The Ticker: Orbotech Plunges on Disappointing Results, Weak Outlook

Caesarstone soars after earnings beat forecasts; Southern Properties to make second attempt at Tel Aviv bond issue; Tel Aviv shares end lower as euro sinks below 4 shekels.

Orbotech plunges on disappointing results, weak outlook

Shares of Orbotech plunged on Wednesday after the maker of equipment used to make electronics posted strong – but not strong enough – improvements in its fourth-quarter results and offered a disappointing outlook for the current quarter. Adjusted net income for the last three months of 2016 actually rose 44% to $33.7 million, up from $23.4 million a year earlier, but at 70 cents per share, they were 7 cents short of what analysts surveyed by Zacks Investment Research had expected. Revenues rose 14% from a year ago to $215 million, but they came in at less than the $219.5 million Zacks analysts had expected. Moreover, the company said it expected revenues for the first quarter of 2017 to be in the range of $180 million to $190 million, unchanged from the same time a year ago, and gross margin to be in the range of 45.5-46%. Shares of Orbotech were down 16.4% to $29.10 at midday New York time. (Omri Zerachovitz)

Caesarstone soars after earnings beat forecasts

Shares of Caesarstone soared on Wednesday after the maker of quartz countertops exceeded expectations for fourth-quarter results. While net profit fell to $15.1 million, or 53 cents a share, from $18.7 million, or 55 cents, a year earlier, the results were 10 cents per share higher than analysts had forecast. Revenue increased by 6% to $135 million, 7% more than the analysts had expected. The company attributed the improvement to a product mix with higher profitability, part of which was offset by higher production costs at its U.S. plant as well as increased sales to Ikea stores in the U.S. that carry lower margins. The company said 2017 revenue would likely be in the range of $580 million to $595 million, with adjusted earnings before interest, taxes, depreciation and amortization in the range of $119 million to $126 million. Caesarstone shares were trading up 13.3% at $34 midday New York time. (Yoram Gabison)

Southern Properties to make second attempt at Tel Aviv bond issue

Southern Properties, a unit of the U.S.-based TCI group, is taking another stab at the Tel Aviv debt market, three months after it pulled its original issue in the face of investor complaints. The property developer will conduct the institutional tranche of a 100 million to 150 million shekels ($26.7 million to $40 million) issue on Thursday. The coupon could end up as high as 8.5%, compared with the 5% Southern originally targeted after S&P Maalot lowered its rating on the bonds to BBB-plus from A – a big downgrade in a short period of time due to Southern’s deteriorating finances. Southern isn’t offering any collateral. Investors had been concerned about the relationship between the company and Gene Phillips, its 80-year-old founder, who has been caught up with tax disputes and unpaid debts in the U.S. Under the revised terms of the issue, proceeds from the bonds can’t be used to repay a loan Phillips had personally guaranteed. (Eran Azran)

Tel Aviv shares end lower as euro sinks below 4 shekels

Tel Aviv shares ended lower on Wednesday, weighed down by continuing declines in Teva Pharmaceuticals and tech stocks. The euro dropped below 4 shekels to a Bank of Israel rate of 3.9947, a drop of 0.3% for the day. The blue chip TA-25 index finished the day down 0.66% at 1,408.42 points, while the TA-100 lost 0.6% to 1,244.87, on turnover of 1.61 billion shekels ($430 million). Tech losers included OPKO Health, down 2.8% to 30.39 shekels; TowerJazz, down 1.3% to 81.50; and NICE Systems, down 1.25% to 253.40. Elbit Systems lost 0.5% to 423.20, even though it said it had won a $110 million contract from an unnamed Asia-Pacific country to upgrade and maintain Mi-17 helicopters. Other big losers were Delta Galil, which fell 3.4% to 112.10, and SodaStream, which lost 2.2% to 165.80. The Leser group, a U.S. property company, raised 120 million shekels in the institutional tranche of a bond sale. (Uri Tomer)

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