Stock Market Today: AT&T's $48 Billion Deal and Campbell Soup's Weak Outlook
Wall Street is set to begin the trading week on a down note. The Dow Jones Industrial Average lost 45 points in pre-market trading, suggesting a lower start to the stock market today. World markets were in the red overnight, with Europe's Stoxx index lower by 0.8% as of 7:30 a.m. EDT.
Meanwhile, news is breaking this morning on a few stocks that should see heavy trading today: AT&T announced a major acquisition over the weekend and Campbell Soup booked weak third-quarter results today.
AT&T shares were down 2.7% in pre-market trading after the telecom giant officially sealed a deal to buy DIRECTV for $48.5 billion. Assuming the purchase wins regulatory approval, investors in the satellite pay-TV provider will receive $28 in cash from AT&T for each share that they own, along with a portion of stock in the combined company. That works out to total compensation of $95 a share. The purchase will make AT&T the second-biggest pay-TV company in America, boasting 26 million subscribers. That base only trails Comcast, which announced its blockbuster deal to buy Time Warner Cable just three months ago. AT&T said its earnings guidance for the year isn't changing much, except for $0.05 a share profit hit that it expects to take by selling its interest in America Movil as part of the deal.
Campbell Soup today booked disappointing results for its fiscal third quarter. Organic sales growth was a surprisingly low 1%, which led to overall revenue of $1.97 billion. Analysts had expected $2 billion in sales. While the company saw success in some product lines, the soup business fell slightly and held back overall results. Profitability shrunk as well, falling to 35.2% of sales from 37% a year ago. CEO Denise Morrison said in a press release that the company was "not satisfied with our sales performance," as Campbell dialed back its revenue outlook for the full year: Management now expects to book 3% annual sales growth, down from the 4%-5% boost it had forecast three months ago. The stock was down 5% in pre-market trading.
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The article Stock Market Today: AT&T's $48 Billion Deal and Campbell Soup's Weak Outlook originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends DirecTV. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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