Under Armour shares jump 7% premarket as earnings beat offsets tepid outlook

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Under Armour Inc. shares jumped 7% in premarket trade Friday, after the athletic apparel and goods maker beat earnings estimates for the third quarter despite the effects of the coronavirus pandemic. The company posted net income of $38.9 million, or 9 cents a share, for the quarter, down from $102.3 million, or 23 cents a share, in the year-earlier period. Adjusted per-share earnings came to 26 cents, well ahead of the 3 cents FactSet consensus. Revenue was flat at $1.4 billion, but beat the $1.2 billion FactSet consensus. “Due to ongoing uncertainty related to COVID-19 and its potential effect on global markets, the company expects material impacts on its business results for the remainder of 2020 and into 2021,” it said in a statement. Under Armour now expects fiscal 2020 revenue to fall at a high-teen percentage rate from 2019, and expects its adjusted loss per share to range from 47 cents to 49 cents. The FactSet consensus is for a loss of 71 cents. The company expects year-end timing impacts from COVID-19, including spring product deliveries that will come in early 2021 instead of late 2020. It also expects a substantial decline in licensing revenue due to lower contractual royalty minimums and contract settlements realized in 2019. Separately, the company said it’s selling its MyFitnessPal platform to private-equity firm Francisco Partners for $345 million in a deal expected to close in the fourth quarter. Shares have fallen 26% in the year to date, while the S&P 500 has gained 2.5%.
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