PepsiCo reports solid quarterly earnings, issues mixed outlook - Yahoo Finance

PepsiCo (PEP) gave investors a good number of things to digest on its earnings day Thursday. Another solid quarter of demand for many of its food and beverages around the world, but a mixed outlook that may be below some aggressive targets held by the Wall Street community.

• Total revenue: $20.6 billion vs. estimates for $20.25 billion

• Operating income: $2.7 billion vs. estimates for $2.73 billion

• Diluted EPS: $1.45 vs. estimates for $1.44

• Organic sales growth: +4.3% vs. estimates for increase of 3.7%

• Core EPS guidance 2020: $5.88 vs. estimates for $5.95

• Other: Company announced a 7% dividend increase

The beverage and snacks giant notched organic volume gains across all segments except for Latin America. Core operating profits — which excludes the impact of currency fluctuations and is a measure watched closely by analysts — fell in four out of seven segments. The language in PepsiCo’s earnings release suggests profits were held back by “certain operating cost increases” that perhaps offset strong work by executives to cut costs. PepsiCo also invested more aggressively in advertising, specifically in the North America beverage business to combat Coke’s strength in Diet Coke.

PepsiCo shares rose slightly in pre-market trading.

FILE - In this July 9, 2015, file photo, Pepsi bottles are on display at a supermarket in Haverhill, Mass. PepsiCo reports financial results on Monday, April 18, 2016. (AP Photo/Elise Amendola, File)

All in, a decent quarter for PepsiCo. What remains to be seen is how investors will balance that with a mixed outlook. PepsiCo guided to 2020 organic sales growth of 4%, below a long-running annual target of 4% to 4.5%. Core EPS guidance of $5.88 was short of some sell-side estimates. PepsiCo management does have a history of guiding conservatively, however, another factor investors must weigh right now.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET or on Verizon FIOS channel 604. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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2020-02-13 11:23:00Z
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Barclays CEO Jes Staley under investigation over links with Jeffrey Epstein - CNN

"The relationship between Mr Staley and Mr Epstein was the subject of an enquiry from the Financial Conduct Authority to which the Company responded," Barclays said. "The FCA ... subsequently commenced an investigation, which is ongoing, into Mr Staley's characterization to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company's response to the FCA."

The focus of the investigation is whether that relationship was properly disclosed to the bank and regulators.

The FCA and another UK regulator, the Bank of England's Prudential Regulation Authority, confirmed in a statement that they are investigating the Barclays CEO. They provided no further detail.

Shares in the bank were trading 3% lower in London on Thursday morning.

Staley has been running Barclays since late 2015. Prior to that he worked for more than 30 years at JPMorgan (JPM), where he served as head of its investment banking division. JPMorgan declined to comment.

In its statement, Barclays said Staley had developed a professional relationship earlier in his career with Epstein, who died in jail last year while awaiting trial on sex trafficking charges. The bank said Staley had told the board that he had had no contact with Epstein since becoming Barclays CEO in December 2015.

"Based on a review, conducted with the support of external counsel, of the information available to us and representations made by Mr Staley, the board ... believes that Mr Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr Epstein. Accordingly, Mr Staley retains the full confidence of the board, and is being unanimously recommended for re-election at the Annual General Meeting."

A Wall Street veteran, Staley has remained committed to growing investment banking at Barclays, even as European peers scale back in this area in favor of wealth management.

But some shareholders have criticized his bid to compete with the likes of Goldman Sachs (GS), Morgan Stanley (MSPRA) and his former employer, which has delivered disappointing returns.

Staley is not the first high profile individual to face scrutiny over his relationship with Epstein.

Britain's Prince Andrew stepped back from public life, and his charities have been shunned by businesses, since details of his close association with the late financier emerged. One of Epstein's accusers, Virginia Roberts Giuffre, has alleged in court filings that she was forced into sexual encounters with the prince while underage. Prince Andrew has denied the allegations.

— Julia Horowitz contributed to this article.

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2020-02-13 09:40:00Z
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Stock market news live: Dow, S&P 500 hit record high as equity traders shake off coronavirus fears - Yahoo Finance

U.S. stocks climbed as traders monitored corporate earnings, a second day of testimony from Federal Reserve Chair Jerome Powell and developments with the coronavirus outbreak.

—

12:00 p.m. ET: Stocks hold near the highs of the sessions

U.S. stocks held onto gains intraday during Wednesday’s session. The S&P 500 joined the Dow in hitting a record high, led by gains in the the consumer discretionary and real estate sectors.

Here were the main moves in the market, as of 12:00 p.m. ET:

• S&P 500 (^GSPC): +0.53% or +17.83 points to 3,375.58

• Dow (^DJI): +0.68% or +200.08 points to 29,476.42

• Nasdaq (^IXIC): +0.68% or +65.65 points to 9,704.59

• Crude oil (CL=F): +2.42% or +$1.21 to $51.15 a barrel

• Gold (GC=F) +0.2% or +$3.10 to $1,573.20 per ounce

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9:48 a.m. ET: S&P 500 aggregate earnings are beating expectations by 5.2% so far

To date, companies comprising just under 80% of the S&P 500’s market capitalization reported fourth-quarter results.

Among these, earnings have so far beaten consensus expectations by 5.2%, and 63% of companies have exceeded their bottom-line estimates, according to an analysis from Credit Suisse chief U.S. equity strategist Jonathan Golub. That compares to 5.2% and 71% over the past three years.

Aggregate earnings per share are on pace to rise 3.5% for the fourth quarter, Golub said. Heading into fourth-quarter earnings results, consensus analysts expected earnings to grow 3.1%.

Companies including Cisco, Applied Materials, MGM resorts and TripAdvisor are due to release results after market close Wednesday.

—

9:33 a.m. ET: Stocks rise, Dow hits record high

The Dow hit a fresh record high just after market open Wednesday, led by shares of Dow Inc. and UnitedHealth Group. Both the S&P 500 and Nasdaq also opened higher.

Here were the main moves in markets, as of 9:33 a.m. ET:

• S&P 500 (^GSPC): +0.51% or +17.23 points to 3,374.98

• Dow (^DJI): +0.67% or +196.63 points to 29,472.97

• Nasdaq (^IXIC): +0.67% or +65 points to 9,703.94

• Crude oil (CL=F): +3.3% or +1.65 to $51.59 a barrel

• Gold (GC=F) -0.03% or -$0.40 to $1,569.70 per ounce

—

9:05 a.m. ET: CVS beats 4Q expectations

CVS Health Corporation (CVS) posted fourth-quarter results that topped consensus estimates, driven by strong growth in its pharmacy services and health benefits businesses after its acquisition of Aetna. Sales guidance for the full year was better than expected, although the midpoint of its guidance for full-year adjusted EPS was slightly light.

Fourth-quarter adjusted earnings were $1.73 per share on net revenue of $66.89 billion, better than the $1.68 per share on net revenue of $63.95 billion expected. For 2020, CVS sees revenue in a range of between $261.97 billion to $265.48 billion, better than the $256.9 billion expected.

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7:47 a.m. ET: Lyft shares sink 5% in early trading after leaving profit guidance unchanged

Lyft’s stock held lower during the overnight session after its better-than-expected fourth-quarter results failed to impress investors. Many had hoped the ride-hailing company would pull forward its guidance for hitting profitability.

In results delivered after market close Tuesday, Lyft said it still expected to be profitable on an adjusted EBITDA basis by the fourth quarter of 2021. Uber, which also runs a number of other businesses including food-delivery and freight services, said it would be profitable by the fourth quarter of this year.

Shares of Lyft fell 5% to $51.24 each during the pre-market session. However, shares had been up 25% for the year to date through Tuesday’s close.

—

7:46 a.m. ET: Dow futures look to open 100+ points higher

Contracts on the three major U.S. stock indices jumped as concerns over the coronavirus failed to meaningfully shake domestic equities for another session. Investors also monitored corporate earnings results and awaited a second day of congressional testimony from Federal Reserve Chair Jerome Powell.

The number of deaths from the coronavirus, now officially named COVID-19 by the World Health Organization (WHO), has claimed the lives of 1,115 individuals globally, with the total number of confirmed cases topping 45,000. However, the number of suspected further cases in China’s Hubei province – the epicenter of the virus – fell by more than 5,000 to 16,000.

Powell addressed the coronavirus in his remarks to the U.S. House Committee on Financial Services Tuesday, saying there would “likely be some effects on the United States,” but that “it’s just too early to say” what the extent of the impact might be. Powell is expected to address the Senate Banking Committee starting at 9:30 a.m. ET Wednesday, after answering a bevy of questions about the labor market, Federal Reserve’s repo market operations and other topics on Monday.

Here were the main moves during the pre-market session, as of 7:46 a.m. ET:

• S&P 500 futures (ES=F): 3,370.50, up 13 points or 0.39%

• Dow futures (YM=F): 29,353.00, up 124 points or 0.42%

• Nasdaq futures (NQ=F): 9,575.25, up 48 points or 0.5%

• Crude oil (CL=F): $50.71 per barrel, up $0.77 or 1.54%

• Gold (GC=F): $1,569.90 per ounce, down $0.20 or 0.01%

Traders work during the opening bell at the New York Stock Exchange (NYSE) on February 3, 2020 at Wall Street in New York City. - Wall Street stocks rose early Monday, bouncing after Friday's rout as markets monitored the coronavirus at the start of a week with key economic data and earnings reports. The Dow suffered the worst losses of the year on Friday as the death toll from the virus continued to climb and the ailment spread to additional countries. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

—

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2020-02-12 17:00:00Z
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A stock and a hard place: SoftBank's $150 billion Alibaba warchest in spotlight - Reuters

TOKYO (Reuters) - SoftBank (9984.T) CEO Masayoshi Son threw cold water on Wednesday on the idea of cutting his firm’s $150 billion stake in e-commerce giant Alibaba (BABA.N), after prominent activist investor Elliott Management called for big buybacks.

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

The emergence of New York-based Elliott as a SoftBank shareholder has renewed focus on the company’s 26% stake in China’s Alibaba, the Japanese firm’s biggest asset and Son’s most successful tech bet to date.

Elliott, one of the world’s best known activist investors, has amassed a holding of almost $3 billion in SoftBank. It is now pushing for changes, including $20 billion in stock buybacks, sources have said. But Son indicated that he is in no rush to sell down the Alibaba shares - raising questions about how SoftBank could fund any potential buybacks.

“I believe Alibaba has lots of room to grow. I’m in no hurry to sell shares,” he told a news conference on Wednesday.

SoftBank is already highly leveraged and struggling to attract outside money to a second tech fund. Son’s reluctance to sell down the holding in Alibaba leaves little scope for buybacks on the scale Elliott wants, analysts said.

“From a shareholder perspective you should sell it and invest in the things that are going to generate returns,” said Kirk Boodry, an analyst at Redex Holdings who writes on research platform Smartkarma.

If SoftBank thinks its returns cannot outperform Alibaba, “it seems weird to be in the venture capital business,” he said.

SoftBank did little to dispel investor concerns about its strategy on Wednesday, reporting that quarterly profit was virtually wiped out by a second straight quarter of losses at the $100 billion Vision Fund.

“These results validate our concerns that most other things that (SoftBank) does outside of Alibaba have led to distractions or value destruction,” Jefferies analyst Atul Goyal wrote in a note.

The stake in the e-commerce giant is worth around $150 billion - more than the market capitalization of SoftBank itself, which is $110 billion.

Son’s group has few other such assets it could use. Others include a two-thirds ownership in Japanese wireless unit SoftBank Corp (9434.T), although SoftBank Group is reliant on dividends from the telecom unit for cash flow.

The unit has pledged to pay out 85% of its net income as dividends.

SoftBank Group had 3.8 trillion yen ($35 billion) in cash and cash equivalents on its books at the end of December.

However, use of that is constrained by SoftBank’s own financial policy - in an effort to reassure investors - including a pledge to maintain enough cash to cover bond redemptions for at least two years.

SoftBank’s weighted average cost of debt is among the highest of all companies on Japan’s Nikkei 225 Stock Average .N255, according to Refinitiv data.

Son did sell down part of the Alibaba stake ahead of the 2016 acquisition of chip designer Arm, using a derivative transaction to capture upside from the subsequent rise in Alibaba’s share price - a move that was a surprise at the time and could well augur further surprises.

Slideshow (2 Images)

While Son said on Wednesday he was aligned with Elliott’s concerns, he made it clear any changes would be on his own terms.

“I’m SoftBank’s biggest shareholder so I care about the stock price and also want to raise corporate value,” he said.

“However the method should be left to us, the management.”

Reporting by Sam Nussey; Editing by David Dolan and Susan Fenton

Our Standards:The Thomson Reuters Trust Principles.

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2020-02-12 15:13:00Z
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Dow Jones Today, Stocks Surge As Coronavirus Slows; Shopify, CVS Health, Akamai Rise On Earnings - Investor's Business Daily

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1. Dow Jones Today, Stocks Surge As Coronavirus Slows; Shopify, CVS Health, Akamai Rise On Earnings  Investor's Business Daily
2. Wall Street Close: Fresh record highs as markets cheer coronavirus headlines/upbeat Fed Chair  FXStreet
3. Stocks close little changed after Fed's coronavirus warning CNBC  msnNOW
4. Dow Jones Futures: Shopify Earnings Soar; Did FTC Big Tech Probe Do Stock Market Rally A Favor With Big Tech Probe?  Investor's Business Daily
5. Market Recap: Tuesday, February 11  Yahoo Finance
6. View full coverage on Google News

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2020-02-12 14:59:00Z
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SoftBank profits plunge 99%, dragged down by Vision Fund losses - CNN

The Japanese tech conglomerate on Wednesday reported operating income of 2.59 billion yen ($23.6 million) for the three months ended in December, a plunge of 99% compared to the same period a year earlier.

SoftBank (SFTBF) founder and CEO Masayoshi Son's closely watched $100 billion Vision Fund was the biggest driver of those losses. The Vision Fund and a related fund reported an operating loss of 225 billion yen ($2 billion) for the quarter, blaming unrealized losses in WeWork and Uber (UBER) for the hit.

Son confirmed at Wednesday's earnings presentation that the fund's recent poor performance — and the accompanying deluge of bad news — has spooked potential investors in his next mega tech fund.

Last year, SoftBank announced it had signed memorandums of understanding with more than a dozen companies to form Vision Fund 2. The company said at the time that it expected to raise $108 billion from companies such as Apple (AAPL), Microsoft (MSFT), Foxconn Technology (HNHPF) and Standard Chartered (SCBFF).

But WeWork's failed IPO and Uber's declining share price "have caused concern amongst potential investors in SoftBank Vision Fund 2," Son said through an interpreter. SoftBank spent roughly $10 billion bailing out WeWork after a disastrous attempt at going public last fall. Uber's stock, meanwhile, has lost 8% of its value since its public debut in May.

"At the moment, I think that our next fund size should be a little bit smaller, because we have caused concerns and anxiety to a lot of people," Son said.

Asked whether Vision Fund 2 could be funded entirely with SoftBank money, Son switched to English, saying: "We can make investment by ourselves. But we have partners who want to work with us, so we'd like to be flexible."

Jefferies analyst Atul Goyal said that Son and other executives need to spend more time harnessing value from other assets.

SoftBank management "spends almost all of its time on (the Vision Fund) and investment securities," Goyal wrote in a note on Tuesday, before the earnings report.

Until SoftBank gives "due importance" to assets such as its stakes in Alibaba (BABA) and chip company ARM, its stock will remain undervalued, Goyal said.

Son believes SoftBank shares trade at a discount of more than 50%, saying on Wednesday that they should be priced at 12,097 yen ($110).

SoftBank is also starting to feel some outside pressure. Earlier this month, activist investor Elliott Management revealed that it has built a "substantial" stake in the company, and is pushing for changes to improve its performance.

Son said that he had meetings with Elliott about two weeks ago, describing the discussion as "open" and "good." SoftBank and Elliott are aligned on several issues, such as a share buyback and upping the number of independent board members, he said.

SoftBank's board is comprised of 11 members, of which only two are classified as independent.

Elliott Management and many analysts who cover SoftBank also want better transparency on the Vision Fund.

The fund, which is mostly operated by London-based SoftBank Investment Advisors, is "regulated under UK law, so we of course follow all regulations for the fund's operations," Son said. "But we'd also like to offer more efforts for enhanced governance and transparency."

Pushed for specifics on how Vision Fund investments are performing, Son said "almost 30 companies in the portfolio recorded a gain, and 30 or so companies recorded a loss, including non-listed companies." He declined to give details on private companies, citing confidentiality agreements.

Among the eight companies in the fund's portfolio that have gone public, five have recorded gains, and three have booked losses as of the end of the December. The biggest winner was cancer diagnostics firm Guardant Health (GH), which gained $1.9 billion for the Vision Fund, and the biggest loser was Uber (UBER), which recorded a loss of $1.06 billion through the end of last year.

The earnings report comes less than 24 hours after a US court approved the $26 billion merger of T-Mobile (TMUS) and Sprint (S), the US carrier SoftBank acquired nearly a decade ago.

Shares in SoftBank rallied on the Sprint news, closing up 12% in Tokyo, ahead of the company's earnings report.

Sprint "has been a major distraction for (SoftBank) since 2012," Goyal said, adding that the merger and all the years Son spent trying to turn around Sprint has "brought little in terms of results."

Offloading Sprint would remove some $44 billion of debt from SoftBank's books.

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2020-02-12 11:04:00Z
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Does China have the financial clout to repair its coronavirus-damaged economy? - South China Morning Post

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Does China have the financial clout to repair its coronavirus-damaged economy?  South China Morning PostView full coverage on Google News
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2020-02-12 10:15:08Z
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