Pernod Ricard half answers Elliott critique 7 Feb 2019 The spirits maker converted more sales into operating profit in the second half of 2018, and promised higher growth and more savings. That addresses some of the activist investor’s concerns. But it glossed over worries about the family-dominated board lacking outside perspective.
Asian drinkers justify Carlsberg’s premium price 6 Feb 2019 The Danish brewer trails bigger rivals AB InBev and Heineken in terms of profitability, yet trades on a higher multiple of earnings. That reflects the promise of higher margins, and greater exposure to growth in China and India. A $491 million share-buyback plan helps too.
SoftBank’s Einstein pitch fails relativity test 6 Feb 2019 Masayoshi Son invoked the Nobel Prize winner’s theories to argue the Japanese group is worth $110 bln more. But adjust his sums for low liquidity and the possibility of squandered cash, and the black hole is small. Massive objects like the Vision Fund distort the laws of physics.
Elliott’s Pernod overhaul can start with wine 6 Feb 2019 The spirits maker’s wines could be worth 2 billion euros including debt. Following rival Diageo’s lead by selling lower-margin wine brands could boost Pernod Ricard’s share price. That might keep aggressive activist shareholder Elliott at bay.
Japanese carmakers can find trade-war refuges 4 Feb 2019 A stronger yen docked some $390 mln from Honda's revenue last quarter, adding to other blows. It's been tough to juggle a safe-haven domestic currency and growth that comes largely from overseas. Rival Mitsubishi's stellar results, built on emerging markets, show it can be done.
PlayStation glitch lights fire under Sony CEO 1 Feb 2019 The $64 bln electronics giant missed operating profit forecasts, as video-games sales disappointed and smartphones tanked. As cash-cow businesses slow, the heat is rising for Kenichiro Yoshida to deliver growth from music and movies - and ditch the unprofitable handsets unit.
KFC is finger lickin’ in a less appetising China 1 Feb 2019 Mainland appetite for fried chicken helped Yum China turn a fourth-quarter profit and pushed same-store sales up 2 pct, beating forecasts. It's still expanding fast too. That suggests a resilient bet on Chinese consumers: even as budgets tighten, cheap eats stay on the menu.
Amazon and Walmart get caught in India’s web 1 Feb 2019 The U.S. titans will be limited to operating marketplaces and prevented from being online retailers under New Delhi’s rules. That opens the door for billionaire Mukesh Ambani to power ahead with his own e-commerce plans. The miscalculation by Amazon and Walmart could be costly.
UK plastics challenge could crumple 31 Jan 2019 Berry Global may trump former owner Apollo’s 3.3 billion pound offer for British packaging firm RPC. But a bid would stretch the U.S. group’s balance sheet while finding cost savings won’t be easy. RPC investors hoping for a bidding war may be disappointed.
New Unilever CEO tripped by emerging market glitch 31 Jan 2019 The Anglo-Dutch consumer giant reported disappointing sales growth in the final quarter. Higher inflation in Argentina caught the company off guard. New boss Alan Jope is having to rely on smart pricing and growth in Asia to help him meet the financial targets he inherited.
Nintendo brushes up gaming skills for 2019 31 Jan 2019 The $36 bln Japanese video-games giant smashed quarterly earnings expectations thanks to new titles. Even after cutting its Switch console sales target, the maker of Super Mario hits looks on track to challenge rival Sony’s PS4. Nintendo’s beaten-down shares are due a boost.
Foxconn’s U.S. debacle offers an economics lesson 31 Jan 2019 The iPhone maker and Wisconsin taxpayers made a $10 bln bet on a manufacturing revival in the United States. Now Terry Gou's outfit says making flat screens there is uncompetitive, and jobs will be in research and design. It's a reality check for Donald Trump's industrial dream.
Alibaba powers on with small things 30 Jan 2019 Quarterly sales grew 41 pct, the weakest pace in three years. But there’s still momentum in Jack Ma’s retail juggernaut. China’s wider slowdown has been marked by tepid demand for big-ticket items like iPhones. Everyday purchases like groceries and apparel are propelling Alibaba.
India’s competitive populism sets ugly fiscal path 30 Jan 2019 Congress party chief Rahul Gandhi is promising voters a minimum basic income of sorts, on top of a pledge to waive farm loans across the country. That would blow a hole in the budget. With an election close, it also puts pressure on Narendra Modi’s government to respond in kind.
Royal Mail decline will make Westminster nervous 29 Jan 2019 The postal service’s latest warning sent its shares well below its 2013 IPO price. Royal Mail is yet to cut its dividend and has minimal debt, but its main earnings generator is in decline. The risk of a lose-lose scenario involving some kind of UK state support has increased.
China’s next stimulus plan looks to the tax man 29 Jan 2019 Caterpillar’s cooler mainland sales are a reminder of Beijing's reluctance to build its way out of trouble. Monetary policy remains cautious too. A lower fiscal burden is the alternative way of encouraging companies to invest, even if local government finances suffer.
Evergrande’s desperation to drive could find road 24 Jan 2019 The Chinese conglomerate’s health unit is making another quirky bet on electric vehicles as the property market at its core stalls. Yet a $900 mln move for NEVS might make more sense than earlier purchases if Evergrande can use it to help startups overcome production problems.
Cracks at Apple appear in Asia’s supply chains 23 Jan 2019 The iPhone-screen maker Japan Display may get a $550 mln lifeline from investors including a Chinese state-backed fund. Weak sales of the handsets have hurt. A rescue would point to the severe ripple effects of Apple’s woes, and herald pain for other suppliers like Foxconn.
Apollo makes a $6 bln virtue of plastic accounting 23 Jan 2019 The buyout group is getting RPC on the cheap. That’s partly because investors were spooked by the packaging-maker’s alleged misleading financials, which Apollo has had a chance to scrutinise through due diligence. Call it an informational arbitrage – at public markets' expense.
Super-apps hold back Chinese movie-ticketing IPO 22 Jan 2019 Maoyan may wind up going public below its latest $3 bln valuation. Slowing box office growth and cooling tech stocks are two problems. A bigger issue is that investors can already buy shares in backers Meituan and Tencent, whose all-in-one apps have a stronger lock on users.