Under Armour Shares Jump On Earnings Beat

Plus, SolarEdge delivered an earnings beat, PepsiCo said it is selling its Tropicana and other North American juice brands to French private equity firm PAI Partners for $3.3 billion, and DHL is buying 12 electric cargo plans from Eviation for U.S. deliveries. 

Stocks were slightly higher at the open on Tuesday with the Dow adding 26 points, or less than 0.1%. The S&P 500 rose by 0.1%, while the Nasdaq gained 0.2%.

Under Armour shares are up more than 5% at the time of writing after the athletic apparel and footwear retailer reported second quarter profit and sales that topped analysts’ estimates. The company posted earnings per share of $0.24 on revenue of $1.35 billion, beating expectations for earnings per share of $0.06 on revenue of $1.21 billion. “Under Armour is a prime example of a company that used a ‘COVID-Cover’ to refashion its business for multi-year success and return to under-promising and over-delivering, suggesting that today’s guidance hike may well prove conservative,” BMO Capital Markets analyst Simeon Siegel said. Under Armour said its apparel segment saw growth of 105%, its footwear sales jumped 85% year-over-year, and its revenue for accessories, including bags and hats, was up 99% in the quarter.

In other earnings news, SolarEdge shares are up nearly 16% this morning after its second quarter earnings topped estimates. The solar company reported adjusted earnings per share of $1.28 on revenue of $480.1 million, versus estimates for earnings per share of $0.89 on revenue of $455.9 million. “We are successfully navigating through the challenging supply chain environment while continuing to support our customers’ growth and expansion and new and existing products,” SolarEdge CEO Zvi Lando said in a statement. Nikola reported a narrower-than-expected loss for the second quarter but lowered its delivery and revenue expectations for the year on supply chain issues. The electric truck maker cut its revenue forecast for the year from $15 million to $30 million down to between $0 and $7.5 million, and also lowered its delivery expectations to 25 to 50 units, down from its previous estimates for between 50 and 100 units. 

Tencent share are down 7% at the time of writing after Chinese state media branded online gaming “spiritual opium,” likening it to a drug. The label prompted the company to broach a ban for kids and triggered fears that Beijing will next set its sights on the world’s largest gaming arena. Xinhua News Agency published the blistering critique, citing a student who said some of their schoolmates played the company’s popular Honor of Kings game for as many as eight hours a day. The article also called for further restrictions on the industry in order to prevent addiction and other negative impacts on kids. The article was at one point deleted and then republished with a new headline and references to drugs removed. “The article brough attention to gaming addiction among minors. It is reminiscent of older articles where video games were compared to digital heroin,” Niko Partners senior analyst Daniel Ahmad said. “The timing of the article has raised concern among investors given the recent crackdown on tech companies [in China] and the education/tutoring sector.”

PepsiCo said that it has agreed to sell its Tropicana, Naked and other North American juice brands to French private equity firm PAI Partners for around $3.3 billion. Pepsi will retain a 39% non-controlling interest in a new holding company for the brands and has granted PAI an irrevocable option to buy certain juice businesses in Europe. “This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” PepsiCo Chairman and CEO Ramon Laguarta said in a statement. “In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet.”

And DHL Express announced it is purchasing 12 electric cargo planes from Eviation for U.S. deliveries as it seeks to reduce its carbon emissions. DHL purchased Eviation’s Alice eCargo models, which are expected to be delivered in 2024. “We firmly believe in a future with zero-emission logistics,” John Pearson, CEO of DHL Express, said in a press release. “Therefore, our investments always follow the objective of improving our carbon footprint. On our way to clean logistics operations, the electrification of every transport mode plays a crucial role and will significantly contribute to our overall sustainability goal of zero emissions. Founded in 1969, DHL Express has been known as a pioneer in the aviation industry for decades. We have found the perfect partner with Eviation as they share our purpose, and together we will take off into a new era of sustainable aviation.”

Stocks We’re Watching

Tower Semiconductor (NASDAQ: TSEM): Tower Semiconductor shares rose as much as 5% yesterday after company reported second quarter earnings, posting 17% year-over-year revenue growth. “We are excited with the second quarter 2021 record revenue performance, leading to a third quarter revenue guidance of substantial continued growth, breaking a $1.5 billion annual run rate. We remain confident that we are serving the right customers in the right markets as evidenced by the 38% mid-range year over year organic revenue growth guidance,” CEO Russell Ellwanger said in the earnings release. “We are effectively executing our expansion plans, and hence expect continued fourth qu


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