AIG’s crisis hangover has Peter Hancock flailing 16 Feb 2017 The insurer's CEO presided over a $3 bln quarterly loss that wiped 10 pct off the stock. That was in part caused by taking a hit on policies written to help AIG recover after its 2008 collapse. Unless Hancock can prove he is getting a handle on risk, his job is on the line.
Patent anger makes Apple Qualcomm’s new Nokia 16 Feb 2017 The iPhone maker's $1 bln claim against its cellphone-chip supplier echoes a showdown a decade ago that threatened to derail Qualcomm's business model. Then, settlements with Nokia and others helped line up another decade of healthy earnings. Qualcomm needs a repeat performance.
Snap’s IPO momentum could be hard to break 16 Feb 2017 The messaging app is seeking a valuation of up to $18.5 bln, less than in its last private fundraising. A cautious initial price may lure buyers. Despite Snap's fading user growth and poor governance, the hype and dearth of new issues mean investors are unlikely to disappear.
Air France takes off, but only for a short flight 16 Feb 2017 The French carrier's profitability improved faster than expected in 2016, while headcount and debt levels fell. Yet the airline's real progress is slower than headline numbers suggest. The recovery is largely thanks to cheap fuel, and that tailwind is likely to be temporary.
Nestle tweaks its recipe, gingerly 16 Feb 2017 The KitKat-maker's formula has for years been: miss targets, sacrifice profit to boost revenue, and serve up an uneasy mix of healthy fare and junk food. New boss Ulf Mark Schneider is starting to tackle the first two. He could shake things up further - if he has a free hand.
Servers shred Lenovo’s M&A credibility 16 Feb 2017 The PC-maker is still struggling to turn around Motorola's mobile business, bought in 2014. Now the purchase of IBM's server unit looks unwise too. Lenovo was once the best example of a Chinese firm growing via foreign deals – but rebuilding that reputation will be very hard.
Nelson Peltz picks good time to scrub P&G 15 Feb 2017 The $230 bln Tide-to-Crest conglomerate was improving steadily even before the pushy investor came calling. While Gillette faces bigger threats, Peltz's proposals for P&G are a mystery for now. Either way, consumer stocks are well positioned for a tougher economic environment.
Turning table on activist runs $10 bln risk at CSX 15 Feb 2017 The railroad quickly acceded to Mantle Ridge's idea to install Hunter Harrison as CEO. Now it's balking at the fund's outsized demands for pay and board seats. Drawing the line on comp and giving shareholders a say is laudable, but a long fight threatens CSX's big market gains.
Struggling U.S. retailers take aim at border tax plan 15 Feb 2017 CEOs from the likes of Target and Gap are meeting with President Trump to voice concern over proposed border taxes. With store closings and job cuts accelerating, a levy that raises prices for consumers would add to the woes of an industry that's America's largest private-sector employer.
EU second-tier banks could get yield curve leg-up 15 Feb 2017 Credit Agricole and ABN Amro posted forecast-busting fourth-quarter earnings on loan growth. Expectations for higher rates could eventually boost pricing in their mainly fixed-rate mortgage books, too. But political uncertainty in the Netherlands and France merits buyer caution.
Heineken’s taste for volatile growth faces a test 15 Feb 2017 The Dutch brewer reassured investors by promising to further improve operating margins in 2017. Its confidence owes much to a foothold in rapidly growing beer markets. But increased economic risks and competition in countries like Mexico and Vietnam threaten its optimistic glow.
Wall St veterans help SoftBank party like it’s ’07 15 Feb 2017 The Japanese group is nearly as much fun for financiers now as Wall St was precrisis. So, for example, an ex-Deutsche credit trader is masterminding a $100 bln tech fund. Hopefully this new mix of big money, ambition and complexity will end better than those heady years did.
SoftBank’s bet on Fortress is a smart acqui-hire 15 Feb 2017 SoftBank boss Masayoshi Son is following through - in a big, unexpected way - on his investment pledge to Donald Trump. Buying Fortress for $3.3 bln won't add any tech luster to SoftBank, but the $70 bln alternative-investment firm provides a platform for acquisition-led growth.
Trump’s Flynn scandal has many corporate analogues 14 Feb 2017 Like messes that roiled firms from Wells Fargo to Valeant, the furor over the national security adviser's misleading statements over Russia point to a common problem: the management style of the CEO. The commander in chief has much to learn from real public-company bosses.
Rolls-Royce is on a slow flight to recovery 14 Feb 2017 The UK engine maker’s record 2016 loss of 4.6 bln pounds masks a better-than-expected underlying performance. Turnaround boss Warren East has limited scope to deliver more positive surprises. New engines are sold at a loss, and revenue for servicing them will take time to rise.
Toshiba memory-chip selloff is drastic medicine 14 Feb 2017 The Japanese group unveiled a $6.3 bln writedown, forecast negative equity and parted company with its chairman. The delivery was chaotic but the message well-telegraphed. The possible sale of a majority of its most valuable unit is new, and reveals the depth of its crisis.
Credit Suisse lure just visible beneath the warts 14 Feb 2017 The Swiss bank's socking 2.3 bln Swiss franc fourth-quarter loss followed a charge to settle U.S. mortgage litigation. Equities trading and Asian investment banking were dismal. But private banking and balance-sheet resilience favour Credit Suisse's stock over richer-priced UBS.
Blackstone now stronger against boss’s party jinx 13 Feb 2017 Steve Schwarzman's lavish 60th birthday in 2007 marked an LBO peak, and the business hit the skids as his firm went public. His star-studded 70th – where Gwen Stefani replaced Rod Stewart a decade ago – has leverage creeping up again, but today's Blackstone is a tougher beast.
Verizon’s new data plans broadcast its ambitions 13 Feb 2017 Weeks ago, an executive said the $200 bln U.S. telco didn't want to offer unlimited data again. Now it's doing just that. Verizon has to match rivals like T-Mobile US. But users' appetite for streaming and shifting regulation may also mean it's joining AT&T on the media M&A hunt.
Vanguard leaves crumbs for active fund managers 13 Feb 2017 A fresh inflow of money to active U.S. equity mutual funds, the first in nearly a year, offers little solace to managers. Vanguard took in almost 90 times as much in January to cross the $4 trln mark. Passive giants' scale and cost edge continue to separate them from the pack.