ADT Corp (ADT) Plunges, These Hedge Funds Took A Beating

ADT Corp (NYSE:ADT) is one of the biggest losers yesterday, declining 17%. Bloomberg/Businessweek said the following about this sharp movement:

ADT Corp., the provider of security services for residences and small businesses, tumbled the most in the Standard & Poor’s 500 Index after profit and sales trailed analysts’ estimates. The shares plunged 17 percent to $31.40 at the close in New York, the biggest decline since the Boca Raton, Florida-based company’s 2012 spinoff from Tyco International Inc. A 9.4 percent decline in new customers for the quarter ended Dec. 27 surprised investors who had long seen ADT as a relatively stable business, said Ian Zaffino, an analyst with Oppenheimer & Co. He said the company faces pressure from new home-security competitors such as AT&T Inc. and Comcast Corp.

Keith Meister

“Customer growth did not meet our expectations this quarter and we have implemented actions, including improvements in our dealer channel and lead generation process, to regain subscriber traction in the future,” ADT’s Naren Gursahaney said in a statement.

Here are some of the highlights from ADT Corp (NYSE:ADT)’s earnings release:

($ in millions, except per share amounts)

Q1 2014

Q1 2013

Change

Recurring revenue

$775

$744

4.2%

Other revenue

$64

$65

-1.5%

Total revenue

$839

$809

3.7%

Net income

$77

$105

-26.7%

EBITDA before special items

$426

$417

2.2%

EBITDA margin before special items

50.8%

51.5%

-70 bps

Diluted earnings per share

$0.39

$0.44

-11.4%

Diluted earnings per share before special items

$0.43

$0.44

-2.3%

Diluted weighted-average shares outstanding

198

236

-16.1%

Some of the hedge funds tracked by Insider Monkey lost big today because of this move. Here are the top 5 hedge funds and their loss today:

1. Keith Meister’s Corvex Capital

Number of ADT Corp shares: 11,166,021

Loss: More than $66 million.

2. Eric Bannasch’s Cadian Capital

Number of ADT Corp shares: 2,320,703

Loss: More than $13 million.

3. Larry Robbins’s Glenview Capital

Number of ADT Corp shares: 2,024,452

Loss: More than $12 million.

4. Peter Rathjens, Bruce Clarke And John Campbell’s Arrowstreet Capital

Number of ADT Corp shares: 1,938,975

Loss: More than $11 million.

5. D. E. Shaw’s D E Shaw

Number of ADT Corp shares: 1,726,555

Loss: More than $10 million.

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