Deutsche Bank analyst Ross Sandler said in a research note that shares had fallen on concerns about the company's billings growth for the third quarter. While some analysts are anticipating billings will be down, which would cause its revenue to come in below forecasts, Sandler expects the company's revenue to meet average expectations. He also said that eight of the company's nine billing units should improve. The final one is still in ramp-up stages.
Sandler noted that the company has rolled out a number of innovations that have gone largely unnoticed by the investment community, which should help its business in the long run.
The analyst reiterated a "Buy" rating and gave a $17 price target.
Meanwhile, Goldman Sachs analyst Heath Terry said he expects Groupon's results will modestly exceed market expectations on gains in its North American and international business. The analyst said that traffic was robust in the third quarter and reiterated a "Buy" rating with a $13 price target.
Groupon named its co-founder Eric Lefkofsky as CEO in August and said it plans to buy $300 million of its own stock over the next two years. Lefkofsky replaced Andrew Mason, who was fired from the online deals site in February amid growing concerns about its financial performance.
"Though we reviewed and bid on a considerable number of sponsor finance and buyout opportunities, originations were low this quarter," said Gordon O'Brien, President Specialty Finance and Operations. "However, we anticipate considerable originations in the fourth quarter, including the already completed financing of the combination of CML with AAIPharma, as well as investments to incubate assets for funds to be managed by our asset management business and an increase in sponsor finance activity."
"In the third quarter, our NAV per share grew by $0.26 and is 12% above its level a year ago, and we materially improved our credit facilities," said Malon Wilkus, Chairman and Chief Executive Officer. "After the quarter closed, we recapitalized our operating company CML, while combining it with AAIPharma, growing the combined entity into one of our largest operating companies. American Capital provided all of the funding for the transaction, but we do not plan on syndicating the senior debt, as we have in past One Stop Buyouts®. This will allow us to earn interest income on the senior loan, and our loan will not have the usual prohibition against the payment of cash dividends to shareholders, allowing CML and AAIPharma to pay cash dividends to American Capital and their other shareholders. We generally intend to use this approach going forward on companies where we own at least 80% of the common equity. We plan to report interest and dividend income from our 80% or greater American Capital owned operating companies, as we have with our operating company American Capital Asset Management. We believe this approach provides our shareholders more transparency into the performance of our operating companies."
"We were extremely active in the quarter on the right side of our balance sheet," said John Erickson, Chief Financial Officer. "We amended our secured term loan facility to significantly lower our borrowing costs and provide increased flexibility. Our blended cost of debt at quarter end is now at 5.1%. Furthermore, we issued $350 million of unsecured senior notes and S&P increased our debt rating to BB- from B+. We are managing our balance sheet with a goal of becoming an investment grade credit. Lastly, we repurchased $176 million of our stock, generating $0.29 of accretion to September 30, 2013 NAV per share, and recently extended our Stock Repurchase and Dividend Program through 2014."
"Within American Capital Asset Management, our Leveraged Finance Group closed on its third managed CLO in the past year, bringing their earning assets under management to $1.5 billion," continued Mr. Erickson. "However, reduction in projected management fees from the two mortgage REITs that it manages caused a net $119 million decline in the valuation of ACAM."
Apollo Global: We raise our 3Q ENI and cash earnings estimates by more than 20% for Apollo as we anticipate another exceptional quarter for fund performance and active portfolio harvesting; in addition, we factor in 10-15% accretion relating to the recent closing of the Aviva U.S. transaction (please see our research piece published today, “Getting Wiser on Athene”). With respect to the monetization environment, Apollo completed eight secondary offerings during 3Q including transactions for major investments in Lyondell, Berry and Realogy. We raise our target price to $45 (old: $40).
Nov 14, 2013, 12:27pm CST
YRC Worldwide CFO: No Teamsters deal this week
Jamie Pierson, CFO, YRC Worldwide Inc.
Andrew C. Grumke
Jamie Pierson, CFO, YRC Worldwide Inc.
Reporter- Kansas City Business Journal
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YRC Worldwide Inc.’s negotiations with the International Brotherhood of Teamsters will not be finished by Friday, according to a report filed by Bloomberg.
YRC CFO Jamie Pierson told Bloomberg that he did not expect to see negotiations completed before a Nov. 15 goal the company set when officials met with leaders of the Teamsters Nov. 5 in Dallas. YRC officials have said a deal must be completed soon in order for the Overland Park-based trucking company (Nasdaq: YRCW) to refinance before its debts begin to come due in February.
YRC formally acknowledged it is in “discussions” with the labor union that represents more than 25,000 of the company’s 32,000 employees but has not commented further on the situation. CEO James Welch did not take analysts’ questions on the subject during the company's quarterly earnings conference call.
Representatives of the Teamsters’ national office in Washington have also declined to comment on the negotiations.
YRC is seeking an extension or an amendment to its current contract with the Teamsters. The two parties current contract runs through March 2015. YRC has told the union it needs to extend the life of that contract into 2019. The company says an agreement is necessary for it to pay $1.4 billion in debts that were incurred under the watch of former CEO Bill Zollars which will come due in 2014 and 2015.
The existing labor agreement is based on three rounds of concessions the company and the union agreed on between 2008 and 2010. In those concessions, the union consented to a 15 percent cut in wages, suspension of pension payments and reduced vacation time for members. YRC began to make pension payments again in early 2012 at 25 percent of the rate paid in 2009.
The deal saves YRC an estimated $350 million in labor costs annually. It also gave the Teamster employees stock in the company and granted the labor union the right to nominate two members to the YRC board.
September 18, 2013
06:43 EDT NOK Nokia upgraded to Outperform from Neutral at Credit Suisse
Credit Suisse upgraded Nokia based on valuation creation of its vast patent portfolio unlocked by the Microsoft deal.