Companies & Funds

Unilever is half way there on Kraft challenge

20 July 2017

The Marmite maker has cut costs faster than expected, reducing ad spend and paying less to its suppliers. Its 20 pct operating margin goal looks reachable. Yet with U.S. rival Kraft Heinz free to reprise its hostile bid next month, volume growth is too low for comfort.

Swedish banks prepare for mini-reverse Brexit

20 July 2017

Nordea has hinted it may leave its home country unless Stockholm joins the EU banking union. Sweden would have to surrender control over banking rules, but would get stable regulation and economies of scale. The UK, which is pulling away from the EU, looks ever more an outlier.

Publicis pleasant surprise flags ad world’s plight

20 July 2017

The French ad group’s top line grew 0.8 percent. But even that looks good: in the previous two quarters Publicis’ organic revenue shrank, and analysts were expecting it to do so again. The challenges to media buying make the industry’s low valuation look justified.

Wanda and Sunac go back to M&A 101

20 July 2017

The Chinese developers have been forced to rejig their $9 bln property deal. The result is a less fiddly structure with a third party. That might get the sale through, but Wanda's long list of problems make it unclear if it is any closer to its bigger goal of listing onshore.

Let venture capitalists subsidize your life

19 July 2017

Frustrated by an inability to invest in unicorns? Try another strategy. VCs and other investors lose money funding vendors of meal kits, car rides, music, data storage, and even household necessities. Here’s how to live well off Silicon Valley’s obsession with the future.

Morgan Stanley gives Goldman a lesson in diversity

19 July 2017

Stabilizing fixed-income trading isn’t the only way CEO James Gorman showed Lloyd Blankfein his tail for the second quarter in a row. His growing wealth unit helped, too. With the diversified firm firing on all cylinders, it is justifiably overtaking Goldman even on valuation.

Carrefour unit shows way to Brazil IPO revival

19 July 2017

The French supermarket chain’s local unit raised $1.6 bln in the country’s biggest stock offering in four years. Rising deal flow suggests growing confidence Latin America’s largest economy is getting back on track. But the recovery’s pace is tepid, and sensible pricing is key.

Reckitt shows bigger rivals how it’s done

19 July 2017

The UK company sold its French’s Mustard unit to U.S. food group McCormick for $4.2 bln, a spicy 7.4 times sales – even though there’s no recovery story and limited synergies. With buyers this hungry, less efficient peers Unilever and Nestlé ought to emulate Reckitt’s recipe.

Akzo’s misguided strategy will weather CEO change

19 July 2017

The Dutch paint maker’s new boss Thierry Vanlancker inherits his predecessor’s fanciful mid-term targets. The goals are backed by Chairman Antony Burgmans, a key opponent of a deal with PPG who may now find his position strengthened. Real change at Akzo is even less likely.

Mayo board’s exodus sets spicy governance example

18 July 2017

Hampton Creek may have used dodgy methods to boost sales of its eggless mayonnaise. Now most of the Silicon Valley startup’s directors have quit after they clashed with the co-founder and CEO. It’s a last resort, but boards at Theranos and Uber, for example, might have tried it.

BofA’s progress fails to achieve escape velocity

18 July 2017

The $236 bln U.S. lender's $4.9 bln of Q2 profit beat estimates as retail, wealth management and investment banking all did the best in years. CEO Brian Moynihan is also keeping costs down. Yet return on equity is stuck in single digits. Only help from the Fed can change that.

Goldman’s compass points in wrong direction

18 July 2017

Fixed-income trading revenue fell 40 pct in the second quarter as Lloyd Blankfein’s Wall Street firm again navigated the market worse than rivals. The $90 bln Goldman is slowly changing course, but its high valuation relative to rivals demands faster improvement.

Ericsson throws kitchen sink at the kitchen sink

18 July 2017

The Swedish telecom kit maker has issued its second profit warning in four months. Demand for wireless networks is shrinking faster than thought. At least Ericsson is no longer losing market share, and has put a number on touted cost savings. It can’t afford to disappoint again.

German climate change policy takes Trumpian turn

18 July 2017

Angela Merkel has castigated the U.S. President for pulling out of the Paris accord. Yet two German states are putting mining jobs ahead of cutting carbon emissions. If they don’t reconsider, the Chancellor’s green credentials – and the global agreement – will suffer a blow.

Netflix triggers shareholders’ Pavlovian response

17 July 2017

The video-streaming service added more subscribers than expected in the quarter and grew operating income, up 83 pct, faster than revenue. That sent shares soaring, even though expected profitability falls a long way short of being able to justify the stock’s fairy-tale multiple.

Dimon acolyte injects controversy into custody war

17 July 2017

Ex-JPMorgan exec and Visa CEO Charlie Scharf is BNY Mellon’s surprise new boss. An accomplished outsider may initially please investors in a firm still lagging rivals despite a push from Nelson Peltz. But growing revenue from clients facing intense fee pressure will be tough.

KKR’s former barbarians tackle toughest gate yet

17 July 2017

Joe Bae and Scott Nuttall look poised to succeed septuagenarian co-founders Henry Kravis and George Roberts. It may spark broader changes to boost the $16 bln firm’s value. But as public rivals Blackstone and Carlyle can attest, private-equity grandees cede power ever so slowly.

Carillion needs high-speed balance sheet repair

17 July 2017

Despite winning a share of the UK’s 55 bln pound high-speed rail line, the distressed construction company’s situation is precarious. Its pressing task is to find investors to put in perhaps 500 mln pounds, before customers start cutting loose.

BlackRock bitten by its own cannibalization

17 July 2017

The world’s largest fund manager pulled in over $100 bln of new money in the second quarter. Most went into cheap ETFs, making revenue and profit fall short. Larry Fink’s shop is still thriving, but it’s not immune to fee pressures partly created by itself and rival Vanguard.

Peltz goes for the close shave at Procter & Gamble

17 July 2017

Unlike his last proxy fight at DuPont, the activist is taking a more surgical approach, lobbying for one board seat at the $223 bln razors-to-detergent conglomerate. Trian is also supporting management and not calling for a breakup. Shareholders would be daft to turn him down.