News Archive

Factbox: Trump touts strong economy; facts are more nuanced

WASHINGTON (Reuters) – U.S. President Donald Trump on Friday hailed a report on economic growth as a sign that the economy was mounting a remarkable turnaround under his stewardship. The facts are more nuanced.

Following are three key remarks made by Trump following a report that the U.S. economy grew at a 4.1 percent annual rate between April and June, followed by facts based on reports by the U.S. government, companies and private economists.

TRUMP: “We’re on track to hit the highest average annualized growth rate in over 13 years…. If economic growth continues at this pace the United States economy will double in size more than 10 years faster than it would have under either President Bush or President Obama.”

FACT CHECK: Commerce Department data shows the economy has grown at a 3.1 percent annualized rate in the first half of 2018. If sustained for the rest of the year, that would be the fastest since 2005.

But economists generally expect growth will slow in coming months. That’s because the recent strength partly owes to a one-time rush by companies to export soybeans and other goods in order to avoid tariffs that took affect in July. Temporary factors have led to many bursts of growth in the past. The economy expanded at faster quarterly paces during four quarters under former President Barack Obama and in three quarters under former President George W. Bush, only to slow down afterward.

TRUMP: “We’ve added 3.7 million new jobs since the election, a number that is unthinkable if you go back to the campaign.”

FACT CHECK: It’s true the U.S. economy has added 3.7 million jobs since Trump’s November 2016 election, according to Labor Department figures. But it’s hardly unthinkable growth and is actually part of widely anticipated slowdown in job creation. U.S. payrolls have grown by an average 191,000 per month since Trump’s election, down from 219,000 per month over the prior two years. The economy has been adding jobs since 2010 and economists have expected job creation to slow, in part due to a shrinking number of jobless Americans.

TRUMP: “In the first three months after tax cuts, over $300 billion poured back into the United States from overseas.”

FACT CHECK: Following a tax overhaul approved in December, U.S. companies brought back $305.6 billion from foreign subsidiaries in the first quarter of 2018, according to Commerce Department data.

Companies did expand their capital spending in the first quarter, but the biggest American companies spent far more on dividends and share buybacks, a sign that the cash they have on hand outstripped their investment opportunities. Apple Inc., for instance, lifted its capital spending to $4.2 billion from $3 billion a year earlier but also spent a record $23.5 billion buying back its stock and another $3.2 billion on dividends.

Reporting by Jason Lange, Lindsay Dunsmuir and Daniel Burns; Editing by Andrea Ricci

Article source:

Trump hails growth as one-offs and consumers boost economy

WASHINGTON (Reuters) – The U.S. economy grew at its fastest pace in nearly four years in the second quarter as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs before they took effect in early July.

President Donald Trump, who ahead of Friday’s release of the gross domestic product report had promoted the notion that second-quarter growth would be robust, declared victory.

“We have accomplished an economic turnaround of historic proportions,” Trump told reporters. “These numbers are very, very sustainable.”

Gross domestic product increased at a 4.1 percent annualized rate also as government spending picked up, the Commerce Department said in its snapshot of second-quarter GDP. While that was the strongest performance since the third quarter of 2014, it was not the best since the recession ended in mid-2009.

January-March quarter GDP growth was revised up to a 2.2 percent pace from the previously reported 2.0 percent rate to account for updated information and methodology improvements.

Compared to the second quarter of 2017, the economy grew 2.8 percent. Output expanded 3.1 percent in the first half of 2018, putting the economy on track to hit the Trump administration’s target of 3 percent annual growth. A measure of domestic demand surged at a 4.3 percent rate in the second quarter.

Contrary to Trump’s assertions, the economy enjoyed periods of robust growth during the Obama administration. GDP growth recorded a 5.1 percent pace in the second quarter of 2014 and the economy experienced four quarters of output above a 4.0 percent rate.

Economists also cautioned against putting much weight on the surge in second-quarter growth as one-off factors, including a $1.5 trillion tax cut package, were behind the growth spurt. The soybean boost is likely to reverse in the coming quarters and the fiscal stimulus is seen fading in 2019.

  • Factbox: Trump touts strong economy; facts are more nuanced
  • U.S. says has addressed residual seasonality in GDP data

“Pop the champagne today, but don’t get used to it, growth going forward has a lot of headwinds,” said Chris Rupkey, chief economist at MUFG in New York. “Unless you cut taxes again, there won’t be additional tax cut monies to line company and consumer pocket books.”

The United States slapped 25 percent duties on $34 billion worth of Chinese goods effective July 6, provoking a similar response from Beijing, which targeted soybeans and other agricultural products as well as U.S.-made cars.

Trump has also imposed tariffs on steel and aluminum imports, leading to retaliation by the United States’ main trade partners, including Canada, the European Union, Mexico and China.

Strong growth in the April-June quarter likely keeps the Federal Reserve on course to raise interest rates two more times this year. The U.S. central bank increased borrowing costs in June for the second time this year and forecast two more rate hikes for 2018.

The GDP report showed the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 2.0 percent rate in the second quarter. The core PCE price index rose at a 2.2 percent pace in the January-March period.

The dollar was little changed versus a basket of currencies. U.S. Treasury yields fell and stocks on Wall Street were down.


While trade war fears helped to boost output last quarter, import duties are seen undercutting economic growth, with higher prices for goods discouraging consumer spending and businesses shelving investment plans. Economists in a Reuters poll earlier this week predicted that growth will slow notably from here.

“The spring quarter could be the high water mark for growth,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “That said, there is every reason to expect that growth in the second half of the year will still be in the 3 percent range.”

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.0 percent rate in the second quarter. That was the fastest in 3-1/2 years and followed the January-March period’s stall-speed pace of 0.5 percent.

Households bought motor vehicles and spent more on health care, utilities, food and accommodation in the last quarter.

Consumer spending is also being driven by a robust labor market, which created an average of 215,000 jobs per month in the first half of this year.

The front-loading of deliveries of soybeans and other goods boosted exports in the second quarter, which grew at their quickest pace in 4-1/2 years, sharply narrowing the trade deficit. Trade added 1.06 percentage points GDP growth in the second quarter after being neutral in the January-March period.

The rush to offload soybeans, however, depleted farm inventories. Inventories declined at a $27.9 billion rate after rising at a $30.3 billion pace in the first quarter. They subtracted 1.0 percentage point from GDP growth.

Business spending on equipment slowed and a further moderation is likely, with trade wars casting a pall on the business spending outlook.

General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV on Wednesday cut their full-year profit forecasts, citing higher steel and aluminum costs.

Harley-Davidson Inc has warned that more expensive steel and aluminum and a 25 percent retaliatory duty imposed by the European Union on shipments from the United States could cost the motorcycle maker $45 million to $55 million this year.

Investment in homebuilding fell for a second straight quarter. Government spending grew solidly, boosted by defense outlays.

Reporting by Lucia Mutikani; Editing by Jonathan Oatis and Andrea Ricci

Article source:

Interactive Brokers increases margin requirement for Tesla

(Reuters) – Interactive Brokers Group said on Friday it will increase margin requirements for clients making Tesla Inc bets due to recent volatility in shares of Elon Musk’s electric car company.

The electronic brokerage said it told clients in a memo on Thursday that it will raise its margin requirements to 30 percent for regular accounts, which typically have a 25 percent margin requirement, and to 20 percent for margin accounts, which typically have a 15 percent requirement.

Due to the change, which takes effect after the market close on Tuesday, July 31, clients making long or short Tesla bets through shares, options, futures or other means will need more cash in their accounts as collateral for any losses.

Roughly 35.4 million Tesla shares, or 27.95 percent of its float, are currently sold short and the cost of borrowing Tesla shares has risen to 2.6 percent this year from less than 1 percent last year, according to financial analytics firm S3 Partners.

Tesla short sellers are down $469 million for the year to date even after gains of $1.23 billion for July on a mark to market basis, according to S3.

Tesla shares last traded down 2.8 percent on the day at $298.19 after Steve Eisman, Neuberger Berman Group money manager, told Bloomberg TV he is betting against Tesla due to negative cash flow. Eisman’s bets against the housing market before the 2008 crisis were chronicled in Michael Lewis’s 2010 book “The Big Short.”

Tesla shares were on track for a 13 percent drop for July and have fallen 4.3 percent so far this year.

The stock often swings wildly in either direction. While some investors have been betting heavily that there will be strong demand for Tesla cars, others have been skeptical due to concerns including cash needs, production problems and controversies surrounding Musk, Tesla’s founder and chief executive.

Tesla has reached a high of $373.73 so far in 2018 and a low of $244.59.

Reporting by Sinéad Carew and Saqib Iqbal Ahmed; Editing by Dan Grebler

Article source:

Caterpillar results likely to shed light on tariffs fallout

CHICAGO (Reuters) – When Caterpillar Inc (CAT.N) reports earnings on Monday, investors will focus on the heavy equipment maker’s ability to adjust its prices in the face of rising materials costs that are expected to pressure profit margins.

Wall Street will also watch out for the company’s commentary on order backlog to assess the strength of global demand amid escalating trade tensions.

Analysts polled by Reuters, on average, expect the company’s adjusted net profit to rise to $2.73 per share in the second quarter, from $1.49 per share a year ago. Net profit for the quarter is estimated to rise to $2.58 per share from $1.35 last year.

Deerfield, Illinois-based Caterpillar, which serves as a bellwether for global economic activity, has benefited from a humming global economy which is having its best run since 2011. After battling the longest downturn in its history, the company expects full-year 2018 profit to be the best ever.

Yet the stock has lost about 18 percent since January amid increasing trade frictions and mounting pressure on costs. The stock last month fell to its lowest level since late October before recovering modestly.

“The market has become very focused on the risk that the industrial cycle is starting to get weaker and even the broader economic cycle,” Stephen Volkmann, an analyst with Jefferies, said on Wednesday. “That seems to be the primary concern.”

The International Monetary Fund warned this month that worsening trade skirmishes could derail global economic recovery and depress medium-term growth prospects.

To be sure, Caterpillar is better placed than many companies to deal with the tariffs as its manufacturing footprint is spread across the globe. It also enjoys superior pricing power thanks to a robust global demand.

But the company said in April that its outstanding first-quarter performance was the “high-water mark” for the year as it would not have the same pricing power to pass on increased material costs.

To offset rising costs, it implemented price hikes on July 1. Still, analysts surveyed by Reuters expect cost of production to be higher than it was in the previous quarter.

President Donald Trump’s tariffs on steel and aluminum imports have raised domestic prices, denting earnings of many manufacturers.

General Motors Co (GM.N) on Wednesday cut its full-year profit forecast on higher metals costs, which also dented the earnings of Whirlpool Corp (WHR.N).

However, some companies like Harley-Davidson Inc (HOG.N) have found a way to soften the blow on their profit margins.

Reporting by Rajesh Kumar Singh in Chicago; Editing by Matthew Lewis

Article source:

Global stocks end fourth week of gains on sour note as investors jeer earnings

NEW YORK (Reuters) – World shares were little changed on Friday as mixed corporate profits and economic data that only met expectations struggled to displace concerns over trade and central bank policy, though a key global equity index was still set for a fourth week of gains.

The MSCI All-Country World Index, which tracks shares in 47 countries, was down 0.35 percent, though still set for its fourth weekly advance.

Investors surveyed a host of second-quarter corporate results, punishing those that came up short, including Intel Corp, down 8.6 percent after its fast-growing data center business missed estimates. Exxon Mobil Corp fell 3 percent and Twitter Inc sank 19 percent after their results.

Data showed the U.S. economy grew at its fastest pace in nearly four years in the second quarter, as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs before they took effect in early July.

But the economic growth figures were widely expected.

The Dow Jones Industrial Average fell 131.68 points, or 0.52 percent, to 25,395.39, the SP 500 lost 25.01 points, or 0.88 percent, to 2,812.43 and the Nasdaq Composite dropped 133.20 points, or 1.7 percent, to 7,718.98.

Bonds did not sell off, as some investors had expected, on strongly positive news. Benchmark 10-year U.S. Treasury yields slipped from their highest level in 1-1/2 months and last rose 5/32 in price to yield 2.9579 percent, from 2.975 percent late on Thursday.

Rates markets await an important week of meetings at the U.S. Federal Reserve and Bank of Japan (BoJ). Earlier speculation that the BoJ might tweak its policies rattled global markets. The bank’s aggressive efforts to keep yields in its own markets low has pushed investors to markets elsewhere, keeping a lid on yields worldwide.

Japan’s 10-year government bond yield hit one-year highs even as the BOJ conducted special, unlimited buying for the second time this week that kept the bonds from shooting higher in yield.

Helped by the yield spike, the Japanese yen strengthened 0.31 percent versus the greenback at 110.90 per dollar.

Against a basket of currencies, the greenback fell 0.1 percent. [FRX/]

U.S. disagreements with its trading partners slipped from the headlines after an agreement on Wednesday to negotiate with the European Union, but Chinese markets still showed scars of the unresolved rifts.

The main Shanghai index closed down 0.4 percent with the U.S.-China standoff on trade still unresolved.

Copper, which is sensitive to growth prospects especially in emerging markets, lost 0.68 percent to $6,248.00 a tonne.

Oil, also sensitive to worldwide economic demand, also sank. U.S. crude fell 1.32 percent to $68.69 per barrel and Brent was last at $74.25, down 0.39 percent on the day.

“While the prospect of tariffs on European cars has diminished, it hasn’t gone away completely, which means inevitably the market shifts its attention elsewhere,” said CMC Markets chief markets analyst Michael Hewson.

“That elsewhere concerns what could happen next with respect to China, and the prospect of an escalation there,” he said.

The Chinese offshore yuan fell to 6.855 per dollar, its weakest since June 2017, before rebounding to end stronger on the day. Earlier losses were cushioned by Chinese state banks’ trading to support the currency.

Reporting by Trevor Hunnicutt; Additional reporting by Ritvik Carvalho in London; Editing by Bernadette Baum and Tom Brown

Article source:

Intel shares slip on fears of AMD data center chip challenge

(Reuters) – Intel Corp (INTC.O) shares fell 9 percent on Friday, after the chipmaker’s upbeat results were overshadowed by concerns that Advanced Micro Devices Inc (AMD.O) may be chiseling off market share from its high-margin data center business.

The company’s profit and revenue beat Wall Street targets, but double-digit growth in its data center chip business fell short of analysts’ expectations and disappointed investors.

“Intel stock continues to be under pressure as investors are looking past near term outperformance and struggling with the storyline of potential future share loss to AMD,” Barclays analysts said.

AMD shares are up 8 percent at $19.88 in early trade. Intel shares were trading down at $47.61.

Intel was at the forefront of selling chips used in making servers where data is stored remotely or in so-called cloud servers. Over the past few years as more companies rushed to the cloud to move data online, Intel enjoyed healthy cloud revenue growth.

Amazon (AMZN.O), which beat profit estimates on Thursday due to its cloud business, and Microsoft (MSFT.O) have been the main beneficiaries of the cloud adoption.

Intel’s Xeon server chips had dominated the market, but started facing competition last year following AMD’s re-entry into the business after a decade with EPYC processors that earned positive reviews.

EPYC chips outperformed Xeon in certain tasks and provided better performance-per-dollar than what Intel chips offered, according to tests done by Anandtech after the launch last year.

AMD currently has a small share of the server business, but any gain will hamper Intel’s plans to focus on data centers to diversify away from a stagnating PC business, where it is the market leader.

Intel has delayed the launch of its next-generation 10nm processors due to production woes, which could erode its market share further.

While AMD is already sampling its 7nm processors and will launch them later this year, Intel’s 10nm chips will hit the market next year.

“We see the stock as increasingly binary around their ability to hold off AMD in the data center,” Morgan Stanley analysts said of Intel. “We don’t see the stock outperforming if AMD successfully takes 3-4 points of server market share in the next 2 quarters and gets to 10% by the end of next year.”

At least four brokerages cut their price targets on Intel stock, while six brokerages had raised their targets on AMD stock after its strong quarterly results earlier this week, mainly due to high demand for server chips.

Reporting by Supantha Mukherjee in Bengaluru; Editing by Bernard Orr

Article source:

Bayer hits back at new Netflix medical device documentary

NEW YORK (Reuters) – Bayer AG disputed accusations in a new Netflix documentary that claims medical device makers and the U.S. Food and Drug Administration placed profits before patient safety.

The company, in a statement released Thursday night, said the documentary “The Bleeding Edge,” which debuted on the streaming site on Friday, lacks scientific support and cherry-picked facts to present an inaccurate and misleading picture of Bayer’s permanent birth control device Essure, one of the products spotlighted in the film.

“This does a disservice to the thousands of women who rely on Essure for their reproductive health, as it may encourage them to pursue risky and unnecessary surgery to remove the device,” Bayer said.

Nexflix did not immediately respond to a request for comment.

Bayer last week announced it would phase out Essure in the United States after discontinuing sales elsewhere in 2017, a move it said was not related to safety concerns. Bayer said studies overwhelmingly showed Essure to be safe.

A small metal coil inserted into a woman’s fallopian tubes, Essure triggers scarring to permanently prevent pregnancy.

Bayer currently faces over 16,000 U.S. lawsuits related to Essure from women who claim the implants caused injuries like excessive bleeding, abdominal pain and allergic reactions.

The documentary features several women who say they were injured by Essure and accuse Bayer of having concealed its knowledge about potential risks.

The documentary also focuses on Johnson Johnson’s metal-on-metal hip and pelvic mesh implants, saying the company knew the products to be unsafe but proceeded to market them anyway.

JJ did not immediately respond to a request for comment. The company in the past has said it stands by the safety of both devices, adding that surgeons are properly informed about potential complications.

The JJ devices featured in the documentary were cleared by the FDA under less stringent procedures than its formal approval process, exempting manufacturers from having to submit clinical data on device safety.

Essure was approved in 2002 following the FDA’s most stringent device review process, but the documentary said Bayer evaded critical safety questions at the time.

The FDA in a statement said it has not yet seen the documentary but that it strives to allow devices with favorable benefit-risk profiles to be marketed.

“Often the true benefit-risk profile of a device cannot be fully understood until it can be evaluated when used in routine clinical practice,” the FDA said, adding that it uses postmarket data to monitor the safety and effectiveness of devices.

The agency is currently monitoring Essure in postmarket studies.

Reporting by Tina Bellon; Editing by Dan Grebler

Article source:

Exxon Mobil, Chevron earnings miss Wall Street expectations

HOUSTON (Reuters) – Exxon Mobil Corp and Chevron Corp, two of the world’s largest oil producers, reported quarterly profit on Friday that fell far short of Wall Street’s expectations.

The disappointing results come as much of the U.S. oil industry has been recovering from a three-year downturn in the energy sector, bolstered by higher production and crude prices.

Exxon’s troubles highlight ongoing issues the company has been having to boost operations, whereas Chevron’s miss was fueled by a slight rise in expenses that likely will not be repeated, analysts said.

Exxon shares fell 2.5 percent to $82.09 shortly after midday, while Chevron’s recovered from an early drop and were up about 2 percent at $126.34. Both stocks are components of the Dow Jones Industrial Average.

The results were particularly weak at Exxon, which has been trying to boost operations in a bid to revive a stock price trading at about the same level it was a decade ago.

“Exxon’s definitely sticking out like a sore thumb right now,” said Edward Jones energy analyst Brian Youngberg. “It’s just hard to find anything good in the quarter.”

Despite rising oil prices, Exxon’s production dropped 7 percent and it spent more than $600 million to upgrade refineries in France, Canada, Texas and Saudi Arabia.

Exxon called the quarter a “challenging” one for its operations and “well below market expectations.”

Neil Chapman, an Exxon executive and member of the company’s management committee, said he is “not happy” about the ongoing refinery maintenance, adding there is “nothing systemic” about the repairs that would reveal weakness in the refining division.

“We are absolutely all over these reliability incidents,” Chapman said on a conference call with investors.

Exxon earned 92 cents per share, while analysts expected earnings of $1.27 per share, according to Thomson Reuters I/B/E/S.

At Chevron, oil production rose 2 percent and profit spiked, but higher corporate expenses surprised Wall Street. Still, the company announced a $3 billion stock buyback program, long awaited by Wall Street.

“We believe annual share repurchases of $3 billion can be sustained over most reasonable price scenarios,” Chevron Chief Financial Officer Pat Yarrington told investors on a conference call.

Chevron earned $1.78 per share, while analysts expected $2.09 per share, according to Thomson Reuters I/B/E/S.

Royal Dutch Shell, a key rival, posted second-quarter profit on Thursday far below forecasts due in part to weakness in refining.

British oil major BP Plc is set to report quarterly results next week. On Thursday it agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion.

Reporting by Ernest Scheyder; Editing by Nick Zieminski and James Dalgleish

Article source:

Twitter warns fake account purge to keep erasing users, shares drop 19 percent

NEW YORK (Reuters) – Twitter Inc (TWTR.N) on Friday said it lost 1 million monthly active users from the previous quarter and warned the closely watched figure could keep falling as it deletes more phony accounts, causing the biggest one-day decline in its shares since 2016.

The company said the work it was doing to clean up Twitter by purging automated and spam accounts had some impact on user metrics in the second quarter, and that it was deciding to prioritize tackling suspicious accounts and reducing hate speech and other abusive content over projects that could attract more users.

Allegations of Russian meddling in the 2016 U.S. election by spreading misleading or divisive content over social media have made the issue of improving control over accounts and content critical for Twitter.

Twitter, like bigger rival Facebook has been under pressure from regulators in several countries to weed out hate speech, abusive content and misinformation, better protect user data and boost transparency on political ad spending.

The user outlook came as Twitter reported higher-than-expected revenue thanks to the FIFA World Cup, video ads and booming international ad revenue. Twitter also earns revenue from licensing its data.

The quarter marked the first time overseas revenue contributed the majority of Twitter’s ad sales.

The World Cup brought in $30 million of revenue in the quarter. But Chief Financial Office Ned Segal told analysts that the event, which carried into the third quarter, raked in less revenue in its second two weeks.

Twitter raised its 2018 capital spending forecast and said adjusted EBITDA margins in the third quarter would be below the second quarter’s.

Twitter shares tumbled 19 percent to $34.75 in afternoon trading, marking their biggest one-day drop since Oct. 6, 2016.

The drop echoed that of Facebook on Thursday, when its shares ended down nearly 19 percent after the company said spending to improve privacy and slower user growth in big markets would hit margins for years.

The reaction in Twitter shares to the user outlook may be overblown, some analysts said.

Twitter executives answered questions on the earnings call by saying the steps to improve daily user and advertiser experience would be a long-term boost for the company, and that there had been no revenue hit.

Revenue of $711 million rose 24 percent from last year and exceeded the average estimate of $696 million.

Chief Executive Jack Dorsey said in a statement that daily users grew 11 percent compared to a year ago, showing that addressing “problem behaviors” was turning the service into a daily utility. The company does not disclose daily users.

Segal said the efforts to improve accounts along with other factors had a negative hit to monthly active users of 3 million in the quarter, which compares with the 1 million net decline, but added that efforts to improve quality of the accounts would take an even bigger bite out of third-quarter monthly users.

Twitter said in a blog post in early July that weeding out accounts would not hurt metrics because the accounts would mostly be inactive.


Monthly active users fell by 1 million in the second quarter from the first to 335 million. Analysts expected a gain of 1 million users, and the results could harden concerns Twitter lacks a clear strategy to fix platform problems and grow usage and revenue together.

“We are making active decisions to prioritize health initiatives over near-term product improvements that may drive more usage of Twitter as a daily utility,” the company said in a shareholder letter. Twitter refers to platform “health” when describing the spam and other issues.

Twitter said the decline in the third quarter would be in the mid-single-digit millions, suggesting a sequential decline to around 330 million users. Analysts had expected 340 million monthly active users in the third quarter, according to Thomson Reuters I/B/E/S.

Twitter’s relations with advertisers have been strained by concerns about phony accounts bought by users to boost their following.

Profit was $100 million, with a $42 million boost due to a tax benefit. Non-GAAP earnings of 17 cents per share were in-line with estimates.

“Investors are overreacting to (monthly active user) trends,” BTIG analyst Richard Greenfield said about the share fall. “This is an identical overreaction that we saw in Q2 last year. Last year’s Q2 created an incredible buying opportunity in the stock.”

Twitter said it lost some users due to the introduction of the General Data Protection Regulation in Europe in May but did not note any revenue impact.

Twitter also saw usage fall after saying it would not subsidize messaging fees for users who accessed its app through text messages.

The new capital expenditures forecast is for between $450 million and $500 million, up from $375 million to $450 million, as Twitter expands and upgrades the computer infrastructure underlying its service. The company again flagged its push to increase headcount this year.

Costs related to licensing video and automated analysis of user data increased overall expenses 10 percent compared with a year ago.

Twitter has said increased video programming, including news shows and live sports, and investing in technology that automatically surfaces interesting content with limited user intervention should make the service appealing to first-timers.

Reporting by Meredith Mazzilli, additional reporting by Munsif Vengattil; Editing by Peter Henderson, Edmund Blair and Nick Zieminski

Article source: