Stock Market Today: A $7 Billion Food Merger and Soaring Sales for Gogo

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has gained 55 points in pre-market trading, suggesting a positive start to the stock market today. Wall Street could follow global stocks higher in today's session: European shares were up a solid 0.5% as of 7:30 a.m. EDT and China's Shanghai index rallied by just over 2%. 

Meanwhile, news is breaking this morning on several stocks that could see heavy trading, including Pinnacle Foods (NYSE: PF  ) , which is the target of a nearly $7 billion acquisition, and Gogo (NASDAQ: GOGO  ) , which delivered its first-quarter results before the opening bell.

Hillshire Brands (NYSE: HSH  ) announced today that it has agreed to purchase Pinnacle Foods for $6.6 billion. The deal will create a food giant that owns 10 brands that sit at either first or second place in their respective markets, including Jimmy Dean and Ball Park from Hillshire and Vlasic and Duncan Hines from Pinnacle. Hillshire expects the deal to immediately boost earnings, with the annual profit gain hitting 15% in about three years. Pinnacle Foods' shareholders will receive $18 in cash for each of their shares plus half of a share in Hillshire Brands, implying a total purchase price of $36 a share, or an 18% premium over Pinnacle's last closing price. Pinnacle was up 21% in pre-market trading, while Hillshire was up 3.5%.

Gogo today booked a 35% spike in sales for the first quarter, as the in-flight wireless Internet provider saw strong demand for its equipment and services. Net loss came in at $0.20 a share, beating the $0.25 in red ink that analysts were expecting. The difference appears to have come from cost containment: Gogo's operating expenses rose by just 30% despite major investments in expanding its operations internationally. The company also reiterated its outlook for the year, saying that 2014 revenue should be roughly $415 million, or 25% higher than last year. To say that Gogo's shareholders have had a turbulent ride so far would be an understatement given the stock's 50% haircut since January. Still, today's report suggests the company has solid revenue growth ahead and may see profits improve at a quicker pace than some investors had thought. The stock was up 9.4% in pre-market trading. 

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2952748, ~/Articles/ArticleHandler.aspx, 11/20/2014 10:08:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement