Exxon Mobil reaches bottom of the oil barrel 29 Apr 2016 The energy goliath suffered a 63 pct fall in quarterly profit. Rivals Chevron and Conoco were hurting, too, as crude fell below $30 in January before investment cuts helped ease excess supply and push up the price. Recovery will be slow and uneven, but the worst is probably past.
Gucci misses opportunity in "hell handbag" spat 29 Apr 2016 The Italian label wants Hong Kongers to stop burning paper versions of its $3,000 handbags at relatives’ graves. While it has a point, legally speaking, Gucci’s ire is misplaced. Wanting to spend the afterlife with a Gucci handbag is the ultimate pledge of brand loyalty.
U.S. Steel’s China hacking gripe clever but risky 29 Apr 2016 The giant producer claims cyber thefts breach trade laws and has asked a federal commission to block offending firms’ imports. It’s a novel way to fight a thorny problem but one unlikely to attract imitators. The Middle Kingdom may be too lucrative a market to tempt retaliation.
TV tech deal is must-see M&A 29 Apr 2016 Rovi’s $1.1 bln purchase price for digital-recording pioneer TiVo should mostly be covered by $100 mln in expected cost savings. Stock rises are rarer for corporate buyers as mergers have become financially irrational. This one suggests there can still be another way.
RBS sale delays hit credibility more than finances 29 Apr 2016 The part-state owned UK bank says it may miss an EU-mandated timeframe to dispose of 300 branches. Even if it takes another 12 months, RBS’s capital position should be OK. But for investors to believe the path to dividend reinstatement, it needs to avoid any missteps.
Deutsche Bank’s zeal to reform takes odd detour 29 Apr 2016 The German bank has parted company with the head of its integrity committee, following criticism of his “overzealous” approach. Deutsche has new executives and says it is committed to addressing past scandals. If so, there should be a place at the table for such ardour.
Euro zone needs better glue than Canadian kindness 29 Apr 2016 Portugal’s eligibility for ECB bond-buying hangs on the rating of Toronto-based agency DBRS. Effectively, the ECB has outsourced the decision of whether to cut off a country. It works to a point: it’s hard to imagine the ECB abandoning Italy or France whatever their ratings.
Investment is real star of strong French growth 29 Apr 2016 GDP increased by a surprisingly robust 0.5 percent in the first quarter, boosted by the biggest rise in household spending in more than a decade. Nationwide shopping sprees may just be the flipside of the frugal end to last year. The pickup in investment is far more cheering.
Private equity gets loco with pricy Spanish IPOs 29 Apr 2016 Telepizza’s dismal IPO debut joins a list of recent duds sold on the market by buyout barons. Investors in other IPOs like Parques Reunidos are getting more cautious. By pushing for high prices, buyout barons may be shooting themselves in the foot.
Too many cooks spoil UK restaurants’ broth 29 Apr 2016 Shares of the Restaurant Group, owner of the Chiquito chain, dropped a fifth after it warned of slower sales, hit by lower footfall in shopping malls. The sector is also gorging on overexpansion. New stores are opening at twice the speed of consumer spending on eating out.
Chinese banks’ stealth clean-up fools nobody 29 Apr 2016 Top lenders like ICBC and BOC are piling up bad loans yet still reporting flat earnings. Pliable regulators are cutting them extra slack. Investors did not trust the banks’ balance sheets anyway. The latest sleight of hand will only fuel their scepticism.
Baidu stops short of full download on local bets 29 Apr 2016 Sales are soaring yet earnings fell 19 pct last quarter at China’s top search engine. Baidu is finally outlining how a costly push into food, movies and maps fits with its main search business. But investors still have little insight into how and when this will start paying off.
Running India’s central bank will get tougher 29 Apr 2016 Investors are fretting about Raghuram Rajan’s future. The RBI governor, whose term expires soon, has helped make the nation a global bright spot and pushed to fix banks’ bad debts. Now Rajan, or whoever replaces him, faces a test to bed down reforms and keep India on track.
Amazon lays tech credentials on virtual table 28 Apr 2016 The internet company’s 28 pct Q1 sales increase is impressive, but more still are its prodigious and growing earnings from selling digital services. Amazon’s lowly margin remains a long way from justifying its $280 bln valuation, but it is finally looking less like a retailer.
Comcast’s $3.8 bln Shrek deal needs some make-up 28 Apr 2016 The broadcaster’s NBC Universal unit is paying a 50 pct premium for DreamWorks, which has been losing money for two years. Cost cuts, recouped revenue and more movies may justify the price for Jeffrey Katzenberg’s studio. But Comcast is leaving its investors in the dark.
Will retirees get just 4 pct long-term returns? 28 Apr 2016 That’s a scenario laid out in a new McKinsey Global Institute report. The idea is that returns in recent decades – and expectations that are still above 7 pct – have been inflated by effects that are now disappearing. If so, Gen Xers will retire even poorer than they expect.
Cox: What Mark Zuckerberg could learn in Quebec 28 Apr 2016 The founders of mini-mart leviathan Couche-Tard devised a clever way to balance supporters and detractors of dual-class stock by eliminating voting rights over time. The idea would suit Facebook and many others, if only bad tendencies fueled by ego could somehow be overcome.
VW leaves worrying set of tyre tracks 28 Apr 2016 Volkswagen’s stricken core brand is selling fewer cars for more money but at a loss. That’s an odd bunch of signals, but hints at price cuts and aggressive marketing to mitigate the fallout of its emissions scandal. At least its premium brands are picking up the slack.
Descending Peak Auto could be rocky road 28 Apr 2016 After selling a record 17.5 mln vehicles in the United States last year, the prospect of a downturn looms for Detroit manufacturers. Even a modest one could hit revenue hard. Ford, GM and Fiat Chrysler are fitter than they were in 2009, but have yet to navigate the downhill.
Abbott’s $25 bln buy inspires little investor hope 28 Apr 2016 It’s buying medical-device maker St. Jude at a $6.5 bln premium. Cost cuts cover less than half that, and earnings accretion doesn’t make it a good deal. Abbott’s value tumbled over $5 bln. Shareholders may recall that the target’s namesake is the patron saint of lost causes.
AbbVie grabs unicorn by its $10 bln horn 28 Apr 2016 The U.S. pharma giant is buying Stemcentrx, an eight-year-old cancer-drug developer backed by the blue-chip Founders Fund. Valued at $5 bln last fall, it was among Silicon Valley startups tarnished by recent markdowns. The sale suggests some hyped firms can still live the fantasy.
Priceline embarrassment goes beyond CEO dalliance 28 Apr 2016 The $68 bln travel website parted ways with Darren Huston citing “activities inconsistent with the board’s expectations for executive conduct.” Resorting to a former boss as a stopgap isn’t disastrous, but it suggests the board missed a trick by not bedding down succession.
Deutsche Bank upgrades from dire to depressing 28 Apr 2016 The German lender made first-quarter earnings of 236 mln euros, confounding forecasts for a loss about that size. But Deutsche’s capital position fell, return on equity was just 1.4 pct and the only bit that really beat revenue expectations was Postbank, which is on the block.
Sanofi bidding war looks expensive from the start 28 Apr 2016 The French pharma group’s $9.3 bln bid for cancer drugmaker Medivation is opportunistic and logical: the target’s shares have fallen on U.S. pricing fears, and Sanofi needs to diversify. But it’s not cheap, and other suitors lurk. Sanofi will struggle to finish the full course.
Lloyds’ dividend promise has Brexit caveat 28 Apr 2016 The UK bank’s payout growth hinges on keeping its capital ratio at 13 percent - which it barely managed in the first quarter. Lloyds’ potential to generate lots of capital is undimmed. But if Britons vote to quit the EU, those earnings may have to be diverted to running repairs.
Anglo American is winning race to cut debt pile 28 Apr 2016 The $1.5 bln the miner will raise from selling its Brazilian phosphate and niobium units is better than might have been expected. A multiple of 10 times EBITDA proves the company can still get a good price even in a downturn. Anglo is slowly but steadily sharpening its focus.
BBVA finds pain in Spain and USA 28 Apr 2016 Shares in the Spanish lender dropped after it disclosed weak first-quarter profit. Currencies and lower trading income have hurt, but business in Spain is sagging and provisions grew in the U.S. It’s an inauspicious start to what was supposed to be a strong year.
Hermes looks down-at-heel minus the Birkin 28 Apr 2016 Sales at the French handbag maker were up 6 percent in the first quarter. That’s its slowest growth in at least five years but still better than most of its rivals. Yet it is now more dependent on the division that makes its $10,000 bags. Strip that out and it looks disheveled.
Bank of Japan goes from activist to bystander 28 Apr 2016 The world’s most aggressive central bank has wrong-footed investors by holding policy steady even as the backdrop weakens. There are reasons to hold back: a previous push into negative rates is still bedding down, for example. But markets could have been let down more gently.
Playing it safe pays off for Samsung in mobile 28 Apr 2016 Strong sales of the new Galaxy S7 helped the Korean giant make $3.4 bln of quarterly operating profit from phones. Unlike Apple, Samsung has not bet so boldly on Chinese growth. Its success rests on more mundane factors, like cost cuts, promotional deals, and good design.