Business in Brief: Leumi Quarterly Profit Boosted by Insurance Reimbursement for U.S. Penalty

Teva shares hammered a second day after disappointing third quarter | After two tough quarters, Delta-Galil profit climbs 31% | Tel Aviv has another quiet day as Wall Street opens lower

People walk past a branch of Bank Leumi in Tel Aviv in this February 18, 2009 file photo.

Leumi quarterly profit boosted by insurance reimbursement for U.S. penalty

Bank Leumi, Israel’s second-largest lender, boosted net profit 30.5% in the third quarter after insurers compensated it for some of the penalties it paid in connection with a U.S. tax investigation. The 235 million shekel ($61 million) reimbursement, together with a 5.1% rise in net interest income, helped the bank increase quarterly net profit to 919 million shekels, from 704 million shekels a year ago, well above the average forecast of 708 million shekels in a Reuters poll of analysts. Leumi paid $400 million in fines in late 2014 to settle two investigations into whether it helped U.S. clients evade taxes. Its Tier 1 ratio, which measures equity capital as a proportion of total risk-weighted assets, rose to 10.86% from 9.58% at the end of 2015. The bank, which said 695 employees, or 6% of its local workforce, agreed to early retirement and are expected to leave by end-2016, cut operating costs 7.8% from a year earlier, to 166 million shekels. Leumi shares ended down 0.6% at 15.42 shekels. (Michael Rochvarger)

Teva shares hammered a second day after disappointing third quarter

Shares of Teva Pharmaceuticals got hammered for a second day amid disappointment over the company’s third-quarter performance and outlook for the year. Jefferies downgraded Teva shares to “hold” from “buy” and cut the price target to $40 from $69, while Morgan Stanley lowered the share to “equal weight” from “overweight” and BTIG downgraded it to “neutral” from “buy.” “Even though earnings were largely consistent with expectations, Teva relied largely on acquisitions in order to generate growth,” Dan Caplinger wrote on the financial website Motely Fool. Meanwhile, at Tuesday’s post-earnings conference call Teva executives got skewered by Cowen & Company analyst Ken Cacciatore, who questioned a series of moves that went sour, including Teva’s $2.5 billion acquisition of Mexican drugmaker Rimsa. “These things seem to be going bad and not just going bad, they seem to go bad quick,” Cacciatore said. Shares of Teva ended down 2.5% at 146.10 shekels ($37.95) after dropping 4.6% the day before. (Yoram Gabison)

After two tough quarters, Delta-Galil profit climbs 31%

After two difficult quarters, Delta-Galil yesterday posted a 31% year-on-year increase in profit in the third quarter. Net income reached $17.7 million, or 69 cents a share, up from $13.4 million, or 52 cents, a year earlier, the company said. Sales edged 4% higher to $296.6 million as Delta completed in August its acquisition of the CBC division of the U.S. apparel maker VF Corporation. “We saw a strong contribution from our recent addition of DG Premium Brands, which includes 7 For All Mankind, Splendid and Ella Moss, and despite the expected soft U.S. market we experienced strong growth in Europe and Israel,” said CEO Isaac Dabah. Profit before adjustments for one-time items, however, fell 8% to about $13 million because of a drop in operating profit and a higher tax liability. Dabah said the company’s new Vietnam factory would begin to contribute to growth in 2017. Delta shares closed 2% higher at 106.60 shekels ($27.69). (Eran Azran)

Tel Aviv has another quiet day as Wall Street opens lower

Tel Aviv shares passed another quiet day as Wall Street opened lower on concerns about higher interest rates and the dollar index reached a 14-month high. The TA-25 index barely moved, registering an 0.04% gain to end at 1.432.33 points, while the TA-100 index advanced 0.3% to 1,250.77. Close to 1.4 billion shekels ($360 million) in shares changed hands. Insurance and real estate stocks led gains. Elbit Systems rose 2.2% to 403 shekels, bringing its advance over the last six trading sessions to 9%, and Frutarom was up 2.35% at 209.30. But El Al Airlines dropped 1.85% to 3.52 amid a deteriorating labor dispute with pilots that has led to canceled flights. Third-quarter earnings continued to pour in and mostly lifted stocks. REIT 1 finished up 4% to 11.29 after reporting that operating income climbed 9% to 60.9 million shekels. Electra Consumer Products gained 3.5% to 54.91 as net jumped 162% to 38 million shekels. (Omri Zerachovitz)