd-axta-guess-inc-ges-salesforce-com-inc-crm/.

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