News Archive


Wall St. touches records as Senate deals to end shutdown

(Reuters) – U.S. stocks advanced on Monday as each of Wall Street’s main indexes touched a record intraday level after U.S. senators struck a deal to end the federal government shutdown.

U.S. senators voted to move forward on legislation that would reopen the federal government until Feb. 8. Funding legislation cleared a procedural hurdle in the Senate and was expected to pass a full Senate vote promptly, allowing government to re-open.

“The only way politics affects what the market does is if they end of having a negative impact on the economy and corporate earnings and so far that hasn’t been the case,” said Michael Arone, Chief Investment Strategist at State Street Global Advisors in Boston.

“The market has been more than willing to ride the tailwind of better global growth and higher corporate earnings, not only in the U.S. but globally.”

Earnings growth of 12.4 percent is expected for the quarter, according to Thomson Reuters data. Of the 55 companies in the SP 500 that have reported earnings through Monday morning, 80 percent have topped expectations, well above the 72 percent beat rate for the past four quarters.

The Dow Jones Industrial Average .DJI rose 65.67 points, or 0.25 percent, to 26,137.39, the SP 500 .SPX gained 13.41 points, or 0.48 percent, to 2,823.71 and the Nasdaq Composite .IXIC added 48.93 points, or 0.67 percent, to 7,385.31.

Halliburton Co (HAL.N) climbed 6.06 percent after posting a much bigger-than-expected quarterly profit in the fourth quarter, benefiting from a shale-driven surge in U.S. oil production.

The Nasdaq biotech index .NBI rose 2.83 percent and was on pace for its best day since June 21 after a flurry of merger activity in the sector with French drugmaker Sanofi (SASY.PA) and U.S.-based Celgene (CELG.O) splurging a combined total of more than $20 billion.

Shares in U.S. hemophilia specialist Bioverativ (BIVV.O) soared 61.69 percent after Sanofi agreed to buy the company for $11.6 billion.

Juno Therapeutics (JUNO.O) jumped 26.74 percent after Celgene agreed to buy the biotech for about $9 billion in cash.

In other MA news, AIG (AIG.N) said it would buy reinsurer Validus Holdings (VR.N) for $5.56 billion, sending the target’s shares up 44.18 percent.

Industrial stocks were one of the few laggards, as woes continued for General Electric (GE.N), down 0.82 after BofA-Merrill Lynch downgraded its stock. GE fell below $16 for the first time since 2011 and is down nearly 8 percent for the year.

Shares of Netflix Inc (NFLX.O), a major contributor to the recent stock rally, were up 2.25 percent ahead of its quarterly results after market closes.

Advancing issues outnumbered declining ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored advancers.

The SP 500 posted 107 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 181 new highs and 14 new lows.

Reporting by Chuck Mikolajczak; Editing by Nick Zieminski

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ftwKyLPkMoE/wall-st-touches-records-as-senate-deals-to-end-shutdown-idUSKBN1FB1K4

U.S. says audit watchdog staff helped KPMG pass audit inspections

WASHINGTON (Reuters) – The U.S. government on Monday announced criminal and civil charges against three former staffers of an audit watchdog for allegedly providing confidential information to help accounting firm KPMG pass regulatory inspections.

Three ex-KPMG executives also were charged for encouraging disclosure of the data on Public Company Accounting Oversight Board (PCAOB) audit inspections, the U.S. Securities and Exchange Commission and Justice Department said in separate filings.

The incidents allegedly occurred between 2015 and 2017, the government said.

“These accountants engaged in shocking misconduct – literally stealing the exam – in an effort to interfere with the PCAOB’s ability to detect audit deficiencies at KPMG,” said Steven Peikin, co-director of the SEC’s enforcement division.

The government charged that the PCAOB and KPMG employees conspired to share information about which audits the watchdog would be reviewing, giving KPMG an opportunity to shore up those particular products before facing scrutiny.

The PCAOB is a private non-profit corporation that monitors the audits of public companies. The government alleged that KPMG was eager to boost its performance under PCAOB inspections, noting the company received roughly twice as many comments on its audits in 2014 than its competitors.

The company recruited and hired PCAOB staff, and the SEC said some of those hires took confidential information about planned inspections with them to their new jobs, or obtained information from former colleagues still at PCAOB who were seeking their own jobs with KPMG.

In a statement on Monday, SEC Chairman Jay Clayton called the charges “disturbing.” But he said he did not believe the improper actions compromised the integrity of the KPMG audits embroiled in the scandal.

Last year, KPMG said it had fired six people over the PCAOB leaks, which the company had identified and brought to the government’s attention. The company hired outside legal counsel to investigate the matter and took “remedial actions” to prevent a recurrence, KPMG spokesman Manuel Goncalves said on Monday in an email.

Peikin said the enforcement action was unrelated to a December shake-up of the PCAOB in which the SEC named a new head for the watchdog and four new board members.

Reporting by Pete Schroeder; Editing by Richard Chang and Paul Simao

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4poFEDF_HCw/u-s-says-audit-watchdog-staff-helped-kpmg-pass-audit-inspections-idUSKBN1FB2DN

Halliburton upbeat on 2018 as oil recovery spreads

(Reuters) – U.S. oilfield services company Halliburton Co (HAL.N) reported a bigger-than-expected adjusted quarterly profit on Monday and gave an upbeat outlook for 2018, as higher oil prices continue to push U.S. production to near-record levels.

Halliburton’s optimistic view for its U.S. and international operations comes as rising crude prices spur demand for oilfield services. Its results, along with those of larger rival Schlumberger (SLB.N), suggested the oil and gas recovery will spread beyond U.S. onshore to international exploration and production markets.

“I am very excited about the way 2018 is shaping up,” said Chief Executive Jeff Miller during the company’s fourth-quarter earnings call. “North American unconventional activity should be very busy,” he added, referring to growth in production from U.S. shale.

Halliburton’s shares were up more than 5 percent at $55.71 in midday trading.

The company took a fourth-quarter charge of $385 million for its operations in Venezuela, which has been mired in political and economic turmoil. Halliburton said it would continue to “vigorously pursue” payments from its primary customer there, but expects continuing delays in payments.

Schlumberger last week reported a $938 million write-down on its Venezuelan assets and receivables. Other oilfield services firms have taken charges recently from receivables and promissory notes exchanged for debts from state-run oil company Petroleos de Venezuela PDVSA.UL.

The company posted an adjusted profit of 53 cents a share, beating the average analyst estimate of 46 cents per share, as per Thomson Reuters I/B/E/S.

“The big takeaway is that they conveyed an unequivocally constructive outlook for the industry in 2018,” said Bill Herbert, research analyst with Simmons Company. He pointed to the company’s expectation that its North American margins will climb to around 20 percent this year. Margins were in the mid-teens in 2017, he said.

The company was upbeat about the health of the U.S. oil industry given the rise in oil prices and increased drilling. The U.S. rig count is up almost 35 percent from last year, according to data from General Electric’s Baker Hughes (BHGE.N)

“Commodity prices are supportive of increasing activity in North America and I am encouraged by the increase in tender activity and the positive discussions we are having with our international customers,” Miller said in a statement.

Halliburton, which makes more than half its revenue from North American operations, said total revenue rose to $5.9 billion for the quarter, from $4.02 billion a year earlier. Revenue in North America was $3.4 billion, up from $1.8 billion.

The uptick in U.S. drilling activity drove up costs for sand and trucking during the quarter, the company said on its call, but sand costs should decline in 2018 as local mines come online.

The company also reported $882 million in tax charges, largely the result of preliminary tax provisions related to the new U.S. tax law passed in December.

Schlumberger on Friday beat Wall Street forecasts and predicted its international operations would grow in 2018 for the first time in four years.

A stronger outlook for the international market follows a nearly 24 percent climb in the global Brent futures contract LCOc1 in the past three months.

“As for the international market, I‘m encouraged for the first time in three years,” said Miller.

Reporting by Nivedita Bhattacharjee and Liz Hampton; Editing by Frances Kerry and Meredith Mazzilli

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/gWTXD3lbCzg/halliburton-upbeat-on-2018-as-oil-recovery-spreads-idUSKBN1FB1HL

Rogers ends Canadian joint venture with Vice Media

(Reuters) – Canada’s Rogers Communications Inc (RCIb.TO) said on Monday it agreed to end a joint venture in Vice Studio Canada and Viceland just three years after announcing it.

The C$100 million ($80.24 million) deal was struck in 2014 in a bid for Rogers to build on Vice’s edgy content targeted at younger viewers. (reut.rs/2rxQhrG)

Rogers Media has transferred its studio interest in the venture to Vice Canada, while all content from the TV channel Viceland would be only available online, the company said.

Rogers’ move comes amid stiff competition from video-streaming services such as Netflix (NFLX.O) and Amazon Prime who are spending heavily to make original shows to draw viewers.

Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Bernard Orr

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/YsawParKVJs/rogers-ends-canadian-joint-venture-with-vice-media-idUSKBN1FB2HY

U.S. refiner PES pins bankruptcy plan hopes on biofuel costs

NEW YORK (Reuters) – Philadelphia Energy Solutions, owner of the largest U.S. East Coast refinery, said on Monday its plan to get out of bankruptcy hinges on whether it can shed existing biofuel costs under the country’s renewable fuel laws.

The plan revives a debate between U.S. refiners and ethanol producers over renewables policy, and could spur actions from other struggling refiners should the U.S. Environmental Protection Administration allow PES to reduce its biofuel obligations.

The Trump Administration could also wade deeper into the fray should the Pennsylvania refinery, which has some 1,100 workers, face closure.

PES told its employees on Sunday it would file for Chapter 11 bankruptcy, pinning its financial difficulties on renewable fuel laws, Reuters reported. In its bankruptcy filing on Monday, the company said it does not have enough cash to comply with the laws for 2016 and 2017.

But PES has also seen its debt grow after its backers took out a $550 million loan used for dividend-style payouts.

PES said its biofuels obligation for 2016 and 2017 totals about $185 million. The company also plans to sell $150 million worth of credits to help emerge from bankruptcy.

Regulatory liabilities are generally given high priority in bankruptcy proceedings, making getting out of such obligations difficult. However, the government has provided relief in past cases, particularly when there is a political dimension, experts have said.

The U.S. Renewable Fuel Standard (RFS) is a Bush-era law that requires refiners to blend biofuels like ethanol into their fuels or buy credits from those who do. Those credits used to trade at a nominal price of just a few cents, but have soared in recent years.

Stephen Lubben, a professor at Seton Hall Law School, said other struggling refiners may also attempt to offload these obligations if the PES bankruptcy gives the refiner relief.

“The EPA will look closely to make sure this is not a sham to leave them holding the bag,” said Lubben. He said a debtor that cannot comply with such rules usually has to liquidate. “If you want to restructure, the business coming out the other side has to comply.”

The bankruptcy plan would be in jeopardy if the bankruptcy court forces the company to comply with its existing RFS obligations, PES warned.

Critics have argued the company’s woes are due to a flawed program, while supporters of renewable fuel laws have said the refiner’s troubles stem largely from a lack of access to relatively cheap crude oil supplies.

“Blaming the RFS is a better story than admitting strategic mistakes related to crude oil markets. But it’s a smokescreen,” said Brooke Coleman, executive director at the Advanced Biofuels Business Council. “Jobs matter, but the RFS is simply not the issue at PES.”

In 2017, refiners including Valero Energy Corp (VLO.N) and CVR Refining (CVRR.N), through the latter’s majority owner Carl Icahn, tried to get the Trump Administration to shift the cost obligation for the credits down the supply chain to blenders like Shell or gas station operators like Wawa.

That effort failed after lobbyists representing ethanol producers intervened, but the battle may now be revived.

“The mechanism for enforcing the RFS is the primary cause for this bankruptcy filing and it must be fixed,” said Pennsylvania’s Republican Senator Pat Toomey in a statement.

The bankruptcy comes six years after private equity firm Carlyle Group LP (CG.O) and Energy Transfer Partners’ (ETP.N) Sunoco Inc rescued PES from financial distress, in a deal supported by tax breaks and grants that saved thousands of jobs.

Shortly after the sale, Carlyle Group issued the controversial $550 million term loan, with the bulk of the proceeds going to investors in the form of dividend-style payouts.

Reporting By Jarrett Renshaw, additional reporting by Tom Hals; Editing by Meredith Mazzilli

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/uOfjkL6gm5E/u-s-refiner-pes-pins-bankruptcy-plan-hopes-on-biofuel-costs-idUSKBN1FB26M

Ford tests Focus prototype in U.S. ahead of China production launch

DETROIT (Reuters) – Ford Motor Co (F.N) is testing prototypes of the redesigned 2020 Focus compact car on U.S. roads 18 months ahead of the car’s production launch in China.

The 2020 Focus will be the first Chinese-built Ford to be sold in the United States.

A heavily camouflaged prototype of the vehicle was parked on Sunday at a retail outlet in Ann Arbor, Michigan, about 40 miles (64 km) west of Ford’s Dearborn headquarters and engineering center. Spy photographers have recently captured Focus prototypes undergoing pre-production testing in Europe as well.

In an email, Ford spokesman Michael Levine said the new Focus will go into production in the second half of 2019 and feature “more technology and more space” and “a number of new Focus models.” He said the redesigned Focus will be “globally sourced, primarily from China.”

Ford said last June that the next Focus for the U.S. market will come from China rather than from Mexico, as originally planned. At the time, Ford said the shift to China, the world’s largest market for cars, would save the company $500 million in tooling costs.

By the time the next-generation model arrives next year, the current Focus will be more than eight years old. Last year’s decision to shift U.S.-bound Focus production from Mexico to China signaled a change in strategy by Ford, in response to dwindling U.S. consumer demand for small cars in favor of more expensive and more profitable trucks and sport utility vehicles.

It is also an indication that China could play a much larger role in future vehicle production for North America, perhaps eclipsing Mexico as a low-cost manufacturing source.

Reporting by Paul Lienert in Detroit; Editing by Tom Brown

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Pejvh17vaR4/ford-tests-focus-prototype-in-u-s-ahead-of-china-production-launch-idUSKBN1FB2B1

The Birimian: plenty more where that came from

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Article source: http://www.mining-journal.com/discovery/news/1310962/birimian-plenty

Biotech M&A takes off as Sanofi and Celgene spend $20 billion

(Reuters) – Biotech deal activity exploded on Monday with French drugmaker Sanofi and U.S.-based Celgene spending a combined total of more than $20 billion to add new products for hemophilia and cancer to their medicine cabinets.

The acquisitions will fuel expectations for a busy year of mergers and acquisitions (MA) as large drugmakers snap up promising assets from smaller rivals to help revive growth.

Sanofi agreed to buy U.S. hemophilia expert Bioverativ for $11.6 billion, its biggest deal for seven years, while Celgene is paying about $9 billion for the 90 percent of cancer specialist Juno Therapeutics it does not already own.

The two cash deals were agreed at a prices of $105 and $87 per share respectively. Shares in Bioverativ leaped 63 percent in early U.S. trading and Juno jumped 27 percent, reflecting the offers, while Sanofi fell 4 percent. Celgene was little changed.

Other biotech stocks were driven higher by the takeover news, with rivals to Juno including Bluebird Bio , Sangamo Therapeutics and Cellectis each gaining around 10 percent.

“The signs are good for biotech deal activity in 2018,” said Chris Stirling, head of KPMG’s global life sciences practice.

Big companies are under pressure from declining sales of older treatments and many are struggling to find sufficient high-value replacements from within their own laboratories, making buying in products and know-how an attractive option.

“It takes a long time to introduce technology that makes a significant difference, and in the interim CEOs are looking at any way to get their hands on product where they believe they can make a decent return,” Stirling said. “They’ve got to be seen to be doing things, otherwise they really struggle to convince investors.”

Both Sanofi and Celgene had been seen as likely multibillion-dollar acquirers.

BUSY START

The French group, which faces mounting competition in its key diabetes unit, lost out on buying U.S. cancer firm Medivation to Pfizer in 2016, and also missed acquiring Swiss-based Actelion, which was bought by Johnson Johnson last year.

Celgene, meanwhile, needs to dilute its reliance on cancer drug Revlimid. It had been widely tipped as a buyer for Juno, whose technology is at the cutting edge of cancer treatment.

Juno is one of several pioneers of a system to modify immune cells to fight tumors and its JCAR017 product is likely to reach the market in 2019, behind rival approval treatments from Novartis and Gilead.

Gilead only recently jumped into the space after acquiring Kite Pharma last year for $12 billion in one of the few standout deals during a relatively subdued year for biotech MA.

Despite the late start, Celgene believes JCAR017 could have peak annual sales of $3 billion and it sees the acquisition being “incrementally additive” to net product sales in 2020. Following setbacks at Juno, Celgene is paying less than the $93 a share it stumped up for just under 10 percent of the company in 2015.

Sanofi expects Bioverativ, which was spun off from Biogen last year, can deliver commercial success despite rapid changes in the $10 billion hemophilia market posed by a novel drug from Roche and the potential of gene therapy to provide a one-time cure.

Those changes have spooked some investors but Sanofi is betting that the factor replacement therapies made by Bioverativ will remain the standard of care for many years and it expects the deal to boost earnings immediately.

Monday’s two big acquisitions build on an already busy start for 2018 biotech MA, with Celgene earlier agreeing to acquire privately-held Impact Biomedicines for as much as $7 billion, including $1.1 billion upfront, and Novo Nordisk bidding $3.1 billion for Belgium’s Ablynx.

Separate reports this month by consultancy EY and law firm Baker McKenzie both predicted a significant rise in life sciences MA in 2018, helped by U.S. tax changes that may lift big companies’ appetite for deals.

Lazard advised Sanofi on its deal, while Guggenheim Securities and J.P. Morgan worked for Bioverativ. J.P. Morgan also worked for Celgene and Morgan Stanley for Juno.

Additional reporting by Tamara Mathias, Matthias Blamont and Shubham Kalia; Editing by Edmund Blair and Alexander Smith

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/q5PFWb9KAm4/biotech-ma-takes-off-as-sanofi-and-celgene-spend-20-billion-idUSKBN1FB20V

West Africa holds onto junior appeal

The region has faced its share of challenges in the form of political instability and infrastructure deficits, but most miners in the region see operating in it as similar to any other mining district, with many upbeat.

Article source: http://www.mining-journal.com/feasibility/news/1310971/west-africa-holds-junior-appeal