News Archive


PayPal’s profit, revenue beat on higher processing volumes


Payment processor PayPal Holdings Inc (PYPL.O) reported higher-than-expected quarterly profit and revenue on Wednesday, helped by an increase in payment processing volumes and customer additions.

The company, which also raised its full-year profit forecast to $1.28-$1.33 per share from $1.26-$1.31, said its board authorized a $5 billion share buyback program.

PayPal’s shares jumped nearly 7 percent to $47.45 in after-hours trading.

The San Jose, California-based company has been expanding partnerships and acquiring new services to gain advantage over rivals in a highly competitive digital payments market.

PayPal struck a deal with Alphabet Inc’s Google (GOOGL.O) last week in a move to bring its payment wallet to brick-and-mortar stores.

Consumers will be able to use their PayPal accounts with Google’s mobile payments platform Android Pay at retailers such as WalGreens Boots (WBA.O) and Dunkin’ Donuts (DNKN.O).

PayPal, which spun off from e-commerce firm eBay Inc (EBAY.O) in 2015, also agreed to buy Canadian bill payment processor TIO Networks Corp (TNC.V) for about $233 million in February.

The company’s net income rose to $384 million, or 32 cents per share, in the first quarter ended March 31, from $365 million, or 30 cents per share, a year earlier.

On an adjusted basis, PayPal earned 44 cents per share, above the average analyst estimate of 41 cents, according to Thomson Reuters I/B/E/S.

Revenue rose to $2.98 billion from $2.54 billion, beating analysts’ average estimate of $2.94 billion.

PayPal’s total payments volume jumped 22.5 percent to $99.33 billion, beating research firm FactSet StreetAccount’s estimate of $99.20 billion.

Active customer accounts rose 10.3 percent to 203 million.

PayPal’s mobile payments volume rose 51 percent to about $32 billion in the quarter. Payment volumes at Venmo, a mobile peer-to-peer payment platform popular with younger customers, more than doubled to $6.8 billion in the first quarter.

Up to Wednesday’s close, the company’s stock had risen 12.5 percent since the start of the year.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Martina D’Couto)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/FheiBBsaMGM/us-paypal-hldg-results-idUSKBN17S2RL

Trump’s plan to slash business taxes seen as ‘guidepost’ by congressional Republicans


WASHINGTON U.S. President Donald Trump on Wednesday proposed slashing tax rates for businesses and on overseas corporate profits returned to the country in a plan that his fellow Republicans in Congress generally welcomed but viewed as an opening gambit.

The Trump administration touted the president’s blueprint – which also calls for raising standard deductions for individuals, reducing the number of tax brackets and repealing inheritance taxes on estates – as a landmark proposal just days before Trump marks his 100th day in office on Saturday.

While Republicans, who control the House of Representatives and the Senate, have long eyed tax cuts, Trump’s proposal may be unpalatable to party fiscal hawks. It lacks plans for raising new revenue and could potentially add billions of dollars to the federal deficit.

The proposals were unveiled at the White House by Trump economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin, who called them “core principles” that would be worked on with Congress to produce a bill that can be passed.

The planned cuts would pay for themselves through economic growth, and by reducing tax deductions and closing loopholes, Mnuchin said.

“Our objective is to make U.S. businesses the most competitive in the world,” he said. “The president is determined to unleash economic growth for businesses.”

House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell and the top Republicans on the congressional tax-writing committees welcomed the proposals, while leaving space for details to change as legislation evolves.

“The principles outlined by the Trump Administration today will serve as critical guideposts” as Congress and the administration work on changes to taxation, they said in a statement.

Details of Trump’s plan emerged before the formal announcement. Ryan, a longtime champion of a major tax restructuring, expressed optimism about it on Wednesday morning, even though it did not include a “border adjustment” tax on imports that he has pushed. That idea was part of initiatives floated by House Republicans as a way to offset revenue losses resulting from steep tax cuts.

“We’re in agreement on 80 percent and on the (remaining) 20 percent we’re in the same ballpark,” he said.

‘UNPRINCIPLED’

Senior Democrats assailed the plan, including its underpinning ideology of “trickle-down” economics.

Ron Wyden, the top Democrat on the Senate tax committee, called it “unprincipled” and said it would produce tax cuts for the wealthy, conflicts for the president because of his own business interests, “crippling debt for America and crumbs for the working people.”

U.S. stocks pared gains on Wednesday after the plan was unveiled. While Wall Street has been optimistic about the prospect of corporate tax cuts since Trump’s election in November, the stocks rally has stalled lately because of a lack of clarity about Trump’s policies and concern over his failure to push through a healthcare bill.

Some analysts said investors were aware of the long road ahead before any tax bill is passed.

“We have a pretty good idea that he (Trump) is targeting lower corporate taxes, lower individual taxes and a simplification of the process, but all that is in an ideal world,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. “The market will not interpret the plan negatively, but there are obstacles in that course, just like with anything that Trump says and does.”

‘UNLOCK’ GROWTH

Trump’s plan would cut the income tax rate paid by public corporations to 15 percent from 35 percent and reduce the top tax rate assessed on pass-through businesses, including small partnerships and sole proprietorships, to 15 percent from 39.6 percent, the White House said.

While public corporations’ profits or losses are taxed directly, “pass-through” businesses are taxed under the individual income tax code.

Mnuchin also said that Trump was proposing that corporations bring offshore profits into the country at a rate well below the current 35 percent rate. He did not say what that rate would be, but said the administration was working with Congress on a low rate.

About $2.6 trillion in profits are being held tax-exempt abroad by U.S. multinationals under a rule that says they are only taxable if brought into the United States, or repatriated. Trump proposes requiring repatriation, but at the lower rate.

If enacted, the measure would produce a one-time surge in revenue that could be dedicated to infrastructure spending, an idea that could attract votes from Democrats.

For individual U.S. taxpayers, the Trump plan would simplify tax returns by reducing the number of tax brackets to three (10 percent, 15 percent and 35 percent) from seven and double the standard deduction available to taxpayers who do not itemize their deductions.

Democrats and fiscal-hawk Republicans will be concerned about how much Trump’s proposals would cause the deficit to balloon. To minimize that impact, Republicans will rely heavily on “dynamic scoring,” an economic modeling method that attempts to predict economic growth and new tax revenues resulting from tax cuts.

“The overall economic plan consists of massive tax cuts and tax reform, regulatory relief and renegotiating trade deals, and with that we will unlock the economic growth that’s been held back for too long in this country,” Mnuchin said.

Business groups including the U.S. Chamber of Commerce welcomed the proposal, while noting it was just the start of potential changes to taxation.

The Retail Industry Leaders Association, comprising some of the nation’s largest retailers, including Wal-Mart Stores Inc (WMT.N), Target Corp (TGT.N) and Best Buy Co Inc (BBY.N), praised the call for a lower tax rate and reiterated opposition to the idea of the border adjustment tax, which some companies fear would raise consumer prices.

The No. 2 Democrat in the Senate, Dick Durbin, attacked the tax proposal and the fact Trump, a wealthy New York real estate developer, had declined to make public his personal tax returns.

“President Trump should release his own tax returns if he wants to have any credibility in a debate about America’s tax code,” Durbin said. Mnuchin said on Wednesday that Trump did not intend to release his tax returns.

(Additional reporting by Steve Holland, David Lawder, Doina Chiacu, Eric Walsh; Writing by Doina Chiacu and Frances Kerry; Editing by Jonathan Oatis and Peter Cooney)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/e4ZICw9M1lA/us-usa-tax-idUSKBN17S1CE

Wall Street dips as tax uncertainty offsets strong earnings


NEW YORK U.S. stocks ticked lower on Wednesday following two sessions of strong gains as upbeat corporate earnings were offset by uncertainty over the feasibility of a proposed business tax cut.

The proposal from the Trump administration would slash tax rates for businesses and on overseas corporate profits returned to the country. It offered no specifics on how it would be paid for without increasing the deficit.


The Dow Jones Industrial Average .DJI fell 21.03 points, or 0.1 percent, to 20,975.09, the SP 500 .SPX lost 1.16 points, or 0.05 percent, to 2,387.45 and the Nasdaq Composite .IXIC dropped 0.27 points, or 0 percent, to 6,025.23.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/DYDqnwf3uuQ/us-usa-stocks-idUSKBN17S1FK

U.S. Congress may seek one-week funding extension to avert shutdown


WASHINGTON The U.S. Congress inched toward a deal to fund the government through September but was preparing to possibly extend a midnight Friday deadline in order to wrap up negotiations and avoid an imminent government shutdown.

The one-week extension would give leading Republicans and Democrats “a little breathing room” to finish negotiations and present their plan for spending around $1 trillion through the rest of the fiscal year to rank-and-file lawmakers, according to a House of Representatives source familiar with the talks.

Negotiators were racing against the clock to clear away remaining disputes in the massive spending bill.

One of those disputes, over a Democratic demand for the continuation of healthcare subsidies helping millions of low-income people afford Obamacare, appeared to be resolved. Two other sources familiar with the negotiations said the White House had assured Democrats the administration would continue the program, at least for the time being.

Republicans in Congress have said they do not want to disrupt the landmark 2010 Affordable Care Act, popularly known as Obamacare, that expanded healthcare to millions of Americans while they craft legislation to repeal large parts of the program and replace it with a different healthcare system.

But President Donald Trump in recent weeks suggested taking action under his own powers to hack away at Obamacare. The latest assurance, if it holds, would mark a step back from that threat.

“We’re getting really close,” House Speaker Paul Ryan, a Republican, told reporters earlier on Wednesday, adding that negotiators were “getting down to the last, final” areas of disagreement.

BORDER WALL

Earlier this week, the Republican president backed off his demand that the bill include money for the “big, beautiful, powerful wall” he wants built along the U.S.-Mexican border.

That signature campaign proposal is seen by most Democrats and many Republicans as an ineffective way of securing U.S. borders.

The Trump administration likely will seek money for the wall in legislation funding the government for the fiscal year starting Oct. 1, but lawmakers are likely to balk again.

Senate Majority Leader Mitch McConnell, a Republican from the coal-mining state of Kentucky, threw his weight behind a plan Democrats were insisting on to make a healthcare program for coal miners permanent. It was unclear if Ryan would go along.

If Congress cannot agree to either a short stopgap funding bill or a longer-term one by midnight Friday, federal agencies will run out of money and likely have to abruptly lay off hundreds of thousands of federal government workers until an appropriations bill is enacted.

Many policymakers are nervous about a repeat of 2013, when the government was shuttered for 17 days.

Even though Trump’s fellow Republicans control both chambers of Congress, they only have 52 seats in the Senate. To amass the 60 votes needed there to pass a spending bill, Republicans will have to win the support of at least some Democratic lawmakers.

Still unclear was whether Republicans’ demand for a $30 billion increase in defense spending for the rest of this fiscal year would be met. Democrats have insisted that any defense spending hikes be paired with similar increases in other domestic program funding.

Democrats have been seeking immediate assistance for a funding gap in Puerto Rico’s Medicaid program, the federal health insurance program for the poor, saying it is in such bad shape that 1 million people are set to lose healthcare.

Also unclear is what “riders” that set new policy might be tucked into the legislation.

Past riders have touched on areas such as banning the Securities and Exchange Commission from requiring corporations to disclose political donations.

Democrats said they were worried Republicans could try to attach language limiting family-planning funds or undo Wall Street reforms enacted after the 2007-09 financial crisis.

(Additional reporting by Susan Cornwell, Amanda Becker and Lisa Lambert; Editing by Jonathan Oatis and Peter Cooney)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/V85XwALtJoU/us-usa-budget-idUSKBN17S146

Former Jefferies Group trader sentenced to two years for fraud


NEW HAVEN, Conn. A federal judge in Connecticut on Wednesday sentenced a former Jefferies Group bond trader to two years in prison and to pay a $2 million fine after he was found guilty earlier this year of defrauding customers on bond prices.


A jury in January found Jesse Litvak guilty of one of 10 criminal charges he had faced, a muted victory as prosecutors try to crack down on abusive sales practices on Wall Street.

(Reporting by Andy Thibault; Writing by Scott Malone; Editing by Tom Brown)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/EdpNcjPJ794/us-jefferies-group-litvak-sentence-idUSKBN17S2NL

Exclusive: ADM names new global trade desk chief as part of wider shakeup


BUENOS AIRES Archer Daniels Midland Co has replaced the leader of its global trading desk, according to an internal memo seen by Reuters on Wednesday, as the company sheds traders around the world while grappling with huge grain supplies that have weakened margins.

Gary McGuigan, most recently managing director of global trade at ADM will succeed Gary Towne as president of the global trade desk, according to the memo. The move is in keeping with a time frame set when Towne, who is retiring from the company, took the job last year, it said.

In a global shakeup in trading operations, the U.S. agribusiness group has let go key personnel in recent months and exited energy trading. It said in early April that it planned to close its South African trading desk and it shrank its operations in Argentina at a time of increasing food production.

Global heads of grains and oilseed trade will report to McGuigan, the memo said. The new vice president of global trade is Andy Kenny, who will continue to serve as global trade finance director, it said.

ADM’s public affairs office in the United States did not have an immediate comment.

In February, ADM reported a 41 percent drop in fourth-quarter net earnings to $424 million. Gains in its agricultural services segment were blunted by more losses by its global trading desk in the quarter, the unit’s second quarterly loss of 2016.

Record global stocks of key commodities including corn, soybeans and wheat thinned margins and limited trading opportunities for ADM.

The company is scheduled to report first-quarter results next Tuesday.

As part of the shake-up of its international trading operations, ADM cut jobs in Argentina last month when it shuttered its Toepfer grains trading unit.

The revamps hit at a time of increased competition from Chinese trading house COFCO Group, which has begun an aggressive expansion into international grains trading.

(Additional reporting by Karl Plume in Chicago; Editing by Bernard Orr)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/t83_CqIz7qk/us-archer-daniels-moves-exclusive-idUSKBN17S2MY

Twitter posts strong user growth, shares soar


Shares of Twitter Inc jumped on Wednesday after the microblogging service reported better-than-expected user growth in the first quarter, although its revenue fell for the first time.

The surprising acceleration, which Twitter attributed to new features and heightened user interest in political news, followed several quarters of stalled user growth that raised questions about Chief Executive Jack Dorsey’s leadership and speculation the platform may be bought by a bigger company.

Twitter reported yearly growth of 6 percent in monthly active users, a key performance indicator for social networking services typically calculated by taking the number of users who have logged in and logged out during the 30-day period, to 328 million.

On a quarterly basis, Twitter added 9 million monthly users.

While Dorsey cited technical changes to Twitter’s timeline which now lists content by themes instead of in a chronological order as part of the reason behind the user growth, Chief Operating Officer Anthony Noto said user interest in news and politics also played a role.

There is “some evidence that we benefited from our new and resurrected users following more news and political accounts in Q1, particularly in the U.S. That’s a really positive thing,” Noto said during a conference call with analysts.

U.S. President Donald Trump, one of the most active politicians on Twitter, has tweeted about five times a day on average since his inauguration in January, according to social media analytics company Zoomph.

Livestreaming, one of Twitter’s biggest pushes since last year to attract new users, also jumped in the first quarter, with more than 800 hours of live video across more than 450 events.

Twitter said the content reached 45 million unique users, up 31 percent from the fourth quarter which was the first full quarter of live content to be streamed on the social media platform.

Of those hours, 51 percent were sports, 35 percent were news and politics, and 14 percent were entertainment, Twitter said.

“Twitter is becoming more relevant to consumers. They are making their products easier to use. And there is a global thirst for news and information that they are benefiting from,” said BTIG Analysts Richard Greenfield.

But some analysts were cautious about the future path of user growth.

“I think that Trump drives a lot of awareness about Twitter among people who otherwise wouldn’t be paying attention,” said Michael Pachter, managing director at Wedbush Securities.

“But again, one quarter isn’t a trend, so let’s see if it’s sustainable.”

Despite the user growth, Twitter’s revenue for the first quarter fell 7.8 percent to $548.3 million, its first drop since its initial public offering.

Twitter’s advertising revenue plunged 11 percent to $474 million in the quarter, but came in above the average analyst estimate of $442.7 million, according to market research firm FactSet StreetAccount. Just in the United States, the decline was steeper at 17 percent.

Net loss narrowed to $61.6 million, or 9 cents per share, in the quarter ended March 31, from $79.7 million, or 12 cents per share, a year earlier. (bit.ly/2phNNZH)

Excluding items, the company earned 11 cents per share, beating the estimate of 1 cent per share.

“While we face revenue headwinds, we made progress focusing revenue products on our strengths,” Dorsey said, adding that user growth will contribute to revenue and profit going forward.

The shares were up 9.9 percent at $16.10 by midday.

(Reporting by Angela Moon in New York and Rishika Sadam in Bengaluru; Editing by Saumyadeb Chakrabarty and Meredith Mazzilli)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/a5aEuJ8jKrg/us-twitter-results-idUSKBN17S1E7

Automakers want California to revise Volkswagen charging station plan


WASHINGTON Major automakers and other groups are raising objections to the way Volkswagen AG (VOWG_p.DE) wants to spend $2 billion on electric vehicle infrastructure and projects, as part of the German automaker’s atonement for diesel emissions cheating.

Volkswagen plans to install hundreds of EV charging stations nationwide as part of the 10-year plan. About $800 million of the total will be spent in California as part of a settlement with the government after the German automaker admitted to secretly installing cheating software in 580,000 diesel vehicles allowing them to emit excess pollution.

The California Air Resources Board is considering whether to approve the $200 million spending plan for the first 30 months and is reviewing the 120 comments submitted, said spokesman Dave Clegern.

Automakers object to the proposed locations of some charging stations in areas that already have many electric vehicles and have concerns about competitive advantages VW could get from the program. An environmental group said more of the stations should be built in low-income areas.

Also, Toyota Motor Corp, Honda Motor Co and Hyundai Motor Co wrote a joint letter urging California to require Volkswagen to spend a “significant portion” of the money on hydrogen fuel cell fueling stations, saying the current commitment by California to get 100 such stations in place by 2020 is “not on track.”

In its initial California spending plan, Volkswagen wants to allocate $120 million to build more than 400 highway and community EV charging stations by 2019 in high-traffic areas. Several automakers said in their comments that they would prefer that the new charging stations be installed instead in areas that have little electric vehicle traffic.

Ford Motor Co said it “has reservations about having a key electrification driver dependent on and ultimately controlled by one automotive competitor.” Ford added VW should target areas where “demonstrated market interest does not already exist.”

BMW AG said Volkswagen “should not be afforded an implicit comparative advantage through its ability to control day-to-day operations of consumer charging events” such as waiting times, pricing and billing.

Under the agreement with California and the Justice Department, funds spent on education and outreach must be brand-neutral and cannot feature Volkswagen vehicles. Charging stations must be accessible to all vehicles.

The three automakers who want Volkswagen to spend more on building hydrogen fueling stations are trying to sell fuel cell vehicles.

Volkswagen declined to comment on the automaker letters, but said its goal is to “make it easy for as many (zero emission vehicle) drivers as possible to enjoy the collective charging networks available.”

The Sierra Club in a letter to California urged VW to “rethink its infrastructure proposal to include more investments in community-based charging in disadvantaged communities.”

The U.S. Environmental Protection Agency this month approved VW’s initial $300 million spending plan for EV projects outside California through 2019, including having 450 charging stations in place by then.

VW will also launch a $44 million “Green City” initiative to pilot future concepts. It expects the city to be Sacramento.

In December, Volkswagen agreed to add three additional electric vehicle models in California by 2020 and must sell an average of 5,000 electric vehicles annually through 2025 in the state.

(Reporting by David Shepardson; Editing by David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jy6FO4UAK9c/us-volkswagen-emissions-automakers-idUSKBN17S2HL

P&G profit falls on strong dollar, slow consumer spending


Procter Gamble Co (PG.N), maker of Tide detergent and Gillette razors, reported an 8.3 percent fall in third-quarter profit hurt by a strong dollar and slowing economic growth that dampened consumer spending in several countries.

Economic and political uncertainties – from higher gas prices in the United States and higher utility prices in Saudi Arabia to demonetization in India – triggered a sharp brake in consumer spending during the quarter, the company said on a post-earnings conference call.

Making matters worse, the U.S. dollar .DXY rose about 3.6 percent in the March quarter, on an average, compared with a quarter earlier, spurred by investors betting on the so-called “Trump trade”.

A strong dollar makes U.S. goods less competitive abroad, and foreign earnings less valuable when converted into dollars. PG, which sells its brands in more than 180 countries, gets nearly half its revenue from Europe, China, Asia and the Middle East.

“We continue to deal with an unprecedented amount of geopolitical disruption and uncertainty, which is affecting market growth, currencies and commodities,” Chief Financial Officer Joe Moeller said on the call.

“We’re aggressively driving cost savings to mitigate these impacts.”

PG has said it plans to save as much as $10 billion in costs over the next five years, and use a chunk of those savings to improve packaging, research and development, and sales coverage.

The company’s stock, which has jumped 10.6 percent in the past year, fell as much as 2 percent in morning trading on Wednesday. The SP 500 index has risen 6.6 percent in the same period.

SALES FALL AGAIN

The consumer goods giant, whose iconic brands include Pampers, Head-and-Shoulders and Vicks, maintained expectations of a mid-single digit rise in full-year adjusted earnings per share growth, and a 2-3 percent increase in organic sales growth.

Net income attributable to the Cincinnati, Ohio-based company declined to $2.52 billion, or 93 cents per share, in the three months ended March 31.

Adjusted earnings came in at 96 cents per share, beating Wall Street estimates by 2 cents.

Organic sales in PG’s two largest businesses – fabric and home care, and baby, feminine and family care – rose 1 percent. Organic sales at its grooming business fell 6 percent.

Net sales fell about 1 percent to $15.61 billion – the thirteenth straight quarter of declines. Analysts had been looking for $15.73 billion, according to Thomson Reuters I/B/E/S.

PG, which traces its roots to a family-run candle and soap business in 1837, has been selling off unprofitable brands and focusing on core brands such as Tide and Pampers to revive sluggish sales.

It sold 41 of its brands, including Clairol and Wella, to Coty Inc (COTY.N) in a $12.5 billion deal in October.

(Reporting by Richa Naidu in Bengaluru; Editing by Sayantani Ghosh)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/vp_17BDjUD8/us-procter-gamble-results-idUSKBN17S1EF