Apple’s old age beats Google’s adolescence 30 Apr 2019 The iPhone maker reported a 5 pct drop in revenue as consumers pocket its marquee product longer. Boss Tim Cook’s handouts to investors provide a nice cushion as he searches for the next big thing. Alphabet’s Google has higher expectations and less room for missing the mark.
Capitalists on defensive even as good times roll 30 Apr 2019 There’s a sense of foreboding at the annual Milken confab in LA. The U.S. economy is robust and valuations frothy. But last year’s tax cuts are history and a downturn may be looming. That could redouble the need to address tough challenges like diversity and inequality.
Beyond Meat’s green IPO could still burn buyers 30 Apr 2019 The plant-based burger maker is seeking a $1.5 bln valuation after raising its IPO target price by 20 pct. The eco-friendly business has developed a following among consumers. But with former investor Tyson entering the alternative-meat space, investors may have tastier options.
Loose credit helps LBO funds slay sacred debt cows 30 Apr 2019 Lenders to private equity managers are increasingly giving up protections. Loan investors more used to demanding and receiving better terms than bonds are now accepting similar conditions – and, in some cases, even worse ones. That could lead to a nasty shock.
Marriott’s home-sharing lacks a disruptive edge 30 Apr 2019 The $46 bln hotelier is borrowing Airbnb’s model of renting out high-end homes. Potentially it expands the business without heavy investment. But the upside is limited: Industries like hotels and taxis have struggled to don new skins without cannibalization and brand damage.
Buffett digs sweetest well in U.S. shale patch 30 Apr 2019 Berkshire Hathaway is putting up $10 billion to help Occidental fund its $38 billion bid for Anadarko. It’s a vote of confidence in Oxy’s unsolicited offer. As usual, though, the best deal will go to Warren Buffett himself, who can still win even if other shareholders lose.
GE’s decent quarter won’t stop the shrink 30 Apr 2019 The $85 bln conglomerate burned less cash than feared in the first quarter, but problems with Boeing’s 737 MAX jet bring new risk to the one division that was thriving. That leaves CEO Larry Culp with no growth engines, and the prospect of cutting GE into still smaller pieces.
StanChart delivers a brittle show of strength 30 Apr 2019 The Asia-focused bank will buy back $1 bln of shares after a strong first quarter. With U.S. legal risks largely banished and the bank trading at a discount, the chutzpah is understandable. But one-off gains mean CEO Bill Winters is still some way from his 10 pct return goal.
Airbus struggles to profit from Boeing misery 30 Apr 2019 The European planemaker is wary of ramping up output despite its U.S. rival’s 737 MAX problems. Avoiding a price war may be one reason and airlines have yet to commit to switching suppliers. Without firm orders, investing in more production would squeeze free cash flow further.
Apple’s Austrian vassal solves one of its problems 30 Apr 2019 Shares in chipmaker AMS soared 20 pct after it forecast better second-quarter sales and implied it was relying less on the iPhone maker for business. But it still has a heavy debt pile and low margins. Greater detail on new revenue sources would make the bounce more durable.
Chinese pork producer goes hog-wild for trade deal 30 Apr 2019 WH Group’s quarterly profit declined by a fifth, even as its shares have surged 50 pct this year. That suggests investors are partly counting on a U.S.-China pact to lift sales amid a bout of African swine fever. It’s a heady dose of optimism for talks that have been so erratic.
Samsung may stay true to its bleak words 30 Apr 2019 The South Korean chipmaker’s quarterly operating profit fell a whopping 60 pct, weighed down by lower prices. Shares are up a fifth this year, however, on an anticipated rebound. Samsung’s abundant use of “weak” and “slow” suggest it could take longer than expected.
Google’s autonomous growth engine shifts lower 29 Apr 2019 The Alphabet unit’s dominance of internet search and advertising continues, but revenue growth slowed to 17 pct in the first quarter. Moreover, it reined in investment, which may indicate further downshifting. It’s rare for the Google juggernaut to sputter, even slightly.
The Exchange: Joseph Stiglitz 29 Apr 2019 Americans are unequal, unheeded and underpaid, the former White House economist argues in his new book “People, Power, and Profits.” He stopped by Breakingviews to discuss why global trade needs a rewrite, Facebook deserves a break-up and socialism is less scary than it sounds.
Boeing’s supine owners invite tougher co-pilots 29 Apr 2019 Investors rejected a fresh call for an independent chair of the $214 bln plane maker. Its boss, Dennis Muilenburg, has been slow to respond to the 737 MAX crisis, and resolving it is more than a full-time job. If owners won’t tighten oversight, regulators and politicians will.
Lesson of Disney’s ‘Endgame’: Go big or go home 29 Apr 2019 The Marvel spectacle pummeled box-office records with $1.2 bln in global sales. The smash hit strengthens the Magic Kingdom’s leverage over screens and furthers superheroes’ dominance of Hollywood. Other film fans will turn to streaming services like Amazon to fill the void.
Slack needs a channel for valuation skeptics 29 Apr 2019 The email disruptor’s revenue jumped 82 pct in the year to January. But losses held steady, leaving profit far away. Private trading in March may imply a price tag of $15 bln or so and Slack could expect even more from its direct listing. Investors may want to chat before buying.
Deutsche Bank chair faces shareholder reckoning 29 Apr 2019 Failed merger talks with Commerzbank are another blot on Paul Achleitner’s seven-year tenure at the German lender. A vote against Bayer bosses suggests investors are becoming more vocal. With his own May 23 judgment day looming, Achleitner has a tough job arguing for continuity.
Spanish election half-solves political paralysis 29 Apr 2019 Prime Minister Pedro Sanchez's Socialists gained support in the country’s third vote in four years. That gives him a clear political mandate, but still no majority. He’s in a stronger position than before but still probably needs support from regional parties to get much done.
Sri Lanka earns a no-confidence discount 29 Apr 2019 The likes of France and Egypt have suffered economically after tragic attacks, but Colombo’s political infighting and botched death toll are apt to slow any recovery. Even if the IMF and China provide backstops, Sri Lanka looks vulnerable to the worst kind of collapse in tourism.
Hong Kong currency peg seduces yet again 29 Apr 2019 Hedge fund manager Kyle Bass is the latest investor to lay out a dire case about a long-time link to the U.S. dollar. His rambling argument suggests overleveraged banks and political ructions make the peg precarious. It probably will require a real crisis to prompt any overhaul.
Subsidies gas up turnaround at Buffett-backed BYD 29 Apr 2019 The Chinese electric vehicle maker reported a stupendous 632 pct increase in first-quarter net profit. Around half of the boost came from generous government grants, which may not be sustained. Even so, investors have cause for cautious celebration.
America is a 2 pct economy growing at 3.2 pct 26 Apr 2019 The faster-than-expected first-quarter growth rate isn’t everything it seems. Trade swings and an inventory bulge drove much of the increase while consumer spending and business investment slowed. The news caused interest rates to drop, which should keep recession risks at bay.
Buyers beware Uber’s slower growth, bigger losses 26 Apr 2019 The ride-hailing app wants an IPO market value of up to $84 bln before dilution, reflecting the share-price slide of rival Lyft. Uber also lost $1 bln in the first quarter, on a top line only 20 pct up on last year. The big question: whether its heavy investment ever pays off.
PayPal’s ride-share with Uber may be bumpy 26 Apr 2019 The $129 billion payments company could pick up some decent new business by investing $500 million in the ride-hailing firm’s IPO. But Uber is a riskier bet than other firms PayPal has taken stakes in. CEO Dan Schulman could be in for an uncomfortable journey.
Cash is the real prize in oil-patch showdown 26 Apr 2019 Forget diversification and other strategic chimeras as the rationale for Chevron and Occidental’s $38 bln battle for shale driller Anadarko. It’s all about sating oil investors’ irrational fixation on dividends. Bigger Chevron can pay more, Occidental has the greater need.
Review: A case for old-fashioned progressivism 26 Apr 2019 Joseph Stiglitz has been an intellectual leader in America’s left-wing economic establishment for decades. His latest book promotes a fairly traditional political and monetary agenda. The analysis and recommendations are mostly fine, but old nostrums may not match today’s needs.
Shell has cover to take the high ground in Brunei 26 Apr 2019 A shareholder group wants the $260 bln energy giant to use its clout in the tiny Asian state to press for gay rights. Shell will be cautious of fallout elsewhere, but talks are possible. It has the leverage to open meaningful dialogue too. A fix, though, won’t be quick.
Deutsche feels chill wind of conscious uncoupling 26 Apr 2019 A day after the German bank ended Commerzbank merger talks it reported a 1.3 pct first-quarter return. Cost cuts at least broadly kept pace with falling revenue. Yet poor performance and zero deal synergies mean even a lowball 4 pct return target is not in Deutsche Bank’s gift.
Renault M&A plan is lesser of two evils for Nissan 26 Apr 2019 The Gallic carmaker is once again pushing for closer integration with its partner, Nikkei says. If the Japanese company were to win concessions, such as board seat parity or an equal stake in a merged group, a deal would make more sense than the current mess.