After Hours Summary: SEDG +18%, AIG +6.5%, KLAC -3% among notable earnings/guidance moversAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SEDG +18.1%, EVER +10.1% (light volume), AVID +9.7%, DCO +7.1%, AIG +6.5%, GWPH +4.9%, FMC +3.9% (light volume), ENSG +3.8% (also announces home health, hospice, and senior living spin-off), COHU +3.4%, LCI +2.4%, FN +2.2%, FRTA +2%
Companies trading higher in after hours in reaction to news: OSMT +53.4% (announces 'positive' topline results of its second Phase III efficacy and safety clinical trialof RVL and long-term Phase III safety study for the treatment of ptosis), COOP +4.7% (ticking higher after CFO disclosed the purchase of ~110K shares worth nearly $1 mln), FNKO +3.2% (following exec appearance on MadMoney), PINC +2.8% (ticking higher; announces exit from specialty pharmacy business; to sell certain assets for $22.5 mln; gives adj. EBITDA guidance), UVE +1% (announces new $40 mln share repurchase authorization), ARNC +0.6% (CEO/Chairman bought via trust 50K shares and Director Gupta bought nearly 23K shares), OXY +0.4% (Anadarko Petroleum [APC] Board determines revised proposal from Occidental constitutes a "superior proposal")
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: XENT -16.3% (also announces departure of Lisa Earnhardt as CEO), TXMD -15.2%, NLS -14.8%, PAHC -12.5% (light volume), HIIQ -9.1%, FRAC -7.3%, TACO -6.1%, GLUU -5.4%, AEIS -4.6% (light volume), RCII -4.2%, KLAC -3.4%, RP -1.8%
Companies trading lower in after hours in reaction to news: TWST -5.5% (announces public offering of 3.0 mln shares of common stock), SGMO -4.9% (ahead of earnings on May 8), PMT -3.1% (announces public offering of 8.0 mln common shares), BYND -1.7% (modestly pulling back despite being initiated with a Outperform at Bernstein), O -1.1% (commences public offering of 11.0 mln shares of common stock), UPLD -1% (commences 2.75 mln common stock offering), YETI -1% (files for 9.5 mln share common stock offering by selling shareholders), CAT -0.9% and AAPL -0.7% (in reaction to comments from USTR Lighthizer confirming that tariffs will rise on Friday)
Israel Blames Islamic Jihad for Spoiling Gaza Truce Talks
Officials in Israel see Gaza’s second-largest militant group as stoking the border conflict in defiance of the Palestinian strip’s ruler Hamas
TEL AVIV—Israeli officials say they are increasingly concerned that Gaza’s second-largest militant group, Palestinian Islamic Jihad, is stoking conflict that neither Israel nor the strip’s ruler Hamas wants.
Israel’s military noted Islamic Jihad’s role in the launching of nearly 700 rockets and mortars this weekend, in contrast to its customary practice of holding Hamas solely responsible for violence emanating from the enclave.
Israel responded by hitting what it said was more than 350 military targets in Gaza. The violence ended early Monday morning in an apparent cease fire, after four Israeli citizens and 25 Palestinians were killed—the deadliest two days of fighting since the 2014 Israel-Gaza war.
Israeli analysts said the Israeli military is training a spotlight on Islamic Jihad because it believes the group has become more powerful. The group holds more of the 10,000 rockets that are in Gaza than Hamas does, say officials familiar with the matter. Islamic Jihad has 6,000 fighters and 12,000 activists, according to Israeli media.
“Israel is a bit concerned with regard to the strengthening process that Islamic Jihad is going through. It’s become too dangerous,” said Kobi Michael, a senior researcher at the Institute for National Security Studies in Tel Aviv.
Both Hamas and Islamic Jihad are funded by Iran, have called for the destruction of the Israeli state and are U.S.-designated terror groups. But Israeli officials have begun to point publicly to what they say are tensions between them following this weekend’s violence and other confrontations in the past months.
Israeli military officials said Islamic Jihad kicked off a cycle of violence by having its snipers target Israeli soldiers on Friday without Hamas’s knowledge.
Hamas’s leader, Ismail Haniya, said the violence resulted from Israel’s shooting of demonstrators protesting at the border on Friday and Israel’s failure to implement previous truce arrangements.
“Given that the Israeli occupation has refused to implement the cease-fire understandings and stalled on time to evade them, it has provoked the anger of the beleaguered people in Gaza,” Mr. Haniya said Sunday in a statement in Arabic. He credited militants in Gaza with responding “to the Israeli attacks calculatedly.”
Israel says deadly force is sometimes necessary to protect its citizens.
However it began, the round of combat lasted longer and was more deadly than any of the preceding battles over the past year.
Before the latest violence, Israel’s military took the unusual step of blaming Islamic Jihad and its Gaza City commander last week for a rocket that was fired toward a southern Israeli coastal town and fell into the sea.
Israeli military officials say Islamic Jihad is trying to spark violent escalation amid complicated longer-term truce talks with Hamas, brokered by the United Nations and Egypt. Israel and Gaza militants have inched closer to war in the past year during oft-violent protests at the border during weekly Friday demonstrations.
Islamic Jihad is trying to “interfere with the process leading to an arrangement and cause the security situation to deteriorate while maintaining a low presence,” the Israeli military said in a statement last week.
The militant group didn’t immediately respond to a request for comment.
Both Israeli and Gaza officials said another violent flare up was possible in the coming weeks.
“The battle is not over,” Prime Minister Benjamin Netanyahu said in a statement. “We are preparing for what’s ahead.”
Iran gives both Hamas and Palestinian Islamic Jihad about $60 million annually, an intelligence official said. Hamas draws other revenue through its governance of Gaza.
Israeli military officials and analysts say Islamic Jihad is strongly influenced by Iran, whereas Hamas has more autonomy in its decision making on the strip.
In recent years, Hamas leadership has said it would accept the state of Israel within its pre-1967 borders, but Islamic Jihad has rejected this. Still, Hamas members continue to call for Israel’s destruction.
The U.S., which designated Islamic Jihad as a terror organization in 1997, says Islamic Jihad is committed to destroying Israel with the aim of creating an Islamic state that would include the West Bank, Gaza and Israel.
Israel could even clandestinely find common cause with Hamas against Islamic Jihad to make sure cease-fire understandings hold, said Mr. Michael, the researcher.
Of 25 Palestinians killed in Israeli strikes retaliating for the barrage of rockets since Saturday, at least eight belonged to Islamic Jihad, according to the group’s website. At least one belonged to Hamas, according to the group’s website and Israeli officials. Several others were civilians, Gaza officials say.
Neither Hamas nor Islamic Jihad have publicly said that they are divided. Neither group claimed responsibility for the shooting that Israel said kicked off this weekend’s violence. Both said they coordinated throughout the weekend’s fighting.
Analysts in Gaza also played down reports of divisions between Hamas and Islamic Jihad and said the events over the weekend can be explained more by the enclave’s flatlining economy, made worse by years of fighting and blockades. They also pointed to Hamas’s rift with the Palestinian Authority in the West Bank, which has withheld salaries from Gaza.
“Israel wants to be released from its responsibility so it invented this story that Islamic Jihad started the escalation,” said Ibrahim Madhoun, a political analyst with ties to Hamas. “The escalation began because Israel continues to kill peaceful protesters and because Netanyahu hasn’t stood by his agreements.”
Treasury Department Rejects Democrats’ Request for Trump Tax Returns
Mnuchin says request lacks a legitimate legislative purpose
WASHINGTON—Treasury Secretary Steven Mnuchin rejected House Democrats’ request for President Trump’s tax returns on Monday, contending that lawmakers were trying to expose details of the president’s finances rather than conducting legitimate legislative oversight.
The move, which Mr. Mnuchin had signaled for weeks, will likely send the dispute between the executive and legislative branches into federal court. Judges may take months or years to resolve the legal question about the boundaries of congressional investigations.
Mr. Trump has refused to release his tax returns voluntarily, breaking a four-decade tradition among presidents and major-party candidates. He has cited a variety of reasons, including the fact that he won the presidency without releasing tax returns and the advice of his tax lawyers to avoid releasing returns while under audit.
Lighthizer Says China ‘Reneging’ on Trade-Talk Commitments
U.S. trade representative says U.S. to raise tariffs to 25% on $200 billion in Chinese goods
WASHINGTON—Top U.S. officials accused Chinese officials of backtracking in high-stakes trade talks Monday and said $200 billion in Chinese goods will face higher tariffs starting Friday.
“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made, in our judgment,” U.S. Trade Representative Robert Lighthizer told reporters in Washington.
Mr. Lighthizer said the administration would formalize a long-delayed increase in tariffs on $200 billion of goods to 25% from 10%, effective Friday. The comments from Mr. Lighthizer, who was joined by Treasury Secretary Steven Mnuchin, echoed a tweet from President Trump on Sunday accusing China of trying to “renegotiate” and warning of raising the tariffs.
Mr. Lighthizer said he expected to continue with talks with Chinese counterparts in Washington on Thursday and Friday. That would mark a delay from previous expectations of a round set to start Wednesday—one that many observers hoped would yield a deal.
Mr. Mnuchin said while some concerns arose last week when he and Mr. Lighthizer were in Beijing for talks, they received some reassurances. Then, over the weekend, the talks went “substantially backward,” Mr. Mnuchin said.
Some observers thought Mr. Trump’s tweet Sunday was an effort to put more pressure on China to achieve a better deal. Yet the briefing from Messrs. Mnuchin and Lighthizer made it clear there are deep concerns about the direction of the talks.
The senior officials declined to specify areas where they think the Chinese side backtracked. “There was concern about the form of the agreement and a redrafting of it” that would pull back from important commitments, Mr. Lighthizer said.
A spokesman for the Chinese Embassy in Washington didn’t immediately respond to a request for comment on the talks Monday.
Short positions on Lyft cast shadow over Uber IPO
Negative sentiment surrounds ride-sharing company as short-sellers increase their bets
Short-sellers have been increasing their bets against Lyft ahead of the ride-sharing company’s earnings report on Tuesday, casting a shadow over the imminent initial public offering of rival Uber.
The negative sentiment around Lyft, which has suffered a sharp fall in its share price since going public in March, underlines investor nervousness over the ride-sharing industry just as Uber prepares to raise $9bn later this week.
As of Friday, more than 19m Lyft shares — about 60 per cent of the freefloat — were on loan, indicating that the stock is subject to heavy short selling, according to data from IHS Markit.
Short-sellers have been increasing their bets against the stock over the past two weeks, the data showed.
Short-sellers borrow shares and sell them with the agreement to replace them later when, they believe, the shares will be trading at an even lower price. Lyft has been dogged by heavy short selling since it listed in March. After an initial pop at its debut on Nasdaq, shares sank and now trade well below the offer price of $72.
Shares were trading down 3.2 per cent at $60.52 on Monday, having rebounded from a low of $54.32 on April 26.
Analysts expected Lyft to report growth in riders and revenue in the first quarter, but also deeper losses from a year ago. That would be a continuation of trends for the company, which has pushed to gain market share from its larger rival Uber. This has boosted the amount of money it takes in from rides, but has also ballooned losses due to hefty spending on fare subsidies and driver incentives.
Lyft is expected to report revenues of $739m, up 86 per cent from the same quarter last year, according to consensus estimates collected by S&P Global Market Intelligence. Its loss before interest, tax, depreciation and amortisation is forecast to widen from $239m to $275m.
“Lyft’s shares have pulled back following the IPO; we expect shares to get back on track and view solid earnings and [second quarter] guidance as a key catalyst to reaffirm Lyft’s position and remind investors of the massive opportunity [long-term],” wrote John Blackledge, analyst at Cowen, in a note to clients. He expects the number of active riders to rise 40 per cent to 19.7m.
Daniel Ives, managing director at Wedbush, the broker, said that short-sellers could be hit if the stock price were to appreciate, forcing them to cover their positions at a loss.
“You could definitely have a short squeeze just given how crowded of a short it is going into this first earnings,” said Mr Ives, who has cut his revenue estimate for Lyft by 2 per cent.
He added that “you would have to see great numbers and robust guidance. If you get any hint of them tripping over their shoelaces in the first quarter . . . that would be disastrous.”
Uber has been pitching its IPO to investors ahead of a listing on the New York Stock Exchange expected on Friday. Its offering could raise up to $9bn, dwarfing the $2.3bn Lyft raised in its March IPO. Uber has said it will continue to spend aggressively to protect its market share worldwide.
Canadian retail operator Hudson’s Bay said Monday it was pursuing strategic alternatives such as a sale or merger for its department store Lord & Taylor, which has struggled to attract shoppers.
Lord & Taylor, founded in 1826 and the oldest US department store, has seen its fortunes fall while Hudson’s Bay’s luxury department store Saks Fifth Avenue has managed to increase sales.
Brick-and-mortar retailers like Lord & Taylor have faced hard times as online shopping on sites including Amazon gains popularity. Retailer Walmart announced last year it would offer a Lord & Taylor flagship store on its website.
Hudson’s Bay said in a prepared statement that its plans to find a buyer for Lord & Taylor are part of efforts to focus on its “greatest opportunities.”
“Over the last year, we’ve taken bold actions and made fundamental fixes that have resulted in a far stronger, more capable (Hudson’s Bay), having returned to positive operating cash flow, increased profitability and strengthened the balance sheet,” Hudson’s Bay chief executive Helena Foulkes said in a press release.
Co-working space landlord WeWork bought Lord & Taylor’s flagship on Fifth Avenue in New York City for $850 million two years ago. Hudson’s Bay has already announced plans to close up to 10 Lord & Taylor locations. The chain had 45 stores as of Feb. 2 and three outlet shops.
Earlier this year, Hudson’s Bay opened a renovated main floor at the Saks Fifth Avenue flagship in New York.
Last year, Hudson’s Bay was trying to revive Lord & Taylor’s fortunes, Reuters reported. One option it had considered was buying retailer Bon-Ton Stores, which had filed for bankruptcy, and merging it with the chain.
A sale was a possibility at the time, but was considered unlikely given that there were few potential buyers who would pay top dollar, Reuters reported, citing sources familiar with the matter.
Hudson’s Bay has retained PJ Solomon as its financial adviser for the review of the Lord & Taylor business, the company said.
U.S. Says It Will Raise Tariffs After China Reneges On Promises
