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Kinder Morgan jumps after Buffett boost

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WASHINGTON, DC - OCTOBER 13: Warren Buffett speaks onstage during Fortune's Most Powerful Women Summit - Day 2 at the Mandarin Oriental Hotel on October 13, 2015 in Washington, DC. (Photo by Paul Morigi/Getty Images for Fortune/Time Inc)©Getty

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Kinder Morgan received a boost on Wednesday after Warren Buffett’s Berkshire Hathaway disclosed a new stake in the company.

Shares in the pipeline operator advanced 10 per cent to $17.18 after Berkshire disclosed a 1.2 per cent stake.

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Rich Kinder, chairman, is the majority shareholder with an 11 per cent stake.

Berkshire owned 26.5m shares worth about $395.9m at the end of December, according to a filing with the Securities and Exchange Commission.

News that Berkshire had taken a stake could boost shares in a company given Mr Buffett’s record for stockpicking.

David Tepper’s Appaloosa Management bought 9.4m shares in Kinder, valued at $140.9m in the fourth quarter, a filing last week showed.

The company, whose profits fell nearly 70 per cent year-on-year in 2015, announced it had cut its quarterly dividend in December in an effort to conserve cash and maintain its investment-grade rating.

Kinder shares have declined nearly 60 per cent since the start of last year.

Priceline jumped 11.2 per cent to $1,235.56 after it reported better fourth-quarter profits than expected as gross bookings climbed 13 per cent.

The travel booking site, based in Connecticut, said profits had risen to $504m, or $10 a share, in the three months to the end of December, compared with $451m, or $8.56, in the period a year ago, exceeding analysts’ estimates. Sales grew 8.6 per cent to $2bn.

“Lower oil prices have contributed to significantly lower airline ticket prices and leave consumers with more discretionary funds,” said Daniel Finnegan, chief financial officer.

Fossil shares jumped 28.6 per cent to $44.30 after the US watchmaker said an important measure of sales showed a surprise rise, and that a decline in profit proved shallower than feared.

Same-store sales climbed just 1 per cent, easily exceeding the forecast of a 2.4 per cent decline for a company that has been battling competition from the likes of Apple and Fitbit.

Fossil, based in Texas, said profits had fallen to $70.4m, or $1.46 a share, from $154.1m, or $3, in the period a year ago.

Revenues declined almost 7 per cent to $992.5m. Analysts on Wall Street had forecast earnings of $1.30 a share, on sales of $928m.

Garmin climbed 16.6 per cent to $41.06 after reporting stronger profits than expected in the fourth quarter and providing upbeat sales guidance.

The Swiss company, which came to fame selling GPS devices but has joined the craze for fitness trackers, said profits had fallen 37 per cent to $132m, or 70 cents a share, ahead of analysts’ forecasts for 48 cents. Sales slid 2.7 per cent to $781m but exceeded estimates.

For the full-year, Garmin forecast sales of $2.82bn, ahead of expectations for $2.77bn.

US stocks climbed as oil rallied, leaving the S&P 500 energy sector the biggest gainer on the benchmark index with a 2.9 per cent rise.

At the close the S&P 500 was 1.7 per cent higher at 1,926.82, the Dow Jones Industrial Average advanced 1.6 per cent to 16,453.83 and the Nasdaq Composite gained 2.2 per cent to 4,534.07.

mamta.badkar@ft.com

Twitter: @mamtabadkar

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