Tenet Healthcare to buy Vanguard Health for $4.3 billion

DALLAS, Mon Jun 24, 2013 — U.S. hospital operator Tenet Healthcare Corp. will buy smaller rival Vanguard Health Systems Inc. for $4.3 billion including debt to expand into new geographies.

The offer of $21 per share represents a premium of 70 percent to Vanguard’s Friday close. Vanguard shares were up 66 percent at $20.51 in thin trading before the bell.

The companies said the deal includes the assumption of $2.5 billion of debt.

Tenet said it expects the deal to add to earnings in the first year and estimates annual savings of $100 million to $200 million.

“This acquisition will take Tenet into new geographic markets, expand the breadth of our service offerings, diversify our earnings sources and increase the benefits we expect to realize under healthcare reform,” Tenet CEO Trevor Fetter said in a statement on Monday.

Tenet has hospitals in California, Texas, several states in the U.S. Southeast and in Pennsylvania.

Vanguard owns and operates 28 acute care and specialty hospitals in the U.S. Midwest, South and Massachusetts.

U.S. hospital stocks have rallied this year as investors expect the companies to benefit from President Barack Obama’s healthcare reform that will expand insurance coverage to more Americans. The reform has also spurred consolidation in the sector.

Tenet has secured fully committed financing from Bank of America Merrill Lynch.

P&G CEO switch will not lead to big strategy change: CFO

CINCINNATI, Fri May 24, 2013 — Procter & Gamble Co. said on Friday the surprise return of A.G. Lafley as chairman and chief executive was not an indication of any bigger problems at the world’s largest consumer products maker.

Lafley replaces Bob McDonald, effective immediately, at P&G, which is in the midst of a major restructuring.
“This change very simply reflects Bob McDonald’s decision to retire and the board’s view that A.G. Lafley was currently the best person to replace Bob and build on the momentum that Bob has initiated and led,” Chief Financial Officer Jon Moeller said on a very brief conference call for analysts on Friday morning.
The CFO said there would not be any dramatic change in strategy due to the switch in CEOs.
The announcement late Thursday was “not indicative of any kind of bigger problem or financial issue,” he said.
Shares of P&G rose to $81.90 in premarket trading after closing at $78.70 on Thursday, before the decision was announced. P&G, the maker of Tide detergent and Gillette razors, did not give a specific reason for McDonald’s departure other than to say that he is retiring. McDonald is 59 and Lafley is 65.
Moeller was the only speaker on the call and he did not take questions from analysts.
He said P&G, which maintained its financial guidance as it made Thursday’s announcement, will continue to focus on maintaining its momentum in developing markets and strengthening its core developed market business, and that the company continues to be “optimistic.”

 

P&G forecasts profit below Street, shares drop

CINCINNATI, Wed Apr 24, 2013 — Procter & Gamble Co. on Wednesday forecast current-quarter profit below Wall Street expectations and year-ago levels, sending shares 3.5 percent lower in early trading.

The world’s largest household products maker also posted fiscal third-quarter profit that topped estimates despite sales that were weaker than both the company and analysts had anticipated.

P&G has been trying to reinvigorate itself under Chief Executive Bob McDonald. The company has held or gained market share in more of its businesses in the latest quarters after stiffer competition from rivals like Unilever and Colgate-Palmolive Co.

While products such as Tide Pods have boosted U.S. sales, P&G still needs to figure out the formula for getting products such as Pantene shampoo to stand out among competitors, it said. P&G plans to promote several brands during the current quarter, including Olay skin care products.

Net sales decreased in the hair care and skin care business in the latest quarter.

“We’ve got a little bit more work to do” in skin care, McDonald told reporters.

In February 2012, McDonald unveiled a $10 billion restructuring plan including thousands of job cuts after P&G acknowledged it was not nimble enough, especially in emerging markets.

Shares of P&G fell to $79.65 in premarket trading after closing at an all-time high of $82.54 on Tuesday

Lockheed sees higher earnings, weaker sales for 2013

BETHESDA, Md., Thu Jan 24, 2013 — Lockheed Martin Corp., the Pentagon’s biggest supplier, said on Thursday that it expected higher earnings this year despite weakening sales, citing a record backlog and continued efforts to cut costs.

Lockheed, which builds everything from F-35 fighter jets, national security satellites to new coastal warships, said earnings per share had dropped 19 percent to $1.73 in the fourth quarter from $2.14 a year earlier, reflecting a large noncash pension adjustment, higher income tax expenses and a special charge for job cuts in its aeronautics division.

Analysts polled by Thomson Reuters I/B/E/S had expected fourth-quarter earnings of $1.82 a share.

Lockheed said it expected earnings per share to rise to between $8.80 and $9.10 in 2013, noting that its outlook assumed that the U.S. Congress would avert $500 billion in additional Pentagon spending reductions known as “sequestration” that are due to take effect over the next decade, starting in March.

Apple results spur price target cuts, shares fall 9 percent

CUPERTINO, Calif., Thu Jan 24, 2013 — Weaker-than-expected holiday sales of Apple Inc.’s iPhone reinforced fears that it is losing its dominance in smartphones, driving its shares down 9 percent in premarket trading and drawing another round of stock price target cuts.

Fourteen brokerages including Barclays Capital, Mizuho Securities USA, Credit Suisse, Deutsche Bank, Raymond James, Robert W. Baird & Co. and Canaccord Genuity cut their price target on the stock by $142 on average to $599.

Apple’s shares closed at $514 Wednesday on the Nasdaq.

Jefferies & Co. cut its rating on Apple’s stock to “hold” from “buy” and slashed its share price target by $300 to $500.

Jefferies analyst Peter Misek, who has previously raised red flags about Apple cutting orders to suppliers, said the iPhone slowdown was “real and material” and here to stay.

“We think Apple is losing the screen-size wars,” Misek said, noting that demand was moving away from the iPhone’s 3.5-inch and 4-inch screens to screens of 5 inches offered by rivals such as Samsung Electronics Co. Ltd, HTC Corp. and Nokia Oyj.

Misek is a top-rated analyst for the accuracy of his earnings estimates for Apple, according to Thomson Reuters StarMine.

Apple said it shipped a record 47.8 million iPhones in the December quarter, but this trailed the average analyst forecast of 50 million units.

3M fourth-quarter profit meets Wall Street view

ST. PAUL, Minn., Thu Jan 24, 2013 — 3M Co. reported a 3.9 percent rise in quarterly profit, matching expectations, on solid growth in sales of its wide array of products ranging from Post-It notes to films used in television screens.

The company said on Thursday that fourth-quarter profit increased to $991 million or $1.41 per share, from $954 million, or $1.35 per share, a year earlier.

Profit met analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Revenue rose 4.2 percent to $7.39 billion from $7.09 billion. Wall Street had looked for $7.18 billion.

The company confirmed its 2013 profit forecast of $6.70 to $6.95 per share.

CEO Inge Thulin, coming to the end of his first year in the top job, has said one of his first priorities is to prune smaller, underperforming businesses and pursue fewer, but larger acquisitions.