>>> Hess beats by $0.17, beats on revs

Hess beats by $0.17, beats on revs
  • Reports Q3 (Sep) loss of $1.03 per share, $0.17 better than the Capital IQ Consensus of ($1.20); revenues fell 38.3% year/year to $1.69 bln vs the $1.67 bln Capital IQ Consensus.
  • Oil and gas production increased to 380,000 barrels of oil equivalent per day (boepd) compared to 318,000 boepd in the third quarter of 2014
  • Oil and gas production in the Bakken was 113,000 boepd, up from 86,000 boepd in the year-ago quarter
  • Completed sale of 50% interest in Bakken Midstream, resulting in $3 billion of cash proceeds E&P capital and exploratory expenditures totaled $849 million in the third quarter, down from $1,371 million in the prior-year quarter.
Preliminary 2016 Guidance
  • E&P capital and exploratory expenditures are expected to be $2.9 billion to $3.1 billion, down approximately 27 percent from 2015 forecasted E&P capital and exploratory expenditures of $4.1 billion
  • Oil and gas production is forecast to be in the range of 330,000 to 350,000 boepd compared to projected production of 370,000 to 375,000 boepd in 2015, and 360,000 boepd in the fourth quarter of 2015

>>> General Dynamics beats by $0.15, beats on revs

General Dynamics beats by $0.15, beats on revs
  • Reports Q3 (Sep) earnings of $2.28 per share, $0.15 better than the Capital IQ Consensus of $2.13; revenues rose 3.1% year/year to $7.99 bln vs the $7.84 bln Capital IQ Consensus.
  • General Dynamics' total backlog at the end of third-quarter 2015 was $68.7 billion. The Aerospace group continued to experience steady demand in the quarter with order activity for each of the products in the Gulfstream portfolio. Also, each of the defense businesses had significant orders in the quarter. The estimated potential contract value, representing management's estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $25.5 billion. Total potential contract value, the sum of all backlog components, was $94.3 billion at the end of the quarter.

>>> Valero Energy beats by $0.13, beats on revs; co raises quarterly dividend 25

Valero Energy beats by $0.13, beats on revs; co raises quarterly dividend 25% to $0.50/share, seeing good seasonal demand for its products in Q4
  • Reports Q3 (Sep) earnings of $2.79 per share, ex-items, $0.13 better than the Capital IQ Consensus of $2.66; revenues fell 34.4% year/year to $22.58 bln vs the $19.45 bln Capital IQ Consensus.
  • Valero saw record volume of gasoline and diesel exports for a third quarter
  • Capital expenditures are expected to be within prior guidance of ~$2.65 bln for 2015 and consistent with prior guidance for 2016 at ~$2.4 bln.
  • The refining segment generated Q3 2015 operating income of $2.3 bln compared to $1.7 bln in Q3 of 2014.
    • The $631 mln increase in operating income primarily resulted from a $2.57 increase in throughput margin per barrel from $11.81 in Q3 of 2014 to $14.38 in Q3 of 2015, driven mainly by stronger gasoline and other product margins
  • Partially offsetting these factors were lower distillate margins and discounts for most sweet and sour crude oils relative to Brent crude oil.
  • Third quarter 2015 refining throughput volumes averaged 2.8 mln barrels per day, which was in line with Q3 of 2014.
  • Valero's refineries operated at 96% throughput capacity utilization in the third quarter of 2015.
  • The co delivered export volumes of 330 thousand barrels per day, a record for a third quarter.
  • "With strong product margins and healthy demand, we delivered solid results this quarter," said Gorder. "We are seeing good seasonal demand for our products in Q4."

>>> Walgreens Boot Alliance beats by $0.07, reports revs in-line; guides FY16 EP

Walgreens Boot Alliance beats by $0.07, reports revs in-line; guides FY16 EPS below consensus at midpoint -- buybacks suspended to fund RAD purchase
  • Reports Q4 (Aug) earnings of $0.88 per share, $0.07 better than the Capital IQ Consensus of $0.81; revenues rose 49.7% year/year to $28.52 bln vs the $28.52 bln Capital IQ Consensus.
    • Fourth quarter total sales for the Retail Pharmacy USA division were $19.9 billion, an increase of 4.7 percent over the year-ago quarter. Total sales in comparable drugstores increased 6.5 percent compared with the same quarter a year ago. Comparable retail sales increased 0.4 percent in the fourth quarter with an increase in basket size partially offset by lower customer traffic compared with last year's fourth quarter.
    • Fourth quarter total sales for the Retail Pharmacy International division were $3.5 billion. On a pro forma constant currency basis, comparable store sales in the fourth quarter increased 4.3 percent compared with the same period a year ago
  • Co issues downside guidance for FY16, sees EPS of $4.25-4.55, excluding non-recurring items, vs. $4.55 Capital IQ Consensus Estimate. This guidance assumes no material accretion from the agreement to acquire Rite Aid (as covered separately yesterday), which is expected to close in the second half of calendar 2016, but reflects an adverse impact on adjusted earnings per share due to the suspension of the balance of the co's $3 billion share repurchase program to partly fund the transaction [estimates likely incorporate the previously planned buyback].

>>> Hershey Foods beats by $0.04, misses on revs; lowers guidance (94.33)

Hershey Foods beats by $0.04, misses on revs; lowers guidance

  • Reports Q3 (Sep) earnings of $1.17 per share, $0.04 better than the Capital IQ Consensus of $1.13; revenues were unchanged from the year-ago period at $1.96 bln.
  • Co issues downside guidance for FY15, sees EPS at low end of prior range, or approximately $4.10 vs. $4.13 Capital IQ Consensus Estimate.
  • Sees full-year net sales about the same, to slightly up, versus 2014, including a net benefit from acquisitions and divestitures of about 1 percentage point and unfavorable foreign currency exchange of at least 1.5 percentage points. Excluding unfavorable foreign currency exchange rates, full-year net sales are expected to increase about 1.5% to 2.0%. This is less than the previously provided range of 3.0% to 4.0% due primarily to international macroeconomic challenges and the aforementioned third-quarter CMG marketplace trends.
  • Given year-to-date results and the impact of higher levels of international trade promotion, the company expects the full-year adjusted gross margin increase to be towards the low end of the estimated 135 to 145 basis point range.

>>> Intl Paper beats by $0.04, misses on revs

Intl Paper beats by $0.04, misses on revs
  • Reports Q3 (Sep) earnings of $0.97 per share, $0.04 better than the Capital IQ Consensus of $0.93; revenues fell 5.9% year/year to $5.69 bln vs the $5.85 bln Capital IQ Consensus.
  • "We remain confident in our ability to continue to deliver consistent, robust free cash flow and create long-term shareholder value, despite a global macro environment that remains challenged."

>>> Northrop Grumman beats by $0.56, beats on revs; guides FY15 EPS above consen

Northrop Grumman beats by $0.56, beats on revs; guides FY15 EPS above consensus
  • Reports Q3 (Sep) earnings of $2.75 per share, $0.56 better than the Capital IQ Consensus of $2.19; revenues fell 0.1% year/year to $5.98 bln vs the $5.86 bln Capital IQ Consensus. Total backlog as of Sept. 30, 2015, was $35.9 billion compared with $38.2 billion as of Dec. 31, 2014. Third quarter 2015 new awards totaled $4.8 billion, and new awards for the first nine months totaled $15.5 billion.
  • Co raises guidance for FY15, sees EPS of $9.70-9.80 vs. $9.67 Capital IQ Consensus Estimate, up from $9.55-9.70; sees FY15 revs of $23.6-23.8 bln vs. $23.69 bln Capital IQ Consensus Estimate.

>>> Starwood Hotels beats by $0.03, reports revs in-line; guides Q4 EPS in-line

Starwood Hotels beats by $0.03, reports revs in-line; guides Q4 EPS in-line
  • Reports Q3 (Sep) earnings of $0.74 per share, $0.03 better than the Capital IQ Consensus of $0.71; revenues fell 4.0% year/year to $1.43 bln vs the $1.43 bln Capital IQ Consensus. Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.4% in constant dollars (decreased 0.3% in actual dollars) compared to 2014. Systemwide REVPAR for Same-Store Hotels in North America increased 5.3% in constant dollars.
  • Co issues in-line guidance for Q4, sees EPS of 0.76-0.82 vs. $0.80 Capital IQ Consensus Estimate. Adjusted EBITDA is expected to be ~$300 mln to $315 mln. REVPAR increases at Same-Store Systemwide Hotels Worldwide of 3% to 5% in constant dollars.
Note: Interval Leisure Group (IILG) announced it will to acquire HOT's vacation ownership business in a ~$1.5 bln deal

--> :details of Deal
Starwood Hotels to sell its vacation ownership business to Interval Leisure Group (IILG) in a ~$1.5 bln deal (20.77)
Interval Leisure Group (IILG) acquires Vistana Signature Experiences Starwood Hotels and Resorts Worldwide.
  • The BODs of both companies have unanimously approved a definitive agreement under which a wholly owned subsidiary of ILG will acquire and then merge w/ Vistana.
  • The combination, which will follow completion of the planned spin-off of Vistana from Starwood announced on February 10, 2015, has a total value to Starwood of ~$1.5 bln.
  • The combination will result in Starwood shareholders owning ~55% of the combined company on a fully diluted basis, with existing shareholders of ILG owning ~45% of the combined company.
  • Following completion of the transaction, ILG expects to continue its current dividend policy.
  • Vistana will finance w/ new borrowings an estimated $132 mln cash distribution.
  • Under the terms of the license agreement, Starwood will receive an annual base royalty fee of $30 mln plus 2% of vacation ownership interest sales.