Nvidia forecast lags Wall Street as crypto demand evaporates

(Reuters) – Nvidia Corp (NVDA.O) shares sank as much as 5 percent in after-hours trading on Thursday after the chip maker said cryptocurrency-fueled demand had dried up and it forecast sales below Wall Street targets, overshadowing quarterly results that otherwise beat expectations.

The company’s bleak outlook for cryptocurrency chips was a sharp reversal from the prior fiscal quarter, when sales to so-called miners of digital currencies such as bitcoin and ethereum amounted to $289 million, nearly a 10th of Nvidia’s revenue. Nvidia previously had forecast sales for cryptocurrency chips for the fiscal second quarter ended July 29 of about $100 million. On Thursday it reported actual revenue of only $18 million.

“Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward,” Nvidia said. It projected third-quarter revenue of $3.25 billion, plus or minus 2 percent, falling short of analyst estimates of $3.34 billion, according to Thomson Reuters I/B/E/S.

Ahead of a conference call with analysts, shares were down 3.6 percent to $248, still quadruple their value two years ago. Shares of Nvidia’s chief rival in the graphics chip market, Advanced Micro Devices Inc (AMD.O), have also been whipsawed by swings in the cryptocurrency markets.

Analysts were troubled by Nvidia’s gross margin forecast of 62.8 percent, slightly below expectations of 62.9 percent and possibly a result of putting more memory modules on its chips.

Analyst KinNgai Chan of Summit Insights Group said Nvidia shares were likely to trade lower as analysts reset their expectations around slower growth rates.

The cryptocurrency news and the lower-than-expected forecast clouded an otherwise strong quarter, including Nvidia’s sales of chips to data centers, where companies such as Amazon.com’s (AMZN.O) Amazon Web Services, Microsoft Corp’s (MSFT.O) Azure as well as Alphabet Inc’s (GOOGL.O) Google Cloud are buying up the chip to power artificial intelligence and other functions.

Nvidia’s largest and oldest business of selling graphical processing units, or GPUs, for video game players beat analyst estimates, bringing in $1.8 billion compared with estimates of $1.75 billion, according to data from FactSet.

Analysts had braced for lower gaming chip sales because Nvidia is widely expected to unveil a new generation of gaming chips ahead of the holiday shopping seasons, possibly as soon as next week. Gamers typically hold off on purchasing chips when new models are just around the corner.

Revenue from the company’s closely watched data center chips business rose 83 percent to $760 million, topping analysts’ estimate of $743.6 million, according to FactSet.

Rivals Intel Corp (INTC.O) and AMD have also been buoyed by the surge in demand from data centers, a rapidly expanding market powered by the explosive growth in mobile and Web apps.

Net income rose 89 percent to $1.1 billion for the fiscal second-quarter. Excluding items, Nvidia earned $1.94 per share. Total revenue rose 40 percent to $3.12 billion.

Analysts on average had expected a profit of $1.66 per share and revenue of $3.10 billion, according to Thomson Reuters I/B/E/S.

Reporting by Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila and Leslie Adler

Exclusive: U.S. seed sellers push for limits on Monsanto, BASF weed killer

CHICAGO (Reuters) – America’s two biggest independent seed sellers, Beck’s Hybrids and Stine Seed, told Reuters they are pushing U.S. environmental regulators to bar farmers from spraying dicamba weed killer during upcoming summers in a potential blow to Bayer AG’s Monsanto Co.

Limiting spraying of the chemical to the spring season, before crops are planted, would prevent farmers from using the herbicide on dicamba-resistant soybeans that Monsanto engineered. The seeds are sold by companies including Beck’s and Stine.

Last summer, after farmers planted Monsanto’s dicamba-resistant soy seeds en masse, the herbicide drifted onto nearby farms and damaged an estimated 3.6 million acres of non-resistant soybeans, or 4 percent of all U.S. plantings.

Problems have not gone away. As of July 15, the University of Missouri estimated that more than a million acres of non-resistant soybeans were hurt by dicamba. Homeowners who live near farms have also complained of damage to their trees and flowers.

The U.S. Environmental Protection Agency (EPA) is now weighing such complaints as part of a high-stakes decision on the herbicide’s future.

Bayer bought Monsanto and its portfolio of dicamba-resistant Xtend brand soy seeds for $63 billion this year in a deal that created the world’s largest seed and pesticides maker.

St. Louis-based Monsanto sells dicamba herbicide, along with rivals BASF SE and DowDuPont Inc. Monsanto and BASF said farmers need dicamba to kill tough weeds and that the chemical can be used safely. DowDuPont declined to comment.

Monsanto is banking on Xtend soybean seeds to dominate soy production in the United States, the world’s biggest producer. They are seen as a replacement for the company’s Roundup Ready line of seeds, engineered to tolerate the weed killer glyphosate, which has lost effectiveness as weeds develop their own tolerance to the chemical.

EPA approval for dicamba to be sprayed on resistant crops expires this autumn. The agency could extend its approval, with or without new restrictions on use, or take dicamba off the market. Seed companies expect a decision in the coming weeks.

Most complaints about dicamba drifting would stop if the EPA restricted its use to killing weeds in fields before crops are planted, Beck’s Hybrids told the agency in a July 27 letter seen by Reuters.

“Anybody that sprays it, you have issues with the volatilization,” CEO Sonny Beck said in an interview on Wednesday, referring to the chemical vaporizing and drifting.

Though his company profited from selling more than a million bags of Xtend soybean seeds this year, Beck said he worried that continued problems with the chemical could give the agriculture sector a bad reputation among consumers.

Restricting use would also help prevent weeds from developing resistance to dicamba, he said.

New limits would be another headache for Bayer, following its acquisition of Monsanto.

Last week a California jury ruled Monsanto must pay $289 million in damages in the first U.S. lawsuit over alleged links between glyphosate and cancer. Monsanto denies glyphosate causes cancer.

Earlier this month, a Brazilian judge suspended the use of products containing glyphosate.

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MONSANTO EXPECTS EPA NOD

Monsanto has blamed U.S. field damage from dicamba largely on improper applications by farmers and says mandatory training helped this year.

Inquiries to the company about dicamba problems dropped to about nine per million acres of dicamba-resistant crops planted, down from about 40 inquiries per million acres last year, said Ryan Rubischko, who heads the company’s dicamba portfolio. He said Monsanto expects the EPA to extend its approval for dicamba.

In a sign the company is concerned, however, Monsanto has asked seed sellers to contact the agency to express support for the product, according to an email the company sent this week that was seen by Reuters. The email noted others had encouraged the EPA to add restrictions on dicamba or prevent sales.

Monsanto likened those efforts to an “uninformed vocal minority” in the email. Rubischko confirmed the company had asked dicamba users to give positive feedback to regulators.

The EPA did not respond to requests for comment.

The agency has held weekly phone calls with agriculture officials in farm states this summer to assess dicamba damage. Agency officials also visited farms in Tennessee, Missouri and Arkansas to see damaged crops first-hand, according to tour participants.

Farther north, Monsanto funded a study by University of Wisconsin researchers that showed dicamba hurt non-resistant soybeans that were covered with plastic when the chemical was sprayed on nearby Xtend soybeans after planting.

Stine Seed has told the EPA in writing and conversations that dicamba should not be sprayed on top of growing soybeans to control weeds, CEO Harry Stine said in an interview on Tuesday. The herbicide has damaged fields of Stine soy seeds by drifting, he said.

Stine Seed is preparing to launch products that will compete with Xtend soy and also works with Monsanto on seed technology.

“I’ve been doing this for 50 years and we’ve never had anything be as damaging as this dicamba situation,” Harry Stine said. “In this case, Monsanto made an error.”

Reporting by Tom Polansek in Chicago; Editing by Caroline Stauffer and Matthew Lewis

USTR Lighthizer eyes NAFTA ‘breakthrough,’ Mexico urges flexibility

WASHINGTON (Reuters) – U.S. Trade Representative Robert Lighthizer on Thursday expressed hope a breakthrough could be made in coming days on reworking the NAFTA trade deal, though his Mexican counterpart said flexibility was needed to reach agreement.

Lighthizer was speaking in Washington during the latest round of high-level talks between U.S. and Mexican officials to rejig the North American Free Trade Agreement, known as NAFTA, with a deal still elusive a year after the renegotiation began.

“I’m hopeful that in the next several days we’ll have a breakthrough,” Lighthizer said in response to a question from U.S. President Donald Trump on how talks were progressing during a U.S. cabinet meeting at the White House.

Trump himself said he was in “no rush” to conclude the talks, repeating his oft-stated complaint that the 24-year-old trade agreement had been a “disaster” for the United States.

“We have much better alternatives than that. So if you can’t make the right deal, don’t make it,” Trump told Lighthizer.

Departing from morning talks at Lighthizer’s offices, Mexican Economy Minister Ildefonso Guajardo suggested there was still work to be done before agreement could be reached.

“Everybody has got to show flexibility,” he told reporters.

Guajardo last month expressed hope that there could be a preliminary NAFTA deal by the end of August, but he has since appeared to pull back from that position.

NAFTA talks ground to a halt in late May in the run-up to the presidential election in Mexico on July 1.

After the election, U.S. and Mexican officials began meeting again without the third member of the pact, Canada, in an effort to tackle difficult issues, including revamped automotive sector rules and a sunset clause that could kill NAFTA after five years if it is not renegotiated.

“We have everything on the table, there are no preconditions and we’ll see at the end how the whole thing falls into place,” Guajardo said as Thursday’s meetings concluded.

He added that they would resume talks on Friday, but the sunset provision would be among the “very last items” to be dealt with in the talks.

Senator John Cornyn of Texas, the second-ranking Republican in the Senate, said he was more optimistic a deal on NAFTA would be reached after a recent phone conversation with Lighthizer.

“Ambassador Lighthizer has been making some phone calls and without talking about the specifics I am pretty optimistic, more optimistic than I have been in a while,” Cornyn told reporters at the Capitol, adding that this would calm anxiety among farmers and businesses over Trump’s trade disputes.

AUTO TARIFF ISSUES LINGER

Some auto industry executives have said the United States and Mexico are close to a deal to increase North American automotive content thresholds, with substantial requirements for content produced in high wage areas, namely the United States and Canada.

But preserving Trump’s ability to levy national security tariffs on Mexican-produced autos that either do not comply with the new rules or from newly built auto plants has been a thorny issue in recent weeks.

Industry officials said on Thursday that the administration still has not agreed to remove the threat of “Section 232” tariffs on vehicles built at new plants nor specified whether passenger vehicles that do not comply with the rules would face a higher tariff than the current 2.5 percent.

Trump has driven the U.S. negotiating process, threatening to dump NAFTA if it is not renegotiated in favor of the United States.

The U.S. president has argued the deal has facilitated an exodus of manufacturing jobs from the United States to Mexico, but NAFTA’s supporters say it has kept the region competitive.

Reporting by Jason Lange, Steve Holland, David Shepardson and David Lawder; writing by Daina Beth Solomon and David Lawder; editing by Dave Graham and Gary Crosse

White House counsel asked FCC chair about Sinclair Tribune merger status

WASHINGTON (Reuters) – White House counsel Don McGahn called the head of Federal Communications Commission in July to ask about the status of Sinclair Broadcast Group Inc’s (SBGI.O) now abandoned $3.9 billion acquisition of Tribune Media Co (TRCO.N).

FCC chairman Ajit Pai disclosed the call in testimony on Thursday before a U.S. Senate panel. Pai said the call from McGahn came around the same time he issued a July 16 statement that said he had “serious concerns” about the proposed takeover and proposed referring the matter to an administrative law judge.

The call suggested unusual interest by the White House in the status of a planned acquisition by a company that President Donald Trump has publicly supported. Pai said that McGahn did not express a view on the merger. He said that the counsel had seen a news report “and wanted to know what … the action was.”

The collapse of the deal, hatched 15 months ago, potentially ended Sinclair’s hopes of building a national conservative-leaning TV powerhouse that might have rivaled Twenty-First Century Fox Inc’s (FOXA.O) Fox News.

Pai said on July 16 that evidence uncovered by the FCC suggested some proposed divestitures of stations by Sinclair would allow the company to control them “in practice, even if not in name, in violation of the law.” He recommended the merger be referred for an administrative hearing. The FCC said later that Sinclair “did not fully disclose facts” about the merger.

The following week, Trump tweeted: “So sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune. This would have been a great and much needed Conservative voice for and of the People.” Trump also tweeted support for Sinclair in April.

Advocacy group Free Press said in an FCC filing in August 2017 that Sinclair forces its TV stations to “air pro-Trump propaganda and then seeks favors from the Trump administration.” Sinclair has previously denied the charge that it is biased in favor of Republicans, and did not immediately respond to a request for comment on Thursday.

The White House did not immediately comment on the McGahn call.

Pai agreed to turn over a written summary of the conversation to Senator Richard Blumenthal, a Democrat.

Last week, Tribune terminated the deal and sued Sinclair for breach of contract, claiming the rival TV-station owner mishandled efforts to get the transaction approved by taking too long and being too aggressive in its dealings with regulators.

Sinclair, the largest U.S. broadcast station owner with 192 stations, said last week it would no longer pursue the Tribune merger and denied Tribune’s allegations.

Reporting by David Shepardson; Editing by Frances Kerry

Encouraged by online sales, Nordstrom raises full-year profit forecast

(Reuters) – Upscale department store Nordstrom Inc (JWN.N) saw its shares soar as much as 14 percent in after-hours trading on Thursday, after reporting better-than-expected quarterly same-store sales growth, as more people shopped at its online stores.

For 2018, the Seattle, Washington-based company expects an adjusted profit of $3.50 to $3.65 per share, compared with its previous forecast of $3.35 to $3.55.

Nordstrom managed to report upbeat results despite the problems in the broader retail sector, which has suffered from fast-changing fashion trends and discount-hungry shoppers who favor buying online.

In large part, analysts said, the results showed Nordstrom successfully boosted online traffic and transactions by promoting blowout sales on social media and making the in-store and online purchasing processes more frictionless for shoppers.

Earlier on Thursday, J.C. Penney Co Inc (JCP.N) shares sank below $2 for the first time after it said it had alienated core middle-aged customers while chasing millennial buyers, and the venerable brand forecast an unexpectedly large loss.

At Nordstrom, online sales, helped by online promotions, rose 23 percent and accounted for 34 percent of total sales.

“We feel like their inventory doesn’t have a huge overlap with Amazon’s,” Director of Capital Markets at asset management firm Exponential ETFs Josh Blechman said. “Because it is a little bit higher-end, that sort of lets their online offerings to shine more.”

On a conference call with investors, Nordstrom’s Co-President Blake Nordstrom also highlighted the competitive advantage Nordstrom has because of its inventory and product assortment.

“The strength of our inventory position allowed us to be fluid and respond quickly. We took swift action to accelerate inventory turns, strengthen our core assortment and improve our execution in stores.”

Nordstrom’s discount Rack stores, Co-President Nordstrom said, saw the biggest inventory change.

Same-stores sales rose 4 percent in the second quarter ended Aug. 4 across both full-price and off-price, beating the average analyst estimate of a rise of 0.81 percent, according to Thomson Reuters I/B/E/S.

Excluding items, the company earned 95 cents per share, beating estimates of 84 cents, according to Thomson Reuters I/B/E/S.

Net sales rose about 7 percent to $3.98 billion, higher than the $3.72 billion analysts had expected, and boosted by the timing of its Anniversary Sale.

Reporting by Karina Dsouza in Bengaluru and Melissa Fares in New York; Editing by Sweta Singh and Grant McCool

How to Balance Creating a Healthy Work Culture While Growing Your Company

“We’re very proud of the progress we have made and obviously we can’t make that progress without our 134,000 dedicated employees all over the world advancing health for humanity,” said Peter Fasolo, Chief Human Resources Officer at Johnson Johnson in an interview with Cheddar. “We want our employees to be physically healthy, financially healthy, have healthy families and healthy careers. You’ll never get more time in life but you will get more energy if it’s directed toward purposeful endeavors.”