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The Morning Ledger: Earnings Won't Be As Good As Forecast, U.S. Firms Warn |
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An Apple Store in Beijing, China. Slumping iPhone sales in the country led the tech giant to cut its quarterly revenue forecast earlier this month. PHOTO: KEVIN FRAYER/GETTY IMAGES
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Good day. Finance executives at the U.S.’s biggest public companies are warning that their earnings may not be as strong as they hoped this year, as dimmer expectations for global growth and disappointing holiday sales cloud the outlook, reports The Wall Street Journal.
Losing steam: Firms in the S&P 500 were projected back in September to report fourth-quarter earnings growth of 17% from the year earlier. Now, the estimated earnings-growth rate for the quarter is closer to 11%, according to FactSet. The drop-off in estimates—the steepest since 2017—is the latest sign that U.S. corporations, from retailers and airlines to phone makers, are losing momentum after several quarters of standout growth.
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Riding high: In contrast, the earnings growth of small private firms improved in the fourth quarter even as larger U.S. companies signaled a dimmer outlook for that period. U.S. middle-market private companies enjoyed the strongest earnings growth in years, propelled by high demand for products and services, according to a report released Friday by Golub Capital, a lender to these firms.
The China-factor: As U.S. companies prepare to report their quarterly earnings, China’s impact on these will be revealed. The amount of damage is likely to depend on such factors as who the company’s customers are and how much competition it faces in China. Retail sales growth in China slowed in November to the lowest level in 15 years, and Chinese consumers have begun putting off major purchases, recent data showed.
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Albertsons Cos., Citigroup Inc. and Shaw Communications Inc. are among the companies slated to report earnings today.
Fourth-quarter earnings results for banks, due to start this week, will mark the last period in which the 2017 tax law’s drop in the corporate rate magnifies earnings growth. Banks’ 2019 earnings growth won’t likely be as robust as in 2018.
As much of the global auto industry descends on Detroit this week for its annual auto show, good news in the U.S. is being tempered with flashing yellow lights overseas.
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PG&E Corp. on Monday said it plans to file petitions to voluntarily reorganize under Chapter 11 bankruptcy proceedings, a day after the company’s chief executive stepped down over the financial fallout spurred by its role in helping spark
the California wildfires.
Children’s clothing retailer Gymboree Group Inc. is expected to seek bankruptcy protection this week, with plans to close all 900 of its stores.
The U.S. Labor Department on Tuesday publishes December data on producer prices. Economists surveyed by The Wall Street Journal forecast producer prices declined 0.1% in December from a month earlier. The U.K. Parliament on Tuesday votes on Prime Minister Theresa May's deal for exiting the European Union, a potentially market-moving event, Bloomberg reports.
The U.S. Federal Reserve on Wednesday releases its beige book report, a collection of anecdotes from businesses in each of the Fed’s 12 districts across the nation.
On Friday, the Fed publishes December industrial-production figures. Economists surveyed by the WSJ forecast a 0.2% rise in December. Also on Friday, the University of Michigan issues preliminary January consumer-sentiment data. Economists surveyed by the WSJ forecast consumer sentiment clocked in at 97.1 in January.
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Cosmetics Group Coty Names New CFO As it Seeks Turnaround |
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CoverGirl makeup products. CoverGirl was one of the brands Coty acquired from Procter & Gamble in 2016. PHOTO: F. MARTIN RAMIN/THE WALL STREET
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Coty Inc., the owner of beauty brands such as Rimmel and Max Factor, on Friday appointed a new finance chief as it contends with sluggish sales and a slump in its stock. Incoming Chief Financial Officer Pierre-André Terisse will fill the void left by former CFO Patrice de Talhouët, who left in the fall to pursue other opportunities.
Mr. Terisse spent the majority of his career working for French food manufacturer Danone SA, including a seven-year stint as group CFO and three years as general manager of the company’s Africa division. Based in London, he will be taking on the new job on Feb. 1, Coty said in statement.
Coty in November reported sales declined 9.2% in its fiscal first quarter, dragged down by problems in its supply chain and a 21% slide in its consumer beauty business. Shares in the company have lost nearly two-thirds of their value in the past year.
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Yanacocha, South America's largest gold mine, a joint venture between Newmont Mining, Minas Buenaventura and International Finance. PHOTO: DADO GALDIERI/BLOOMBERG NEWS
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Newmont Mining Corp. agreed to buy rival Canadian gold producer Goldcorp Inc. in an all-stock transaction the companies valued at $10 billion, intensifying a consolidation wave among global miners as they compete for a dwindling supply of easy-to-find gold.
MNG Enterprises Inc., a hedge-fund-backed media group known for buying up struggling local papers and cutting costs is planning to make an offer for USA Today publisher Gannett Co., according to people familiar with the matter.
Media giant Viacom Inc. is in talks to sell a majority stake in some of its China operations after running into difficulties trying to scale its business in the world’s second-largest economy.
Roughly a year after EQT Corp. bought Rice Energy Inc. to form the largest U.S. natural gas producer, the combined company has offered a cautionary tale—that in the fracking industry, bigger isn’t always better.
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Huawei's offices in Warsaw, Poland. PHOTO: KACPER PEMPEL/REUTERS
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Poland is joining the U.S. in pressing its NATO allies to coordinate efforts to address security challenges from China after Friday’s arrest of two men on charges of spying for Beijing. Huawei on Saturday said it had fired a sales director arrested in Poland on espionage charges.
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Carlos Ghosn was paid around $8 million last year from a Netherlands-based entity jointly owned by Nissan Motor Co. and partner Mitsubishi Motors Corp., according to a person familiar with Nissan’s investigation of Mr. Ghosn. Meanwhile, his wife Carole said Mr. Ghosn is suffering under "harsh treatment" in a Japanese jail, the BBC reports.
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Hong Kong’s antitrust regulators have launched a probe over cartel allegations against the city’s biggest port operators after they formed an alliance aimed at controlling almost all of the port’s seaborne trade.
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Germany’s competition watchdog has raised “serious doubts” over the railway merger between Siemens AG and Alstom SA, in another blow to a Franco-German deal seen as a watershed for EU industrial policy on China, the Financial Times reports.
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The Trump administration last week revived a program that is key to home lending, after the mortgage industry said its closure during the partial government shutdown could have forced lenders to delay or scrap loan closings.
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China’s trade surplus with the U.S. hit a record last year, as robust American demand for Chinese goods undercut the Trump administration’s tariff offensive aimed at narrowing the countries’ lopsided trade gap.
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