Alibaba splurges to impress China’s store owners 2 Nov 2017 Sales are soaring at Jack Ma's $477 bln e-commerce giant. But it is investing heavily in experimental supermarkets and malls that show off its payments, logistics and marketing prowess to others. It's a costly way to keep Alibaba’s technology and services revenue growing.
Belt-tightening gives Tidjane Thiam breathing room 2 Nov 2017 The Credit Suisse boss delivered an 80 pct jump in third-quarter pre-tax profit despite lower revenue. An activist seeking to break up the Swiss lender can point to a misfiring investment bank. But cost-cutting and higher wealth management earnings give Thiam the upper hand.
Shell and BP stuck incinerating shareholder value 2 Nov 2017 After years adjusting to cheap oil, Shell and BP are beating earnings estimates and throwing off enough cash to cover dividends. BP will soon be buying back shares, too. It’s a start. But even if prices hold up, it will be years before their returns top their cost of capital.
BT leaves decisive dividend call on hold 2 Nov 2017 The UK telecoms group kept its interim payout flat and raised the prospect of investment in pricey full-fibre networks. Increasing the dividend while pleasing regulators may prove tricky. But ducking the trade-off for now means shareholders will have to dial up the uncertainty.
Facebook’s long-term problem just got shorter 1 Nov 2017 Mark Zuckerberg vowed to do more to combat fake content in response to the fallout from Russia-backed ads. He warned profitability will take a hit just as the social network added almost $5 bln to the bottom line. As government scrutiny grows, the $500 bln firm has little choice.
Parts makers offer safer Auto 2.0 bets than Tesla 1 Nov 2017 Elon Musk’s outfit trades at an outlandish valuation on hopes it’ll lead the electric and autonomous car revolution. Yet it routinely misses targets and faces intense competition. Battery makers like LG Chem and Tesla partner Panasonic may pave a less volatile road to riches.
Holding: Facts may spoil board-elections brawl 1 Nov 2017 Shareholder advocates say subjecting all directors to annual votes keeps firms fit, while critics like lawyer Marty Lipton argue it rewards costly short-term moves. Now a compelling study pokes holes in both views. It’s welcome progress in a testy but needed governance debate.
BT’s dividend signal faces interference 1 Nov 2017 The British telco has pledged to keep lifting payouts to shareholders despite the burden of pension payments, rising capex and sports rights. Dividends could suck up almost all its free cash over the next three years. A 6 percent yield suggests investors think it’s at risk.
Chicago School gets $125 mln for being wrong 1 Nov 2017 The university’s tradition leans heavily towards free and efficient markets. Hedge-fund boss Ken Griffin’s name and cash – generated in an industry that depends on markets being inefficient – will now endow the economics department. Kudos to Griffin and Chicago’s open mind.
StanChart has yet to reward shareholders’ patience 1 Nov 2017 Resurgence is proving more difficult than recovery for the emerging market lender. Chief Executive Bill Winters has returned it to profitability, but is struggling to boost income faster than costs. Still-low returns make restarting meaningful dividends a distant prospect.
Aetna lays out its insurance value for CVS 31 Oct 2017 Revenue at the $56 billion health-coverage firm fell 5 pct last quarter, partly from dumping some Obamacare policies. But profit jumped 48 pct. That offers alluring protection for CVS, whose pharmacy and drug-benefit business is threatened by rising competition and transparency.
Under Armour’s governance is a value trap 31 Oct 2017 The sportswear firm’s stock tanked after a rare drop in quarterly sales. Broader retail woes don’t help. But shares have plunged two-thirds since founder Kevin Plank cemented control with non-voting stock. That gives investors little room to exercise the company back to health.
Burberry can lose kid gloves along with Bailey 31 Oct 2017 Designer Christopher Bailey is leaving the British fashion brand after 17 years. It has taken the company three years to unpick the deferential 2014 decision to hand him the CEO role. His exit gives new boss Marco Gobbetti a freer hand to implement much-needed turnaround plans.
BNP Paribas earns benefit of capital doubt 31 Oct 2017 A drop in trading profit failed to do much damage at the French bank, which reported an impressive 11.6 pct return on tangible equity in the third quarter. Beating its own return targets, even though they’re modest, should help dispel perennial questions over BNP’s capital level.
WPP woes cement Mad Men bargain-basement valuation 31 Oct 2017 The group may cut targets for the third time this year. Advertising firms are grappling with frugal customers and online sales. Investors rate them as lowly as media dinosaurs like newspaper sellers. M&A options look tricky. Their best bet is to hope clients start spending again.
UniCredit NPL glitch muddies Italian bank cleanup 31 Oct 2017 The ECB is reportedly examining whether the bank inflated the price of a $21 bln bad-loan sale, a move that could hurt its capital. It’s surprising as UniCredit’s valuations were less rosy than peers. Regulatory confusion gives lenders more reason to cling on to dud loans.
Twin tailwinds help Ryanair weather pilot crisis 31 Oct 2017 The 20 bln euro no-frills airline will meet its full-year profit goal despite a rostering mess that cost it thousands of flights. Passenger numbers were up 11 pct in the six months to September. Ryanair’s fare cuts helped, but it also got lucky with rivals’ bankruptcies.
Sony’s success may delay further disentangling web 31 Oct 2017 The Japanese group riding high on Spider-Man is also thriving in games, chips and music. It now expects annual operating profit to hit a record $5.6 bln. That's testament to a long overhaul, but also increases a temptation to stay in areas like phones, TVs and financial services.
It’s past time for PetroChina to shed pipelines 31 Oct 2017 China’s largest oil and gas producer reported a 290 pct rise in quarterly earnings. The firm should now spin off its $87 bln pipeline network and share the gains with weary investors. Management might not like a breakup, but fortunately, state planners are here to help.
Glencore’s Hong Kong exit sends message to Aramco 31 Oct 2017 The secondary listing touted as a gateway to Chinese investors during the miner's 2011 IPO never lived up to the hype. The same goes for Coach and others, who could be forgiven for following Glencore out. It's also a good sign the Saudi oil titan can cross Hong Kong off its list.