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Disney and other entertainment giants report after upbeat results from peers, but investors are getting harsher on companies that don’t deliver

Last month, Netflix Inc.
NFLX,
+1.80%
stock jumped after it reported big subscriber gains and hiked prices. Last week, results from Paramount Global
PARA,
+15.44%
beat expectations, sending shares of the streaming and entertainment giant on its best percentage gain in nearly a year, and Roku Inc.
ROKU,
+8.58%
also offered an upbeat outlook.

This week — as Walt Disney Co., Warner Bros. Discovery Inc., Lions Gate Entertainment Corp. and AMC Entertainment Holdings Inc. all report results — we’ll get a deeper sense of whether the entertainment industry is starting to make investors happy again, even if they make viewers less happy in the process.

Those companies will report as the streaming industry, under pressure from investors to turn a better profit, consolidates and as platforms charge more to watch and cram more advertisements into shows and films.

Cable TV providers and movie theaters, too, are trying to figure out a way forward as streaming becomes more prevalent. Even as Hollywood’s writers come back to work following a strike that shut down production, its actors are still striking, with issues surrounding AI usage to portray actors, streaming payments and other issues in the balance.

Disney
DIS,
+2.14%,
which reports results on Wednesday, faces questions about losses at Disney+, efforts to cut billions in costs and stamp out streaming-account sharing, its planned takeover of the streaming platform Hulu and speculation over which of its large media properties it might sell. BofA analysts recently estimated that ESPN, which Disney has leaned on for years, could be worth around $24 billion. Meanwhile, activist investor Nelson Peltz has been angling for seats on Disney’s board, and its fight with Florida Gov. Ron DeSantis continues.

Elsewhere, Warner Bros. Discovery
WBD,
+6.23%
— the parent company of the streaming service Max, Warner Bros. Pictures, Discovery Channel, CNN and other channels — reports on Wednesday, as it tries to turn its reserves of intellectual property into franchise films. Meme-stock theater chain AMC
AMC,
+2.19%,
which also reports Wednesday, following upbeat results from rival Cinemark Holdings Inc.
CNK,
-2.43%.

Sales at the theater chains have been lifted in recent months by “Barbie” and “Oppenheimer.” While both were original films, analysts have said the avalanche of sequels and remakes in theaters is unlikely to stop.

The pressure to boost profits will ultimately affect what TV shows and films get made, and what viewers actually consume. And a report from FactSet on Friday found that investors have been more unkind than usual to companies whose results come up short of Wall Street’s expectations.

That report found that through the third-quarter earnings season, companies whose earnings miss expectations have seen an average stock-price drop of 5.2% during the two days before the publication of the results through the two days after. If that figure holds, it would be the stock market’s biggest adverse reaction to an earnings miss since the second quarter of 2011.

This week in earnings

Among S&P 500 companies, 55 including one from the Dow, will report quarterly results during the week ahead.

EV startup Rivian Automotive Inc.
RIVN,
+0.68%
reports amid concerns about EV demand. Following Ticketmaster parent Live Nation Entertainment Inc.’s
LYV,
+3.53%
blowout quarterly results last week, results from Madison Square Garden Entertainment Corp.
MSGE,
+1.03%
will shed more light on people’s appetites for live entertainment. Results from digital marketing platform Klaviyo Inc.
KVYO,
+3.86%
and fast-casual chain Cava Group Inc.
CAVA,
+5.49%
— both recent IPOS — will offer a deeper look at digital ad budgets and a competitive restaurant backdrop, respectively.

The New York Times Co.
NYT,
+0.91%
also reports during the week. So do Planet Fitness Inc.
PLNT,
-0.09%,
Gilead Sciences
GILD,
+0.44%,
eBay Inc.
EBAY,
+3.98%
and Take-Two Interactive Software
TTWO,
+1.03%.

The call to put on your calendar

Cybersecurity drama: Cyberattacks are getting more severe, and customers are starting to feel their effects more acutely. Against that backdrop, casino and resort operator MGM Resorts International
MGM,
+5.27%
will report quarterly results on Wednesday, in the wake of a cyberattack that took down some of its systems. MGM has said that attack, which the company disclosed in September, would cost them roughly $100 million.

The company said the fallout of that attack — which disrupted hotel bookings and put hotels on manual operations, resulting in long lines — was largely contained to September. But the SEC last week accused software company SolarWinds Corp.
SWI,
+1.74%
of failing to disclose its purported cybersecurity vulnerabilities, potentially leaving other companies wondering whether they’re vulnerable to similar legal action.

The numbers to watch

The gig economy and delivery demand: Rival ride-hailing platforms Uber Technologies Inc. and Lyft Inc. report results on Tuesday and Wednesday, respectively. Maplebear Inc.
CART,
+0.94%,
better known as the grocery-delivery platform Instacart, also reports on Wednesday.

Analysts have been kinder to Uber
UBER,
+2.73%,
the larger of the two ride-hailing companies. But Lyft has tried to cut its prices and roll out new services, including one that tries to match women and non-binary riders and drivers. The financials from all three companies will land after strong results from food-delivery platform DoorDash Inc.
DASH,
+5.35%,
which has expanded its services into retail an effort to compete with Instacart and other delivery providers. And they’ll fill in the picture of rider demand following the back-to-school season and a bigger push to get workers back into offices.

Beyond ride-sharing, results from Uber and Instacart will narrow the lens on delivery demand, as some analysts question whether higher prices for basics and the return of student-loan payments might make food delivery more dispensable. Analysts also seem likely to zero on in those companies’ high-margin digital-ad businesses, as more e-commerce platforms try to turn their apps and websites into online billboard space.

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November 5, 2023

Dividend stocks are dirt cheap. It may be time to back up the truck.

The stock market always overreacts, and this year it seems as if investors believe dividend stocks have become toxic. But a look at yields on quality dividend stocks relative to the market underlines what may be an excellent opportunity for long-term investors to pursue growth with an income stream that builds up over the years.

The current environment, in which you can get a yield of more than 5% yield on your cash at a bank or lock in a yield of 4.57% on a10-year U.S. Treasury note
BX:TMUBMUSD10Y
or close to 5% on a 20-year Treasury bond
BX:TMUBMUSD20Y
seems to have made some investors forget two things: A stock’s dividend payout can rise over the long term, and so can it is price.

It is never fun to see your portfolio underperform during a broad market swing. And people have a tendency to prefer jumping on a trend hoping to keep riding it, rather than taking advantage of opportunities brought about by price declines. We may be at such a moment for quality dividend stocks, based on their yields relative to that of the benchmark S&P 500
SPX.

Drew Justman of Madison Funds explained during an interview with MarketWatch how he and John Brown, who co-manage the Madison Dividend Income Fund, BHBFX MDMIX and the new Madison Dividend Value ETF
DIVL,
use relative dividend yields as part of their screening process for stocks. He said he has never seen such yields, when compared with that of the broad market, during 20 years of work as a securities analyst and portfolio manager.

Dividend stocks are down

Before diving in, we can illustrate the market’s current loathing of dividend stocks by comparing the performance of the Schwab U.S. Equity ETF
SCHD,
which tracks the Dow Jones U.S. Dividend 100 Index, with that of the SPDR S&P 500 ETF Trust
SPY.
Let’s look at a total return chart (with dividends reinvested) starting at the end of 2021, since the Federal Reserve started its cycle of interest rate increases in March 2022:

FactSet

The Dow Jones U.S. Dividend 100 Index is made up of “high-dividend-yielding stocks in the U.S. with a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios,” according to S&P Dow Jones Indices.

The end results for the two ETFs from the end of 2021 through Tuesday are similar. But you can see how the performance pattern has been different, with the dividend stocks holding up well during the stock market’s reaction to the Fed’s move last year, but trailing the market’s recovery as yields on CDs and bonds have become so much more attractive this year. Let’s break down the performance since the end of 2021, this time bringing in the Madison Dividend Income Fund’s Class Y and Class I shares:

Fund	2023 return	2022 return	Return since the end of 2021
SPDR S&P 500 ETF Trust	14.9%	-18.2%	-6.0%
Schwab U.S. Dividend Equity ETF	-3.8%	-3.2%	-6.9%
Madison Dividend Income Fund – Class Y	-4.7%	-5.4%	-9.9%
Madison Dividend Income Fund – Class I	-4.7%	-5.3%	-9.7%
Source: FactSet

Dividend stocks held up well during 2022, as the S&P 500 fell more than 18%. But they have been left behind during this year’s rally.

The Madison Dividend Income Fund was established in 1986. The Class Y shares have annual expenses of 0.91% of assets under management and are rated three stars (out of five) within Morningstar’s “Large Value” fund category. The Class I shares have only been available since 2020. They have a lower expense ratio of 0.81% and are distributed through investment advisers or through platforms such as Schwab, which charges a $50 fee to buy Class I shares.

The opportunity — high relative yields

The Madison Dividend Income Fund holds 40 stocks. Justman explained that when he and Brown select stocks for the fund their investible universe begins with the components of the Russell 1000 Index
RUT,
which is made up of the largest 1,000 companies by market capitalization listed on U.S. exchanges. Their first cut narrows the list to about 225 stocks with dividend yields of at least 1.1 times that of the index.

The Madison team calculates a stock’s relative dividend yield by dividing its yield by that of the S&P 500. Let’s do that for the Schwab U.S. Equity ETF
SCHD
(because it tracks the Dow Jones U.S. Dividend 100 Index) to illustrate the opportunity that Justman highlighted:

Index or ETF	Dividend yield	5-year Avg. yield	10-year Avg. yield	15-year Avg. yield	Relative yield	5-year Avg. relative yield	10-year Avg. relative yield	15-year Avg. relative yield
Schwab U.S. Dividend Equity ETF	3.99%	3.41%	3.20%	3.16%	2.6	2.1	1.8	1.6
S&P 500	1.55%	1.62%	1.79%	1.92%
Source: FactSet

The Schwab U.S. Equity ETF’s relative yield is 2.6 — that is, its dividend yield is 2.6 times that of the S&P 500, which is much higher than the long-term averages going back 15 years. If we went back 20 years, the average relative yield would be 1.7.

Examples of high-quality stocks with high relative dividend yields

After narrowing down the Russell 1000 to about 225 stocks with relative dividend yields of at least 1.1, Justman and Brown cut further to about 80 companies with a long history of raising dividends and with strong balance sheets, before moving further through a deeper analysis to arrive at a portfolio of about 40 stocks.

When asked about oil companies and others that pay fixed quarterly dividends plus variable dividends, he said, “We try to reach out to the company and get an estimate of special dividends and try to factor that in.” Two examples of companies held by the fund that pay variable dividends are ConocoPhillips
COP,
-0.29%
and EOG Resources Inc.
EOG,
+0.52%.

Since the balance-sheet requirement is subjective “almost all fund holdings are investment-grade rated,” Justman said. That refers to credit ratings by Standard & Poor’s, Moody’s Investors Service or Fitch Ratings. He went further, saying about 80% of the fund’s holdings were rated “A-minus or better.” BBB- is the lowest investment-grade rating from S&P. Fidelity breaks down the credit agencies’ ratings hierarchy.

Justman named nine stocks held by the fund as good examples of quality companies with high relative yields to the S&P 500:

Company	Ticker	Dividend yield	Relative yield	2023 return	2022 return	Return since the end of 2021
CME Group Inc. Class A	CME, +0.47%	2.04%	1.3	31%	-23%	1%
Home Depot, Inc.	HD, -0.39%	2.79%	1.8	-3%	-22%	-25%
Lowe’s Cos., Inc.	LOW, +0.27%	2.17%	1.4	3%	-21%	-19%
Morgan Stanley	MS, -1.54%	4.24%	2.7	-3%	-10%	-13%
U.S. Bancorp	USB, -0.25%	5.89%	3.8	-22%	-19%	-37%
Medtronic PLC	MDT, -4.32%	3.62%	2.3	1%	-23%	-22%
Texas Instruments Inc.	TXN, -0.21%	3.30%	2.1	-3%	-10%	-12%
United Parcel Service Inc. Class B	UPS, -0.16%	4.17%	2.7	-8%	-16%	-23%
Union Pacific Corp.	UNP, +1.52%	2.52%	1.6	2%	-16%	-15%
Source: FactSet

Click on the tickers for more about each company, fund or index.

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

Now let’s see how these companies have grown their dividend payouts over the past five years. Leaving the companies in the same order, here are compound annual growth rates (CAGR) for dividends.

Before showing this next set of data, let’s work through one example among the nine stocks:

If you had purchased shares of Home Depot Inc.
HD,
-0.39%
five years ago, you would have paid $193.70 a share if you went in at the close on Oct. 10, 2018. At that time, the company’s quarterly dividend was $1.03 cents a share, for an annual dividend rate of $4.12, which made for a then-current yield of 2.13%.
If you had held your shares of Home Depot for five years through Tuesday, your quarterly dividend would have increased to $2.09 a share, for a current annual payout of $8.36. The company’s dividend has increased at a compound annual growth rate (CAGR) of 15.2% over the past five years. In comparison, the S&P 500’s weighted dividend rate has increased at a CAGR of 6.24% over the past five years, according to FactSet.
That annual payout rate of $8.36 would make for a current dividend yield of 2.79% for a new investor who went in at Tuesday’s closing price of $299.22. But if you had not reinvested, the dividend yield on your five-year-old shares (based on what you would have paid for them) would be 4.32%. And your share price would have risen 54%. And if you had reinvested your dividends, your total return for the five years would have been 75%, slightly ahead of the 74% return for the S&P 500 SPX during that period.

Home Depot hasn’t been the best dividend grower among the nine stocks named by Justman, but it is a good example of how an investor can build income over the long term, while also enjoying capital appreciation.

Here’s the dividend CAGR comparison for the nine stocks:

Company	Ticker	Five-year dividend CAGR	Dividend yield on shares purchased five years ago	Dividend yield five years ago	Current dividend yield	Five-year price change	Five-year total return
CME Group Inc. Class A	CME, +0.47%	9.46%	2.44%	1.55%	2.04%	20%	42%
Home Depot Inc.	HD, -0.39%	15.20%	4.32%	2.13%	2.79%	54%	75%
Lowe’s Cos, Inc.	LOW, +0.27%	18.04%	4.14%	1.81%	2.17%	91%	109%
Morgan Stanley	MS, -1.54%	23.16%	7.62%	2.69%	4.24%	80%	108%
U.S. Bancorp	USB, -0.25%	5.34%	3.60%	2.78%	5.89%	-39%	-26%
Medtronic PLC	MDT, -4.32%	6.65%	2.90%	2.10%	3.62%	-20%	-9%
Texas Instruments Inc.	TXN, -0.21%	11.04%	5.24%	3.10%	3.30%	59%	82%
United Parcel Service Inc. Class B	UPS, -0.16%	12.23%	5.56%	3.12%	4.17%	33%	56%
Union Pacific Corp.	UNP, +1.52%	10.20%	3.37%	2.07%	2.52%	34%	49%
Source: FactSet

This isn’t to say that Justman and Brown have held all of these stocks over the past five years. In fact, Lowe’s Cos.
LOW,
+0.27%
was added to the portfolio this year, as was United Parcel Service Inc.
UPS,
-0.16%.
But for most of these companies, dividends have compounded at relatively high rates.

When asked to name an example of a stock the fund had sold, Justman said he and Brown decided to part ways with Verizon Communications Inc.
VZ,
-0.94%
last year, “as we became concerned about its fundamental competitive position in its industry.”

Summing up the scene for dividend stocks, Justman said, “It seems this year the market is treating dividend stocks as fixed-income instruments. We think that is a short-term issue and that this is a great opportunity.”

Don’t miss: How to tell if it is worth avoiding taxes with a municipal-bond ETF

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October 11, 2023

Expectations for Nvidia’s earnings are massive. Will they even matter?

When Nvidia Corp. last reported quarterly results, the chip maker forecast record revenue that was far above anything it had put up before. In response, investors sent the stock into orbit. On Wednesday, the latest round of earnings for the company will be a test of Nvidia’s status as the darling of the AI investment boom, and a test of whether it can deliver on its own lofty expectations.

The results will also be an update of tech demand overall, after businesses tightened their IT budgets following worries about an economic slowdown. But even with Nvidia’s
NVDA,
-0.10%
stock up more than 200% so far this year and expectations rising just as much, some analysts still say there’s room for shares to go higher, despite supply-side logjams.

Barclays said that Nvidia, whose chips analysts say will help power AI technology in the days to come, has “monopolized the economics of the AI boom, with no clear competitor close behind.” They added that “cloud capex budgets are being funneled towards AI.”

Signs that Nvidia might be falling behind on meeting chip demand have started to emerge. But as businesses rush to mark their territory, or potential territory, in the world of AI, Wedbush analysts have asked whether Nvidia’s results and forecast would even matter, as today’s production constraints turn into tomorrow’s sales.

“We don’t think NVDA results/guidance need to hit the high end of expectations,” Wedbush analyst Matt Bryson said in a research note on Friday.

“With demand for AI training having lifted substantially in the past quarter and with no other silicon supplier now capable of providing part volumes within an order of magnitude of NVDA’s output, we believe any unfilled demand will just be pushed into forward quarters fueling future sales and (earnings per share),” he continued.

Synovus analyst Daniel Morgan was also bullish on Nvidia’s business targeted toward data centers, as those facilities try to integrate generative AI and large language models. And within Nvidia’s gaming segment, he said the company’s new Ada Lovelace graphics-processing unit ecosystem “appears to be seeing a high level of success in retail.”

Still, the longer a stock runs higher, the harder it can fall. And Nvidia’s $1 trillion valuation, Morgan said, “is not for the faint-hearted.”

This week in earnings

Along with Nvidia, China search giant Baidu Inc.
BIDU,
-3.63%
reports, as the nation’s economic rebound sputters. And if more businesses are still cautious about cloud spending, or shifting spending to AI, the mood could filter through to results from Splunk Inc.
SPLK,
+0.35%
and Snowflake Inc.
SNOW,
+0.47%.
Peloton Interactive Inc.
PTON,
+1.59%,
Workday Inc.
WDAY,
+0.16%
and Marvell Technology Inc.
MRVL,
+0.05%
also report.

The call to put on your calendar

Zoom and offices: If even Zoom is calling some of its workers back to the office, what could that possibly mean for its results on Monday and the business of videoconferencing? Zoom Video Communications Inc.
ZM,
+1.42%
hasn’t been spared from the wave of tech-industry layoffs, and the company is trying to branch out from its pandemic-mainstay video-call platform, and harnessing its technology to handle phone calls and customer contact centers. Benchmark Research analyst Matthew Harrigan, in a note last week, said he still liked Zoom’s prospects, even though he wasn’t expecting “much instant gratification.” “We do expect AI to crystallize as a significant positive for Zoom even as it navigates through customer pushback on using customer data to train AI models off privacy concerns,” he said.

The numbers to watch

Sales, forecasts and inventories from retailers: Last week, Target Corp.
TGT,
+0.85%
reported what one analyst called “the definition of mixed results,” while another said the results amounted to “Recessionary trends without the recession.” Sales of essentials like groceries, as they have over the past year, helped Walmart Inc.’s
WMT,
+1.44%
results, but management said that consumers were still feeling the pain from inflation, which for some shoppers over the past year has left little room for much beyond the basics.

In the week ahead, we’ll get results whole bunch of retailers that don’t sell basics — like department stores Macy’s Inc.
M,
+0.53%
and Kohl’s Corp.
KSS,
+3.53%
; clothing chains Nordstrom Inc.
JWN,
+0.47%,
Gap Inc.
GPS,
+2.17%,
Urban Outfitters Inc.
URBN,
+2.00%
; shoe retailer Foot Locker Inc.
FL,
+0.60%
and beauty-products chain Ulta Beauty Inc.
ULTA,
+1.40%.
Those retailers will report as prices for some things start to come down, or at least not rise as fast, and as some economists overcome their recession fears. But remarks from executives could offer some sense of the impact from higher borrowing costs and the return of student loan payments, and how much they’ll be able to bank on the back-to-school season and wealthier — and more carefree — consumers.

Dollar-store Dollar Tree Inc.
DLTR,
+0.44%
will also report results, as low-income consumers suffer more under inflation and deal with the end of pandemic-era supplemental food assistance. Off-price retailer Burlington Stores Inc.
BURL,
+1.43%
reports as well, after Ross Stores Inc.
ROST,
+5.01%
Chief Executive Barbara Rentler said that while its low- and moderate-income shoppers were still hurting, shoppers overall “responded well to our improved value offerings throughout our stores.”

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August 20, 2023

Electrolux Starts Preparations For Potential Divestment of Zanussi and Other Non-Core Brands During Coming Yrs

By Dominic Chopping

STOCKHOLM–Electrolux on Thursday swung to an unexpected second-quarter net loss and said it is considering selling its Zanussi brand and other non-core assets during the coming years that together could raise around 10 billion Swedish kronor ($973.3 million).

The Swedish home-appliance manufacturer posted a second-quarter net loss of SEK648 million from a profit of SEK257 million as earnings were weighed by SEK643 million provision, significantly lower volumes due to weaker market demand, currency headwinds, labor cost and energy inflation.

A FactSet analyst poll had expected a net profit of SEK350 million.

Sales fell 3.2% to SEK32.65 billion, versus the SEK34.05 billion expected in a company-compiled consensus.

The weak demand environment, with lower consumer purchasing power resulting in more consumers shifting to lower price points, continued in the second quarter, it said.

Although price increases contributed somewhat positively in the quarter, earnings promotions also increased significantly and Electrolux now expects the net price effect to turn negative from the third quarter.

“In the challenging times we are now experiencing, it is vital to continue with strategic portfolio management,” Chief Executive Jonas Samuelson said.

“Further structural simplification and complexity reduction are thus being evaluated.”

Demand in 2023 is now expected to be negative in all regions.

Write to Dominic Chopping at dominic.chopping@wsj.com

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July 20, 2023

Logitech’s stock hit by reports its $30 game controller was used to steer missing sub near Titanic

U.S.-listed shares of Logitech International SA, a Swiss maker of computer peripherals and software, were down about 3.6% Monday, amid reports that one of the company’s gamepads was being used to steer the submersible that went missing while taking five people down to the wreck of the Titanic.

Logitech’s $30 F710 gamepad was the controller of the OceanGate submarine vessel that is the subject of a massive sea-and-air search, according to a segment on the “CBS News Sunday Morning Show” by reporter David Pogue that aired last November.

In the segment, OceanGate Chief Executive Stockton Rush, one of the five people currently onboard the submersible, showed Pogue the game controller that he said “runs the whole thing,” causing the reporter to burst out laughing.

Pogue later describes the “MacGyver jerry-riggedness” of the whole thing, which included off-the-shelf components such as lights from Camper World and construction pipes as ballast. Rush explained that other parts of the vessel were made in cooperation with Boeing, NASA and the University of Washington.

As The Verge pointed out, game controllers are used in other instances to control submarine periscopes, including by the U.S. Navy and Elon Musk’s The Boring Company.

On Monday, Pogue tweeted that during his report which was filmed last summer, the submersible got lost for a period — while he was on the surface.

In that instance, the vessel still had contact with the surface. This time, there are no communications, although a Canadian military surveillance aircraft detected underwater noises early Wednesday, as the Associated Press reported.

A statement from the U.S. Coast Guard did not elaborate on what rescuers believed the noises could be, though it offered a glimmer of hope for those lost aboard the Titan. Estimates suggested as little as a day’s worth of oxygen could be left if the vessel is still functioning.

Also on the vessel with Rush are a British adventurer, two members of a Pakistani business family and a Titanic expert.

Authorities reported the carbon-fiber vessel overdue Sunday night, setting off the search in waters about 435 miles (700 kilometers) off the coast of of St. John’s.

The submersible had a four-day oxygen supply when it was put to sea around 6 a.m. Sunday, according to David Concannon, an adviser to OceanGate Expeditions, which oversaw the mission.

Questions remain about how teams could reach the lost submersible, which could be as deep as about 12,500 feet (3,800 meters) below the surface near the watery tomb of the historic ocean liner. Newly uncovered allegations also suggested there had been significant warnings made about the vessel’s safety prior to its disappearance.

Read: Missing Titanic submersible: Here’s what we know so far

Logitech’s stock
LOGI,
-2.69%
is down about 18% in the month to date.

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June 21, 2023

Amazon’s $1.7 Bln Takeover of iRobot Cleared by UK Regulator

By Joe Hoppe

The U.K. Competition and Markets Authority on Friday said it has cleared Amazon.com’s proposed $1.7 billion acquisition of iRobot Corp.

The regulator, which had launched an initial formal investigation in April into the takeover of the Roomba maker, concluded that the deal wouldn’t lead to competition concerns in the U.K.

The deal remains under regulatory review in other jurisdictions. In September, iRobot said the U.S. Federal Trade Commission formally requested documents from both companies explaining the deal’s purpose and rationale. A securities filing by iRobot said both companies would cooperate with the FTC’s investigation.

After an investigation, which typically takes up to a year, the FTC can sue to block a merger, seek concessions such as divestitures or decline to take action, allowing a deal to close.

“We’re working cooperatively with the relevant regulators in their review of the merger,” an Amazon spokesperson said at the time.

Write to Joe Hoppe at joseph.hoppe@wsj.com

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June 16, 2023

The $3,499 Vision Pro headset, iOS 17, and everything else Apple just announced at WWDC

Apple Inc.’s $3,499 Vision Pro headset stole the show Monday as Apple kicked off its annual WWDC event.

Chief Executive Tim Cook and other executives showed off the next chapter of Apple
AAPL,
-0.76%
technology — “spatial computing” — during a keynote event that failed to maintain Apple’s record stock price. Shares had been on track to close at an all-time high before the event began, but were trading in the red once the event wrapped.

While the Vision Pro and its eye-popping price tag was the biggest news from the presentation, Apple also teased forthcoming software enhancements and new Mac computers.

Here’s everything that was announced Monday.

The Vision Pro headset

Apple was widely expected to roll out a mixed-reality headset at Monday’s event, but the announcement still brought a few surprises.

While Apple was rumored to be planning a price tag in the range of $3,000 for its new Vision Pro headset, the actual price of $3,499 was higher. Also, Apple won’t be selling the device until early next year, later than expected, in a move that means the company will miss the holiday season.

The company spent ample time during Monday’s presentation showing off what the Vision Pro can do in terms of bringing photographs, movies and everyday web browsing into physical spaces. Though the company discussed some gaming applications, and a partnership with Unity Software Inc.
U,
+17.16%,
executives didn’t dwell on gaming and focused the immersive experience more fully.

See MarketWatch’s enhanced coverage of the Vision Pro launch here.

New iPhone software

Apple’s iPhone software enhancements are typically a focus of WWDC, an event aimed at developers who create apps for that and other Apple platforms. This year’s update — iOS 17 — will feature new ways to share contact information, journal and make use of the iPhone while it’s locked.

With iOS 17 this fall, Apple users will also be able to set up contact “posters” for themselves, which will appear in full screen when they call others. They’ll be able to see live transcriptions of voice mails so they can determine whether to pick up calls they initially ignored.

See MarketWatch’s full guide to the new iOS 17 features here.

Read: Are thousand-dollar iPhones now a necessity? From reactions to Apple earnings, you sure might think so.

A 15-inch MacBook Air

Apple is making the MacBook Air bigger with a new 15-inch model that features the company’s M2 chip. This version will start at $1,299 and become officially available next week, though preorders begin today. The device gets 18 hours of battery life, is 11.5-millimeters thin and weighs just over 3 pounds.

Mac Pro and Mac Studio

Apple had set out to infuse its personal-computer lineup with custom chips, and the company rounded that out Monday with new Mac Pro and Mac Studio devices that feature Apple Silicon processing. The Mac Studio will start at $1,999, and the Mac Pro will begin at $6,999.

Don’t miss: AI could give a big boost to profit margins — but there’s one key unknown, Goldman Sachs says

New iPad software

Apple will refresh its iPad software as well, with a new custom lock screen, widget enhancements, machine-learning tools that help with PDF editing and better annotation functions for PDFs. Plus, users will be able to at last set multiple timers.

New Mac software

Apple plans to upgrade its Mac operating system as well with a new version that will be called Sonoma. A key feature of this update is a redesign of the widgets function, giving users the ability to place widgets on their home screens and see these automatically fade when necessary so they don’t become distracting.

The new Sonoma operating system will add various tools for web presentations, including a feature that lets people appear as overlays on top of their presentation content and new reaction animations that can show balloons and confetti in response to meeting content.

Within Safari, family members will be more easily able to share passwords. The company will also let people create separate profiles for home, work, and school use of a Mac.

Audio and video improvements

Apple is adding Adaptive Audio to help AirPods users drown out distracting sounds when appropriate. The technology will proactively lower outside volume when someone is on a call and detect when someone is talking to a real-life companion in order to lower music volume for the duration of the conversation.

Within video, Apple will let people use their phone cameras to engage in FaceTime conversations shown on an Apple TV. The company will also support AirPlay connectivity at hotels.

Apple Watch software enhancements

WatchOS 10, the new Apple Watch operating system, will let users retain their aesthetic watch faces but twist the digital crown to see widgets for information like weather, timers and events. The company is also looking to make the Apple Watch more useful for cyclists with advanced tracking features. One part of this allows users to pair an iPhone and see cycling data on the phone’s lock screen, which can be useful for those who dock their phones on a bike while also wearing the watch.

Watch owners will receive a new hiking app as well, which will let users see elevation data and topographical information.

Read: Apple could be cooking up 3 more $10 billion-plus businesses, one analyst says

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June 5, 2023

Apple’s new Vision Pro headset will cost $3,499, arrive in 2024

Apple Inc. officially showed off its mixed-reality headset Monday, with the new Vision Pro device supporting 3-D content and featuring a price tag of $3,499.

The Vision Pro, Apple’s
AAPL,
-0.76%
first major new product category in eight years, will be available early next year and feature the ability for users to control the device with their hands, eyes and voice, a distinguishing feature of the headset in the current market. Chief Executive Tim Cook previewed the widely anticipated device during the keynote address of Apple’s WWDC developer event Monday.

Apple had been rumored for years to be developing a mixed-reality headset, which merges immersive augmented reality with real-life surroundings. Cook has long been excited about AR technology, and Monday’s event gave a sense for how he sees the theme playing into the business going forward as he announced WWDC’s “one more thing.”

“It’s the first Apple product you look through and not at,” he said, adding that Vision Pro represents “spatial computing” and brings “a new dimension to powerful personal technology.”

Users will be “no longer limited by a display,” Cook claimed.

One key feature of the Vision Pro is the ability to see apps overlaid across real-world surroundings. Users will be able to determine how immersed they want to be by tweaking settings on a digital crown.

The device will also allow users to rely only on their eyes, hands and voice to control content. Users can flick to scroll through options and tap their fingers together to select something with gestures that Apple says are subtle. Apple showed off how users will be able to arrange apps like FaceTime and Safari and then turn to the side to switch from one app to another. Their eyes will still be visible to people engaging with them in the real world.

The company highlighted panoramic photos and noted that users will be able to capture “spatial” 3-D videos and photos using the headset. Apple teased that people would be able to make the surroundings of a plane disappear if they opted to watch 3-D video while flying.

Robert Iger, Walt Disney Co.’s
DIS,
+0.25%
CEO, appeared onstage to call the launch a “momentous event” that could help make Disney’s vision “a reality” through the advent of deeply immersive and personal stories. The Disney+ app will be available “on day one” through Vision Pro.

Apple explained that users can either plug the Vision Pro in or use an external battery that will provide roughly two hours of use. The display has “more panels than a 4K TV for each eye.” The Vision Pro relies on Apple’s custom processing, including a new R1 chip that the company says helps reduce latency issues, which have plagued other devices.

Users will be able to set up digital personas as part of the new visionOS operating system for the device.

With the Vision Pro, Apple is wading into a market for augmented- and virtual-reality devices that has been underwhelming thus far as products from Meta Platforms Inc.
META,
-0.45%
and others have failed to pick up meaningful traction with consumers. VR devices dominate the market, according to third-party data from IDC, but overall shipments plunged more than 50% in the latest quarter amid economic pressures and a general cooling of interest.

Read: Apple debuts new 15-inch MacBook Air for $1,299, adds new Mac Pro and Studio PCs

While Apple is sitting on a number of multibillion-dollar businesses now, the company’s current big moneymakers weren’t seen as slam dunks when they launched. Evercore ISI analyst Amit Daryanani noted that critics dinged the early iPhone for a lack of third-party apps and keyboard and pointed to fading interest in watch-wearing more generally at the time the Apple Watch debuted.

Whether Apple can succeed again in making a once-questioned product category mainstream remains to be seen with the Vision Pro. The company could sell over 10 million units in the first five years, according to Daryanani, but that would make the device Apple’s slowest to ramp in the 21st century.

See more: Apple could be cooking up 3 more $10 billion-plus businesses, one analyst says

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June 5, 2023

Roku stock gains after earnings beat, though ad market remains challenging

Roku Inc. shares moved 2% higher in Wednesday’s after-hours action as the streaming-media company cited continued ad-market pressures but topped expectations for its latest quarter.

The company reported a first-quarter net loss of $193.6 million, or $1.38 a share, compared with a loss of $26.3 million, or 19 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting a $1.47 loss per share.

Roku…

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April 26, 2023

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

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

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April 3, 2023

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

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

Updated Feb. 21, 2023 9:16 am ET / Original Feb. 21, 2023 5:04 am ET

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February 21, 2023

AMD Stock Should Benefit From Next-Generation Computer Chips

These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

Advanced Micro Devices AMD-Nasdaq

Buy (four stars out of five) • Price $64.52 on Dec. 23

by CFRA

Our Buy recommendation reflects our expectation for significant share gains on the central-processing-unit data-center side from the ramp-up of AMD’s next-generation EPYC processor, greater momentum for AMD’s graphics processing units, and our expectation for balance sheet improvement.

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December 30, 2022

Microsoft to bring ‘Call of Duty’ to Nintendo if Activision merger approved

Microsoft Corp. said late Tuesday it has made a “10-year commitment” to bring the massively popular “Call of Duty” videogame series to Nintendo Co. consoles, when — and if — its merger with Activision Blizzard Inc. is completed.

In a tweet late Tuesday night, Xbox head Phil Spencer announced the deal. “Microsoft is committed to helping bring more games to more people – however they choose to play,” he said, adding: “I’m also pleased to confirm that Microsoft has committed to continue to offer Call of Duty on @Steam simultaneously to Xbox after we have closed the merger with Activision Blizzard King.”

Microsoft is awaiting federal approval of its $68.7 billion acquisition of Activision.

A deal to share one of Activision’s
ATVI,
-0.29%
most lucrative videogame titles could appease some antitrust concerns from regulators. Spencer told Bloomberg News that a similar offer had been extended to rival Sony Corp.
SONY,
-2.62%
for its PlayStation consoles, but said that offer had so far been rebuffed.

A “Call of Duty” title has not been available on Nintendo since 2013.

In an interview with the Washington Post published Tuesday, Spencer said there was no Nintendo “Call of Duty” release date set yet, but that if the merger closes — it has a June 2023 target date — future “Call of Duty” games would be released for all platforms at once. “Once we get into the rhythm of this, our plan would be that when [a Call of Duty game] launches on PlayStation, Xbox, and PC, that it would also be available on Nintendo at the same time,” he told the Post.

Nintendo shares
7974,
+0.33%
rose slightly in Tokyo trading following the news. Microsoft shares
MSFT,
-2.03%
fell Monday, and are down 17% year to date, compared to the S&P 500’s
SPX,
-1.44%
17% decline this year.

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December 6, 2022

Roku stock plunges as downbeat earnings forecast assumes ad budgets could ‘degrade’

Roku Inc. shares plummeted 19% in after-hours trading Wednesday after the streaming company topped expectations with its latest results but gave a weaker-than-anticipated outlook for the holiday quarter as economic conditions could further “degrade advertising budgets.”

For the fourth quarter, Roku executives anticipate $800 million in revenue and a loss of $135 million on the basis of adjusted Ebitda. The FactSet consensus called for $899 million in revenue as well as a $48 million adjusted Ebitda loss.

“As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market,” the company said in its shareholder letter. “We expect these conditions to be temporary, but it is difficult to predict when they will stabilize or rebound.”

Chief Financial Officer Steve Louden shared on a call with reporters following the release that the company’s forecast “reflects the fact that we see a lot of challenges in the macro environment.”

He explained that Roku tends to be more exposed to the scatter ad market — which represents ads bought during the quarter — than the typical TV network. Scatter spending is easy for marketers to turn on, but also easier for them to turn off, he noted.

The forecast overshadowed the results from Roku’s third quarter, which were broadly better than expected.

The company posted a net loss of $122.2 million, or 88 cents a share, whereas it logged net income of $68.9 million, or 48 a share, in the year-earlier period. Analysts tracked by FactSet were expecting a $1.29 loss on a per-share basis.

Roku also reported a loss of $34 million on the basis of adjusted earnings before interest, taxes, depreciation and amortization. The company had posted positive adjusted Ebitda of $130 million in the year-before quarter. The FactSet consensus was for a $74 million loss on the non-GAAP metric.

Revenue rose to $761 million from $680 million, while analysts were anticipating $696 million.

The company generated $670 million in platform revenue and $91 million in player revenue. Analysts were expecting platform revenue of $613 million and player revenue of $87 million.

Roku had 65.4 million active accounts in the latest quarter, up from 63.1 million in the second quarter. Average revenue per user was $44.25 on a trailing-12-month basis, compared with $44.10 in the second quarter and $40.10 in the prior year’s third quarter.

Analysts were anticipating 64 million active accounts and $43.40 in average revenue per user.

Louden noted on the media call that the account numbers “outperformed expectations.” The company has seen “strong sales of smart TVs both in the U.S. and internationally,” with Louden adding that “it’s hard to tell how much is driven by a shift back to home or back to streaming, which is a very good value proposition if money is tight.”

Viewers spent 21.9 billion hours streaming content through Roku’s platform in the period. The FactSet consensus was for 20.9 billion hours streamed.

As companies like Netflix Inc.
NFLX,
-4.80%
and Walt Disney Co.
DIS,
-3.94%
explore ad-supported streaming more deeply, Louden sees opportunity for Roku to be of further value.

“That changes their focus a bit from only thinking about subscribers to thinking about engagement” and he sees Roku’s team members as “experts in understanding how consumers look at that.”

The company also noted in its shareholder letter that CFO Louden intends to leave Roku at some point in 2023 after helping to recruit and train his successor.

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November 2, 2022

21 dividend stocks yielding 5% or more of companies that will produce plenty of cash in 2023

When the stock market has jumped two days in a row, as it has now, it is easy to become complacent.

But the Federal Reserve isn’t finished raising interest rates, and recession talk abounds. Stock investors aren’t out of the woods yet. That can make dividend stocks attractive if the yields are high and the companies produce more cash flow than they need to cover the payouts.

Below is a list of 21 stocks drawn from the S&P Composite 1500 Index
SP1500,
+3.12%
that appear to fit the bill. The S&P Composite 1500 is made up of the S&P 500
SPX,
+3.06%,
the S&P 400 Mid Cap Index
MID,
+3.18%
and the S&P Small Cap 600 Index
SML,
+3.80%.

The purpose of the list is to provide a starting point for further research. These stocks may be appropriate for you if you are looking for income, but you should do your own assessment to form your own opinion about a company’s ability to remain competitive over the next decade.

Cash flow is key

One way to measure a company’s ability to pay dividends is to look at its free cash flow yield. Free cash flow is remaining cash flow after planned capital expenditures. This money can be used to pay for dividends, buy back shares (which can raise earnings and cash flow per share), or fund acquisitions, organic expansion or for other corporate purposes.

If we divide a company’s estimated annual free cash flow per share by its current share price, we have its estimated free cash flow yield. If we compare the free cash flow yield to the current dividend yield, we may see “headroom” for cash to be deployed in ways that can benefit shareholders.

For this screen, we began with the S&P Composite 1500, then narrowed the list as follows:

Dividend yield of at least 5.00%.
Consensus free cash flow estimate available for calendar 2023, among at least five analysts polled by FactSet. We used calendar-year estimates, even though fiscal years for many companies don’t match the calendar.
Estimated 2023 free cash flow yield of at least double the current dividend yield.

For real-estate investment trusts, dividend-paying ability is measured by funds from operations (FFO), a non-GAAP figure that adds depreciation and amortization back to earnings. Adjusted funds from operations (AFFO) takes this a step further, subtracting cash expected to be used to maintain properties. So for the two REITs on the list, the FCF yield column makes use of AFFO.

For many companies in the financial sector, especially banks and insurers, free cash flow figures aren’t available, so the screen made use of earnings-per-share estimates. These are generally considered to run close to actual cash flow for these heavily regulated industries.

Here are the 21 companies that passed the screen, with dividend yields of at least 5% and estimated 2023 FCF yields at least twice the current payout. They are sorted by dividend yield:

Company	Ticker	Type	Dividend yield	Estimated 2023 FCF yield	Estimated “headroom”
Uniti Group Inc.	UNIT, +7.36%	Real-Estate Investment Trusts	8.33%	25.25%	16.92%
Hanesbrands Inc.	HBI, +5.56%	Apparel/ Footwear	8.33%	17.29%	8.96%
Kohl’s Corp.	KSS, +5.80%	Department Stores	7.68%	16.72%	9.04%
Rent-A-Center Inc.	RCII, +10.40%	Finance/ Rental/ Leasing	7.52%	17.26%	9.73%
Macerich Co.	MAC, +8.18%	Real-Estate Investment Trusts	7.43%	18.04%	10.60%
Devon Energy Corp.	DVN, +5.72%	Oil & Gas Production	7.13%	14.47%	7.33%
AT&T Inc.	T, +1.19%	Major Telecommunications	6.98%	14.82%	7.84%
Newell Brands Inc.	NWL, +5.16%	Industrial Conglomerates	6.59%	17.42%	10.82%
Dow Inc.	DOW, +2.96%	Chemicals	6.18%	15.63%	9.45%
LyondellBasell Industries NV	LYB, +3.64%	Chemicals	6.09%	16.07%	9.99%
Scotts Miracle-Gro Co. Class A	SMG, +5.01%	Chemicals	6.04%	12.68%	6.65%
Diamondback Energy Inc.	FANG, +5.23%	Oil & Gas Production	5.56%	13.63%	8.08%
Best Buy Co. Inc.	BBY, +5.86%	Electronics/ Appliance Stores	5.53%	14.08%	8.55%
Viatris Inc.	VTRS, +5.62%	Pharmaceuticals	5.50%	28.95%	23.45%
Prudential Financial Inc.	PRU, +5.66%	Life/ Health Insurance	5.38%	13.30%	7.91%
Ford Motor Co.	F, +7.76%	Motor Vehicles	5.23%	15.95%	10.72%
Invesco Ltd.	IVZ, +6.76%	Investment Managers	5.23%	14.95%	9.73%
Franklin Resources Inc.	BEN, +4.37%	Investment Managers	5.17%	13.21%	8.04%
Kontoor Brands Inc.	KTB, +0.73%	Apparel/ Footwear	5.17%	14.15%	8.98%
Seagate Technology Holdings PLC	STX, +4.09%	Computer Peripherals	5.11%	13.19%	8.07%
Foot Locker Inc.	FL, +1.35%	Apparel/ Footwear Retail	5.03%	15.52%	10.49%
Source: FactSet

Any stock screen has its limitations. If you are interested in stocks listed here, it is best to do your own research, and it is easy to get started by clicking the tickers in the table for more information about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

For the “estimated FCF yields,” consensus free cash flow estimates for calendar 2023 were used for all companies except the following:

For the REITs, (Uniti Group Inc.
UNIT,
+7.36%
and Macerich Co.
MAC,
+8.18%
), consensus AFFO estimates were used.
Consensus EPS estimates were used for Prudential Financial Inc.
PRU,
+5.66%,
Invesco Ltd.
IVZ,
+6.76%
and Franklin Resources Inc.
BEN,
+4.37%.

Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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October 4, 2022

Tag: home electronics

This week in earnings

The call to put on your calendar

The numbers to watch

Dividend stocks are down

The opportunity — high relative yields

Examples of high-quality stocks with high relative dividend yields

This week in earnings

The call to put on your calendar

The numbers to watch

The Vision Pro headset

New iPhone software

A 15-inch MacBook Air

Mac Pro and Mac Studio

New iPad software

New Mac software

Audio and video improvements

Apple Watch software enhancements

Cash flow is key