Editor’s Note: Karl Utermohlen will be on vacation from Dec. 20 through the end of the year. Stocks to Watch will return in the new year.
The week’s hot-button topic is the fate of the GOP tax plan, which Congress will vote on this coming week. Meanwhile, the Nasdaq Composite may be headed towards 7,000 as it gained 0.8% yesterday, while the S&P 500 Index surged 0.6% and the Dow Jones Industrial Average posted a 0.6% gain.
Here’s what Monday afternoon brought:
McDermott International Inc (MDR)
McDermott International announced that the company is merging with a fellow transportation services company.
The company will be joining forces with Chicago Bridge & Iron Company N.V. (NYSE:CBI) in a merger that will combine a number of crafts from the two companies, including engineering, procurement and distribution.
The deal is slated to be an all-stock transaction that is worth about $6 billion. The new CEO of the combined company will be McDermott’s CEO David Dichson, and it will be headquartered in Houston.
Shareholders from McDermott’s will own about 53% of the combined company once the deal is completed, while CB&I investors will have the rest of the combined company, also garnering a pro-forma annual revenue of roughly $10 billion.
The agreement is expected to be in effect as of the second quarter of 2018.
MDR shares fell 2.6% after hours.
Kratos Defense & Security Solutions, Inc (KTOS)
Kratos Defense & Security Solutions recently inked a deal that will help it get unmanned drones.
The company announced on Monday that its Unmanned Systems Division (USD) recently earned a single award IDIQ contract worth up to $27 million from a U.S. Government Agency that deals with unmanned drone systems.
Kratos Defense & Security Solutions’ USD segment focuses on the design, development and fielding of high-performance jets powered by unmanned aerial drone systems for combat and tactical applications.
“Work under this contract will be performed at secure Kratos facilities and at government locations,” the company said in its press release. “Due to competitive, customer related and other considerations, no additional information will be provided at this time.”
KTOS stock gained 2.8% on Monday.
Heico Corp (HEI)
Heico reported on its fourth quarter late on Monday, topping expectations.
For the period, the jet engine and aircraft replacement parts manufacturer earned $53.7 million in net income, amounting to roughly 62 cents per share. Analysts were calling for earnings of 57 cents per share.
Heico’s adjusted earnings wasn’t the only segment to surpass estimates as revenue came in at $421.2 million, ahead of the $407.7 million that analysts polled by Zacks Investment Research had called for.
For the full fiscal year, Heico reported earnings of $186 million, which tallied up to $2.14 per share. Revenue for fiscal 2017 amounted to $1.52 billion.
HEI stock gained 1.1% after the bell.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.