News Archive


South Korea’s Kia Motors drafts Trump contingency plan


SEOUL Kia Motors (000270.KS) said on Thursday it is drawing up a contingency plan to cope with the policies of U.S. President Donald Trump, reflecting growing wariness by Asian exporters about the prospect of U.S. protectionism.

Trump has promised to revive U.S. industrial jobs by forcing automakers to stop making cars in Mexico, threatening to tax imports and promising to make it more attractive for businesses to operate in the United States.

South Korea-based Kia Motors last year started production at a new plant in Nuevo Leon, Mexico, while sister firm Hyundai Motor (005380.KS) will begin making cars at Kia’s Mexico plant this year.

“We acknowledge that there are a lot of concerns about the uncertainty stemming from the new U.S. administration,” Han Chun-soo, Kia’s chief financial officer, said during an earnings conference call.

“While closely monitoring its policy directions, we are preparing to respond by setting up a step-by-step, scenario-based contingency plan.”

Trump has warned German carmakers and Japan’s Toyota (7203.T) of a “big border tax” if they build cars for the U.S. market in Mexico. So far however he has not commented on the South Korean carmakers’ plans.

Kia plans to more than double its Mexico output this year to 250,000 vehicles and aims to boost U.S. sales by 8 percent to 699,000 vehicles. Hyundai and Kia together rank fifth in global car sales.

Hyundai Motor on Wednesday said it expected competition and protectionist measures to increase, after posting its lowest quarterly profit in about five years.

Hyundai Motor group, which includes Kia, last week said it planned to lift U.S. investment by 50 percent to $3.1 billion over five years and could build a new plant there.

KIA TARGETS SUVs

Kia on Thursday said it planned to launch a small sport utility vehicle in South Korea this year, in a bid to take advantage of a booming segment.

The model would be a “crossover utility vehicle (CUV)” based on its Pride sedan, also known as the Rio, the carmaker said without elaborating.

Kia Motors already sells a small SUV called Niro, a gasoline-electric hybrid model.

It also planned to introduce a small SUV in Europe this year, it added.

(Reporting by Hyunjoo Jin; Editing by Stephen Coates and Tony Munroe)

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Xiaomi exec Barra joins Facebook to lead virtual reality business


Facebook Inc (FB.O) has hired Hugo Barra, the most prominent global executive at Chinese smartphone maker Xiaomi Inc [XTC.UL], to lead its virtual reality business including the Oculus unit, Chief Executive Mark Zuckerberg said.

The 32-year-old Facebook founder has spoken about virtual reality as an important part of the company’s future business, especially as the technology becomes less expensive and its uses clearer. Facebook acquired Oculus in 2014, believing it to be the next major computing platform.

“Hugo shares my belief that virtual and augmented reality will be the next major computing platform. They’ll enable us to experience completely new things,” Zuckerberg said in a post on Facebook.

Earlier this week, Barra said he was stepping down as Xiaomi’s vice president after three-and-a-half-years, citing health concerns and a new job.

His exit comes at a time when Xiaomi is trying to adjust its strategy. The company pulled back from several overseas markets, including Singapore and Brazil, in 2016. It is increasing its offline retail presence and aims to develop artificial intelligence and internet finance as growth areas.

(Reporting by Abinaya Vijayaraghavan in Bengaluru and Miyoung Kim in SINGAPORE; Editing by Himani Sarkar)

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Japan PM says free trade talks with U.S. possible


TOKYO Japanese Prime Minister Shinzo Abe said on Thursday it was possible Tokyo and Washington could hold bilateral free trade talks in the wake of U.S. President Donald Trump’s withdrawal from the Trans-Pacific Partnership (TPP) this week.

Fulfilling a campaign pledge Trump signed an executive order on Monday pulling the United States out of the TPP and distancing Washington from its Asian allies. Trump said the TPP would rob Americans of jobs and investment.

“Japan will continue to stress the U.S. the importance of the TPP but it is not totally unfeasible for talks on EPA(Economic Partnership Agreement) and FTA (Free Trade Agreement)” with the United States, Abe told parliament after asked about trade talks between the two nations.

Asked about talks on a U.S.-Japan trade deal on Wednesday, Abe said he would refrain from speculating about Trump’s trade policy until his cabinet line-up was approved and policies became clearer. Trump has made clear he favors two-way trade deals over multilateral ones.

The remaining 11 TPP nations — Japan, Australia, New Zealand, Canada, Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam — are expected to hold talks in March to try and salvage the multilateral trade pact.

Australia has suggested China as a possible TPP member, replacing the United States, but Beijing has its own multilateral trade pact and Japan is cool on the idea. Many Asian nations had seen the TPP as a counterbalance to China’s growing power in the region.

(Reporting by Takashi Umekawa, writing by Kaori Kaneko; Editing by Michael Perry)

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Judge denies $80 million penalty in Wal-Mart truck drivers lawsuit: AP


A federal judge refused to order Wal-Mart Stores Inc (WMT.N) to pay $80 million in penalties in a lawsuit alleging the retailer failed to pay hundreds of truck drivers in California the minimum compensation for certain tasks, the Associated Press reported.

U.S. District Judge Susan Illston in San Francisco ruled on Wednesday that Wal-Mart acted in good faith when paying the drivers and reasonably believed its payment policy aligned with California law, AP reported. apne.ws/2jTppuK

Current and former Wal-Mart truck drivers in California sued the company in 2008, claiming a plan that compensated drivers by mileage and activity rather than hours worked violated state law. The company dropped the plan in 2015.

In November 2016, a jury held that Wal-Mart owed the drivers backpay and handed down a $55 million verdict against the company for failing to pay about 850 of its truck drivers all of the compensation to which they were entitled.

“While we still disagree with the jury’s verdict in the case, we’re pleased the judge declined to award any additional penalties,” Wal-Mart said in an emailed statement.

U.S. District Judge Susan Illston in San Francisco previously ruled that Wal-Mart violated California law for not paying its truck drivers minimum wage for all work performed. Illston left the determination of damages for trial.

Lawyers for the drivers had asked Illston to award an additional $80 million in penalties and damages.

Wal-Mart said that its drivers were among the highest paid in the industry, earning about $80,000 to over $100,000 per year, adding that drivers were paid in compliance with California law and often in excess of what California law requires.

(Reporting by Bhanu Pratap in Bengaluru; Editing by Amrutha Gayathri)

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Oil prices rise on weakening dollar, but plentiful supplies cap gains


SINGAPORE Oil prices rose on Thursday, driven up by a weakening dollar, but gains were capped by plentiful supplies and inventories despite an effort by OPEC and other producers to cut output and prop up the market.

Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.59 per barrel at 0313 GMT, up 51 cents, or 0.93 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $53.22 a barrel, up 47 cents, or 0.89 percent.

Traders said that the increase was largely down to a weakening dollar .DXY, which has lost 3.9 percent in value since its January peak. Since oil is traded in dollar, a cheaper greenback makes fuel purchases less costly for countries using other currencies, potentially spurring demand.

However, oil price gains were capped by data from the U.S. Energy Information Administration (EIA) which showed a 2.84 million barrels increase in commercial crude inventories to 488.3 million barrels, which add to a 6.3 percent rise in U.S. oil production since the middle of last year to 8.96 million barrels per day (bpd).

“EIA estimates that crude oil and other liquids inventories grew by 2.0 million barrels per day in the fourth quarter of 2016, driven by an increase in production and a significant, but seasonal, drop in consumption,” the agency said.

Rising U.S. inventories and output are countering efforts by the Organisation of the Petroleum Exporting Countries (OPEC) and other producers including Russia to cut supplies by a almost 1.8 million bpd during the first half of 2017 in an effort to end a global glut.

Key customers in Asia are also being spared any significant cuts as producers fear losing market share to competitors.

“The recent agreement among OPEC and non-OPEC members for oil exports reduction will not impact our commitments and oil exports to Japan since we have highly strategic relationships between the two great nations,” said Aabed Al-Saadoun, deputy minister for company affairs at Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources on Friday in Tokyo.

(Reporting by Henning Gloystein; Editing by Kenneth Maxwell and Michael Perry)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fCFhmUAkbjk/us-global-oil-idUSKBN15A072

Whole Foods to shut three regional kitchens


Whole Foods Market Inc (WFM.O) said it would close three remaining regional kitchen facilities as part of an ongoing plan to streamline its operations.

The three kitchen facilities are in Everett, Massachusetts, Landover, Maryland and Atlanta, a company spokeswoman said in an emailed statement.

The closures will affect about 500 jobs, but Whole Foods said it expects to place most of the employees within the company or with its suppliers.

In June, U.S. food safety regulators warned the grocer that inspections at its Everett plant turned up violations that could result in food being “contaminated with filth or rendered injurious to health.”

The Austin, Texas-based company has reported five quarters of falling sales at established stores, and while the decline may be easing, Whole Foods faces intense competition from retailers ranging from Kroger to Wal-Mart Stores Inc (WMT.N) and Amazon.com Inc (AMZN.O).

In November, Whole Foods said its co-founder John Mackey would resume his job as solo chief executive six years after he split the role with co-CEO Walter Robb, known as the businessman who carried out Mackey’s vision.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Gopakumar Warrier)

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AT&T’s results match Street expectations, smartphone subscriber base grows


ATT Inc (T.N), the No. 2 U.S. wireless carrier, reported quarterly results that matched analysts’ estimates, as it added more smartphone customers in a saturated wireless market, and said it was confident its deal to buy Time Warner Inc (TWX.N) would be approved.

ATT is banking on the deal to boost its media offerings such as over-the-top services and to gain control of cable channels like HBO and CNN as well as film studio Warner Bros. The company bought DirecTV in 2015 as part of its plans to diversify from its wireless phone business, which has faced stiff competition from smaller rivals T-Mobile U.S. Inc (TMUS.O) and Sprint Corp (S.N).

“ATT has made some big bets to reposition its portfolio away from the wireless business, but the businesses that they have accumulated isn’t growing either,” MoffettNathanson analyst Craig Moffett said.

The company said it added 1.1 million smartphones to its subscriber base in the fourth quarter.

U.S. President Donald Trump said he opposed the company’s proposed acquisition of Time Warner during his election campaign.

Thirteen Democratic senators on Wednesday asked ATT to explain how its planned $85.4 billion takeover is in the public interest.

“We look forward to bringing Time Warner into the fold and doing some very unique things with media and entertainment and content,” Chief Executive Randall Stephenson said on a conference call with analysts. The company expects the deal to close later this year.

He also said a lower corporate tax rate was likely under the new administration and that he was optimistic about the appointment of net neutrality opponent Ajit Pai to head the Federal Communications Commission.

Shares of ATT were flat after the close of regular trading.

Although margins improved, net income attributable to the company fell to $2.44 billion, or 39 cents per share, in the fourth quarter ended Dec. 31, from $4.01 billion, or 65 cents per share, a year earlier.

Excluding a pretax loss of about $1 billion and other items, the company earned 66 cents per share in the latest quarter, in line with the average analyst estimate.

Revenue fell to $41.84 billion, missing the average estimate of $42.04 billion, according to Thomson Reuters I/B/E/S.

Looking ahead to this year, ATT said it expects consolidated revenue growth in the low-single digits on a percentage basis and adjusted EPS growth in the mid-single digit range. Capital spending is estimated around $22 billion, similar to levels spent in 2016.

(Additional reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty, Bernard Orr)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fPWjZG2blYo/us-at-t-results-idUSKBN1592PK

Starbucks nominates Microsoft CEO Nadella to its board


Starbucks Corp (SBUX.O) nominated Microsoft Corp (MSFT.O) Chief Executive Satya Nadella to its board at a time when the company is increasingly focusing on technology to drive sales.

The announcement comes a month after former Microsoft executive Kevin Johnson was named Starbucks CEO to replace co-founder Howard Schultz. Schultz, who will step down in April, will remain as executive chairman.

The world’s biggest coffee chain is investing heavily on expanding its digital capabilities.

About 8 percent of the company’s transactions in the United States are now made on its mobile app – up from 6 percent in the fourth quarter, Starbucks said at its investor day last month.

The company also laid out plans to equip 80 percent of its more than 25,000 stores around the world with digital enhancements such as mobile order, mobile pay and personalization by 2019.

“Satya Nadella will bring extensive experience and an understanding of how technology will be used and experienced around the world,” Starbucks said in a statement.

The company also said it nominated Rosalind Brewer, chief executive of Wal-Mart Stores Inc’s (WMT.N) Sam’s Club division and Jørgen Vig Knudstorp, executive chairman of the LEGO Brand Group, to its board.

The appointments will expand the size of the board to 14 from 12.

The nominees will be subject to a shareholder vote at the company’s annual meeting on March 22.

Jamie Shennan, a long time Starbucks director, will be retiring before the annual meeting, the company said.

(Reporting by Gayathree Ganesan and Siddharth Cavale in Bengaluru; Editing by Saumyadeb Chakrabarty)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ZA9aLFpGidc/us-starbucks-board-idUSKBN1592JH

Dow hits 20,000 as earnings, Trump rekindle rally


The Dow Jones Industrial Average marched higher after hitting 20,000 for the first time on Wednesday as strong earnings and President Donald Trump’s pro-growth initiatives reignited a post-election rally.

Trump has made several business-friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burden on domestic manufacturers and clearing the way for the construction of two oil pipelines.

The SP 500 and the Nasdaq Composite indexes also hit record highs.

The Dow came within a point of the historic mark on Jan. 6, as investors banked on pro-growth policies and tax cuts many expect from the new administration.

However, the index had struggled in recent weeks as investors grew cautious as they looked for clarity on the new administration’s policies.

“Trump has a majority of both houses, so the likelihood of things getting done quicker than they usually do is higher,” said Mark Spellman, portfolio manager at Alpine Funds.

“He can fast-track a lot of policies which is typically not the case.”

Trump, a real estate mogul and a former reality television star, marked the moment with a tweet: “Great!#Dow20K”.

Sentiment was also lifted by better-than-expected fourth-quarter earnings. Of the 104 SP 500 companies that have reported results so far, nearly 70 percent have beaten earnings expectations, according to Thomson Reuters I/B/E/S.

Fourth-quarter earnings will likely show growth of 6 percent, markedly better than any quarter over the last year or so, said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

“So the fundamentals are clearly improving,” he said.

If the Dow remains above 20,000 by closing time, the 42-session surge from the first close above 19,000 would mark the second-shortest length of time between such milestones.

The most rapid rise was between 10,000 and 11,000 from March 29 to May 3, which took 24 days. The rise from 18,000 to 19,000 took the Dow 483 trading sessions.

The surge since Nov. 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks – with Goldman Sachs (GS.N) and JPMorgan (JPM.N) accounting for about 20 percent of the gain.

On Wednesday, Boeing (BA.N) hit a record high of $168.18 on strong earnings, giving the Dow its biggest boost. Goldman Sachs (GS.N) was the second biggest influence on the index, with a 1 percent gain.

At 12:59 p.m. ET (1759 GMT), the Dow .DJI was up 148.2 points, or 0.74 percent, at 20,060.91 – on track for its best day since Dec. 7.

The SP 500 .SPX was up 15.08 points, or 0.66 percent, at 2,295.15 and the Nasdaq Composite .IXIC was up 43.53 points, or 0.78 percent, at 5,644.49.

Nine of the 11 major SP 500 sectors were higher, led by a 1.33 percent rise in financials .SPSY.

Real estate .SPLRCR and telecom services .SPLRCL – defensive parts of the market – were the outliers.

Advancing issues outnumbered decliners on the NYSE by 1,847 to 1,034. On the Nasdaq, 1,894 issues rose and 891 fell.

The SP 500 index showed 76 new 52-week highs and one new low, while the Nasdaq recorded 174 new highs and 10 new lows.

(Reporting by Yashaswini Swamynathan; additional reporting by Tanya Agrawal in Bengaluru; Editing by Anil D’Silva)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Ko_1x2hoqEo/us-usa-stocks-idUSKBN1592CQ