Trade war tariffs eat Daimler’s homework 21 Jun 2018 The carmaker’s tariff-induced profit warning is odd, since Chinese duties would hit U.S. cars but not imports from elsewhere. Daimler’s statement could cover for poor performance, or make a political point about a trade war’s costs. Expect other companies to try the same.
French cable group suffers earnings power shortage 18 Jun 2018 Nexans lost almost a fifth of its value after saying EBITDA may fall 15 pct. The company’s racy growth plans rest on trends like offshore wind and soaring data use, but investors value it as a sector basket-case. Given the profit warning and a departing CEO, that looks fair.
Rockwell dabbles in financial overengineering 11 Jun 2018 Paying $1 bln for a non-controlling stake in a rival software company seems odd. PTC doesn’t need the cash. Such shareholdings in peers can have logic, as some drugmakers have shown. The bar is high, though, especially after Rockwell last year turned down a takeover at a premium.
M&A pause is promising for Wesfarmers investors 7 Jun 2018 The $39 billion Australian conglomerate is exiting British DIY and spinning off supermarkets. Newish boss Rob Scott is wary about future dealmaking. That is encouraging for shareholders: it makes more sense for now to work existing businesses harder and return more cash.
GE needs to put much more imagination to work 4 Jun 2018 A $135 bln debt load and reduced earnings power are weighing down the $120 bln conglomerate. JPMorgan reckons CEO John Flannery needs to raise $30 bln to cut leverage, and the company’s dividend could be in further danger. GE’s 63 pct Baker Hughes stake is the ripest for a sale.
Greyhound owner’s turnaround faces lengthy delay 31 May 2018 Bus and rail operator FirstGroup’s CEO resigned and its shares fell after it reported a loss, due to competition from low-cost airlines. It can cut costs and sell assets, but tough markets and management upheaval don’t help. A sale looks easier, but may not deliver a good price.
Investors risk whiplash in car parts M&A standoff 31 May 2018 Shares in German headrest maker Grammer are trading 10 pct above an offer from Ningbo Jifeng. That’s optimistic. A big Bosnian investor is unlikely to counter-bid, and the Chinese group just needs another 25 pct to win control. Selling in the market may be the safest option.
China is winner in German-Bosnian governance fight 29 May 2018 Manufacturer Ningbo Jifeng may offer to buy out other shareholders of Bavarian auto supplier Grammer. The Chinese group is offering a tiny premium and should make a healthy return. But a lowball exit may appeal to investors weary of a boardroom spat with Bosnia’s Hastor family.
GE power slump is positive wrapped in negative 23 May 2018 The $130 bln conglomerate warned profit from making turbines won’t grow this year. And demand could remain soft for a while. GE’s sprawl means that as the world goes, so do its businesses. But the irony of slimming down is that fossil fuel dependency just becomes more visible.
GE CEO finally shunts turnaround plan onto tracks 21 May 2018 John Flannery is selling the struggling conglomerate’s sputtering locomotive unit to Wabtec for $2.9 bln and half of the new outfit, most to be spun off to shareholders. It’s not transformational but it removes a big headache and indicates how Flannery might shed other assets.
Xerox effort to go quietly is thwarted on all sides 2 May 2018 Carl Icahn and Darwin Deason have ousted the CEO and board members at the struggling copier company, and at least delayed any deal with Fujifilm. The outgoing CEO, directors and advisers all look bad. Yet Xerox needs a credible final act, and the activists don’t have one written.
India’s top builder starts useful renovation 2 May 2018 Larsen & Toubro is selling its electrical and automation unit to Schneider and Singapore's Temasek for $2.1 bln. It reduces the sprawl of a $30 bln group with lacklustre returns. To achieve ambitious targets could require more remodelling from a CEO less than a year into the job.
KLX purchase gives Boeing a boost over Airbus 1 May 2018 Paying $4.25 bln for the parts provider lifts the U.S. plane maker’s services arm. It’s the latest bolt-on enabling Boeing to bring more manufacturing in-house and maintain aircraft long after delivery. Yet CEO Dennis Muilenburg still has more to do to reach cruising altitude.
Arconic is sorely testing Elliott’s mettle 30 Apr 2018 Investors wiped $2 bln off the parts maker’s value after it slashed its earnings outlook. Activist Elliott helped oust CEO Klaus Kleinfeld last year. But new boss Chip Blankenship faces the same old production snafus and aluminum price hikes. It’s looking like a long campaign.
U.S. industrial giants need to be better than good 25 Apr 2018 Boeing shares took off after the $200 bln plane maker beat forecasts and raised its outlook. Rivals with strong earnings that cast even faint doubt on the future, like Northrop Grumman and Lockheed, lost market value. With equities priced for perfection, investors are seeking it.
GE can get ahead of chairman-CEO trend 25 Apr 2018 The conglomerate defeated a shareholder proposal to separate the top jobs. But 41 pct of investors supported the measure, up from 24 pct a year ago. Double-titled boss John Flannery could pre-empt an embarrassing rebuke next year, and improve governance, by embracing a split now.
United and Equifax boost GE chairman-CEO splitters 24 Apr 2018 The airline says having an independent chair lets CEO Oscar Munoz focus on running the company. Equifax is keeping the double act it adopted after last year’s massive hack. It’s recognition there are two jobs that need doing. Beleaguered GE is looking increasingly out of step.
Subsea 7 can still save McDermott from itself 23 Apr 2018 The Oslo-listed oil services group has lobbed in a $2 bln offer for its U.S. counterpart. Subsea 7’s bid looks low, and hinges on McDermott ditching an agreed deal with CB&I. But CB&I’s sale of Stone & Webster to Toshiba is a bad precedent, and Subsea 7 can afford to pay more.
India is prize worth keeping for Uber 20 Apr 2018 The ride-hailing giant says it won’t exit the market with a minority stake as it did in Southeast Asia and China. Uber has a narrower gap with local rival Ola and the country can serve as a good test-bed for new ideas. Without India, Uber would also look less global in an IPO.
GE offers 100 bln reasons to divorce CEO and chair 20 Apr 2018 That’s how many dollars of investor booty the industrial group has incinerated since John Flannery replaced Jeff Immelt. The new boss wants to create more accountability. But that starts at the top. An investor proposal to separate the roles deserves shareholder support.