Q: What are your thoughts on the current earnings report and how do they fare relative to expectations ? Seemingly, the market doesn't want them to buy 7i, based on the price action since bid announce and subsequent events of other bidders. Why do you think?
5i Research Answer:
EPS of 74c missed estimates of 76c; revenue of $17.4B missed estimates of $18.18B. EBITDA of $1.51B matched estimates. The dividend was raised 11%. Margins were largely in line with forecasts. Sales rose 6.6% but earnings slipped a bit. No update on 7i was given. It is a big acquisition, and investors are concerned on its size and ATD's ability to handle such a big deal. But its track record of acquisitions is excellent, and we do think it would be a good fit for the company, at the right price. It continues to work with 7i for a friendly deal. We are confident ATD will walk if it cannot make a deal work for it. It has shown discipline and walked away from acquisitions in the past.