spin off

EBAY INC. $62 (Nasdaq symbol EBAY; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 1.2 billion; Market cap: $74.4 billion; Price-to-sales ratio: 4.2; No dividends paid; TSINetwork Rating: Above Average; www.ebay.com) has settled a long-standing dispute with classified advertising website Craigslist.

In 2004, eBay acquired a 28.4% stake in the privately held company for $32 million. However, Craigslist accused eBay of using its confidential information to launch a rival classified ad service in the U.S. in 2007. Under the settlement, eBay has sold its shares back to Craigslist for an undisclosed amount.

The deal should help speed up eBay’s plan spin off its PayPal online payments division as a separate company later this year. The remaining firm will focus on auction websites.

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CONAGRA FOODS INC. $44 (New York symbol CAG; Income Portfolio, Consumer sector; Shares outstanding: 427.1 million; Market cap: $18.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.conagrafoods.com) bought Ralcorp Holdings, the largest private-label food maker in the U.S., for $4.75 billion in January 2013.

The purchase has not worked out as well as ConAgra had hoped, as strong competition hurt Ralcorp’s sales and earnings. As a result, the company has had to write down this investment by $2.1 billion.

In response, ConAgra has launched a restructuring plan aimed at improving Ralcorp’s profitability. This strategy includes better packaging, speeding up deliveries and launching new products. It has also cut its private-label prices, which should help improve Ralcorp’s market share.

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YUM! BRANDS INC. $92 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 432.4 million; Market cap: $39.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.yum.com) aims to spur sales at its U.S. KFC restaurants with several new initiatives, including upgrading stores and launching new menu items. The company also plans a new series of TV and online ads featuring an actor playing Colonel Harland Sanders, the late founder of Kentucky Fried Chicken. The stock is up 26% since the start of 2015, partly due to speculation that Yum may spin off its KFC and Pizza Hut chains in China, which account for half of its revenue. Food-safety concerns and strong competition from other fast-food restaurants have hurt Yum’s Chinese operations in the past two years. Yum Brands is still a hold....

SYMANTEC CORP., $24.48, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In its fiscal 2015 fourth quarter, which ended April 3, 2015, Symantec earned $299 million, or $0.43 a share. That fell short of the consensus estimate of $0.44. The latest earnings are also down 10.2% from $333 million, or $0.48 a share, a year earlier. The decline is partly because Symantec is hiring more programmers as it expands its cybersecurity operations. However, the company’s restructuring, which includes cancelling unprofitable deals to pre-install software on new computers and simplifying its product lines, saved it $150 million in fiscal 2015....

YUM! BRANDS INC. $92 (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 432.4 million; Market cap: $39.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.yum.com) aims to spur sales at its U.S. KFC restaurants with several new initiatives, including upgrading stores and launching new menu items. The company also plans a new series of TV and online ads featuring an actor playing Colonel Harland Sanders, the late founder of Kentucky Fried Chicken.

The stock is up 26% since the start of 2015, partly due to speculation that Yum may spin off its KFC and Pizza Hut chains in China, which account for half of its revenue. Food-safety concerns and strong competition from other fast-food restaurants have hurt Yum’s Chinese operations in the past two years.

Yum Brands is still a hold.

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GANNETT CO., INC. $35 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 227.8 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.gannett.com) publishes newspapers in the U.S. and U.K., including USAToday, its flagship paper. The company also owns 46 TV stations and websites that attract over 39 million unique visitors a month. In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47. The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses....

GANNETT CO., INC. $35 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 227.8 million; Market cap: $8.0 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.3%; TSINetwork Rating: Average; www.gannett.com) publishes newspapers in the U.S. and U.K., including USAToday, its flagship paper. The company also owns 46 TV stations and websites that attract over 39 million unique visitors a month.

In the three months ended March 29, 2015, Gannett’s revenue rose 4.9%, to $1.5 billion from $1.4 billion a year earlier. Strong gains at the broadcasting and digital divisions (49% of the total) offset an 8.8% decline at the publishing businesses (51%) due to weak ad revenue. Earnings improved 4.3%, to $0.49 a share from $0.47.

The company still plans to spin off its publishing operations as a separate firm that will keep the Gannett name. The remaining company, called Tegna (New York symbol TGNA), will own the broadcast and Internet businesses.

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PLEASE NOTE: Our next Hotlines will go out on Friday, April 10, 2015. PHILIPS ELECTRONICS N.V. ADRs, $29.30, New York symbol PHG, is selling most of its light emitting diode (LED) components and automotive lighting division (which is changing its name to Lumileds) to private equity firm GO Scale Capital. Under the deal, Philips will sell 80.1% of Lumileds for $2.9 billion. That’s equal to 11% of its $26.6-billion market cap (or the value of all of its outstanding shares). Philips expects to complete the sale in the third quarter of 2015....

FEDEX CORP., $172.04, New York symbol FDX, earned $580 million in the third quarter of its 2015 fiscal year, which ended February 28, 2015. That’s up 53.4% from $378 million a year earlier. Per-share earnings gained 63.4%, to $2.01 from $1.23, beating the consensus forecast of $1.87. The gains mainly resulted from the company’s recent restructuring and a 30.4% drop in fuel costs. Harsh winter weather in the year-earlier quarter also disrupted ground deliveries and depressed FedEx’s earnings. Overall revenue rose 3.7%, to $11.7 billion from $11.3 billion, missing the consensus estimate of $11.8 billion....

VISA INC., $269.34, New York symbol V, and Citigroup Inc. (New York symbol C) have won a contract with retailer Costco Wholesale Corp. (Nasdaq symbol COST). Under the deal, which takes effect April 1, 2016, Costco will only accept Visa credit cards at its 474 warehouse stores in the U.S. In addition, Citigroup will offer Costco members a new co-branded Visa card with an enhanced loyalty rewards program—though shoppers can also use Visa cards issued by other banks. This deal should increase Visa’s payment volumes and earnings. Moreover, the company’s risk is low, as Citigroup will issue the cards and collect the payments....