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Tag: industrial news

  • Alphabet earnings push stock up 6%; CFO Ruth Porat to become president, chief investment officer

    Alphabet earnings push stock up 6%; CFO Ruth Porat to become president, chief investment officer

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    Google parent Alphabet Inc.’s stock jumped 6% in after-hours trading Tuesday after the company beat estimates on the top and bottom line, and announced the transition of Chief Financial Officer Ruth Porat to president and chief investment officer in September.

    Fueled by strong advertising sales, Alphabet
    GOOGL,
    +0.56%
     
    GOOG,
    +0.75%
    racked up fiscal second-quarter net income of $18.4 billion, or $1.44 a share, compared with net income of $16 billion, or $1.21 a share, in the same quarter a year ago.

    Total revenue was $74.6 billion, compared with $69.7 billion a year ago. Sales minus traffic-acquisition costs were $62.06 billion, vs. $57.5 billion last year.

    Analysts surveyed by FactSet had expected on average net earnings of $1.34 a share on revenue of $72.85 billion and ex-TAC revenue of $60.25 billion.

    “There’s exciting momentum across our products and the company, which drove strong results this quarter,” Alphabet Chief Executive Sundar Pichai said in a statement. “Our continued leadership in AI and our excellence in engineering
    and innovation are driving the next evolution of Search, and improving all our services.”

    During a conference call Tuesday afternoon, he highlighted the intertwining of advertising and Alphabet’s strides in generative AI. He added the company continues to consolidate and align operations to streamline spending.

    Shares of Alphabet have advanced 39% so far this year largely on the strength of generative AI and its potential. The broader S&P 500 index 
    SPX,
    +0.28%
    is up 19%. Alphabet’s stock inched up 0.6% to $122.21 in the regular session Tuesday.

    Google’s total advertising sales improved to $58.14 billion from $56.3 billion a year ago, and edged analysts’ average expectations of $57.45 billion. Google Cloud hauled in $8 billion, compared with $6.3 billion last year. YouTube ad sales rebounded to $7.7 billion from $7.34 billion a year ago.

    “The proverbial floodgates aren’t opening yet but clients are starting to see pockets of opportunity and are willing to invest for a direct return,” Aaron Levy, vice president of paid search at Tinuiti, said in an email.

    Porat, who has played an essential role in Google’s advertising success since she became CFO in 2015, will start her new role on Sept. 1. She will be responsible for Alphabet’s investments in its Other Bets portfolio, and the company’s investments in countries and communities around the world. Porat will continue to report to Pichai.

    “We see technology can make so much of a difference in people’s lives… and in economic growth globally,” Porat said during the conference call late Tuesday.

    The monetization of AI continues to be an obsession of investors and Wall Street. Microsoft Corp.’s
    MSFT,
    +1.70%
    AI version, Bing, hit the market first, but Google’s competing entry, Bard, is making headway, according to analysts. Alphabet is ramping up AI initiatives to improve operational efficiency and productivity.

    When asked on the call about AI monetization, Pichai said the technology expands the company’s total addressable market, brings in potential new customers, deepens the versatility of its product portfolio, and differentiates core products such as cybersecurity.

    AI’s importance was underscored by a Wall Street Journal report on Tuesday that Google co-founder Sergey Brin has been spotted at the company’s Mountain View, Calif., headquarters in recent weeks working with AI researchers on a large-scale project. Brin has been largely out of sight after stepping down from an executive role at parent company Alphabet in 2019.

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  • Microsoft earnings top estimates, but stock falls as execs detail AI’s costs

    Microsoft earnings top estimates, but stock falls as execs detail AI’s costs

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    Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading Tuesday after the company discussed the year ahead.

    The technology giant has won favor on Wall Street for its positioning in the artificial-intelligence revolution, though Chief Financial Officer Amy Hood said on Tuesday’s earnings call that “even with strong demand and a leadership position,” Microsoft’s
    MSFT,
    +1.70%
    “growth from our AI services will be gradual.” Microsoft’s AI for its Azure cloud-computing business needs to ramp, and the company is working toward the general availability of its Copilot productivity product.

    Microsoft’s AI revenue impacts will thus be weighted toward the second half of the new fiscal year that just began, she continued. Meanwhile, she expects that Microsoft’s capital expenditures will rise sequentially each quarter “as we scale to meet demand signals.”

    Hood’s commentary came as Microsoft posted fiscal fourth-quarter results Tuesday afternoon that showed a 15% jump in revenue for the company’s cloud-computing segment, which it calls Intelligent Cloud. Revenue for the segment came in at $24.0 billion, while analysts had been anticipating $23.8 billion. The growth rate was 17% on a currency-neutral basis.

    The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. Microsoft’s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The FactSet consensus was for 27% growth in constant currency.

    “While we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,” Evercore ISI analyst Kirk Materne said in a note to clients.

    For the September quarter, Microsoft anticipates 25% to 26% in constant-currency Azure growth.

    The cloud migration is still in the “early innings,” Chief Executive Satya Nadella said on the call, while also highlighting a “new world of AI driving a set of new workloads.”

    “We think of that, again, being pretty expansive from a TAM [total addressable market] opportunity and we’ll play it out,” he continued, though the company is also up against the “law of large numbers” given the massive scale of its cloud business.

    The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. Analysts tracked by FactSet were modeling $2.55 a share.

    Overall revenue for Microsoft climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion.

    See also: Microsoft bulls are excited as company reveals pricing for AI offering

    Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. That part of the business includes LinkedIn and both commercial and consumer versions of Office. Analysts had been looking for $18.1 billion.

    Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. The FactSet consensus was for $13.6 billion.

    Nadella, meanwhile, expressed optimism about the eventual opportunities brought upon by Microsoft’s Copilot offerings.

    “I do think people are going to look at how can they complement their [operating-expense] spend with essentially these Copilots in order to drive more efficiency and, quite frankly, even reduce the burden and drudgery of work on their OpEx and their people and so on,” he said.

    Evercore’s Materne called the overall results “solid” amid “a lot of macro headwinds.”  Microsoft’s investment story “gets stronger in [the second half of the calendar year] as some optical headwinds reverse and [comparisons] soften, and Microsoft’s position in the enterprise market continues to get stronger as customers look to consolidate spending,” he wrote.

    Read: Amazon finally is nearing a bottom on this key measure, analyst says

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  • UPS, Teamsters reach tentative deal, averting threat of a strike

    UPS, Teamsters reach tentative deal, averting threat of a strike

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    Package-delivery giant United Parcel Service Inc. and the Teamsters union on Tuesday said they had reached a tentative five-year labor agreement that would boost jobs, pay and other protections, after increasingly vocal threats of a strike reignited concerns about the impact to the economy and the nation’s shipping ecosystem.

    Teamster locals in the U.S. and Puerto Rico will now meet on July 31 to review and recommend the tentative deal, which will cover 340,000 workers, the Teamsters said in a release. Rank-and-file members will vote on the deal starting on Aug. 3, with the voting process running until Aug. 22.

    Under the deal’s terms, current full and part-time UPS
    UPS,
    -1.32%
    workers in the Teamsters union will get $2.75 more per hour this year, and $7.50 more over the course of the contract, according to a release.

    Current part-timers would have their pay raised to at least $21 per hour immediately, with a 48% average total wage hike over the next five years. New part-time hires would start at $21 per hour and advance to $23 per hour, the Teamsters said.

    Full-time UPS delivery drivers in the Teamsters union would see their average top pay rate rise to $49 per hour.

    The deal also ends a two-tier wage system at UPS and makes Martin Luther King Day a holiday for union members. UPS will also outfit newer delivery vehicles with air conditioning and cargo ventilation. The deal also ends forced overtime on union members’ days off.

    Shares of UPS were up 0.8% in afternoon trade. Shares of rival FedEx Corp.
    FDX,
    +0.34%
    were up 0.5%.

    Talks between UPS and the union began in April. Some Wall Street analysts expected both sides to reach a deal, despite a more hardline stance from Teamster leadership.

    “Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits,” Teamsters General President Sean O’Brien said in a statement.

    “Teamster labor moves America,” he continued. “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations.”

    UPS Chief Executive Carol Tome, in a separate statement, also praised the deal.

    “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” she said.

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  • UPS, Teamsters Reach Agreement on New Contract

    UPS, Teamsters Reach Agreement on New Contract

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    UPS, Teamsters Reach Agreement on New Contract

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  • U.S. stocks drift higher as tech earnings, Fed rate decision loom

    U.S. stocks drift higher as tech earnings, Fed rate decision loom

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    U.S. stocks were modestly higher on Tuesday as the Dow’s winning streak continued for now, while investors waited for big tech company earnings after the bell and the Federal Reserve’s interest rate decision on Wednesday.

    How stocks are trading

    • The S&P 500 climbed 5 points, or 0.1%, to 4,560

    • The Dow Jones Industrial Average gained 12 points, or 0%, to 35,423

    • The Nasdaq Composite increased 51 points, or 0.3%, to 14,110

    On Monday, the Dow Jones Industrial Average
    DJIA,
    +0.21%
    rose 184 points, or 0.52%, to 35411, the S&P 500
    SPX,
    +0.30%
    increased 18 points, or 0.4%, to 4555, and the Nasdaq Composite
    COMP,
    +0.66%
    gained 26 points, or 0.19%, to 14059.

    What’s driving markets

    The Dow Jones Industrial Average is on an 11-session winning streak, its best run in more than six years, as hopes build that the Federal Reserve’s remaining interest rate hikes this year will not cause a recession as inflation cools.

    Whether the Dow can make it an even dozen days of gains and extend its rally even further to fresh 15-month highs will likely depend on the next few days containing corporate earnings reports and Fed comments.

    Dow components 3M
    MMM,
    +5.58%
    and Verizon Communications Inc.
    VZ,
    +0.60%
    both reported results before the bell. So did big name companies like General Electric
    GE,
    +5.97%
    and General Motors
    GM,
    -4.44%    .

    After the bell, come Microsoft
    MSFT,
    +1.18%
    and Visa
    V,
    -0.28%    ,
    with non-Dow member Alphabet
    GOOG,
    +0.11%
    also a highlight. Coca-Cola
    KO,
    -0.23%
    and Boeing
    BA,
    -1.67%
    are among those Dow members presenting their numbers on Wednesday.

    Investors will be want to hear from Alphabet and Microsoft about their cloud businesses, the ongoing impact and use of artificial intelligence and their general outlooks for American and global markets, David Sekera, chief U.S. market strategist at Morningstar, said in a phone interview.

    Meanwhile, equity markets are in “a little bit of a holding period” ahead of the events to come, he noted.

    Read also: IMF sees signs global economy is headed in the right direction

    Wednesday also sees the Fed’s latest monetary policy decision. The market is certain the central bank will increase its policy interest rate by another 25 basis points to a range of 5.25% to 5.50%.

    But investors are less sure of whether that will be the last hike of the current cycle, so the Fed’s accompanying statement and what Chair Jerome Powell says at his press conference will be the main drivers of bonds, equities and forex around the event.

    “Our view is the Fed is one and done,” Sekera said. Even with expectations that central banks will continue to “talk tough” on inflation, Sekera said Morningstar’s base case is that July’s 25-basis point hike is the last, while inflation continues to cool over the second half of the year. Rate cuts could occur as early as February, he said.

    At Vanguard, Andrew Patterson, senior international economist, said in a note that the Fed could reach its terminal rate “with 1 or 2 more hikes.” The central bank is “likely to remain on hold through at least the end of the year.  If inflation proves persistent, this may be a sign of a higher neutral rate and the Fed may need to go to 6% or beyond in order to bring inflation back to target,” he said.

    Others think there’s more rate hikes to go. “There is a great chance that the Fed will spoil your mood if you are among those thinking that this week’s rate hike will be the last for this tightening cycle in the U.S.,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

    Read also: ‘No chance we’re having a soft landing’: Stock-market strategist David Rosenberg gives Powell’s Fed no credit — and no mercy

    Meanwhile, helping underpin sentiment on Tuesday was a rebound in Chinese stocks, notably property developers after Beijing signaled support for the heavily-indebted sector.

    In other economic data Tuesday, home prices increased for the fourth consecutive month in May, according to the S&P Case-Shiller Index. May’s strongest price gains were in Midwest cities, but the overall gains underscore the ongoing lack of supply of homes.

    While home prices are rising, so is consumer confidence. One gauge on consumer sentiment reached a two-year high, according to data out Tuesday. The Conference Board’s index for July increased to 117.0, which was above economists’ expectations and up from a revised 110.1 last month.

    While mood is brightening, the index is still below pre-pandemic levels as consumers contend with the toll of high prices and rising interest rates.

    Companies in focus

    • General Electric Co.
      GE,
      +5.97%
      shares up more than 6% and approaching a nearly five-year high after second quarter results from the aerospace and renewable energy company that topped expectation. The company reported net income of $946 million, or 86 cents per share, from a loss of $1.25 billion, or $1.13 a share one year ago, while free cash flow and revenue also beat estimates.

    • Verizon Communications Inc.
      VZ,
      +0.60%
       shares are up more than 0.7% after the telecommunications company topped profit expectations in its latest earnings but came just below revenue expectations. The company reported $1.21 earnings per share, above FactSet consensus for $1.17 earnings per share.

    • General Motors Co.
      GM,
      -4.44%
      shares are more than 3% lower after the car maker delivered better than expected second quarter earnings and raised its guidance. The company had adjusted earnings per share of $1.91, topping the $1.86 consensus according to FactSet.  

    • 3M Co.
      MMM,
      +5.58%
      shares are more than 6% higher Tuesday after results showing the company booked a loss in connection with a litigation settlement over “forever chemicals.” But taking away the one-time charge, the company still topped adjusted profit expectations and raised its full-year outlook.

    • Spotify Technology
      SPOT,
      -13.68%
      shares tumbled about 12% Tuesday after the streaming giant easily surpassed subscriber-growth expectations for its latest quarter but failed to sport upside on its key financials.

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  • F5, Logitech, Cadence Design, GE, GM, Microsoft, Alphabet, and More Stock Market Movers

    F5, Logitech, Cadence Design, GE, GM, Microsoft, Alphabet, and More Stock Market Movers

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    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-9cc9fac3

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  • Unilever PLC 1H EPS EUR1.40

    Unilever PLC 1H EPS EUR1.40

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    By Joe Hoppe

    Unilever said Tuesday that its second-quarter sales growth beat expectations, as price increases outweighed a slight decline in volumes, and it raised full-year guidance.
    

    

    The Anglo-Dutch retailer–which owns consumer brands like Ben & Jerry’s ice cream, Dove soap and Domestos cleaning products–posted underlying sales growth of 7.9% for the second quarter of the year, with a decrease of 0.3% in volumes and an increase of 8.2% in prices. Analysts’ consensus for underlying sales growth was 6.4%, according to a forecast from the company.
    

    “As underlying price growth has sequentially moderated from 13.3% in the fourth quarter of 2022, volumes were virtually flat with a step-up in performance in Beauty & Wellbeing and Personal Care offsetting volume declines elsewhere,” it said.
    

    For the first half as a whole, sales growth came in at 9.1%, beating the company’s compiled consensus of 8.3%.
    

    The company said first-half pretax profit was 5.27 billion euros ($5.83 billion) compared with EUR4.36 billion a year earlier.
    

    Turnover came in at EUR30.43 billion, including EUR15.74 billion in the second quarter. Analysts expected half-year and second-quarter turnover of EUR30.34 billion and EUR15.59 billion, respectively.
    

    The company raised its guidance for full-year underlying sales growth for 2023 to be above 5%. It had previously guided at the upper end of 3%-5%.
    

    The board declared a quarterly dividend of 42.68 European cents a share, flat on the first half of 2022.
    

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

    

    

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    Tupperware’s stock sees largest daily gain on record amid meme-like surge
    
			
    Tupperware’s stock sees largest daily gain on record amid meme-like surge
    
			
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    Tupperware Brands Corp. shares enjoyed their best day on record Monday despite an apparent absence of news related to the beleaguered seller of kitchen and home products.
    

    The stock shot up more than 75% Monday in meme-like trading action and amid vastly higher-than-average volume. The surge marked Tupperware’s
    
        TUP,
    
        +75.56%
    
       largest one-day percentage gain yet, surpassing the prior record of a 67.7% increase on July 29, 2020, according to Dow Jones Market Data.
    

    

    Just shy of 130 million Tupperware shares changed hands on the day, easily breaking the record of 42.7 million shares traded, also set on July 29, 2020. The name’s 30-day average volume is about 2.4 million shares.
    

    The stock finished Monday at $1.58 to record its highest close since April 6, 2023, according to Dow Jones Market Data.
    

    Tupperware shares remain off 62% so far in 2023 amid serious challenges for the company. It issued a going-concern warning in April and disclosed that it has hired financial advisers, and it said earlier in the year that it had discovered misstatements in past financial reports. 
    

    Don’t miss: Why investors gamble on shares of bankrupt companies — Bed Bath & Beyond, for example
    

    The company’s website doesn’t appear to show any recent filings or press releases that would have driven Monday’s stock move. Tupperware didn’t immediately respond to a MarketWatch request for comment about the day’s trading activity.
    

    Tupperware’s stock is up 136% over a two-session span, with the rally coming as investors don’t necessarily seem spooked by companies sporting bankruptcy risk. Used-car retailer Carvana Co.
    
        CVNA,
    
        +1.36%    ,
    
       once thought to be on the brink of failure, has seen its shares come roaring back this year, up nearly 900% over the course of 2023.
    

    See more: Carvana’s stock has roared back from the brink. This chart shows its meteoric surge.
    

    

    

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    ‘Oppenheimer’ gives stock investors another reason to be bullish about nuclear energy
    
			
    ‘Oppenheimer’ gives stock investors another reason to be bullish about nuclear energy
    
			
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    One of the hottest movies of the summer is the staggeringly good biopic “Oppenheimer,” about the man who oversaw the frantic race to develop the atomic bomb during World War II. 
    

    The atom bomb dropped on Hiroshima, Japan on Aug 6, 1945 was a fission-style device. This also happens to be the same basic physics behind nuclear reactors that are in use today. It’s a reminder that technology can be, at its essence, agnostic: Whether it is used for malevolent or benevolent purposes (in nuclear fission’s instance, an instrument of death or clean, carbon-free electricity) depends upon the intent of the user. 
    

    

    Fission reactors generate about 10% of the world’s electricity today. The United States gets even more of its electricity this way, about a fifth.
    

    These percentages are likely to rise as global demand for electricity — and concerns about global warming and climate change —  rise. This will present opportunities for long-term oriented investors. The lion’s share of this demand — about 70%, says the Paris-based International Energy Agency (IEA), will come from India, which the United Nations says is now the world’s most populous country, China, and Southeast Asia. Put another way, “the world’s growing demand for electricity is set to accelerate, adding more than double Japan’s current electricity consumption over the next three years,” says Fatih Birol, the IEA’s executive director.
    

    While fossil fuels remain the dominant source of electricity generation worldwide — the Central Intelligence Agency estimates that it provides about 70% of America’s electricity, 71% of India’s and 62% of China’s, for example—the IEA report says future demand will be met almost exclusively from two sources: renewables and nuclear power. “We are close to a tipping point for power sector emissions,” the IEA says. “Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.”
    

    

    

    
        “ The Biden administration is a big booster of nuclear energy.  ”
      
    

    

    

    It’s helpful that the Biden administration is a big booster of nuclear energy, which the White House sees as an integral part of its broader effort to move the U.S. economy away from fossil fuels. The Department of Energy says that the country’s 93 reactors generate more than half of America’s carbon-free electricity. But price pressures from wind, solar and natural gas (which the feds call “relatively clean” even though it emits about 60% of coal’s carbon levels) have putseveral reactors out of business in recent years. 
    

    The bipartisan infrastructure bill that Biden signed into law in November 2021 includes $6 billion, spread out over several years, for the so-called Civil Nuclear Credit Program, designed to keep reactors — and the high-paying jobs that come with them — running. If a plant were to close, it would “result in an increase in air pollutants because other types of power plants with higher air pollutants typically fill the void left by nuclear facilities,” the administration says. U.S. Energy Secretary Jennifer Granholm has said the Biden administration is “using every tool available” to get the country powered by clean energy by 2035.
    

    The private sector is beginning to stir. Last week, Maryland-based X-Energy said it would build up to 12 reactors in Central Washington state, for Energy Northwest, a public utility. These wouldn’t be the behemoth-type reactors we’re used to seeing, but “advanced small, nuclear reactors.” X-Energy, which is privately held,  has also been selected by Dow
    
        DOW,
    
        -1.40%
    
       to construct a similar facility in Texas.  
    

    Other companies are also rolling out new technology to meet demand. Nuclear fusion — a breakthrough in that it creates more energy than the Oppenheimer-era fission model and at a lower cost — is likely to be the basis for reactors in the years ahead; the Washington, D.C.-based Fusion Industry Association thinks the first fusion power plant could come online by 2030. After seven rounds of funding, one fusion company, Seattle-based Helion Energy, is currently valued at around $3.6 billion, and appears headed for a public offering.    
    

    Here too, the Biden administration is getting involved. In May, the Department of Energy announced $46 million in funding for eight other fusion companies. “We have generated energy by drawing power from the sun above us. Fusion offers the potential to create the power of the sun right here on Earth,” says Granholm.  
    

    There are several opportunities here for long-term investors. You can pick your way through any number of publicly held companies, including more traditional utilities, or spread your bet across the industry through a handful of exchange-traded funds. The largest of these is the Global X Uranium Fund 
    
        URA,
    
        +0.78%    ,
    
       with about $1.6 billion in assets. It’s up about 9% year-to-date. The VanEck Uranium + Nuclear Energy Fund 
    
        NLR,
    
        +0.41%
    
       is up almost 10% and sports a 1.8% dividend yield. These are respectable year-t0-date returns, even though they lag the S&P 500
    
        SPX,
    
        +0.32%
    
       (up close to 19%) by a wide margin. 
    

    More: Net-zero by 2050: Will it be costly to decarbonize the global economy?
    

    Also read: Fukushima’s disaster led to a “lost decade” for nuclear markets. Russia, low carbon goals help stage a comeback.
    

    

    

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    AMC, Chevron, Tesla, Domino’s, Microsoft, and More Stock Market Movers
    
			
    AMC, Chevron, Tesla, Domino’s, Microsoft, and More Stock Market Movers
    
			
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    Ocado to Receive GBP200 Mln in Settlement from AutoStore
    
			
    Ocado to Receive GBP200 Mln in Settlement from AutoStore
    
			
     [ad_1]
    

    

    By Christian Moess Laursen
    

    Ocado Group said Monday that it has reached an agreement to settle all litigation with Norwegian peer AutoStore over e-commerce patent claims.
    

    The online grocer and retail-technology specialist said AutoStore will pay Ocado 200 million pounds ($257.1 million) in 24 monthly installments starting this month.
    

    

    The settlement includes a cross-licence of certain patents between the two companies, whereby they both have freedom to access and use technology covered by each other’s pre-2020 patents.
    

    The agreement gives access to part of each company’s patent portfolio for both of them to use or develop their own products, Ocado said.
    

    The settlement ends a three-year row that started in 2020, when AutoStore filed a claim for patent infringement against Ocado regarding e-commerce tech.
    

    Write to Christian Moess Laursen at christian.moess@wsj.com
    

    

    

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    AMC revises stock-conversion settlement plan after Friday’s surprise court setback
    
			
    AMC revises stock-conversion settlement plan after Friday’s surprise court setback
    
			
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    AMC Entertainment Holdings Inc. has submitted a revised proposal for its stock-conversion plan, after a judge rejected a settlement Friday that would have given a green light to the deal.
    

    In a letter to investors that was posted Sunday on Twitter, AMC Chief Executive Adam Aron said that a modified proposal was filed Saturday with the Delaware Chancery Court intended to address the court’s concerns. If the court agrees, Aron said he hopes to implement the plan “as soon as possible.”
    

    

    Movie-theater chain AMC
    
        AMC,
    
        +1.62%
    
       has wanted to turn its its so-called APE
    
        APE,
    
        -2.17%
    
       — or AMC Preferred Equity — preferred units into common stock as part of its battle to eliminate debt. But Delaware Chancery Court Vice Chancellor Morgan Zurn on Friday rejected a settlement with opposing shareholders that would have allowed that conversion to move forward. That sent AMC shares rocketing more than 60% higher in after-hours trading Friday.
    

    “AMC must be in a position to raise equity capital,” Aron stressed in his letter Sunday, saying that if the company is unable to do so, the risk of running out of cash in 2024 or 2025 rises.
    

    “The risk of financial collapse is not whimsical,” Aron said, noting the bankruptcies of rival theater chain Cineworld/Regal and retailer Bey Bath & Beyond.
    

    AMC shares are up 8% year to date, but have sunk 54% over the past 12 months.
    

    

    

    

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    With Microsoft, Meta and Alphabet earnings hanging on AI, more investors are asking: ‘How are you going to pay for that?’
    
			
    With Microsoft, Meta and Alphabet earnings hanging on AI, more investors are asking: ‘How are you going to pay for that?’
    
			
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    Shares of big tech companies have coasted through this year on AI euphoria, but as Microsoft Corp., Alphabet Inc. and Meta Platforms Inc. prepare to report results this week, some investors are starting to ask how much those AI advancements might actually cost. 
    

    Those questions have surfaced after several months during simply saying “AI” on earnings calls appeared to be enough for investors. If  the economy sours though — as some expect in the second half of this year or next year — big tech’s AI ambitions could go with it.
    

    

    “Given the exorbitant costs associated with the development, hosting and serving of AI products, many investors are concerned about the potential for [fiscal 2024] commentary regarding a material increase,” Jefferies analyst Brent Thill wrote, according to a MarketWatch earnings preview for Microsoft’s
    
        MSFT,
    
        -0.89%
    
       results.
    

    Microsoft and Alphabet Inc.
    
        GOOGL,
    
        +0.69%
    

            GOOG,
    
        +0.65%    ,
    
       which both report on Tuesday, have been in heated competition in the world of online search and digital advertisements, as Microsoft leans more on its massive investments in research lab OpenAI to muscle up its own search capabilities. But a Deutsche Bank analyst said that so far, Google appears to have the upper hand in that battle. 
    

    Still, for Microsoft, after a broader pullback in IT spending earlier this year, analysts have found more to like about its cloud-computing business — namely market-share gains, generally-sturdy demand, and whatever ways AI can fit into the equation. Wolfe Research analyst Alex Zukin, in a recent note, said he believed “the focus will turn from what is good enough, to how good can it be,” as Microsoft moves deeper into AI. 
    

    “How good can it be?” might also be a question for Meta
    
        META,
    
        -2.73%    ,
    
       which reports second-quarter results on Wednesday. 
    

    Shares of the social-media company have more than doubled in value so far this year. JMP analyst Andrew Boone, in a recent note, cited likely improvements in Meta’s digital ad segment, better engagement, and a broader advertising backdrop that “appears to be stable” after a slowdown in spending, Still, there are signs that the initial user attraction to Threads, Meta’s answer to Twitter, has fizzled. 
    

    This week in earnings
    

    For the week ahead, 166 companies in the S&P 500 index report results, including 12 from the Dow, according to FactSet. Among them are Domino’s Pizza Inc.
    
        DPZ,
    
        -0.62%    ,
    
       which now plans to deliver pizza via Uber Eats after years of chafing at third-party delivery apps. Industrials General Electric Co.
    
        GE,
    
        -0.82%
    
       and 3M Co.
    
        MMM,
    
        +0.04%
    
       also report, after 3M agreed to pay $10.3 billion to settle accusations it was responsible for so-called “forever chemicals” in drinking water. 
    

    Quick-service restaurant chains Chipotle Mexican Grill Inc.
    
        CMG,
    
        +0.20%
    
       and McDonald’s Corp.
    
        MCD,
    
        -0.51%
    
       also report, with BofA analysts expecting an “almost normal” quarter for the industry, after spending at chain restaurants grew last month and costs for some ingredients started to ease following two years of supply disruptions. Auto makers General Motors Co.
    
        GM,
    
        -1.81%
    
       and Ford Motor Co.
    
        F,
    
        -0.71%
    
       also report, and while parts shortages that have constrained vehicle production have shown signs of fading, so has electric-vehicle “euphoria.”
    

    The calls to put on your calendar
    

    Visa, Mastercard: Earlier this month executives from the big banks said U.S. consumers are generally doing OK despite still-rampant inflation, although perhaps less OK than in prior months. This week credit-card giants Visa Inc. and Mastercard Inc. report results on Tuesday and Thursday, respectively.  The profit, sales and credit-card volume figures from Visa
    
        V,
    
        -0.15%
    
       and Mastercard
    
        MA,
    
        -0.14%
    
       will offer more specifics on consumer spending, as vacations and concerts compete with more expensive and more pressing needs, like groceries and other bills. 
    

    Shares of Visa and Mastercard are up so far this year, but some analysts said there could be more room investors to step in. SVB MoffettNathanson analyst Lisa Ellis recently said shares of both companies were hovering at “unusually attractive” levels. 
    

    The number to watch
    

    Mattel outlook, and anything ‘Barbie’-related: The “Barbie” movie hit theaters nationwide on Friday. And after an epic marketing campaign, Mattel Inc.’s investors, banking on the film to drive a rebound for the toy maker during the second half of this year, will be zeroed in on the box-office results following the film’s debut on Friday. 
    

    Expectations for the film are huge. And when Mattel
    
        MAT,
    
        -0.42%
    
       reports second-quarter results on Wednesday, executives could offer the first answers to some big questions: Has the film helped revive toy sales? Sales for anything else? Will the “Barbenheimer” effect help or hurt financials? 
    

    The film — directed by Greta Gerwig, written Gerwig and Noah Baumbach, and starring Margot Robbie and Ryan Gosling — brings together two writers with indie bona fides and two actors with mainstream starpower. Reviews so far have been favorable, and Barbie is already Mattel’s most profitable franchise. But the movie isn’t directly geared toward children, movie theaters have struggled to get back on track after pandemic lockdowns, and toy demand through this year has been weak after ballooning during the pandemic. And some analysts don’t expect “Barbie” to do much for Mattel’s stock.  
    

    Emily Bary and Jon Swartz contributed reporting to this story. 
    

    

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  • 
		
		
    
			
    Chevron’s Second Quarter Profit Beats Outlook on Record Shale Production
    
			
    Chevron’s Second Quarter Profit Beats Outlook on Record Shale Production
    
			
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    Chevron said it had record production in the shale-rich Permian Basin region in the second quarter.
    

          
    
            Patrick T. Fallon/AFP via Getty Images
    
          
    
  
    

    

    

    

    
        
    
          
    
            Chevron
    
          
    
        
    
       released a second-quarter performance update on Sunday that was better than expected ahead of the oil major’s earnings announcement this week.
    

    

    

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  • 
		
		
    
			
    Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced
    
			
    Chevron’s Q2 adjusted profit beats estimates on record Permian production; new CFO announced
    
			
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    Chevron Corp. released a second-quarter performance update that was better than expected on Sunday, ahead of the oil major’s earnings announcement this week.
    

    Adjusted profit of $3.08 a share beat the consensus of $2.97 a share as tracked by FactSet. That is down about 47% from the second quarter last year and down from profit of $3.55 a share in the first quarter of 2023.
    

    

    The company also announced its chief financial officer, Pierre Breber, is retiring after 35 years at the company. Eimear Bonner, the chief technology officer, will succeed him starting in March 2024. 
    

    Chief Executive Mike Wirth thanked Breber for his contributions and welcomed Bonner, a 24-year Chevron veteran, saying she can “build on Chevron’s strong foundation and drive further value for shareholders.”
    

    Chevron
    
        CVX,
    
        +1.46%
    
       said it had record quarterly production in the Permian Basin, 11% higher than last year’s second quarter. It produced 772,000 barrels of oil equivalent a day, and added that it is on-track for its full-year guidance. The Permian is a shale basin covering parts of West Texas and southeastern New Mexico.
    

    Quarterly shareholder distributions of $7.2 billion also set a record, Chevron said, including $4.4 billion in share buybacks and $2.8 billion in dividends. 
    

    Chevron expects to close the acquisition of shale driller PDC Energy in August.
    

    

    

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  • 
		
		
    
			
    AT&T, Verizon Investors Have More Than Lead Cables to Worry About
    
			
    AT&T, Verizon Investors Have More Than Lead Cables to Worry About
    
			
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    AT&T, Verizon Investors Have More Than Lead Cables to Worry About
    

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  • 
		
		
    
			
    Am I being tricked into overtipping when I eat out? Should I tip before or after sales tax is added?
    
			
    Am I being tricked into overtipping when I eat out? Should I tip before or after sales tax is added?
    
			
     [ad_1]
    

    

    Dear Quentin,
    

    I’ve read your previous responses to letters on tipping, and my thoughts are simple: Tipping is dependent on the service given. I won’t tip at a deli counter, but I will tip more in a diner. I see no reason to tip a deli counter person on a regular basis. The person who rings up my groceries isn’t allowed to accept tips, and they do a lot more than put a sandwich in a bag.
    

    

    As far as restaurants go, 15% is the starting point and I will go up from that as warranted. I do tend to tip a high percentage in diners. The waitstaff there are generally fabulous, deal with lower price points and a varied clientele. I feel they also suffer from customer bias where some people seem to think it’s only a diner not a fancy restaurant.
    

    

    

    
        “‘Helping others is not always through money. I volunteer my time with several charities and donate blood.’”
      
    

    

    

    The job is the same whether my meal is $10 or $100. I try to pay in cash to ensure the waitstaff is promptly getting their tip, and to ensure that the money does indeed go to the wait staff. Are we expected to tip on a total that includes credit-card charges? What’s more, helping others is not always through money. I volunteer my time with several charities and donate blood.
    

    What troubles me is that throughout the New York City metro area, tipping recommendations in restaurants are based on faulty calculations. My friends and I all agree that tips are supposed to be based on the price of the meal — that is the subtotal or pre-tax figure. Restaurants frequently encourage people to tip on the final amount. 
    

    A Fair Tipper
    

    Related: I’m sick and tired of tipping 20% every time I eat out. Is it ever OK to tip less? Or am I a cheapskate? 
    

    Dear Fair,
    

    Yes, yes, yes, and yes. 
    

    Yes, wait staff in diners work as hard as any restaurant worker, and they deserve whatever your optimum tip — 15% or 20% — and as much as you would tip in a white-tablecloth restaurant. Yes, consumers should not be expected to tip in a deli — unless you have a good relationship with the staff, and you tip occasionally for goodwill. If you choose to “skip” the charity donation in a pharmacy, that’s OK too. Yes, donations and tips are increasingly being conflated, and that’s not always a good thing. We should be comfortable with the charity and 100% sure that the donation is going to the charity in question. 
    

    And your main point: Yes, tipping on the subtotal before tax and before credit-card charges is absolutely fair, although a lot of people — especially when calculating the tip among friends — tip on the after-tax total. Why? Perhaps we don’t want to be seen splitting hairs over the tax among friends and/or in front of a service worker who has given us exemplary service. Calculating tips is often done under pressure, and no one likes to be seen as a cheapskate. I almost always tip on the total amount, knowing that the sales tax is included, primarily because I figure that extra $1 or more is going to the person who served my table.
    

    My colleague, MarketWatch news editor Nicole Pesce, put together a guide for how much you should tip everyone, and who you should NOT tip. She also cited three reasons why tipping has become such a note of contention, and why it appears we are tipping more: people tipped staff more during the pandemic (they were, after all, putting their health and lives at risk with their jobs); 40-year high inflation over the last 12 months has increased the cost of everything and, as such our tips rose in tandem with prices; and, finally, digital tipping appears to be ubiquitous, and people have been suffering from tipping fatigue. 
    

    

    

    
        “‘You’re not the only one: Americans are souring on tipping.’”
      
    

    

    

    You’re not the only one with tipping fatigue, though: Americans are generally souring on tipping. A large majority (66%) of U.S. adults have a negative view about tipping, according to a poll released by the personal-finance site Bankrate last month. The bottom line: consumers feel they are being forced to compensate employees for low pay (41%) and they don’t appreciate all that digital guilt tipping (32%) and, as a result, they believe that tipping culture has gotten out of control (30%). Respondents also said they were confused about how much to tip (15%), but a small minority (a paltry 16%) said they would be willing to pay higher prices in lieu of tipping.
    

    People appear to be less generous with their tipping amounts, and they also appear to be tipping less often. What’s perhaps most surprising from Bankrate’s research is that only 65% of diners actually tip when they eat out (that’s down from 73% last year). After restaurants, people are most likely to tip barbers/hairdressers (53% of those polled) and food-delivery workers (50%). From thereon, only a minority of people say they tip taxi or rideshare drivers (New York City cabs, which give tipping options upon payment, may be an outlier here), hotel housekeepers, baristas and food-delivery workers.
    

    It’s important that we have this conversation about tipping because expectations and digital tipping methods are evolving all the time. On the one hand, people are facing higher prices and they are understandably feeling under pressure to tip. On the other hand, this conversation naturally overlaps with the working conditions and pay of service workers. Americans are tipping less than they did during the worst days of the pandemic. Service workers — along with medical personnel, bus and train drivers and first responders — were among the heroes of the pandemic. That is something I hope we never forget.
    

    

    

    

    “The person who rings up my groceries isn’t allowed to accept tips, and they do a lot more than put a sandwich in a bag,” the letter writer says.
    

          
    
            MarketWatch illustration
    
          
    
  
    

    

    Also read:
    

    ‘I respect every profession equally, but I feel like so many people look down on me for being a waitress’: Americans are tipping less. Should we step up to the plate? 
    

    ‘We’re very upset!’ We gave a friend $400 concert tickets and $2,000 Rangers seats, but weren’t invited to his wedding. Do we speak up?
    

    ‘All of these tips add up’: If a restaurant adds a 20% tip, am I obliged to pay? Should tipping not be optional? 
    

    

    

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    AMC Entertainment Shares Soar After Judge Blocks Equity Transactions
    
			
    AMC Entertainment Shares Soar After Judge Blocks Equity Transactions
    
			
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     AMC Entertainment  shares soared 70% after-hours Friday after a judge rejected a proposed court settlement that would have cleared the way for the movie-theater giant to complete a set of equity transactions enabling it to issue substantially more shares.
    

    

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    AMC stock surges 60% after Delaware judge puts brakes on APE-to-stock conversion plan
    
			
    AMC stock surges 60% after Delaware judge puts brakes on APE-to-stock conversion plan
    
			
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    Shares of AMC Entertainment Holdings Inc.  rocketed more than 60% higher on Friday after a judge in Delaware shot down a settlement that would have allowed the movie-theater chain to move ahead with a plan, maligned by some investors, to dump more shares onto the market, according to reports. 
    

    AMC
    
        AMC,
    
        +1.62%
    
       has wanted to turn its  its so-called APE — or AMC Preferred Equity — preferred units into common stock. But Delaware Chancery Court Vice Chancellor Morgan Zurn rejected an earlier settlement that would have allowed that conversion to move forward. 
    

    

    The theater chain has been looking to find ways to boost its share count and sell more shares — a tack that helped it through the COVID-19 pandemic — as it tries to shore up its finances and rein in its debt, the Wall Street Journal noted. 
    

    But not every investor was on board with the plan, amid worries about share dilution. 
    

    “At this juncture, the Court’s only task is to approve or reject the proposed
    settlement,” wrote in the ruling, obtained by Bloomberg Law. “The focus of the settlement is on the claims presented in this case. The Court cannot address issues that do not pertain to the fairness of the settlement.”
    

    “Such issues raised by AMC stockholders include theories about synthetic shares, Wall Street corruption, dark pool trading, insider trading and RICO violations, and a request for a share count,” the ruling continued. “The Court’s role is limited to considering settlement-specific issues, like the strength of the plaintiffs’ claims, the consideration the class would receive, and the scope of the release the class would give in exchange for that consideration.”
    

    “To cut to the chase, the settlement cannot be approved as submitted,” the ruling added later.
    

    AMC did not immediately respond to a request for comment. 
    

    

    

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    Wall Street’s most AI-enthusiastic bank delivers machine-generated research notes
    
			
    Wall Street’s most AI-enthusiastic bank delivers machine-generated research notes
    
			
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    JPMorgan Chase & Co., the largest U.S. bank, has been wading into artificial intelligence to a greater extent than its rivals and is now producing a series of research notes that are AI-generated.
    

    The move represents something of a step forward in an area that’s been seen as ripe for disruption — investment research — at a time when the AI revolution is taking hold on Wall Street. At JPMorgan, AI is being used to create short summaries of human-produced reports and to link those reports inside the firm’s Cross Asset Spotlight.
    

    

    Questions remain over how far machine-generated research can go in replacing humans, and regulations on it are still in the early stages — putting pressure on Wall Street banks to be completely transparent about how their research is being put together. Research reports are generally subject to rules from Finra, or the Financial Industry Regulatory Authority, which require that a qualified registered principal approves a report prior to distribution to the public. Banks may also include legal or compliance approvals as part of their process. Through a spokeswoman, JPMorgan
    
        JPM,
    
        -0.23%
    
       declined to comment for this article. 
    

    In a disclaimer attached to JPMorgan’s Cross Asset Spotlight note, primary authors Thomas Salopek and Federico Manicardi cited the large amount of content that investors need to sift through in constantly-moving markets as part of the reason that AI is being used. Salopek and Manicardi said they can produce an AI-generated summary of the most relevant and recent analyst reports on a particular topic or event — as they did on Tuesday with a focus on earnings, China, the soft-landing scenario, and AI’s impact on U.S. interest rates.
    

    “What seems to be going on here is that they’re using an AI-based system to build a summary publication of existing human-generated reports that are already out there,” said Michael Wagner, co-founder and chief operating officer of Omnia Family Wealth, a multifamily office based in Miami, which oversees more than $2.5 billion and is already using AI to assist with its client conversations.
    

    “It certainly is still relatively unusual, but I think analyst jobs are safe for now,” Wagner said in an email to MarketWatch. “It’s an interesting development that shows how AI-driven automation could impact labor markets. If relatively repetitive ‘knowledge work’ can be automated in this fashion, banks and law firms may not need as many lower-level employees as they do today.”
    

    New York-based JPMorgan has been leading Wall Street’s shift toward AI in a number of different ways. From February through April, the bank advertised more than 3,600 jobs globally that are all related to AI, according to Bloomberg. In May, it filed a patent application for its own software, known as IndexGPT, which can be used for analyzing and selecting securities for its clients. And JPMorgan has also created a tool that scans speeches by Federal Reserve officials to detect policy shifts and potential trading signals.
    

    WSJ: Pro Take: JPMorgan’s Fedspeak Evaluator Is Unsure About This Week’s Rate Decision
    

    Rivals of JPMorgan haven’t gone quite as far. Representatives of BofA Securities
    
        BAC,
    
        +1.06%    ,
    
       Citi
    
        C,
    
        -0.64%    ,
    
       and Deutsche Bank
    
        DB,
    
        +0.66%
    
       said their organizations haven’t produced any AI-generated research notes. 
    

    Goldman Sachs
    
        GS,
    
        +0.96%
    
       has written about the economic and market impacts of AI, but hasn’t used the technology to write text for its research yet, according to economist Joseph Briggs and chief global strategist Praveen Korapaty. Morgan Stanley
    
        MS,
    
        +0.25%
    
       declined to comment through a spokeswoman. 
    

    As of Friday afternoon, U.S. stocks
    
        DJIA,
    
        +0.20%
    

            SPX,
    
        +0.25%
    

            COMP,
    
        +0.06%
    
       were heading higher as investors prepared for a major rebalancing of the Nasdaq-100 index and the expiration of trillions of dollars of stock option contracts. Meanwhile, Treasury yields were mixed ahead of next week’s policy announcement by the Federal Reserve.
    

    

    

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