(Reuters) – Hedge fund Appaloosa LP has urged Allergan Plc’s board to separate the roles of chairman and chief executive officer, it said on Tuesday, a year after making a similar effort.
The David Tepper-led hedge fund has a 0.59 percent stake in the drugmaker, according to Refinitiv data.
Last week, Allergan shelved plans to sell its women’s health business, which it had put on the block in May along with its infectious disease unit to focus on its core businesses.
Analysts have said that Allergan is ripe for reentry of shareholder activism following a disappointing earnings report last week.
“In the wake of last Tuesday’s earnings call … it should by now be readily apparent to all interested and responsible parties that Allergan requires a fresh approach to its business strategy and an unbiased review of its capabilities, opportunities, and way forward,” Appaloosa President Tepper said in a letter to Allergan’s board.
The company did not immediately respond to Reuters’ request for comment.
Allergan’s shares have fallen about 20 percent over the past 12 months.
Reporting by Tamara Mathias and Manas Mishra in Bengaluru; Editing by James Emmanuel
PARIS (Reuters) – General Electric is to pay 50 million euros ($57 million) for failing to meet a job creation target agreed when it took over French group Alstom’s energy business, the French Finance Ministry said on Tuesday.
The U.S. conglomerate is to pay the money into a reindustrialisation fund bringing together representatives of the company, local authorities where it has plants and the government.
When it bought Alstom’s energy business in 2015, GE had committed to maintain jobs for at least three years in France and create 1,000 net new jobs by the end of 2018.
GE has created only a net new 25 jobs in the face of weak demand for gas turbines, the Finance Ministry said.
($1 = 0.8754 euros)
Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta
(Reuters) – U.S. grains trader Archer Daniels Midland Co on Tuesday reported fourth-quarter earnings that fell short of estimates as three of its four key business groups reported results below the same period a year earlier.
Adjusted operating profit in ADM’s origination business, which includes grain trading, fell nearly 30 percent to $183 million in the quarter, despite higher volumes of North American corn and soybean exports to markets outside of China.
Profits also were hurt by “significant insurance settlements” tied to sorghum shipments in early 2018.
Last April, Reuters reported that several ships carrying cargoes of sorghum, a niche animal feed, from the United States to China changed course after Beijing slapped hefty anti-dumping deposits on U.S. imports of the grain.
An anti-dumping probe by Beijing, which halted trade between the world’s biggest buyer and seller of the grain early last year, was among the first trade fights between the United States and China, which are still embroiled in a trade war.
“Current-quarter results were driven by an intra-company insurance settlement relating to sorghum shipments in early 2018, as well as other underwriting losses,” ADM said in its earnings report.
The company’s oilseeds unit reported better-than-expected results, but its carbohydrate solutions and nutrition group were pressured by lower sales and margins in Europe and the Middle East, and lower margins in North America due to lower production rates.
ADM has four different units that include origination, carbohydrate solutions, nutrition and oilseeds. Chicago-based ADM has been trying to invest in higher-margin businesses to boost earnings in a volatile commodity market.
Net earnings attributable to ADM fell to $315 million, or 55 cents per share, from $788 million, or $1.39 per share, a year earlier, when the company recorded $249 million in tax gains.
Excluding one-time items, the company earned 88 cents per share, while analysts, on average, estimated 92 cents, according to IBES data from Refinitiv.
Revenue fell to $15.95 billion from $16.07 billion. The consensus analyst estimate was $16.81 billion, according to Refinitiv data.
Its shares dropped 2.1 percent to $43.55 in light premarket trading.
Reporting by P.J. Huffstutter in Chicago and Arundhati Sarkar in Bengaluru; Editing by Arun Koyyur and Jeffrey Benkoe
(Reuters) – The Renault-Nissan-Mitsubishi alliance will tie up with Alphabet Inc’s Google to develop autonomous taxis and other services using self-driving vehicles, the Nikkei reported on Tuesday.
Google’s self-driving car company Waymo will work with the carmakers and announce a plan for the arrangement as early as this spring, the business daily reported.
The partners are considering the joint development of unmanned taxis using Nissan vehicles and a system that handles reservation and payments, Nikkei said.
A spokesman at the Renault-Nissan-Mitsubishi alliance Nick Twork said, “This (Nikkei) story is based on rumors and speculation. We have nothing to announce.”
Google’s Waymo declined to comment.
Last month, Nissan Motor Corp said its board remained committed to the carmaker’s alliance with Renault SA and Mitsubishi Motors Corp, after directors met to discuss the ongoing investigation into former chairman Carlos Ghosn and ways to bolster governance.
Reporting by Mekhla Raina in Bengaluru; Additional Reporting by Naomi Tajitsu in Tokyo; Editing by Shounak Dasgupta
(Reuters) – Wall Street rose on Tuesday boosted by consumer discretionary and technology companies amid peak earnings, which have largely been positive so far, while investors wait for President Donald Trump’s State of the Union address.
The SP 500 is eyeing its fifth straight session of gains after a recent dovish stance from the Federal Reserve and on hopes that a trade deal between the United States and China could be reached.
Estée Lauder Cos Inc jumped 11.6 percent as the cosmetics maker raised its annual forecast while luxury fashion group Ralph Lauren Corp rose 9.7 percent after its quarterly revenue and profit beat estimates.
About 71 percent of the SP 500 companies that have reported earnings have topped estimates. While estimates for fourth-quarter earnings growth are 15.4 percent, expectations for the first-quarter are much lower at 0.5 percent, according to IBES data from Refinitiv.
Alphabet Inc wrapped up FAANG earnings by posting better-than-expected quarterly revenue and profit. However, worries about sharply higher spending, sent its shares down 0.8 percent.
Google parent’s shares were however the only one among the FAANG stocks in the red. Apple Inc rose 1.8 percent and pushed the tech index 0.8 percent higher, while Amazon.com boosted the consumer discretionary sector.
“Where there was a shortfall in Google it was for the right reason. We’d rather have companies reinvest in their businesses, because you’re spending on the future of the company,” said Art Hogan, chief market strategist at National Securities in New York.
“We’re in a wait-and-see mode over the State of the Union to see if any news will be broken, and that tends to put us in a quieter trading environment.”
Trump is set to challenge Democrats to approve funding for his long-sought border wall before the Congress at his State of the Union speech due at 09:00 p.m. ET (0200 GMT Wednesday).
The President has contemplated declaring a national emergency as the Congress wasn’t moving towards a deal to fund building a wall along the U.S.-Mexico border, but a source close to Trump said the President was not expected to take that step.
At 9:41 a.m. ET the Dow Jones Industrial Average was up 104.81 points, or 0.42 percent, at 25,344.18, the SP 500 was up 6.75 points, or 0.25 percent, at 2,731.62 and the Nasdaq Composite was up 33.11 points, or 0.45 percent, at 7,380.64.
The defensive consumer staples sector, utilities and real estate sectors were all in the red.
Following a turbulent end to 2018, U.S. stocks have had a strong run this year with the benchmark SP 500 and blue-chip Dow Industrials up more than 8 percent, and the tech-heavy Nasdaq rising 10.7 percent.
However not all earnings were positive. Seagate Technology Inc slipped 4.9 percent after the hard drive maker gave a downbeat current-quarter forecast.
Advancing issues outnumbered decliners for a 1.95-to-1 ratio on the NYSE and a 2.17-to-1 ratio on the Nasdaq.
The SP index recorded nine new 52-week highs and no new lows, while the Nasdaq recorded 25 new highs and three new lows.
Reporting by Medha Singh in Bengaluru; additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta
SAO PAULO (Reuters) – General Motors Co said on Saturday it is negotiating “feasibility conditions” to invest 10 billion reais ($2.73 billion) in Brazil from 2020 to 2024, after having warned last month that new investments would depend on returning to profit.
The automaker also said it is completing an investment plan of 13 billion reais between 2014 and 2019.
“As market leaders, we are taking on the responsibility of facing the challenges of competitiveness that the industry is experiencing in order to make a sustainable future possible for our businesses and the proper return to shareholders,” said Carlos Zarlenga, chief executive of GM Mercosul, in a statement.
“We continue to work with unions, dealers, suppliers and the government in order to enable this new and additional 10 billion reais investment in the factories of São Caetano do Sul and São José dos Campos,” he added.
Newspaper Valor Economico reported on Friday that General Motors Co was in talks to invest 9 billion reais ($2.5 billion) in the state of Sao Paulo over the next three years in return for tax incentives.
GM has in recent weeks warned its employees in Brazil that “sacrifices” would be necessary for the company to return to profit in the country, raising concerns about layoffs or shuttered assembly lines. Last month, the carmaker told public officials and unions it was in talks with Sao Paulo state about tax incentives.
Valor reported that GM would invest in its product line until 2022, and then the following year, the company would start to enjoy tax rebates. Valor, which also reported that GM’s losses in Brazil last year totaled 1 billion reais despite being the country’s market leader, did not specify the exact amount GM would expect to generate in tax incentives.
Reporting by Gabriel Stargardter; Editing by Alistair Bell
BEIJING (Reuters) – China’s sprawling services sector maintained a solid pace of expansion in January even though growth moderated slightly, a private survey showed on Sunday, offering continued support for the world’s second-largest economy as manufacturing cools.
The Caixin/Markit services purchasing managers’ index (PMI) fell slightly to 53.6 in January from 53.9 in December, but well above the 50.0 mark separating growth from contraction.
Overseas sales continued to support the sector, with new export business rising at the fastest clip in more than a year, thanks to efforts among Chinese services firms to attract foreign clients. Overall new orders also ticked higher, to 52.6 from 52.3 in December.
The resilience of the services sector, which accounts for more than half of China’s gross domestic product, is key to countering the ongoing slowdown in manufacturing.
Chinese factories have been hit by a long-term restructuring of industries, a crackdown on pollution and China’s trade tensions with the United States.
“Overall, China’s economic growth was weighed on by weakening domestic demand in January, although exports improved marginally as the Sino-U.S. trade negotiations flagged signs of progress,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.
China’s policies to support domestic demand and developments in the trade war “will remain key to the prospects of the Chinese economy. Given that the government has refrained from taking policies of strong stimulus, the downward trend of the economy may be hard to turn around for the time being,” Zhong said.
Caixin’s composite manufacturing and services PMI, also released on Sunday, slipped to 50.9 in January from 52.2 in December. The January manufacturing PMI, announced on Friday, was 48.3, the lowest since February 2016.
Beijing has taken a raft of measures in the past year to encourage growth – reducing the levels of cash that banks must hold as reserves to spur lending, cutting taxes and fees, and expediting infrastructure spending.
Resolving trade tensions with the United States remains key to improving sentiment and lifting the outlook for Chinese exporters.
Illustrating how China’s services sector is holding up, services firms added to their payroll numbers in January. Inflation pressures eased, with operating costs and output charges rising at a slower pace.
Caixin’s upbeat readings for services were consistent with a official survey published on Thursday that showed the industry picked up for a second straight month in January.
LONDON (Reuters) – Goldman Sachs (GS.N) is among the investors in a $20 million fundraising for financial technology firm Bud, the two companies said on Monday, the latest in a series of investments by big global banks seeking to partner with fintechs.
Bud, which is already backed by HSBC (HSBA.L), is one of a number of upstart firms taking advantage of Britain’s new Open Banking rules to try and help users manage their finances better by combining data from multiple banks and service providers.
Recognising the threat posed by nimbler fintechs, big banks are investing in such companies in an effort to pair their respective strengths.
Fintech companies such as Bud have moved quickly to try to capitalize on the new rules designed to promote competition and make it easier for users to see all their financial products in one place. But traditional banks still have many more customers.
Other investors in the latest round of fundraising by Bud include Australia’s ANZ (ANZ.AX), South Africa’s Investec (INVP.L) and Spain’s Banco Sabadell (SABE.MC).
Bud said it would use the $20 million investment to help to double its staff numbers from the current 62, and to expand into new markets.
Reporting By Lawrence White. Editing by Jane Merriman
LONDON (Reuters) – Carmaker Nissan has scrapped plans to build its new X-Trail SUV in Britain and will produce it solely in Japan, warning two months before Brexit that uncertainty over Britain’s departure was making it harder to plan for the future.
Falling demand for diesel cars in Europe has forced Nissan to invest in other technologies and save costs. It cut hundreds of jobs at its Sunderland factory in the north of England, Britain’s biggest car plant, last year as output slumped 11 percent, hit by levies and crackdowns on diesel.
“Nissan has increased its investments in new powertrains and technology for its future European vehicles,” the firm said. “Therefore the company has decided to optimize its investments in Europe by consolidating X-Trail production in Kyushu.”
“While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” said Nissan Europe Chairman Gianluca de Ficchy.
Britain’s business minister Greg Clark said the announcement was a “blow to the sector and the region.”
Britain is due to leave the European Union on March 29. Lawmakers last month rejected Prime Minister Theresa May’s Brexit deal, heightening fears of a disorderly no-deal Brexit and of new trade barriers. May said on Sunday she would seek a “pragmatic solution”.
In a letter to workers, de Ficchy said Nissan has a task force that reports to him and is “considering all of the possible scenarios and the potential impact on the business.”
Nissan builds roughly 30 percent of the country’s 1.52 million cars and exports the vast majority to the continent
It said four months after Britain voted to leave the EU in June 2016 that it would manufacture the new X-Trail in Britain – a major vote of confidence in the country and May, shortly after she took office.
A source told Reuters at the time that Nissan received a letter from the government promising extra support in the event that Brexit hit the competitiveness of the Sunderland plant.
According to the Sunday Times newspaper, ministers are now considering whether to withdraw a 60 million pounds ($78.46 million) package of support for the company.
“This kind of support package to help in areas such as training and skills is typical across the industry. Clearly we will be reviewing it in the light of this decision,” a government source told the newspaper.
The new X-Trail could have created hundreds of jobs.
The carmaker’s planned investment in the next-generation Juke and Qashqai models, which was also announced in 2016, was unaffected, Nissan said on Sunday.
The announcement came just two days after an EU-Japan free trade agreement kicked in, which includes the European Union’s commitment to removing tariffs of 10 percent on imported Japanese cars.
Many Japanese companies had long seen Britain as the gateway to Europe, after being encouraged to open factories in the country by former prime minister Margaret Thatcher. Brexit has thrown that into doubt, prompting consternation in Tokyo.
Sunday’s announcement also came as the carmaker continues to deal with the fallout from the arrest of its former boss Carlos Ghosn, which has clouded the outlook for the automaking alliance between Nissan, Renault and Mitsubishi.
Reporting by Costas Pitas, additional reporting by Kanishka Singh in Bengaluru; Editing by Janet Lawrence, Alexandra Hudson and Daniel Wallis
TOKYO (Reuters) – Asia stocks hovered near four-month highs on Monday after a mixed performance on Wall Street at the close of last week, while the dollar firmed against the yen following strong U.S. job and manufacturing data.
MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat. It had scaled a four-month peak on Friday along with a surge in its global peers.
Trade was subdued with many of the region’s markets closed for the Lunar New Year. China’s financial markets are closed all week, while those in South Korea are shut until Thursday.
Hong Kong’s Hang Seng, which is trading for only half a day, edged up 0.2 percent.
Japan’s Nikkei added 0.5 percent.
On Wall Street on Friday optimism from a surge in January U.S. job growth was offset by a weaker-than-expected outlook from Amazon.com Inc that battered retail stocks. The Dow nudged up 0.26 percent while the Nasdaq shed 0.25 percent. [.N]
“Key points for the markets this week will be how the remaining U.S. corporate earnings releases turn out, and whether they are in line with recent upbeat data,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“While corporate earnings and fundamentals remain key, political developments, notably the U.S.-China trade situation, remain potential risk factors,” he said.
A U.S. Labor Department report on Friday showed nonfarm payrolls jumped by a stronger-than-forecast 304,000 jobs last month, the largest gain since February 2018.
That report, along with better-than-expected ISM manufacturing activity numbers for January, pointed to underlying strength in the world’s biggest economy.
“After last week’s risk appetite revival, the data pulse and the tone of Fed speakers will be important. For the Goldilocks market to continue, we need to find a delicate balance between improving data and still-neutral central banks,” strategists at ANZ wrote.
Global equity markets performed strongly last week after the Federal Reserve pledged to be patient with further interest rate hikes, signaling a potential end to its tightening cycle.
Friday’s robust economic data triggered a sharp rebound in U.S. Treasury yields, in turn lifting the dollar.
On Monday, the U.S. currency was a shade higher at 109.555 yen after advancing 0.6 percent on Friday.
The euro was little changed at $1.1456 after getting pulled back from a high of $1.1488 on Friday.
The Australian dollar was mostly steady at $0.7244 after slipping 0.4 percent the previous session.
The benchmark 10-year U.S. Treasury yield was at 2.686 percent after climbing nearly 6 basis points on Friday to pull away from a four-week low of 2.619 percent earlier last week.
West Texas Intermediate (WTI) U.S. crude oil futures extended Friday’s rally and were last up 0.3 percent at $55.42 per barrel.
On Friday, WTI futures had rallied 2.7 percent on the upbeat U.S. job report, signs that Washington’s sanctions on Venezuelan exports have helped tighten supply and data showing U.S. drillers cut the number of oil rigs. [O/R]