Israel Chemicals Profit Plunges 45% in Fourth Quarter Amind Labor Disruptions

Alon rejects ex-CEO's offer to acquire its retail group; Wix narrows 4Q loss, sees profit in 2015l Stocks perform better after elections than before, study finds.

Reuters

Israel Chemicals profit plunges 45% in fourth quarter amind labor disruptions

Israel Chemicals yesterday reported that fourth-quarter 2014 profit plunged almost 45% from a year earlier, weighed down by increased financial expenses, a higher tax rate and labor disruptions. ICL earned $108 million in the quarter, down from $195 million a year earlier. Revenue slipped 1%, to $1.4 billion, due to the impact of exchange rates and a decline in sales volume that was partly offset by an increase in selling prices. Profit was below analyst’ consensus forecasts of $149.3 million adjusted net while revenue was on target, according to a Reuters poll of analysts. Cost-cutting measures saved $100 million in 2014, but labor interruptions lost the company sales of about $60 million, ICL said. CEO Stefan Borgas told a conference call that the company expected to do better this year. “Hopefully, 2014 was the bottom,” he said. ICL shares dropped a sharp 5.4% to end at 27.50 shekels ($7.12). 

Alon rejects ex-CEO’s offer to acquire its retail group

Alon Group rejected an offer by its recently ousted CEO, David “Dudi” Wiessman, to buy its 73% stake in the troubled retail group Alon Blue Square. Alon said yesterday it was spurning the offer, which Wiessman had made just 12 hours earlier and valued the retailing group at between 850 million and 1 billion shekels ($220 million-$260 million). “Alon Blue Square is not for sale,” the closely-held Alon said. “The new management is focused on developing Alon Blue Square and improving it, so it is fair to assume that it is worth more than Dudi Wiessman’s valuation.” While Wiessman was ousted as Alon CEO after a long feud with controlling shareholder Shraga Biran, he has yet to be pushed out of his other jobs in the group, including CEO of Alon Blue Square, which operates Mega supermarkets among other brands. Shares of Alon Blue Square, which had a market cap of about 714 million shekels before the offering was announced, rose 5.3% to close at 11.41 shekels. 

Wix narrows 4Q loss, sees profit in 2015

Wix.com, which provides software tools for building websites, reported a smaller-than-expected loss in the fourth quarter and forecast strong revenue growth in 2015 as more of its customers convert to paid services from free ones. Wix said yesterday that its losses excluding one-off items narrowed to 25 cent a share from 29 cents the same time last year, as revenue surged 67% to $41.6 million. Analysts were expecting Wix to lose 30 cents a share on revenue of $39.9 million, according to Thomson Reuters I/B/E/S. The company forecast revenue of between $198 million and $202 million in 2015, an increase of up to 47% over 2014. “The risk factor to Wix’s business model is minimal; it’s less than it used to be,” CFO Lior Shemesh said. Wix’s Nasdaq-listed shares were up 5.9% at $19.69 at noon local time on Wednesday. 

Greek jitters weighs on Tel Aviv shares

Tel Aviv shares tracked their European peers lower on yesterday as euro zone meetings on the Greek debt crisis threatened to give rise to confusion rather than clarity and Bank Leumi sold off a big block of The Israel Corporation. The TA-25 and TA-100 indexes both dropped about 0.3% to close at 1,457.47 and 1,286.46 points, respectively, in heavy trading of 1.83 billion shekels ($470 million). Leumi sold a 6.9% bloc of Israel Corporation stock to institutional investors at 1,330 shekels each yesterday, spurring a 7.1% drop in the market to leave the shares at 1,301 shekels. Meanwhile, IDB Development Corporation extended its rally, rising 7.5% to 1.49 and bringing its two-day gain to 17.5%. In the fixed-income market, the government’s Shahar bond due in March 2024 rose 0.21% to lower its yield to 1.85%, while the inflation-indexed Galil bond climbed 0.34%, leaving its yield at 0.23%.

Stocks perform better after elections than before, study finds

Investors might do well to wait until after Israel’s March 17 election to invest in the Tel Aviv Stock Exchange —– or not. A study Research by Prof. Yossi Yagil, dean of the Carmel Academic Center’s business school, found that over the plast 60 years the average excess real return on the TASE in the month before an the election was just 0.7%, but in the month after following it was 5.6%. In For the three months preceding each election before it the average difference was smaller but still significant, at – 4.2%. before and 5.6% after. The greatest biggest advantage was in the year after the election, when the average return was 11.3%, compared with a negative return of 3.2% in the year before. But Yagil warned that this year’s vote may not bring profits to punters. “We don’t expect it to happen this way, among other reasons because of the near-zero interest rate environment today in Israel and in many countries overseas,” he said.