News Archive


Exclusive: EU regulators to clear Orange deal to buy Jazztel


BRUSSELS/MADRID (Reuters) – French telecoms group Orange (ORAN.PA) is set to secure European Union approval for its 3.4-billion-euro ($3.79 billion) deal to acquire Spanish fixed line network operator Jazztel after offering to strengthen rivals in Spain, four people familiar with the matter said on Thursday.

Orange, which hopes the deal will help it better compete with Vodafone (VOD.L) in the Spanish market after Vodafone acquired cable operator Ono last year, submitted concessions to the European Commission last month. It has since modified them slightly.

“The merger will be approved,” said one of the sources, who declined to be named because the European Commission has yet to announce its decision. The other sources also said the deal was going to be approved.

They said Orange had offered to sell overlapping assets with Jazztel, including parts of Jazztel’s fibre optic network, and to wholesale ADSL (broadband) capacity to rivals.

Jazztel currently sells mobile services as a mobile virtual network operator using the Orange network.

A Commission spokeswoman and Orange declined to comment. The Commission has set a June 1 deadline for its decision.

European Competition Commissioner Margrethe Vestager is scheduled to speak at an event in Madrid on May 20.

(Additional reporting by Leila Abboud in Paris; Editing by Greg Mahlich)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ubOjDya06MA/story01.htm

Deal questions loom as Time Warner Cable reports subscriber uptick


(Reuters) – Time Warner Cable Inc (TWC.N) on Thursday reported a bigger-than-expected rise in video subscriptions for the first quarter but gave no indication of any merger deals after Comcast Corp withdrew its bid to buy the company.

Since the Comcast (CMCSA.O) deal was called off on Friday after U.S. regulators raised concerns, questions have arisen about whether Time Warner Cable is an acquisition target or if it would go it alone. On Monday, Reuters reported the Time Warner Cable was open to discussions with Charter Communications Inc (CHTR.O).

The future of the No. 2 U.S. cable provider is much on the minds of analysts.

Time Warner Cable Chief Executive Officer Rob Marcus said in a conference call when asked about potential deals: “We’re not really going to respond to questions about any mergers and acquisitions.”

The company said it added 30,000 residential video customers in the first quarter, its first increase since 2009. Analysts were expecting 11,800 subscribers. The number of high-speed data subscribers also rose.

“We feel great about the operating health of our business right now,” Marcus said.

Shares of Time Warner Cable were down 0.6 percent at $156.98 in morning trading.

“Time Warner Cable is unmistakably investing for growth, and that has to raise questions about whether they would be willing to sell to Charter after all,” MoffettNathanson analyst Craig Moffett said.

Time Warner Cable said it expected 2015 operating income before depreciation and amortization, excluding special items, to be flat this year.

Analysts also wondered whether Time Warner Cable would follow Verizon Communications Inc’s (VZ.N) lead and start to offer smaller bundles to its customers, rather than traditional packages stuffed with hundreds of channels.

Chief Operating Officer Dinesh Jain said there was still a lot of value in the triple-play package of video, broadband and landline services.

“In terms of skinny packages, we don’t want to be pioneers on that,” he said.

Net income attributable to the company fell to $458 million, or $1.59 per share, in the quarter from $479 million, or $1.70 per share, a year earlier. Analysts were expecting $1.87 per share, according to Thomson Reuters I/B/E/S.

Revenue rose to almost 3.5 percent to $5.78 billion, below the analysts’ average estimate of $5.83 billion.

(Editing by Saumyadeb Chakrabarty, Maju Samuel and Lisa Von Ahn)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/9x207TsIelk/story01.htm

Wall Street opens lower as Apple, Celgene weigh


(Reuters) – Wall Street opened lower on Thursday as Apple (AAPL.O) weighed on the major indexes and Celgene (CELG.O) led a fall in biotech stocks, more than offsetting encouraging economic data.

All the 10 major SP sectors were down, with the technology index retreating .SPLRCT 1.1 percent. The Nasdaq biotech index .NBI dropped 1.7 percent.

Apple (AAPL.O) fell 2.3 percent to $125.70 and was the biggest drag on the Dow, SP 500 and the Nasdaq. The company limited availability of the Apple Watch after a key component supplied by a Chinese company was found to be defective, according to the Wall Street Journal.

Equity markets were weak despite the release of encouraging economic data earlier in the day.

The number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week and consumer spending rose in March, signs the economy was regaining momentum after stumbling badly in the first quarter.

“I think we’re going to see cleaner data come out in the second quarter and with the jobless claims being at their lowest levels in 15 years, that certainly points towards a strengthening labor market which has been a clear focus point of the Fed,” said Mark Luschini, chief market strategist at Janney Montgomery Scott in Philadelphia.

At 10:30 a.m. EDT (1430 GMT) the Dow Jones industrial average .DJI was down 123.88 points, or 0.69 percent, at 17,911.65, the SP 500 .SPX was down 14.73 points, or 0.7 percent, at 2,092.12 and the Nasdaq Composite .IXIC was down 47.89 points, or 0.95 percent, at 4,975.75.

Celgene (CELG.O) fell 3.4 percent to $109.39 and was the biggest drag on biotech stocks after the biotechnology company blamed the dollar for its lower-than-expected quarterly revenue. The stock was the second biggest drag on the SP 500 and the Nasdaq.

Baidu (BIDU.O) declined 5.9 percent to $206 after China’s dominant Internet search engine provider posted its slowest quarterly revenue growth rate in almost seven years.

Companies continue to cite the strong dollar .DXY, which has climbed nearly 9 percent against a basket of major currencies from January to March, for weak results and forecasts.

Colgate-Palmolive (CL.N) fell 1.9 percent to $67.17 after cutting its full-year profit forecast for the second time, saying the impact of the dollar would worsen.

Automotive supplier BorgWarner (BWA.N) also cited the dollar for a fall in quarterly revenue. Its stock dropped 4.2 percent to $58.35.

ConocoPhillips (COP.N) fell 0.62 percent to $67.94 after it reported a sharp fall in quarterly profit, hurt by a steep decline in crude oil prices.

Yelp (YELP.N) shares slumped 18.1 percent to $42.00 a day after the operator of consumer review website forecast second-quarter revenue below analysts’ expectations.

Earnings expected after the close on Thursday include Dow component Visa (V.N), insurer AIG (AIG.N) and LinkedIn (LNKD.N).

Declining issues outnumbered advancing ones on the NYSE by 2,348 to 524, for a 4.48-to-1 ratio on the downside; on the Nasdaq, 1,948 issues fell and 557 advanced for a 3.50-to-1 ratio favoring decliners.

(Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Ygo48PGWNV8/story01.htm

GM to invest $5.4 billion in U.S. plants over next three years


DETROIT (Reuters) – General Motors Co (GM.N) said on Thursday it will spend $5.4 billion over the next three years on its U.S. manufacturing plants to boost production and vehicle quality.

“The common thread among our investments is the focus on product improvements,” GM North American manufacturing chief Cathy Clegg said, adding that the overall investments would create 650 jobs and retain more than 15,000 existing positions.

The announcement comes as GM and the United Auto Workers union gear up for negotiations on a new master contract this fall for roughly 50,000 U.S. hourly workers. UAW leaders have pushed for the Detroit automakers to invest in union-represented factories.

GM has budgeted $9 billion for global capital spending in 2015, up from last year’s $7 billion, to pay for vehicle launches and investments in new technology. It has historically spent about two-thirds of its capital outlay in North America and officials have forecast the same going forward.

GM outlined about $784 million of the investments for three Michigan plants, and said it would give details over the next several months about the remaining $4.6 billion in spending.

The Detroit company said it will spend $520 million on tooling and equipment for new vehicle programs at its Lansing Delta Township assembly plant, $139.5 for a new body shop and stamping facility at pre-production operations in Warren, Michigan, and $124 million at the Pontiac, Michigan, stamping plant, where top executives will make the announcement.

Separately, GM is weighing a $1.3 billion investment in its large SUV plant in Arlington, Texas, that would add 589 jobs.

Local officials have already given approvals for the project, but GM hasn’t confirmed it is making the investment.

GM executives have talked about their desire to eliminate problems at the Texas plant that have held back production of highly profitable big SUVs like the Cadillac Escalade. Most GM truck plants have been running at or near full capacity to meet demand.

Automakers have been wary of adding too much production capacity in North America, and risk undoing gains in pricing power they have achieved since making painful cuts during the financial crisis. GM and rivals have instead pushed to increase output at existing plants using additional shifts, overtime and investments to improve efficiency.

(Editing by Jeffrey Benkoe)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/p8MqmtWONTE/story01.htm

Exclusive: EU regulators to clear Orange, Jazztel deal


BRUSSELS/MADRID (Reuters) – French telecoms group Orange (ORAN.PA) is set to secure European Union approval for its 3.4-billion-euro ($3.79 billion) deal to acquire Spanish fixed line network operator Jazztel after offering to strengthen rivals in Spain, four people familiar with the matter said on Thursday.

Orange, which hopes the deal will help it better compete with Vodafone (VOD.L) in the Spanish market after Vodafone acquired cable operator Ono last year, submitted concessions to the European Commission last month. It has since modified them slightly.

“The merger will be approved,” said one of the sources, who declined to be named because the European Commission has yet to announce its decision. The other sources also said the deal was going to be approved.

They said Orange had offered to sell overlapping assets with Jazztel, including parts of Jazztel’s fibre optic network, and to wholesale ADSL (broadband) capacity to rivals.

Jazztel currently sells mobile services as a mobile virtual network operator using the Orange network.

A Commission spokeswoman and Orange declined to comment. The Commission has set a June 1 deadline for its decision.

European Competition Commissioner Margrethe Vestager is scheduled to speak at an event in Madrid on May 20.

(Additional reporting by Leila Abboud in Paris; Editing by Greg Mahlich)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ubOjDya06MA/story01.htm

Eurogroup’s Dijsselbloem: there is a plan B for Greece


AMSTERDAM (Reuters) – The head of the Eurogroup said on Thursday that Europe is prepared for any outcome to the standoff between Greece and its creditors.

Jeroen Dijsselbloem, who heads the group of finance ministers of countries that use the euro, had been asked specifically whether there is a “plan B” in case Greece should be forced out of the euro zone or defaults on its debts.

“(Is) the eurozone prepared for eventualities, the answer to that is: ‘yes’,” Dijsselbloem said.

Dijsselbloem, who is also the Netherlands’ finance minister, was answering questions at a meeting with members of Dutch parliament.

Dijsselbloem said he hoped that discussions with Greece would become more productive after Prime Minister Alexis Tsipras reshuffled his team of negotiators discussing a resumption of the country’s current bailout programme, sidelining Finance Minister Yanis Varoufakis.

“Hopefully we were able to make a kind of new start this week,” he said. “I say ‘hopefully’ because of course the result has yet to be seen.”

Dijsselbloem said he could not confirm reports in Greek media about statements by Tsipras and Varoufakis on which of various economic reforms they might apply to satisfy Greece’s creditors.

“I wish that less time would be given to interviews, and more on extraordinarily conscientiously working on keeping Greece from the threatening abyss,” he said.

(Reporting By Toby Sterling; Editing by Jeremy Gaunt)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/hT26xW5CAu0/story01.htm

Nokia’s network profits drop, raise concerns over Alcatel deal


HELSINKI/PARIS (Reuters) – Finland’s Nokia (NOK1V.HE) reported quarterly profits well below market forecasts at its telecom network equipment business, sending its stock tumbling 10 percent and raising concerns over its planned takeover of smaller rival Alcatel-Lucent (ALUA.PA).

First-quarter revenue was ahead of expectations, but operating profit dropped 61 percent, which Nokia blamed largely on the need to cut prices to secure major mobile contracts in China and on weaker software sales.

With Nokia shares now trading about 20 percent lower than before the Alcatel deal was announced, significant divergence in the performance of both companies could call into question the terms of the all-share offer valuing Alcatel-Lucent at 15.6 billion euros ($17.5 billion), analysts said.

Alexander Peterc, an analyst from Exane BNP Paribas, said it would arguably be better for the deal’s prospects if Alcatel also posted a weak first quarter.

“Otherwise disgruntled shareholders deploring what they describe as low exchange parities in Nokia’s all-share bid for Alcatel might start campaigning for an upward revision of Nokia’s bid.”

Similar pressures recently imperilled the cement industry’s mega-merger between Holcim and Lafarge before new terms were reached, and could affect Shell’s planned buy of BG.

Shares in Alcatel-Lucent, which reports quarterly earnings on May 7, dropped more than 7 percent by 1328 GMT (0928 EDT).

The ranks of investors betting against Alcatel-Lucent appear to be growing: according to Markit data, 44 percent of the shares that can be borrowed are out on loan, indicating high levels of interest from short sellers who believe shares will fall. That compares to 38 percent before the Nokia deal was announced.

It remains to be seen whether Nokia’s weaker profitability is a blip or a new reality, a year after the company doubled down on network equipment as it sold its flagship handset business to Microsoft (MSFT.O).

Nokia on Thursday tweaked its operating margin profit goal for the year, pointedly aiming for the middle of an earlier range of 8 to 11 percent and further spooking investors who had hoped for the top of the range.

Chief Executive Rajeev Suri defended the terms of the Alcatel-Lucent deal, although he declined to say whether they could be revisited.

“We’ve met many investors in the last couple weeks, and there’s very strong, good feedback,” he said, adding that both boards had already approved the terms.

Odey Asset Management, Alcatel’s second-largest shareholder with a 5 percent stake, became the first big holder to come out against the deal on Thursday. In a letter to investors, the fund, which had been buying shares in the three months before the deal to reach 146 million in mid-April, argued that Nokia had not given Alcatel a high enough premium to justify a takeover and called the terms “unacceptable”.

Suri said that some of the negative factors contributing to Nokia’s weak quarter would ease in the second half.

“The capex conditions are challenging at this point, and there is a little bit more competitive activity overall,” Suri said, referring to capital spending by telecom operators to upgrade networks globally.

The network unit, where Nokia competes with Swedish market leader Ericsson (ERICb.ST) and Chinese low-cost powerhouse Huawei [HWT.UL], saw its core operating profit fall to 85 million euros ($94 million), or 3.2 percent of sales, compared with analysts’ average forecast of 226 million euros.

“The networks business has performed well in the past two years, so this drop in profits is a real surprise and a disappointment,” said Mikael Rautanen of Inderes Equity Research.

“Estimates will be cut hard, and this raises concern whether this was a turning point for the worse for the unit.”

The Alcatel takeover aims to boost scale to better compete with Ericsson and Huawei, as well as wringing out cost savings of 900 million euros by 2019 amid weak growth prospects for the industry.

In addition to the network equipment business, Nokia also owns a mapping business called HERE, which it has put up for sale, and a smartphone patent portfolio.

HERE, which analysts value at 5 to 7 billion euros, has attracted interest from several bidders including tech companies Facebook and Uber, as well as private equity firms.

Suri declined to comment on how the sale process was going, saying only that Nokia was not a forced seller and noted that the profit outlook had improved for the business.

(Additional reporting by Anna Ercanbrack and Nishant Kumar; Editing by Eric Auchard and Vincent Baby)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fIN9v3A2ZcY/story01.htm

Cost cuts help New York Times profit beat estimates


(Reuters) – New York Times Co (NYT.N) reported a better-than-expected quarterly profit as its cost-cutting initiatives offset a decline in revenue.

The company said in October it would cut about 7.5 percent of its newsroom positions and shut its mobile app, NYT Opinion, to compensate for dwindling advertising revenue.

The newspaper publisher forecast advertising revenue for second quarter to fall at a mid-single digit percentage rate. The company said it expects operating costs to decrease at a low-single digit percentage.

Operating costs fell about 4 percent to $350.3 million in the first quarter.

The New York Times, like several newspaper and magazine publishers, has been under relentless pressure to replace an evaporating pool of print advertising dollars, once the lifeblood of newspapers, with digital ads and money from subscriptions.

Print advertising revenue decreased 11.1 percent in the quarter, while digital advertising revenue increased 10.7 percent. Total advertising revenue fell 5.8 percent to $149.9 million.

Circulation revenue grew marginally to $211.5 million, helped mainly by a 14.4 percent increase in revenue from digital-only subscription products.

The company reported a net loss attributable to shareholders from continuing operations of $14.3 million, or 9 cents per share, compared with a profit of $2.7 million, or 2 cents per share, a year earlier.

Excluding items, earnings from continuing operations rose to 11 cents per share.

Revenue fell 1.6 pct to $384.2 million.

Analysts on average had expected earnings of 8 cents per share on revenue of $384.3 million, according to Thomson Reuters I/B/E/S.

Up to Wednesday’s close, the company’s shares had fallen about 3 percent this year.

(Reporting By Arathy S Nair and Abhirup Roy in Bengaluru; Editing by Joyjeet Das)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/XYLaDvbQp_k/story01.htm

U.S. jobless claims at 15-year low; consumer spending rises


WASHINGTON (Reuters) – The number of Americans filing new claims for jobless benefits tumbled to a 15-year low last week and consumer spending rose in March, signs the economy was regaining momentum after stumbling badly in the first quarter.

The economic outlook was brightened further by another report on Thursday showing a solid increase in wages in the first quarter, which should keep the Federal Reserve on track to raise interest rates this year.

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 262,000 for the week ended April 25, the lowest reading since April 2000, the Labor Department said.

It was the eighth straight week that claims remained below 300,000, which is usually associated with a strengthening labor market, suggesting March’s moderation in job growth was likely an aberration.

Economists polled by Reuters had forecast claims falling to 290,000 last week. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 last week to 283,750.

U.S. stock index futures briefly pared losses after the data, while prices for U.S. government debt fell. The dollar was largely unchanged against a basket of currencies.

Separately, the Commerce Department said consumer spending rose 0.4 percent last month as households stepped up purchases of big-ticket items like automobiles.

The increase followed a 0.2 percent gain in February and indicated that consumer spending picked up momentum at the end of the first quarter, which bodes well for consumption in the April-June period.

While that should boost growth in the second quarter, the rebound in economic activity will likely be curbed by an inventory overhang, a strong dollar and cuts in energy sector investment.

Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, increasing 0.5 percent last month.

When adjusted for inflation, consumer spending rose 0.3 percent in March after being flat in the prior month.

The economy slowed to a crawl in the first quarter as it struggled with severe winter weather, a now-settled labor dispute at normally busy West Coast ports, a strong dollar and lower energy prices, which have cut into domestic oil production.

The Fed on Wednesday acknowledged the first quarter’s sharp growth moderation, but dismissed it as partly the result of transitory factors.

Spending last month picked up despite personal income being flat. But the income weakness will likely be temporary as the labor market gradually tightens.

WAGE GAINS

In a third report, the Labor Department said the Employment Cost Index, the broadest measure of labor costs, advanced 0.7 percent – the largest gain since the third quarter of 2014 – after an unrevised 0.5 percent rise in the fourth quarter.

The ECI is widely viewed by policymakers and economists as one of the better measures of labor market slack.

Wages and salaries, which account for 70 percent of employment costs, rose 0.7 percent in the first quarter. They had increased 0.6 percent in the fourth quarter.

Private sector wages and salaries increased 0.7 percent, the largest rise since the third quarter of 2014, after gaining 0.5 percent in the prior quarter.

In the 12 months through March, labor costs jumped 2.6 percent, the largest rise since the fourth quarter of 2008. That is still below the 3 percent threshold that economists say is needed to bring inflation closer to the Fed’s 2 percent target. Labor costs increased 2.2 percent in the 12 months through December. Private sector wages and salaries were up 2.8 percent in the 12 months through March, the biggest gain since the third quarter of 2008, after rising 2.2 percent in the 12 months through December.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/rNt-gpJ84Zw/story01.htm