Gap, Tesla, Marriott and more

Check out the companies making headlines after the bell:

Shares of Gap surged more than 20 percent after market close on Thursday based on news that the clothing company will split into two publicly traded companies, with Old Navy on its own. The other entity, not yet named, will include Gap, Athleta, Intermix, Banana Republic, and Hill City. The Old Navy company brings in about $8 billion in annual sales, while the new company will make roughly $9 billion in annual sales.

The news overshadowed Gap’s mixed fourth-quarter earnings. The company reported earnings per share of 72 cents, versus 62 cents expected. Revenue was $4.62 billion, lower than the $4.69 billion forecast by analysts.

Nordstrom shares jumped more as much 6 percent after hours Thursday based on relatively strong full-year guidance despite a fourth-quarter revenue miss. The department store company earned $4.48 billion in revenue, missing estimates of $4.61 billion surveyed by Refinitiv. Earnings per share were $1.48. Same store sales increased 0.1 percent.

The company forecasts 2019 revenues to increase between 1 and 2 percent, below Wall Street’s estimate of an increase of 2.7 percent. Nordstrom expects 2019 earnings per share between $3.65 and $3.90, in line with estimates of $3.67.

Marriott shares fell as much as 3 percent in extended trading Thursday after posting mixed fourth-quarter earnings. The hotel company reported earnings per share of $1.44 on revenues of $5.29 billion. Analysts expected earnings per share of $1.39 on revenues of $5.48 billion, according to Refinitiv consensus estimates. The stock has since lost most of its gains.

Shares of Dell rose more than 3 percent and then dipped negative in extended trading Thursday following the release of the computer company’s fourth-quarter earnings. Dell posted revenues of $24 billion.

Shares of VMware jumped more than 3 percent after hours Thursday based on fourth-quarter earnings. Beating on the top and bottom lines, the computer software company earned $2.59 billion in revenue, compared to the $2.50 billion expected on the Street. Earnings per share came in at $1.98.

Shares of Tesla dropped more than 3 percent after being halted for volatility prior to news that the electric automaker launched its standard Model 3, starting at $35,000. Elon Musk’s company also announced it is shifting all sales online and does not expect to be profitable in the first quarter.

Nutanix shares cratered more than 24 percent after market close based on dismal 2019 guidance. The computer software company estimates full year revenues between $290 and $300 million, well below the $348 million expected by analysts. They also see a full-year loss of 60 cents per share, compared to the forecast loss of 28 cents.

The full-year forecast overshadowed the company’s second-quarter earnings beat. Nutanix reported a second-quarter loss of 23 cents per share on revenues of $335 million. Analysts has expected a loss per share of 25 cents on revenues of $331 million.

Gap to split into two public companies, with Old Navy as a standalone

Gap Inc. said Thursday it will split into two independent publicly traded companies — one of just Old Navy, and then a yet-to-be-named company, which will include its other brands like Banana Republic and Athleta.

Its shares surged more than 20 percent in after-hours trading on the news.

Following a review by Gap’s board of directors, “it’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward,” Gap board Chairman Robert Fisher said.

Gap said the new company, which it’s currently referring to as “NewCo,” should make roughly $9 billion in annual sales. It will include the namesake Gap brand, Banana Republic, Intermix and athleisure lines Athleta and Hill City.

Old Navy, meanwhile, brings in about $8 billion in annual sales by itself. This brand has notably been the strongest within the company, as Gap’s namesake label has struggled to grow sales of late. Old Navy has been successful in targeting shoppers on a budget, rivaling off-price channels like TJ Maxx and Ross Stores.

Gap Inc.’s current CEO, Art Peck, will remain CEO of “NewCo,” Gap said. Sonia Syngal, the current president and CEO at Old Navy, will lead the new public, standalone Old Navy company.

The spin-off should help both companies operate with “a sharpened strategic focus and tailored operating structure,” Peck said in a statement. The transaction is expected to be completed in 2020, subject to final approval by Gap’s board of directors.

Gap also on Thursday announced it plans to shut 230 of the namesake brand’s locations over the next two years, as it works to restructure its business. The retailer posted mixed results for the holiday quarter.

Gap shares have fallen roughly 20 percent over the past 12 months, bringing its market cap to about $9.7 billion.

Facebook’s Workplace reaches 2 million paid users

Mark Zuckerberg delivers a keynote at Facebook's Oculus Connect 5 event in San Jose, California, on September 26, 2018. 

Screenshot

Mark Zuckerberg delivers a keynote at Facebook’s Oculus Connect 5 event in San Jose, California, on September 26, 2018. 

Facebook on Thursday announced that Workplace, the company’s communications tool for companies, now has more than 2 million paid users.

Facebook launched Workplace in late 2016, and since then, the company has not shared much about the progress the enterprise service.

The progress appears to be reflected in Facebook’s latest financial filing, which shows the company generated $825 million in revenue from “payments and other fees” in 2018, up 16 percent from 2017.

The announcement comes about two months since Facebook appointed executive Karandeep Anand as the new leader for Workplace’s product development. It also comes months after the company told clients it would move Workplace to website domain separate from that of the company’s consumer product.

Despite this progress, Workplace remains in a crowded market that includes the likes of Microsoft and Slack, which is preparing to go public this year. Microsoft claims its Teams product is used by 329,000 organizations while Slack in January said it is now used by more than 85,000 paying organizations. And just this week, a former rising star from Facebook launched a startup called Threads that competes directly with Workplace.

Facebook on Thursday did not say how many organizations pay for Workplace, but the company in late 2017 said Workplace was used by 30,000 organizations. A marketing email sent by Workplace on Thursday repeated that figure.

“We’ve already helped millions of people at over 30,000 companies work better together,” the Workplace marketing email said. “We’d love to do the same for you.”
WATCH: Here’s how to see which apps have access to your Facebook data — and cut them off

Senate confirms acting EPA chief for permanent role

Andrew Wheeler, acting administrator of the Environmental Protection Agency (EPA), speaks during a Bloomberg Technology Television interview in San Francisco, California, U.S., on Monday, Feb. 4, 2019.

David Paul Morris | Bloomberg | Getty Images

Andrew Wheeler, acting administrator of the Environmental Protection Agency (EPA), speaks during a Bloomberg Technology Television interview in San Francisco, California, U.S., on Monday, Feb. 4, 2019.

The Senate has confirmed former coal industry lobbyist Andrew Wheeler to lead the Environmental Protection Agency, despite concerns by Democrats and one Republican about regulatory rollbacks he’s made in eight months as the agency’s acting chief.

Senators voted 52-47 on Thursday to confirm Wheeler, who was nominated by President Donald Trump after former administrator Scott Pruitt resigned under pressure last year.

Republican Sen. John Barrasso of Wyoming, chairman of the Senate environment committee, called Wheeler “uniquely qualified” and said the EPA under Wheeler is putting forward proposals that “both protect our environment and allow the country’s economy to flourish.”

But Democratic Sen. Tom Udall of New Mexico said Wheeler was “nominated to unravel and undo the environmental protections that are now in place.”

GM President of North America Alan Batey is retiring after 40 years

General Motors’ President of North America Alan Batey plans to retire in 2019 after 40 years at the Detroit automaker, the company said Thursday.

His role will be filled by Barry Engle, who currently runs GM’s international business, starting April 1. Engle has been with GM since 2015, beginning his tenure at the automaker as executive vice president and president of South America. he was promoted to head of all GM’s international operations in 2017.

Engle has held a variety of positions elsewhere in the automotive industry, including 13 years at Ford, a CEO of an agricultural equipment company, and CEO of an electric vehicle startup called THINK. He was also a Chrysler Plymouth Jeep dealer.

Batey will stay on as an adviser.

Julian Blissett, who is currently executive vice president of GM-SAIC, the automaker’s joint partnership with Shanghai Automotive Industry Corporation, will become senior vice president of GM International.

Batey has been in his current role since 2014, and has also led Global Chevrolet since 2013. He was vice president of U.S. sales and service from 2012 to 2013, and vice president of U.S. sales and service for Chevrolet from 2010 to 2012. Batey started with GM in 1979 and has held positions around the world, including the United Kingdom, Switzerland, United Arab Emirates, Germany, Netherlands, Korea, and Australia.

Shares of GM were down 1.5 percent on Thursday.

This story is breaking news. Please check back for updates.

Michael Cohen’s testimony gives both sides fodder in possible impeachment fight

Michael Cohen, former attorney and fixer for President Donald Trump, testifies before the House Oversight Committee on Capitol Hill February 27, 2019 in Washington, DC.

Alex Wong | Getty Images News | Getty Images

Michael Cohen, former attorney and fixer for President Donald Trump, testifies before the House Oversight Committee on Capitol Hill February 27, 2019 in Washington, DC.

Michael Cohen’s gripping congressional hearing fueled even more talk about Democrats’ potential plans to pursue the impeachment and removal of President Donald Trump.

But in the near term, it’s not clear which side gained more from the testimony of Trump’s former personal attorney and fixer: the president’s Democratic opponents in Congress, who zeroed in on Cohen’s claims that Trump committed illegal acts after taking office; or Trump’s Republican defenders, who highlighted Cohen’s lack of evidence that the Trump campaign colluded with Russia in 2016.

Cohen testified before the House Oversight Committee for over 7½ hours Wednesday, a few months before starting his three-year prison term for campaign-finance violations and tax evasion, and lying to Congress in 2017 about a failed Trump Organization plan to build a tower in Moscow.

The former Trump loyalist’s remarks began with a bang. Trump is a “racist” and a “con man,” Cohen said, who knew in advance about WikiLeaks’ plans to publish stolen Democrats’ emails during the election and secretly reimbursed him for hush-money payments made to a porn star after entering the White House. Cohen provided copies of financial statements and checks, alleged schemes to manipulate the value of Trump’s assets for financial gain, and delved into the threats he says he made to various people and institutions to benefit Trump.

Only Republicans brought up impeachment during the hearing itself — a telling omission from the Democrats’ wide-ranging lines of inquiry that suggests a cautious approach to the politically volatile subject.

GOP Rep. Clay Higgins of Louisiana spent a portion of his cross-examination time castigating Democrats for allowing Cohen to appear publicly in the first place.

“This is an attempt to damage our president and set some soft cornerstone for future impeachment proceedings, this is the full intent of the majority,” he fumed.

Other Republicans echoed Higgins’ accusation later on.

“I do not think you could believe much of what this guy says,” Ohio Rep. Jim Jordan, the Oversight Committee’s ranking Republican, said of Cohen in a “Fox News” interview Wednesday. “What I do think was going on today is that this was the first step in the Democrats’ crazy impeachment plans.”

Coyote fur is in big demand thanks to popular parkas

“Canada Goose is always the name that people relate to, but there are so many other brands that make similar coats,” says Mark Downey, CEO of Fur Harvesters Auction Inc. of North Bay, Ontario. “Basically, it’s just a coyote trim ruff that goes around the hood of all those kinds of coats.”

Downey suspects the bull market for coyote will continue. North American Fur Auctions was similarly optimistic in a November web posting, saying the trim business continues to be in full fashion with Canada Goose being the major taker.

Toronto-based Canada Goose did not respond to requests for comment.

The hot market for coyotes comes as trappers deal with recent economic slumps in China and Russia, competition from ranched fur and the intense ire of animal welfare activists, who consider the popular steel leg-hold traps particularly cruel.

Coyote trappers see themselves as sportsmen helping control populations of a ubiquitous animal often considered a nuisance. Coyotes have been spotted from the streets of Los Angeles to Manhattan’s Central Park. Farmers view them as chicken poachers, and suburban residents see them as threats to their pets.

To trappers, coyotes are one of the few money-making animals, along with bobcats and a few others.

“It is the one bright spot in most of the country,” says Dave Linkhart, of the National Trappers Association.

Hughes will pay trappers an average of $75 to $105 and as much as $120 for a western coyote. He sells to operations that create trim strips, which sells to garment makers.

“The coyotes that we have here in Montana are probably the best coyotes in the world for trim,” Hughes said. “They’re heavy, so the hair stands up for the trim, and they’re pale.”

He handles an average of 10,000 coyotes annually, though the numbers are down for western coyotes this year. Some blame early-season snow in Canada and the western United States, which made it harder for trappers to get out. Others believe there are simply fewer western coyotes this winter.

Either way, Downey said, “there’s not enough western coyotes to go around,” increasing demand on eastern coyotes, which tend to have coarser fur.

At the Herkimer auction, eastern coyotes tended to sell for $19 to $46. Rutherford made more than $200 for seven coyote furs.

“Coyotes are going to move,” he says. “Good-quality coyotes are going to sell.”

Nearing age 65? What you need to know about Medicare

If you tapped your Social Security benefits before age 65, you’ll automatically be signed up for original Medicare (unless you live in Puerto Rico).

“About a month or two before you turn 65, you’ll be automatically enrolled, and your card will just show up in the mail,” Roberts said.

In this situation, you’ll see your Social Security check reduced by the cost of the Part B premium.

Roberts said that if you already are getting Social Security benefits and you want to delay Medicare because you have qualifying coverage through your employer (see next section), call the Social Security Administration and tell them not to enroll you.

If you haven’t yet tapped Social Security, the burden is on you to sign up. In that case, you get a seven-month enrollment period that starts three months before your birthday month and ends three months after that.

JC Penney, Square, Tesla, L Brands & more

Check out the companies making headlines before the bell:

J.C. Penney — The retailer earned an adjusted 18 cents per share for the fourth quarter, 8 cents a share above estimates,. Revenue also beat Wall Street forecasts and J.C. Penney announced plans to close 18 full-line stores this year.

Horizon Pharma — The drugmaker announced positive results from a late-stage trial for a drug designed to treat active thyroid-eye disease, with nearly 83 percent of patients showing improvement compared to under 10 percent for those treated with a placebo.

Party City — The party supplies retailer earned $1.02 per share for the fourth quarter, 7 cents a share below estimates,. Revenue also came in below forecasts, hurt in part by helium supply pressures.

SeaWorld Entertainment — The theme park operator lost 13 cents per share for its latest quarter, a penny a share smaller than Wall Street was anticipating. Revenue beat estimates, however, and park attendance increased by 8 percent during the quarter compared to a year earlier.

Sotheby’s — The auction house earned $1.72 per share for the fourth quarter, beating the consensus estimate of $1.48 a share. Revenue also came in above forecasts. Sotheby’s said it was in position to improve results even further in 2019, subject to market conditions.

Western Union — Western Union announced the sale of its Speedpay bill paying business to ACI Worldwide for $750 million in cash. Western Union also announced a $1 billion share buyback program.

Celgene — Celgene shares are under pressure after major Bristol-Myers Squibb shareholder Wellington Management said it would not support the acquisition. Wellington said it thinks Bristol-Myers shareholders are accepting too much risk and that Celgene shareholders are getting the drug maker’s shares at well below implied asset value. Bristol-Myers said it believed the acquisition was taking place at an attractive price, and that it was an important opportunity to create sustainable value.

HP Inc. — HP Inc. earned an adjusted 52 cents per share for its latest quarter, matching Wall Street forecasts. The computer and printer maker’s revenue missed estimates, however, amid weakness in printer supply sales. HP said its market share and pricing for those supplies came under pressure during the quarter. Based on those results and the company’s comments, Bank of America/Merrill Lynch downgraded the stock by two notches, from “buy” to “underperform.”

Box — Box reported adjusted quarterly profit of 6 cents per share, beating the consensus estimate of 2 cents a share. The cloud storage firm’s revenue came in below forecasts, however, as was its forward guidance.

Square — Square beat estimates by a penny a share, with adjusted quarterly earnings of 14 cents per share. The digital payment company’s revenue also beat forecasts, however Square’s current-quarter outlook is below some analysts’ forecasts.

Booking Holdings — Booking Holdings earned $22.49 per share for its latest quarter, compared to a consensus estimate of $19.42 a share. The operator of Priceline and other travel websites saw its revenue come in below estimates, and its current-quarter guidance was below consensus, as well.

L Brands — L Brands came in 7 cents a share above estimates, with adjusted quarterly profit of $2.14 per share. The fashion retailer’s revenue fell below forecasts on declining sales at its Victoria’s Secret brand. The company also issued weaker-than-expected full-year guidance.

Tesla — Tesla was designated as a “Fresh Pick” at Baird, which also reiterated an “outperform” rating. Baird said pessimism on Model 3 demand is overblown, and that weak first-quarter delivery expectations are already priced into the stock.

Fitbit — Fitbit earned 14 cents per share for the fourth quarter, double what Wall Street was expecting. The fitness device maker’s revenue also beat estimates, however revenue and profit guidance for the current quarter is weaker than expected. Fitbit said it expected an increase in devices sold but a decline in the average selling price.

Anheuser-Busch InBev — Anheuser-Busch InBev is predicting strong profit and revenue growth this year, following better-than-expected earnings during the fourth quarter. The world’s largest brewer said its results will be helped by higher prices and by more consumers buying its premium beers.

KKR — The private-equity firm and China’s Tencent are separately exploring bids for a stake in Vivendi’s Universal Music division, according to Reuters.

Apple — Apple will lay off 190 workers at its self-driving car program, according to a filing with state regulators in California.

Southwest Airlines — Southwest won Federal Aviation Administration approval to fly to Hawaii from California, a route that is considered an important part of its growth plans.

BlackBerry — BlackBerry filed a patent infringement lawsuit against Twitter, accusing Twitter of illegally using mobile messaging technology developed by BlackBerry.