BREAKINGVIEWS

Huawei can afford to hang up on America

17 January 2020

The Chinese telecoms firm is fighting to keep its rural-carrier customers amid D.C. pressure. It’s a losing battle and makes little sense given the tiny contribution to Huawei’s top line. Quitting the U.S. would get rid of a headache and leave more energy for bigger conflicts.

Microsoft puts climate grandstanders in the shade

17 January 2020

The $1.3 trln software firm’s plan to remove all carbon it has ever produced raises the bar for rivals seeking to appear green. Funding tech to remove atmospheric CO2 adds a multiplier effect. The only way Microsoft could improve on this would be to ditch its dirtier customers.

Vodafone’s India demise would cause wave of pain

17 January 2020

Shares in the telco’s local unit plunged 25% after a court dismissed a plea to review $7 bln of levies. The government could accept delayed payment, still leaving Vodafone Idea with a heavy burden. The alternative, bankruptcy of the big brand, will hit a fragile economy hard.

Richemont’s triple test to add share price sparkle

17 January 2020

The $46 bln Cartier owner weathered a hit to Hong Kong sales in the last three months of 2019. The shares are up 20% in the past year, but badly lag luxury rivals. To close the gap, the Swiss group must fend off LVMH-powered Tiffany and deliver on its costly online acquisition.

French demos poor excuse for Casino earnings miss

17 January 2020

The retailer’s shares slumped after it said trading profit in France rose just 5% in 2019 – half the previous guidance. On a call with analysts Chief Financial Officer David Lubek blamed recent pensions protests. The unconvincing explanation hints at bigger problems.

China’s shadow bankers sneak back to market

17 January 2020

GDP grew 6.0% last quarter, but lending disappointed. A drive to cut bad debt while pushing banks to prop up small risky firms has squeezed healthier private companies. With informal, pricey credit moving to fill the gap, officials may have to tolerate a shadow loan revival.

Anta Sports puts ultimate buy rating on itself

17 January 2020

After outrunning short-sellers, the Chinese apparel giant is issuing 1 bln euros of convertible debt that pays nothing and can’t be swapped for equity until shares rise 40%. Strong take-up will signal confidence Anta can repeat its success reviving Fila with Finland’s Amer.

Exxon is climate activism’s great white whale

16 January 2020

The $292 bln oil producer is too big to push around, even though it’s at odds with green priorities of investors like BlackRock. Boss Darren Woods almost never shows up for earnings calls. Still, shareholders could land a blow by aiming anew at Woods’ dual chair-and-CEO role.

Trump’s trade war chases its own tail

16 January 2020

The U.S. president is hailing his agreement with China as a boost to farmers and manufacturing workers. It is, but only because they were the losers from trade conflict. Obama showed that following the rules doesn’t work; Trump has only shown that ripping them up doesn’t either.

Bombardier trips twice in deleveraging two-step

16 January 2020

The indebted Canadian group warned 2019 profit would fall short. It’s trying to cut borrowing, so the last thing it needs is a charge against rail projects combined with a possible cash call at its joint venture with Airbus. Exiting the JV in a hurry may be the least bad option.

Nestlé needs backup in war on plastic

16 January 2020

The KitKat maker will invest $2 bln to sell more grub in recycled packaging. Yet even that will only help cut its use of new plastics by a third. For the scheme to work, CEO Mark Schneider needs a market for second-hand wrapping to take off, and other food groups to take a hit.

Morgan Stanley puts decent cap on forgettable year

16 January 2020

The Wall Street firm’s 2019 revenue hit $41 bln, partly thanks to lumpy private equity gains. Overall, strong wealth management was offset by relatively weak trading. More worryingly for 2020, costs outpaced revenue. At least James Gorman isn’t the only CEO with room to improve.

Pearson’s excuses are running thin

16 January 2020

The publisher’s shares hit a 12-year low after it said 2019 operating profit would miss forecasts. CEO John Fallon and his finance chief, who are both leaving, switched focus from paper textbooks to digital ones. Their replacements will have to work out how to make that succeed.