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Why Pivotal Software, Perspecta, and Agilent Technologies Jumped Today

By Timothy Green – Aug 15, 2019 at 10:57AM

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Positive news helped these stocks break free from a volatile market and surge higher.

After the major benchmarks tumbled roughly 3% on yesterday, the stock market found itself on a roller-coaster ride on Thursday. Early gains turned to losses, then back into gains, then back into losses. By the end of the session, indexes were largely higher, but a few stocks broke out of this pattern with more significant jumps. Here's why Pivotal Software (PVTL), Perspecta (PRSP), and Agilent Technologies (A 1.02%) surged today.

Pivotal Software nears an acquisition

Shares of cloud platform provider Pivotal Software skyrocketed 68.7% after the company disclosed that it was in discussions with VMware regarding a possible acquisition. While no definitive agreement has been executed, the company is working on negotiating a deal that would see VMware acquire all outstanding Pivotal Class A shares for $15 in cash each.

A rising blue and orange chart.

Image source: Getty Images.

This process is complicated by the ownership structure of these companies. As of May 3, Dell Technologies owned a 61.4% stake in Pivotal and an 80.6% stake in VMware. While the $15 offer price is much higher than where Pivotal has been trading recently, it's well below its 52-week high of roughly $29. Shares of Pivotal tumbled in June after the company slashed its full-year guidance.

Perspecta raises its guidance

Perspecta stock jumped 10.5% after the U.S. government services provider reported solid fiscal first-quarter results and boosted its guidance for the full year. Revenue of $1.1 billion was up 7% year over year on an adjusted basis, beating the average analyst estimate by $20 million. The defense and intelligence segment was the star performer, with revenue rising 13% to $752 million. Adjusted earnings per share came in at $0.52, down slightly from the prior-year period but $0.02 better than analysts were expecting.

On top of beating expectations, Perspecta raised its full-year outlook. The company now expects revenue between $4.4 billion and $4.5 billion, up $50 million from previous guidance. Adjusted EPS should be between $2.08 and $2.18, a few cents higher than the company's earlier outlook.

Agilent beats expectations

Shares of Agilent gained 6.1% after the lab equipment and services provider reported better fiscal third-quarter results than expected. Revenue surged 6% year over year to $1.27 billion, driven by double-digit growth in the Agilent CrossLab group and the diagnostics and genomics group. Analysts were expecting revenue to be $30 million lower. Adjusted earnings per share rose 13% to $0.76, also beating analyst estimates.

With a strong third quarter in the books, Agilent raised its guidance for the full year. The company now forecasts revenue between $5.105 billion and $5.125 billion, and adjusted EPS between $3.07 and $3.09. This guidance doesn't include any impact from the acquisition of BioTek, which is expected to close in the fourth quarter and strengthen the company's cell analysis segment.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends VMW. The Motley Fool has a disclosure policy.

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