When a Jacksonville-based company is the top gainer in the market on a particular day, I usually make note of it. However, I have to admit I missed one recently.
That's because this company, APR Energy PLC, trades on the London Stock Exchange.
APR Energy's stock jumped as much as 222 pence on Oct. 23 to a new high of 1,177 pence, after announcing a major deal with General Electric Co.
APR, which builds interim power plants around the world on a fast-track basis, agreed to buy GE's power rental business for $314 million, including $250 million in APR stock. The deal creates a strategic alliance between APR and GE and makes GE a significant investor in APR.
"The transaction diversifies our revenue base, gives us exposure to new geographies and sectors, and enhances our natural gas footprint. We are excited to be working closely with GE, whose partnership and equity commitment is an endorsement of our prospects and our ambition to be the leader in the large-scale, fast-track power industry," APR Chief Executive John Campion said in a news release.
The company basically builds power plants quickly, in a 30- to 90-day period, for places that need power on a short-term basis.
APR was formed in 2004 when Campion and co-founder Laurence Anderson bought Alstom Power's power rental business. They decided to locate the headquarters of the international company in Jacksonville.
APR has 130 employees in Jacksonville, up from 55 two years ago, and expects to keep growing, said spokeswoman Toni Woods.
"We're still hiring," she said.
The company reported revenue of $87.2 million in the first half of this year and in an interim report released along with the GE announcement, it reported revenue of $84 million in the third quarter.
APR became a public company in 2011 when it was acquired by Horizon Acquisition Co., a British company that was already trading on the London exchange and was looking for a business to buy. So, APR continues to be traded in London, but Woods said that is a natural location for the stock despite its U.S. headquarters.
"The industry itself is much more known in England," she said.
The GE deal could make APR more widely known.
"Especially as GE has chosen to take a large equity stake in APR, we believe APR should benefit considerably from GE's relationships in the market, given that GE is one of the major suppliers of turbines," JPMorgan analyst Robert Plant said in a report after the deal was announced.
Plant said the deal expands APR's reach geographically and also increases its exposure to the natural gas market, "which we think is an attractive part of the temporary power market given the increased supply of natural gas and its cost and emissions efficiency."
However, Cantor Fitzgerald analyst Caroline de La Soujeole said in a report last week that it's a "good time for investors to exit," as she maintains a "sell" rating on the stock.
She said APR in August indicated intent to move away from temporary power projects to semi-permanent power.
The GE deal "cements the company's move from temporary power to semi-permanent power. We have yet to be convinced over the merits of this strategy," de La Soujeole said.
St. Joe selling off land
When the St. Joe Co. started its transformation from an industrial conglomerate to a real estate development firm about 15 years ago, it was the largest private landowner in the state with more than 1.1 million acres of Florida property, or about 3 percent of the state's entire land area.
After a major sale last week, its landholdings are dwindling.
St. Joe, which moved its headquarters from Jacksonville to WaterSound in the Florida Panhandle three years ago, announced an agreement to sell 382,834 acres of timberland and rural land in the Panhandle for $565 million to Utah-based AgReserves Inc.
AgReserves Inc. is a tax-paying affiliate of The Church of Jesus Christ of Latter-day Saints.
St. Joe, which had already sold off a lot of property over the past 15 years, will be left with about 184,000 acres mainly in the Panhandle that will be used for real estate development.
The company said the sale will help it focus on its development activities. "The proceeds from the sale will provide the company with significant liquidity and numerous opportunities to create long-term value for our shareholders," CEO Park Brady said in a news release.
St. Joe has one community under development in Northeast Florida, RiverTown in St. Johns County. However, most of its activity is in the Panhandle, which is why it moved its headquarters there.
Most of the 1.1 million acres of land it originally owned was timberland in the Panhandle region.
St. Joe also on Thursday announced third-quarter earnings of 5 cents a share, down from 17 cents the previous year. The company said its third-quarter 2012 earnings were bolstered by rural land sales.
Atlantic Coast Financial CEO in place
Atlantic Coast Financial Corp. finally has a new chief executive officer.
The Jacksonville-based banking company said in a Securities and Exchange Commission filing last week that it was notified by the Federal Reserve Bank of Atlanta that it did not object to the appointment of John Stephens as president, CEO and a director. So Stephens took over those roles on Oct. 31.
Atlantic Coast Financial announced the hiring of Stephens in September but because the company is operating under a consent order, federal banking regulators had to approve the appointment.
Former CEO G. Thomas Frankland resigned in June after shareholders rejected a buyout offer for the company. The parent company of Atlantic Coast Bank had been without a permanent CEO since then.
Web.com beats forecasts
Web.com Group Inc. last week reported higher-than-expected third-quarter earnings and predicted fourth-quarter earnings will be better than analysts' forecasts.
The Jacksonville-based company, which provides website development services for businesses, reported adjusted earnings of 55 cents a share in the quarter, up from 41 cents last year.
Web.com had previously forecast earnings of 51 cents to 52 cents in the quarter and the average forecast of analysts was 53 cents, according to Thomson Financial.
The company also projected earnings of 57 cents to 58 cents for the fourth quarter, which is higher than the average analysts' forecast of 56 cents.
Chairman and CEO David Brown said in a conference call with analysts that Web.com's performance through the first nine months this year is meeting or exceeding its growth targets.
"We are succeeding in our goal of increasing our cross-sell and upsell into our 3 million-plus subscriber base, which is driving accelerating ARPU (average revenue per user) growth. We are adding net subscribers at a faster pace than we originally anticipated as we begin to benefit from the positive impact of our branding efforts over the past year," Brown said.
Web.com's stock jumped as much as $3.94 to $30.42 in early trading Wednesday after the late Tuesday report, before slipping back and closing Wednesday at $27.75
Web.com's stock fell back last month after two negative reports on the website Seeking Alpha by bloggers who admitted they are shorting the stock – betting the stock will fall. They raised questions about how the company adjusts its financial reports after acquisitions.
However, analysts who follow the company don't share those concerns. According to Thomson, 11 of 13 analysts have a "buy" rating on the stock.
"Our thesis remains that Web.com can systematically cross-sell and upsell into its massive installed base for some time to come," FBR Capital Markets analyst David Hilal said in a report after the earnings release.
"This should lead to higher ARPU, which is the main driver in the model, followed by consistent net subscriber additions," he said.
Jeff Martin of Roth Capital Markets maintains a "neutral" rating on the stock, but that's based on the price. He has a $29 price target for the stock. "We remain optimistic with respect to the Web.com strategy, but continue to find the valuation lofty at 11.9 times 2014 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)," Martin said in his report last week.
Vulcan earnings up
Vulcan Materials Co. also rose on higher-than-expected earnings, jumping $4.11 to $57.78 last Monday.
The Alabama-based construction materials company, which has its Southern operating group's headquarters in Jacksonville, reported earnings from continuing operations of 32 cents a share, up from 12 cents a year earlier. That was 5 cents higher than the average forecast of analysts surveyed by Thomson.
Vulcan is benefiting from a rebound in housing construction activity. Florida is one of its strongest markets, with third-quarter shipments up 35 percent since last year, the company said.
Patriot acquires trucking company assets
Patriot Transportation Holding Inc. last week announced it acquired the assets of Pipeline Transportation Inc., a Jacksonville company that produced $16.5 million in revenue in the 12-month period ended June 30.
Jacksonville-based Patriot reported revenue of $102.6 million in the nine-month period ended June 30, including $82.6 million in its transportation segment.
Patriot is working on a plan to possibly split its main businesses, transportation and real estate, into two separate publicly traded companies.
PHH not splitting up
Speaking of companies with two distinct business units, PHH Corp. last week shot down speculation that it would separate its mortgage banking and fleet management subsidiaries into separate companies.
During its quarterly conference call, CEO Glenn Messina said PHH explored the possibility of splitting up the businesses but determined it would be too costly. He said a split would require a debt restructuring and tax payments that would consume up to $920 million in cash.
"We believe the high level of estimated cash required for debt restructuring and payment of taxes could consume the gross proceeds realized from such a separation or a substantial portion of our unrestricted cash balances," Messina said.
"Management and the board will continue to evaluate and consider all opportunities to maximize value for our shareholders," he said.
PHH report a "core" net loss of 78 cents a share for the third quarter. The loss included 10 cents a share related to job cuts in its mortgage banking business.
PHH, which operates the mortgage business out of its New Jersey headquarters and a second location in Jacksonville, last month filed a Worker Adjustment and Retraining Notification notice saying it would cut 365 jobs in its Jacksonville office. That will leave it with about 700 employees in Jacksonville.
PHH's results also were impacted by 57 cents in charges related to prepayment of debt.
Stein Mart sales up
Stein Mart Inc. last week reported another month of strong sales.
Total sales for the four weeks ending Nov. 2 rose 6.9 percent to $95 million and comparable-store sales – sales at stores open for more than one year – rose 5.4 percent.
The Jacksonville-based fashion retailer operated 264 stores across the country at the end of October, up from 262 a year earlier.
CEO Jay Stein said in a news release that he is hoping the company can maintain its sales growth.
"I can assure you that we are working hard to maintain our momentum through the fourth quarter, despite the shortened holiday selling season and highly promotional environment we see around us," he said.
Analyst upgrades EverBank
Despite a disappointing earnings report the previous week, Compass Point analyst Kevin Barker upgraded his rating last week on Jacksonville-based EverBank Financial Corp. from "sell" to "neutral."
"The core operating result was lower than expected, however the company is taking action to better align itself with the current environment with the sale of MSRs (mortgage servicing rights), payoff of wholesale borrowings, and exit from wholesale originations," Barker said in his research note.
"We believe management is taking the right steps for the long-term by moving toward a more traditional commercial banking model, which should result in more consistent earnings and eventually, a higher valuation multiple," he said.
S&P upgrades CSX
Standard & Poor's Ratings Services upgraded its long-term corporate credit rating on Jacksonville-based CSX Corp. from BBB to BBB-plus.
The ratings agency said the upgrade reflects CSX's strengthening credit measures and improved liquidity.
"Although freight volumes have been flat, we expect CSX to continue to benefit from good operating efficiency and modest pricing gains (in the low-single-digits percent area), resulting in satisfactory operating profitability and stable credit metrics," S&P analyst Anita Ogbara said in a news release.
Florida East Coast earnings drop
Florida East Coast Holdings Corp. reported third-quarter revenue rose 5 percent to $66.2 million, but operating income fell 6 percent to $14 million.
The Jacksonville-based company, which operates the 351-mile Florida East Coast Railway from Jacksonville to Miami, reported a final net loss of $596,000 in the quarter after interest expenses.
Florida East Coast said in its quarterly SEC filing that it incurred higher expenses in the quarter, including increased labor and benefits costs due to "additional headcount."
Florida East Coast is privately owned by funds affiliated with Fortress Investment Group, but it continues to file financial reports with the SEC because of publicly issued bonds.
Embraer hires 39 at JIA
Brazilian aircraft manufacturer Embraer S.A. said in a quarterly SEC filing that it has hired 39 "highly skilled workers" so far at its Jacksonville International Airport facility.
Embraer said in February that it would hire 50 people at the 40,000-square-foot assembly hangar, where it is building the A-29 Super Tucano light attack aircraft for the U.S. Air Force.
The company said the facility is on schedule with the first deliveries planned by mid-2014.
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