Amazon’s juggling becomes ever-more captivating 27 Oct 2016 The $390 bln retailer's quarterly results showed heady growth again. It lifted retail sales, unveiled gadgets, shot new shows, expanded cloud computing and entered new markets. Jeff Bezos keeps adding balls, and nothing hit the floor – except any hope of big, imminent profit.
Tronc may have to face newspaper free fall solo 27 Oct 2016 Michael Ferro, chairman of the absurdly renamed L.A. Times and Chicago Tribune publisher, spent months resisting Gannett's entreaties. Now the buyer is in trouble: a double-digit plunge in ad sales and nasty losses. Ferro may find himself, well, tronced by his own petard.
Here’s one telecoms merger that makes some sense 27 Oct 2016 Unlike AT&T's quixotic bid for Time Warner, there's a modicum of industrial logic to combining Level 3 with CenturyLink. Crunching the two telephone companies should also benefit shareholders financially, with synergies worth some $5 bln achievable based on historic precedents.
Viewsroom: AT&T’s dog of a deal 27 Oct 2016 CEO Randall Stephenson's $85 bln offer for Time Warner lacks strategic rationale, has politicians of all stripes criticizing it and has destroyed shareholder value while denying owners a vote. All it lacks – so far – is an activist shareholder demanding it be scrapped.
Palantir data starts to form an IPO pattern 27 Oct 2016 Boss Alex Karp once said companies lose competitiveness when they go public. Now he's more open to his $20 bln Big Data enterprise doing just that. Getting bigger, turning a profit and worrying about keeping staff are factors. One casualty could be Palantir's mystique.
Qualcomm’s $47 bln NXP deal may have an extra gear 27 Oct 2016 The chipmaker is paying over the odds to expand beyond stagnant smartphones. The $10 bln premium for NXP overwhelms anticipated cost savings worth about $4 bln. Qualcomm's chances of dominating the future market for self-driving cars help explain the deal's warm reception.
Ford’s messy quarter is a slowdown, not a crash 27 Oct 2016 Weaker sales contributed to the 56 pct drop in the carmaker's third-quarter earnings. But so did recalls and other funnies. Strip those out and the Mustang maker's margins are healthier than they look. The rally in U.S. vehicle sales may be over, but the off-ramp is manageable.
AT&T deal may yet help more indie M&A shops 27 Oct 2016 The year's biggest merger enlisted boutiques Perella Weinberg and Allen & Co alongside their bigger Wall Street rivals. If the $85 bln Time Warner acquisition emboldens other CEOs, the likes of Lazard and Moelis should benefit. They can use the help amid a patchy advice market.
Blockchain for banks will eat its creators 27 Oct 2016 A transaction involving Wells Fargo and a cotton trader has made the payment technology a reality. Meanwhile a consortium-backed platform will soon share its code. Banks act like this is a good thing, but their role as middlemen in markets like corporate bonds and FX is at risk.
Twitter’s Jack Dorsey can’t square two-job circle 27 Oct 2016 The $12 bln social-media service will slash 9 pct of its workforce after a botched sale process. Revenue and user growth is slowing, making next year's profit target optimistic. The whole mess suggests it's time for Twitter's lame one-year experiment with a two-timing CEO to end.
Resilient UK growth adds to policymakers’ quandary 27 Oct 2016 GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.
Volkswagen is painting over its rust spots 27 Oct 2016 The troubled $71 bln German carmaker reported a surprising 17 pct increase in quarterly operating profit and a better outlook. Yet the improvements owe more to accounting small print than better operating performance. At least the group's cash cushion is still expanding.
GE plays tactical hardball with Elliott 27 Oct 2016 The U.S. industrial firm is feuding with the hedge fund over two 3D-printing companies. It refused to cave in to Elliott on one, opting for a rival instead, and raised its bid on the other. This is a decent enough compromise and will stop activists from seeing GE as easy prey.
Telefonica finally faces up to debt reality 27 Oct 2016 The Spanish telco has sensibly cut its dividend and abandoned strict leverage targets. Though the payout may still be too high, the reduction eases the pressure to complete difficult asset sales. Telefonica can now focus on its operations, where cashflow is growing nicely.
Fair winds not enough for Deutsche and Barclays 27 Oct 2016 The European banks gained from Wall Street’s bond trading fervour in the third quarter. But legal costs dragged return on tangible equity down to 2 pct at Deutsche and 3.6 pct at Barclays. The UK lender has fewer troubles than its German peer, but both need good times to last.
Samsung heir’s new job comes with tough to-do list 27 Oct 2016 Shareholders put Jay Y. Lee, son of the electronics group's patriarch, on the board. That makes his role official just as Samsung grapples with the Note 7 fallout and an activist investor's demands. Lee's accountability and signs of greater transparency come at the right time.
China is bluffing on shadow bank crackdown 27 Oct 2016 The central bank is broadening oversight of off-balance sheet finance in the $4 trln wealth management product industry. But increasing scrutiny of the obvious isn't much of a threat to banks that rely on WMPs for profit. Shadow banking supports growth and is here to stay.
Tata ex-chairman turns rebel without a clear cause 27 Oct 2016 The ousted Cyrus Mistry has penned an activist-worthy letter outlining problems at the Indian conglomerate, including over-priced deals and poor governance. Long term, the family-controlled holding apparatus might reform itself. Short term, it may only create more mess.
Tesla’s surprise profit paves way for more capital 26 Oct 2016 Elon Musk's electric-car maker moved back into the black. The small Q3 income could help investors see clear to approving the silly SolarCity deal. Tesla and Musk also have sent mixed signals about needing fresh money, but now would be as good a time as any to try and top up.
Brazil twists knife with reversed JBS carve-up 26 Oct 2016 The $11 bln meatpacker lost a fifth of its market value after the state development bank vetoed a spinoff of international operations that would have cut the company's financing costs. It's a reminder to global investors that the country's interfering ways will be slow to change.
Amazon is trying to deliver everything to everyone 26 Oct 2016 The near $400 bln internet giant's efforts in gadget production, online video, shipping logistics and even bricks-and-mortar stores may smack of hubris. But there's a method to the ambition. Feedback loops mean it may be easier for Amazon to crack multiple markets at once.
Guest view: Oil market needs a “swing consumer” 26 Oct 2016 The oil market is broken. Volatile prices undermine global energy security and increase geopolitical risk, while OPEC seems unable to co-ordinate a cut to supply. There is a solution: focus on demand rather than supply. What’s needed is a “tactical petroleum fund”.
South Africa’s real ratings test is yet to come 26 Oct 2016 Finance Minister Pravin Gordhan has cut GDP forecasts and predicted a higher deficit. His mini-budget shouldn’t heighten the risk of a sovereign downgrade. But if Gordhan’s Nov. 2 court appearance on questionable fraud charges prompts his resignation, junk status may soon follow.
Comcast schools AT&T on media M&A 26 Oct 2016 The cable giant now streams a third of its revenue from NBC Universal, a deal it concluded in early 2013. The regulatory and political climate was more accommodating and CEO Brian Roberts' strategy sound. AT&T's $85 bln bid for Time Warner, by contrast, is a dog's breakfast.
Europe pushes Renzi in dangerous direction 26 Oct 2016 The European Commission is questioning Italy's 2017 budget, just ahead of a key referendum. Capitulation might weaken Prime Minister Matteo Renzi, who has little to lose by flouting Europe's rules. If Renzi falls or takes a pugilistic position, Europe is in for bigger battles.
Bayer’s strong earnings can’t outweigh dismal deal 26 Oct 2016 The German chemical giant's quarterly results beat expectations for the third time running. Bayer's shares have been dragged down regardless by its overpriced $66 bln takeover of Monsanto. It would take fanciful improvements in performance to make good the $15 bln of lost value.
Oil prices are too gloomy on chance of OPEC deal 26 Oct 2016 Crude prices have wilted after Iraq joined Nigeria, Iran and Libya in seeking exemptions from production cuts. But this need not be the death knell of a deal to reduce output. Even a small reduction to production would balance a market that is now only narrowly oversupplied.
Lloyds manfully braves the Brexit treadmill 26 Oct 2016 The UK bank's third-quarter earnings fell two-thirds, hurt by a new 1-bln-pound provision for insurance mis-selling. Adjust for one-offs, and Lloyds' return on equity was a respectable 11.5 pct. But even if an EU exit is gentle, prolonged low rates would force that number down.
Santander switches problem children 26 Oct 2016 Britain and Spain have replaced Brazil as the Iberian lender's most troublesome markets. Its U.S. unit is small, but has struggled to win the trust of regulators. If Brazil keeps recovering Santander ought to hit its targets, though those aren't terribly inspiring.
Tata’s head hunt calls for clarity on governance 26 Oct 2016 A search is on for a leader of the $100 bln Indian conglomerate after the sacking of its chairman. Big names like Indra Nooyi and Arun Sarin are doing the rounds. But to attract top talent, Tata needs to address governance. A commitment to limit meddling would be a good start.