ReportWire

Tag: Advertising/Marketing/Public Relations

  • Netflix stock falls after subscriber growth, earnings forecast miss. But it’s bouncing back on ad plans, shared-password crackdown in U.S.

    Netflix stock falls after subscriber growth, earnings forecast miss. But it’s bouncing back on ad plans, shared-password crackdown in U.S.

    [ad_1]

    Netflix Inc.’s stock initially plunged in after-hours trading Tuesday, after the streaming giant posted weaker subscriber growth and forecast a smaller profit than Wall Street expected. But shares later recovered and crossed into positive territory on company disclosures that its new ad-supported service is a success and its crackdown on shared accounts in the U.S. is coming this quarter.

    Netflix
    NFLX,
    +0.29%
    reported that subscribers increased by 1.75 million in the first quarter of the year, missing analysts’ average estimate of 2.2 million. Netflix reported fiscal first-quarter net earnings of $1.31 billion, or $2.88 a share, compared with $3.53 a share in the year-ago quarter.

    Revenue improved to $8.16 billion from $7.87 billion a year ago. Analysts surveyed by FactSet had expected on average net earnings of $2.86 a share on revenue of $8.18 billion.

    For the second quarter, Netflix executives guided for earnings of $2.84 a share on $8.24 billion in revenue, while analysts on average were expecting earnings of $3.07 a share on sales of $8.18 billion. Netflix no longer provides guidance on subscriber additions, a sign its years of rapid growth are clearly cooling.

    Shares plunged lower than $300 in after-hours trading immediately following the release of the results, after closing with a 0.3% increase at $333.70. But shares had crossed into positive territory and were recently above $335 in the extended session.

    Netflix executives have hoped to goose their financial results with cheaper, ad-supported options and a crackdown on password sharing. In a letter to shareholders Tuesday, company executives said the ads plan in the U.S. “already has a total ARM (subscription + ads) greater than our standard plan.”

    At the same time, they disclosed a password crackdown in the U.S. will occur in the second quarter, a bit later from previous expectations.

    “We shifted out the timing of the broad launch from late Q1 to Q2,” Netflix executives wrote. “While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a
    better outcome for both our members and our business.”

    Additionally, Netflix also announced that it will end the DVD-by-mail business that launched the company into consumers’ homes. Revenue from the DVD business had declined from $911 million in 2013 to $146 million in 2022.

    “This a catch-22 environment for streaming companies as they are pivoting from chasing subscribers to chasing profits while at the same time inflation-weary consumers are reassessing their discretionary spending habits,” KPMG U.S. National Media Leader Scott Purdy said, in assessing the results. “Today’s figures, a bellwether for the industry at large, signal that winter is coming for the consumer. All of the subsidies are ending. Consumers can expect to be hit with ads, higher prices, and password sharing crackdown.”

    Expectations among investors heading into Netflix’s quarterly report were muted. The focus was on Netflix’s switch toward better monetization with an ad-supported service and a rolling crackdown on shared accounts. Analysts in particular were closely watching the performance of Netflix’s new “Basic with Ads” plan ($6.99 a month) and its effectiveness in stanching the defection of subscribers to competing services from Walt Disney Co.
    DIS,
    +0.63%
    and Apple Inc.
    AAPL,
    +0.75%    .

    Netflix’s rollout of the ad-supported tier could also have a temporary impact on margins: Netflix reported an operating margin of 21%, compared with about 25% in the year-ago quarter.

    At the same time, Netflix put an end to paid shared accounts in some Latin American countries last year, and expanded plans to do so Canada, New Zealand, Portugal and Spain in February.

    “In our view, the password-sharing crackdown will result in a greater number of subs as well as revenue because the primary account holder will either pay an additional fee for members who have moved out of the household or those sharing accounts become full subscribers,” Bank of America analysts said in a recent note.

    Shares of Netflix have climbed 12% so far this year, while the broader S&P 500 index
    SPX,
    +0.09%
    has advanced 8%.

    [ad_2]

    Source link

  • Why Snap is suddenly eligible to join the S&P 500

    Why Snap is suddenly eligible to join the S&P 500

    [ad_1]

    Snap Inc.’s initial public offering led to changes that barred the company and others like it from joining major stock indexes, but at least one major index provider has decided to drop those limitations after less than six years.

    S&P Dow Jones Indices announced Monday afternoon that a 2017 rule barring companies with multiple share classes from joining indexes such as the S&P 500
    SPX,
    +0.33%
    has been dropped. The move comes after the index manager consulted with “market participants” at the end of last year to discuss several potential changes to the policy.

    Snap
    SNAP,
    +1.78%
    was the poster child for the initial change, after the parent company of the Snapchat mobile app went public in 2017 by selling a class of shares with no voting rights. That unprecedented move ensured that co-founders Evan Spiegel and Bobby Murphy would retain absolute power over their company even while selling shares to the public.

    Snap’s move was an acceleration of an approach used by a generation of Silicon Valley tech companies to ensure that founders retained control of their companies even while selling shares to the public. Companies such as Facebook parent Meta Platforms Inc.
    META,
    -1.19%
    and Google parent Alphabet Inc.
    GOOGL,
    -2.66%
    GOOG,
    -2.78%
    used similar structures that provided their leaders with special shares that included increased voting rights, which Snap took further by offering no voting rights.

    From 2017: Snap backlash, Facebook capitulation won’t stop founder-friendly stock structures

    In response, FTSE Russell established rules about putting votes in the public’s hands while selling stock, and S&P Dow Jones Indices completely barred all companies that had multiple classes of stock from joining its core indexes. While FTSE Russell’s rule — which requires that at least 5% of votes rest in the hands of public investors — remains, S&P Dow Jones Indices will now drop its rule entirely, after roughly 80% of respondents voted in favor of a change in 2017.

    There were other options besides completely dropping the rule. Participants in the consultation process were given several options and asked to rank them, including barring companies that only offer nonvoting stock to the public — such as Snap — or allowing companies that establish “sunset” provisions that would eventually revert all shares to equal voting rights.

    Related: Investors want change, but founders like Mark Zuckerberg hold them off

    Snap declined to comment Monday afternoon.

    The change to allow all companies with multiple share classes to join the S&P Composite 1500 and its multiple component indexes is effective as of Monday, S&P Dow Jones Indices announced, though no changes were immediately made to any index. Tracking stocks will still not be eligible for inclusion, according to the announcement.

    For more: As Snap melts down, its founders make sure to protect the people who matter — themselves

    [ad_2]

    Source link

  • 10 dividend stocks yielding at least 4.5% that are rated ‘buy’ by most analysts

    10 dividend stocks yielding at least 4.5% that are rated ‘buy’ by most analysts

    [ad_1]

    During a period of high interest rates, it might be more difficult to impress investors with dividend stocks. But the stocks can have an important advantage over the long term. The dividend payouts can increase over the years, helping to push share prices higher over time.

    When considering stocks for dividend income, yield shouldn’t be the only thing you consider. If a stock’s price has tumbled because investors are worried about the company’s business prospects, the dividend yield might be very high. A double-digit yield might mean investors expect to see a cut to the dividend soon.

    There are many ways to look at companies’ expected ability to maintain or raise their dividend payouts. But one can also take a simple approach to begin researching stock choices.

    At the moment, you can get a bank CD with a yield of close to 5% pretty easily. Here’s a look at current yields for CDs and U.S. Treasury securities and an approach for laddering them not only to protect your cash but to hedge against interest-rate risk.

    For investors who would rather aim for long-term growth to go along with dividend income, or take a relatively conservative approach to growth while reinvesting dividends, a screen of stocks in the S&P 500
    SPX,
    +0.33%
    produces only 10 stocks with dividend yields of 4.5% or higher with majority “buy” or equivalent ratings among analysts polled by FactSet. Here they are, sorted by dividend yield:

    Company

    		 Ticker

    		 Dividend Yield

    		 Expected payout increase through 2025

    		 Share “buy” ratings

    		 April 16 price

    		 Consensus price target

    		 implied 12-month upside potential
    Comerica Inc.

    		 CMA,
    +4.00%         		6.56%

    		 10%

    		 58%

    		 $43.30

    		 $60.53

    		 40%
    Citizens Financial Group Inc.

    		 CFG,
    +4.19%         		5.77%

    		 12%

    		 74%

    		 $29.10

    		 $39.29

    		 35%
    Healthpeak Properties Inc.

    		 PEAK,
    +2.33%         		5.71%

    		 9%

    		 60%

    		 $21.01

    		 $27.69

    		 32%
    Hasbro Inc.

    		 HAS,
    +1.28%         		5.34%

    		 8%

    		 69%

    		 $52.40

    		 $69.27

    		 32%
    Philip Morris International Inc.

    		 PM,
    +0.46%         		5.11%

    		 11%

    		 67%

    		 $99.48

    		 $113.56

    		 14%
    Realty Income Corp.

    		 O,
    +1.30%         		5.04%

    		 7%

    		 56%

    		 $60.77

    		 $70.00

    		 15%
    Fifth Third Bancorp

    		 FITB,
    +3.33%         		4.99%

    		 3%

    		 72%

    		 $26.44

    		 $34.55

    		 31%
    VICI Properties Inc.

    		 VICI,
    +1.58%         		4.82%

    		 12%

    		 95%

    		 $32.35

    		 $37.73

    		 17%
    Organon & Co.

    		 OGN,
    +1.01%         		4.71%

    		 5%

    		 55%

    		 $23.80

    		 $31.89

    		 34%
    Iron Mountain Inc.

    		 IRM,
    +0.82%         		4.69%

    		 15%

    		 78%

    		 $52.76

    		 $56.00

    		 6%
    Source: FactSet

    Click on the ticker for more about each company.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    The dividend yields for this group of 10 companies are based on current annual regular payout rates, with all paying quarterly except for Realty Income Corp.
    O,
    +1.30%    ,
    which pays monthly.

    These two oil and natural gas producers would have passed the above screen based on their most recent dividend payments and analysts’ sentiment, however, they pay a combined fixed-plus-variable dividend every quarter, with the fixed portion relatively low:

    • Shares of Pioneer Natural Resources Co.
      PXD,
      -0.77%
      closed at $230 on April 14. Among analysts polled by FactSet, 59% rate the stock a “buy” or the equivalent, and the consensus price target is $257.42. The company pays a fixed quarterly dividend of $1.10 a share, which would make for a dividend yield of only 1.91%. However, the most recent variable quarterly dividend was $4.48 a share, for a combined quarterly dividend of $5.58, which would translate to an annualized dividend yield of 9.70%. The consensus estimate for dividends in 2025 is $4.63 — the analysts are only estimating the fixed portion of the dividend. Pioneer has held preliminary merger discussions with Exxon Corp.
      XOM,
      -1.16%      ,
      according to a Wall Street Journal report.

    • Devon Energy Corp.’s
      DVN,
      -0.72%
      stock closed at $55.70 on April 14. The shares are rated “buy” or the equivalent by 55% of analysts and the consensus price target is $67.66. The fixed portion of Devon’s quarterly dividend is 20 cents a share, for an annualized dividend yield of 1.44%. The variable portion of the most recent quarterly dividend was 69 cents a share. The total payout of 89 cents would make for an annual dividend yield of 6.39%. Analysts expect the fixed portion of annual dividends to total $3.61 in 2025, according to FactSet.

    Don’t miss: Buffett is buying in Japan. This overseas value-stock fund is also making bets there. Is it a good way to diversify?

    [ad_2]

    Source link

  • Microsoft Looks to ChatGPT AI to Transform Its Digital Ad Business

    Microsoft Looks to ChatGPT AI to Transform Its Digital Ad Business

    [ad_1]

    Microsoft Looks to ChatGPT AI to Transform Its Digital Ad Business

    [ad_2]

    Source link

  • Chicago to host 2024 Democratic convention

    Chicago to host 2024 Democratic convention

    [ad_1]

    Chicago will host the 2024 Democratic National Convention, the Democratic National Committee said Tuesday, bringing the event back to the city for the first time since 1996.

    The Democratic Party seems to be closing ranks behind President Joe Biden as its 2024 nominee, although Marianne Williamson and Robert F. Kennedy Jr. are mounting long-shot challenges. The president said Monday that he’s “planning on running” but wasn’t prepared to make a formal announcement yet.

    Read: As Biden says he’s ‘planning on running,’ here are the potential 2024 Republican candidates.

    “The Midwest reflects America and will give Democrats an opportunity to showcase some of President Biden and Vice President Harris’s most significant accomplishments for American families,” DNC Chair Jaime Harrison said in a statement. Chicago beat out cities including New York and Atlanta in the competition to host the convention.

    A water taxi plies the Chicago River.


    Getty Images

    Biden said in a statement that the city is a “great choice” for the event and that his party will “showcase our historic progress including building an economy from the middle out and bottom up, not from the top down.”

    Republicans are planning to host their 2024 convention in Milwaukee.

    Read more: Republicans pick Milwaukee to host 2024 national convention

    Chicago hosted the Democratic convention most recently in 1996, when President Bill Clinton was renominated. The 1968 Democratic convention in Chicago was marked by violent clashes between police and antiwar demonstrators.

    Chicago Mayor-elect Brandon Johnson called his city “unmatched when it comes to hosting events of this scale.”

    Johnson said: “I look forward to working closely with the DNC to facilitate a spectacular convention that showcases Chicago’s diverse culture, our beautiful lakefront, our renowned hospitality sector, and our best asset: our amazing people.”

    The Democratic convention is scheduled for Aug. 19-22, 2024.

    [ad_2]

    Source link

  • ‘An evil act of targeted violence’: Shooting in downtown Louisville bank leaves 5 dead, 9 wounded

    ‘An evil act of targeted violence’: Shooting in downtown Louisville bank leaves 5 dead, 9 wounded

    [ad_1]

    LOUISVILLE, Ky. — A Louisville bank employee armed with a rifle opened fire at his workplace Monday morning, killing four people — including a close friend of Kentucky’s governor — while livestreaming the attack on Instagram, authorities said.

    Police arrived as shots were still being fired inside Old National Bank and killed the shooter in an exchange of gunfire, Louisville Metro Police Department Chief Jacquelyn Gwinn-Villaroel said. The city’s mayor, Craig Greenberg, called the attack “an evil act of targeted violence.”

    The shooting, the 15th mass killing in the country this year, comes just two weeks after a former student killed three children and three adults at a Christian elementary school in Nashville, Tennessee, about 160 miles to the south. That state’s governor and his wife also had friends killed in that shooting.

    In Louisville, the chief identified the shooter as 25-year-old Connor Sturgeon, who she said was livestreaming during the attack.

    “That’s tragic to know that that incident was out there and captured,” she said.

    Meta
    META,
    -0.62%    ,
    the company that owns Facebook and Instagram, said in a statement that it had “quickly removed the livestream of this tragic incident this morning.”

    Social company companies have imposed tougher rules over the past few years to prohibit violent and extremist content. They have set up systems to remove posts and streams that violate those restrictions, but shocking material like the Louisville shooting continues to slip through the cracks, prompting lawmakers and other critics to lash out at the technology industry for slipshod safeguards and moderation policies.

    Nine people, including two police officers, were treated for injuries from the Louisville shooting, University of Louisville Hospital spokeswoman Heather Fountaine said in an email. One of the officers, 26-year-old Nickolas Wilt, graduated from the police academy on March 31. He was in critical condition after being shot in the head and having surgery, the police chief said. At least three patients had been discharged.

    Kentucky Gov. Andy Beshear said he lost one of his closest friends in the shooting — Tommy Elliott — in the building not far from the minor league ballpark Louisville Slugger Field and Waterfront Park.

    “Tommy Elliott helped me build my law career, helped me become governor, gave me advice on being a good dad,” said Beshear, his voice shaking with emotion. “He’s one of the people I talked to most in the world, and very rarely were we talking about my job. He was an incredible friend.”

    Also killed in the shooting were Josh Barrick, Jim Tutt and Juliana Farmer, police said.

    “These are irreplaceable, amazing individuals that a terrible act of violence tore from all of us,” the governor said.

    It was the second time that Beshear was personally touched by a mass tragedy since becoming governor.

    In late 2021, one of the towns devastated by tornadoes that tore through Kentucky was Dawson Springs, the hometown of Beshear’s father, former two-term Kentucky Gov. Steve Beshear. Andy Beshear frequently visited Dawson Springs as a boy and has talked emotionally about his father’s hometown.

    Beshear spoke as the investigation in Louisville continued and police searched for a motive. Crime scene investigators could be seen marking and photographing numerous bullet holes in the windows near the bank’s front door.

    As part of the investigation, police descended on the neighborhood where the suspect lived, about 5 miles south of the downtown shooting. The street was blocked as federal and local officers talked to residents. One home was cordoned off with caution tape. Kami Cooper, who lives in the neighborhood, said she didn’t recall ever meeting the suspect but said it’s an unnerving feeling to have lived on the same street as someone who could do such a thing.

    “I’m almost speechless. You see it on the news but not at home,” Cooper said. “It’s unbelievable, it could happen here, somebody on my street.”

    A man who fled the building during the shooting told WHAS-TV that the shooter opened fire with a long rifle in a conference room in the back of the building’s first floor.

    “Whoever was next to me got shot — blood is on me from it,” he told the news station, pointing to his shirt. He said he fled to a break room and shut the door.

    Deputy Police Chief Paul Humphrey said the actions of responding police officers undoubtedly saved lives.

    “This is a tragic event,” he said. “But it was the heroic response of officers that made sure that no more people were more seriously injured than what happened.”

    Just a few hours later and blocks away, an unrelated shooting killed one man and wounded a woman outside a community college, police said.

    The 15 mass shootings this year are the most during the first 100 days of a calendar year since 2009, when 16 had occurred by April 10, according to a mass killings database maintained by The Associated Press and USA Today in partnership with Northeastern University.

    Going back to 2006, the first year for which data has been compiled, the years with the most mass killings were 2019 and 2022, with 45 and 42 mass killings recorded during the entire calendar year. The pace in 2009 slowed later in the year, with 32 mass killings recorded that year.

    [ad_2]

    Source link

  • Apple CEO Tim Cook explains why consumers would want a mixed-reality headset

    Apple CEO Tim Cook explains why consumers would want a mixed-reality headset

    [ad_1]

    Apple Inc. Chief Executive Tim Cook, GQ’s latest cover boy, has a sales pitch for a mixed-reality headset.

    “The idea that you could overlay the physical world with things from the digital world could greatly enhance people’s communication, people’s connection,” Cook told GQ, without confirming the rumored June 5 announcement of Apple’s
    AAPL,
    +0.77%
    Reality Pro headset.

    Apple’s plunge into the so-called metaverse would offer a jolt to a flagging industry as well as serious competition to Facebook parent Meta Platforms Inc.
    META,
    +0.53%    ,
    Alphabet Inc.’s
    GOOGL,
    +0.61%

    GOOG,
    +0.88%
    Google, Microsoft Corp.
    MSFT,
    -0.37%    ,
    Snap Inc.
    SNAP,
    +0.27%
    and others.

    “ ‘It’s the idea that there is this environment that may be even better than just the real world — to overlay the virtual world on top of it might be an even better world.’ ”


    — Tim Cook

    Creative users, the lifeblood of Apple’s business model, stand to gain the most from virtual-reality products, according to Cook.

    “It’s the idea that there is this environment that may be even better than just the real world — to overlay the virtual world on top of it might be an even better world,” Cook told GQ. “If it could accelerate creativity, if it could just help you do things that you do all day long and you didn’t really think about doing them in a different way.”

    Cook also looked inward during the far-ranging interview, explaining his persona and the challenges in succeeding the legendary Steve Jobs as Apple CEO. Jobs died in 2011.

    “I always hate the word normal in a lot of ways, because what some people use to describe normal equals straight,” Cook said. “Some people would use that word in that kind of way. I don’t know — I’ve been described as a lot of things, but probably normal is not among those.”

    Added Cook: “I knew I couldn’t be Steve. I don’t think anybody could be Steve. I think he was a once-in-a-hundred-years kind of individual, an original by any stretch of the imagination. And so what I had to do was to be the best version of myself.”

    From the archives (October 2011): Steve Jobs: MarketWatch’s CEO of the Decade

    [ad_2]

    Source link

  • Disney eliminates metaverse division in cost-cutting purge: report

    Disney eliminates metaverse division in cost-cutting purge: report

    [ad_1]

    The metaverse is among the first victims of Walt Disney Co.’s cost-cutting purge.

    The Magic Kingdom is shutting down its next-generation storytelling and consumer-experiences unit, the small division that was developing metaverse strategies, as part of a plan to slash 7,000 jobs, according to a Wall Street Journal report on Tuesday.

    Disney…

    [ad_2]

    Source link

  • How First Republic stock’s tailspin started and why it hasn’t stopped

    How First Republic stock’s tailspin started and why it hasn’t stopped

    [ad_1]

    Shortly after Silicon Valley Bank disclosed on March 8 that it was running short of cash and needed to raise capital, First Republic Bank’s epic stock slide began.

    The stock
    FRC,
    -15.47%
    has lost 90% of its value in less than two weeks, hitting an all-time low of $12.18 a share on Monday.

    Supportive comments from Treasury Secretary Janet Yellen helped it snap back on Tuesday, but it’s hovering between positive and negative territory on Wednesday as investors await a key Federal Reserve decision on interest rates.

    First Republic finds itself in a tough spot with a low share price and fresh debt downgrades and not even efforts to inject $30 billion into the company’s deposits in a scheme backed by JPMorgan Chase & Co.
    JPM,
    -2.58%
    and a backstop from the U.S. Federal Reserve seem to be helping.

    The bank’s troubles stem from its overlap both in clientele and parts of its balance sheet with doomed Silicon Valley Bank, which is being sold off this week by the Federal Deposit Insurance Corp. after it officially failed on Friday, March 10. Silicon Valley Bank suffered a classic run on a bank, when depositors, nervous that it needed to raise capital, yanked their deposits.

    First Republic has suffered the same deposit flight.

    As a San Francisco bank with a focus on serving high-end clients, First Republic has acted as wealth manager for the greater Silicon Valley region of executives, managing directors and startup CEOs, as well as their counterparts on the East Coast.

    The list incudes Facebook
    META,
    -1.16%
    Founder Mark Zuckerberg, who has a large mortgage courtesy of First Republic, as the Wall Street Journal has reported. Few of its loans ever sour — it had $213 billion in assets at the end of 2022 and $176 billion in deposits.

    With its sophisticated lending products and access to the technology startup world, Silicon Valley Bank was also known for its a customer base from the venture capital and private equity world. 

    Also Read: 24 bank stocks that contrarian bottom-feeders can feast on now

    Those well-heeled clients of both banks started running into problems as interest rates rose last year, pundits warned of an economic slowdown and investors switched to a risk-off strategy of conserving cash and containing costs.

    The collapse of FTX and strain in the crypto world also fed the need for cold, hard government-backed currency. Rising interest rates made it more expensive to borrow and put a chill on the deal-making environment.

    All of this and other factors led to a drain on deposits at Silicon Valley Bank and others as it faced “elevated client cash burn” at a rate that was double pre-2021 levels, even as venture capital and private equity funds were slowing down their capital raising activities, the company said in an ill-fated mid-quarter report.

    On March 8 after the market close, Silicon Valley Bank said it planned to sell $2.25 billion in common stock and a type of preferred stock, with one of its major clients, private equity firm General Atlantic, in line to buy $500 million worth. Goldman Sachs Group Inc.
    GS,
    -1.14%
    was handling the deal.

    The company also disclosed that it had lost $1.8 billion on the sale of $21 billion in available-for-sale securities on its balance sheet to cover deposit withdrawals.

    It was this last part that caused big trouble for First Republic. Not only did its clientele overlap with Silicon Valley Bank, its holdings included some of the same securities that Silicon Valley Bank sold at a loss.

    Wall Street investors quickly started bidding down shares of First Republic and other regional banks and the credit rating agencies moved in, cutting the bank’s rating from investment grade deep into junk in just a few days.

    None of this helped First Republic hold on to its deposits.  

    As one longtime banking official said recently, money from Silicon Valley types typically comes in the form of uninsured deposits, which means they’re in excess of the $250,000 that the FDIC will guarantee if a bank goes out of business. This so called hot-money is great for banks when times are good, but can move away quickly if the environment changes.

    “When hot money gets nervous, it runs,” former FDIC chairman Bill Isaac told MarketWatch recently.

    While an unprecedented effort on March 16 by 11 banks to inject $30 billion into First Republic’s deposits temporarily provided a lift to its stock, the move apparently wasn’t enough.

    First Republic said last Thursday that it had borrowed between $20 billion and $109 billion from the Federal Reserve during that week. It also increased short-term borrowing from the Federal Home Loan Bank by $10 billion at a rate of 5.09%.

    Jefferies analyst Ken Usdin said the numbers revealed that First Republic’s total deposits had dropped by up to $89 billion in the week ended March 17 past week—or about three times more than the $30 billion injection from the bank.

    “With [First Republic’s] earnings profile clearly impaired, the new deposits effectively bridge the estimated $30.5 billion of uninsured deposits still on [the bank’s] balance sheet, providing time for [it] to likely explore a sale,” Usdin said.

    Janney Montgomery Scott analyst Tim Coffey said First Republic’s stock drop in recent days reflects uncertainty around what a potential second bailout would look like, or how the bank’s balance sheet is faring after a steep run in deposits and the falling value of its long-dated securities.

    Another unknown is the company’s latest Tier 1 capital Ratio, a key measure of a bank’s balance sheet strength.

    Like Silicon Valley Bank, First Republic’s balance sheet has had more than the usual exposure to long-dated securities, which have been falling in value as interest rates rise. 

    A typical mix for a bank of comparable size is to hold about 72% of securities as available for sale. The remaining 28% are held to maturity. First Republic’s mix is reversed with 12% available for sale and 88% held to maturity.

    The bank’s mix of longer-dated assets now commands a lower market value, given where interest rates are. The bank’s emphasis on long-dated securities provided a better return when interest rates were near zero, but they have been a liability in the current environment.

    “They’ve had duration risk where the value of their securities started going down as interest rates rose,” Coffey told MarketWatch.

    Another problem for First Republic is that many of those long-dated securities are in the mortgage business, which has been ailing as interest rates rise.

    Plenty of questions remain about First Republic’s situation and whether it could have been avoided. The challenges facing First Republic as well as the demise of Silicon Valley Bank and Signature Bank will be the focus of hearings on Capitol Hill next week.

    Wall Street is also awaiting comments from the U.S. Federal Reserve when it updates its interest rate policy later on Wednesday.

    And JPMorgan Chase continues to work with First Republic on a potential bailout, even as the bank has reportedly hired Lazard
    LAZ,
    -2.17%
    to weigh strategic alternatives.

    All of these factors add to the uncertainty swirling around First Republic, giving investors little reason to go long on the stock for now.

    Also Read: 24 bank stocks that contrarian bottom-feeders can feast on now

    Related: Senate Banking Chair Sherrod Brown sees bipartisan support for changes to deposit insurance

    [ad_2]

    Source link

  • Amazon’s stock dips 1% as another 9,000 layoffs announced

    Amazon’s stock dips 1% as another 9,000 layoffs announced

    [ad_1]

    Amazon.com Inc. is eliminating another 9,000 jobs, the company announced Monday morning.

    In a memo to staff, Amazon
    AMZN,
    -1.25%
    Chief Executive Andy Jassy said the cuts would take place over the next few weeks and primarily affect Amazon Web Services, People Experience and Technology Solutions, advertising and Twitch. [Twitch CEO Dan Clancy broke the news of 400 layoffs to employees in a blog post later Monday.]

    “This was a difficult decision, but one that we think is best for the company long term,” Jassy wrote.

    “For several years leading up to this one, most of our businesses added a significant amount of headcount,” Jassy added. “This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”

    The news sent the retailer’s stock down 1% in trading Monday.

    The latest layoffs, amid a challenging macroeconomic climate that has claimed tens of thousands of jobs in the tech industry, follow an earlier round at Amazon, announced in November, that affected more than 18,000 employees. Additionally, Amazon has paused construction of its second headquarters in Virginia.

    At the same time, there are rumblings out of the Beltway that the Biden administration is preparing legal actions against Amazon stemming from investigations into its business practices, according to a report in Politico.

    Amazon is the second Big Tech company this month to announce additional job cuts. Last week, Mark Zuckerberg, CEO of Facebook parent Meta Platforms Inc.
    META,
    +1.12%    ,
    wrote in a blog post the social-networking company would slash 10,000 more employees as it focuses on a “year of efficiency.” The move drove Meta shares up 7% and helped the company top $500 billion in market value for the first time since June.

    In November, the company said it would cut 11,000 employees, or about 13% of its workforce, in the first layoffs in the company’s 18-year history.

    [ad_2]

    Source link

  • Credit Suisse, UBS, First Republic, and More Stock Market Movers

    Credit Suisse, UBS, First Republic, and More Stock Market Movers

    [ad_1]

    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

    https://www.barrons.com/articles/stock-market-movers-a86267f

    • Order Reprints
    • Print Article
    [ad_2]
    Source link

  • Ryan Reynolds Sells Mint Mobile for $1.35 Billion to T-Mobile

    Ryan Reynolds Sells Mint Mobile for $1.35 Billion to T-Mobile

    [ad_1]

    Ryan Reynolds Sells Mint Mobile for $1.35 Billion to T-Mobile

    [ad_2]

    Source link

  • Asana stock soars 24% as software company says path to profitability is improving

    Asana stock soars 24% as software company says path to profitability is improving

    [ad_1]

    Asana Inc. on Wednesday reported and forecast narrower-than-expected losses, saying the figures reflected a firmer path to profitability, and its stock skyrocketed in after-hours trading.

    The project-management software provider — whose chief executive is a co-founder of Meta Platforms Inc.’s
    META,
    +0.25%
    Facebook — forecast first-quarter sales of $150 million to $151 million, with an adjusted net loss of between 18 cents and 19 cents a share. That’s better than FactSet forecasts for a 23-cent per-share loss with revenue of $150.4 million.

    For the full year, Asana
    ASAN,
    +1.83%
    said it expects revenue of between $638 million and $648 million, with an adjusted net loss of 55 cents to 59 cents. Analysts polled by FactSet expected a 79 cent-per-share loss, on sales of $645.8 million.

    The company reported a fourth-quarter net loss of $95 million, or 44 cents a share. That compares with a loss of $90 million, or 48 cents a share, in the same quarter last year. Revenue rose 34% to $150.2 million, compared with $111.9 million in the same quarter last year.

    Adjusted for stock-based compensation, restructuring and other costs, Asana lost 15 cents a share, compared with 25 cents a year earlier.

    Analysts polled by FactSet expected Asana to reported an adjusted loss of 27 cents a share, on revenue of $145.1 million.

    Shares soared 24% after hours.

    The company reported earnings as other workplace-oriented cloud-services platforms, like Salesforce Inc.
    CRM,
    -0.20%
    and Workday
    WDAY,
    -1.69%    ,
    scale back and lay off workers. The tech industry has tried to shrink, after hiring to meet digital demand brought by the pandemic that later fizzled as COVID restrictions lifted.

    Shares of Asana have fallen 60% over the past two months. By comparison, the S&P 500 Index
    SPX,
    +0.14%
    has lost 4.3% of its value over that period.

    [ad_2]

    Source link

  • Tesla, Apple, Ciena, and More Stock Market Movers

    Tesla, Apple, Ciena, and More Stock Market Movers

    [ad_1]

    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

    https://www.barrons.com/articles/stock-market-movers-6acba64b

    • Order Reprints
    • Print Article

    Stock futures traded mostly flat Monday as Wall Street kicked off a week that includes testimony before Congress from Federal Reserve Chairman Jerome Powell and the U.S. jobs report for February.

    These stocks were poised to make moves Monday:

    [ad_2]

    Source link

  • Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks.

    Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks.

    [ad_1]

    Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants. The Justice Department just can’t stop filing antitrust suits against Google. The initial public offering market is closed. Venture-capital investments are plunging, along with valuations of prepublic companies. Maybe they should try turning the whole thing on and off.

    The only strategy that seems to be working is to lay people off. Tech CEOs suddenly are channeling Marie Kondo, tidying up and keeping only the people and projects that “spark joy,” or at least support decent operating margins. Layoffs.fyi reports that tech companies have laid off more than 122,000 people already this year.

    [ad_2]

    Source link

  • Walmart, Home Depot, Meta, DocuSign, Medtronic, and More Stock Market Movers

    Walmart, Home Depot, Meta, DocuSign, Medtronic, and More Stock Market Movers

    [ad_1]

    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

    https://www.barrons.com/articles/stock-market-movers-5b0c54ae

    • Order Reprints
    • Print Article

    [ad_2]

    Source link

  • Trade Desk stock rockets after earnings as CEO says company is outperforming like never before

    Trade Desk stock rockets after earnings as CEO says company is outperforming like never before

    [ad_1]

    Shares of Trade Desk Inc. surged on Wednesday after the advertising-technology company issued an upbeat outlook that helped quell fears about the digital-ad market.

    Chief Executive Jeff Green spoke positively on the earnings call about the company’s performance relative to rivals, saying that the company grew 24% in the fourth quarter while most of its “large competitors” saw negative growth.

    Trade Desk’s
    TTD,
    +25.60%
    revenue rose to $491 million from $396 million, while analysts tracked by FactSet were modeling $490 million.

    “I don’t think we’ve ever had the level of industry outperformance in our six years or so as a public company as we did in 2022,” he said, according to a transcript provided by AlphaSense/Sentieo. “And it means that we can be very confident that we’re gaining share and that our platform continues to gain traction with advertisers.”

    Shares of Trade Desk were up 28% in morning action. Shares of streaming-media company Roku Inc.
    ROKU,
    +9.04%    ,
    which is due to post results after the closing bell, were up more than 7%.

    Executives at Trade Desk, which makes programmatic ad technologies for connected television, see that area of the market as particularly compelling right now.

    “Not only is the shift from linear to CTV driving significant growth in digital spend as advertisers shift dollars from linear TV to connected TV, but more spend is happening outside the walled gardens as advertisers shift spend from user-generated content to premium streaming content,” Green shared.

    The company reported fourth-quarter net income of $71 million, or 14 cents a share, compared with $8 million, or 2 cents a share, in the year-earlier period. On an adjusted basis, Trade Desk said it earned 38 cents a share, down from 42 cents a share a year before but ahead of the FactSet consensus, which was for 35 cents a share.

    For the first quarter, management anticipates at least $363 million in revenue, along with about $78 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda).

    The FactSet consensus was for $358 million in revenue and $75 million in adjusted Ebitda.

    “2023 will be the year that everything in TV changes,” Green told investors on the earnings call. “The market needs an upfront that is always on, but also leverages data so that content owners sell fewer, more relevant ads at higher CPMs and advertisers get more efficacy.” CPM stands for “cost per mille” and measures what advertisers pay for impressions.

    The company also announced Wednesday that its board of directors has authorized it to buy back up to $700 million of its stock.

    “The new share-repurchase program is designed to help offset the impact of future share dilution from employee stock issuances,” Trade Desk said in a release.

    [ad_2]

    Source link

  • Big Tech just added to a shrinking forecast, but maybe Bob Iger can brighten the mood

    Big Tech just added to a shrinking forecast, but maybe Bob Iger can brighten the mood

    [ad_1]

    Wall Street’s expectations for 2023 have been diving as forecasts for the new year come in light, and the news could get worse once they factor in disappointing results from Big Tech. But at least Bob Iger is coming back for a sequel.

    Google, Facebook, Amazon and Apple all disappointed with holiday earnings this week. Their forecasts ranged from nonexistent to piecemeal to meh, and the fallout will only add to the biggest dive in Wall Street’s expectations through the beginning of a year since 2016.

    Analysts’ average forecast for 2023 earnings from the S&P 500 index
    SPX,
    -1.04%
    dropped by 2.5% in January, according to FactSet Senior Earnings Analyst John Butters, the worst in seven years. Those projections began heading lower last year, and the decline is only steepening — analysts are now projecting 3% earnings growth in 2023, and that is contingent on a big holiday rebound from the results being released this quarter.


    Uncredited

    The news was even worse for the first quarter, for which projections declined 3.3% in January as companies whiffed on their forecasts at a rapid pace: 86% of the 43 companies that have guided for first-quarter earnings have missed projections, Butters reported. Earnings are now expected to decline 4.2%, which would be the first year-over-year earnings decline since the third quarter of 2020, when the COVID-19 pandemic write-offs started to come in.

    Big Tech only added to the downward trajectory in recent days. Amazon.com Inc.
    AMZN,
    -8.43%
    missed on its holiday earnings as well as its forecast for the first quarter, and that company could determine if S&P 500 profits rise in 2023 all on its own. Amazon’s worst holiday earnings since 2014 could also contribute to the consumer discretionary sector’s first earnings decline since the beginning of the pandemic, with holiday sector earnings now expected to drop more than 5%.

    Google parent Alphabet Inc.
    GOOGL,
    -2.75%
    GOOG,
    -3.29%
    and Facebook parent Meta Platforms Inc.
    META,
    -1.19%
    also missed their respective earnings targets amid problems with the digital-advertising industry, leading to the communications-services sector having the worst earnings season in the S&P 500. Profit has declined 25.2% in that sector so far, the worst among the 11 S&P 500 sectors, but would be down just 6.5% without the effects of Meta and Alphabet, Butters reported.

    Apple Inc.
    AAPL,
    +2.44%
    also didn’t do projections any favors, reporting its biggest sales decrease since 2016 and an earnings miss Thursday afternoon. In a piecemeal forecast, executives projected a similar sales decline in the calendar first quarter, though unofficially.

    This week in earnings

    After the busiest week in earnings season wrapped up, don’t expect much of a breather — 95 S&P 500 companies are expected to report in the week ahead, the third consecutive week with at least 90 companies reporting. There will be plenty of intrigue among companies not in the S&P 500 too, including Robinhood Markets Inc.
    HOOD,
    -3.59%
    and Affirm Holdings Inc.
    AFRM,
    -14.14%
    reporting together on Wednesday afternoon.

    Only one Dow Jones Industrial Average
    DJIA,
    -0.38%
    stock will report, but that is the Wednesday call you will want to tune in for: Bob Iger’s return to the Walt Disney Co.
    DIS,
    -2.21%
    earnings show.

    The calls to put on your calendar
    The numbers to watch

    [ad_2]

    Source link

  • Google suffered ‘pullback’ in ad spending over holidays, Alphabet stock falls after earnings

    Google suffered ‘pullback’ in ad spending over holidays, Alphabet stock falls after earnings

    [ad_1]

    Alphabet Inc.’s stock slipped nearly 5% in extended trading Thursday after the tech giant missed slightly on revenue and earnings in ho-hum quarterly results.

    Google’s parent company reported fiscal fourth-quarter total revenue of $76.05 billion, up from $75.3 billion a year ago. Earnings were $13.62 billion, or $1.05 per share, compared with $20.64 billion, or $1.53 per share, last year. Alphabet’s revenue, minus traffic-acquisition costs (TAC), was $63.12 billion, vs. $61.9 billion a year ago.

    “We’re on an important journey to re-engineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet,” Chief Executive Sundar Pichai said in a statement announcing the results. The company recently announced 12,000 layoffs and has scaled back hires.

    In a conference call later with analysts, Google Chief Business Officer Philipp Schindler said a “pullback” in spending by advertisers amid a more challenging economy as well as foreign-exchange headwinds impacted sales.

    Analysts polled by FactSet expected Alphabet
    GOOG,
    +7.27%

    GOOGL,
    +7.28%
    to report total revenue of $76.2 billion and earnings of $1.18 per share, with sales expected to be in line with last year’s results and profit declining from the holiday season a year ago. Revenue, minus TAC, were modeled at $63.2 billion, which also suggests little to no growth from last year.

    Google’s total advertising sales slid to $59 billion from $61.2 billion a year ago, missing analysts’ average expectations of $60.44 billion. Google Cloud brought in $7.32 billion, compared with $5.54 billion last year. YouTube ad sales slipped to $7.96 billion from $8.63 billion a year ago.

    “The search giant underperformed our expectations across almost all business units, most importantly its core ad-search segment,” Jesse Cohen, senior analyst at Investing.com, said. “Once again, YouTube growth slowed to a crawl amid tough competition from TikTok and other players in the video-streaming space.”

    A dip in digital advertising has defined the past few quarters for Google, Meta Platforms Inc.
    META,
    +23.28%    ,
    Snap Inc.
    SNAP,
    +9.93%    ,
    Pinterest Inc.
    PINS,
    +8.99%
    and other companies dependent on ads. Meta’s better-than-expected quarterly report Wednesday was a sign of encouragement after Snap had another desultory quarterly performance.

    Indeed, Alphabet shares closed up 7% in Thursday’s regular session, at $107.74, before retreating 5% in after-hours trading.

    Read more: Alphabet earnings: What to expect from the Google parent company

    “After Alphabet’s advertising revenue cycle reached peak growth” in the second quarter of 2021, revenue for this part of the business is set to decelerate for the sixth quarter in a row, said Monness, Crespi, Hardt analyst Brian White, who forecast a 3% drop in the recently completed quarter.

    On Thursday, Alphabet Chief Financial Officer Ruth Porat said that beginning in
    the current quarter, AI subsidiary DeepMind will be included in Alphabet’s corporate costs rather than in Other Bets.

    Alphabet’s stock has declined 24.7% over the past 12 months. The S&P 500 index 
    SPX,
    +1.47%
    is down 6.7% over the past year.

    [ad_2]

    Source link

  • Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss

    Meta stock spikes nearly 20% as cost cuts and $40 billion for investors overshadow earnings miss

    [ad_1]

    Meta Platforms Inc. shares soared in after-hours trading Wednesday despite an earnings miss, as the Facebook parent company guided for potentially more revenue than Wall Street expected in the new year and promised more share repurchases amid cost cuts.

    Meta
    META,
    +2.79%
    said it hauled in $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago but stronger than expectations. Earnings were $4.65 billion, or $1.76 a share, compared with $10.3 billion, or $3.67 a share, last year.

    Analysts polled by FactSet expected Meta to post fourth-quarter revenue of $31.55 billion on earnings of $2.26 a share, and the beat on sales coincided with a revenue forecast that also met or exceeded expectations. Facebook Chief Financial Officer Susan Li projected first-quarter sales of $26 billion to $28.5 billion, while analysts on average were projecting first-quarter sales of $27.2 billion.

    Shares jumped more than 19% in after-hours trading immediately following the release of the results, after closing with a 2.8% gain at $153.12.

    Alphabet Inc.’s
    GOOGL,
    +1.61%

    GOOG,
    +1.56%
    Google and Pinterest Inc.
    PINS,
    +1.56%
    benefited from Meta’s results, with shares for each company rising more than 4% in extended trading Wednesday.

    “Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”

    Read more: Snap suffers worst sales growth yet in holiday quarter, stock plunges after earnings miss

    Facebook’s 2 billion-user milestone was slightly better than analysts expected for user growth on Meta’s core social network. Daily active users across all of Facebook’s apps neared, but did not crest, another round number, reaching 2.96 billion, up 5% from a year ago.

    Meta has been navigating choppy ad waters as it copes with increasing competition from TikTok and fallout from changes in Apple Inc.’s
    AAPL,
    +0.79%
    ad-tracking system in 2021 that punitively harmed Meta, costing it potentially billions of dollars in advertising sales. Meta has invested heavily in artificial-intelligence tools to rev up its ad-targeting systems and making better recommendations for users of its short-video product Reels, but it laid off thousands of workers after profit and revenue shrunk in recent quarters.

    The cost cuts seemed to pay off Wednesday. While Facebook missed on its earnings, it noted that the costs of its layoffs and other restructuring totaled $4.2 billion and reduced the number by roughly $1.24 a share.

    Meta executives said they now expect operating expenses to be $89 billion to $95 billion this year based on slower salary growth, cost of revenue, and $1 billion in savings from facilities consolidation — down from previous guidance for $94 billion to $100 billion. Capital expenditures are expected to be $30 billion to $33 billion, down from previous guidance of $34 billion to $37 billion, as Meta cancels multiple data-center projects.

    In a conference call with analysts late Wednesday, Zuckerberg called 2023 the “year of efficiency” after 18 years of unbridled growth. He recommitted to Meta’s emphasis on AI and the metaverse, a platform for “better social experiences” than the phone, he said.

    “The reduced outlook reflects our updated plans for lower data-center construction spend in 2023 as we shift to a new data-center architecture that is more cost efficient and can support both AI and non-AI workloads,” Li said in her outlook commentary included in the release.

    Meta expects to increase its spending on its own stock. The company’s board approved a $40 billion increase in its share-repurchase authorization; Meta spent nearly $28 billion on its own shares in 2022, and still had nearly $11 billion available for buybacks before that increase.

    “Investors are cheering Meta’s plans to return more capital to shareholders despite worries over rising costs related to its metaverse spending,” said Jesse Cohen, senior analyst at Investing.com.

    “At first glance…Meta getting its mojo back,” Baird Equity Research analyst Colin Sebastian said in a note late Wednesday. “Results and guidance look particularly solid after Snap’s dismal report; however, further cuts to operating and capital expenditures announced this afternoon were perhaps the biggest surprise.”

    UBS analyst Lloyd Walmsley said he anticipates double-digit revenue growth exiting 2023 and strong growth in earnings and free cash flow.

    The results came a day after Snap Inc.
    SNAP,
    -10.29%
    posted fourth-quarter revenue of $1.3 billion, flat from a year ago and the worst year-over-year sales growth Snap has ever reported. But they also arrived on the same day Facebook scored a major win in a California court. The company successfully fended off the Federal Trade Commission bid to win a preliminary injunction to block Meta’s planned acquisition of VR startup Within Unlimited.

    Read more: Meta wins bid to buy VR startup Within Unlimited, beating U.S. FTC in court: report

    Meta shares have plunged 53% over the past 12 months, while the broader S&P 500 index 
    SPX,
    +1.05%
    has tumbled 10% the past year.

    [ad_2]

    Source link