News Archive


Mondelez’s profit beats on higher demand for key brands

(Reuters) – Mondelez International Inc’s (MDLZ.O) quarterly profit beat analysts’ estimates, fueled by strong demand for its key brands like Cadbury Dairy Milk and Oreo cookies in Europe and growth in emerging markets.

Shares of the confectionery, food and beverage company rose marginally in extended trading on Wednesday.

Net income attributable to the company rose to $802 million, or 53 cents per share in the fourth quarter ended Dec. 31, from $93 million, or 6 cents per share, a year earlier.

The company had a $59 million benefit from U.S. tax reform.

Excluding items, Mondelez earned 57 cents per share, beating the estimate of 56 cents per share.

The East Hanover, New Jersey- based company said its net revenue rose to $6.97 billion, meeting analysts’ average estimate of $6.97 billion.

The company said it expects double-digit adjusted earnings per share growth on a constant currency basis for 2018. Mondelez also expects organic net revenue to increase 1 percent to 2 percent for 2018 and adjusted operating income margin of about 17 percent.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Bernard Orr

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Facebook’s user engagement dips on News Feed tweaks; shares fall

(Reuters) – Facebook Inc (FB.O) reported slightly slower-than-expected growth in daily active users in the latest quarter and said changes made to the News Feed reduced the time spent by users by about 50 million hours every day.

Shares of the company were down 3 percent at $181.26 after the bell on Wednesday. Facebook said about 1.40 billion people were using its service daily as of Dec. 31, up 14 percent from a year earlier, compared with analysts’ estimate of $1.41 billion, according to financial data and analytics firm FactSet.

Facebook had warned earlier this month that user engagement would take a hit in the near term from attempts to tweak its flagship News Feed feature.

“Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent,” Chief Executive Mark Zuckerberg said in a statement.

The company also plans to highlight “trustworthy” news in the feed following allegations that Russian operatives and others spread false reports on the site, particularly during the 2016 U.S. Presidential election.

This change is set to shrink the amount of news on Facebook to about 4 percent of all content from 5 percent currently.

Net income attributable to Facebook shareholders rose to $4.27 billion, or $1.44 per share, in the fourth quarter ended Dec. 31 from $3.56 billion, or $1.21 per share, a year earlier.

Excluding a tax provision, the company earned $2.21 per share, topping analysts’ estimates of $1.95, according to Thomson Reuters I/B/E/S.

Total revenue rose 47 percent to $12.97 billion, while full-year revenue was also up 47 percent at $40.65 billion.

Total advertising revenue was $12.78 billion, compared with analysts’ estimate of $12.30 billion, according to Thomson Reuters I/B/E/S.

Mobile ad revenue accounted for 89 percent of the total ad sales, up from 84 percent a year earlier.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D’Silva

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Fed leaves rates unchanged, sees inflation rising this year

WASHINGTON (Reuters) – The U.S. Federal Reserve kept interest rates unchanged on Wednesday but said inflation likely would rise this year, bolstering expectations borrowing costs will continue to climb under incoming central bank chief Jerome Powell.

Citing solid gains in employment, household spending and capital investment, the Fed said it expected the economy to expand at a moderate pace and the labor market to remain strong in 2018.

“Inflation on a 12-month basis is expected to move up this year and to stabilize” around the Fed’s 2 percent target over the medium term, the central bank said in a statement following a two-day policy meeting, the last under Fed Chair Janet Yellen.

It also said its rate-setting committee had unanimously selected Powell to succeed Yellen, effective Feb. 3. Powell, a Fed governor who has worked closely with Yellen, was nominated by President Donald Trump and confirmed by the U.S. Senate.

Powell is expected to hew closely to the policies embraced by Yellen, who spearheaded the gradual move away from the near-zero interest rates adopted to nurse the economy back to health and spur job growth after the 2007-2009 recession.

Fed policymakers have been encouraged in recent months as the economy picked up speed and the unemployment rate fell to a 17-year low of 4.1 percent.

The Fed, which raised rates three times last year and in December forecast three more hikes for this year, said on Wednesday it expected “further gradual” rate increases will be warranted. The target range for the federal funds rate currently is 1.25 percent to 1.50 percent.

“The use of ‘further’ opens the door to four hikes and likely closes the door on two,” Michael Gapen, chief U.S. economist for Barclays, wrote in a note to investors.

U.S. stocks rose slightly after the Fed statement before paring gains. Short-term interest rate futures showed traders adding slightly to bets the Fed would raise rates three times in 2018, starting at its next meeting in March.

INFLATION VIEW UPGRADED

The Fed’s gradual path of rate increases will hinge on a continued pickup in inflation, which has lingered below target despite a strong job market. Fed policymakers have said they expect an acceleration this spring, once short-term factors that held down inflation are squarely in the rear-view mirror.

In its statement, the central bank noted that market-based measures of inflation have increased in recent months.

The statement did not address the likely impact of the Trump administration’s tax overhaul on economic growth, and gave no hint of concern about overshooting on inflation.

Several Fed policymakers recently have said they expected the tax changes, which include an estimated $1.5 trillion in corporate and individual tax cuts, to provide an economic lift by boosting business and household spending.

The economy grew 2.3 percent in 2017.

U.S. stocks have soared to record highs in recent weeks as investors calculated that corporate profits would rise after the passage of Trump’s tax legislation.

There were no dissents in the Fed’s decision on Wednesday.

Reporting by Ann Saphir and Jason Lange; Additional reporting by Sinead Carew and Richard Leong in New York and Noel Randewich in San Francisco; Editing by Paul Simao

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AT&T quarterly profit tops estimates, shares rise

NEW YORK (Reuters) – ATT Inc (T.N) said on Wednesday that quarterly profit beat Wall Street analyst estimates, helped by impacts from tax cuts and wireless subscriber additions.

Net income attributable to ATT was $19.0 billion, or $3.08 per share, in the fourth quarter ended Dec. 31, up from $2.4 billion, or 39 cents a share, in the year-earlier period.

Shares rose 4 percent to $38.93 in after-hours trading.

Excluding items, ATT reported earnings of 78 cents per share, which included a 13-cent impact from tax cuts signed into law by U.S. President Donald Trump late last year. Analysts on average were expecting earnings of 65 cents per share, according to Thomson Reuters I/B/E/S.

Revenue was $41.7 billion, compared with $41.8 billion in the year-earlier period. Analysts had expected $41.2 billion.

ATT also said it added 329,000 phone subscribers who pay a monthly bill in the quarter, compared with a loss of 67,000 a year earlier.

Reporting by Anjali Athavaley; Editing by Matthew Lewis

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Wall St. ends off day’s highs as Fed sees inflation rising

(Reuters) – U.S. stocks finished marginally higher on Wednesday as indexes gave up early gains after the Federal Reserve said it sees inflation rising this year, signaling it remains on track to boost interest rates again in March.

The Fed kept rates unchanged but, in a statement following its two-day policy meeting, it repeated that it expected that “further gradual” rate hikes will be warranted.

“The subtle message is that they will continue to press rates higher,” said Scott Kimball, director and portfolio manager at BMO Global Asset Management.

The central bank raised rates three times last year and sees three additional hikes in 2018 even as it continues to trim its balance sheet on a largely pre-set schedule.

“They’re more confident in their expectations of rising inflation,” said Kevin Logan, Chief U.S. Economist at HSBC Securities.

Bolstering the Fed’s view of a solid economy, ADP published a report on Wednesday showing 234,000 private sector jobs added in January compared with 185,000 expected by analysts. The U.S. Labor Department is due to release its more comprehensive report on Friday.

The Dow Jones Industrial Average .DJI rose 73.74 points, or 0.28 percent, to 26,150.63, the SP 500 .SPX gained 1.47 points, or 0.05 percent, to 2,823.9 and the Nasdaq Composite .IXIC added 9.00 points, or 0.12 percent, to 7,411.48.

Stocks were lifted earlier Wednesday by a surge in Boeing (BA.N) which forecast better-than-expected full-year profits and said it expects to deliver a record number of commercial aircraft in 2018, sending its shares up 4.9 percent.

The aerospace giant was the biggest percentage gainer on the Dow, helping pull the blue-chip index out of its biggest two-day plunge since September 2016.

The selloff earlier in the week had been prompted by an increase in U.S. Treasury yields to multi-year highs. The U.S. yield curve flattened to a decade low following the Fed statement as traders sold more short-dated Treasuries.

Facebook (FB.O) shares dipped more than 4 percent in after-market trading after the social media giant reported results.

Among the SP 500’s 11 major sectors, technology .SPLRCT gave the biggest boost to the index.

Healthcare stocks continued to weigh on the three major U.S. indexes following a report on Tuesday that Amazon.com (AMZN.O), Berkshire Hathaway (BRKa.N) and JPMorgan Chase (JPM.N) were joining forces to cut healthcare costs for its U.S. employees. The SP 500 healthcare index .SPXHC fell 1.5 percent.

Analysts expect fourth-quarter SP 500 earnings growth of 13.7 percent, up from 12 percent expected at the start of the month. So far, 37 percent of companies in the index have reported and 80.5 percent have come in above consensus estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.

The SP 500 posted 34 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 82 new highs and 48 new lows.

Volume on U.S. exchanges was 8.05 billion shares, above the 7.18 billion average for the full session over the last 20 trading days.

Reporting by Stephen Culp; additional reporting by Kate Duguid; Editing by Nick Zieminski

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Qualcomm’s earnings top estimates as modem chip sales surge

(Reuters) – Chipmaker Qualcomm Inc’s (QCOM.O) earnings and revenue topped Wall Street forecasts for the first fiscal quarter as demand surged for its chips used in smartphones and cars, making up for a fall in licensing revenue.

The results come as San Diego-based Qualcomm tries to rebuff a $103-billion takeover approach by Broadcom Ltd (AVGO.O) and close its long-pending $38-billion deal to buy automotive chip maker NXP Semiconductors (NXPI.O).

Qualcomm is trying to convince shareholders that it can boost earnings as a standalone company through a $1 billion cost reduction plan and by resolving license disputes including a high-profile patent battle with Apple Inc (AAPL.O).

Strong quarterly results in Qualcomm’s CDMA technologies (QCT) unit that makes modem chips contrasted with a steep fall in revenue in the licensing business.

Weighed down by the Apple dispute, the licensing business posted a 28 percent fall in revenue to $1.30 billion in the first quarter ended Dec. 24.

Apple sued Qualcomm last January, accusing it of overcharging for chips and of refusing to pay some $1 billion in promised rebates.

Revenue at the QCT business rose 13 percent to $4.65 billion.

Qualcomm posted a net loss of $5.95 billion compared to a profit of $682 million a year earlier, reflecting a $6 billion one-time charge because of new U.S. tax laws.

Excluding one-time items, Qualcomm earned 98 cents per share, topping analysts’ average estimate of 91 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 1.2 percent to $6.07 billion and exceeded analysts’ estimates of $5.93 billion.

Shares of the company were slightly lower at $67.70 in after-hours trading on Wednesday.

Reporting by Sonam Rai in Bengaluru; Editing by Sai Sachin Ravikumar

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Microsoft reports better-than-expected quarterly revenue, profit

(Reuters) – Microsoft Corp (MSFT.O) reported better-than-expected quarterly revenue and profit on Wednesday, helped by robust demand for its cloud computing services and flagship Azure product, which has recorded dramatic growth over several quarters.

Microsoft took a $13.8 billion charge in the second quarter that resulted in a loss, but excluding items it earned 96 cents per share, beating analysts’ average expectation of 86 cents.

Revenue climbed 12 percent to $28.92 billion, beating analysts’ expectations of $28.40 billion.

Since Chief Executive Officer Satya Nadella took the helm in 2014, Microsoft’s cloud business – which includes products such as Office 365, Dynamic 365 and Azure computing platform – has emerged as a major growth driver.

Revenue from the intelligent cloud segment rose 15.3 percent to $7.80 billion in the second quarter, including 98 percent growth for Azure. Analysts on average had expected $7.51 billion, according to Thomson Reuters I/B/E/S.

This is the 10th consecutive quarter of more than 90 percent revenue growth for Azure, which directly competes with Amazon.com Inc’s (AMZN.O) Amazon Web Services.

The company posted a net loss of $6.30 billion, or 82 cents per share, in the second quarter ended Dec. 31, compared to a profit of $6.27 billion, or 80 cents per share, a year earlier. [bit.ly/2npGtLa]

Shares of the technology giant fell 1 percent in late trade.

Reporting by Pushkala Aripaka in Bengaluru; Editing by Bernard Orr

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Argentina companies list on U.S. exchanges ahead of expected rate hikes

BUENOS AIRES (Reuters) – Argentine companies are rushing to list shares on U.S. exchanges beginning this week to beat an expected hike in interest rates by the U.S. Federal Reserve, analysts said, while taking advantage of an improved investor climate under President Mauricio Macri after years of populist rule.

Airport operator Corporación América Airports (CAAP.N) and power generator Central Puerto SA (CEPU.BA) are expected to raise $1.4 billion between them in listings this week.

Biotech firm Bioceres is expected to raise some $140 million with a listing next week, while food processor Molino Cañuelas (MOLC.BA), energy producer Genneia [EMGSD.UL] and real estate developer TGLT (TGLT.BA) also have both local share sales and international IPOs in the pipeline.

“There is still plenty of money available in global markets. They are taking advantage of the moment ahead of the Fed’s promised interest rate hike,” said Héctor Scasserra, head of brokerage Arpenta Valores and a board member of Argentina’s Bolsas y Mercados Argentinos (BYMA.BA) stock exchange.

An increase in rates by the Fed would likely dampen investor interest in equities. Companies are also seeking to take advantage of a positive outlook for growth in Argentina and investor enthusiasm for Macri’s business-friendly policies.

The Fed kept interest rates unchanged on Wednesday, but it is expected to raise borrowing costs in March under incoming central bank chief Jerome Powell.

While many of their Latin American peers have listed on international exchanges in recent years, Argentine companies largely held back, as investors were weary of former President Cristina Fernandez’s interventionist policies.

Since taking office in December 2015, Macri has sought to attract foreign investment and develop capital markets. He ended a holding period of foreign capital, passed a reduction of corporate tax rates in an overhaul of Argentina’s tax system, and is pushing reforms to labor and capital markets laws.

“The table is set and there are optimistic growth expectations for these companies,” said Joaquin Bagües, an analyst at Balanz Capital in Buenos Aires.

Central Puerto could price its 35.5 million share offering at $1.85 per share, while Corporacion America will likely price at the upper end of its $19-$23 per share range to strong demand from funds with exposure to emerging markets, according to consultancy Delphos Investment.

Reporting by Walter Bianchi; Writing by Luc Cohen; Editing by Leslie Adler

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U.S. food distributors allege Tyson Foods, rivals fixed chicken prices

CHICAGO (Reuters) – Top U.S. food distributors Sysco Corp and US Foods Holding Corp have joined retailer Winn-Dixie Stores [BILODW.UL] and other poultry buyers suing the country’s biggest chicken processors for allegedly conspiring to inflate prices.

The distributors sued companies including Tyson Foods Inc, Pilgrim’s Pride Corp, Sanderson Farms Inc and Perdue Farms in separate complaints filed in federal court in Illinois on Tuesday.

The U.S. chicken sector, which is dominated by these large meat processors, has come under increased scrutiny in recent years as customers and farmers have alleged antitrust violations relating to pricing, production and compensation.

“This is a case about how a group of America’s chicken producers reached illegal agreements and restrained trade,” the lawsuits from Sysco and US Foods said.

Tyson, the biggest U.S. chicken company, and Pilgrim’s Pride denied the allegations on Wednesday. Sanderson Farms said it will defend itself against the claims. Privately held Perdue declined to comment.

U.S. poultry buyers previously claimed in a 2016 lawsuit that Tyson and its competitors had colluded since 2008 to reduce output and manipulate prices. Winn-Dixie, which operates grocery stores throughout the southeastern United States, sued the chicken companies earlier this month.

“We expect the industry to fight the allegations and come out successful,” Mizuho analyst Jeremy Scott said.

Sysco and US Foods allege processors curbed the supply of chickens by colluding to limit breeder birds that produce flocks that are ultimately slaughtered for meat consumption.

Data provider Agri Stats participated in the conspiracy, according to the lawsuits, by distributing information about chicken production that gave processors insights into rivals’ supplies. Agri Stats, which the complaints say is a subsidiary of Eli Lilly Co, did not immediately respond to a request for comment.

“Follow-on complaints like these are common in antitrust litigation,” Tyson spokesman Gary Mickelson said. “Such complaints do not change our position that the claims are unfounded.”

Tyson shares were down 3.6 percent, and Sanderson Farms shares lost 3.8 percent. Shares of Pilgrim’s Pride, mostly owned by Brazilian meat packer JBS SA, were down 6 percent.

Last year, such processors earned some of their highest profit margins in more than a decade as prices for grains used to feed birds slumped due to a global glut.

The cases are Sysco Corporation v Tyson Foods Inc et al, U.S. District Court, Northern District of Illinois, No. 18-cv-00700 and US Foods Inc v Tyson Foods Inc et al, U.S. District Court, Northern District of Illinois, No. 18-cv-00702.

Reporting by Tom Polansek, editing by G Crosse and Chizu Nomiyama

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