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GLW | Owens Corning rises on Zelman upgrade | With shares up nearly 40 over the past year Zelman Associates is jumping on the Owens Corning NYSE OC train
The firm has upgraded the stock to Buy from Hold leading shares to advance 2 4 in early trade
Source Bloomberg First Word |
GLW | Corning 5 after beats long term outlook | Corning NYSE GLW 5 reports Q4 beats and affirms a 2020 2023 growth outlook that sees 6 8 compound annual sales growth and 12 15 compound annual EPS growth
Revenue breakdown Display Tech 795M 12 Y Y Optical Communications 903M 23 Environmental Tech 374M 17 Specialty Materials 453M 14 Life Sciences 256M 8
Earnings call starts at 8 30 AM with a webcast here
Press release |
GLW | Corning Inc GLW Q4 2019 Earnings Call Transcript | Corning Inc NYSE GLW Q4 2019 Earnings CallJan 29 2020 8 30 a m ETContents
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks
OperatorWelcome to the Corning Incorporated Quarter Four 2019 Earnings Call Operator Instructions It is my pleasure to turn the call over to Ann Nicholson Vice President of Investor Relations Please go ahead Ann H S Nicholson Vice President Investor RelationsThank you Steve and good morning and welcome to Corning s fourth quarter 2019 earnings call With me today are Wendell Weeks Chairman and Chief Executive Officer Tony Tripeny Executive Vice President and Chief Financial Officer and Jeff Evenson Executive Vice President and Chief Strategy Officer I d like to remind you that today s remarks contain forward looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995 Those statements involve risks uncertainties and other factors that could cause actual results to differ materially These factors are detailed in the company s financial reports You should also note that we will be discussing our consolidated results using core performance measures unless we specifically indicate our comments relate to GAAP data Our core performance measures are non GAAP measures used by management to analyze the business A reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at Corning com You may also access core results on our website with downloadable financials in the interactive analyst center Supporting slides are being shown live on our webcast and we encourage you to follow along They are also available on our website for downloading And now I will turn the call over to Wendell Wendell P Weeks Chairman and Chief Executive OfficerThank you Ann and good morning everyone This morning we reported fourth quarter and full year 2019 results For the fourth quarter sales were 2 9 billion net income was 406 million and EPS was 0 46 For the full year sales increased 2 to 11 7 billion net income was 1 6 billion and EPS was 1 76 While our 2019 growth did not meet our long term targets we once again outperformed our underlying markets We grew environmental sales 16 while car sales were down We grew Specialty Materials sales 8 while smartphone units were down In Life Sciences we exceeded industry growth on the strength of new products for bioprocess and advanced cell culture In Display our glass volume grew mid single digits while TV unit sales were down and in Optical we outperform the passive optical market which declined a high single digit percentage Changing market and customer dynamics impacted our 2019 performance significantly Corning enter 2019 building on two years of strong growth and that growth continued in the first half with sales up 11 and EPS up 24 year over year In the second half a supply chain correction in the display industry and weakness in the optical market highlighted by capital spending reductions at two of our significant customers led to declines in Display Technologies and Optical Communications While we acted quickly to mitigate lower than expected second half demand in Display and Optical we did not fully overcome these challenges As a result our second half sales were down versus 2018 and as our volume decreased factory utilization declined and so did our profitability especially gross margin We re confident that the situations in Display and Optical communications are temporary and we expect the company to return to sales and profit growth in the second half In Display we see indicators that the supply chain correction has ended and we expect normal seasonality to resume with the majority of volume and growth in the second half We also plan to start production at our next Gen 10 5 plants which will support faster than market growth as the plant s ramp In Optical we expect year over year growth in the second half driven by projects for 5G fiber to the home and hyperscale data center deployments We expect these higher volumes to increase factory utilization and support higher profitability and we expect to benefit from the recent and ongoing cost actions in Optical Communications and Display Tony will provide additional segment details and I will focus on our overall progress and outlook 2019 was challenging from a financial perspective but we remain committed to our new Strategy Growth Framework introduced last year Our new framework is the evolution of our strategy and capital allocation framework which we successfully completed last year Building on the strong foundation of our original framework we made excellent progress on many strategic initiatives during the year We made commercial and regulatory progress on Valor We opened a dedicated factory for our burgeoning auto interiors glass business and grew our order book significantly Display pricing remained moderate and we advanced several compelling innovations in Gorilla Glass and Optical Communications We met or exceeded all of the goals of our 2016 to 2019 strategy and capital allocation framework including returning more than 12 5 billion to shareholders over four years through share repurchases and a 67 dividend per share increase all while creating a better stronger more resilient company Under our new Strategy Growth Framework we expect to continue capturing significant organic growth and creating additional value for shareholders From 2020 to 2023 we expect to deliver 6 to 8 compound annual sales growth and 12 to 15 compound annual EPS growth Expand operating margin and return on invested capital invest between 10 billion and 12 billion with a focus on our organic growth and return 8 billion to 10 billion to shareholders through a combination of dividend increases and opportunistic share repurchases How do we plan to achieve these goals We are targeting an incremental 3 billion to 4 billion in annual sales along with improved profitability by the end of 2023 driven primarily by our strategy to create and sell into new product categories that enhance our customers offerings As I ve said before we re not just counting on everybody buying more stuff we re putting more Corning into the products that people already buy this provides a mechanism for us to grow even in challenging environments We saw that happen during 2019 in Environmental Specialty Materials and Life Sciences as I outlined earlier In short a big part of Corning s story over the next four years is a content story and we expect to see it across the company Let s look at how we advanced our strategy in each market access platform in the fourth quarter and for the full year In Optical Communications we are currently feeling the impact of capital spending reductions in both the carrier and enterprise markets We expect to recovery driven by 5G fiber to the home and hyperscale data center deployments Our goals in Optical Communications are to advance our product portfolio and align costs with demand in the near term we re making progress in both areas Perspective in 2019 we continue to transform the way the world connects by enabling 5G solutions with industry leaders New collaborations with Intel and Verizon demonstrate our commitment to helping our customers increase efficiency and address the challenges of new network deployment We also extended our leadership and data centers as Altice Portugal the country s largest provider of telecommunication services selected our EDGE product EDGE provides the increased speed power and capacity needed to withstand future pressure on servers and network capabilities EDGE has been playing a vital role in our continued success in enterprise it s been deployed in 30 countries used in 50 000 installations and has received 10 global awards since its introduction Stepping back the long term trend in Optical is strongly positive due to the benefits of photons replacing electrons in network after network and we re unique situated to enable that shift But it s not always a smooth line As one network or segment upgrades to Optics there can be a pause before the next one begins that pause is where we are right now So we re aligning capacity and inventory to current market demand We vital equipment and reduced head count and we re delaying capital investments In the long term because of our leadership we are positioned to continue putting more Corning solutions into every network that is built We will return to growth as the inevitable Optical trend continues Turning to mobile consumer electronics We re making significant progress on our goal of doubling sales Since 2016 we ve added 500 million in sales on a base of 1 1 billion We grew sales 42 cumulatively while smartphone unit sales did not grow In 2019 we bolstered the presence of Corning content on and in mobile devices with amplify screen protectors decorative backs and durable solutions for wearables Apple announced that it is awarding 250 million from its advanced manufacturing fund to Corning building on the 200 million we received from Apple s fund in 2017 Both investments support Corning s state of the art glass processes equipment and materials integral to the delivery of next generation consumer devices In 2019 as one of our prominent customers noted we took a major step forward in state of the art cover glass In 2020 we will continue to advance and introduce new glasses and we are confident that the adoption of our technologies will enable us to our sales goals so stay tuned Moving to the Automotive market our goal is to double sales by 2023 In 2019 we ran production capacity in Hefei China to meet committed demand for both our auto glass solutions and our gasoline particulate filter products We are well on our way to building a 500 million plus GPF business by 2023 Sales in 2019 exceeded 250 million and in 2019 Automotive Glass Solutions deliver the industry s first auto grade Gorilla Glass for 2D and 3D interiors along with Corning s patented ColdForm Technology Earlier this month we announced collaborations with industry leaders across the auto ecosystem including Visteon LGE BOE and VIA Optronics We are beginning mass production and have built an order book worth several hundred million dollars with nearly half of that book under contract In Life Sciences Vessels we reached several exciting milestones in 2019 We exceeded 1 billion in sales in our Life Sciences segment as adoption of our industry leading bioprocess in advanced cell culture products continues driving our organic growth rate 7 And we continue to build momentum for Valor Glass We signed commercial agreements with three leading pharmaceutical companies and received FDA approval for use of Corning Valor Glass as a primary package for a marketed drug product These major milestones validate our strategy to build a long term multi billion dollar franchise as we create a new standard in pharmaceutical glass packaging In Display our goal is to stabilize returns The market continues to shift to large size TVs which are most efficiently produced by our customers on Gen 10 5 fabs Our leadership in Gen 10 5 glass supports medium and longer term volume growth In 2019 we continued to increase output at our first Gen 10 5 plant in 2020 we plan to ramp additional Gen 10 5 capacity in tandem with our customers And 2019 was a great year for display glass pricing We saw low single digit percentage price declines for the full year which was even more moderate than anticipated And we expect a moderate pricing environment again in 2020 You can see that across our markets our strategic investments are well aligned with major trends and our relationships with industry leading customers are creating new opportunities We ve got the structural steel in place Our strategy is sound We re advancing growth in each of our market access platforms and we will overcome the challenges in Display and Optical In 2020 three operational priorities drive our focus Successfully ramping our next Gen 10 5 plants Aligning cost and capacity to current demand and commercializing innovations to support our customers Execution against these priorities will create the momentum needed to achieve our strategy and growth framework goals Now let me turn the call over to Tony for more details Tony Tripeny Executive Vice President and Chief Financial OfficerThank you Wendell and good morning In the fourth quarter we delivered on sales and EPS expectations Sales in each of our businesses performed at or above expectations and we generated over 1 billion in adjusted operating cash flow We accelerated actions in Optical Communications to align production output and working capital to current customer demand This impacted gross margin which was below our fourth quarter guidance For the full year as expected sales and profitability were down due to the challenges in Display and Optical communications While we also faced challenges in other markets it s important to note that Specialty Materials Environmental Technologies and Life Sciences powered through and grew sales As we turn to 2020 we expect continued strong growth in all three of these businesses We also expect the Display and Optical sales and profitability to grow year over year beginning in the second half As a result we expect margins and profitability for the corporation to improve in the second half of the year Now before I get into the details of our performance and results I want to note that the largest difference between our GAAP and core results are related to charges associated with capacity realignment in Display and Optical Communications and at our equity venture Hemlock Semiconductor Other differences between our GAAP and core results come from a non cash mark to market adjustment for our currency hedge contracts and a change in our tax reserves Now with respect to mark to market adjustments GAAP accounting requires earning translations hedge contracts and foreign debt settling in future periods to be mark to market and recorded a current value at the end of each quarter even though those contracts will not be settled in the current quarter For us this impacted GAAP earnings in quarter four by 59 million To be clear this mark to market accounting has no impact on our cash flow Our currency hedges protect us economically from foreign exchange rate fluctuations and provide higher certainty for our earnings and cash flow our ability to invest for growth and our future shareholder distributions Our non GAAP or core results provide additional transparency into operations by using a constant currency rate aligned with the economics of our underlying transactions We re very pleased with our hedging program and the economic certainty it provides We received 1 7 billion in cash under our hedge contracts since their inception more than five years ago As shifting to results fourth quarter sales were 2 9 billion net income was 406 million and EPS was 0 46 For the full year sales were up 2 to 11 7 billion net income was 1 6 billion and EPS was 1 76 Now let s look at the detailed segment results and outlook In Display Technologies fourth quarter sales were 795 million and net income was 180 million Q4 glass prices declined slightly sequentially as expected Our fourth quarter volume was up low single digit sequentially better than expected Display full year sales were 3 3 billion and net income was 786 million Our full year 2019 price decline was a low single digit percentage Retail demand in 2019 was strong Our preliminary view with most but not all of the data in is that retail display increased mid single digits in 2019 driven by TV screen size growth Last month glass market volume was up low single digits less than retail as set makers took a conservative stance in the back half of the year due to macro uncertainty This conservativism drove panel maker utilization reductions and led to a supply chain correction We believe that supply chain inventory exiting 2019 is healthy and we think the correction is largely behind us Full year 2019 for full year 2019 our glass volume was up mid single digits outperforming overall glass market driven by our increased Gen 10 5 output during the year The glass market shipped more volume in the first half than the second half due to the supply chain correction and so did we The lower shipments in the second half reduced our gross margin For 2020 we again expect the retail market measured in square feet to be up by a mid single digit percentage driven by TV screen size growth and given that the supply chain is now at a healthier inventory level We expect the glass market to increase in the mid single digits and for our volume growth to be similar to the overall glass market In the first quarter we expect the glass market to be up low single digit sequentially as panel maker utilization increases We expect our volume to be down low single digit sequentially underperforming the glass market because of a structural shift in the Korean panel market Up until two years ago South Korea was the leading provider of panels Korean panel makers are going through structural changes that will reduce their capacity significantly as the global center of panel making moves to China This reduction impacts our shipments in Korea In the second half of 2020 we expect to grow faster than the glass market as our new Gen 10 5 tanks in China buyer up and absorb the panel demand that is shifting from South Korea Given Corning s leadership with three of the four planned Gen 10 5 fabs we expect the benefit from this regional shift We expect more normal seasonality in 2020 and from almost all of our year over year volume growth to incur in the second half As our volume increases we expect our margins to improve Turning to pricing we expect Q1 sequential glass price declines to be moderate For 2020 with over 95 of our volume under contract we expect full year price declines to be at mid single digit percentage We reached our goal of mid single digit year over year declines in the second half of 2018 and had even more favorable changes for several subsequent quarters More recently as just discussed the panel industry is working through a fundamental restructure of capacity migrating from Korea to China The fact that we continue to have moderate price declines while these changes are happening is positive We believe that three factors continue to drive the favorable glass pricing environment we ve been experiencing First we expect glass supply to continue to be balanced with demand or even tight For Corning we are aligning our capacity with demand We are also pacing our Gen 10 5 capital projects to align with panel makers schedules Second our competitors continue to face profitability challenges at current pricing levels And third display glass manufacturing requires periodic investments in existing capacity to maintain operations Glass prices must support acceptable returns on those investments Now to recap Display the industry is emerging from a temporary supply chain correction retail remained strong with the increase in TV screen size continuing to drive glass volume growth we are well positioned with our customers and successfully ramping new Gen 10 5 facilities and we expect to return to year over year growth in volume margins and profitability in the back half of the year In Optical Communications fourth quarter sales were 903 million and net income was 62 million Profitability was impacted by lower volume and reduced production output to bring down inventory For the full year sales were 4 1 billion down 3 in a market that declined by a high single digit percentage Net income declined 17 to 489 million In 2020 sales increased 13 year over year in the first half and declined 16 in the back half The lower volume in the back half negatively impacted sales margins and profitability Nearly 90 of the second half year over year decline can be explained by changes in spending by two large customers a large carrier completed its fiber to the home build and redirected capital to pay down its debt A hyperscale data center customer concluded a period of unusually intense building We have excellent relationships with these customers and continue to co innovating with them We expect our sales to increase at both companies as they spend more on Optical passes In 2020 we expect year over year sales to be down 5 to 10 as the lower level of sales we experienced in the second half of 2019 continues throughout the first half of 2020 and we expect first quarter sales to be down about 25 versus the strong project spending in Q1 of 2019 In the back half of 2020 we expect year over year growth in sales and profits to resume driven by projects for 5G fiber to the home and hyperscale data center deployments Now the exact timing of these projects is hard to predict if they proceed as expected will be in the upper range of our guidance If the project start later will be at the lower end of the range When year over year growth occurs Our factories will fill and our margins and profitability will improve we are working closely with our customers and we ll keep you informed as the year progresses Stepping back we are innovating to improve network speed and capacity We also continue to receive confirmation that Optical is essential for 5G and hyperscale and to secure long term agreements with major industry players all of which sustains our confidence in our ability to deliver long term growth In Environmental Technologies fourth quarter sales were 374 million up 17 year over year and ahead of expectations Continued adoption of gasoline particulate filters drove the growth Net income was 64 million driven by strong operational performance and successful ramping of additional GPS capacity in China For the full year sales were 1 5 billion up 16 Net income was 263 million 2019 GPF sales exceeded 250 million and we are well on our way to building a greater than 500 million gasoline particulate filter business With a market leading product we continue to earn a majority position globally as automakers award platforms to make Euro 6 and China 6 regulations Sales are accelerating as Euro 6 regulations are in full effect and automakers are preparing for China 6 implementation in 2020 Our Hefei plant start up is ahead of schedule and has been key to delivering incremental sales and net income We expect continued growth Looking to 2020 despite continued weakness in the global auto markets and the expected downturn in the North America heavy duty market we once again expect to grow year over year with sales up in the mid single digits in the first quarter and for the full year We expect GPF sales to exceed 350 million for the year Specialty Materials in its ended strong driven by demand for our premium glasses Fourth quarter sales were 453 million up 14 year over year and net income was 94 million Full year sales were 1 6 billion up 8 year over year and grew for the fourth straight year despite essentially flat smartphone unit volume Net income was 302 million Similar to 2019 we expect our growth in 2020 to come from further advancement and adoption of our premium glasses as well as our additional innovations for Mobile Consumer Electronics We expect Specialty Materials sales to be up by a high single digit percentage for the full year We expect Q1 sales to be up a mid single digit percentage year over year Life Sciences also ended the year strong exceeding expectations with fourth quarter sales of 256 million an increase of 8 year over year net income was 38 million up 31 year over year For the full year the business reached the milestone of with sales of 1 billion a 7 increase year over year Net income was a 150 million up 28 year over year For 2020 our market outlook and customer demand remain positive and we expect growth to continue with full year sales at mid single digits In the first quarter we also expect sales to be up mid single digits year over year Now let s turn to the consolidated results and outlook Operating cash flow in the quarter was 1 1 billion As we said in October we expected to reduce working capital in the second half We did reduce working capital in Q3 and again in Q4 Full year adjusted operating cash flow was 2 1 billion and capex was just under 2 billion We are taking actions that will result in stronger operating cash flow and lower capital spending in 2020 We expect capex to be approximately 1 5 billion for the year Gross margin in the fourth quarter was 37 Gross margin was impacted by the lower volume and reduced production output to bring down inventory in Display and Optical Communications In the first half of 2019 gross margin was 40 in the back half of the year as Display and Optical Communications volumes declined gross margin also declined to 38 In the first half of 2020 we expect Display and Optical volumes to remain low impacting our gross margin percent We expect volume in Display and Optical Communications to grow sequentially and year over year in the second half When that happens gross margin should improve to approximately 40 In the first quarter we expect sales to be seasonally lower than the fourth quarter and gross margin to be the lowest for the year down 100 to 150 basis points from the fourth quarter We expect gross margin dollars and percentage to increase sequentially thereafter Moving on to the rest of our P L as a percent of sales We expect SG A and RD E to be nearly 14 and approximately 8 5 respectively for the full year In addition we expect other income other expense to be approximately 275 million in 2020 Full year gross equity earnings are expected to be approximately 170 million down 67 million from the prior year The expected decline in 2020 is due to lower expected sales at our Hemlock Semiconductor JV Most of Hemlock Semiconductor business is under long term take or pay contracts which include upfront cash payments In the fourth quarter of 2019 similar to prior years Hemlock sell some of their solar customer contracts The settlements positively impacted their 2019 cash flow and reduced expectations for future sales in the solar segment Hemlock took a charge related to realigning capacity to the lower sales level The business remains quite profitable selling primarily semiconductor products which are supported by Hemlock s quality leadership and long term take or pay contracts We expect our effective tax rate for 2020 to be approximately 20 to 21 Now before I close I know there are a lot of questions on the impact of the Coronavirus on Corning The safety and well being of our people is our number one priority We are in close contact with our employees customers and suppliers and we are engaging with governments and health services organizations as we monitor the situation at the same time we have not factored any meaningful operational or financial impact in our guidance the situation remains fluid and as more information becomes available We will update you accordingly In closing we expect 2020 to be in many ways the mirror image of 2019 We believe that the first half will remain challenging as markets and customer dynamics reflect We expect the first half will remain challenging as market and customer dynamics reflect what we ve seen over the last six months And in the second half we expect to return to growth in Display and Optical Communications improved and a strong growth continues in Environmental Specialty Materials and Life Sciences As this happens we expect the company to return to grow to growing sales and profitability as we saw in the first half of 2019 Overall Corning is operating on a strong foundation that we ve built over the past four years and we continue to make progress in key areas as evidenced by our ongoing customer announcements We are confident in our ability to achieve the objectives we laid out in our 2020 to 2023 Strategy Growth Framework With that let s move to Q A Ann Ann H S Nicholson Vice President Investor RelationsThanks Tony Okay Steve we re ready for our first question Questions and Answers Operator Operator Instructions Our first question will come from the line of Rod Hall of Goldman Sachs Please go ahead Rod Hall Goldman Sachs AnalystYeah thanks for the question A couple of quick ones So on Display pricing I wanted to start off Tony and Wendell to whoever wants to answer this On the the movement of pricing through 2020 understand that the mid single digit declines are being driven by the movement from Korea to China But could you talk us through more of that dynamic What is driving that Are you assisting that movement with your own pricing or is there a mix of factor or something like that And then could you also talk about the timing of that is the first half pricing view that we re going to see different from the second half in Display And then I also wanted to just quickly ask you about Optical I know Justin working on modeling that And it sounds like you feel like you ve got some better visibility I m just wondering on the low end of that guide are you do you think you are adequately cautious I guess the answer is yes but how do you have any confidence in engaging the risk on Optical Thanks Tony Tripeny Executive Vice President and Chief Financial OfficerAll right Rod Let me first start with the pricing answer I mean as you know most of our contracts get put in place in the fourth quarter and the seasonally the largest price decline that we have in any quarters in the first quarter and that is the case here too and we expect more moderate price declines is as items move out throughout the year I think from a Korea standpoint I think what s important to highlight here is that there is just a lot of change going on in the industry I think Korea capacity is going to be down around 40 on a year over year basis So that s a pretty significant decline from a pricing standpoint from a capacity standpoint and has that capacity comes offline It shows back up in China So as we see our year flow out we re going to see less volume a little bit less volume in the market in the first half of the year and more volume in the back half of the year And so I think that that s that s a trend that s been going on and that s a trend that we really see the impact of our in 2020 Wendell P Weeks Chairman and Chief Executive OfficerI think if we just take through display First I think you ve got it right Rod on that just the way in which we do our contracts sort of the pattern of price through the year in a little more weighted earlier in the year than later I think what Tony was trying to get across is if you take a look at the Korean market or the Korean production and their share of the overall world market just two years ago they were the largest producer of large size panels in the world And what s happening is Gen 10 5 plants in LCD are to so much lower cost and you re seeing sort of the China industrial policy of that capital will be underwritten in China there is giving our Korean customers a challenge to how do they compete When they have it made that investment in Gen 10 5 So you re just seeing a pretty natural which begin and what Tony was talking about was that we ve seen announcements out of the Koreans that over time you re going to see about a 40 reduction in their capacity all happened this year but over that time period and you re just going to see that shift toward China and the Gen 10 5 plants Now when that shifts there are players at the glass level who are better or worse positioned in that We are extremely well positioned in that but the overall industry structure just sort of has to move with that dislocation and so the fact that we are able to maintain such really good strong pricing performance in the face of this level of announcements for folks I think is what Tony is getting at is why we feel that s really good news for the pricing environment And then since we re so well positioned in China we ll just see that progress that he talked about in the back half Just continue to accelerate through timeRod Hall Goldman Sachs AnalystWendell Can I just ask you do you guys think that this year is the year that all this kind of is this play out this year in the next year things go back to more of a normal trajectory or do you think this is a multi year kind of transition and it will continue next year to be strange Wendell P Weeks Chairman and Chief Executive OfficerWell I think you re going to see the bulk of it happen with the this year with just the fact that how clear the Korean panel makers have become just on their future We always anticipated much like we move from Japan to Taiwan and Korea happened that and then we pre positioned for that that we d see this move to China I think this year what was surprising to everybody in the industry is as we went through this last supply chain correction is that the Chinese players continue to produce pretty strongly and pretty aggressive pricing for panels and this made the Korean customers sharply act and sort of implement sort of some the long term strategy thought they had in near term and they re just focusing their guns on next gen innovations for their Korean based panel capacity And while there set arms are sourcing more and more out of the Chinese panel makers So our view that the bulk of this move has been announced will feel in the industry will continue to feel its after effects It s pretty big change But I think the bulk of it going to be behind us this year Rod Hall Goldman Sachs AnalystOkay thank you And optical visibility Tony Tripeny Executive Vice President and Chief Financial OfficerYeah I think from an optical visibility standpoint as you re right Jeff and his team have been doing a lot of work relative to what the future especially in the near term looks like over the next year or so and we ve tried to integrate that work along with what we know from a business standpoint and what our customers are telling us and the range is really inform for those both of that work I mean at the minus 5 of the range that s an indication that we ve got certain customer projects and we re following those closely and if that happens we ll be closer to that and at the lower end of the range the minus 10 that would be reflective of what some of those projects actually get themselves pushed out So I mean that s how we ve done the work and clearly we ve we really are focused on getting better at that over the last six months Rod Hall Goldman Sachs AnalystOkay great thank you guys I appreciate it OperatorOur next question will be from the line of Wamsi Mohan Bank of America Please go ahead Wamsi Mohan Bank of America AnalystYes thank you I was wondering if you can maybe talk a little bit about your plans to use this capacity is going to be stranded in LCD in Korea What timeframe can or should we expect asset redeployment and that to show up in your financial results and I will follow up Wendell P Weeks Chairman and Chief Executive OfficerSo we ve a basically we ve already done most of that Korea is a low cost production facility for us So what we are doing and what we ve been planning for is to continue to use that as a strong melting source for full sheet to feed some of our finishing operations in China So therefore the main piece that we ll see will be on that part of the plants which is where we finished the last cut it into into the right sizes So that s where we will primarily see that we ve made those adjustments We have to continue to work our way through just sort of what s the appropriate way is to work our way through all the workforce implications and we re continuing to do that But remember so much of our higher cost capacity in Display we have evolved to play into our Gorilla plays and work it and Korea as well we ve taken a hunk of their panel making production and instead put that in the Gorilla So this is all playing out on our long term planning It s just it s happening at a little more accelerated fashion Wamsi Wamsi Mohan Bank of America AnalystOkay Thank you Wendell And just as a follow up there was obviously a meaningful step down here in your FX plans for this year How should we think about sort of the next couple of years given what we know about the demand environment here is this sort of a level that we should expect that we can sustain over a couple of year timeframe or is this something that given the market conditions and given sort of the more elevated capex levels over the last couple of years that this is sort of more of a one time How should we think about this capex levels over the next few years Thank you Tony Tripeny Executive Vice President and Chief Financial OfficerWamsi as you know our capex is really kind of divided into two different pieces one is what it takes to kind of sustain and continue to improve our businesses and then the second is what it takes to build and grow the businesses especially as we get new customer demand And so we re always going to matter In the longer term is how much additional customer demand and commitments do we get And then what is going to drive as far as capital spending Now of course once we start those projects it takes a couple of years for the for both the sales and the revenues to show up And if you think back on to IR Day I think Jeff did good description of that But I think as as we look at in 2020 there are certain projects that were can finishing up with customer demand that will drive growth in 2021 and 2022 and you know exactly what we ll spend in 2021 and 2022 will just depend on how our innovations continue to evolve and how much customer commitment we get there So overall we said we d spend 6 billion to 8 billion and I think these numbers are really consistent with that Wendell P Weeks Chairman and Chief Executive OfficerYeah I think the way to think about the timing is we ve got but now sort of the bulk of the investment that we need to deliver the revenue and earnings growth that we laid out of our Strategy Growth Framework Wamsi Mohan Bank of America AnalystOkay thank you for the context That s helpful Wendell P Weeks Chairman and Chief Executive OfficerAnd they only thing now we told to is what happens in the period after that and then how much strong demand will we see that and then we ll just have to start early because it takes a while to build those facilities So that s a little bit far in the future for us to be able to dial up exactly And as we get closer to it we ll be a lot more clear with you sir Wamsi Mohan Bank of America AnalystOkay great Thank you OperatorOur next question will come from the line of Meta Marshall Morgan Stanley Please go ahead Meta Marshall Morgan Stanley AnalystGreat thanks I wanted to dig a little bit into kind of the growth in Specialty Materials next year And just it seems as if just get a sense of how much of that is just from newer generations of Gorilla Glass versus kind of a new use cases And then maybe second just a little bit of a description of kind of what is the difference between core and non core gross margins kind of backing out one time effects that impacted in Q4 and just how that carries forward to Q1 would be helpful Thank you Tony Tripeny Executive Vice President and Chief Financial OfficerWell why don t I start with that I think that there is as we do the various restructuring actions Some of that shows up into the gross margin and since that is in part of our ongoing operations That ends up in our GAAP results but not in our core results We did a number of things during the quarter in particular in Optical Communications and in our Display business and those are one time charges and that s where you see that Wendell P Weeks Chairman and Chief Executive OfficerAnd in Specialty the bulk of our financial drivers are the new generations of glass But we will also see some revenue growth out of our new innovation sets that are non glass especially our group of very durable optical treatments and that is a little bit lower gross margin percent then glass but clearly this next year we re counting on our glass innovations to get adopted and that providing strong growth in an overall unit growth market which we are not anticipating to grow strongly Meta Marshall Morgan Stanley AnalystGot it Thank you OperatorOur next question will come from the line of Samik Chatterjee J P Morgan Please go ahead Samik Chatterjee J P Morgan AnalystHi thanks for taking the question if I can just start off on Environmental Technologies and going to be if you can talk to the what do you expecting What s the driver for the moderation in growth that you re expecting from the teens growth rate you had this year in 2019 to more of a mid single digit in 2020 Is that kind of content moderation on automotive or is that more driven by the diesel segment which obviously has a more challenging outlook I believe Tony Tripeny Executive Vice President and Chief Financial OfficerIt is mostly driven by the change in the diesel segment GPF we feel continues to be very strong and we expect sales to be up few Phonetic million dollars in 2020 They were up more than that in 2019 but we re well on our way to the 0 5 billion goal that we set out for this business where we are clearly the market leader and continue to have great success Samik Chatterjee J P Morgan AnalystOkay thank you Wendell P Weeks Chairman and Chief Executive OfficerAnd if I can you still segment you re going to see us because you going to see the North American heavy duty diesel market as you ll see from talking to our customers that we expect to go through down cycle here but we are replacing that with our gates And as the Chinese adopt some of our new tech and there diesel market So that s why I ve sort of moderating Samik Chatterjee J P Morgan AnalystAnd Tony if you can quickly clarify what s driving the confidence in improving cash flow in 2020 versus 2019 when the outlook on the profitability or profit side seems to be more kind of flat to down modestly Tony Tripeny Executive Vice President and Chief Financial OfficerSo there is a couple of things there I mean I think the first thing is that in 2019 we built a lot of working capital And now we always but build inventory and working capital as we expect businesses to grow but obviously compared to the first part of the year our businesses didn t grow as much So there is we wouldn t be growing as much working capital in 2020 as we did in 2019 And then the second thing is in the back half of the year we do expect to see growth on a year over year basis and I think that will help us from a cash flow standpoint And then of course finally we are going to also reduce our capital spending compared to what we spent in 2019 So from an overall standpoint we expect our free cash flow to be much greater than it was this year Samik Chatterjee J P Morgan AnalystAll right thank you Thanks for taking the call Operator Operator Instructions Our next question will come from the line of Steven Fox of Cross Research Please go ahead Steven Fox Cross Research AnalystHi good morning I had a question a couple of questions on Optical actually First of all I was curious on your view on the just the industry supply situation My understanding is that there is quite a bit of excess capacity in China for fiber and cable I understand you cannot move seamlessly across the globe But it seems to be making its way into Europe are you guys factoring in any of those any of that excess supply into your model should we be concerned about pricing pressure risks as the year goes on And then I have follow up Wendell P Weeks Chairman and Chief Executive OfficerI think on that would Steve You are seeing that to the extent that is going to impact us is already in our financials The actual level of excess inventory in China has been trending down there is still some to come I think how rapidly the Chinese market tightens up will depend a lot on this upcoming tender it will see out of China Mobile We anticipate that is part of this they will lay forward a little more clearly what their 5G plans are and therefore what they ll need to densify that network If that comes out with a very aggressive set of 5G builds then the China market itself will tighten up very significantly If it s not quite as aggressive we ll just have a little bit longer tail We think we ve got the bulk of that in these numbers Steven Fox Cross Research AnalystOkay that s very helpful Thanks for that And then just in terms of the Optical margins I guess the rough math is you did about 9 pre tax margins this quarter which is about half of what you are doing a few quarters ago So I guess maybe just I think I understand the walk from 18 to 9 but if there is anything you want to point out there But more importantly when you get to the second half of the year if you re executing or demand is where you think it s going to be are the percent margins reasonable or should we think about that is taking a little longer to come back Thanks Tony Tripeny Executive Vice President and Chief Financial OfficerI think from an overall standpoint our margins in this business and it s Display all about volume and we had significant decline in volume in the back half of last year 16 on a year over year basis and that really impacts our factory utilizations and the like and that clearly causes our margins to go down And we do expect to return to growth in the back half of 2020 and when that happens we get both the benefit of that volume But of course we ve also done some cost reductions during that period of time So we expect from an overall standpoint we d get back to the 40 gross margins and Optical both Optical and Display would also get back to where they were before Steven Fox Cross Research AnalystGreat very helpful Thank you OperatorOur next question will come from the line of Asiya Merchant of Citigroup Please go ahead Asiya Merchant Citigroup AnalystGreat thank you for taking my questions Lot of them have been answered but just had a quick question on Specialty Materials knowing that this primarily goes into a lot of smart phones we re starting to see smartphones inflect to growth this year Calendar 20 driven by 5G models etc The growth rate that you talked about should we expect some inflection there I think you re guiding for growth rate to be similar to what it was this year given that it was slightly down market for smartphone Thank you Tony Tripeny Executive Vice President and Chief Financial OfficerYeah I think from an overall standpoint clearly of smartphones started to grow you would that would certainly impact our business but what s really has made the difference from our business standpoint is the content that we provide on the smartphones As Wendell said I mean we ve grown 40 over four year has grown every single year in the last four years even though the number of smartphone units have been down in most of those years And so yes I think as you get more smartphones that might put us at the higher end of the high single digits But the really matters there are is our premium glass strategy and some of our other innovations and that s what s really driving our growth Asiya Merchant Citigroup AnalystAnd so should we expect that 5G phones We have higher content but I think you guys have talked a lot about higher content and other category in other consumer electronics as well So if you could just maybe talk a little bit about that And then just on margins Sorry to keep talking about that The 40 inflecting to 40 is that something we expect in the third quarter third quarter is it more toward the fourth quarter it s really depends on how quickly or does it just simply a matter of that 5 to 10 range that you talked about that in the Optical segment Thank you Wendell P Weeks Chairman and Chief Executive OfficerLet me start with the 5G phone and then I ll turn it over to Tony on the profitability So yes I think your hypothesis on 5G using more of our content is true We don t anticipate that 5G becomes a very large segment in smartphones here in this coming year but you are right it has more of our content it tends to be the most premium phones which is our very best glass and because of the nature of what it takes to deliver 5G we have an increase in the need for RF transparency which tends to increase the amount of glass required on those phones I think sort of a question back for you We would be very interested if you are now predicting a positive inflection point in smartphone unit sales We currently aren t counting on that if you have any insight into that that would be helpful to us Tony Tripeny Executive Vice President and Chief Financial OfficerOkay And then on margins you re absolutely right I mean I think what requires for the margins to get back to the 40 is the volume increase that we expect in the back half of the year and exactly where that ends up in the timing of that volume increase is what s going to drive us back to 40 in the back half of the year we should be back at the 40 number Asiya Merchant Citigroup AnalystGreat thank you Ann H S Nicholson Vice President Investor RelationsOperator we ve got time for one more question OperatorAnd that question will come from the line of Tim Long of Barclays Please go ahead Tim Long Barclays AnalystThank you Yeah let me just squeeze two quick ones in if I could I just wanted to go back to the GPF market You highlighted better than expected results in 2019 and 100 million additional next year just talk a little bit about what you think drove the outperformance this year do you think it was better share Were there any advance sales into the China market or what specifically drove that and that help in the trajectory next year And then on the auto glass side can you just give us an update on timing there it sounds like still a lot of wins but when when can we start to see more meaningful contribution there Thank you Wendell P Weeks Chairman and Chief Executive OfficerSo on the GPF side our product shrinks the relative advantages of our product led to us winning more than we originally planned So that is one driver The other is that with the move to real world driving the automotive companies are envisioning perhaps use of GPF and even some more advanced GPF technologies on more and more of their vehicle platforms So that s more of a longer term piece It s in pretty much everything that we ve worked so far has been positive about our relative position in GPF and the need for this technology to help clean up cars even further especially in a city environment Tony Tripeny Executive Vice President and Chief Financial OfficerAnd then on the auto glass piece I mean clearly we re winning these awards and our factories ramping So we will see some increased sales this year But as you know the automotive market in the supply chain takes longer than say the mobile consumer electronic supply chain So the bigger impact of that will be in 2021 but we will see some increases as we go through each quarter of this year Wendell P Weeks Chairman and Chief Executive OfficerYes So net after we break through that that sort of 100 million revenue run rate level will our analytics would be able to click and can be a lot more helpful to you and us and being able to guide the trajectory going forward We just need a little more data We need to get implanted in a few more places was breakthrough that run rate and then we should be able to be a little more accurate for you sir Tim Long Barclays AnalystOkay thank you very much Ann H S Nicholson Vice President Investor RelationsThanks All right thank you everybody for joining us today Before we close I wanted to let you all know that we re going to be at the Goldman Sachs Technology and Internet Conference on February 11 Mobile World Congress on 26th February And at the Susquehanna Technology Conference on March 12th So once again thanks for joining us Steve you can please disconnect all lines Duration 66 minutesCall participants Ann H S Nicholson Vice President Investor RelationsWendell P Weeks Chairman and Chief Executive OfficerTony Tripeny Executive Vice President and Chief Financial OfficerRod Hall Goldman Sachs AnalystWamsi Mohan Bank of America AnalystMeta Marshall Morgan Stanley AnalystSamik Chatterjee J P Morgan AnalystSteven Fox Cross Research AnalystAsiya Merchant Citigroup AnalystTim Long Barclays Analyst
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GLW | The Silver Lining in Corning s Latest Challenging Quarter | When Corning NYSE GLW announced fourth quarter 2019 results early Wednesday the market s initial positive reaction was no surprise considering those results arrived comfortably above both Wall Street s models and management s guidance laid out three months ago But shares of the glass centric tech stock have since all but given up that brief post earnings surge both as investors absorbed news of difficult industry conditions and as broader market indexes pulled back on coronavirus fears
The silver lining Corning continues to outpace the growth of the industries on which it relies leaving it well positioned to profit handsomely when those industries rebound
In the meantime let s take a closer look at how Corning ended its tumultuous year as well as what the company had to say about its future expectations
Data source Corning GAAP generally accepted accounting principles
While it s important to examine GAAP results Corning also provides core non GAAP metrics to offer clarity on the performance of its underlying businesses This effectively means excluding items like foreign currency translation acquisition costs and restructuring expenses
To that end Corning s core net sales in Q4 fell a more modest 4 year over year to 2 851 billion Its core net income declined 25 to 406 million and fell 22 on a per share basis to 0 46 By comparison leading into the report analysts consensus estimates had called for lower core earnings of 0 44 per share on core sales of 2 7 billion
By business segment Corning s display technologies sales fell 12 to 795 million translating to a 25 decline in segment net income to 180 million While display glass volumes outpaced the market with mid single digit percent growth in line with expectations detailed in September that growth was more than offset by a moderated low single digit percent decline in display glass pricing
Next optical communications segment sales dropped 23 to 903 million leaving full year 2019 sales down 3 even as the broader optical market endured high single digit percent declines After coupling those lower volumes with reduced production in an effort to lower inventories optical segment net income fell a steep 63 to 62 million
Corning s smaller businesses fared better Quarterly life sciences sales rose 8 year year over to 256 million well ahead of the lab equipment niche it serves driving a 31 increase in segment net income to 38 million Environmental technologies sales also rose 17 to 374 million thanks to sustained gas particulate filter demand sending segment net income up an impressive 52 to 64 million And specialty materials which notably includes Corning s premium Gorilla Glass cover glass products jumped 14 to 453 million translating to an 8 increase in segment net income to 94 million
Expect to build momentum throughout 2020
Corning chairman and CEO Wendell Weeks elaborated
In 2019 we grew sales 2 driven by strong performance in three businesses We advanced key growth initiatives and took actions to address the material impact of changing market and customer dynamics in Display Technologies and Optical Communications While our 2019 growth did not meetlong term targets we once again outperformed our underlying markets and expect to build momentum throughout 2020 that will keep us on track to achieve the goals set forth in our four year Strategy Growth Framework
Of course Weeks was referring to Corning s new 2020 2023 Strategy Growth Framework introduced last June under which the company is targeting annual sales growth of 6 to 8 and compound annual growth in earnings per share of 12 to 15 Corning also pledged to return 8 billion to 10 billion to shareholders through 2023 via stock repurchases and dividends even as it invests 10 billion to 12 billion back into growing the business through a combination of RD E research development and engineering capital investments and mergers acquisitions
In the meantime for 2020 according to CFO Tony Tripeny Corning sees continued growth for the three smaller segments Specialty Materials Life Sciences and Environmental Technologies And on a consolidated basis management believes Corning will return to sales and profit growth and expand margins by the second half of 2020 driven largely by improved volumes in both the core display technologies and optical communications businesses
That s fair enough it s a telling sign of Corning s dominance and leadership that it continues to outgrow the industries it targets after all And Corning remains well positioned to benefit when those industries turn for the better So while it s no surprise to see investors offering a muted positive reaction to this stronger than expected end to 2019 I still think the stock is a compelling bet for patient long term shareholders |
WMB | Refreshed Kerber relishing emotional return to Wimbledon s grass | By Martyn Herman LONDON Reuters Angelique Kerber was born on Germany s Baltic coast but for her Wimbledon feels like the green green grass of home Especially this year when she will walk back through the All England Club gates as defending champion It is not new territory for the 31 year old former world number one who on two other occasions arrived for the start of a Grand Slam having won it the year before But she has never experienced that at Wimbledon the title she cherishes the most I think maybe it s the same but different in some ways because Wimbledon was the tournament I was looking forward to win one day left hander Kerber said at Eastbourne this week I think when I get there it will be very emotional and I will have a lot of great memories I m really happy to go back there and enjoy the memories the people the place It s always really special but especially this time Kerber won the Australian Open and U S Open in a remarkable 2016 but struggled the following year She was back to her best last year reaching the semi final of the Australian Open the quarters in Paris before convincingly beating Serena Williams NYSE WMB in the Wimbledon final when many had already given the title to the American This year there has again been a slump although illness and injuries rather than the loss of drive of 2017 have been the root cause An ankle injury during the claycourt season left her struggling and she lost in the first round of the French Open That she says may have been a blessing I feel much better after Paris I had 10 days off for recovery and rehab and right now I m feeling good the pain has gone I m not sick and I feel ready again she said That s the most important thing for me to be able to be ready to fight I m in match mode I m hungry after having a little break I feel motivation and the energy It s a good sign After the drudgery of clay Kerber looked immediately at home on the Mallorca grass last week beating former Wimbledon champion Maria Sharapova and grasscourt threat Caroline Garcia before losing in the semi final to Swiss Belinda Bencic Few players move better on grass than Kerber and her stock Wimbledon photograph could be one of her getting low knees almost scraping the grass to fire a backhand Grass is more natural for me than clay the world number five who owns a 30 10 record from her 11 Wimbledon said The serve is a big thing on grass You have to play different on the first two balls after the serve or the return The next few shots must be really aggressive The other image would be her collapsing to Center Court that sunny Saturday a year ago when she completed a 6 3 6 3 defeat of Williams having played near perfect tennis I ve watched the video of the match a couple of times she said I took all my chances that day While the pressure will be amped up in a few days when Kerber leaves the chilled out surrounds of Eastbourne and heads to Wimbledon she believes she is well equipped to handle it and start another title quest Everything starts from zero and everyone would like to beat me Kerber said
It is a pressure but I learned from the other two times I was defending slams that I must just focus on the next opponent the next step the next practice same as when I won the slams Keep it simple |
GLW | 5 Merrill Lynch Buy Rated Tech Stocks That Pay Large Dividends | One of the best places for investors to have been over the past year was the technology sector and with good reason Industry giant Apple Inc NASDAQ AAPL had a massive 86 increase alone in 2019 However the question facing investors in the sector is simple Where do we go now With fourth quarter earnings reporting winding down we decided to review the results looking for tech stocks that delivered solid earnings were rated Buy at Merrill Lynch and also paid solid dependable dividends We found five stocks that look like solid investments for 2020 and that should hold up better if we get a protracted technology and momentum sell off div connatix margin bottom 1 5em div connatix img margin unset BroadcomThis stock has rallied smartly off last summer s lows and could potentially break out to new highs this year Broadcom Inc NASDAQ AVGO has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure wireless communications enterprise storage and industrial end markets Applications for Broadcom s products in its end markets include data center networking home connectivity broadband access telecommunications equipment smartphones and base stations data center servers and storage factory automation power generation and alternative energy systems and displays Top Wall Street analysts like Broadcom s leadership in the mobile data center and broadband markets and especially in the radio frequency RF arena Many analysts see a cyclical rebound in industrial and communications demand Broadcom investors receive a very solid 4 07 dividend Merrill Lynch has a 360 price target on the shares The Wall Street consensus target is handily lower at 350 62 and Broadcom stock closed Thursday s trading at 319 16 per share CorningThis company continues to be a huge player in the fiber optic world and it resides on the Merrill Lynch US 1 stock list of top picks Corning Inc NYSE GLW is a technology pioneer that manufactures LCD glass for flat panel displays for multiple product lines Telecommunications 30 of sales produces optical fiber and cable component hardware and equipment and photonic components for the telecommunications CATV and networking industry In addition the company s Environmental Technologies division 12 of sales produces specialized glass glass ceramic and polymer based products for the automotive industry Corning offers shareholders a reasonable 2 84 dividend Merrill Lynch has a 34 price target while the consensus target was last seen at 30 17 Corning stock closed at 28 17 a share on Thursday IBMThis blue chip giant still offers investors a very solid entry point International Business Machines Corp NYSE IBM is a leading provider of enterprise solutions offering a broad portfolio of information technology IT hardware business and IT services and a full suite of software solutions The company integrates its hardware products with its software and services offerings in order to provide high value solutions IBM s five major segments are 1 Cognitive Solutions 2 Global Business Services 3 Technology Services Cloud Platforms 4 Systems and 5 Global Financing Analysts cite the company s potential in the public cloud as a reason for their positive outlook going forward But note that IBM is among the big corporations with the most debt |
WMB | Former technical head Lowe leaves Williams F1 team | LONDON Reuters Former technical director Paddy Lowe is leaving Williams NYSE WMB with immediate effect and has stepped down from the board of directors the Formula One team said on Tuesday Lowe had been on an extended leave of absence since March 5 before the start of the season After a period of careful reflection I have reached the decision that I will not return to work at Williams he said in a team statement Lowe s position at the former world champions appeared shaky last year and worsened after they failed to finish their new car in time for the start of testing in Barcelona and turned up two days late The team are last in the championship and have yet to score a point with a car that has been the slowest on track all season Williams finished last overall in 2018 and have not won a race since 2012 Lowe joined Williams in 2017 from dominant champions Mercedes but last year s car the first under his supervision proved ill handling and uncompetitive The family owned British team have British rookie George Russell and Poland s Robert Kubica as their drivers
We understand and respect the decision Paddy has reached and wish him well for the future said deputy principal Claire Williams |
WMB | U S not where it needs to be on LGBT employment Fed s Williams | NEW YORK Reuters The United States is not where we need to be on increasing employment levels of lesbian gay bisexual and transgender LGBT people a top economic policymaker said on Tuesday Federal Reserve Bank of New York President John Williams NYSE WMB said at an LGBT finance industry event that unemployment rates are nearly double the national average for people of those sexual orientations As President of a Federal Reserve Bank I am focused on two vital economic goals maximum employment and stable prices for the U S economy Williams said in remarks prepared for delivery in New York These statistics paint a clear picture of why conferences like this one are so important We are not where we need to be Williams comments come as celebrations take place around the world to mark the Stonewall uprising in New York 50 years ago when patrons of a gay bar fought back against police harassment which is seen as the beginning of the modern LGBT rights movement Gay pride parades will also be celebrated around the world on June 30
Williams did not comment on his economic or policy outlook less than a week after the Fed signaled it could cut interest rates by as much as half a percentage point over the remainder of this year in response to increased economic uncertainty and a drop in expected inflation Yet one argument for keeping rates lower for longer is that doing so can bring more marginalized people into the workforce |
WMB | Djokovic has sympathy for Nadal over Wimbledon seedings gripe | By Martyn Herman LONDON Reuters Spaniard Rafael Nadal received support from Wimbledon champion Novak Djokovic on Tuesday after criticising the unique seedings formula used by the grasscourt Grand Slam which gets underway at the All England Club on Monday Nadal looks set to fall victim to the formula which tweaks the seedings based on previous form on grass with the 33 year old expected to be seeded third behind top ranked Djokovic and Roger Federer despite being world number two Wimbledon which will announce the seedings on Wednesday is the only one of the four Grand Slam tournaments not to stick rigidly to the ATP and WTA rankings With Nadal seeking a first Wimbledon title for nine years seeded three it would mean he would most probably have to beat eight time champion Roger Federer and four time winner Djokovic to get his hands on the trophy for a third time Wimbledon is the only tournament of the year that doesn t follow the ranking the 33 year old Nadal told Spanish TV station Vamos on Tuesday It s their choice Either way being second or third seed I have to play at the best level to aspire to the things I aspire to It is better to be second than third but if they consider that I have to be third I will accept I don t think it s a good thing that Wimbledon is the only one with its own seeding formula Nadal lost a semi final epic to Djokovic last year but in his previous five appearances he never got past round four SEEDING SURPRISE Wimbledon top seed Djokovic said he could understand Nadal s frustration It s their rules and you have to respect it although it s a little bit surprising to be honest the Serb told Reuters after playing at the Boodles exhibition event on Tuesday Roger is the greatest of all time and has won the most Wimbledon titles of any player in history and if any player deserves it it s him But at the same time it s Nadal that he is taking over from as the second seed so it s surprising to be honest The top 32 players on the ATP ranking list who are present at Wimbledon will take the seeded places but a formula using results on grass for the past 24 months can change the order The only thing that doesn t seem right to me is that it s just Wimbledon that does it If everyone did it I think it would be appropriate or correct Nadal told Vamos The women s seedings follow the WTA ranking list but can be tweaked to produce a balanced draw
Serena Williams NYSE WMB was ranked 183rd ahead of last year s tournament but was handed a seeding of 25 |
WMB | Rise of the Machines | Howard Morgan co founder of First Round Capital and one of the original members of Renaissance Technologies talks with Grant Williams NYSE WMB about how high frequency trading and algorithm based investment strategies have distorted traditional price discovery in financial markets This clip is excerpted from a video published on Real Vision on March 22 2019 entitled Failure as a Forerunner to Success |
WMB | Federer seeded second at Wimbledon Nadal drops to three | LONDON Reuters Eight time champion Roger Federer was confirmed as the second seed for Wimbledon on Wednesday bumping Rafael Nadal down to third despite being ranked below the Spaniard Defending champion Novak Djokovic tops the draw while new world number one Ash Barty is top seed in the women s singles South African Kevin Anderson runner up to Djokovic last season is fourth seed despite falling to eighth in the ATP rankings as Wimbledon used its special formula once again Twice Wimbledon champion Nadal will be seeded three meaning he is likely to have to beat both Federer and Djokovic to claim his first title at the All England Club since 2010 The Spaniard was critical of the Wimbledon s seedings formula this week saying it s not a good thing that the grasscourt event is the only one of the four Grand Slams that does not stick rigidly to ATP rankings for seedings Wimbledon uses form over the past 24 months on grass to tweak the positions of the top 32 players in the men s draw While the women s seedings are in line with the WTA rankings Wimbledon reserves the right to change the order to create a balanced draw Anderson s promotion is bad news for French Open runner up and world number four Dominic Thiem who drops to fifth seed and could play Djokovic Federer or Nadal in the last eight Former runner up Marin Cilic moved up from a world ranking of 18 to the 13th seeded spot
Seven time champion Serena Williams NYSE WMB is seeded 11th as per her WTA ranking Last year the American was bumped up to 25th seed despite being ranked 183rd after returning to the Tour following the birth of her daughter |
WMB | NBA notebook Durant opts out will hit free agency | NBA superstar Kevin Durant has declined his 31 5 million player option with the Golden State Warriors and will become an unrestricted free agent ESPN s Adrian Wojnarowski reported Wednesday The 30 year old forward and his business manager Rich Kleiman are in New York evaluating free agency options according to the report Free agency begins Sunday Durant has been in New York since traveling there to have surgery for the ruptured right Achilles tendon he suffered in Game 5 of the NBA Finals against the Toronto Raptors Multiple reports have said the Brooklyn Nets are targeting Durant and Boston point guard Kyrie Irving while the New York Knicks and Warriors also have expressed interest in signing him to a max contract Eyeing a sign and trade for Philadelphia 76ers All Star Jimmy Butler the Houston Rockets are shopping center Clint Capela guard Eric Gordon and forward P J Tucker to cap abundant teams ESPN reported ESPN reported that the Rockets are shopping those players individually seeking the best available first round pick that they could then include in a deal for Butler The Rockets would need to move two or all three players in order for the salaries to match a max contract for Butler which would be 140 million over four years Center Marc Gasol will return to the Toronto Raptors in 2019 20 after exercising his 25 6 million player option Gasol could have been an unrestricted free agent but he will instead play out the final season of a five year 113 2 million pact The 34 year old arrived in Toronto in February via trade from the Memphis Grizzlies with whom he spent his first 10 plus NBA seasons Despite lessened production he helped the team to its first NBA championship in franchise history Atlanta Hawks guard Allen Crabbe was arrested on a charge of driving under the influence Tuesday in Los Angeles Crabbe s blood alcohol content reportedly measured 0 08 percent which is the legal limit in California He was charged with a misdemeanor DUI and his bail was set at 5 000 according to Los Angeles Police Department records The Brooklyn Nets agreed to trade Crabbe to the Hawks earlier this month though the deal cannot be official until July 6 The NBA has begun exploring options that include a possible midseason tournament a postseason play in tournament and an abbreviated regular season schedule in 2021 22 ESPN reported According to the report an advisory committee with about a dozen top team executives took part in a June 17 conference call to discuss with the league office possible alternatives to the traditional NBA schedule The Phoenix Suns extended a qualifying offer to forward Kelly Oubre Jr ESPN reported The move will make the 23 year old a restricted free agent allowing Phoenix the opportunity to match any offer sheet from another team Acquired from the Washington Wizards in a December 2018 trade Oubre averaged 16 9 points and 4 9 rebounds in 40 games 12 starts with the Suns The Minnesota Timberwolves extended a qualifying offer to point guard Tyus Jones Jones 23 averaged 6 9 points and 4 8 assists in 68 games during his fourth season with the Timberwolves in 2018 19 The Memphis Grizzlies extended point guard Delon Wright a qualifying offer The Athletic reported Wright 27 averaged 12 2 points 5 4 rebounds 5 3 assists and 1 6 steals in 26 games 11 starts with the Grizzlies after arriving in the Feb 7 trade that sent Gasol to the Raptors The Washington Wizards extended a qualifying offer to center Thomas Bryant according to The Athletic The 21 year old averaged 11 4 points and 7 4 rebounds per game last season starting 53 of 72 contests The New Orleans Pelicans declined to give a qualifying offer to center Cheick Diallo ESPN reported Diallo 22 averaged six points and 5 2 rebounds in 64 games one start last season The Los Angeles Lakers extended qualifying offers to guard Alex Caruso and forward Johnathan Williams NYSE WMB Caruso 25 averaged 9 2 points and 3 1 assists across 25 games four starts last season earning a more prominent role late in the year Williams 24 saw action in 24 games as a reserve averaging 6 5 points and 4 1 rebounds His offer is for a two way contract The Dallas Mavericks extended qualifying offers to forwards Maxi Kleber and Dorian Finney Smith ESPN reported Kleber 27 averaged 6 8 points and 4 6 rebounds last season playing in 71 games 18 starts Finney Smith 26 played in 81 of 82 games 26 starts and averaged 7 5 points and 4 8 rebounds The NBA removed center Omer Asik s salary from the Chicago Bulls cap due to a career ending illness The Athletic reported
The exception opens 3 million in cap space for the Bulls Asik has not played since 2017 18 after being diagnosed with Crohn s disease Field Level Media |
WMB | Serena headed to Wimbledon seeking return to form | By Frank Pingue Reuters Serena Williams NYSE WMB will bring her quest for a record equalling 24th Grand Slam title to Wimbledon next week where she will try to shake off a nagging knee injury and show the tennis world that her window of opportunity is still open Williams has been stuck on 23 Grand Slam titles one behind the all time record held by Margaret Court for over two years and has shown little evidence of late that she will be able to snap that drought at the All England Club As long as she s playing she s going to be a threat to win anything ESPN tennis analyst and former world number one John McEnroe told a conference call But it s just now there s more things that can go wrong I suppose like more days where she might not have it and other days where players won t give in as easily So that just makes it more difficult The 37 year old American s time on court has been limited to a handful of matches since the Australian Open in January due in part to a knee injury that kept her from competing in a tune up event ahead of Wimbledon where action begins on July 1 After losing in the third round at the French Open Williams did not exactly sound her confident self when asked if she would have enough time to get in optimal shape for Wimbledon where she is a seven times winner I hope so I m still working on it and working on getting there said Williams So I think it will be I think it be enough time We ll see but I definitely hope so When Williams was at the peak of her career she was so far above the competition that she could barrel her way through a Grand Slam draw even if she was having an off day But the combination of injury a limited playing schedule and an increased standard of women s tennis over the past few years have left many to question whether she can again triumph in one of tennis blue riband events TWO STEPS SLOWER Williams won the most recent of her Grand Slam titles at the 2017 Australian Open when she was in the early stages of her pregnancy which led to her taking a year off from competition She came back with a bang in 2018 and despite not playing at her best managed to reach the final at both Wimbledon and the U S Open It s hard for me to bet against Serena Look what happened last year Two finals in Grand Slams said ESPN tennis analyst and 18 times Grand Slam champion Chris Evert The one difference that I see in Serena is since she s come back she s been one or two steps slower than normal I think that s a little bit of fitness I think it s a little bit of match play I think it s a little bit of confidence Healthy legs are key to any player s game but perhaps even more vital for someone like Williams who relies heavily on her physicality and court coverage to set up big shots Williams has been unable to deliver her trademark big serves on a consistent basis of late but will likely take comfort in the friendly confines of the All England Club given she is most effective on grass But unlike in her prime Williams rivals know she is not the same player she once was and do not walk onto the court nearly as intimated as they once were when facing one of the game s all time greats There s so many things that may be going against Serena and she thrives on that and she loves that and that s when she comes through said Evert
I would have said in January if there was any Grand Slam she was going to win it would probably be Wimbledon and if her serve is on she s going to be tough to beat |
WMB | Trump peace plan conference is blip on Israel s radar as political Iran crises swirl | By Dan Williams NYSE WMB JERUSALEM Reuters A U S led conference in Bahrain designed to drum up investment in the Palestinian economy and pave a path to peace with Israel has gone largely unremarked by Israelis preoccupied with a political crisis and their arch foe Iran Palestinians who view the Trump administration as biased towards Israel boycotted this week s meeting in Manama It was also held without an official Israeli delegation Organizers said privately this was due to worry about a further dent to the event s credibility after an election in Israel in April election failed to produced a new coalition government With Prime Minister Benjamin Netanyahu facing proliferating challengers in a new election due in September and beset by corruption scandals the hazier than ever peacemaking horizon with the Palestinians drew scant discussion in Israeli media Economy Minister Eli Cohen went as far as to suggest that Bahrain may have closed the door on further diplomacy We saw that even in an economic conference where the Palestinians were meant to come and get money to come and get tools and inducements to come and develop their economy they did not come he told Israel s Reshet 13 TV We see really that they do not want a peace accord They simply don t want us here Again the Palestinians true face has been exposed The Palestinians who have shunned the United States since it recognized disputed Jerusalem as Israel s capital in late 2017 suspected the conference sought to lure them into surrendering their statehood goal in return for global financial relief It is not clear whether a peace plan promised by the Trump administration will call for a two state solution sought by the Palestinian Authority and backed internationally which involves creation of a Palestinian state alongside Israel Netanyahu voiced conditional acceptance in 2009 of a future demilitarized Palestinian state He has since said its creation would not happen on his watch and that he plans to annex some Jewish settlements in the occupied West Bank communities many countries view as illegal Stalled since 2014 peacemaking has been on a backburner for some Israelis while others feel a need to work for coexistence This is a matter that s important to me We need an end to this situation said Jerusalem chef Israel Bachar 45 It s a little odd that the Americans held this Bahrain conference without convening the two main parties involved I don t think it s helpful to try to impose things from outside Netanyahu described the Bahrain gathering as part of a U S effort to bring about a better future and solve the region s problems Two days before it opened he toured the strategic Jordan Valley the eastern most part of the West Bank that borders Jordan with U S National Security Adviser John Bolton and said Israel must retain a presence there in any peace deal Israeli journalists were at Bahrain a rarity for a Gulf state that does not formally recognize Israel The resulting coverage focused as much on wider Israeli Arab contacts and Bahrain s tiny Jewish community as on the Palestinian no shows Cohen a member of Netanyahu s security cabinet said Arab delegates saw Bahrain as a chance to close ranks with Israel on bilateral commerce and in the face of a common adversary This was in fact a regional summit against Iran he said We see here a coalition in the Middle East They Arab powers understand that their security threat is Iran Washington and Tehran have exchanged threats and heated rhetoric in recent weeks with a U S increasing sanctions on Iran and Iranian forces shooting down a U S drone in the Gulf The Institute for National Security Studies at Tel Aviv University gave a cautious welcome to the initiatives announced in Manama including a global investment fund for the Palestinians But it said these could not trump statecraft While a willingness to earmark huge investments in economy infrastructure education health and welfare in the West Bank and Gaza Strip should be good news what is also required is a political plan that is both creative and beneficial to the Palestinians INSS scholars Tomer Fadlon and Sason Hadad wrote
Israel captured the West Bank and Gaza in the 1967 Middle East war It pulled its troops and settlers out of Gaza in 2005 and Hamas Islamists who have called for Israel s destruction now rule the enclave Palestinians seek both territories for a future state |
WMB | American Gauff qualifies for Wimbledon aged 15 | By Martyn Herman LONDON Reuters Cori Gauff became the youngest player in the professional era to survive the Wimbledon qualifying draw on Thursday as the 15 year old American thrashed Belgium s Greet Minnen 6 1 6 1 to seal her place in next week s main draw Gauff who is combining her practice sessions with her schoolwork looked like a seasoned grasscourt player as she claimed her a third successive straight sets victory I knew I was the underdog and I was just enjoying it Gauff who says it would be a dream to play idols Serena or Venus Williams NYSE WMB at Wimbledon told reporters fresh from walking off court at Roehampton Serena is the reason why I play tennis and why my dad decided to get me a racket Obviously I don t care who I play I m just happy to be in the draw but I would love to share the court with Serena If I played any one of them it would be a dream come true Gauff who won the French Open junior title in 2018 was given a wildcard into the Wimbledon qualifying event and took advantage in spectacular fashion She will be the first 15 year old in the main draw since Britain s Laura Robson in 2009 I had no expectations really she said I feel really blessed My parents never put any limitations on my goals and told my to shoot as high as I can |
BMY | Biotech Sector Watchlist ADXS CLDX NLNK SRNE | The overall look of the indices has me concerned so we re going to be extremely cautious going forward However the biotech sector has been doing well so we are going to highlight some of those here Advaxis Inc NASDAQ ADXS had a terrific day on Wednesday opening at 10 15 getting up to 10 90 and closing at 10 59 up 47 cents or 4 6 on 1 1 million shares The volume was the best in a couple weeks As this stock recently came out of a falling wedge it stair stepped its way up with a series of pops and flags and now it s been up two days in a row Watch for a test maybe as early as Thursday of the 11 11 10 zone If it gets up there and through that then the new targets are 13 3 4 and ultimately to 19 Celldex Therapeutics Inc NASDAQ CLDX had a beautiful day on Wednesday up 2 93 to 29 30 or 11 on 5 million shares After the recent breakout it pulled back topped pulled back one more time formed another wedge and broke away with a breakaway gap It had a couple important technical days leading to the top of the channel If it gets some upside momentum look for 33 34 but at any moment this stock could get into a consolidation mode since it s at resistance Longer term the February highs at 33 33 would be a target zone NewLink Genetics Corporation NASDAQ NLNK a swing trade pick of ours is doing great up 3 39 to 49 53 or 3 4 on 700 000 shares traded Wednesday It popped pulled back and consolidated nicely and it hit the top of the trendline With momentum it could get to 52 53 the short term target Beyond that look for it to get to 60 62 Sorrento Therapeutics Inc NASDAQ SRNE has been acting great ever since we began highlighting it with the exception of one day But look how it recovered It formed a coil broke out and has been moving steadily It looks like it s being accumulated especially when you look at the On Balance Volume moving up steadily It s not getting too far ahead of itself a nice orderly advance On Wednesday it jumped across a triple top to close up 34 cents or 2 6 on 267 600 shares The volume wasn t big and it didn t close great but it hit a new high on Wednesday at 13 84 The targets are near 17 and then eventually 23 24 Other stocks on Harry s Charts of the Day included Ambarella Inc NASDAQ AMBA Bristol Myers Squibb Company NYSE BMY Capnia Inc NASDAQ CAPN NewLink Genetics Corporation NASDAQ NLNK Ocular Therapeutix Inc NASDAQ OCUL Ohr Pharmaceutical Inc NASDAQ OHRP Orexigen Therapeutics Inc NASDAQ OREX Pernix Therapeutics Holdings Inc NASDAQ PTX Sanchez Energy Corporation NYSE SN Sorrento Therapeutics Inc NASDAQ SRNE and Unilife Corporation NASDAQ UNIS |
WMB | Williams Loses Its Way | With only the slightest risk of hyperbole I can assert that anything written by Michael Lewis is worth reading His latest work recounts the friendship between two Israeli psychologists which led to Daniel Kahneman s Kahneman with his late friend Amos Tversky developed an area of Behavioral Economics which shows why so much economic theory fails in practice because humans inconveniently act like humans and not the economic agents econs in Kahneman s book economists assume Both books are highly readable
I was reminded of this by Williams Companies NYSE WMB ill considered secondary announced late on Monday Last August WMB and its MLP Williams Partners NYSE WPZ were pondering how they would finance their capex budget The Shale Revolution has led to many opportunities for WMB to add on to its Transco natural gas pipeline network an irreplaceable artery running down the eastern United States The price of WPZ reflected this uncertainty through a 9 7 yield So WMB did something rather they cut their distribution with the intention of using the cash saved to invest in WPZ Removing the financing uncertainty drove both stocks higher WPZ s distribution was now secure its financing assured and WMB shareholders who are total return oriented rather than fixated on dividends cheered the redirection of some WMB cash into cheap WPZ units We wrote about this in
To return to Michael Lewis he recounts how Amos Tversky came to believe that humans underestimate how random life is He showed how events that appeared inevitable after the fact were very often assigned extremely low probabilities prior Thus is it that last Summer s moves by WMB appeared to be the reliably sensible choice you d expect from an insightful management team Whereas in fact the partial reversal of the August moves by WMB last week confirm that intelligent moves don t necessarily confirm intelligence by the protagonists but can in fact be dumb luck
The two press releases reflect an Orwellian quality Last August the goal was to ensure WPZ s distribution was stable and WMB s dividend was sacrificed to this end Confusingly today WPZ s distribution is no longer regarded as important while WMB s is now raised The solemn language about positioning for long term growth appears in both press releases even while in concert they reflect not a coherent strategy but a staggering from one transaction to another based on the last piece of advice received WMB doesn t seem to know if it needs cash or not on the one hand it s raising 2BN in equity but on the other it s increasing its payout
More disappointing than their flip flopping on dividends was the elimination of the Incentive Distribution Rights IDRs received by WMB from WPZ IDRs are the payments the GP receives for running their MLP WMB gave up its future claim to IDRs which based on their 3Q16 receipt amounts to 900MM in annual cashflow In exchange they received 289MM WPZ units which based on the new reduced dividend will generate only 694MM in cashflow Moreover IDR cashflows are worth a much bigger multiple than LP cashflows because they grow faster Pure GPs trade at 2X the multiple of MLPs and this was one of the attractive features of owning WMB A fair consideration for the foregone IDRs would have been substantially more than the number of WPZ units actually received which is why WMB shares fell 10 when the moves were announced If WMB management was surprised at the market s reaction they re either dim or incompetent
WMB s management has shown that they never really understood how intelligent they d been in August when they redirected some of WMB s cashflows away from dividends and towards WPZ There wasn t anything obviously wrong with this plan it didn t require tinkering Their moves are random There is no strategy just a series of unrelated moves Tversky showed Israeli Air Force instructors that the harsh feedback they gave trainees following errors wasn t in fact causing subsequent improvement Rather pilots performance varies and regression to the mean caused bad decisions to be followed by good ones regardless of the feedback from instructors The management at WMB is similarly showing that they re no better than average at corporate finance
As usual their advisers are the smartest guys in the room finding new ways to shuffle the deck while generating fees If you re an equity underwriter every client looks as if they d benefit from more equity capital This is no doubt the type of muddle headed thinking that has caused Keith Meister one time WMB board member vocal critic and head of Corvex Capital so much frustration WMB controls great assets unfortunately the management isn t of the same quality
Disclosure We are invested in WMB |
WMB | Surging Earnings Estimates Signal Good News For Williams Companies WMB | The Williams Companies Inc NYSE WMB operates as an energy infrastructure company that could be an interesting play for investors That is because not only does the stock have decent short term momentum but it is seeing solid activity on the earnings estimate revision front as well These positive earnings estimate revisions suggest that analysts are becoming more optimistic on WMB s earnings for the coming quarter and year In fact consensus estimates have moved sharply higher for both of these time frames over the past four weeks suggesting that Williams Companies could be a solid choice for investors Current Quarter Estimates for WMBIn the past 30 days 3 estimates have gone higher for Williams Companies while none have gone lower in the same time period The trend has been pretty favorable too with estimates increasing from 12 cents a share 30 days ago to 18 cents today a move of 50 Current Year Estimates for WMBMeanwhile Williams Companies current year figures are also looking quite promising with 3 estimates moving higher in the past month compared to none lower The consensus estimate trend has also seen a boost for this time frame increasing from 56 cents per share 30 days ago to 70 cents per share today an increase of 25 Williams Companies Inc The Price and Consensus Bottom LineThe stock has also started to move higher lately adding 5 over the past four weeks suggesting that investors are starting to take note of this impressive story So investors may definitely want to consider this Zacks Rank 3 Hold stock to profit in the near future You can see 5 Trades Could Profit Big League from Trump PoliciesIf the stocks above spark your interest wait until you look into companies primed to make substantial gains from Washington s changing course Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals tariffs lower taxes higher interest rates and spending surges in defense and infrastructure |
WMB | Can Williams Companies WMB Pull A Surprise In Q1 Earnings | Energy infrastructure provider Williams Companies NYSE WMB is set to release first quarter 2017 results after the closing bell on May 3 In the preceding three month period the Tulsa OK based company delivered a positive earnings surprise of 6 25 on the back of cost reductions and improvement in financial performance Coming to earnings surprise history the company posted a negative average earnings surprise of 9 69 in the trailing four quarters Let s see how things are shaping up for this announcement Factors at PlayWilliams Companies underwent a major change in 2017 when it abandoned its GP MLP model in exchange for 289 million units of its midstream MLP William Partners NYSE WPZ This has helped to shore up finances of William Partners and also improved the coverage metrics of Williams The company also boosted its quarterly dividend by 50 to 30 cents per share This is expected to position the company for sustainable long term growth as well as solidify the investment grade credit ratings of its subsidiary In the first quarter the rig count and the natural gas production in the Marcellus area increased by around 114 and 4 respectively This is likely to positively impact William Partners from which it derives maximum earnings Increased demand of natural gas from residential customers in the quarter owing to lower winter temperature will contribute to earnings Despite these positives the company s high leverage ratio of over 80 makes it susceptible to financial risk and can affect its earnings adversely Further the company s exposure to commodity price volatility may hamper its growth potential This is also reflected in the price performance of the company which declined around 5 in the quarter Williams Companies Inc The Price and Consensus Earnings WhispersOur proven model does not conclusively show that Williams Companies will beat estimates this quarter That is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold for this to happen That is not the case here as you will see below Zacks ESP Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 0 00 This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 20 cents You can uncover the best stocks to buy or sell before they are reported with our Zacks Rank Williams Companies currently carries a Zacks Rank 3 Though a Zacks Rank 3 increases the predictive power of ESP the company s ESP of 0 00 makes surprise prediction difficult Please note that we caution against Sell rated stocks Zacks Rank 4 or 5 going into the earnings announcement especially when the company is seeing negative estimate revisions Stocks to ConsiderWhile earnings beat looks uncertain for Williams Companies categorized under the Zacks industry here are some companies for investors to consider in the broader energy space that according to our model have the right combination of elements to post an earnings beat this quarter Earthstone Energy Inc NYSE ESTE is expected to release first quarter earnings results on May 9 The company has an Earnings ESP of 133 33 and a Zacks Rank 3 You can see Chesapeake Energy Corporation NYSE CHK is expected to release first quarter earnings results on May 4 The company has an Earnings ESP of 5 26 and a Zacks Rank 3 Sell These Stocks Now Just released today s 220 Zacks Rank 5 Strong Sells demand urgent attention If any are lurking in your portfolio or Watch List they should be removed immediately These are sinister companies because many appear to be sound investments However from 1988 through 2016 stocks from our Strong Sell list have actually performed 6X worse than the S P 500 |
WMB | Williams WMB Q1 Earnings Miss Revenues Beat Estimates | North American energy firm Williams Companies Inc NYSE WMB reported adjusted earnings from continuing operations of 14 cents per share missing the Zacks Consensus Estimate of 20 cents on increased costs However the bottom line improved from the prior year figure of 3 cents per share The improved results were driven by higher revenues absence of impairment costs and growth in operating income from both its segments For the quarter ended Mar 31 2017 Williams reported revenues of 1 988 million surpassing the Zacks Consensus Estimate of 1 978 million and also improving from the year ago quarter level of 1 660 million Segmental AnalysisIn Sep 2016 Williams announced major changes for a simplified leaner business model and implemented the changes effective Jan 1 As a result of the realignment and the sale of Canadian operations Williams NGL Petchem Services reporting segment has been eliminated Williams Partners This segment reported adjusted operating profit of 1 117million up 5 3 from 1 060 million in the year ago quarter The upside was primarily driven by increased revenues higher commodity prices lower operating and selling costs Increased contributions from expansion projects in Gulf of Mexico and Transco contributed to the results Other The segment posted adjusted operating profit of 28 million compared with the year ago quarter loss of 4 million Results were driven by higher income associated with a regulatory asset primarily driven by our increased ownership in William Partners LP NYSE WPZ Expenses SummaryThe total cost and expenses increased 11 2 to 1 555 in the reported quarter as against 1 398 in the prior year quarter The increase was mainly driven by higher product costs which escalated 82 compared to the prior year quarter However reduction in the operating and maintenance costs O M and Selling General and Administrative Expenses S G A partially offset the increase in the total costs The O M expenses in the reported quarter were 368 million as against 391 million in the year ago quarter The S G A expenses decreased to 161 million from the prior year figure of 221 million Capital Expenditure Balance SheetDuring the reported quarter Williams capital expenditure was 511 million As of Mar 31 2016 the company had cash and cash equivalents of 639 million The long term debt of the company was 21 825 million representing a debt to capitalization ratio of 72 1 Williams Companies Inc The Price Consensus and EPS Surprise Zacks Rank Key PicksBased in Tulsa Williams is a premier energy infrastructure provider in North America The company s core operations include finding producing gathering processing and transportation of natural gas Boasting a widespread pipeline system Williams is one of the largest domestic transporters of natural gas by volume The company under Zacks categorized currently carries a zacks Rank 3 Hold Better ranked players in the broader energy space include Bellatrix Exploration Ltd TO BXE and Penn Virginia Corporation NASDAQ PVAC Both companies sport a Zacks Rank 1 Strong Buy You can see Bellatrix reported positive earnings surprise of 58 54 in the trailing four quarters Penn Virginia posted positive average earnings surprise of 36 67 in the preceding four quarters Will You Make a Fortune on the Shift to Electric Cars Here s another stock idea to consider Much like petroleum 150 years ago lithium power may soon shake the world creating millionaires and reshaping geo politics Soon electric vehicles EVs may be cheaper than gas guzzlers Some are already reaching 265 miles on a single charge With battery prices plummeting and charging stations set to multiply one company stands out as the 1 stock to buy according to Zacks research It s not the one you think |
WMB | Williams Partners Wins Local Support For Atlantic Sunrise | Williams Partners L P NYSE WPZ recently announced that its Atlantic Sunrise Expansion project is witnessing strong support from all segments of the society in Pennsylvania The project eyes continuous growth and development of the state s economy as well as strives to create thousands of jobs Atlantic Sunrise received a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission FERC in Feb 2017 The project can start providing benefits to Pennsylvania after the last of the remaining state permits required to begin construction are secured Construction on the Central Penn Line the greenfield portion of the project is anticipated to commence in the third quarter of 2017 This will enable the full project capacity to be brought online in mid 2018 In 2015 Pennsylvania State University researchers estimated Atlantic Sunrise to directly and indirectly generate about 8 000 jobs in the 10 Pennsylvania counties during its construction phase This is likely to result in an approximate 1 6 billion economic impact in the project area Recently a petition signed by over 3 000 supporters was sent to Pennsylvania Governor Tom Wolf demanding acceleration of the state regulatory approval for the project Additionally over 1 200 people and organizations submitted supportive comments to FERC during the public comment period Tulsa OK based Williams Partners is an MLP formed by Williams Companies Inc NYSE WMB to acquire own and operate a portion of its midstream assets The partnership is involved in gathering transporting and processing natural gas as well as fractionating and storing NGL Williams Partners stock however shows weakness in its price chart Units of the partnership have gained 2 3 in the last three months while the Zacks categorized registered an increase of 4 2 Williams Partners currently has a Zacks Rank 2 Buy Other stocks from the same space that warrant a look are SunCoke Energy Inc NYSE SXC Exterran Corp NYSE EXTN and Canadian Natural Resources Limited Ltd TO CNQ All these stocks sport a Zacks Rank 1 Strong Buy You can see SunCoke Energy posted a positive earnings surprise of 120 0 in the preceding quarter The company beat estimates in two of the four trailing quarters with an average negative earnings surprise of 35 78 Exterran posted a positive earnings surprise of 123 21 in the year ago quarter Canadian Natural Resources posted a positive earnings surprise of 30 77 in the preceding quarter It surpassed estimates in two of the four trailing quarters with an average negative earnings surprise of 275 46 5 Trades Could Profit Big League from Trump PoliciesIf the stocks above spark your interest wait until you look into companies primed to make substantial gains from Washington s changing course Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals tariffs lower taxes higher interest rates and spending surges in defense and infrastructure |
GLW | Corning GLW Beats Q3 Earnings And Revenue Estimates | Corning GLW came out with quarterly earnings of 0 44 per share beating the Zacks Consensus Estimate of 0 40 per share This compares to earnings of 0 51 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 10 A quarter ago it was expected that this specialty glass maker would post earnings of 0 44 per share when it actually produced earnings of 0 45 delivering a surprise of 2 27
Over the last four quarters the company has surpassed consensus EPS estimates four times
Corning which belongs to the Zacks Communication Components industry posted revenues of 2 97 billion for the quarter ended September 2019 surpassing the Zacks Consensus Estimate by 2 62 This compares to year ago revenues of 3 05 billion The company has topped consensus revenue estimates four times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Corning shares have added about 1 3 since the beginning of the year versus the S P 500 s gain of 21 3
What s Next for Corning
While Corning has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Corning was unfavorable While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 4 Sell for the stock So the shares are expected to underperform the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 45 on 2 71 billion in revenues for the coming quarter and 1 70 on 11 43 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Communication Components is currently in the top 33 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
GLW | Why Is Corning GLW Down 3 4 Since Last Earnings Report | A month has gone by since the last earnings report for Corning GLW Shares have lost about 3 4 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Corning due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important drivers Corning Q3 Earnings Revenues Top Estimates Fall Y YCorning s third quarter 2019 results were consistent with its earlier update issued on Sep 16 Net IncomeOn a GAAP basis net income for the September quarter declined to 337 million or 38 cents per share from 625 million or 67 cents per share in the year ago quarter primarily due to lower operating income and lower net gain from translated earnings contract Core net income came in at 397 million or 44 cents per share compared with 476 million or 51 cents per share in the prior year quarter The bottom line however beat the Zacks Consensus Estimate by 4 cents RevenuesQuarterly GAAP net sales were down 2 5 year over year to 2 934 million which were consistent with the Sep 16 update Core sales decreased to 2 969 million from 3 045 million reported in the year earlier quarter The top line however surpassed the consensus estimate of 2 893 million Segment ResultsNet sales from Display Technologies segment were 793 million compared with 852 million in the year earlier quarter Display glass volume declined by a high single digit percentage sequentially consistent with the Sep 16 update The full year 2019 price decline is expected to improve to a low single digit percentage compared with prior expectation of a low to mid single digit percentage decline The segment s net income was 185 million compared with 218 million in the prior year quarter Net sales from Optical Communications segment declined 9 8 year over year to 1 007 million due to overall market weakness driven by customer project spending decisions primarily in carrier networks The segment s net income was 127 million compared with 168 million in the prior year quarter Management continues to expect full year sales to decline 3 5 compared with 2018 Environmental Technologies segment s net sales increased 19 9 to 397 million driven by sustained adoption of gasoline particulate filters and strong demand in the heavy duty market The segment s net income was 79 million compared with 60 million in the prior year quarter For the full year management currently expects sales to grow by a mid teen percentage compared with prior expectation of low teens percentage growth The Specialty Materials segment s net sales were up 1 to 463 million led by healthy demand for the company s portfolio of mobile consumer electronics glass solutions The segment s net income was 92 million compared with 116 million in the prior year quarter Net sales from Life Sciences segment were up 10 8 to 256 million The segment s net income was 41 million compared with 30 million in the prior year quarter owing to higher sales volume and manufacturing performance optimization Corning continues to outpace overall market growth and expects full year sales to be up by a mid single digit percentage year over year Other DetailsCost of sales increased 7 9 year over year to 1 917 million Gross profit declined to 1 017 million from 1 232 million due to lower net sales as well as higher cost of sales Core gross profit was 1 156 million compared with 1 280 million in the prior year quarter with respective margin of 39 and 42 Cash Flow LiquidityDuring the first nine months of 2019 Corning generated 1 013 million of net cash from operating activities compared with 1 978 million in the year ago period As of Sep 30 2019 the specialty glass maker had 971 million in cash and equivalents with 6 225 million of long term debt Going ForwardWhile taking actions to offset recent headwinds Corning remains confident in its strategy and continues to advance its long term growth initiatives The company is extending performance under its 2020 2023 Strategy Growth Framework It is focusing on its portfolio and utilizing financial strength to enhance shareholder returns The company s capabilities are becoming increasingly vital to diverse industries and multiple opportunities support leadership across all of its market access platforms
How Have Estimates Been Moving Since Then
In the past month investors have witnessed a downward trend in estimates revision
VGM Scores
At this time Corning has an average Growth Score of C though it is lagging a lot on the Momentum Score front with an F However the stock was allocated a grade of B on the value side putting it in the second quintile for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions has been net zero Notably Corning has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
GLW | Corning GLW Stock Sinks As Market Gains What You Should Know | Corning GLW closed the most recent trading day at 28 74 moving 1 74 from the previous trading session This move lagged the S P 500 s daily gain of 0 01 Meanwhile the Dow gained 0 01 and the Nasdaq a tech heavy index added 0 2
Coming into today shares of the specialty glass maker had gained 1 04 in the past month In that same time the Computer and Technology sector gained 2 57 while the S P 500 gained 2 67
GLW will be looking to display strength as it nears its next earnings release In that report analysts expect GLW to post earnings of 0 45 per share This would mark a year over year decline of 23 73 Meanwhile our latest consensus estimate is calling for revenue of 2 69 billion down 12 81 from the prior year quarter
GLW s full year Zacks Consensus Estimates are calling for earnings of 1 74 per share and revenue of 11 50 billion These results would represent year over year changes of 2 25 and 0 86 respectively
It is also important to note the recent changes to analyst estimates for GLW Recent revisions tend to reflect the latest near term business trends As a result we can interpret positive estimate revisions as a good sign for the company s business outlook
Research indicates that these estimate revisions are directly correlated with near term share price momentum Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system which ranges from 1 Strong Buy to 5 Strong Sell has an impressive outside audited track record of outperformance with 1 stocks generating an average annual return of 25 since 1988 The Zacks Consensus EPS estimate has moved 0 38 lower within the past month GLW is currently a Zacks Rank 3 Hold
Digging into valuation GLW currently has a Forward P E ratio of 16 79 This valuation marks a discount compared to its industry s average Forward P E of 25 27
We can also see that GLW currently has a PEG ratio of 2 08 This metric is used similarly to the famous P E ratio but the PEG ratio also takes into account the stock s expected earnings growth rate The Communication Components industry currently had an average PEG ratio of 2 4 as of yesterday s close
The Communication Components industry is part of the Computer and Technology sector This group has a Zacks Industry Rank of 148 putting it in the bottom 42 of all 250 industries
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
You can find more information on all of these metrics and much more on Zacks com |
GLW | Corning Partners LG Visteon For Enhanced In car Solutions | Corning Incorporated NYSE GLW recently collaborated with South Korean electronics giant LG Electronics and automotive electronics technology leader Visteon Corporation NASDAQ VC to deploy curved automotive interior glass solutions The alliance is likely to drive significant demand for Gorilla Glass and other fiber optic products thereby fortifying Corning s position in the glass substrate industry Dubbed ColdForm Technology it is aimed at enhancing the curved automotive display modules with advanced glass solutions immersive display designs and reliability testing services The avant garde glass technology also ensures constant synchronization of information between various entertainment systems and mobile devices with rapid response and best in class interactive displays With its trademark durability of AutoGrade Gorilla Glass ColdForm glass provides a safe car interior that can endure sudden traffic mishaps Further the much acclaimed in car solution will allow automakers to save costs considerably compared with traditional hot formed glasses primarily because of the ease of cutting preparing and shipping flat glass sheets It provides ample scope of freedom in design and creativity to deliver industry leading curved display modules for digital clusters and integrated center stack applications This in turn makes ColdForm Technology an essential ingredient in the digital revolution of automotive interior design Despite macroeconomic headwinds Corning continues to outpace the market it serves The company is seeking to extend its strong performance under its new 2020 2023 Strategy Growth Framework while focusing on portfolio depth and financial strength to enhance shareholder returns The company has been developing innovative formulations that are not only suitable for imparting superior picture quality but also taking care of their effects on the environment Several other factors are also expected to drive Corning s fiber optic solutions business over the next several years primarily the burgeoning use of mobile devices that require efficient data transfer and efficient networking systems As optical networks are more efficient and most of the existing networks are copper based demand for optical solutions is particularly strong Corning has several products focused on this market to meet the varying consumer needs and aims to benefit significantly from the underlying growth trend Corning has long term earnings growth expectation of 8 1 Driven by diligent execution of operational strategies the stock has rallied 7 5 compared with s rise of 0 4 in the past three months Corning currently has a Zacks Rank 4 Sell A couple of better ranked stocks in the industry are SeaChange International Inc NASDAQ SEAC and Ooma Inc NYSE OOMA both sporting a Zacks Rank 1 Strong Buy You can see SeaChange has long term earnings growth expectation of 10 Ooma has long term earnings growth expectation of 47 7 The Hottest Tech Mega Trend of AllLast year it generated 24 billion in global revenues By 2020 it s predicted to blast through the roof to 77 6 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
GLW | Earnings Preview Corning GLW Q4 Earnings Expected To Decline | Corning GLW is expected to deliver a year over year decline in earnings on lower revenues when it reports results for the quarter ended December 2019 This widely known consensus outlook gives a good sense of the company s earnings picture but how the actual results compare to these estimates is a powerful factor that could impact its near term stock price
The earnings report which is expected to be released on January 29 2020 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This specialty glass maker is expected to post quarterly earnings of 0 44 per share in its upcoming report which represents a year over year change of 25 4
Revenues are expected to be 2 69 billion down 12 8 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 0 93 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Corning
For Corning the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 0 38
On the other hand the stock currently carries a Zacks Rank of 4
So this combination makes it difficult to conclusively predict that Corning will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Corning would post earnings of 0 40 per share when it actually produced earnings of 0 44 delivering a surprise of 10
Over the last four quarters the company has beaten consensus EPS estimates four times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Corning doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
GLW | Corning GLW Q4 Earnings Revenues Top Estimates Fall Y Y | Corning Incorporated NYSE GLW reported decent fourth quarter 2019 results wherein the top line and the bottom line surpassed the respective Zacks Consensus Estimate However revenues and earnings decreased on a year over year basis In 2019 Corning successfully delivered on its 2016 2019 Strategy and Capital Allocation Framework goals It returned more than 12 5 billion to shareholders over four years including a 67 increase in dividends per share while investing to advance longer term growth initiatives Net IncomeOn a GAAP basis net income for the December quarter declined to 32 million or 1 cent per share from 292 million or 32 cents per share in the year ago quarter primarily due to lower operating income and equity in losses of affiliated companies For 2019 net income was 960 million or 1 07 per share compared with 1 066 million or 1 13 per share in 2018 Quarterly core net income came in at 406 million or 46 cents per share compared with 539 million or 59 cents per share in the prior year quarter The bottom line however beat the Zacks Consensus Estimate by 2 cents Corning Incorporated Price Consensus and EPS Surprise
RevenuesFourth quarter GAAP net sales were down 7 2 year over year to 2 817 million This reflects the material impact of changing market and customer dynamics in Optical Communications and Display Technologies business segments For 2019 GAAP net sales were up 1 9 year over year to 11 503 million Quarterly core sales decreased to 2 851 million from 3 081 million recorded in the year ago quarter The top line however surpassed the consensus estimate of 2 680 million Quarterly Segment ResultsNet sales from the Optical Communications segment which accounts for the lion s share of total revenues declined 22 6 year over year to 903 million reflecting overall market weakness due to customers project spending decisions primarily in carrier networks The segment s net income was 62 million compared with 165 million in the prior year quarter impacted by lower volume and reduced production to decrease inventory The company expects full year 2020 sales to decline by 5 10 as the lower level of sales experienced in the second half of 2019 continues throughout the first half of 2020 It expects first quarter 2020 sales to be down nearly 25 year over year implying strong project spending in first quarter 2019 It anticipates year over year growth in sales and profit to resume in the second half of 2020 driven by projects for 5G fiber to the home and hyperscale data center deployments Net sales from Display Technologies were 795 million compared with 899 million in the year earlier quarter due to lower glass volume and prices For 2020 the company anticipates its display glass volume to grow by a mid single digit percentage similar to the mid single digit growth expected in the display glass market It expects glass price declines to remain moderate down mid single digits for the full year The segment s net income was 180 million compared with 240 million in the prior year quarter Specialty Materials net sales were up 13 5 to 453 million supported by innovations and strong demand for premium glasses The company expects high single digit year over year sales growth in 2020 The segment s net income was 94 million compared with 87 million in the prior year quarter Environmental Technologies net sales increased 17 2 to 374 million primarily driven by gasoline particulate filter GPF adoption The segment s net income was 64 million compared with 42 million in the prior year quarter On a year over year basis management expects sales to increase by a mid single digit percentage in both first quarter and full year 2020 Net sales from Life Sciences were up 7 6 to 256 million as the business continued to outpace market growth The segment s net income was 38 million compared with 29 million in the prior year quarter On a year over year basis sales are expected to increase by a mid single digit percentage in both first quarter and full year 2020 Other DetailsQuarterly cost of sales increased 7 1 year over year to 1 963 million Gross profit declined to 854 million from 1 202 million due to lower revenues and higher cost of sales Core gross profit was 1 054 million compared with 1 297 million recorded in the prior year quarter with respective margin of 37 and 42 Cash Flow LiquidityIn 2019 Corning generated 2 031 million of net cash from operating activities compared with 2 919 million in 2018 As of Dec 31 2019 the specialty glass maker had 2 434 million in cash and equivalents with 7 729 million of long term debt compared with the respective tallies of 2 355 million and 5 994 million a year ago Going ForwardWhile sales growth in 2019 did not meet long term targets the company outperformed the underlying markets and expects to build momentum throughout 2020 It remains confident in its 2020 2023 Strategy Growth Framework goals Through 2023 Corning expects to deliver 6 8 compound annual sales growth and 12 15 compound annual earnings per share growth while investing 10 billion to 12 billion in RD E capital and mergers and acquisitions It also plans to expand operating margin and ROIC and deliver 8 billion to 10 billion to shareholders including annual dividend per share increase of at least 10 To deliver its goals the company expects to add an incremental 3 billion to 4 billion in annual sales and improve profitability by the end of 2023 Zacks Rank Stocks to ConsiderCorning currently has a Zacks Rank 3 Hold A few better ranked stocks in the broader industry are Splunk Inc NASDAQ SPLK Cloudera Inc NYSE CLDR and Chegg Inc NYSE CHGG While Splunk sports a Zacks Rank 1 Strong Buy Cloudera and Chegg carry a Zacks Rank 2 Buy You can see Splunk topped earnings estimates in the trailing four quarters the surprise being 74 3 on average Cloudera surpassed earnings estimates thrice in the trailing four quarters the positive surprise being 36 1 on average Chegg topped earnings estimates in the trailing four quarters the beat being 49 4 on average Looking for Stocks with Skyrocketing Upside Zacks has just released a Special Report on the booming investment opportunities of legal marijuana Ignited by new referendums and legislation this industry is expected to blast from an already robust 6 7 billion to 20 2 billion in 2021 Early investors stand to make a killing but you have to be ready to act and know just where to look |
VZ | White House dismisses idea of U S buying Nokia Ericsson to challenge Huawei | By David Shepardson WASHINGTON Reuters U S Vice President Mike Pence on Friday and the top White House economic adviser dismissed an unusual suggestion from U S Attorney General William Barr that the United States consider taking control of two major foreign rivals of China based Huawei Technologies Co Ltd Barr a former general counsel at Verizon Communications Inc NYSE VZ said on Thursday the United States and its allies should consider taking a controlling stake in Finland s Nokia HE NOKIA and Sweden s Ericsson BS ERICAs to counter Huawei s dominance in next generation 5G wireless technology White House economic adviser Larry Kudlow added later on Friday that the United States was working closely with Nokia and Ericsson saying the companies equipment was essential to the buildout of 5G infrastructure But he said the U S government is not in the business of buying companies whether they re domestic or foreign adding that there s nothing to prohibit American tech companies from acquiring them Pence earlier in the day had suggested an alternative approach when asked by CNBC for his response Great respect to Attorney General Barr but we believe the best way forward is what Ajit Pai announced just over the last several days Pence said referring to the Federal Communications Commission s chairman s efforts to free up more spectrum for 5G wireless use That s the plan the president has endorsed and will be carrying forward Pence said adding that the United States can expand 5G by using the power of the free market and American companies The White House and representatives for Barr and Pai all declined to comment Shares in Nokia closed 4 higher on the New York Stock Exchange and Ericsson shares were up nearly 5 4 on Nasdaq Both companies declined to comment Nokia and Ericsson have a combined market capitalization of about 53 billion and it is unclear what source of funds the U S government could potentially tap to take stakes in the firms or if foreign regulators would approve In a remarkable statement underscoring how far the United States may be willing to go to counter Huawei Barr on Thursday disclosed proposals by the United States aligning itself with Nokia and or Ericsson Barr said the alignment could take place through American ownership of a controlling stake either directly or through a consortium of private American and allied companies Barr said that putting our large market and financial muscle behind one or both of these firms would make it a far more formidable competitor and eliminate concerns over its staying power or their staying power
We and our closest allies certainly need to be actively considering this approach he added |
VZ | U S judge expected to rule in favor of Sprint T Mobile merger sources | By Diane Bartz and Greg Roumeliotis Reuters A U S district judge is expected to rule in favor of allowing Sprint and T Mobile US NASDAQ TMUS to merge over the objections of a group of state attorneys general according to two sources familiar with the matter Shares of Sprint surged 69 in Monday s after hours trade and T Mobile stock rose 8 Shares in T Mobile parent Deutsche Telekom DE DTEGn were up 4 2 at 0917 GMT on Tuesday U S District Court Judge Victor Marrero is expected to make his decision public on Tuesday one source said Deutsche Telekom confirmed Tuesday as the expected date We remain confident that the judge will decide in favor of the transaction said Europe s largest telecoms company by revenue Approval of the deal would be a high profile defeat for state attorneys general led by New York and California who had argued that a merger of the No 3 and No 4 U S wireless carriers would lead to higher prices especially for customers who use prepaid plans popular with people with poorer credit The deal has already been approved by federal regulators The companies had said the deal was needed to help them build out next generation of wireless called 5G and better compete with sector leaders Verizon Communications Inc NYSE VZ and AT T Inc NYSE T Executives from the companies including T Mobile Chief Executive John Legere testified during the trial that Sprint s business was deteriorating and would not survive if it did not merge with T Mobile The two companies are expected to start talks on renegotiating the terms of their 26 5 billion merger in the next few days two sources said Deutsche Telekom is keen to cut the price of the deal arguing that Sprint s fortunes have deteriorated since they inked their agreement the sources added However Sprint in which Japan s Softbank Group has a major stake is expected to argue that T Mobile needs Sprint in order to grow its cashflow and to boost its capacity using its spectrum according to the sources There is no certainty that there will be a renegotiated deal the sources cautioned The court did not immediately respond to a request for comment Sprint and T Mobile both declined to comment One merger opponent Gigi Sohn a former telecoms regulator now at Georgetown Law tweeted her displeasure with reports of the decision If antitrust law doesn t even block a 4 3 merger like this we need to start from scratch she tweeted referring to the market shrinking to three from four competitors I ll have more to say tomorrow after I read the judge s decision through my tears While a group of states decided to fight the deal in court the federal government approved it with conditions a decision which remain in effect The U S Justice Department approved the deal in July after the carriers agreed to sell some assets to satellite provider Dish Network Corp which would create its own cellular network to ensure that there would still be four competitors in the market The Federal Communications Commission signed off on the deal in October Dish shares rose 2 after hours The states maintained that Dish was ill equipped to become a competitive fourth wireless carrier The Wall Street Journal earlier reported that the court was expected to approve the deal on Tuesday |
VZ | Cable Companies Could Be a Threat to Verizon s Wireless Business | At the time it probably seemed like a great idea Verizon NYSE VZ has unused capacity built into its wireless network and it can t convert every single person in the United States into a Verizon Wireless customer It may as well monetize its network s excess by letting cable giants Comcast NASDAQ CMCSA and Charter Communications NASDAQ CHTR use it as the backbone for their fledgling wireless services
But in retrospect maybe it wasn t the best idea after all Although the two companies wireless businesses combined still don t hold a candle to Tracfone Verizon s biggest third party user of its network it only took the two newcomers a couple of years to catch up with the nation s second biggest reseller of cellphone service That s Consumer Cellular with its three million customers give or take
If nothing else the sheer pace of Comcast s and Charter s growth should prompt Verizon to consider that it s feeding what will become serious competitors
Wholesale wireless service
They re called a mobile virtual network operator or MVNO for short The term simply refers to cellular service providers that don t actually own the network they plug their customers into
Rather these small providers lease access to wireless networks operated by bigger names like Verizon and AT T and take care of their own billing selling and customer service Tracfone Net10 Boom Mobile Straight Talk and Expo Mobile are just some of the MVNOs that utilize Verizon s network
It also includes Comcast s Xfinity Mobile and Spectrum Mobile both of which launched using Verizon s infrastructure and both of which still appear to be exclusively using Verizon s network
Most importantly both are making inroads with consumers very rapidly Charter began offering cell phone service in the third quarter of 2018 and now serves a little more than one million subscribers Comcast s service started in the second quarter of 2017 and it s signed up more than two million customers
That s only a fraction of Verizon s 94 5 million wireless customers reported as of the end of 2019 which boasts numbers similar to rival AT T s But the pace is the concern particularly in light of the advantage cable names stumbled into
New wireless connectivity isn t totally wireless
The technology of combining WiFi connectivity and physical wires to keep cellphones linked to a network is something most major wireless carriers have tinkered with as the number of connected devices has exploded and put a strain on spectrum But the switch or handoff from one connection type or hub to another has proven tricky and expensive
Surprisingly cable companies have had the solution all along The physical lines they own running down the street to your house can be readily adapted to serve as WiFi antennas called strand mounted small cells And Comcast s and Charter s broadband customers may not even realize they re actually utilizing their home wifi when using their smartphones while at home This mixed connection approach is a far more economical one to operate letting cable companies into the mobile phone business without complete reliance on others networks
And yes Comcast and Charter have every intention of extracting the benefits of scaling up this hybrid approach As Charter CEO Tom Rutledge plainly stated during the company s third quarter earnings call We re uniquely positioned to take advantage of wireline and wireless network convergence over time with our fully distributed wireline network
Moffett Nathanson s analysts believe the cable giants may be thinking in more mercenary terms though In October the firm suggested that Charter may choose to buy citizens broadband radio service CBRS spectrum to develop a partial wireless network in places where doing so would yield a strong return on the investment Yet the company would continue to utilize Verizon s network in areas where the return on an investment in a home grown network would be weak
Exactly what sort of savings this hybrid approach might produce depends on several factors But Moffett Nathanson s report puts things in perspective stating that We suspect that Altice is already assuming they can offload as much as half of their traffic onto strand mounted small cells allowing them to sell unlimited plans for just 20 per month
The same report went on to say Even without core network control under the Verizon MVNO contract Charter and Comcast look poised to pursue the same strategy by leveraging eSIMS and in their case their own strand mounted small cells jibing with Rutledge s comment
If Comcast or Charter can get anywhere close to selling a mobile service for 20 per month even if it s just to existing internet customers even the most loyal Verizon customers will have something to think about
Put it on your radar
It s not an existential threat to Verizon at least not yet But it eventually could be
The MVNO wholesale industry took shape at a time when the only way to make a mobile phone work was with a direct connection to a tower with a licensed radio frequency That limitation is no longer in place and cable companies infrastructure leaves them well positioned to offer cheap wireless service
Verizon is in a particularly difficult situation as Comcast and Charter are content to let Verizon tackle the difficult less rewarding part of their job just so they can poach its customers |
VZ | Stocks Sprint T Mobile Surge in Premarket After Court OKs Merger | By Geoffrey Smith
Investing com Stocks in focus in premarket trading on Tuesday 11th February Please refresh for updates
8 58 AM ET Real estate group Jones Lang LaSalle NYSE JLL rose 4 4 after reporting earnings and revenue well ahead of consensus in the three months through December
Underlying earnings per share came in at 6 35 compared to consensus forecasts of 5 82 after the successful integration of HFF The company gave no precise guidance for 2020 but said it has optimism and confidence in our ability to continue to take market share and capitalize on long term growth opportunities
8 50 AM ET Slack Technologies NYSE WORK stock was volatile after the company had to downplay a report from Business Insider on Monday that claimed it had struck a major deal with IBM NYSE IBM The messaging technology company said in an SEC filing that IBM has been Slack s largest customer for several years and has expanded its usage of Slack over that time
8 45 ET Sprint NYSE S stock leaped 73 after a New York district judge threw out a suit from several state attorneys general trying to block its merger with T Mobile
T Mobile US NASDAQ TMUS stock jumped around 8 as the ruling clears a way to unite the country s number 3 and 4 wireless carriers a merger that should help them to win more customers of AT T NYSE T and Verizon NYSE VZ and defend themselves against new entrants
Under Armour NYSE UA stock fell 13 2 to its lowest in over two months after the sports gear company warned it faces restructuring charges of up to 425 million in the current fiscal year Around 200 million of those could be down to the suspension of its plans for a flagship store in New York
Under Armour also said it expects a hit to sales of up to 60 million in the current quarter due to the coronavirus outbreak and it now expects full year revenue to be down by a low single digit percent
Hasbro NASDAQ HAS stock rose 6 5 after the company reported a better than expected holiday quarter bolstered by sales of Frozen II and Star Wars merchandise
Underlying earnings were over 30 ahead of forecasts at 1 24 a share |
VZ | Stock Wall Street Hits New Highs as Sprint T Mobile Surge | By Geoffrey Smith
Investing com Wall Street opened at fresh highs on Tuesday on hopes that the coronavirus may peak soon while shares in Sprint and T Mobile soared after a court threw out a lawsuit seeking to block their merger
By 10 40 AM ET 15 40 GMT the Dow Jones Industrial Average was up 111 points or 0 4 while the S P 500 was up 0 6 and the Nasdaq Composite was up 0 8
The market was also supported by comments from Federal Reserve Chairman Jerome Powell suggesting the Fed would backstop the economy to protect it against spillovers from the coronavirus wihch was officially named Covid 19 by the World Health Organization today Markets have been in risk on mood across the world on Tuesday after the number of new cases confirmed by China fell 19 from Monday raising hopes that the outbreak will peak soon
Powell told Congress the Fed is closely monitoring the situation in China for persistent and material impacts on the U S economy
For the moment he added it was too early to say whether there would be any
In the meantime the current stance of monetary policy will likely remain appropriate Powell said adding that he expected to continue using repos to stabilize the money market through April
The biggest moves in early trading were by wireless carriers Sprint NYSE S and T Mobile US NASDAQ TMUS which rose by 73 and 11 respectively after a New York judge threw out a lawsuit that aimed to stop their merger on antitrust grounds
Rivals Verizon NYSE VZ and AT T NYSE T which may profit from the greater concentration in the sector were mixed Verizon stock fell 0 6 while AT T stock rose 0 7
Earnings season continued to throw out mixed results with Under Armour NYSE UA falling 15 4 after it warned of up to 425 million in restructuring costs this year including from the possible suspension of plans for a flagship store in New York
Mastercard NYSE MA stock rose 1 1 after gaining a license to operate a bank card clearing network in China another step in the gradual opening of the country s financial system
Toymaker Hasbro NASDAQ HAS rose 2 2 but gave up earlier gains after reporting a better than expected holiday quarter bolstered by sales of merchandise related to Star Wars and Frozen II
Elsewhere the dollar index retraced 0 1 to 98 668 while U S crude oil futures rebounded 1 8 to 54 88 a barrel |
VZ | Verizon Stock Falls 3 | Investing com Verizon NYSE VZ Stock fell by 3 10 to trade at 58 37 by 11 18 16 18 GMT on Tuesday on the NYSE exchange
The volume of Verizon shares traded since the start of the session was 9 49M Verizon has traded in a range of 58 33 to 60 35 on the day
The stock has traded at 60 3200 at its highest and 57 6500 at its lowest during the past seven days |
VZ | Verizon the loser as Sprint T Mobile win analyst | Verizon VZ 2 3 is the net loser from T Mobile s and Sprint s court win analyst Craig Moffett writes chiefly due to the respective spectrum situations among major carriers It s no secret that Verizon needs midband spectrum to proceed with 5G deployment he says and the merger going forward takes not just one but two spectrum options off the table Verizon bet exclusively on millimeter wave leaving it without a good answer now except to bet on C band he adds and that will take years to deliver usable spectrum in smaller areas Other carriers today AT T NYSE T 0 5 Sprint NYSE S 72 5 T Mobile NASDAQ TMUS 10 9 |
VZ | T Mobile Sprint merger wins U S judge approval | Shares of Sprint shot up more than 70 percent on Tuesday while T Mobile shares also rose after a federal judge approved their 26 billion deal defeating a lawsuit by a group of states to block the merger
The ruling clears the path to combine the nation s third and fourth largest wireless carriers creating a new telecom giant in a deal that already won federal approval when the carriers agreed to sell some assets to Dish
In a trial in December the states led by California and New York argued that the deal would reduce competition leading to higher prices while T Mobile and Sprint said the merger would better equip the new company to compete with top players such as Verizon NYSE VZ and AT T leading to lower prices and faster internet speeds
The companies have also said that uniting could speed up the rollout of a national 5G network since the deal would combine their spectrum holdings
Sprint and T Mobile said in a statement they would move to finalize the merger which is still subject to certain closing conditions and possible court proceedings |
VZ | S P 500 Nasdaq eke out new closing highs | By Stephen Culp NEW YORK Reuters S P 500 and the Nasdaq inched to their second consecutive record closing highs on Tuesday as Chinese officials said the deadly coronavirus epidemic could be contained by April But the Dow closed flat and the S P 500 and the Nasdaq pared their gains after the Federal Trade Commission FTC issued orders to large tech companies to provide information on mergers that were too small to report to antitrust regulators Microsoft Corp NASDAQ MSFT was the biggest drag on all three major U S stock indexes following FTC s demand for data from company Data was also requested from Alphabet NASDAQ GOOGL Inc Amazon com NASDAQ AMZN Apple Inc NASDAQ AAPL and Facebook Inc NASDAQ FB The World Health Organization or WHO called the Chinese coronavirus public enemy number one But China s foremost medical adviser on the outbreak said the crisis could be over by April soothing jitters over the fast moving epidemic even as supply chains ruptured and Chinese firms began laying off workers As much as there s a desire to push stock higher there s also an exhaustion Oliver Pursche vice chairman and chief market strategist at Bruderman Asset Management in New York It s letting the air out and exhaling The best thing that could happen for stocks this year is that we go sideways for a while and let markets catch their breath Market participants watched closely as U S Federal Reserve Chair Jerome Powell began his semiannual economic update before congress Powell s remarks reiterated his view that the economy in its 11th year of expansion remains resilient but that the central bank was closely monitoring potential risks including the coronavirus Powell addressed the coronavirus and acknowledged that it might be a catalyst for the Fed to take action if warranted Pursche added It means the Fed is keenly aware of the risks but it also means that the risks are very real The Dow Jones Industrial Average was flat the S P 500 gained 5 66 points or 0 17 to 3 357 75 and the Nasdaq Composite added 10 55 points or 0 11 to 9 638 94 Of the 11 major sectors in the S P 500 all but communications services consumer staples and technology closed in positive territory with real estate showing the largest percentage gain T Mobile shares jumped 11 8 after a federal judge approved its purchase of Sprint clearing the path for a deal originally valued at 26 billion Sprint surged 77 5 while larger rival Verizon Communications Inc NYSE VZ slid 2 6 Cell tower operators including SBA Communications Corp NASDAQ SBAC American Tower Corp NYSE AMT and Crown Castle International NYSE CCI Corp gained between 4 and 7 on expectations that the deal could increase tower demand Under Armour Inc NYSE UAA tumbled 16 7 after the sportswear company forecast a surprise drop in 2020 profit Advancing issues outnumbered declining ones on the NYSE by a 2 31 to 1 ratio on Nasdaq a 1 75 to 1 ratio favored advancers The S P 500 posted 80 new 52 week highs and 3 new lows the Nasdaq Composite recorded 152 new highs and 60 new lows
Volume on U S exchanges was 7 33 billion shares compared with the 7 67 billion average over the last 20 trading days |
VZ | U S stocks mixed at close of trade Dow Jones Industrial Average down 0 00 | Investing com U S stocks were mixed after the close on Tuesday as gains in the Oil Gas Basic Materials and Healthcare sectors led shares higher while losses in the Telecoms Technology and Consumer Goods sectors led shares lower
At the close in NYSE the Dow Jones Industrial Average declined 0 00 while the S P 500 index gained 0 17 and the NASDAQ Composite index gained 0 11
The best performers of the session on the Dow Jones Industrial Average were Intel Corporation NASDAQ INTC which rose 1 54 or 1 02 points to trade at 67 41 at the close Meanwhile 3M Company NYSE MMM added 1 44 or 2 30 points to end at 162 45 and Caterpillar Inc NYSE CAT was up 1 39 or 1 87 points to 136 19 in late trade
The worst performers of the session were Verizon Communications Inc NYSE VZ which fell 2 57 or 1 55 points to trade at 58 69 at the close Microsoft Corporation NASDAQ MSFT declined 2 26 or 4 26 points to end at 184 44 and Procter Gamble Company NYSE PG was down 1 59 or 2 01 points to 124 16
The top performers on the S P 500 were T Mobile US Inc NASDAQ TMUS which rose 11 78 to 94 49 SBA Communications Corp NASDAQ SBAC which was up 7 28 to settle at 284 00 and DISH Network Corporation NASDAQ DISH which gained 7 14 to close at 39 48
The worst performers were Under Armour Inc A NYSE UAA which was down 18 88 to 16 59 in late trade Under Armour Inc C NYSE UA which lost 16 69 to settle at 15 12 and Macerich Company NYSE MAC which was down 6 81 to 24 23 at the close
The top performers on the NASDAQ Composite were Rexahn Pharmaceuticals Inc NYSE REXN which rose 78 92 to 3 650 Genprex Inc NASDAQ GNPX which was up 29 84 to settle at 1 6100 and MakeMyTrip Limited NASDAQ MMYT which gained 21 16 to close at 29 32
The worst performers were Yayyo Inc NASDAQ YAYO which was down 63 46 to 0 391 in late trade Phio Pharmaceuticals Corp NASDAQ PHIO which lost 57 27 to settle at 2 85 and Alkaline Water Company Inc NASDAQ WTER which was down 32 43 to 1 000 at the close
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1906 to 893 and 82 ended unchanged on the Nasdaq Stock Exchange 1632 rose and 1003 declined while 85 ended unchanged
Shares in T Mobile US Inc NASDAQ TMUS rose to all time highs gaining 11 78 or 9 96 to 94 49 Shares in Under Armour Inc A NYSE UAA fell to 52 week lows down 18 88 or 3 86 to 16 59 Shares in SBA Communications Corp NASDAQ SBAC rose to all time highs rising 7 28 or 19 26 to 284 00 Shares in Under Armour Inc C NYSE UA fell to 52 week lows down 16 69 or 3 03 to 15 12 Shares in Yayyo Inc NASDAQ YAYO fell to all time lows falling 63 46 or 0 679 to 0 391 Shares in Phio Pharmaceuticals Corp NASDAQ PHIO fell to all time lows down 57 27 or 3 82 to 2 85 Shares in Alkaline Water Company Inc NASDAQ WTER fell to 52 week lows losing 32 43 or 0 480 to 1 000
The CBOE Volatility Index which measures the implied volatility of S P 500 options was up 0 93 to 15 18
Gold Futures for April delivery was down 0 53 or 8 35 to 1571 15 a troy ounce Elsewhere in commodities trading Crude oil for delivery in March rose 0 77 or 0 38 to hit 49 95 a barrel while the April Brent oil contract fell 0 04 or 0 02 to trade at 54 23 a barrel
EUR USD was up 0 05 to 1 0919 while USD JPY rose 0 02 to 109 80
The US Dollar Index Futures was down 0 08 at 98 638 |
GLW | Why Corning Stock Declined 3 6 in 2019 | What happened
Shares of Corning NYSE GLW declined 3 6 in 2019 according to data from S P Global Market Intelligence trailing far behind the S P 500 s impressive 29 gain
To be fair the glass centric tech stock started the year on a high note rising 15 through the end of February on the heels of its strong fourth quarter 2018 report But Corning all but gave up those gains after its subsequent quarterly updates showed headwinds impeding the growth of its core optical communications segment
So what
To be sure Corning first tempered its optical growth expectations at the end of April calling for full year gains of 10 down from the low teens before after a major fiber to the home customer shifted the timing of a large optical deployment Still Corning largely reiterated its previous expectations for its remaining display technologies environmental life sciences and specialty materials segments at the time
Then shares slumped in late July when Corning posted reasonably solid second quarter 2019 results but followed by further reducing its expected optical segment growth to be in the low to mid single digit percent range for the year due to carrier customer weakness
More recently in September Corning piled on investors concerns by not only lowering its outlook for the optical segment yet again this time calling for sales to decline 3 to 5 for all of 2019 on lower spending from certain enterprise customers but also by slashing expectations for its display technologies segment volume to increase only slightly for the full year down from guidance for high single digit volume growth before
Now what
As it stands Corning is now trading roughly flat from where it stood a year ago and around 14 below its 52 week high But I do think there s reason for optimism surrounding the stock considering the underlying causes for Corning s stalling growth aren t necessarily indicative of a company losing market share to competitors Rather they re a function of acting as an industry leader for markets facing headwinds that won t last forever leaving Corning primed to benefit when those markets eventually inevitably rebound That s why as I wrote last month Corning management remains confident in its strategy for creating shareholder value over the long term And I think Corning s depressed stock price will ultimately reflect as much |
WMB | Barty eases past inspirational Williams into Birmingham semis | Reuters French Open champion Ashleigh Barty warmed up for Wimbledon with a comfortable 6 4 6 3 win over Venus Williams NYSE WMB to reach the semi finals of the Nature Valley Classic in Birmingham on Friday The 23 year old Australian fired six aces won four break points and won 77 of points on her first serve in a match that lasted an hour and 25 minutes World number two Barty was given a scare in the opening set when Williams flew into a 4 1 lead but the American was undone by her rising unforced error count 28 which gave Barty the opening she needed to get back into the contest I knew my level would have to be very good today to make it a contest Barty said on court after her win Venus was an inspiration to every single girl and boy around the world she still is What she s been able to do for this sport is incredible Her career has been phenomenal and it s not over yet adding that she could absolutely not see herself playing at 39 like Williams Barty is now two wins away from becoming the first Australian woman to top the tennis rankings in more than 40 years as a title win in Birmingham will allow her to leapfrog world number one Naomi Osaka who exited in the second round You start to think ahead it s natural it happens Barty said of the potential number one ranking It s important for me to come out and focus tomorrow Whatever happens happens Barty will now face Barbora Strycova who beat Kristyna Pliskova 6 2 6 4
The other semi final will be played between Germany s Julia Goerges and Croatia s Petra Martic who outlasted Jelena Ostapenko 6 7 4 7 5 6 1 in a marathon encounter |
WMB | Thompson scorches to 100 meters victory at Jamaica trials | By Kayon Raynor KINGSTON Reuters Olympic champion Elaine Thompson edged Shelly Ann Fraser Pryce in a photo finish to win the 100m title at the Jamaican trials on Friday and book her spot at this year s world championships in Doha Thompson running in lane four had a poor start but overhauled Fraser Pryce in the last 20m to win in 10 73 seconds three thousandths of a second ahead of her training partner I ve been battling with Achilles injury and it s been a tough season so to come out here and retain my national title means a lot to me as I m not 100 percent a tearful Thompson told Reuters The winning time was Thompson s fastest since 2017 while Fraser Pryce s last ran this fast in 2015 Fraser Pryce Olympic champion in Beijing and London said she was doing what was impossible for some people To be honest I m defying odds being 32 and representing coming back from having a baby she told Reuters Reigning world under 20 champion 17 year old Briana Williams NYSE WMB finished third in a national junior record of 10 94 to secure a place on her first senior Jamaica team Yohan Blake the 2011 world champion posted a season best 9 96 to win the men s 100m crown ahead of Tyquendo Tracey 10 00 and Rasheed Dwyer 10 10secs Earlier Commonwealth 400m hurdles champion Janieve Russell was only fourth as little known Russell Clayton took the title with a career best 54 73 It means everything an elated Clayton told Reuters on winning and qualifying for her first world championships team I ve been working so hard for this and it s finally here she added World under 20 silver medalist Shiann Salmon was second in a personal best 55 39 while Rhonda Whyte took third in 55 41 The men s race was won by Kemar Mowatt in 48 70 ahead of Romel Lewis 49 46 and Jaheel Hyde 49 57 Mowatt who has been battling shin and Achilles injuries this season said Next couple months I ll prep and I m sure I ll have some diamond league races so I ll prep for those leading into Doha
In the women s long jump Tissanna Hickling won with a leap of 6 78m while Shadae Lawrence won the women s discus with 61 14m |
WMB | Tennis Barty a win away from world number one | Reuters Ashleigh Barty will become the first Australian woman to be ranked world number one in more than 40 years if she beats her doubles partner Julia Goerges in the final of the Nature Valley Classic in Birmingham on Sunday The 23 year old fresh from her maiden Grand Slam triumph at the French Open has not dropped a set all week and an 11th successive victory will see her displace Japan s Naomi Osaka in top spot and emulate Evonne Goolagong s feat from 1976 Barty sent down 11 aces and fired 24 winners on Saturday to dispatch world number 51 Barbora Strycova from the Czech Republic 6 4 6 4 I have to try and do what I can do and that is prepare and do as best that I can tomorrow and try and play a good tennis match and if I win it s a bonus said Barty who is seeking her sixth WTA tour title at an event where she was runner up to Petra Kvitova in 2017 There are all things that come with it But those things are certainly not what I m worried about It is not going to change the way that I sleep at night if I don t get there or not If it happens it happens If it doesn t it doesn t Should she win Barty will join select company as the only other female players to win the singles title at Roland Garros and their next event on British grass courts have been Serena Williams NYSE WMB Steffi Graf four times Martina Navratilova Chris Evert and Margaret Court But Goerges has also hit rich form and beat Petra Martic 6 4 6 3 in the other semi final Barty and Goerges who has yet to win a title on grass but last year reached the Wimbledon semi finals have a 1 1 head to head record but the Australian won their previous clash en route to claiming the Zhuhai crown last year
If Barty loses the final she will be two points short of catching Osaka the smallest margin between the top two ranked players since WTA rankings began |
WMB | Norway sink Australia in shootout to reach last eight | NICE France Reuters Norway beat Australia 4 1 on penalties to reach the women s World Cup quarter finals for the first time since 2007 following a highly entertaining 1 1 draw after extra time on Saturday Norway s Isabell Herlovsen opened the scoring shortly after the half hour but Elise Kellond Knight s direct corner seven minutes from time sent the game into extra time during which Australia s Alanna Kennedy was sent off Australia missed their first two spot kicks in the shootout and Ingrid Syrstad Engen buried the winning penalty to send Norway through They will face either England or Cameroon for a place in the last four I m really content with how we handled all this pressure and stress Norway coach Martin Sjogren told a news conference Australia coach Ante Milicic was understandably devastated for his team I don t know if there are any words to describe how I m feeling but more importantly how the girls are feeling he said Australia set a high tempo from the start and went close in the opening minute when Sam Kerr collected a through ball from Caitlin Foord and fired just wide But it was Norway who found the back of the net first as Karina Saevik played Herlovsen in and the striker finished clinically in the 31st minute There had to be VAR action and it happened five minutes from the interval when a ball bounced off Maria Thorisdottir s shoulder and referee Riem Hussein awarded Australia a penalty a decision that was overturned after a three minute VAR review For all their slick passing the Matildas proved quite toothless in the area having managed only a single shot on target by the hour mark But Kellond Knight sent a corner straight into the far corner of the net with seven minutes left only her second goal in 110 appearances for her country to send the game to extra time Caroline Graham Hansen s fierce shot was tipped over the bar by Australia keeper Lydia Williams NYSE WMB in the 99th as both teams attacked relentlessly and Kennedy was shown a straight red card for bringing down Lisa Marie Utland as she rushed toward goal Vilde Boe Risa attempted a long range lob that landed on the crossbar as Australia struggled physically but they hung on for dear life to force the shootout
Kerr and Emily Gielnik missed the first two attempts and Norway kept cool heads to book their place in the last eight |
WMB | Athletics Thompson completes sprint double at Jamaican trials | By Kayon Raynor KINGSTON Reuters Olympic champion Elaine Thompson posted a world leading 22 00 to win the 200 meters on Sunday and complete the sprint double on the last day of the Jamaican trials Thompson who won the 100 on Friday was passed by Shelly Ann Fraser Pryce in the first 50 meters but surged home to regain the half lap title she last won in 2015 Fraser Pryce beaten by Thompson in a photo finish in the 100 was once again second best clocking 22 22 ahead of Schillonie Calvert 22 92 Thompson said it had been a tough four days at the trials Now that the championship is over I finally can sleep and eat some good food go back to the drawing board I have Prefontaine Sunday coming so I have to just regain my focus she told Reuters She also confirmed her intention to compete in both the 100 and 200 at the Sept 28 Oct 6 world championships in Doha In the men s 200 Rasheed Dwyer came home in 20 23 to deny Yohan Blake 20 27 the sprint double with Andre Ewers third 20 48 Shericka Jackson produced a lifetime best of 49 78 to win her second 400 title and said the time the second best of the year behind Olympic champion Shaunae Miller Uibo 49 05 sets her up well for the rest of the season I ve been really working hard 2018 was my off year to get some speed in and I think it has worked pretty well along with the strength and conditioning work and it s really good to know I just ran a life time best here Jackson told Reuters World champion Danielle Williams NYSE WMB was disqualified from the 100 hurdles and three athletes sustained injuries leading to the national athletics association voiding the race The men s hurdles was won by Commonwealth Games champion Ronald Levy 13 23 ahead of world under 20 silver medalist Orlando Bennett 13 27 and Andrew Riley 13 33
In the field Shanieka Ricketts retained her triple jump crown 14 73 ahead of Kimberly Williams 14 39 while O Dayne Richards bronze medalist from the 2015 world championships won the men s shot put 19 93 |
WMB | Beyond the rainbow Same sex weddings are mainstream 50 years after Stonewall | By Richard Leong Reuters Kimberly Bailey owner of The Butter End Cakery in Los Angeles loves taking wedding cake orders from LGBTQ clients because their design requests are often more creative than straight couples She recently made a square layer cake with black piping for a gay male couple who wanted something different than the traditional round cake with gold piping that is served at most straight weddings While Bailey believes every couple should take pride in expressing themselves through their wedding cake she draws the line at making her creations overwhelmed in rainbow colors You don t need to dye your cakes Bailey said referring to the rainbow symbol of diversity that has become an emblem for LGBTQ people While rainbow wedding cakes remain in high demand Bailey prefers using rainbow as a decorative accent rather than the focus of the cakes she makes Quirky wedding cakes are just one of the ways in which the 76 billion a year wedding industry in the United States has embraced and adapted to same sex couples in the four years since the U S Supreme Court ruled that the Constitution provides same sex couples the right to marry The landmark decision opened up a fresh stream of business for the caterers bakers florists and venue operators who serve those wanting to tie the knot Same sex unions and other LGBTQ rights may have taken even longer to come to pass but for the Stonewall uprising in New York 50 years ago this month when patrons of a gay bar fought back against police harassment Celebrations have kicked off around the world to mark the protest considered the beginning of the modern LGBTQ rights movement For Carla Ten Eyck a Hartford Connecticut based photographer the segment of her business involving same sex couples has grown steadily each year since the court ruling I get more and more inquiries I m booking more every year she said A number of wedding services providers interviewed by Reuters estimated 1 to 6 of their annual revenues now come from lesbian gay bisexual transgender and other queer people They are increasingly assimilated into the mainstream market said Kathryn Hamm LGBTQ education expert at The Knot Worldwide which owns The Knot and WeddingWire two leading online wedding services companies At the same time the industry has adapted Service providers are attending workshops to learn about the special needs and preferences of LGBTQ people everything from wedding attire and use of inclusive language in wedding vows LGBTQ Wedding Trends Why They Matter For All Couples and Making Your Business More LGBTQ Inclusive were among the online and in person workshops The Knot has hosted CHANGING ATTITUDE Growing acceptance of LGBTQ couples in the wedding industry is consistent with the relatively swift shift in societal attitude about same sex marriage According to a Reuters Ipsos poll released this month a majority of Americans 58 said they support same sex marriage up 8 percentage points from a similar poll conducted in April 2015 just before the U S Supreme Court ruling in June of that year About 4 5 of the U S population or 11 million people identify as LGBTQ according to the Williams NYSE WMB Institute at the University of California at Los Angeles Much of the wedding industry is taking a low key approach to selling services to LGBTQ couples avoiding heavy handedness in aiming to convey a message of inclusiveness Zola a company that operates a wedding registry website and other businesses has adopted less gender specific descriptions on their websites while at the same time ensured diverse images of opposite sex and LGBTQ couples in their marketing materials We are seeing they are celebrating their love like any other couples said Jennifer Spector Zola s director of brands LGBTQ couples on average spend less than straight couples on weddings On the wedding ceremony and reception combined same sex couples on average spend 28 400 compared with the 29 500 average for opposite sex couples according to WeddingWire s annual survey Depending on the venue location and the number of guests a reception at the upscale Mandarin Oriental in Washington can easily start at 100 000 Bailey the cake business owner in Los Angeles said her cakes run anywhere from 800 to 18 000 One gay couple Blake Coehlo 30 and Matthew Fernando 29 budgeted 15 000 for their wedding in February in Tucson Arizona Even without a wedding planner they kept close to their budget with help from their mothers Despite widespread acceptance industry professionals concede LGBTQ couples may still face problems with finding receptive vendors in places where conservatives oppose same sex weddings often on religious grounds A year ago the U S Supreme Court sided with a Colorado cake shop whose owner cited religious freedom when refusing to make a cake for a same sex couple The decision left unresolved the bigger question of whether certain businesses can claim religious exemptions from anti discrimination laws Last Monday the high court threw out a lower court ruling against the owners of an Oregon bakery who refused based on their Christian beliefs to make a wedding cake for a lesbian couple It s still happening said Jove Meyer New York based wedding planner When you are in conservative parts of America you might be turned down Meyer said he requires businesses he works with to sign a non discrimination policy Still many same sex couples say they felt welcome when planning their weddings
Everyone we used was actually very happy and accommodating to us it was really refreshing and made me feel really proud said Fernando |
WMB | No magic formula to Barty s rise says coach Tyzzer | By Martyn Herman EASTBOURNE England Reuters How do you take a player with no ranking and who had just spent a year hitting cricket rather than tennis balls and turn her into a Grand Slam champion and world number one in three years Ashleigh Barty s coach Craig Tyzzer was asked on Monday It was a logical line of questioning on the first day of the 23 year old Australian s residence at the summit But those hoping he would share the magic formula were left disappointed I don t know what the secret is If I knew that I would be selling myself to every player on the Tour Tyzzer who Barty turned to in 2016 having ended her self imposed exile from the sport told reporters at the Eastbourne championships on Monday She has done this over a journey of three years since we started back It was not a simple fix you never stop it s not easy You never stop improving Credit to her she has pushed herself a lot and deserves every bit of her success What he did know back then was that former junior Wimbledon champion Barty who had struggled to deal with the expectations placed on her young shoulders was ready to do the hard yards When she approached me and said I m thinking of giving this another go the look that she gave me I knew she was deadly serious about coming back he said She want straight into a 12 week training block She had done zero fitness in the time she was off I said to her this will be the test to see if you want it because it will be solid every day As soon as we were through that first week she was exhausted but I could see she was deadly serious FIRST TOURNAMENT Barty s first tournament back was in Eastbourne in 2016 where she came through qualifying and reached the semi finals Since then the only way has been up for the Queenslander who this month became the first Australian woman to win the French Open for 46 years and on Sunday won the Birmingham grasscourt title to confirm her rise to number one in the rankings Now she will head to London trying to join an elite list of greats Margaret Court Billie Jean King Chris Evert Martina Navratilova Steffi Graf and Serena Williams NYSE WMB to win the French Open and Wimbledon titles back to back Such is the current depth at the top of the women s game that Tyzzer is cautious about making bold predictions even if Barty is making a habit of exceeding expectations Is there anything higher than number one It wasn t a goal for us he said We set goals about making it to the top 10 She cut those off in the first three months of this season Just because you are number one or have won a Slam you are not going to win every match you play There are too many good girls out there now and Ash knows that s not realistic She respects them and knows they are capable of beating her We will just keep doing the same processes and if she plays her best she is capable of beating anybody she is not scared of any of the girls and wants to compete as hard as she can
Barty pulled out of the Eastbourne tournament on Monday as a precaution to avoid aggravating an arm injury |
WMB | NBA awards Antetokounmpo wins MVP Doncic top rookie | Milwaukee Bucks forward Giannis Antetokounmpo became the second European player to be selected the NBA s Most Valuable Player winning the honor on Monday night at the league s awards show in Santa Monica Calif Luka Doncic the No 3 overall selection who was traded to the Dallas Mavericks on draft day in 2018 won the Rookie of the Year Award Antetokounmpo a 24 year old from Greece joins Germany s Dirk Nowitzki 2006 07 Dallas Mavericks as European NBA MVPs The only other non United States players to capture the honor were Nigeria s Hakeem Olajuwon 1993 94 Houston Rockets and Canada s Steve Nash 2004 05 and 2005 06 Phoenix Suns In addition two time MVP Tim Duncan 2001 02 and 2002 03 San Antonio Spurs was born in the U S Virgin Islands Antetokounmpo received 78 first place votes well ahead of the 23 for fellow MVP finalist James Harden of the Rockets last season s winner The third finalist Paul George of the Oklahoma City Thunder received no first place votes Two three years ago I had the goal in my head that goal to be the best player in the league Antetokounmpo said I m gonna do whatever it takes to win and I m going to win MVP And every time I step on the floor I think of my dad and that motivates me to play harder and move forward even when my body is sore I don t feel like playing I m always going to show up and I m going to do the right thing The Greek Freak averaged 27 7 points 12 5 rebounds 5 9 assists 1 5 blocks and 1 3 steals in 72 games Bucks general manager Jon Horst who was selected the Executive of the Year on Monday said in a statement We are beyond proud of Giannis for earning his first MVP award This well deserved honor is due to his relentless hard work and dedication in becoming the most impactful player in the NBA Giannis propelled the Bucks to great heights last season with his leadership drive and unselfish play His grace on and off the court has made him one of the most admired players in the world Antetokounmpo also was a finalist for Defensive Player of the Year which went to Utah Jazz center Rudy Gobert for the second year in a row George also was a candidate for the defensive honor Doncic received 98 of the 100 votes with Trae Young of the Atlanta Hawks getting the other two The third finalist was the top pick in last season s draft Phoenix Suns center Deandre Ayton First of all I want to congratulate Trae and Deandre for amazing seasons and not just them but the whole rookie class I think it s amazing and we can make something big Doncic said while accepting the award Named Most Improved Player was power forward Pascal Siakam of the NBA champion Toronto Raptors who won the award over fellow finalists De Aaron Fox of the Sacramento Kings and D Angelo Russell of the Brooklyn Nets Like Doncic Siakam ran away with the award receiving 86 out of 100 votes Los Angeles Clippers guard Lou Williams NYSE WMB was chosen the Sixth Man of the Year for the third time matching Jamal Crawford for the most times winning the award The only other two time winners of the Sixth Man award were Kevin McHale Ricky Pierce and Detlef Schrempf The other finalists for the Sixth Man award were Williams teammate Montrezl Harrell and the Indiana Pacers Domantas Sabonis Coach of the Year went to the Bucks Mike Budenholzer who beat out fellow finalists Doc Rivers of the Los Angeles Clippers and Michael Malone of the Denver Nuggets Doncic a 20 year old guard who averaged 21 2 points 7 8 rebounds and 6 0 assists in 32 2 minutes per game is Dallas second Rookie of the Year winner joining Jason Kidd a co winner with Grant Hill in the 1994 95 season Doncic played in 72 games last season Young a point guard averaged 19 1 points 8 1 assists and 3 7 rebounds in 30 9 minutes per game last season He played in 81 of the team s 82 contests A year ago Young the No 5 overall draft pick in 2018 was dealt from Dallas to Atlanta along with a 2019 first round pick in exchange for Doncic Siakam averaged 16 9 points 6 9 rebounds and 3 1 assists over 31 9 minutes and played in 80 games ESPN noted that Siakam a third year player whom the Raptors drafted with the 27th overall pick in 2016 increased his point total by 9 6 points per game over the 2017 18 season the biggest gain by any player to have played in 40 games in the consecutive seasons Williams 32 put up 20 points 5 4 assists and three rebounds per game in 75 appearances in 2018 19 starting just once Budenholzer 49 led the Bucks to a 60 22 record in his first season in Milwaukee their best record since going 60 22 in the 1980 81 season The 16 win improvement over the previous season was the best mark in the NBA this season and earned the Bucks the No 1 seed in the Eastern Conference They lost to the eventual NBA champion Raptors in six games in the conference finals
Budenholzer also won Coach of the Year in Atlanta in 2015 after leading the Hawks to a 60 22 record in his second of five seasons with the team Field Level Media |
WMB | Fed Lowers Long Run U S Rate Outlook as Growth Outlook Dims | Bloomberg Federal Reserve policy makers are discovering they likely need to shift into an even lower gear than in recent history if they are to speed up the U S economy
Chairman Jerome Powell and colleagues last week estimated that the so called neutral interest rate the level which neither stimulates nor restricts growth now sits around 2 5 down from 2 75 in March and as high as 4 in 2014
That means the Fed s current benchmark of 2 25 2 5 is unlikely to provide the power policy makers once assumed it would leaving eight of them anticipating they will have to reduce rates this year amid growing risks to the economic outlook
This is really important said Torsten Slok chief economist at Deutsche Bank Securities who expects a rate cut in July For many years the Fed has been arguing that monetary policy was easy and accommodative and supporting growth and inflation After a decade of easy monetary policy the Fed has decided that policy is no longer stimulative
Reasons listed for the lower neutral rate include ongoing fallout from the financial crisis weaker productivity continued slackness in the labor market and an aging population which when combined leave the economy structurally weaker and so more vulnerable to rate hikes
The upshot is the Fed may have to lower rates if it wants to boost expansion to offset global headwinds including slow global growth and trade disruptions from President Donald Trump s tariff battles
Powell will give his view of policy in a speech on Tuesday to the Council on Foreign Relations in New York
Futures Contracts
Fed funds futures contracts are pricing in at least a 25 basis point cut in July with roughly 44 chance of a 50 basis point cut Those expectations for a steeper drop in the policy rate have grown in the days since Powell signaled a willingness to act swiftly as needed to protect the economy
They have come to the conclusion that growth is slowed by productivity and demographic factors that predate the Great Recession and that are not reversing soon said Jonathan Wright a Johns Hopkins University economics professor and a former Fed researcher
Trump has targeted U S growth of 3 or more a goal met last year because of fiscal stimulus including a 1 5 trillion tax overhaul Kevin Hassett outgoing chairman of Trump s council of economic advisers reiterated earlier this month he still expects 3 growth this year I m not trimming it back he said June 3
Forecast Shift
Fed officials didn t explain their reasoning in changing the forecasts in the Summary of Economic Projections While some including Powell have said they hope tax and fiscal policies will boost productivity their lowering of the neutral rate is a concession they are not expecting that to be sustained They estimate long term growth at 1 8 to 2
There was never going to be a big pickup in growth said Brad DeLong an economist at University of California at Berkeley who worked in the Treasury Department in the 1990s with Lawrence Summers and like Summers has cautioned growth is in a period of secular stagnation DeLong cites low inflation high savings and risk aversion by borrowers It is not a surprise
Estimates of neutral sometimes called R star have helped to guide Fed policy for years as a loose benchmark that didn t get too much attention Powell raised interest in the theoretical rate last October when he allowed that rates were a long way from neutral implying many hikes to get there He backtracked a month later by saying rates were just below a range of estimates of neutral
The Fed s target rate has never peaked at such a low level rising to more than 5 before the last two recessions Rates averaged 4 8 in the 20 years ended in 2007
Low neutral interest rates are very real and they re here to stay New York Fed President John Williams NYSE WMB a leading researcher of the neutral rate said in a speech in June He cited low productivity slower population growth and a decline in demand for savings
Williams and two Fed colleagues Kathryn Holston and Thomas Laubach have used economic data in a model estimating neutral at 0 42 as of the first quarter implying a rate of about 2 or so when inflation is included That compares to rates of more than 5 in in the 1960s and 3 5 as recently as the late 1990s
While estimates of long term productivity have been unreliable and some economists point to artificial intelligence and machine learning as potentially raising the level in the future an aging population makes it unlikely there will be a big pickup in labor force growth The national median age rose to 38 2 years last year according to newly released data from the U S Census Bureau while the number of births fell to the lowest level in 32 years
Carl Riccadonna chief U S economist at Bloomberg Economics said the lower neutral rate is inextricably linked to declines in estimates of full employment as the U S labor market continues to tighten without appearing to spark much inflation
The Fed is eating humble pie which is welcome news said Diane Swonk chief economist at accounting firm Grant Thornton LLP They are shifting with reality as opposed to holding onto old dogma |
BMY | GoPro And Amicus Stocks Performed Well Yesterday | It was a mixed market on Monday We re going to go over longs and shorts here and see just what s going on
Amicus Therapeutics Inc NASDAQ FOLD had a good day on Monday popping out of a wedge up 99 cents or 17 4 on 5 9 million shares That s very good volume for this stock If it follows through on Tuesday I m looking for it to take out the 7 1 2 area 8 dollars and then 9 dollars as my targets
GoPro Inc NASDAQ GPRO had a great day on Monday up 2 35 or 3 on 8 7 million shares After the run up and pullback it had a breakaway gap but couldn t get through resistance only an inverse head and shoulders If it can get this up through 87 1 2 That s my short term target
Qihoo 360 Technology Co Ltd NYSE QIHU one of our Boxer Swing Shorts It my target bounced and forming a bear wedge It already made two legs down The third leg could be devastating getting all the way down towards 50
Waddell Reed Financial Inc NYSE WDR continues as a short It did very well for us by rolling over hard and forming another bear wedge It may very well test the lows again at 43
Other on Harry Charts of the Day are Bristol Myers Squibb Company BMY Celldex Therapeutics Inc NASDAQ CLDX Esperion Th NASDAQ ESPR NewLink Genetics Corporation NASDAQ NLNK Planar Systems Inc NASDAQ PLNR Trulia Inc NYSE TRLA VelocityShares 3x Long Natural Gas VelocityShares 3X Long Natural Gas NYSE UGAZ UGAZ and Viggle NASDAQ VGGL
Stocks on the short side include Core Laboratories NYSE CLB Emerge Energy Services LP EMES Hi Crush Partners LP NYSE HCLP Nu Skin Enterprises Inc NYSE NUS Qihoo 360 Technology Co Ltd QIHU Waddell Reed Financial Inc NYSE WDR and Yelp Inc NYSE YELP |
BMY | In A Market That Won t Quit Ideas For Swing Traders | The market just keeps pressing higher I know the market is long in the tooth but it just won t quit and until we get a decisive turn down we ll keep playing the long side Although swing traders might make some money on the short side on some of the Boxer Shorts
Bristol Myers Squibb Company NYSE BMY may not be done consolidating but it is pushing the upper end of the flag It s something to keep an eye on It traded 67 million shares on Tuesday and was up about a half percent Nothing great but I did want to show you that it s set up to make a move here
Integrated Device Technology Inc NASDAQ IDTI swing trader popped 82 cents or 4 76 on 3 2 million shares and you can see the pullback opportunity here to support the bottom trendline and now it s popping The highs over the last week or so were 18 35 and now Tuesday s high is at 18 31 If it can get up through this area you may see this stock run some more The eventual target is in the 21 range
NewLink Genetics Corporation NASDAQ NLNK swing trade is acting well You can see in the last couple weeks the pullback and on Tuesday the snapback up 1 75 or 5 6 on 880 200 shares traded That s not spectacular volume but the technicals look like they re about to turnaround Moving averages have held and so has price support This would be the logical place for this to take off The first target is set at 35 35 1 2 the second target 38 39 Ultimately I m looking for a big move to retest the highs in the low 40 s
Vimicro International Corp NASDAQ VIMC has been a little slow I have been waiting a month for this stock to get going It had a big move They say the bigger the move the bigger the consolidation Yet it s a bullish looking move Kind of a wedge pattern It has a falling wedge within a larger wedge Either way it s a consolidation pattern that if taken out could explode On Tuesday it did pop 35 cents or 4 on 477 700 It needs to get some extension with more volume Keep an eye on this one because if it does start to move it could quickly test 11 11 1 2 range maybe 11 3 4 range and then it s off to the races at 11 90 12 00 perhaps into the 13 15 zone
Other on Harry s Charts of the Day are Avanir Pharmaceuticals Inc AVNR Bitauto Holdings Limited BITA GoPro Inc GPRO Green Brick Partners Inc GRBK GW Pharmaceuticals GWPH Integrated Device Technology Inc IDTI Direxion Daily Jr Gld Mnrs Bull 3X Shrs JNUG ETF Direxion Daily Gold Miners Bull 3X Shrs NUGT Royal Gold Inc RGLD Maxwell Technologies Inc MXWL NewLink Genetics Corporation NLNK Omeros Corporation OMER Planar Systems Inc PLNR Regulus Therapeutics Inc RGLS Silver Wheaton Corp SLW SunEdison Inc SUNE TerraForm Power Inc TERP Vimicro International Corp VIMC and ZELTIQ Aesthetics Inc ZLTQ |
WMB | Prospects Continue To Brighten For U S Energy Infrastructure | A few seemingly unrelated pieces of news caught our attention last week Together they provide a useful perspective on why U S energy infrastructure offers such an attractive return potential
Khalid al Falih Saudi Arabia s Energy Minister of a looming shortage of crude oil with the risk of a consequent price spike This may seem like an odd concern given last year s collapse in prices but the Saudis are looking farther ahead than the drawdown of existing stockpiles
He recognizes that the 300 400BN slashed from drilling budgets this year and the estimated 1TN cut through 2020 will lead to much less new supply coming online than might have been the case had oil stayed at 100 a barrel where it was in 2014 There s a substantial time lag between committing to a new project and producing oil Volatile prices hurt demand and are therefore not in the interests of suppliers either We wrote about precisely this issue in Why Oil Could Be Higher for Longer
However Rex Tillerson Exxon Mobil NYSE XOM Exxon Mobil CEO offered a contrasting view based on the resurgence in shale output in the U S being capable of responding to higher prices with increased output Unlike conventional oil projects with their large upfront investment and long payback times shale drilling involves numerous fairly cheap wells and high initial production This means payback times are shorter and production can be quickly curtailed when prices are adverse see Why the Shale Revolution Could Only Happen in America On their recent earnings call Haliburton CEO Dave Lesar said
North America has assumed the role of swing producer in global oil production
Either of these views on oil could be right In each case it will be good for U S producers and their infrastructure providers
Related to this there s a growing disconnect between falling capital expenditure capex by companies drilling for hydrocarbons and their rising production Antero Resources NYSE AR has cut capex by 20 since last year while production is up 14 EQT Corporation NYSE EQT cut capex 41 and raised production by 31 CONSOL Energy Inc NYSE CNX 74 and 16 Exploration and production companies E P are managing substantial improvements in efficiency which speaks to Rex Tillerson s comments above
The chart above shows what s happened in the Permian Basin in Texas currently one of the most productive regions in the U S Using data from the U S Energy Information Administration EIA the rig count fell 75 from September 2014 to May 2016 while production increased 19 over the same period representing a dramatic improvement in efficiency and lower break evens for E P companies This is pointedly not what the Saudis expected when they increased output in 2014 so as to expose the weak business models of shale drillers
Finally a few weeks ago see There s More to Pipelines Than Oil we noted a documentary made in the 1950s about the Transcontinental Gas Pipe Line later called Transco and today owned by Williams Companies NYSE WMB It s worth watching In 1931 the Natural Gas Pipeline Company of America built a transmission pipeline from Texas and Louisiana to Chicago It is still in use today owned by Kinder Morgan NYSE KMI
Properly maintained infrastructure lasts a long time far longer than the depreciation schedules used under GAAP accounting which is why net income is generally less useful than cashflow less the cost of maintenance Distributable Cashflow or DCF in measuring performance GAAP depreciation a non cash expense depresses net income and understates the cash flow generating capability of an asset that doesn t depreciate according to a GAAP schedule
Pipelines more typically increase in value over time because they re hard to replicate On KMI s earnings call on Wednesday chairman Rich Kinder noted the challenges in building certain new projects such as in New England because of the regulatory environment but added
to the extent it becomes difficult to build new infrastructure that tends to make existing pipeline networks more valuable
U S energy infrastructure remains one of the most interesting places to invest
Disclaimer We are invested in KMI and WMB |
WMB | Can MLPs Go Global | We re into earnings season for public companies including Master Limited Partnerships MLPs Quarterly report cards on performance should provide useful information on the nascent recovery in the U S energy sector
When they reported 3Q16 earnings Buckeye Partners NYSE BPL caught our attention with their investment in VTTI BV a global owner of storage and terminalling assets headquartered in the Netherlands VTTI BV is owned by Vitol a privately held energy company Beneath VTTI BV is a publicly traded MLP VTTI Energy Partners LP NYSE VTTI BPL and VTTI Vitol are in similar businesses albeit BPL is in the U S while VTTI Vitol are worldwide
BPL has bought 50 of the General Partner of VTTI for 1 1BN an investment whose returns are virtually all going to come outside the U S It s quite a thought provoking move The MLP structure is a consequence of the U S tax code MLPs generally don t pay tax on their income because their investors do There are substantial tax disincentives for non U S investors and U S tax exempt investors to invest directly in MLPs It s not impossible but in most cases prohibitively costly Because MLPs aren t taxed they have a cost of equity capital advantage over an otherwise identical business structured as a C corp
Diagram from Buckeye s presentation on the deal
But this advantage ought not to extend beyond the U S The profits earned by a refined product terminal located in say New York aren t taxed at source because the investors are U S taxable and report their proportional share of the income on their tax return via a K 1 But why would the Dutch or South Africans similarly extend this advantage to physical assets in their country owned by VTTI a U S listed MLP And in fact they don t which ought to eliminate the MLP cost of equity advantage and restrict the MLP structure to holding U S assets
VTTI is a partnership but chooses to be taxed as a corporation And it does pay tax at an average rate of 24 over the past four years according to their The Netherlands Malaysia U S and Belgium all receive tax from VTTI reflecting their far flung footprint So we have a tax paying entity with a GP entitled to Incentive Distribution Rights IDRs a low growth investment that trades at a 7 3 yield based on their most recently declared quarterly distribution of 0 3281
Most MLP GPs are earning 50 of the marginal dollar of Distributable Cash Flow DCF earned by the MLPs they control VTTI isn t yet there IDRs come with DCF thresholds similar in concept to the marginal tax rates that kick in as your income rises VTTI s GP is at the top of the 15 IDR share Beyond 0 328125 per unit they get 25 and above 0 39375 they get 50 Vitol and now BPL will increasingly participate in per unit DCF growth Vitol retains storage assets at the parent level which they can sell drop down to VTTI as well as 600MM of new projects under consideration So there s some visibility around how they might grow DCF
The question is why is this structure working with non U S assets whose income is already being taxed before it reaches the equity owners For the answer look to Williams Companies NYSE WMB In August we noted that WMB had recognized they had two types of investor income seeking MLP investors who hold Williams Partners WPZ and growth seeking investors who hold WMB So when WMB cut its dividend in order to invest in WPZ both sets of investors found something to like WPZ investors liked the support this gave to their distribution while WMB investors cheered the redirection of their dividends into a high yielding security Both securities rose WPZ is YieldCo generating steady income WMB is GrowthCo with better growth prospects In we explained our thinking
The VTTI structure works because VTTI investors are most focused on income and won t drive the yield on VTTI down much for the promise of faster growth So that growth is partly redirected via the GP IDRs to VTTI BV and now to BPL as well
It ll be interesting to watch because on the earnings call BPL didn t identify operating synergies as being that important to them They are financial investors in a sector they know pretty well They now own a GP The MLP model is showing its applicability globally not through a tax advantage but via its ability to separate cashflows and meet the specific needs of different investor segments lowering its cost of equity
Disclosure We are invested in BPL and WMB |
WMB | Williams Companies WMB Earnings Beat Estimates In Q3 | Williams Companies Inc NYSE WMB based in Tulsa Oklahoma is a premier energy infrastructure provider in North America The company s core operations include finding producing gathering processing and transportation of natural gas
Boasting of a widespread pipeline system Williams is one of the largest domestic transporters of natural gas by volume Its facilities gas wells pipelines and midstream services are concentrated in the Northwest Rocky Mountains Gulf Coast and Eastern Seaboard
Currently Williams Companies has a Zacks Rank 3 Hold but that could change following its third quarter 2016 earnings report which has just released
WILLIAMS COS Price and EPS Surprise
We have highlighted some of the key details from the just released announcement below
Earnings The company reported adjusted earnings from continuing operations of 20 cents per share surpassing the Zacks Consensus Estimate of 16 cents However the bottom line deteriorated from the prior year figure of 22 cents per share
Revenue For the quarter ended Sep 30 2016 Williams Companies reported revenues of 1 905 million The top line missed the Zacks Consensus Estimate of 1 971 million but improved from the year ago quarter level of 1 799 million
Segmental AnalysisWilliams Partners This segment reported adjusted operating profit of 1 189 million in the quarter up 8 1 from 1 100 million in the year ago quarter The upside was largely driven by a reduction in operating and maintenance and selling general and administrative expenses
Williams NGL Petchem Services The unit incurred adjusted operating loss of 13 million substantially wider than the year ago quarter loss of 5 million A significant rise in project development costs led to the underperformance Other The segment posted adjusted operating profit of 16 million which is higher than the the year ago quarter profit of 8 million
Check back later for our full write up on this Williams Companies earnings report later
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GLW | Corning Shattered After Guidance Likely Headed Even Lower | Summary
Corning Incorporated NYSE GLW fell 6 on Wednesday after the company cut its fiscal year guidance
Based on its market cycles we believe the stock has further downside risk in the coming months
Corning GLW Stock Weekly Chart from askslim com
Corning which produces display technology revised its revenue forecast for the optical communications segment Management now expects sales to decline by 3 to 5 for the current fiscal year compared to the average analyst projection of a 4 3 increase
Stepping back the company explained that For full year 2019 we continue to expect to grow faster than the overall glass market and volume growth to be up slightly
In any case our approach to stock analysis uses market cycles to project price action The stock is likely now in the declining phase of its current cycle If this is the case then the remainder of the cycle into December will be quite rocky Our target is below 26
For more from Slim or to learn about cycle analysis check out the askSlim Market Week show every Friday on our |
GLW | Prospects Look Healthy For Communication Components Industry | The Zacks industry primarily comprises companies that provide diverse telecom products and services for the development of scalable network architecture demand driven video solutions and broadband access equipment These include various building blocks such as small cells routers and antennas that are incorporated into equipment and facilities and are subsequently utilized by service providers to build networks for end users Their product portfolio encompasses optical and copper connectivity products hybrid fiber coaxial equipment edge routers metro Wi Fi storage and distribution equipment for cable TV operators cable and DSL modems EMTAs Embedded Multimedia Terminal Adapter gateways and set top boxes Some firms within the industry also offer cloud networking and virtualization solutions for data centers and cloud computing environments along with end to end network visibility and analytics that help build test certify maintain and optimize complex physical and virtual networks Some industry firms offer innovative audio products including analog and digital microphones and balanced armature speakers audio processors and software and algorithms that are used in applications that serve the mobile ear and IoT markets A few industry participants even provide glass substrates that are commonly found in LCD TVs notebooks and flat panel desktop PC monitors ceramic substrates for mobile emission control systems filter plates for genomics centrifuge tubes and laboratory filtration products In addition some firms offer digital platform for hands free communication via secure text messaging alert and alarm management that effectively solve healthcare communication and workflow challenges A couple of leading stocks within the industry are Arista Networks Inc ANET and Corning Incorporated NYSE GLW GLW Here are the three major themes in the industry Telecom service providers are increasingly leaning toward fiber optic cable in order to meet the burgeoning demand for cloud based business data and video streaming services by individuals Moreover fiber optic cable network is vital for backhaul and last mile local loop which are required by wireless service providers for the deployment of 5G network Fiber networks are also essential for the growing deployment of small cells that bring the network closer to the user and supplement macro networks to provide extensive coverage Higher utilization of advanced routers to deliver data packets from one network to another is gaining prominence while state of the art antenna systems remain essential architectural components for seamless connectivity The 5G transition is expected to be disruptive in nature potentially creating new avenues for industries across the board 5G is likely to augment the scalability security and universal mobility of the telecommunications industry which is expected to propel the wide proliferation of IoT The telecom firms are facilitating its customers to move away from an economy of scale network operating model to demand driven operations by offering easy programmability and flexible automation The industry remains well poised to meet these evolving trends given its technology prowess product depth and wide applications The industry participants are transforming the entertainment experience through a holistic approach to content delivery in order to help providers anticipate demand for more personalized relevant and mobile experiences Voice powered interactions are fast emerging as a critical and necessary feature as consumers tend to engage with technology through natural spoken commands across the mobile ear and IoT platforms This has led to a wide array of products ranging from mobile phones to headsets and from smart speakers to household appliances Moreover the firms offer a variety of pathways for delivering services through a combination of network based video transcoding packaging storage and compression technologies required to deliver new IP video formats and home gateways to connected devices inside and outside home Some firms are also benefiting from the expanding cloud networking market primarily driven by strong demand for scalable infrastructure which has become necessary for new applications and services Apart from delivering high capacity and availability cloud networking promises predictable performance along with programmability that enables integration with third party applications for network management automation orchestration and network services Consumer demand for faster Internet speeds with more capacity continues to grow at an escalating rate primarily driven by increasing consumption of video The wide proliferation of cloud networking solutions is further resulting in increased storage and computing on a virtual plane Since both consumers and enterprises are using the network more there is tremendous demand for quality networking equipment Moreover demand for faster data transfer is fueling growth of optical networks The industry participants provide the technology to enable customers manage this exponential bandwidth development cost effectively through steady investments in state of the art technologies These include DOCSIS Data Over Cable Service Interface Specification DSL Digital Subscriber Line and Next Generation PON Passive Optical Network platforms that enable service providers to deliver the highest bandwidth to subscribers across any physical connection Further some firms within the industry are benefiting from innovations in the glass substrate market enabling panel manufacturers to do away with costs that are usually necessary for making slimmer lighter and more power efficient consumer devices Overall the industry appears poised to benefit from healthy growth dynamics favorable industry drivers and solid demand trends Zacks Industry Rank Indicates Encouraging ProspectsThe Zacks Communication Components industry is housed within the broader Zacks sector It carries a Zacks Industry Rank 105 which places it at the top 41 of more than 250 Zacks industries The group s which is basically the average of the Zacks Rank of all the member stocks indicates encouraging prospects Our research shows that the top 50 of the Zacks ranked industries outperforms the bottom 50 by a factor of more than 2 to 1 The industry s positioning in the top 50 of the Zacks ranked industries is a result of positive earnings outlook for the constituent companies in aggregate Looking at the aggregate earnings estimate revisions it appears that analysts have reposed faith in this group s earnings growth potential The industry s earnings estimates for 2019 have jumped 4 2 over the past year Before we present a few communication components stocks that are well positioned to outperform the market based on a strong earnings outlook let s take a look at the industry s recent stock market performance and valuation picture Industry Outperforms Sector and S P 500The Zacks Communication Infrastructure industry has outpaced the broader Zacks Computer and Technology sector as well as the S P 500 composite over the past year largely due to healthy demand trends The industry has rallied 7 5 over this period compared with the S P 500 and sector s rise of 4 7 and 5 respectively One Year Price PerformanceIndustry s Current ValuationOn the basis of trailing 12 month price to book P B ratio the industry is currently trading at 3 16X compared with the S P 500 s 4 01X It is also below the sector s trailing 12 month P B of 4 44X Over the past five years the industry has traded as high as 3 50X and as low as 1 03X and at the median of 1 64X as the chart below shows Trailing 12 Month price to book P B Ratio Chart Bottom LineWith gradual deployment of 5G technologies fiber optics and massive proliferation of data traffic the industry boasts inherent growth potential However issues related to the trade war remain a latent threat One of the stocks in the space currently sports a Zacks Rank 1 Strong Buy You can see We are also presenting three stocks with Zacks Rank 2 Buy that are well positioned to grow UTStarcom Holdings Corp UTSI Based in Admiralty Hong Kong this communication components manufacturer has gained a modest 10 4 year to date The Zacks Consensus Estimate for current fiscal year earnings for this Zacks Rank 1 stock has moved up 40 in the past 90 days Price and Consensus UTSICommunications Systems Inc JCS Headquartered in Minnetonka MN this communication components manufacturer has gained a stellar 107 4 year to date The Zacks Consensus Estimate for current fiscal year earnings for this Zacks Rank 2 stock has moved up 700 since May this year Price and Consensus JCSSeaChange International Inc SEAC Founded in 1993 and headquartered in Acton MA this communication components manufacturer has gained a solid 121 4 year to date The Zacks Consensus Estimate for current fiscal year earnings for this Zacks Rank 2 stock has moved up 91 7 over the past 90 days Price and Consensus SEACTurtle Beach Corporation HEAR Headquartered in San Diego CA this Zacks Rank 2 communication components manufacturer delivered a trailing 12 month positive earnings surprise of 104 9 The Zacks Consensus Estimate for the current fiscal year and next fiscal year earnings has moved up 18 1 and 11 1 respectively since March this year Price and Consensus HEAR Today s Best Stocks from Zacks Would you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
VZ | Baby Yoda powers Disney streaming subscriptions to fast start | By Lisa Richwine and Neha Malara Reuters Walt Disney NYSE DIS Co s new streaming service Disney reached 28 6 million paying subscribers this week the company said on Tuesday as it reported quarterly earnings that beat Wall Street forecasts Shares of Disney were flat following the results after bouncing between positive and negative territory The results showed Disney made a strong entrance into the streaming video wars dominated by Netflix Inc NASDAQ NFLX The owner of sports powerhouse ESPN is trying to transform its business to capture audiences that are moving online Analysts at three brokerages had expected more than 20 million subscribers to Disney which is available in five countries including the United States Disney will be available in India on March 29 through streaming service Hotstar Netflix which began delivering online video 13 years ago boasts 67 7 million paid subscribers in the United States and Canada Subscribers at Hulu a streaming service Disney now controls climbed to 30 7 million as of Monday the company said ESPN customers reached 7 6 million this week I believe we re now well positioned to not only withstand the disruptive forces of technology but thrive in today s increasingly dynamic media environment Disney Chief Executive Bob Iger said on a conference call Iger said 50 of Disney subscribers signed up directly with the company and 20 came from its partnership with Verizon Communications Inc NYSE VZ He said the service did not experience significant cancellations after the end The Mandalorian a Star Wars series that became a cultural phenomenon thanks to a character commonly called Baby Yoda During an earnings call Iger said that The Mandalorian will return in October and will go beyond season two including the possibility of infusing it with more characters and taking those characters in their own direction in terms of series Selling Disney in a bundle with ESPN and Hulu helped lower cancellation rates Iger added Earnings for the quarter grew with help from healthy business at Disney s theme parks and the strong performance of animated movie Frozen 2 Excluding certain items Disney earned 1 53 per share above the average analyst estimate of 1 44 according to IBES data from Refinitiv Revenue rose to 20 9 billion up 36 from a year earlier The parks experiences and products division posted operating income of 2 3 billion up 9 from the prior year Disney was forced to close both Shanghai Disney Resort and Hong Kong Disneyland in late January during the busy Chinese New Year holiday to help stop the spread of coronavirus The closings could shave 135 million off operating income at Shanghai and 40 million at Hong Kong if they extend for two months Chief Financial Officer Christine McCarthy said The bulk of Disney s theme parks revenue comes from its U S parks Iger told CNBC that advance U S bookings had not been affected The Hong Kong park could see an additional 105 million decline in operating income during the quarter McCarthy said as ongoing anti government protests have depressed tourism Disney s direct to consumer and international segment the division that is spending big to build the streaming business reported an operating loss of 693 million below analyst expectations Operating income in Disney s media unit home to ESPN the Disney Channels and ABC rose 23 to 1 6 billion
Profit more than tripled at the movie studio to 948 million |
VZ | Chinese telecoms giant Huawei sues Verizon for patent infringement | Huawei has filed two lawsuits against Verizon alleging the U S carrier infringed patents held by the Chinese telecoms giant Huawei owns standard essential patents which are technologies critical for mobile networks including 3G 4G and now 5G Other firms including some of Huawei s rivals will need to use the patented technology for telecommunications networks Huawei claims it has been trying to negotiate royalty payments with Verizon for a significant period of time but were unable to reach an agreement on license terms |
VZ | Verizon slams Huawei lawsuit A sneak attack on our company and our nation | Huawei sued Verizon in the U S alleging the American telecoms firm infringed patents held by the Chinese network equipment maker Verizon slammed Huawei s lawsuit against it as a PR stunt claiming it is a sneak attack on our company and our nation This lawsuit is a sneak attack on our company and our nation The action lacks merit and we look forward to vigorously defending our company and our nation a Verizon spokesperson told CNBC |
VZ | Huawei sues Verizon over patents Verizon blasts PR stunt | SHENZHEN China WASHINGTON Reuters China s biggest telecommunications equipment maker will square off in court against the No 1 U S wireless carrier over whether Verizon Communications Inc NYSE VZ should pay Huawei Technologies Co Ltd for patent infringement Late Wednesday Huwaei sued Verizon in two U S District courts in Texas alleging the company used 12 Huawei patents without authorization in areas such as computer networking download security and video communications The suit sought an unspecified amount of compensation and ongoing royalty payments Verizon on Thursday called the lawsuits nothing more than a PR stunt and a sneak attack on our company and the entire tech ecosystem Huawei said in a statement it is simply asking that Verizon respect Huawei s investment in research and development by either paying for the use of our patents or refraining from using them in its products and services Verizon s statement said Huawei s real target is not Verizon it is any country or company that defies it The action lacks merit and we look forward to vigorously defending ourselves Huawei alleged Verizon has profited greatly from its technology It said the U S company s Wireline segment which covers voice data and video communications products generated revenue of 29 8 billion in 2018 Huawei and Verizon held six face to face meetings over the matter since February last year according to the lawsuits Huawei said it met with Verizon in New York on Jan 21 but there was no substantial progress and thus no licensing agreement was reached Huawei said Verizon is providing access to infringing technologies and services that use Huawei patented technology such as Cisco NASDAQ CSCO Integrated Service Routers Aggregation Services Routers Network Convergence Systems Nexus Switches Catalyst Switches and Clouds Services Router 1000v series which facilitate communications throughout Verizon s networks In June Reuters reported Huawei told Verizon it should pay licensing fees for use of more than 230 Huawei patents and was seeking more than 1 billion The Chinese company decided to take action for 12 patents because it considered evidence clearest and that number was manageable for the litigation a person told Reuters Huawei in December also sued the U S Federal Communications Commission after the FCC designated the company a security threat which Huawei denies and barred it from a government subsidy program
Huawei has received more than 1 4 billion in patent license fees since 2015 and paid over 6 billion for use of patented technology the company said |
WMB | French Open champion Barty makes smooth transition to grass | Reuters French Open champion Ashleigh Barty made a smooth transition from Parisian clay to British lawns as the Australian opened her grasscourt campaign with an impressive 6 3 6 4 victory over Croatia s Donna Vekic on Wednesday In her first match since winning her maiden Grand Slam title by beating Marketa Vondrousova at Roland Garros little more than a week ago the 23 year old began sluggishly but quickly found her rhythm to move through to the second round Vekic is no slouch on grass and Barty emerging as one of the favorites for Wimbledon said it was the perfect test I knew that I had to be sharp and I had to be ready Otherwise it wouldn t even be a contest world number two Barty said on court It was nice and clean today out here I was just really excited to come back out and kind of dust off the cobwebs a little bit Unseeded Jelena Ostapenko who won the French Open two years ago but has struggled this year ended the hopes of Britain s Johanna Konta winning 6 3 6 4 Five time Wimbledon champion Venus Williams NYSE WMB also moved through with the 39 year old defeating Aliaksandra Sasnovich Barty a former junior Wimbledon champion dropped serve early on but her deep skidding sliced backhand began to work its magic as the Vekic errors mounted She broke twice to take the opening set and twice more to seize control in the second Vekic prolonged the contest to grab back one of the breaks when Barty served for the match However Barty made no mistake the second time around when she brought up match point with an ace and sealed victory when Vekic netted an attempted drop shot Barty s French Open title was somewhat unexpected seeing as she is not a renowned claycourter Grass on the other hand is tailor made for her game which is why all eyes will be on her at Wimbledon which starts a week on Monday The odds are against her following up her French title by winning Wimbledon Only six women Margaret Court Billie Jean King Chris Evert Martina Navratilova Steffi Graf and Serena Williams have managed that in the professional era
She will continue to hone her grasscourt skills against American Jennifer Brady who beat Lesia Tsurenko 6 3 6 3 |
WMB | Trans Mountain oil pipeline expansion may start in September | By Rod Nickel and Nia Williams NYSE WMB WINNIPEG Manitoba CALGARY Alberta Reuters Construction to expand the Trans Mountain oil pipeline could begin in September assuming the next regulatory steps go smoothly the project s chief executive said on Wednesday The C 7 4 billion 5 56 billion project was stalled a year ago after a Canadian court ruled the federal government which also owns Trans Mountain failed to adequately consult indigenous groups Prime Minister Justin Trudeau on Tuesday reapproved the expansion cheering the oil industry but angering environmental groups Expanding Trans Mountain would ease congestion on pipelines that move Alberta crude lifting Canadian prices If things go according to plan I can see shovels in the ground as early as September said Trans Mountain Chief Executive Ian Anderson on a conference call Getting started is the most critical thing Construction looks to take 30 to 34 months he said Oil could flow through the twinned pipeline by the second or third quarter of 2022 delayed by about a year since last year s court decision Anderson said Work to obtain building permits started on Wednesday Canadian Finance Minister Bill Morneau said separately in Calgary Once complete the project will triple the capacity of Trans Mountain which carries crude from Alberta s oil sands to British Columbia s Pacific Coast Supporters say it is a vital conduit to help Canadian oil reach higher priced international markets but opponents including environmental and indigenous groups and some municipalities argue the risk of a spill is too great Trans Mountain has stockpiled about 30 of the pipe it needs and would resume construction where it left off a year ago at the Westridge Marine Terminal in Burnaby B C and between Edmonton and Jasper Alberta Anderson said The project still requires approvals from the National Energy Board NEB regulator permits from municipal and provincial governments and finalization of its route The NEB expects to issue a certificate of public convenience and necessity this week but Trans Mountain must also meet 156 conditions said spokeswoman Sarah Kiley Some conditions must be met before construction can resume The Coldwater indigenous band in British Columbia has raised concerns about risks to its aquifer Anderson said Trans Mountain has closely consulted Coldwater and is willing to consider route alternatives In British Columbia where the provincial government opposes the project a protest against Trans Mountain took place in Vancouver on Tuesday and another is planned in Victoria on Saturday Anderson said Trans Mountain has had no direct conversations with the Canadian government about preventing protests that may aim to disrupt work but said it has its own security plan in place Trudeau s government bought the pipeline last year from Kinder Morgan NYSE KMI Canada for C 4 5 billion to help the expansion project get built Opponents of Trans Mountain are expected to challenge the approval in court Morneau said the government felt it had fulfilled its duty to consider environmental impacts and consult with indigenous groups Our view is we have done the work we need to do to make sure this project can go forward in the right way he said Investors also remain skeptical The Toronto Stock Exchange energy index was down 0 6 percent even though crude futures were slightly higher
1 1 3303 Canadian dollars |
WMB | Stosur prepared for qualifying battles to stop rankings slide | By Martyn Herman SANTA PONSA Spain Reuters Former U S Open champion Samantha Stosur says she is prepared to slog through qualifying draws to restore her ranking having slipped outside the world s top 100 for only the second time in 11 years The 35 year old Australian who reached number four after stunning Serena Williams NYSE WMB to win the 2011 U S Open has fallen to 115th on the WTA list and could go lower after a second round defeat by Elise Mertens at the Mallorca Open on Wednesday But she is far from downhearted and was already checking flights from the idyllic Balearic isle to the cooler climes of Eastbourne where she will be involved in the first round of qualifying on Friday Stosur is of the glass half full mentality however and rather than get down on herself she is prepared to fight her way back up the rankings Look I still want to play and if that s the situation I m in and I want to continue then that s what you have to do play in qualifying draws Stosur told Reuters after a 6 3 6 3 defeat by fourth seed Mertens on the Santa Ponsa grass If you re playing well enough hopefully you re not doing it for too long It s not ideal but the aim is to try and work very hard to make the main draw at the U S Open It s not the place I want to be in but I feel that I m on the right track and there is room for improvement Maybe I see things a bit different nowadays to six or seven years ago Stosur is at least assured of a main draw slot at Wimbledon where she will hope to improve a puzzling record that has seen her never pass the third round in singles in 15 visits despite reaching three women s doubles finals and twice winning the mixed doubles on the London lawns Mallorca has been a nice relaxed start to the grasscourt swing she said All in all being on the grass for five days it s going pretty well Just finding a way to get the ball shooting through and hitting flatter Mertens will face American Sofia Kenin in the quarter finals Second seed Anastasija Sevastova thrashed Ajla Tomljanovic in the day s late match to book a last eight clash with China s Yafan Wang
Thursday s action is headlined by a clash between reigning Wimbledon champion Angelique Kerber and 2004 winner Maria Sharapova who is back after a six month injury layoff |
WMB | The Challenges to Gold Exploration and Extraction | Surviving hot jurisdictions diseases like malaria and disastrous helicopter crashes are just part of why being in gold mining and exploration is so difficult Grant Williams NYSE WMB talks to Ross Beaty and a host of other mining experts to better understand the challenges gold miners face finding mining and refining the yellow metal This video is excerpted from a piece published on Real Vision on January 26 2018 entitled Gold The Story of Man s 6000 Year Obsession Episode 1 |
WMB | European Tour hires Scudamore to boost Ryder Cup revenue | Reuters The European Tour has hired former Premier League executive chairman Richard Scudamore to help boost revenue from the Ryder Cup the governing body announced on Thursday The job is Scudamore s first paid role since leaving the Premier League at the end of 2018 Scudamore was at the helm of the organization for nearly 20 years overseeing its growth into the world s most lucrative soccer league and global money machine The 59 year old will join a committee of sports and business executives led by Damon Buffini former head of private equity group Permira tasked with increasing income from the biennial team golf competition between Europe and the United States The committee includes Europe s victorious 2014 Ryder Cup Captain Paul McGinley Premiership Rugby chairman Ian Ritchie European Tour chief executive Keith Pelley and its deputy CEO Guy Kinnings The success of The 2018 Ryder Cup in France demonstrated the global appeal of the modern day Ryder Cup but there remains significant growth potential European Tour chairman David Williams NYSE WMB said in a statement A record 270 000 fans witnessed Europe beat United States for the Ryder Cup crown at Le Golf National on the outskirts of Paris last September The victory was Europe s seventh in the last nine contests A report compiled by researchers from Sheffield Hallam University s Sport Industry Research Centre found that the tournament boosted economic activity in France by around 235 7 million euros 266 27 million The three day match broadcast reached over 40 global TV networks to a total household reach of around 620 million This committee will look at ways of optimizing that while also protecting the contest s rich heritage Williams said adding it would explore opportunities to grow revenues and profits from the 2022 edition in Italy and beyond I am delighted to welcome Ian and Richard to the committee They will bring valuable insight from their time in the business of other sports to add to the considerable golfing expertise brought by Paul Keith and Guy
The Ryder Cup is jointly administered by the European Tour and the PGA of America with the 43rd edition of the competition set to be held in Whistling Straits Wisconsin in 2020 |
WMB | Chanel Fendi host tribute to grand couturier Karl Lagerfeld | By Rachel Joyner PARIS Reuters Amid colossal portraits and clean lines of black white and red Chanel Fendi and a gaggle of stars paid homage to the fashion titan and Kaiser of mode Karl Lagerfeld on Thursday The mythic kingpin of the cutting edge died in February aged 85 devastating the industry after his decades as head of legendary labels Fendi and Chanel as well as his eponymous brand Stars including Pharrell Williams NYSE WMB Tilda Swinton Helen Mirren and Cara Delevingne paid homage to Lagerfeld on the stage during a tribute entitled Karl For Ever Blurring the lines of haute couture theater and film much as Lagerfeld was known to do the event consisted of live performances and dramatic readings montaged with a short documentary Featuring the ever reticent co owner of Chanel Alain Wertheimer the film was narrated by Lagerfeld himself sewn together from dozens of clips before his death Looking on the celebrity studded crowd featured Mayor of Paris Anne Hidalgo singer songwriter and supermodel Carla Bruni Valentino creative director Pierpaolo Piccioli Valentino himself model Gigi Hadid editor in chief of Vogue Anna Wintour and the first lady of France Brigitte Macron The show conceived by Canadian opera director Robert Carsen was held in the glass domed Grand Palais the same quintessentially stylish structure that housed some of Lagerfeld s most sensational shows which included elements as spectacular as a 265 tonne iceberg and a replicate Eiffel tower Karl For Ever sought not only to highlight Lagerfeld s long list of achievements as grand couturier photographer or publisher but to highlight the man behind the glasses The celebration explored his personal passions like tango literature and music and highlighted anecdotes from those who knew him well Lagerfeld created iconoclastic spectacle driven fashion In this Lagerfeldian world to be boring was a cardinal sin He also brought Chanel back from death s door reinvigorating the wilting couture house with the modern moxie that has since kept Chanel a lucrative and industry defining fashion house a job that required constant reinvention It s up to us to adjust to our times Lagerfeld said in one video Evolution can t be stopped and will not be stopped tomorrow
The tribute punctuated Paris men s fashion week for Spring Summer which wraps up Sunday |
WMB | Fraser Pryce Thompson make easy progress at trials | By Kayon Raynor KINGSTON Reuters Three times world champion Shelly Anne Fraser Pryce and training partner Elaine Thompson eased into the semi finals of the 100 meters at the Jamaican trials for this year s world championships with neither breaking a sweat on Thursday Fraser Pryce logged a controlled 11 08 seconds to easily win the first heat on the opening day of the trials while 2016 Rio Olympic 100 and 200 meters champion Thompson clocked 11 34 World under 20 champion Briana Williams NYSE WMB was the second fastest qualifier with 11 20 Fraser Pryce who had a baby in 2017 had entered the Jamaican trials for the Sept 28 Oct 6 world championships in Qatar with the second fasest time of the year having run 10 88 seconds in Kingston earlier this month The 32 year old s form had prompted coach Stephen Francis to suggest she was running close to her personal best of 10 70 seconds but Fraser Pryce said it was about purely about taking small steps as she focused on the worlds in Doha If I am to be honest with you for me its just focusing on the technique my first 30 meters I m still having some challenges with it she told Reuters So each race is to get better and you know once I m able to cement the 30 and different phases maybe at that time I can start thinking about times Honestly I don t know what his expectations are for me the real aim right now is to make the team and take it from there Fraser Pryce won the world title in 2009 2013 and 2015 Former men s 100m world champion Yohan Blake the only Jamaican man with a sub 10 second run this year also eased into the semi finals as he clocked 10 19 just behind Waseem Williams 10 17 Former world record hold Asafa Powell was third fastest qualifier with 10 27
Clive Pullen qualified for his second world championships when he won the triple jump with a leap of 17 02 meters |
WMB | Osaka s Birmingham exit gives Barty shot at number one | Reuters French Open champion Ashleigh Barty could become the first Australian woman to top the tennis rankings in more than 40 years if she wins the Nature Valley Classic in Birmingham following Naomi Osaka s second round exit on Thursday Osaka who became world number one after winning the Australian Open needed to reach the Birmingham final to guarantee she would stay ahead of Barty in the rankings but lost 6 2 6 3 to Kazakhstan s Yulia Putintseva Barty made short work of Jennifer Brady beating the American 6 3 6 1 on Thursday to book her place in the quarter finals and will become world number one if she goes on to win the tournament The stars have aligned a little bit for me and I think when you get those opportunities you have to do your best to take them with both hands the 23 year old told reporters That s what we have been able to do over the last month in particular but I feel like I m comfortable in my own skin I feel like I know exactly how I want to play in most matches and it s just about going out there trying to execute as best I can
Evonne Goolagong Cawley was the last Australian woman to top the world rankings in 1976 and if Barty wants to emulate her idol she will first have to get past five times Wimbledon champion Venus Williams NYSE WMB in Friday s quarter final |
WMB | New blood in Ukraine parliament will ease reform path Zelenskiy party chief | By Margaryta Chornokondratenko and Matthias Williams NYSE WMB KIEV Reuters Ukraine can pass reforms to make politicians more accountable and lift a ban on the sale of farmland after lawmakers hostile to change are tossed out in a July snap election the head of President Volodymyr Zelenskiy s party told Reuters Zelenskiy scored a landslide presidential election victory in April and the ex comedian holds a commanding opinion poll lead going into next month s parliamentary election though his Servant of the People party may fall short of a majority He had no prior political experience but Zelenskiy s anti establishment message and unorthodox style relying heavily on social media and jokes to cut through to voters has resonated with an electorate fed up with corruption and politics as usual Dmytro Razumkov the head of Zelenskiy s party said parliament has blocked the president s reform initiatives including bills to strip lawmakers of immunity from prosecution and another on officials illegally enriching themselves He thinks that will change once Zelenskiy s party wins its first seats and parliament now filled with lawmakers loyal to Zelenskiy s predecessor Petro Poroshenko is overhauled Razumkov said his party was open to forming a coalition with other parties but declined to name them I think that the time has come for a transfusion in the Verkhovna Rada and the emergence of new blood young blood in the rather old fashioned building of the Verkhovna Rada Razumkov said in an interview at his party headquarters NEW IMF AGREEMENT Razumkov said Zelenskiy s party would try to persuade parliament to lift a moratorium on the sale of farmland that has been in force since 2001 This step is backed by foreign donors and businesses who see huge investment potential Ukraine s fertile land already makes it one of the world s top grain exporters but some fear that lifting the moratorium means small landholders might be bullied to sell their land on the cheap to big businesses or foreigners Razumkov said Zelenskiy s team would create the right legal framework to make sure that does not happen but did not give a timeline for when the moratorium could be lifted A priority for any new government will be Kiev s relationship with the International Monetary Fund whose cash for reforms aid programs supported Ukraine through conflict with Russian backed forces and an economic crash since 2014 Zelenskiy plans to negotiate a new IMF deal after the election to replace an existing 3 9 billion standby agreement Today talking about some red lines I think is premature said Razumkov when asked what red lines in the talks the new government would have A potential sticking point is the IMF s demand for Ukraine to deregulate household heating tariffs and bring them up to market levels The policy has sparked criticism from lawmakers and citizens in the past who say it hurts living standards If we are talking about raising or lowering the price of gas and the requirements of the IMF the IMF does not formulate this position Razumkov said saying the Fund wanted a balanced budget And you can balance the budget in many ways The IMF has recently begun to take a rather tough position because this organization is fed up when it is constantly being deceived he said
I can cite many examples when certain agreements were reached between Ukraine and the IMF and then we did not fulfill our commitments he said referring to the current authorities and parliament |
BMY | Long And Short Charts Of The Day BABA BMY CYBR RWLK | The markets had an interesting volatile day on Monday and they ended the day mixed Some of the stocks we follow did well I m going to go over longs and shorts to give you a status update
Alibaba Group Holdings NYSE BABA is a recent IPO After the IPO pop it came down from the 109 range to the low 80s towards the 82 81 low In a week and a half it s gone up from there to Monday s high of 98 85 up 2 03 or 2 on 28 million shares It has been up 8 out of 9 days There s a possibility of two or three things and either it pulls back or it blows through it As early as Tuesday this stock may pop and with a lot of companies coming out with recommendations of 120 125 targets It could extend Keep an eye on it If it gets above the 97 99 area it may start to run a couple points
Bristol Myers Squibb Company NYSE BMY which I ve been hearing fundamentally but from a technical standpoint I saw the breakout of a beautiful base that took six months to develop Such a short move requires some sort of pullback consolidation which may have begun on Monday It was only off a dime The volume increased a little bit I just think that if that stock pulls back in this zone and consolidates it s headed to much higher levels First a retest of the early year s high at the 57 range and if it gets through that we could see 63ish Those are the targets
Cyber Ark Software Ltd NASDAQ CYBR had an excellent day on Monday Always look at an IPO on a 15 minute basis for more chart data This stock backed and filled for three weeks or so and broke out over the last couple sessions You can see a spike up it reached the post IPO high at 35 88 and on Monday it spiked up again up 4 84 or 16 on 3 9 million shares The short term target on this one is 39 40
ReWalk Robotics Ltd NASDAQ RWLK also had a good day on Monday up 3 18 or 12 on 506 700 shares traded It came out and popped and then drifted down from the declining channel Two declining top lines were broken and it punched through the moving averages Watch resistance at 30 it may reach that Tuesday morning Between 30 31 1 2 are scalp targets but my swing trade target is mid 30 s around 35
Other stocks on Harry s Charts of the Day are Chembio Diagnostics Inc NASDAQ CEMI NewLink Genetics Corporation NASDAQ NLNK Infinera Corporation NASDAQ INFN NewLink Genetics Corporation NASDAQ NLNK Novavax Inc NASDAQ NVAX and Vitae Pharmaceuticals Inc NASDAQ VTAE
Stocks on the short side include CARBO Ceramics Inc NYSE CRR Emerge Energy Services LP EMES Hi Crush Partners LP NYSE HCLP Hornbeck Offshore Services Inc NYSE HOS Nu Skin Enterprises Inc NYSE NUS Qihoo 360 Technology Co Ltd NYSE QIHU Westlake Chemical Corp NYSE WLK and Yelp Inc NYSE YELP |
WMB | Will Williams WMB Board Be Replaced By Corvex s Meister | Oklahoma based pipeline company Williams Companies Inc NYSE WMB which recently lost a court battle to preserve a takeover from another pipeline operator Energy Transfer Equity L P NYSE ETE is facing a new trouble as the former director of the company has announced plans to overhaul the entire board of the company Keith Meister the managing partner of Corvex Management that holds a 4 1 stake in Williams intends to nominate 10 employees of his own hedge fund as placeholders In this proxy battle launched against Williams these employees will serve as placeholders for the Thursday Aug 25th deadline of nominating new directors and the permanent independent directors will be presented by Corvex to the shareholders in November The reason behind Meister launching the proxy battle was the rejection of the proposal to nominate a majority of seven independent directors to the board by Williams Also Meister and the other directors lost confidence in the company when it was unable to close a deal to be acquired by Energy Transfer Equity In addition Williams missed financial expectations saw growth projects fail and had a poor safety history over the last five years WILLIAMS COS Price Following the deal cancellation with Energy Transfer Equity Williams has been making investments of more than 1 5 billion in its master limited partnership Also the company has been taking steps to reduce its debt load by divesting its assets Tulsa OK based Williams Companies is a premier energy infrastructure provider in North America The company s core operations include finding producing gathering processing and transportation of natural gas The company boasts a widespread pipeline system and is one of the largest domestic transporters of natural gas by volume Recently Williams Companies reported decent second quarter 2016 earnings on the back of significant cost reductions and continued improvement in financial performance The company reported adjusted earnings from continuing operations of 19 cents per share in line with the Zacks Consensus Estimate Moreover the bottom line improved from the prior year figure of 15 cents per share Presently Williams Companies carries a Zacks Rank 3 Hold implying that the stock will perform in line with the broader U S equity market over the next one to three months Some better ranked players in the energy sector include Enbridge Energy Partners L P NYSE EEP and China Petroleum Chemical Corp NYSE SNP Both these stocks sport a Zacks Rank 1 Strong Buy Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
WMB | Williams Companies Announces Organizational Realignment | Williams Companies Inc NYSE WMB recently announced that it has introduced certain changes in the organization to simplify its structure as well as enhance direct operational alignment The move is aimed at the development of the company s proven natural gas focused strategy and to retain focus on customer service and execution Williams intends to consolidate the number of Operating Areas within the company to three Atlantic Gulf West and Northeast Gathering Processing from five by early 2017 According to the organizational changes NGL Petchem Services operations in the Gulf area the Geismar olefins plant the refinery grade propylene splitter and pipelines in the Gulf Coast region will be incorporated into the Atlantic Gulf Operating Area Atlantic Gulf will retain the Transco interstate gas pipeline which is the nation s largest and fastest growing interstate natural gas transmission pipeline system Transco is a 10 200 mile network with a mainline that extends nearly 1 800 miles between South Texas and New York City Substantial natural gas gathering and processing and crude oil production and handling and transportation in the Gulf Coast region will also be included under Atlantic Gulf Rory Miller a 30 year energy industry veteran who has led the area since 2013 will continue to work in the same capacity The West Operating Area will include all gathering systems operations and commercial activities in the Barnett Eagle Ford and Haynesville shales the Mid Continent region and Permian Basin It will also comprise the Northwest Pipeline interstate gas pipeline system as well as gathering processing and treating operations in Wyoming the Piceance Basin and the Four Corners area Moreover an NGL fractionator and storage facilities near Conway KS a rail loading facility at Hutchinson KS and a 50 equity method interest in Overland Pass Pipeline will be operated within the West Operating Area Also included is a non operated 50 interest in the Delaware Basin gas gathering system in the Permian Basin region The consolidated West Operating Area will be headed by Walter Bennett who has led the West Operating Area since joining Williams in 2014 Operations in Pennsylvania West Virginia Ohio and New York will continue to remain under the Northeast Gathering Processing Operating Area The area comprises the Susquehanna Supply Hub and Ohio Valley Midstream It also includes a 69 equity investment in Laurel Mountain Midstream and a 58 4 equity investment in Caiman Energy II which owns a 50 interest in Blue Racer Midstream Jim Scheel who joined Williams in 1988 will continue to lead the Northeast Gathering Processing Operating Area WILLIAMS COS Price
Financial reporting under the new organizational alignment is expected to be effective from early January in concurrence with the implementation of related management changes Notably the company has announced a series of actions including its strategic plan since early July Williams stock has also increased in value by about 42 since Williams Companies currently carries a Zacks Rank 3 Hold Some better ranked players from the energy sector are Matador Resources Company NYSE MTDR NGL Energy Partners LP NYSE NGL and Enviva Partners L P NYSE EVA All these stocks sport a Zacks Rank 1 Strong Buy You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
WMB | Enterprise EPD Withdraws Takeover Offer For Williams | Enterprise Products Partners L P NYSE EPD recently made a public announcement that it has withdrawn its takeover bid for rival Williams Companies Inc NYSE WMB The partnership cited Williams lack of engagement as the reason behind the move Per sources Enterprise Products Partners made a second all stock offer for Williams in late August The revised bid upped the offer made earlier in the summer However the partnership did not receive any official response from Williams both times Enterprise Products Partners issued a statement mentioning that though it does not comment on market rumors or speculations the movements in its stock price as well as questions from its investors drove it to make the withdrawal public According to the sources Williams board had been in the process of evaluating the Enterprise Products Partners bid but the full board had not yet assembled to contemplate over the new offer Enterprise Product Partners had initially approached Williams after peer Energy Transfer Equity L P NYSE ETE backed out of agreed upon takeover of the company in June Following an unsuccessful attempt to overthrow the company s chief executive officer Alan Armstrong nearly half of Williams board resigned ENTERPRISE PROD Price
Enterprise Products Partners a leading master limited partnership MLP is engaged in providing a wide range of midstream energy services to producers and consumers of natural gas natural gas liquids NGL and crude oil The partnership s assets include about 49 000 miles of onshore and offshore pipelines approximately 225 million barrels of storage capacity for NGLs refined products and crude oil and 14 billion cubic feet of natural gas storage capacity Enterprise Products Partners currently carries a Zacks Rank 3 Hold Another better ranked player from the energy sector is Enviva Partners L P NYSE EVA which sports a Zacks Rank 1 Strong Buy You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
WMB | Controlling Assets Without Buying Them | On Tuesday morning Enbridge NYSE ENB and Spectra NYSE SE revealed how they d spent the Labor Day weekend by announcing their merger After the highly contentious and ultimately unconsummated Energy Transfer Williams soap opera it was a welcome surprise to see two large energy companies join their businesses agreeably without rancor
Although the financial media excitedly covered the union investors in the Master Limited Partnerships MLPs controlled by ENB and SE might well have wondered what s in it for them In another demonstration that the General Partner GP is where the action is their long list of affiliated MLPs enjoyed only muted revaluation at best The combined ENB SE will control among others Spectra Energy Enbridge Energy Partners and Midcoast Energy Partners NYSE MEP Yet since control of the MLP lies with the GP rather than the Limited Partners LPs there was no need to acquire the MLPs
Not only did SEP investors not see a bump in their stock price but SEP s price fell as the market reflected its greater use as a source of funding for the 26BN combined capex program scheduled 2017 19 One of the MLPs EEP has a cap on its Incentive Distribution Rights IDRs the fees paid to the GP of only half the limit set for SEP This makes it potentially attractive for EEP to be rolled up into SEP where the more generous SEP IDR structure would apply to its cashflows GPs always have options
Suppose two big hedge fund managers merged To avoid any confusion we ll use fictitious names of two already successful firms Masters of the Universe Masters and Kings of the Cosmos Kings The owners of Masters and Kings would rightly celebrate since they anticipate many operating efficiencies as well as synergies by working more closely together Clients of the hedge funds run by Masters and Kings would gamely cheer the union as well reasoning that a good financial event for the stewards of their capital surely couldn t actually be bad for the clients even if no objective evidence supports such warm feelings Principals from Masters and Kings would reach out to significant clients and explain their new growth strategy as win win good for all concerned and driven by partnership philosophy In fact a good rule as an investor is to recognize that when a money manager refers to his clients as partners think hedge funds and private equity the fees look less partner like and more wealth transfer like
Masters and Kings will use their now larger aggregate Assets under Management AUM to grow their investment strategies to the limits of their capacity and beyond They ll rely on the Large Size Highly Successful Defensible Decision thought process of new investors and their consultants The original clients misplaced earlier happiness is rewarded with lower returns
It s not a perfect analogy MLP investors are generally treated far better by MLP GPs than are hedge fund and private equity clients And hedge fund managers rarely merge although size and performance reliably follow opposite paths But the ENB SE merger is about synergies faster cashflow growth and stability from diversification The affiliated MLPs main purpose in life is to provide cheap capital to support the GP s growth plans A skillful GP generates MLP returns just sufficiently attractive to keep investors returning but anything in excess is wasteful When an MLP yield falls from say 7 to 5 the corresponding strong price performance cheers its investors However to the GP the resulting low yield on its MLP creates an imperative to cash in by issuing equity cheaply to fund more growth A GP who allows the yield on his MLP to fall too far is missing an opportunity to issue equity Investment bankers rarely fail to point this out
We like the ENB SE merger but that s because we re invested in ENB and SE rather than any of the affiliated MLPs We also note that Williams Companies NYSE WMB continued the rally that followed its escape from the altar with Energy Transfer The 11 4X Price Distributable Cash Flow multiple of WMB looks attractive relative to SE s 25 3X more so following ENB s willingness to merge at that valuation
We are invested in ENB SE and WMB |
WMB | WMB Growing Without Paying For It | Investors in Master Limited Partnerships MLPs like their distributions to be reliable and by comparison with other asset classes generous Investors in the General Partners GPs that control them hold a more discerning view on value creation
Last month we highlighted how Williams Companies NYSE WMB was giving its MLP investors in Williams Partners LP NYSE WPZ what they want reliable high distributions while also meeting the different needs of WMB investors for total return see
The slide below from a recent WMB investor presentation lays it out nicely WMB has two sources of cashflow LP distributions from WPZ since it owns WPZ units and Incentive Distribution Rights IDR related cashflows from their GP interest These two items are expected to generate 1 2BN and 1BN respectively for WMB over the next twelve months
Move right across the bar chart and they re planning to invest 1 3BN annually in new projects by investing in new units of WPZ These new WPZ units will generate additional IDRs through WMB s GP interest Working through the numbers WPZ will supplement the 1 3BN it receives for selling new units to WMB with 1 2BN in debt giving it 2 5BN to invest in new projects
We know from other regulated projects that WPZ s minimum IRR target is 15 on invested capital The table below shows how this cashflow will divide up WMB receives on average 32 of WPZ cashflows i e the 1BN GP take is 32 of the 3 1BN total WPZ Distributed Cash Flow the left most bar on the chart
So WMB should expect 32 of the project s cashflows and WPZ LP unitholders 68 up to a 9 4 return on the LP units the current yield on WPZ Thereafter since the GP is at the 50 level on IDRs the excess cashflow is split equally
The total IDR take for WMB from the 2 5BN WPZ capital outlay is 131MM representing a 13 1 growth rate on its current 1BN GP IDR receipts WMB can if it chooses sell the 1 3BN in WPZ LP units acquired into the open market at a time of its choosing thus winding up with no net cash outlay in exchange for this growth
So what s it worth The LP cashflows are pretty straightforward 1 2BN in WPZ distributions less the 300MM in cash operating costs leaves 900MM valued at the market yield on WPZ units of 9 4 gives 9 6BN
WMB s market cap is 22 4BN so the GP stake is being valued at 12 8BN 22 4BN 9 6BN or 11 3X next year s cashflow This looks cheap compared to other transactions
For example Marathon MPL acquired MarkWest last year at an implied GP multiple of more than twice this according to figures from Wells Fargo And our analysis here only assumes GP IDR growth from new projects it gives no credit to growth from WPZ s substantial existing asset base
So we think the 13 1 growth rate on the GP IDRs is conservative In effect WMB can grow its GP IDR derived cashflow without having to pay for it
We think on this basis that WMB is undervalued
DISCLAIMER We are invested in WMB |
WMB | Williams And Its Partnership Complete Asset Sale For 1 06B | Williams Companies Inc NYSE WMB and its master limited partnership Williams Partners L P NYSE WPZ recently announced that they have completed the sale of their Canadian businesses to Inter Pipeline Ltd for combined cash proceeds of approximately 1 06 billion This deal announced at the beginning of August is aimed at reducing the debt of the two companies In recognition of the value of inter company contracts Williams has decided to give up 150 million of incentive distribution rights in the quarter after the deal to ease the partnership s consent to the sale After taking into account this waiver the combined sale price division is about 839 million for Williams Partners and approximately 220 million for Williams TD Securities Inc and Barclays LON BARC acted as lead financial adviser and co adviser to Williams on the transactions Also Williams and Williams Partners do not expect to record a taxable gain on the transactions Tulsa OK based Williams is a premier energy infrastructure provider in North America The company s core operations include finding producing gathering processing and transportation of natural gas Williams Partners on the other hand is an energy master limited partnership engaged in gathering transportation treating and processing of natural gas as well as fractionation and storage of NGLs The partnership owns interests in three major interstate natural gas pipelines that together deliver 30 of the natural gas consumed in the U S WILLIAMS COS Price Williams currently carries a Zacks Rank 4 Sell Williams Partners on the other hand carries a Zacks Rank 5 Strong Sell Some better ranked players in the broader energy sector include Enbridge Inc NYSE ENB and China Petroleum Chemical Corp NYSE SNP Both these stocks sport a Zacks Rank 1 Strong Buy You can see For the last four quarters Enbridge posted an average positive earnings surprise of 4 8 China Petroleum Chemical on the other hand posted an average positive earnings surprise of 1 383 3 for the last four quarters Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
WMB | Energy Infrastructure More To Pipeline Stocks Than Just Oil | If I had 1MM for every time an MLP investor has asked me where crude oil is going I could probably buy a good chunk of Plains All American NYSE PAA the biggest crude oil pipeline operator in the U S But PAA aside MLPs are not as closely aligned with crude oil as popularly believed
The charts below show in raw numbers how many miles of U S pipelines are dedicated to crude oil refined products Natural Gas Liquids NGLs and natural gas We have over 2 million miles of transmission capacity for natural gas While a good portion of that travels the last few yards to a residence or business almost 1 3 million miles is classified as Distribution Main mileage
On pure miles of pipeline natural gas swamps anything else Their owners are diverse and include utilities as well as MLPs The network of gas pipelines has been growing to accommodate America s increasing use of natural gas for heating electricity generation and other industrial uses
The Energy Information Administration EIA counts 300 000 miles of inter state and intra state transmission pipelines which are largely controlled by MLPs
We have over 200 000 miles of pipelines carrying hazardous liquids which are roughly evenly split amongst petroleum refined products NGLs referred to as HVLs and crude oil The last two categories have been responsible for the growth in this sector
We re also storing more NGLs too and the chart below shows a recent jump in storage capacity measured in Millions of Barrels
Meanwhile spending on new infrastructure has continued although the 2015 MLP Crash did lead to the deferral of some projects There have also been some notable cancellations because of the often complex approval process
Kinder Morgan NYSE KMI halted their North East Direct project because they were unable to obtain enough capacity commitments This was in part because in Massachusetts there s no financial incentive for a utility to secure long term supply which limited their interest in signing up for pipeline capacity Access Northeast another effort to improve distribution and storage for New England under the direction of Spectra Energy NYSE SE may also be cancelled for similar reasons
A surprising consequence is that Boston now Liquified Natural Gas LNG by ship for use in winter even while the U S is beginning to export it LNG has to be liquefied for storage and regassified for use a not trivial expense borne by the helpless consumers in the region
It s not uncommon to hear energy sector executives complaining about the present Administration and their opposition to fossil fuels The increases in crude oil and natural gas production over the past eight years weaken the case for critics although the drawn out and eventual cancellation of the Keystone pipeline project did not reflect an enlightened energy policy
More recently the Dakota Access Pipeline DAPL project run by Energy Transfer Partners ETP has been the victim of some hostile and possibly illegal moves by the Administration It is too long a story to recount but a good description is on Forbes see While the opposition to new projects such as this hurts many unwitting participants including consumers who d benefit from cheaper energy such difficulties can only enhance the value of existing infrastructure Given the unpredictability of the approval process as shamefully on display in the DAPL case a new build looks ever more daunting compared with extracting higher returns out of existing assets
In fact on this point we recently ran across a very old sometime in the 1950s highlighting the Transcontinental Gas Pipe Line Corporation as it traverses from Texas north through the eastern U S to New York City If you have twenty five minutes to spare it s worth watching It reminds how energy infrastructure has a useful life of decades and is in many cases impossible to replicate as communities develop around and over it Today Transco as it is called belongs to Williams Companies NYSE WMB
What has changed over the past couple of years is that the planned new infrastructure dedicated to natural gas has grown while crude oil projections have fallen as forecast by the Interstate Natural Gas Association of America INGAA The charts below compare 2014 and 2016
The prospect of MLPs investing approximately two times their current market capital in new projects over the next twenty years hasn t been much altered MLPs and crude oil are gradually disengaging see MLPs and Crude Oil the Improbable Dance Partners Just as hedge fund asset growth is good for hedge fund managers MLP asset growth should be good for MLP General Partners At a time when the Federal Reserve continues its benign interest rate policy of wealth transfer from savers to borrowers see The Shrinking Pool of Cheap Assets MLPs remain one of the few asset classes to offer attractive valuations
Disclosure We are invested in KMI SE and WMB |
GLW | Corning GLW Beats Q2 Earnings And Revenue Estimates | Corning GLW came out with quarterly earnings of 0 45 per share beating the Zacks Consensus Estimate of 0 44 per share This compares to earnings of 0 38 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 2 27 A quarter ago it was expected that this specialty glass maker would post earnings of 0 39 per share when it actually produced earnings of 0 40 delivering a surprise of 2 56
Over the last four quarters the company has surpassed consensus EPS estimates four times
Corning which belongs to the Zacks Communication Components industry posted revenues of 2 99 billion for the quarter ended June 2019 surpassing the Zacks Consensus Estimate by 0 37 This compares to year ago revenues of 2 76 billion The company has topped consensus revenue estimates four times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Corning shares have added about 12 9 since the beginning of the year versus the S P 500 s gain of 20 5
What s Next for Corning
While Corning has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Corning was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 51 on 3 20 billion in revenues for the coming quarter and 1 95 on 12 14 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Communication Components is currently in the bottom 40 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
GLW | Corning Updates Guidance Based On Current Market Conditions | Corning Incorporated NYSE GLW recently updated guidance for its operating segments to better reflect the business environment under the prevailing market conditions In particular the company has lowered expectations for two segments while maintaining view for three Within the Display Technologies segment Corning has reduced its volume expectations for the third quarter and currently anticipates sales to be down by high single digit percentage on a sequential basis The company had earlier expected a sequential sales decline of low single digit percentage due to ramp up of Gen 10 5 manufacturing capacity The soft sales projections are primarily based on lower than expected utilization levels by several panel manufacturing customers driven by conservative buying patterns by set makers However management expects this change to be temporary and anticipates panel maker utilization to gradually rise in first half 2020 In the Optical Communications segment third quarter sales are projected to be down by a low teen percentage compared with the prior expectation of a low single digit percentage decline year over year This is largely attributable to lower capital spending by several major carriers on cable deployments and fiber to the home projects For full year 2019 Corning expects segment sales to decrease 3 5 against earlier expectation of a low to mid single digit percentage top line growth Notably the stock has declined 14 6 in the past year while the has rallied 4 3 Despite macroeconomic headwinds Corning continues to outpace the market it serves which underscores the resilience of its portfolio The company is extending strong performance under its new 2020 2023 Strategy Growth Framework It is focusing on its portfolio and utilizing financial strength to enhance shareholder returns The company s capabilities are becoming increasingly vital to diverse industries and multiple opportunities support leadership across all of its market access platforms Multiple factors should drive Corning s fiber optic solutions business over the next several years primarily the increasing use of mobile devices that require efficient data transfer and efficient networking systems Supporting this trend is the proliferation of clouds which is now resulting in increased storage and even computing on a virtual plane Since optical networks are more efficient and most of the existing networks are copper based the demand for optical solutions is particularly strong Corning has several products focused on this market to meet the varying consumer needs and aims to benefit significantly from the underlying growth trend Corning currently has a Zacks Rank 4 Sell Some better ranked stocks in the industry are Communications Systems Inc NASDAQ JCS and UTStarcom Holdings Corp NASDAQ UTSI both sporting a Zacks Rank 1 Strong Buy and SeaChange International Inc NASDAQ SEAC carrying a Zacks Rank 2 Buy You can see Communications Systems surpassed earnings estimates in the last reported quarter by an astounding 600 UTStarcom surpassed earnings estimates twice in the trailing four quarters the average positive surprise being 56 4 SeaChange International has a long term earnings growth expectation of 10 5 Stocks Set to DoubleZacks experts released their picks to gain 100 or more in 2020 One is a famous cutting edge food company that is hiding in plain sight Swamped with competitors and ignored by Wall Street its stock price floundered Now suddenly it acquired a company that gives it an advantage none of its peers have |
GLW | New Strong Sell Stocks For September 18th | Here are 5 stocks added to the Zacks Rank 5 Strong Sell List today Corning NYSE GLW is engaged in display technologies optical communications environmental technologies specialty materials and life sciences businesses The Zacks Consensus Estimate for its current year earnings has been revised 5 3 downward over the last 30 days Cosan Limited NYSE CZZ is involved in fuel and natural gas distribution logistics lubricant sugar and ethanol businesses The Zacks Consensus Estimate for its current year earnings has been revised 25 downward over the last 30 days GameStop Corp NYSE GME is a multichannel video game and consumer electronics retailer The Zacks Consensus Estimate for its current year earnings has been revised 26 downward over the last 30 days Rio Tinto LON RIO Group NYSE RIO is engaged in mining of mineral resources The Zacks Consensus Estimate for its current year earnings has been revised 1 downward over the last 30 days PetroChina Company Limited NYSE PTR is the owner and operator of an integrated oil company in China The Zacks Consensus Estimate for its current year earnings has been revised 2 7 downward over the last 30 days View the entire |
VZ | Verizon Communications Inc VZ Q4 2019 Earnings Call Transcript | Verizon Communications Inc NYSE VZ Q4 2019 Earnings CallJan 30 2020 8 30 a m ETContents
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks
OperatorGood morning and welcome to the Verizon Fourth Quarter 2019 Earnings Conference Call Operator Instructions If you have any objections you may disconnect at this time It is now my pleasure to turn the call over to your host Mr Brady Connor Senior Vice President Investor Relations Brady Connor Senior Vice President of Investor Relation Technical Issues As a reminder our earnings release financial and operating information and the presentation slides are available on our Investor Relations website A replay and transcript of this call will also be made available on our website Before we get started I d like to draw your attention to our Safe Harbor Statement on slide two Information in this presentation contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties Discussions of factors that may affect future results is contained in Verizon s filings with the SEC which are available on our website This presentation contains certain non GAAP financial measures Reconciliations of these non GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website The quarterly growth rates disclosed in our presentation slides and during our formal remarks are on a year over year basis unless otherwise noted as sequential In addition to our comments today on February 13 Verizon will be hosting an Investor Day in New York City and will be webcasting presentations by Hans and the leadership team More information about the event will be posted on our IR website As a reminder we re in the middle of a millimeter wave spectrum auction so we will not be able to comment on our current millimeter wave spectrum holdings or strategy Now let s take a look at consolidated earnings for the fourth quarter and full year In the fourth quarter we reported earnings of 1 23 per share resulting in full year earnings of 4 65 per share on a GAAP basis Reported fourth quarter earnings include a net pre tax loss from special items of approximately 2 4 billion including an early debt extinguishment charge of 2 1 billion an impairment charge of 236 million primarily related to the writedown of goodwill within our media business and a net charge related to severance and annual mark to market for our pension and OPEB liabilities of 135 million In addition we recorded a 2 2 billion tax benefit related to the sale of preferred shares in a foreign affiliate The cash impact related to the tax benefit of this sale will be realized in 2020 Excluding the effects of these special items adjusted earnings per share was 1 13 in the fourth quarter up 0 9 compared to 1 12 a year ago Full year adjusted earnings per share was 4 81 up 2 1 compared to 4 71 a year ago Let s now move to slide four and take a closer look at our fourth quarter earnings profile The impacts to earnings from the adoption of accounting standards ASC 606 for revenue recognition and ASC 842 for leases continued throughout 2019 As we illustrated in previous quarters we realized a lesser benefit from the adoption of ASC 606 in 2019 compared to the prior year primarily due to the deferral of commission expense The reduction of the benefit realized creates a year over year headwind to both reported earnings per share and adjusted earnings per share which will continue throughout 2020 The impact was 0 03 for the fourth quarter and 0 12 for the full year For 2020 we expect the headwinds from the deferral of commission expense to be approximately 0 09 In addition to ASC 606 accounting standard ASC 842 for leases which was implemented at the beginning of 2019 results in a gross up on the balance sheet for all operating leases This new leasing standard affects our earnings per share primarily due to the expensing of certain upfront lease costs creating a headwind of 0 01 in the fourth quarter and 0 05 for the full year We do not expect a year over year impact from the lease standard in 2020 Full year adjusted EPS growth of 2 1 illustrated on the earnings waterfall slide reflects strong underlying performance of the business partially offset by the impacts of the deferral of commission expense and the adoption of the leasing standard Additional details of our quarterly performance will be covered by Matt later in this call Hans E Vestberg Chairman and Chief Executive OfficerThank you Brady and thank you everyone for joining this fourth quarter earnings call Let me summarize quickly a little bit everything we have done in 2019 which is building a great fundamental for 2020 The transformation is built on a network process changes brand changes go to market changes and of course also a lot of new talent coming into our team All that we re doing during 2019 We ve fortified our network with new architecture We had a lot of product changes with a voluntary program We rebranded and put one brand for everything we re doing in the company We made a new go to market including new management teams That has been a big change in the company that is solidifying our way of accessing the market an even better way in 2020 So all that s happening we continue to actually execute well on our day to day business Our network continues to be the best in the market We just had new confirmation from J D Power RootMetrics that again our network our 4G network is clearly the best in the market Very happy with the team that they keep up that work The other thing that we have been very focused on is of course to continue to lead the market in wireless and for consumers And here we re seeing Ronan Dunne and his team continue with a good pacing Unlimited came out with new offerings seeing that our customer getting optionality optionality when it comes to the wireless offering but also on the cable side within mix and match that we came out with earlier this year We also added in a lot of partnership as we now have network service as a strategy We added in the Apple Music and more lately of course we included with Disney Both of them has been a win win for both our partners for our customers and for Verizon And this is the strategy we want to have going forward On the business side we also did a lot of important partnerships where we had the same model I think about the partnership with for example AWS Amazon on the 5G mobile edge compute again a totally new way of accessing a market that we have not been into And speaking about 5G we had our commitment 30 cities We made 31 We said we re going to launch 5G Home with the NR standard We did that and we said we re going to launch the first 5G mobile edge compute We did that in Chicago in December So all in all a year with so much execution and at the same time continue to achieve what we want to do And we round that up with our financials in the year end operational metrics I m really happy to report that we had our best year since 2013 when it comes to phone net adds a growth of 28 year over year And again that is how our team has been working with a new model And on the financial side we continue to see that we had a good wireless service revenue over the year with 3 2 for the full year which is the highest since 2014 And when it comes to our profitability our EPS was up 2 1 within 2019 for the full year And we continue to create strong cash flow which is of course giving us the flexibility going forward to see that we can execute on our strategy Ultimately consumer group continued to have a very good year in 2019 with everything they re doing The Verizon business group have of course the headwinds when it comes to the secular decline in the Wireline side at the same time as we re investing more in that area We re investing in processes tools and structures And why is that important It s so important because this is one of the greatest opportunities for growth for us when it comes to 5G and how we address the market And I can tell you during 2019 I met so many large corporations that we now can actually work with because our offering is so strong when it comes to fiber and 5G But we need to put that structure in place for the Verizon business group in order for them to actually both execute on the revenue side but also on the cost side And that s really what we re focused on Ultimately I think we have created a very strong fundamental for going into 2020 And if you think about our priorities for 2020 first of all continue to grow on the core business I mean we showed this year we can continue to grow 4G and our core businesses and that we ll continue to do in 2020 as well including building our network to be the best network in this market Secondly is leveraging our new assets that we re building We re building on fiber We re building our 5G and seeing that we can start leveraging that with our customer And I think that this year we ll continue to have a lot of focus on our 5G build and what we re doing in 5G and we will come back to that later on how we see the 5G market when we will have an Investor Day later in February So the third priority in 2020 is around our financials and our discipline there And the ambition is to accelerate the growth in revenue and EPS in 2020 and continue to create strong cash flow as we did in 2019 But it s also to continue to have the discipline and efficiency in our capex and opex spend That s very important because this is really driving us going forward being able to execute on our strategy And the four priorities around our customer centricity and our purpose driven company both are very important to engage with all our stakeholders if it s the society our employees or customers to have that in our genes in the company every day Here we will drive a lot around thinking about the customers giving them optionality as we did in 2019 We will just continue to do that And when it comes to our responsibility to drive a responsible business we laid out a lot of things in 2019 what we want to do and combine our responsibility of our society with our strategy We think that is strengthening us as a company to all our stakeholders And ultimately that will create even more value for all our stakeholders So all in all I think we have a really good platform coming into 2020 We are excited for it and we hope that all of you are excited for 2020 as well So by that I hand over to Matt Matthew D Ellis Executive Vice President and Chief Financial OfficerThank you Hans and good morning everyone We will begin with a review of our consolidated operating and financial results In the fourth quarter consolidated operating revenue was 34 8 billion up 1 4 Service revenue remains the primary driver of growth driven by volumes and step ups in access partially offset by lower wireless equipment revenue and secular declines in revenue from our wireline products and services predominantly in our business segment At the beginning of the year we provided consolidated revenue guidance of low single digit percentage revenue growth for 2019 For the year total revenue grew 0 8 including a 3 1 decline in wireless equipment revenue Adjusted EBITDA was 11 1 billion as compared to 11 6 billion last year The headwinds mentioned earlier from the deferral of commission expense and the lease accounting standard lowered EBITDA by 239 million which is approximately a 70 basis point impact on EBITDA margin in the quarter These results reflect continued strong margin performance in consumer despite a meaningful increase in volumes and secular weakness in the wireline portion of the business segment Full year consolidated adjusted EBITDA totaled 47 2 billion and EBITDA margin was 35 8 slightly lower than last year s margin of 36 2 Full year adjusted EBITDA included headwinds of approximately 70 basis points from the deferral of commission expense and the lease accounting standard which overshadowed our improved operational performance in 2019 Through our Business Excellence program We have realized cumulative cash savings of 5 7 billion and are on track to achieve our goal of 10 billion of cumulative cash savings by 2021 The Voluntary Separation Program resulted in approximately 1 3 billion of expense savings this year and we have been at our full run rate of savings for the last two quarters of the year Adjusted EPS for the fourth quarter was 1 13 up 0 9 from 1 12 a year ago We achieved our 2019 goal of low single digit growth by posting a full year adjusted EPS of 4 81 representing a yearly growth rate of 2 1 including the 0 17 headwind related to ASC 606 and 842 that Brady mentioned earlier Let s now turn to cash flow results on slide eight We had strong cash flows in 2019 which allowed us to continue our focus on investing in our networks increasing our dividend for the 13th straight year and strengthen the balance sheet The year over year increase in CFFO was due to operational improvements and lower discretionary employee benefit contributions partially offset by higher cash tax payments and payments related to the Voluntary Separation Program Capital expenditures for 2019 totaled 17 9 billion and well within our guided range of 17 billion to 18 billion Capital spending for the year was driven primarily by our fiber deployment in 60 plus markets outside of our ILEC footprint and the build out of our 5G Ultra Wideband network Additionally we continue to support growth in data and video traffic on our industry leading 4G LTE network and the upgrade to our Intelligent Edge Network architecture Free cash flow for the year was 17 8 billion up 0 7 year over year Our balance sheet continued to strengthen with our net unsecured debt down 3 7 billion year over year Our net unsecured debt to adjusted EBITDA ratio rounds down to 2 0x versus our targeted range of 1 75 to 2 0x We remain focused on reducing our secured debt portfolio into our targeted range while continuing to actively manage our near term maturities optimize our overall funding footprint and lower our cost of capital As part of this management of the balance sheet we conducted liability management transactions in the quarter and throughout the year which will reduce our interest expense going forward Now let s review our operating segment results starting with Consumer on slide nine Our Consumer segment entered the fourth quarter with strong momentum The combination of the new mix and match pricing attractive device promotions Our award winning network and the new Disney partnership drove continued success in the fourth quarter amid a competitive holiday season We are extremely pleased with the early uptake on Disney and the ability to partner with an iconic consumer brand and content company to bring even greater value to our unlimited customers As a result fourth quarter fund gross adds were up 9 3 year over year and postpaid phone net adds were 588 000 up 12 6 year over year Phone churn of 0 83 was up six basis points from a year ago consistent with our expectations and reflecting the elevated competitive activity across the industry A breakdown of our postpaid net additions is provided on this slide Total postpaid device activations were flat from prior year at 9 5 million including 7 9 million phones Our retail postpaid upgrade rate was 6 3 Down from 6 6 a year ago reflecting the continued elongation of the handset upgrade cycle Fios Internet net additions of 35 000 were up sequentially and down year over year Our customers see value in our high quality broadband offering paired with multiple choices for video such as Fios TV YouTube TV and Disney Fios Video net losses for the quarter totaled 51 000 Earlier this month we launched Mix Match on Fios providing customers with choice transparency and the opportunity to only pay for the services they want Now let s move to slide 10 to discuss the consumer financial performance We continue to see growth in consumer operating revenues through our updated service offerings in Wireless and Fios which were offset by modest declines in wireless equipment revenue and ongoing declines in copper based wireline services Consumer operating revenues for the fourth quarter were 24 2 billion and for the full year were 91 1 billion Which were up 2 and 1 4 respectively We are utilizing tools such as pricing and partnerships to add to our value proposition and drive further increases in wireless service revenue and ARPA Customers recognize the value of being connected to their best network in order to consume services or operate new devices As customers require additional data we seek to drive step ups to unlimited plans from meter plans step ups within unlimited to higher tier plans and increasing connections per account Consumer wireless service revenue for the quarter was 13 4 billion a 1 9 increase and 53 8 billion for the full year We expect to see further subscriber growth as we continue to effectively compete in the marketplace and from continued migrations to unlimited as approximately 50 of our customer base is still on meter data plans In the fourth quarter Consumer wireless equipment revenue decreased 2 1 as pressure from promotional offerings and lower upgrade volumes more than offset the increase in phone gross adds For the full year equipment revenue decreased 4 4 driven primarily by lower upgrade volumes Consumer Fios revenue remained relatively flat due primarily to the demand for our broadband offerings offsetting the impact of reductions in video subscribers Consumer segment EBITDA margin was 39 9 in the quarter down 130 basis points from last year including headwinds of approximately 80 basis points from the deferral of commission expense and the lease accounting standard For the full year EBITDA margins were 44 3 including headwinds of approximately 85 basis points The consumer segment demonstrated in 2019 that it can increase customer volumes while continuing to produce strong margins Now let s move to our business segment on slide 11 Business wireless trends remained strong throughout the year Fourth quarter phone gross adds were up 10 5 from the prior year primarily with the small and medium business and public sector contributing to postpaid phone net adds of 202 000 which were up 54 2 from the prior year A breakdown of our postpaid net additions is provided on this slide Our continued strong customer loyalty across the business segment led to phone churn of 1 in the quarter which was up two basis points sequentially and down seven basis points over the prior year Total postpaid device activations in the quarter were up 7 1 over the prior year while our retail postpaid upgrade rate was 5 versus 5 3 in the prior year Let s now move to slide 12 to review our business financial performance Operating revenues for the business segment in the fourth quarter were up approximately 1 over the prior year Wireless revenue growth of 8 4 was partially offset by wireline product revenue declines Wireless service revenue grew 7 driven primarily by small and medium business customers From a customer group perspective small and medium business revenue increased 7 9 over the prior year driven by wireless service revenue growth of more than 11 and double digit Fios growth partially offset by ongoing declines in traditional data and voice services Global enterprise revenues declined 1 6 driven by legacy wireline pricing pressure and technology shifts Public sector and other revenue decreased 1 6 as growth in wireless products and services was offset by wireline declines Wholesale revenues declined by 10 6 driven by price compression and volume declines in legacy wireline products which we expect to continue Business segment EBITDA margin was 20 7 in the quarter down 260 basis points from last year including headwinds of approximately 50 basis points from the deferral of commission expense in the lease accounting standard The reductions in margins year over year are due to the growth in wireless activations reductions in wireline revenues and the investments we are making in the business such as the launch of our business ready marketing campaign and the transformation of our go to market processes Now let s move on to slide 13 to discuss Verizon Media Group Verizon Media Group continued to make good progress in the quarter Total revenue was 2 1 billion which was essentially flat versus the prior year a meaningful improvement from the decline reported at the beginning of the year While we have more work to do we are very pleased with the results and the foundation we are building for future growth Native advertising and our demand side platform continued to gain traction mitigating the ongoing declines in legacy desktop search revenue streams Let s now move to slide 14 which reconciles Verizon 2 0 results to our legacy Verizon 1 0 results As we close out 2019 we are providing a reconciliation to legacy 1 0 results for the last time The charts on this slide reconcile revenue and EBITDA from our consumer and business segments back to wireless and wireline The top chart shows consumer revenues of 24 2 billion in the quarter After removing consumer wireline and adding back business wireless we had total wireless revenues of 25 3 billion with EBITDA margin of 41 The bottom chart shows a similar reconciliation from business to wireline results starting with business revenue of 8 1 billion and arriving at total wireline revenue of 7 1 billion in the quarter down 4 1 from the prior year EBITDA margins were 11 9 down from 17 6 last year The factors impacting wireline margins are largely the same as those highlighted in the business segment most notably the ongoing pressure from legacy wireline product revenue declines and the investments to drive future growth You can find additional detail in our supplemental information included on our website Let s now move to slide 15 to discuss the wireless results Total wireless operating revenues increased 3 5 and to 25 3 billion in the fourth quarter driven by a 2 7 increase in service revenue and benefits from the total mobile protection pricing action taken in the third quarter The fourth quarter performance was below our targeted range primarily as a result of higher base optimization into new pricing plans which we believe is stabilizing and the impact of increased gross adds on our promotional expense that amortized reservice revenue For the full year wireless service revenue grew 3 2 driven by retail postpaid ARPU growth of 2 5 and a 27 8 increase in phone net adds Total wireless EBITDA margin as a percentage of total revenue in the quarter was 41 This includes headwinds of approximately 80 basis points primarily from the deferral of commission expense and the lease accounting standard We are proud of this result particularly given the strong volumes driven in the quarter Continuing the momentum from the third quarter phone gross adds were up 9 6 to 3 1 million Postpaid phone net adds for the quarter was 790 000 Which were up from 653 000 a year ago marking our highest fourth quarter phone net add performance in the last six years Postpaid smartphone net additions in the quarter were 969 000 up 11 from the prior year Postpaid phone churn of 0 86 was up from 0 82 last year while total retail postpaid churn of 1 13 was up five basis points year over year For the quarter we increased customer net accounts by 30 000 Total postpaid device activations were up 1 2 This was a result of a 6 increase in postpaid gross additions from the prior year to 5 1 million offset by a decrease in our retail postpaid upgrade rate to 6 from 6 3 a year ago Now let s focus on our outlook for 2020 on slide 16 We exited the year with great momentum reflected by strong wireless volumes in both our consumer and business segments which together with our focus on execution positions us for accelerated growth in 2020 For 2020 we expect low to mid single digit percentage growth in consolidated revenue compared to the prior year Included in this outlook are continued growth and momentum in wireless service revenue trends within both the consumer and business segments and an expected increase in equipment revenue as we expand the availability and reach of our 5G network For the full year we expect to see adjusted earnings growth of 2 to 4 driven by recurring service and other revenue growth in both consumer and business as well as ongoing cost initiatives Adjusted earnings growth includes the impact of deferred commission expense as well as investments within Verizon business group and product development continued process improvement and new work tools that would not only drive cost savings but create incremental growth opportunities in areas such as 5G One Fiber and MEC We expect to see cost benefits of this work begin to materialize in the back end of 2020 and increase in 2021 with revenue benefits starting in 2022 We are excited about the future opportunities in our business segment and believe revenue and margins will expand in the future Below the line we expect depreciation and amortization to be similar to 2019 Interest expense is expected to decline due to lower debt balances and the impact of our liability management last year We expect each quarter in 2020 to be below the fourth quarter 2019 expense level Adjusted effective tax rate is guided between 23 and 25 in line with the actual results from the prior two years We expect consolidated capital spending to be between 17 billion and 18 billion including the expansion of our 5G network in new and existing markets additional 4G densification to stay ahead of demand and our ongoing fiber build our capital spending guidance results in our capital intensity continuing within our normal range although the timing will be higher earlier in the year than last year In summary we expect to build on our strong financial performance and are positioned for accelerated growth in 2020 Now let s take a look at capital allocation Our capital allocation process is disciplined and focused Priorities for the upcoming year remain investing in the business continuing our commitment to the dividend and managing our balance sheet to achieve our targeted leverage range With our leverage near the high end of the target range and expectations for EBITDA growth and healthy free cash flow in 2020 we are pleased to add share repurchases as a fourth priority of our capital allocation policy Repurchases will begin after the priorities have been met including investment in our 5G rollout potential spectrum purchases and the increased investment in the business segment as highlighted earlier Our earnings growth outlook for 2020 excludes the benefit from any potential share repurchases Summing up in 2019 we demonstrated that we can improve service revenue and grow the company from a position of strength which drove increased volumes throughout the year utilizing updated unlimited offerings effective promotional strategies and partnerships positioning the company for sustainable growth Our 5G built right strategy offers new opportunities to drive further growth as we continue to strengthen our network leadership Importantly we achieved strong results while expanding our industry leading margins as adjusted for accounting impacts during a period in which additional competitors entered our industry Though we continue to face challenges within our legacy products and services we are making strategic investments to drive growth in the coming years In addition we continue to make progress in our media group and we believe we have the necessary assets and appropriate strategy to drive further improvements Execution is a key focus within Verizon and we remain disciplined in our approach to capital allocation delivering on our commitment to strengthen our balance sheet In short we entered 2020 with strong momentum poised to deliver growth and innovation With that I ll turn the call over to Brady so we can get to your questions Brady Connor Senior Vice President of Investor RelationThanks Matt Brad ready to take questions now Questions and Answers Operator Operator Instructions Your first question comes from Brett Feldman of Goldman Sachs Please go ahead sir Brett Feldman Goldman Sachs AnalystThanks for taking the question The principal variance in your fourth quarter results versus ours and I think most people s expectations was the higher level of spending in the business P L and it looks it s on the wireline P L And during your remarks you talked about a step up investments in the business Services segment to drive growth in the future So I m assuming that we ve already started to see that in the fourth quarter run rate I guess what I was hoping to get more clarity on is what precisely are you spending that on I mean if I annualize that uptick it s well in excess of 1 billion of incremental opex So I think there s going to be a lot of interest in where you re spending it and how we should expect that payoff to flow through And then to the flip side of that is the annual EPS guidance you gave for this year it looks pretty close to what most people are looking for including us so there must be an offset and that would imply you re getting better operating leverage somewhere in your wireless business And so I was hoping you can maybe just walk through where the cost performance and the margin improvement is coming from on wireless as you look into 2020 Hans E Vestberg Chairman and Chief Executive OfficerSo Brett I can start and so when it comes to the business group you re right I mean we had already impacts in the fourth quarter on our investment that we re doing in the business group Matt mentioned some of them If I go deeper I mean as we are now approaching the market with a full portfolio for our enterprise customers small and medium customers we need to get all our billing system all our tools behind CRM etc actually working in a customer dimension And this hasn t been invested in before and we just need to invest there And that s why you see also in the guide that you say yourself we re staying basically on your line of expectation That means that at the end of the year we will see impact of those sort of investments and then they re going to roll off So part of these investments are of course one timers investments we re doing and then it will go away because we just need to fix a couple of things in order to address the market in the right side on the right way Secondly the secular decline in wireline business that is continuing So that is sort of a little bit more sustainable But that s why in the remarks on that we said also that in 21 we ll see even more impact of the cost reductions we re doing and then the revenue impact will start gradually coming 21 22 in this side But all in all we re very excited about the opportunities that Verizon business group have because that s why we started building the Verizon Intelligent Edge Network some three four years ago in order to actually address this market in the best way and the traction we are seeing with our customers is really good But on your first question if there is some impact in the fourth quarter the answer is yes Matt anything to add Matthew D Ellis Executive Vice President and Chief Financial OfficerYes Brett thanks for the question So we certainly saw the uptick in spending as Hans discussed We feel very strongly about the opportunities in VBG even more so today than we did when we announced a new operating structure But some parts of that business haven t been a focus of our investment over the years so we re excited about the future ahead there You mentioned a kind of annualized run rate of 1 billion and that s certainly not the number that we have in mind for that investment in 2020 So I think that s significantly overstating where the 2020 number will be But if you go back to the comments earlier we did say that we would expect to see an impact on margins in 2020 in line with what we saw in the second half of 19 I would expect we ll start to see the benefits of the transformation activities on the cost side of the business around the back end of the year really impacting 2021 in a more significant fashion and then getting into 22 and beyond on the revenue side But look we I think the underlying thing here is the level of confidence that we have that over time by making these investments we can grow both revenue and margins within the business segment So that s what we re focused on You also asked about the total margin structure of the company If you ve got this additional cost the earnings guide would suggest there s some other things offsetting it in the other direction I think it starts with revenue When you continue to have strong service revenue growth in both consumer and business on the wireless side and some of the other revenue lines that we mentioned that gives you a good starting point for earnings growth When you combine that with our ongoing cost activities and then even with the investment we re making in VBG I would expect to see upside to earnings through the year as a result of that Brett Feldman Goldman Sachs AnalystThank you Brady Connor Senior Vice President of Investor RelationBrad we re ready for the next question OperatorThank you The next question comes from John Hodulik of UBS You may go ahead sir John Hodulik UBS AnalystOkay Thanks Maybe for Matt on service revenue growth came in a little bit lighter than we expected here in the fourth quarter Can you give us a little bit more detail on sort of the drivers there especially in light of the better than expected subs And it also looked like consumer wholesale wireless revenues were sort of flattish sequentially Was there any kind of reset this quarter in the sort of wholesale rate especially given the growth in subscribers in some of your MVNO customers And then lastly any commentary looking out to 20 on service revenue growth year over year would be great Matthew D Ellis Executive Vice President and Chief Financial OfficerThanks John Look for service revenue growth in the fourth quarter at 2 7 for wireless as a whole as you say was all below the guide that we had A couple of reasons for that and both of them actually speak to the value that we re creating with our customers The first is we actually saw the people who had the opportunity to optimize by moving to the new pricing structure that we launched in August actually moved a little faster than we initially anticipated And so we think that s actually now complete and behind us earlier than we expected might see a little bit of an impact in the first half of 20 but certainly got more of it behind us in 19 And then the other piece is a little bit of accounting noise in the service revenue line A number of our part of our handset costs from a promo standpoint get capitalized and amortized against service revenue So when you have the increase in volumes that we had in 3Q and 4Q where we had gross adds we re up around 10 year over year in both quarters What that means is we re starting to see an increase in that promo amortization coming against the service revenue line That will be a little bit of a headwind in the first half of 2020 as well until that reaches kind of a plateau level in terms of the impact But certainly as you think about service revenue at the end of the year the trajectory of the business having the net add growth that we had we feel very strong about another good year of service revenue ahead of us And as we mentioned net adds the highest number that we ve had for six years So the wireless business is performing well in both consumer and in business and we expect that to continue Hans E Vestberg Chairman and Chief Executive OfficerSo I can only add on to Matt that of course this is part of our strategy I mean since the launch of unlimited we have constantly sort of developed our model to see that our customer can enjoy different type of packages in the mix and match but we also had a very clear strategy You see that our metered customers can be able to go up to unlimited and that s why we made that move in August And I mean we see the payoffs here with the net adds We roughly have today 50 50 metered and unlimited So we see that the continuation of putting more value in the packages and seeing that we can actually get the journey for our customer coming into the unlimited is extremely good And that s as a growth engine for us and you have seen that in the second quarter or the second half of 19 So we have more to do here but I think that the whole team of Ronan Dunne etc they are thinking about this But also don t forget business side with Tami that have done a really good job with the wireless customers as well So we re really encouraged when we see what we have done in the in our offerings and how that has responded well with the market So we re happy with what we have seen in the last half year end and give us encouragement for 2020 John Hodulik UBS AnalystThank you Brady Connor Senior Vice President of Investor RelationBrad ready for the next question OperatorThank you The next question comes from Philip Cusick of JP Morgan Please go ahead sir Philip Cusick JP Morgan AnalystHi guys Thanks You put up a big capex number at the end of the year and guided to the similar 17 billion to 18 billion Can you talk about any shifts within the capex priorities for 2020 versus 19 in terms of either fiber versus wireless mix or any shift within the fiber build in terms of the types of locations or deployments you plan to do And when should we think about you starting to really monetize that fiber build Hans E Vestberg Chairman and Chief Executive OfficerYes As you saw that we had a strong capex coming into the fourth quarter ultimately I m really happy about it You can see that our pace is coming up here quite dramatically in what we re investing in right now And the interesting thing is of course that since we launched the Verizon Intelligent Edge Network we have constantly found a lot of efficiency in our capex build and that of course is giving us possibilities to continue to do more and more So I think that our technology department have no constraints on what they need to do in 2020 This is what they have plans for in order for us to continue to fortify our 4G network to continue with strong additions in the 5G as well as continue with our fiber build And when it comes to the monetization of the fiber build we re already starting to do that Of course because many of the fibers right now are going to our cell sites on air because that was a part of it Then of course it has come a little bit later in monetization for our small and medium businesses and enterprise business etc But clearly we re already now seeing the benefits of doing that So going into 2020 I think we have a very solid capital allocation for our capex Matt and the team have worked with the technology team and we are improving every year how we do this work And of course it s a lot of reallocation inside that 17 to 18 And if we go back three years it s a dramatic change how we spend because of the new design on the network but also the technology evolutions Matthew D Ellis Executive Vice President and Chief Financial OfficerYes So on the monetization of the fiber as Hans mentioned it s a multiuse network But you re already starting to see the impact and I ll give an example And I think some of our network folks have mentioned this publicly in the past few months You go back to the first quarter of last year and the majority of our new cell sites were going up on third party fiber you get into the fourth quarter of last year in the 60 plus markets that where we re adding fiber It s now a significant majority is going up on our own fiber So that will have a significant beneficial significant benefit on you d think our expenses going forward And then as we continue to go we ll add other monetization opportunities over the course of the next couple of years So I d say we re already starting to see the benefits of the fiber build in our income statement Philip Cusick JP Morgan AnalystThanks Matt Brady Connor Senior Vice President of Investor RelationBrad ready for the next question OperatorThank you The next question from David Barden of Bank of America Sir you may go ahead David Barden Bank of America AnalystHey guys Thanks for taking the questions I guess two questions if I could First just with respect to kind of the back part of the year I think that there s a degree of anxiety about the level of competition that might emerge in the market around 5G and around the possibility of a 5G iPhone launch and how the various carriers are going to market and kind of position themselves as network to go to for it So if you could kind of give us a little color on kind of how you see the second half of the year playing out with this potential 5G iPhones super cycle emerging And then the second would be I just wanted to have you guys maybe address there s an organization called Opensignal that has shared some data with the sell side and others that kind of suggests that there s a handful of markets that Verizon s stressed in terms of their spectrum allocations And I think that that s raised kind of questions about what Verizon spectrum strategy is a network management strategy is going to be as we kind of bump into some of these limitations So I just want to have you guys address that if you could Hans E Vestberg Chairman and Chief Executive OfficerOkay On the first question there I mean Ronan Dunne already said in the beginning of the year that we re going to have some 20 5G devices coming out in the market this year So of course we re going to see more 5G devices coming out It s going to be more build in the markets in 2020 than we had last year So of course this is a year that there is going to be even more 5G things coming in When it comes to any particular phones coming out in the market we cannot really comment on it because that we ll leave to the company to do But in general of course if this is a market which has a high degree of iOS that means that when a 5G phone will come out from Apple that will be important for many consumers to look into what they think is a good change In our case I think we re building a unique 5G experience with our millimeter wave that nobody else is building and have the capability to do So I think that s really where the difference will come I mean we already have the best 4G network as you have seen in the latest J D Power and RootMetrics We re going to continue to have that So we re going to give the best experience for customers And we and I m confident that how we are building the network will make a big difference And that s why we also feel very confident if with all these devices coming out including if the iPhone would come out that we will have a good chance to actually grab more customers that want to be on our network When it comes to the spectrum and all of that I mean I think that I might have talked about this so many times I mean one thing is of course that we first of all have all the assets to deploy our 5G strategy when it comes to millimeter wave and using dynamic spectrum sharing be available nationwide when our customers are ready So I think that s clear I think that another thing that is very clear that spectrum is not the only thing that is needed to do a great network Think about what I have seen I worked with 400 carriers around the world in my life It is a lot of carriers have a lot of spectrum They don t have a great network I mean they don t use it in the right way I came to this company because these companies invest on the world how to deal with data Everything from spectrum to how you densify networks and what type of software you put in and that s a long term planning how to do that right And I think that s something where you or people around us go wrong when I look at us because think about how we have been performing and many actually thought that we would never sustain an unlimited And the more the network is growing we re getting more and more headroom as we re continuing deploying our software and the engineering capabilities we have in the company So again we feel good about the position we have Of course as we all know there might come out the C band And we re of course encouraged about the FCC s plan of doing that We think the C band is an important spectrum for many reasons I mean first of all it s one of the global spectrums that frequency will be global So roaming will be done on it and that s very important for U S market to get into that And it s very important for Verizon to get into that So I think but it s not hindering our strategy right now to deploy a great 5G network and be able to capture the market on 5G Matthew D Ellis Executive Vice President and Chief Financial OfficerI ll just add one comment on that David on that piece I mean our engineers took a look at that report yesterday and they said there s so much missing in terms of their planning They have line of sight to meet our needs for many years to come And so I think I would put money on our engineering team every day of the week and their track record is second to none So we re very very confident that we have the spectrum we need to continue to grow the business David Barden Bank of America AnalystAwesome Thanks guys Brady Connor Senior Vice President of Investor RelationBrad we re ready for the next question OperatorThe next question comes from Simon Flannery of Morgan Stanley Sir you may go ahead Simon Flannery Morgan Stanley AnalystGreat On spectrum maybe you could just comment on CBRS Obviously there s an auction coming up how do you see that fitting into your plans And then on 5G Home you haven t talked a whole lot about it With the CPE coming is that still second half of the year What are your expectations for what we should see in 2020 Hans E Vestberg Chairman and Chief Executive OfficerGreat Thank you Good morning On the CBRS as you know we have already started for quite a long time ago to do trials and see how it works and it works fine We think it s a good addition to the portfolio that in order to see that we get good customer expectations So we think CBRS is an important spectrum even though it is sort of more share than anything else but it s going to be definitely something we re using as it comes out Secondly when it comes to the 5G Home I mean you re confirming actually what we have in front of us The next generation chipset that goes into the CP for 5G Home will come out At least the plan right now is in third quarter which means that commercial product is probably coming out a little bit later because it takes some time from the chipset to the device By then we will have of course deployed far more millimeter wave across the country so we will be able to start launching many more markets when that happens So that will come back to a little bit more about that when have our Investor Day the 13th of February talk a little bit more about it But that s in the grand scheme the plans for 5G Home and that s no different from what we said half a year ago Simon Flannery Morgan Stanley AnalystOkay Thank you Brady Connor Senior Vice President of Investor RelationBrad we re ready for the next question OperatorThank you This question comes from Craig Moffett of MoffettNathanson Please go ahead sir Craig Moffett MoffettNathanson AnalystCan you share any early results I know it s very early days but of your mix and match video offer And it s hard to miss that with your mix and match video offer for Fios that the customer is seemingly far better off to choose the YouTube TV option to save a lot of money Is that the intention And why not make the step to say that s our only video offer and you really focus the business on the Fios broadband connectivity where it would seem you have a much better story to tell Hans E Vestberg Chairman and Chief Executive OfficerThank you I think when it comes to the mix and match we want to give our customers optionality on top of the broadband If it s the fiber broadband or if it s the 5G Home broadband we want to give them optionality Of course one optionality is always to have a broadband and having over the top services But another is of course giving the mix and match optionality right now to see that they use the right packages that is more fitted for them Still of course it s what they can choose whatever channels you have because they come in packages But the early or early indication is of course that customers that has been on trial for a month they clearly see what channels they re using and what package we can suggest for that that is going to be more optimized So I think for us we just think about our customers and where the market is going and we want to give them the optionality of actually having different ways they can address the market when it comes to their content consumptions And I think it s good for our customer experience but it s also good for our customers because all of them can do it So as you said it s a little bit early but I think that our customers are very happy that we re giving them this optionality And I think this is of course what everyone see where the market is going meaning more and more over the top content is coming in and you want you need thought mixing and matching that And here we have a great opportunity given our service strategy and we can work with all the type of optionality in the content market as we re not owning any content Craig Moffett MoffettNathanson AnalystThank you Brady Connor Senior Vice President of Investor RelationBrad we are ready for the next questionOperatorThank you The next question comes from Michael Rollins of Citi Please go ahead sir Michael Rollins Citi AnalystHi good morning Thanks A couple of follow up questions First with the revenue guidance range of low to mid single digits for 2020 Can you frame the flex points as to what would drive revenue growth to the higher end of the range relative to the lower end of the range And then second with respect to the fiber expansion can you just also frame for us just the total amount of fiber you re trying to go after over a three to five year period to help us put into context what the current deployment activity means for the company s longer term goals Matthew D Ellis Executive Vice President and Chief Financial OfficerThanks Mike So let me start with the revenue guide and unpack that a little bit for you So as you think about how would you get from 0 8 this year to low to mid single digits next year if I go through the individual pieces they re obviously within consumer It s a continuation of service revenue trajectory that you ve seen so far the other revenue line as well And then within business again continuation of those service revenue trends They re very very strong We don t see those slowing down anytime soon So that will be better A little bit of improvement on the wireline side of the business but nothing significant And then even within media you think about that being down 3 on a full year basis in 19 but getting back to about flat in the fourth quarter so less of a headwind of revenue from media in 20 than 19 Within the total number the 0 8 last year wireless equipment was negative 3 1 We don t expect that number to be negative in 2020 But obviously that is the biggest wildcard within the overall revenue guide as we think about it in terms of knowing exactly what we see primarily in the second half of the year as you get into the holiday season and iconic launches and the like So but we feel optimistic about the revenue growth going forward here really building on the momentum that we ve built across both consumer and business over the course of the past couple of years and feel pretty good about that guide as a result Hans E Vestberg Chairman and Chief Executive OfficerOn the fiber side I mean I think first of all I mean we said it in a couple of times during 19 We re starting to get on the level of sort of activity per month and quarter right now that we were planning from the beginning It took us some two years to get out to that pace The team is really good at it right now We can get much more scalability around it than the way we re doing it Remember also we always do the trade off between owning and leasing or sharing with someone and that is a very prudent or financially disciplined way of looking at our deployment In many cases we see it as owning it has really an advantage for us because of the multiuse of our network Now we re doing sites all the time We re going to create revenue for our business side So we probably have a couple of years left on doing that But in general I feel good about the pace we have right now and the multiuse of the fiber we have And I think this is one of the most critical assets in a network today in today s world especially as we build Verizon Intelligent Edge Network and you want actually to start delivering the 5G experience that we re expecting We need this fiber to be there So that s basically where we are with the fiber Michael Rollins Citi AnalystThank you Brady Connor Senior Vice President of Investor RelationThanks Mike Brad we are ready for the next question OperatorThank you The next question from Tim Horan of Oppenheimer Sir please go ahead Tim Horan Oppenheimer AnalystThanks With 5G I think the coverage is going to be very important also and I think you re using dynamic spectrum selection for that Can you just talk about how that s going and the timing And then just kind of further on 5G maybe just some color on what you re thinking how much further ahead you are than your peers And maybe lastly any other use cases that you re seeing talking to either enterprise customers or consumer customers for 5G for both coverage and density Hans E Vestberg Chairman and Chief Executive OfficerYes On the DSS the dynamic spectrum sharing as you have seen some PR we re done We have already gotten this to work from the software point of view And the majority of our baseband is ready for taking DSS So what we have said I m not going to give you an exact date but I m going to tell you we re going to be ready when we feel the market is ready and our customers need to have that coverage And again remember we want to have the best network performance wise We don t want to deploy it because it s called 5G We want to see that we actually give a superior performance to our customers And that s why we think that the millimeter wave what we re doing there is extremely important because we talked about 10 to 20x at least more throughput and speed than we have on the 4G network and we still have the best 4G network So I think that s what we already assessed When we meet at the Investor Day we re going to talk a little bit more about the technology sector We ll get a little bit more in depth around that When it comes to the 5G and where we are I think that you saw last year that we had a strong deployment coming in during 19 but of course we have even higher ambitions in 20 And we will also come back and talk a little bit about more about that But it goes in all three directions in our multipurpose network It s for the mobility case for the home case and it s also for the 5G mobile edge compute case not forgetting that because all three of them are using our multipurpose network And when it comes to use cases I can do some of them But of course on the mobile edge compute we see a lot of optimization in factories We see private we see private 5G networks in order to keep the data and the security and the throughput in a facility if that s a campus whatever that use case has come up very early on On the consumer side I guess there s sort of a big event coming up here on Sunday It s called Football American Football and you re going to see quite a lot on 5G experience there What we can do with millimeter wave in the stadium how we can use broadcasting cameras with 5G a lot of new innovation both with consumer but also for the distribution of content With our spectrum positioning we basically are limited on the uplink when it comes to stadiums which is the big blocker today in a stadium So I think you re going to see quite a lot next I d say four or five days on consumer cases as well as we will continue to give you more insights to it the next couple of weeks and when we meet in New York here Tim Horan Oppenheimer AnalystThank you Brady Connor Senior Vice President of Investor RelationYeah Thanks Tim Brad we got time for one more question OperatorThank you The last question comes from Colby Synesael of Cowen and Company Your line is open Colby Synesael Cowen and Company AnalystGreat Thank you I actually wanted to talk about the buyback I was wondering if you could talk about providing any more color on the potential for timing You mentioned one of the sensitivities was portent purchases of spectrum Obviously we had the CBRS auction I think in June and then C band whether it s later this year or maybe early next year Do those have to have first take place and you have to have a better understanding of ultimately what you spent before you could actually start to do a buyback Or could you actually end up doing it before And then secondly there s been a lot of debate around your current MVNO relationship with various cable companies and some of your competitors making some comments that they re going to try to go after that Is there a specific date when that contract expires or anything specific about 2020 that we should be thinking about that could be a catalyst if you will for the money to leave And how important is it to you to maintain that Matthew D Ellis Executive Vice President and Chief Financial OfficerYes Colby thanks for the question So on the buyback look it s great to be having this conversation We re approaching our target leverage had good conversations with the board for quite a while now As we get closer to the target range what comes next And so glad to announce that change in the capital allocation model this morning But as you mentioned there s a couple of key variables as we think about capital allocation going forward here And spectrum is the largest one of those So I don t know if we need to actually get through the auctions but having line of sight to exactly when the auctions will be is kind of a key variable So we re very supportive of the actions the FCC is taking to try to make as much spectrum available And as we get a little more clarity hopefully in the near term future that will also impact our decision on timing of any buybacks But as you think about buybacks the reason why we re having that conversation is the strong cash flow that we saw last year Last year we were at 35 7 billion of CFFO And even after you back out capex and the dividend 7 8 billion left over And with an expectation of EPS growth working capital might be a little bit of a wild card but I would expect to see that free cash flow after dividend number be strong again this year and expect it to be higher on a year over year basis So it puts us in a great position where we can make some good decisions going forward here Hans E Vestberg Chairman and Chief Executive OfficerOn the MNO so I can as we re having it as Service as a Strategy this is important relationships for us That s how we want to get monetization better than anybody else on our capital investments and that s why we re building a network We are managing a multitude of stakeholders and the MNOs are important It s an ongoing relationship And we really think it s important relationships so that s us any sort of large enterprises We see that we have both agile on the technology side and having good conversations with them but it s no different from another enterprise you would have So and I think it s a win win for both of us And hopefully they see equally good value having MNO on top of the best network in the country At the same time as we see a value over there as well So we will continue to be there And it s hard for me to comment what my competitors are saying about it I m not sure what insights they have But again we feel good about our relationship and we will continue to see that we are managing it as any very important customer Colby Synesael Cowen and Company AnalystThank you very much Brady Connor Senior Vice President of Investor RelationThat s all the time we have today Before I end the call I d like to turn it back to Hans for a couple of closing comments real quick Hans E Vestberg Chairman and Chief Executive OfficerOkay I will be brief on this one I think we have talked about all the relevant things for Q4 2019 and 2020 and as I said we have our Investor Day coming up here in February So but all in all I reinforce that we did a lot of transformation in 2019 The team and the organization has really responded well to it That goes all the way from a network change to our organization change to our voluntary program branding and all of that went down and at the same time we ve delivered a strong result And I think we have set us up ourselves for actually continued good role We have said that long term we have would like to have growth of GDP plus I think the guide this year is an acceleration compared to 19 which means that the confidence level is going up what we can do with the core assets we have And we still sort of have told you where 5G will come in which is more of 2021 So we work with assets we have right now but we build also a great foundation on 5G going forward for the years after So all in all I think the whole team the executive team and the company feel excited coming into 2020 and that s how I sum it up Thank you very much for being on this call Operator Operator Closing Remarks Duration 69 minutesCall participants Brady Connor Senior Vice President of Investor RelationHans E Vestberg Chairman and Chief Executive OfficerMatthew D Ellis Executive Vice President and Chief Financial OfficerBrett Feldman Goldman Sachs AnalystJohn Hodulik UBS AnalystPhilip Cusick JP Morgan AnalystDavid Barden Bank of America AnalystSimon Flannery Morgan Stanley AnalystCraig Moffett MoffettNathanson AnalystMichael Rollins Citi AnalystTim Horan Oppenheimer AnalystColby Synesael Cowen and Company Analyst
More VZ analysis
All earnings call transcripts |
VZ | Verizon s Adding Subscribers but Not Profits | A lot of people signed up for Verizon s NYSE VZ wireless phone service in the fourth quarter The telecom giant added another 790 000 postpaid phone subscribers its best Q4 performance in six years as a result of strong gross additions and best in industry churn rates
Verizon s ability to attract subscribers seems to rely heavily on pricing and promotions While its revenue came in above expectations its earnings fell below the consensus The main culprit may be Verizon s moves to lower its pricing on unlimited plans and offer its customers a free year of Disney s NYSE DIS Disney streaming service Average revenue per account fell sequentially and EBITDA margin contracted across both the consumer and business segments EBITDA declined 1 2 in its consumer segment compared to growing EBITDA at its competitors like AT T NYSE T and T Mobile NASDAQ TMUS
Verizon s lower profitability despite its strong subscriber growth is something investors need to pay attention to
Using Disney to compete
Disney may have been instrumental to Verizon s big net subscriber addition number during Q4 Given lots of pent up demand for the streaming video service combined with a new Apple iPhone release last quarter Verizon s unlimited plan became an attractive option for customers thinking about switching That s especially true among iPhone purchasers as Verizon also includes an Apple Music subscription in its unlimited plans
Q4 was also the first full quarter of its new unlimited plan pricing which offered more for less than its previous plans
CFO Matt Ellis noted the company was extremely pleased with the early uptake on the Disney offer but didn t provide any exact details on how many customers subscribed Verizon previously said about 17 million customers would be eligible for the free year of Disney between its wireless and home broadband subscribers
The move to partner with Disney and Apple puts Verizon on a more even playing field with T Mobile and AT T T Mobile offers its top tier unlimited subscribers a deep discount on a Netflix subscription making it free in some instances AT T is offering its top end unlimited subscribers free HBO Now which it ll upgrade to HBO Max when the service launches in May Despite the lower consumer price of Disney consumers are drawn to the brand as evidenced by the 10 million sign ups which included pre sales it saw on launch day
Dragging down profitability
The new plans and Disney subscriptions seems to have affected Verizon s cost of service which climbed 90 million sequentially and grew 6 5 year over year The terms of Verizon s contract with Disney are unknown and Verizon s accounting for the service is unclear That jump in cost of service is the biggest drag on profits for the company s consumer wireless business
AT T managed to sustain EBITDA growth in the fourth quarter for its mobility segment despite fewer net subscriber additions Even so its horizontal integration with HBO means it could offset higher cost of service from offering customers a free subscription with higher revenue in its WarnerMedia segment paid by the mobility segment
Meanwhile T Mobile is managing to grow EBITDA because it s gaining operational efficiency from scaling its customer base
Verizon doesn t have those advantages as it already operates at scale and its media segment doesn t hold any valuable subscription video services But maintaining its strong brand reputation with customers with competitive offers keeps it well positioned to return to growth in the future as it rolls out 5G services
That growth won t come anytime soon though Management expects low to mid single digit consolidated revenue growth and EPS growth of 2 to 4 for full year 2020 |
VZ | FCC plans to take action over wireless real time location data disclosures | By David Shepardson WASHINGTON Reuters U S Federal Communications Commission FCC Chairman Ajit Pai said on Friday the telecommunications regulator plans to take action against at least one unnamed wireless carrier over the apparent unauthorized sale of real time location data from users The FCC said in May 2018 it was referring reports that a website flaw could have allowed the location of mobile phone customers to be tracked to its enforcement bureau to investigate In a letter to Congress on Friday Pai said the FCC s enforcement bureau has concluded that one or more wireless carriers apparently violated federal law FCC Commissioner Jessica Rosenworcel said on Friday it was a shame the FCC took so long to act on what she called reports that shady middlemen could sell your location within a few hundred meters based on your wireless phone data She added It s chilling to consider what a black market could do with this data AT T Inc N T and Sprint Corp N S declined to comment on the FCC letter Verizon Communications Inc N VZ and T Mobile US O TMUS did not immediately respond to requests for comment A trade group representing U S wireless carriers said on Friday that upon hearing allegations of misuse of the data carriers quickly investigated suspended access to the data and subsequently terminated those programs Lawmakers last year expressed outrage that aggregators were able to buy user data from wireless carriers and selling location based services to a wide variety of companies and that data could be obtained by bounty hunters and others Pai said he soon plans to circulate to the five member FCC commission a formal notice of liability to one or more carriers A security researcher said in 2018 that data from a California based tech firm could have been used to track mobile consumers of AT T Verizon Sprint and T Mobile US within a few hundred yards of their location and without their consent U S Senator Ron Wyden in 2018 told the FCC that wireless carriers were selling customers location data to a shady prison phone company that was allowing prison guards to track Americans cell phones He said on Friday he was eager to see whether the FCC will truly hold wireless companies accountable or let them off with a slap on the wrist |
VZ | Verizon s Slow and Steady Machine Ends 2019 on a High Note Still a Top Dividend Stock | The mobile business isn t the high growth industry of times past but Verizon NYSE VZ continues to chug along as it builds out the next generation 5G network Net subscriber additions in the fourth quarter accelerated from a sluggish start early in 2019 the media group made up of AOL and Yahoo assets scooped up a few years ago stabilized after an extended period of decline and net debt ended down 3 72 billion and close to management s long term target 5G is still a work in progress and Verizon isn t likely to reenter growth mode anytime soon but solid performance means the 4 1 yielding dividend is still a good pick for investors looking to generate some income
Promotions lead to higher retail additions
First up on the consumer side net wireless subscriber additions of 731 000 and a 6 3 wireless upgrade rate helped push segment revenue up 2 in Q4 to 24 2 billion Management credited its ongoing promotional activity for the increase specifically the Disney NYSE DIS streaming service bundle for customers with unlimited data plans Those gains were offset by continued weakness in the FiOS wireline business Revenues were flat year over year with more high speed internet customers offsetting traditional phone and TV cord cutting
It was a similar story on the business end with 396 000 net wireless adds getting slightly offset by wireline voice net subscriber losses of 99 000 Even so business segment revenue of 8 07 billion in the quarter notched a 1 increase Media Group sales of 2 1 billion were flat not great but better than the negative territory of early 2019 Altogether wireless strength helped Verizon manage modest growth in the last year
Data source Verizon
The business segment is old and tired for now
Of course much of these results are built on Verizon s 4G network and after a decade the growth there is scant and highly susceptible to competitive forces as the company dukes it out with AT T NYSE T and T Mobile NASDAQ TMUS Things could start to pick up in 2020 though as Verizon s 5G currently available in parts of 34 cities rolls out in more markets
While many consumers are excited about the prospect of near gigabit data speeds on their phones from an investment perspective it s Verizon s business segment that is set to benefit the most from 5G Another 17 billion to 18 billion in expected capital expenditures in the year ahead will support among other things the continued development of the new network CEO Hans Vestberg said on the earnings call that many businesses are anxious to get access to the next gen wireless service and demand should be a key driver of Verizon s growth
Early results have thus far been promising with 5G use cases powering things like a Corning NYSE GLW fiber optic cable factory and Verizon partnering with Amazon s NASDAQ AMZN cloud computing segment Amazon Web Services AWS to bring early 5G access to the network edge in Chicago More coverage should equate to more deals like this for Verizon s sleepy business segment and expanding what s possible for its mobile business
As for 2020 management said to expect revenue growth in the low to middle single digits and adjusted earnings growth of 2 to 4 It s not setting the world ablaze but while 5G waits in the wings Verizon s leading network is still best in class and handily supporting the 4 1 a year dividend payout |
VZ | Convicted former WorldCom CEO Ebbers dead at 78 | Reuters Bernard Ebbers the former WorldCom Inc chief executive convicted in one of the largest U S accounting scandals died on Sunday his family said in a statement Ebbers 78 a one time milkman became known as an exacting cost obsessed boss was released from prison in December because of his deteriorating health He had served about 13 1 4 years of a 25 year prison term for orchestrating an 11 billion fraud that led to his now defunct telecommunications company s 2002 bankruptcy at the time the largest Chapter 11 case in U S history In a court filing in September Ebbers lawyers said their client was legally blind suffered from a heart ailment and anemia had lost 40 lb 18 kg in a little over a year and had become incapable of walking regularly for exercise I know many of the victims of WorldCom opposed Dad s release Many also wrote in support of release his son Joy Ebbers Bourne said in the statement My family and I continue to pray for everyone affected by the fall of WorldCom WorldCom had filed for bankruptcy in July 2002 It emerged from Chapter 11 in April 2004 as MCI Inc which was later acquired by Verizon Communications Inc N VZ |
VZ | Obituary Bernard Ebbers convicted of orchestrating WorldCom fraud dead at 78 | Bernard Ebbers who built WorldCom Inc into a telecommunications giant and was convicted in one of the largest U S accounting scandals died on Sunday his family said in a statement He was 78
His health had been rapidly deteriorating before a federal judge granted him a compassionate release from prison in December 2019 after he had served a little over 13 years of a 25 year sentence
He was hospitalized multiple times in November and December yet there was still no diagnosis or proactive treatment plan his son Joy Ebbers Bourne said in the statement
Known as Bernie the bearded twice divorced Ebbers spent nearly two decades transforming a small Mississippi company once known as Long Distance Discount Service into WorldCom through a slew of acquisitions including the 37 billion takeover of the much larger MCI Communications in 1998
That made Ebbers company a rival for AT T Verizon NYSE VZ and other long distance carriers and made Ebbers a billionaire
But it crashed down in 2002 in an 11 billion accounting fraud where former employees said Ebbers had urged them to inflate WorldCom s financial results to make the company more profitable and please Wall Street analysts
Ebbers was convicted by a Manhattan jury in March 2005 for orchestrating the fraud and was found guilty of securities fraud conspiracy and other crimes
His punishment was more severe than those imposed on two other chief executives from big corporate scandals in the same period a 24 year prison term for Enron s Jeffrey Skilling and a 15 year term for Adelphia Communications John Rigas Skilling s term was later shortened and he and Rigas have been released
Ebbers denied he was at fault saying it was subordinates who had concealed WorldCom s skyrocketing costs
He thought himself less a micromanager and more the high school basketball coach he once was
I m not an engineer by training I m not an accountant by training all those types of specialized skills he told the New York Times in 1998 which interviewed him on his 130 foot yacht Countach
My job is to bring people in who do have those specific skills and then rely on them I m the coach I m not the point guard who shoots the ball
WorldCom had about 103 8 billion of assets when it filed for Chapter 11 protection from creditors in July 2002 making its bankruptcy the largest in U S corporate history
That title is now held by Lehman Brothers bankruptcy in 2008 CNBC and Portfolio com in 2013 named Ebbers the fifth worst American CEO of all time Lehman s Richard Fuld ranked first
GOING TO CHURCH WITH A CROOK
Bernard John Ebbers was born on Aug 27 1941 in Edmonton Alberta He later moved to California and New Mexico and then back to Canada before obtaining a physical education degree in 1967 from Mississippi College where the 6 foot 4 1 93 m Ebbers had a basketball scholarship
Ebbers became a businessman and had amassed a small chain of motels by 1983 when he and other entrepreneurs came up with the idea for LDDS
He became CEO two years later and it changed its name to WorldCom in 1995 The name changed to MCI WorldCom after the MCI purchase and later back to WorldCom
Ebbers remained on the prowl announcing a 129 billion merger with Sprint Corp in October 1999 only to have regulators block that tie up
But as the global technology and telecommunications bubble began to burst Ebbers became financially strained from margin calls leading him to borrow heavily from WorldCom
He was ousted in April 2002 amid unhappiness over more than 400 million he reportedly owed Two months later WorldCom revealed an accounting shortfall and said it would restate some results The chief financial officer was fired
With his former company on the brink Ebbers reportedly appeared on June 30 2002 at the Easthaven Baptist Church in Brookhaven Mississippi where he attended services and taught Sunday school
He reportedly told the congregation that no one would find he had knowingly committed fraud and assured that you aren t going to church with a crook
Testifying in his own defense at his trial a relatively rare move in a high profile white collar case Ebbers invoked his coaching past to describe his management style
I considered myself demanding he said I expected results I sometimes said things I shouldn t have said maybe
But he maintained ignorance of details I don t know about technology and I don t know about finance and accounting he said according to The New York Times
Jurors thought otherwise
NO SLAP ON WRIST
Ebbers health began deteriorating rapidly in late 2019 not long after he sought early release from prison under a federal law allowing some older prisons to obtain freedom sooner
According to court papers he had become legally blind had fallen several times was easily disoriented and needed help to walk eat and groom himself His cognitive skills had slid well below the level suggesting dementia Ebbers weight fell to 142 pounds 64 kg in December 2019 from 200 pounds 91 kg in July 2018
Even Barbara Jones the federal judge who imposed Ebbers prison sentence thought early release was appropriate
U S District Judge Valerie Caproni who took over the case after Jones entered private practice concluded that society had no reason to fear Ebbers would resume fashioning fraudulent securities schemes or pose any threat if he were released
Thirteen years of incarceration up to the point of approaching death is not a slap on the wrist Caproni wrote in
January 2020 Ebbers has essentially served the life sentence
that the sentencing court predicted it had imposed |
GLW | Report China begins review of optical fiber dumping duties | As it had previously announced China has begun a review of anti dumping duties against some optical fiber imports from the United States Bloomberg reports China had said it would look at anti dumping duties on fiber preform that it imported from the U S and Japan to see if the dumping would continue if it removed the measures It planned to continue levying the duties during a yearlong review Domestic companies had filed a complaint saying they ve found a further increase in dumping according to the commerce ministry Corning NYSE GLW up 1 1 Other related tickers OTCPK SMTOF 0 6 OTCPK FUWAY OTC FUWAF Now read |
WMB | Canadian government rejects most Senate amendments to major projects bill | By Nia Williams NYSE WMB and Allison Lampert
CALGARY Alberta MONTREAL Reuters Canada s Liberal government has rejected most of the amendments proposed by Conservative senators to a bill that will overhaul how major projects like oil pipelines are assessed a move criticized by Canada s main crude producing province Alberta
Prime Minister Justin Trudeau s government introduced Bill C 69 to fulfill a 2015 election pledge to streamline and restore trust in Canada s environmental approval process for major projects
The legislation in its original form was fiercely opposed by the oil industry and a number of provincial governments including Alberta which argued it would deter investment and kill new projects Last week a Senate committee voted to approve the legislation but with 187 amendments
In a motion posted overnight on Tuesday the government said it will accept 62 amendments most of which were proposed by independent senators It will modify another 37
Nearly all the amendments proposed by Conservative senators were rejected
The Conservative changes would take us backwards increase polarization and ironically make it harder to get good projects built Canada s Minister of Environment and Climate Change Catherine McKenna said That is why we rejected 90 of the Conservative amendments
The Liberal controlled House of Commons will debate Bill C 69 later on Wednesday before voting on whether to approve the revisions The legislation will then return to the Senate
Canada holds the world s third largest crude reserves but has faced years of regulatory delays in getting new export pipelines build leading to crude getting bottlenecked in Alberta and trading at a discount to global oil benchmarks
The Liberal government is due to decide next week whether to approve the Trans Mountain pipeline expansion
Trudeau s cabinet originally approved the project in 2016 but that decision was overturned by Canada s Federal Court of Appeal which ruled regulators had failed to consider marine impacts and the government had not adequately consulted indigenous groups
Alberta s conservative premier Jason Kenney criticized the government s decision to accept only a third of the amendments Last week he urged the Liberals to pass the bill with all 187 Senate recommendations
We will make one last appeal to the federal government to listen to employers to many First Nations to provincial and territorial governments and to the Senate of Canada in adopting those constructive amendments Kenney told reporters in Montreal
Some environmental groups praised the motion for preserving many of the safeguards promised by Trudeau in the 2015 election
The Senate amendments would have gutted Bill C 69 said Anna Johnston lawyer at West Coast Environmental Law Association |
WMB | Robbie Williams takes stake in college sings mentoring s praises | By Hanna Rantala LONDON Reuters Pop singer Robbie Williams NYSE WMB a judge on Britain s The X Factor television show last year is taking a stake in a performing arts college as he looks to mentor more jazz hand people like him The singer of Angels and Let Me Entertain You will have a 20 stake in Liverpool s LMA which offers degrees in music performing arts and games design Williams who hails from Stoke on Trent a city 56 miles 90 km southeast of Liverpool mentored a choir from LMA on The X Factor last year and said he really enjoyed the experience I was looking into the eyes of all the students and I was like They are me That s who I was and who I am you know we sort of jazz hand people the 45 year old singer told a news conference It s just that energy that I wanted more of and also I don t mind saying I was surprised I was actually quite good at mentoring It s something that I want to carry on in whatever capacity that is I loved it LMA s plans include opening a new London campus next year Williams a member of popular 1990s boyband Take That will help drive LMA s expansion in Britain and abroad I ll find out more as we go along But I want to mentor I want to be there I want to find out how to teach I have a bit of experience in the business Williams whose wife Ayda Field was also a judge on The X Factor alongside series creator Simon Cowell is working on an album and will not return to the show this year I m going to be all over the place promoting that We wanted it desperately to work with The X Factor but it just wasn t to be he said It s a to be continued because myself and Simon are good friends our family are good friends the kids hang out all of the time and I think it s just a pause on the relationship Williams said
This year I ve got to go and promote my album to death So that s what I ll be doing |
WMB | Chance of disorderly Brexit jumps eventual free trade deal still likely Poll | By Jonathan Cable LONDON Reuters The likelihood Britain and the European Union part ways without a deal has jumped in the past month according to economists in a Reuters poll as most candidates jockeying to take over as prime minister appear to have adopted a hard line stance Three years on since Britons voted to leave the EU there is still little clarity as to how when or even if the two sides will draw a line under Britain s four decades of membership Theresa May still holding the country s top job but who has failed to get her Withdrawal Agreement ratified by Britain s parliament announced last month she was quitting and there are numerous contenders vying to replace her Boris Johnson a former foreign minister and the bookmakers favorite to take over kicked off his official leadership campaign on Wednesday with a pledge to lead Britain out of the EU on Oct 31 no matter what happens Johnson has said he would be willing to leave the bloc without a deal and the median forecast for the chance of a disorderly Brexit jumped to 25 in the June 11 14 Reuters poll from the 15 given in May The possibility of a no deal Brexit appears to have risen said Howard Archer at EY ITEM Club Many of the contenders looking to replace May as leader of the Conservatives and prime minister have stressed that the UK must leave the EU on Oct 31 deal or no deal British lawmakers on Wednesday defeated an attempt led by the opposition Labour Party to try to block a no deal Brexit While that no deal Brexit chance has risen the two sides will eventually settle on a free trade deal whether they need a transitional arrangement or not according to a strong majority of economists That is a view they have held since late 2016 when Reuters first started polling on the question The other compromise option was the second most likely outcome Britain remaining a member of the European Economic Area paying into the EU budget to maintain access to the EU s single market Third and fourth spots went to the extreme options cancelling Brexit or leaving the EU without any deal and being forced to operate under World Trade Organization rules Once again these two were close but flipped in the latest poll with no Brexit last and WTO rules in third spot Some regular respondents said they were reluctant to commit to a view as they did not feel confident about the outcome UP OR DOWN Britain s economy dodged the recession that was expected to accompany the vote to leave but contracted sharply in April and growth forecasts for this quarter were trimmed to 0 1 from the 0 2 given last month But the economy is still unlikely to go into recession the median chance of one over the next 12 months was 25 and it was 30 for in the next two years and GDP will expand 0 3 0 4 per quarter through to the end of 2020 forecasts unchanged from last month suggested Inflation which the Bank of England targets at 2 0 is expected to average 1 9 this year and around target next year BoE Deputy Governor Ben Broadbent added his voice on Tuesday to reminders from the central bank it still wants to raise interest rates echoing comments from two of his fellow policymakers Medians in the latest poll predict no move from the Bank for over a year and it is then expected to add 25 basis points to borrowing costs and take the bank rate to 1 00 That forecast is two quarters later than in last month s poll None of the 69 economists polled expected any move from the Monetary Policy Committee when its latest policy decision is announced on June 20 Financial markets are betting the BoE is more likely to cut rates than to raise them over the coming year yet when asked the probability the bank s next move would be to cut economists gave a median 35 However some data suggests the economy is ripe for an increase and the median chance the next move would be a hike was 60 With employment at an all time high unemployment at a 44 year low and wage growth pushing higher again the MPC may seek to take the opportunity to push back against a market that now thinks the next move in rates will be downward said Elizabeth Martins at HSBC A hike though would be in the opposite direction to the BoE s major peers The chances of a Federal Reserve interest rate cut this year have dramatically increased in the past month while the European Central Bank has opened the door to more stimulus ECILT US For other stories from the Reuters global long term economic outlook polls package see Polling by Sujith Pai and Sumanto Mondal Editing by Ross Finley and Alison Williams NYSE WMB |
WMB | Canada set to approve hotly debated pipeline expansion Trudeau unlikely to benefit | By David Ljunggren and Nia Williams NYSE WMB OTTAWA CALGARY Alberta Reuters Canada looks set to approve a hotly debated plan to expand an oil pipeline this week people familiar with the process told Reuters but the move is unlikely to help Prime Minister Justin Trudeau rebuild flagging support ahead of an October election The Liberal government last year took the unprecedented step of buying the Trans Mountain pipeline from Kinder Morgan NYSE KMI Canada for C 4 5 billion 3 4 billion to ensure the expansion went ahead to help solve crude transportation bottlenecks If completed the expansion would nearly triple capacity on the pipeline that runs from the western crude rich province of Alberta to British Columbia s Pacific coast But it has faced increasing protests from environmental activists and aboriginal groups Trudeau who came to power promising to improve Canada s environmental record faces a difficult decision If he approves it he could anger environmentalists and local residents who fear the impact of the project If he rejects it he risks further alienating an energy lobby that has accused him of wanting to wreck their industry as he has pressed ahead with plans to strengthen the environmental assessments of major new energy projects at a time of low prices He has said the expansion will proceed if the conditions are right His cabinet is set to take a final decision on Tuesday and Finance Minister Bill Morneau is due to address a business audience in the Albertan energy capital of Calgary on Wednesday Two federal government insiders with knowledge of the situation said there was little doubt Ottawa would give the green light I am expecting an approval Anything else would pose serious questions about what we are doing on the energy file said one of the sources who requested anonymity given the sensitivity of the situation A senior Alberta government source also said approval was expected It s the least this government can do to approve this pipeline said the source However a senior federal government source insisted no decision had yet been taken and noted Ottawa had the power to push back the announcement The office of the Prime Minister declined to comment The cabinet will need to consider whether the project has done enough to win over aboriginal support An original expansion plan approved by the Liberals in 2016 was overturned by a court which ruled the government had not adequately consulted indigenous groups Ottawa says it has ramped up talks with aboriginal communities Wood Mackenzie analyst Mark Oberstoetter said it was more than 50 likely that the government would move forward with Trans Mountain given that a rejection would be a hard story to tell your taxpayer base The Canadian Association of Petroleum Producers has forecast total investment in Canada s oil and natural gas industry will fall by about 10 to C 37 billion in 2019 from 2018 underscoring how Canada has struggled to recover from the 2014 15 global oil price crash But even if it is approved construction may not start any time soon given the resistance by environmental and aboriginal groups And an approval would do little to revive Liberal fortunes in Alberta where the party looks set to lose all three of its parliamentary seats in October s vote At the same time it could also enrage voters in British Columbia where there are greater concerns about the potential impact of expansion and where the Liberals have 17 legislators Significantly many of those seats are in the Lower Mainland and connected to coastline that could be affected by the project said Kathryn Harrison political science professor at University of British Columbia There are significant risks for the Liberals in British Columbia she said |
WMB | Qatar sends technical experts to Israel eyeing new Gaza power line | By Nidal al Mughrabi and Dan Williams NYSE WMB GAZA JERUSALEM Reuters A Qatari technical delegation held talks in Israel and the Gaza Strip this week about helping pay for a proposed new power line between them officials on both sides said on Tuesday marking a potential expansion of Doha s aid efforts for Palestinians Qatar has in recent years funneled hundreds of millions of dollars into relief projects in Hamas controlled Gaza which it views as helping stave off privation and fighting with Israel The intervention is approved by Israel but has gone largely unacknowledged by rightist Prime Minister Benjamin Netanyahu who along with U S allied Arab leaders has cold shouldered Doha for its ties to Iran and Islamist groups like Hamas Spearheading the Qatari drive has been envoy Mohammed Al Emadi who Palestinian officials said this week brought 10 million to Gaza via Israel to disburse to the poor It was the third such Qatari cash infusion in three months said the officials who requested anonymity But this time Al Emadi was accompanied by Qatari electricity and water experts They met with the Israel Electric Corporation in Tel Aviv on Sunday and in Gaza with energy officials on Monday to discuss a Qatari offer to pay for the completion of a new Gaza electricity line Israeli and Palestinian officials said Qatar had no immediate comment Al Emadi has previously spoken of Doha s willingness to take part in the project whose cost he put at around 60 million The new line known as Line 161 would provide 100 megawatts to Gaza which currently gets a total of 120 megawatts from Israel short of the 500 megawatts to 600 megawatts that Palestinians say the blockaded enclave needs Beside averting some of Gaza s chronic blackouts an improved electricity supply would also help power sewage pumps and prevent water contamination plaguing 2 million Palestinians It will make a difference said a Palestinian official Maybe we will not have electricity 24 7 but people may begin to feel there isn t a power crisis anymore An Israeli official said however that Line 161 would take around three years to complete and that it was not clear if or when the caretaker Netanyahu government might approve it The prime minister s office had no immediate comment
Netanyahu is running for reelection in September having failed to put together a new conservative coalition after coming ahead in an April ballot partly due to far right accusations that he has not been tough enough on Hamas |
WMB | Special Report Air Force landlord falsified records to boost income records show | By M B Pell TINKER AIR FORCE BASE Oklahoma Reuters When Paige and Nick Ippolito moved to a row house on this air base in 2015 the floors in the kitchen living room and hallway were warped They told the base s landlord Balfour Beatty Communities but nothing was done a company maintenance report shows Nick a Navy petty officer second class stationed at Tinker worried their baby daughter might lose a finger in the jagged flooring After a water leak further broke up the floor a company technician noted in a maintenance log that the eight month old may become sick from chewing on pieces breaking away from the flooring The floor tiles and adhesive contained asbestos a carcinogen an internal company maintenance report shows The official Balfour Beatty maintenance logs available to the Air Force indicate the company promptly addressed the problems The leak for instance was fixed in 20 minutes the records purport to show In fact the logs were faked The family said that repair took over a week The Ippolitos endured the other hazards for months You think your family is safe and then you find out your kid is eating asbestos flooring It makes me sick Nick Ippolito said It seems like they re just out for the dollar Balfour Beatty among the U S military s largest housing providers systematically falsified its Tinker Air Force Base maintenance logs for years Reuters found through a review of company records Air Force reports and interviews with former workers The fake entries made the company appear responsive to tenant complaints and unsafe conditions helping it secure millions in performance incentive fees for good service that it otherwise often would not have qualified for The efforts left families in harm s way and persuaded Air Force brass to ignore warnings of trouble raised by military base employees For years Balfour Beatty kept two sets of maintenance books at Tinker Reuters working in partnership with CBS News found A falsified set of official electronic records was shown to the Air Force listing quick response times A handwritten set of accurate records was also kept by the company in order to track what was really happening These records never disclosed to the military but examined in part by Reuters show that weeks routinely elapsed before hazards were remedied Robert Whittington Balfour Beatty s manager at Tinker from 2014 until July 2017 told Reuters he doctored work order information in the electronic maintenance logs at the direction of his superiors and pressured staff to close out unfinished work orders so that late responses would not count against the company Whittington said he knew falsifying records left families in peril A retired Air Force veteran he said he was disgusted by his actions and after wrestling with his conscience and refusing further orders to alter records resigned It s like they re operating a bank robbery at a corporate level Whittington said I got to the point where I was waking up in the morning and wondering Well how many people am I going to have to screw over today Whittington s claims are supported by numerous internal memos to Balfour Beatty employees instructing them on how to engage in the deception Reuters documented at least 65 instances in 2016 and 2017 in which Balfour Beatty employees backdated repair requests filed paperwork claiming false exemptions from response time requirements or closed out unfinished maintenance requests Such problems were well known to some Air Force housing employees stationed at Tinker For years they told the Air Force of questionable record keeping and slum like living conditions Yet their attempts to hold Balfour Beatty accountable were blocked by the Air Force Civil Engineering Center or AFCEC a unit based in San Antonio Texas that is tasked with monitoring private landlords At least 18 times since 2015 Tinker based Air Force housing officials warned that Balfour Beatty maintenance logs contained false information making it appear the company promptly responded to service requests Air Force reports show We do not feel that emergency urgent and routine work orders are accurately recorded said one periodic report on Balfour Beatty s performance Quarter after quarter the Air Force engineering center downplayed these concerns giving the company high service marks and advising Tinker officials to drop their complaints It doesn t matter if they were in compliance or not they would still get paid a local housing official at Tinker wrote in a February 2018 email At the heart of the failure to hold the Tinker landlord accountable was a conflict within the Air Force On one side was the on site Air Force housing office whose prime mission was assisting residents and conducting daily oversight of Balfour Beatty On the other was AFCEC responsible for developing and managing all of the Air Force s privatized housing projects While AFCEC too has an oversight role it is also responsible for ensuring smooth long term relations with the landlords with whom it does business Over the years AFCEC repeatedly sided with its partner Balfour Beatty Presented with the evidence Reuters found of years of false reporting slow repairs and hazardous conditions at its homes Balfour Beatty said the company learned in 2016 that one employee at Tinker had acted improperly without providing specifics It described this as an isolated incident and said it worked with the Air Force to strengthen its maintenance system The company did not comment on instances of false record keeping the internal memos and other irregularities Reuters documented before and after 2016 at Tinker and other bases Balfour Beatty said it has cooperated fully with inquiries by the Air Force and other government agencies into its business As an organization BBC has not and does not condone the falsification of records in any way the company said in a statement In December Reuters reported widespread instances of shoddy construction and safety hazards in new housing units private companies including Balfour Beatty built on U S bases Since that report the Air Force says it has been withholding fees from the company at Tinker pending a review of the matter In response to the new findings about the company John Henderson the Air Force assistant secretary for installations said in March he had real issues with Balfour Beatty s performance at Tinker But he said he did not believe housing companies purposefully changed maintenance records to win incentive fees In June after being shown further details of Reuters reporting he said he will await the outcome of ongoing investigations to determine what happened He said there were discrepancies in the maintenance records and that allegations of fraud involving Tinker and at least two other company bases were referred to the Air Force Office of Special Investigations and the Federal Bureau of Investigation in 2017 We trust our private sector partners to act in good faith Henderson said When this doesn t happen we must hold those responsible accountable for achieving better outcomes to ensure that we continue to be worthy of earning the trust of our Airmen and our Nation The Air Force Office of Special Investigations does not discuss investigations said Linda Card chief of public affairs for the agency But she added Conversations are still taking place with the U S Department of Justice about what avenues criminal or civil if any can be pursued against Balfour Beatty Regardless of that inquiry s outcome the Air Force plans to boost transparency by creating an automated maintenance request process allowing residents to view the status of a work order Henderson said It also plans to revamp the incentive fee system with details still being worked out He defended the work of the Air Force s engineering center saying it had taken the allegations against Balfour Beatty seriously and performed an on site review of the company s work at Tinker The news of accounting irregularities by a major contractor comes as U S lawmakers are overhauling the Pentagon s family housing program The defense spending bill for 2020 proposed by the Senate Armed Services Committee includes measures to prevent fraudulent work orders committee staff told Reuters in part due to concern that millions in fees have been paid based on falsified maintenance records Our military families deserve high quality housing throughout their service and that includes ethical and fair treatment by housing providers said Oklahoma Republican Jim Inhofe the committee chair PROFIT INCENTIVES Beginning in 1996 the military launched the largest ever corporate takeover of U S federal housing shifting ownership of more than 200 000 family housing units on bases to private real estate developers and property managers under 50 year contracts These lucrative contracts include bonuses or incentive fees that private landlords can earn by meeting performance goals set with the military To receive the fees real estate companies must meet quarterly and annual goals such as responding to resident maintenance requests within a specified time The fees are payable each quarter and are generally worth up to 2 of the total rent payments from service families living on base Balfour Beatty Communities located in Malvern Pennsylvania runs the military housing unit of Balfour Beatty plc a London based infrastructure company with annual revenue of 10 7 billion The company earns 33 million in annual profit on its military housing operations Balfour Beatty Communities President Chris Williams NYSE WMB told Congress in February The incentive fees alone on those operations are worth about 800 million over the life of the 50 year contracts it holds for 43 000 homes on 55 Air Force Navy and Army bases across the country Reuters calculates Balfour Beatty took over housing operations at Tinker in 2008 Since then Reuters estimates it has earned up to 2 million in incentive fees there Signs of irregular reporting have surfaced at other Balfour Beatty bases In 2016 Air Force housing officials stationed at California s Travis Air Force Base alleged company employees were using a second set of maintenance logs an Air Force statement confirmed In 2017 the housing officials found the company was closing out maintenance requests before they were finished and classifying records incorrectly the base s quarterly housing performance records show That same year housing officials at Fairchild Air Force base in Washington State said Balfour Beatty submitted inaccurate maintenance data in its application to receive incentive fees The Air Force could not substantiate the allegations at Travis and Fairchild But it stopped paying incentive fees to Balfour Beatty at the two bases late last year pending a review and referred the incidents to Air Force investigators and the FBI Still the Air Force has never clawed back incentive fees paid to Balfour Beatty an Air Force spokesperson said Nor has AFCEC audited the maintenance records of any other base managed by the company BIG LEAKS TWO SETS OF BOOKS At Tinker Reuters last year found half of the nearly 400 new homes built by Balfour Beatty suffered from gushing leaks raw sewage backups rotten wood and severe mold Starting in late 2015 Balfour Beatty was overrun with maintenance requests in both old and new homes Roofs leaked plastic water lines burst and heating and air conditioning failed former manager Whittington said Yet that same year the company recorded just 23 late work orders out of 6 000 jobs internal work order data show In early 2016 Whittington said executives cut the base s maintenance staff from six to five as corporate headquarters in London demanded larger profits from their military housing projects That left about 132 homes for each worker to cover he said Still Balfour Beatty told the Air Force it was responding promptly to maintenance requests Some Air Force housing personnel at Tinker considered the number of late responses suspiciously low and the incentive fees the company was winning oddly high Air Force emails show It s funny that all properties are always 100 handled on time one Air Force housing employee noted in a 2016 email to colleagues Then in July 2016 during a casual conversation the Tinker housing personnel noticed a hand written maintenance schedule on the desk of a Balfour Beatty work order clerk named Tina Brown Brown was responsible for taking maintenance requests over the phone and scheduling technicians to resolve them Since her first day she told Reuters she maintained an unofficial hand written set of maintenance logs in addition to the official computerized records shared with the Air Force The hand written books allowed Brown and other employees to accomplish two ends according to Brown and other people familiar with the operation They could accurately track the work so they could eventually complete it but do so without triggering the clock that started ticking once a work order was entered in the official electronic system Facilities manager Tim Heath instructed her to enter work orders in this fashion according to Brown and Whittington Heath did not return calls and text messages seeking comment The requests were often logged into the official system by Brown the day they were completed not the day they were called in By doing so the workers ensured that Balfour Beatty was appearing to meet the response time goals set in its Air Force contract 30 minutes to begin an emergency request four hours for an urgent one and 24 hours for a routine matter The ruse also allowed the company to meet job completion goals 24 hours for an emergency and two business days for both urgent and routine items An example from 2016 shows how the set up worked A page from Brown s unofficial handwritten records includes a work request from a family with a broken stove dated July 7 2016 The official electronic maintenance log captured in a screenshot from Brown s work station shows the family s request was not entered until July 12 2016 the day before the work was done If the request had been accurately logged it would have failed the incentive requirements After finding Brown s shadow set of books Air Force housing officials at Tinker interviewed residents in the summer of 2016 and confirmed that Balfour Beatty was not entering requests when residents called them in These findings are very disheartening one official wrote in a July 2016 email to colleagues Balfour Beatty later addressed the accusation in an application for an incentive fee payment It told the Air Force it had discovered discrepancies in the data entry process at Tinker and quickly acted to ensure it didn t recur according to the fee request it filed About two weeks earlier Balfour Beatty had fired Brown As she was escorted out of the office according to people who witnessed the scene she shouted to co workers that she had been axed for keeping a fake set of books at the direction of her boss Heath They threw me to the wolves Brown said She filed a wrongful termination suit against the company that is still pending In its statement Balfour Beatty did not name Brown but said a single employee acted inappropriately Internal Balfour Beatty documents show the company issued broad instructions to employees to alter the books That was the message in a 2013 directive about work orders emailed to Balfour Beatty employees You will modify and correct these work orders so that they comply with the Response Time of 30 minutes 1 hours and a Completion Goal of 24 working hours for Emergency work orders the memo states Another 2016 internal memo shared via emailed instructs clerks to place maintenance requests in a red folder if workload excessive and can t schedule right away Whittington said Tinker never had enough maintenance staff to tend to the base s 660 homes All the while Whittington said corporate staff from Phoenix pushed him to close out maintenance requests so the company could obtain incentive fees Work orders were closed when they weren t actually completed Whittington said Again that plays into the incentive bonus Whittington said he pressured his staff to fudge the numbers In an email dated September 1 2016 he directed two employees to close 119 resident maintenance requests in four hours The objective is to get ALL open Work orders closed today he wrote Whittington said he was directed by his regional manager Rebecka Bailey and vice president Raul Martinez Bailey is no longer with the company both she and Martinez declined to comment ASBESTOS HAZARDS All those years families lived with a range of hazards raw sewage backups vermin infestations and exposure to asbestos In the McNarney Manor neighborhood of Tinker all but a handful of the 262 homes have flooring material containing asbestos Whittington and two other former employees said Balfour Beatty covered that material with floating floors or carpeting for aesthetic purposes and to seal away the asbestos tiling a common and effective abatement strategy Much of the new flooring was cheap and poorly installed however according to Balfour Beatty work order records From 2012 to February 2019 McNarney residents called in at least 350 maintenance requests complaining about flooring including buckling warping and according to one work order black stuff coming thru flooring In the Ippolitos case Balfour Beatty s maintenance records show the company moved the family into the home knowing the flooring was in bad condition as one log put it and that a risk of asbestos exposure existed The company should have hired a specialist to safely remove the asbestos or seal it off properly said Nick Ippolito who worked for 12 years as a residential construction supervisor before joining the Navy But I guess that took too much money for them he said In 2018 the couple left the Navy Balfour Beatty declined to discuss the cases of specific families It said it was not aware of widespread flooring problems in the McNarney homes THE EXCEPTION POLICY After Tina Brown was fired in mid 2016 Whittington said company executives directed Balfour Beatty employees at Tinker to stop keeping a second set of hand written maintenance logs The number of late work orders skyrocketed from eight during the first half of 2016 to 377 during the second half according to a Reuters analysis of Tinker work order data The company completed 12 of its maintenance calls late which would have been too many to receive its full incentive fees The company didn t report these numbers to the Air Force however Instead in its application for incentive fees for the third quarter of 2016 Balfour Beatty again reported stellar figures saying it completed between 96 and 98 of maintenance calls on time The company sought 100 of the incentive fees for which it was eligible that quarter 41 536 Air Force housing officials at Tinker expressed disbelief We have had many complaints from residents from each category stating work orders were not completed within specified timeframe the Tinker housing office wrote to another outside contractor recommending against incentives that quarter They were right to be suspicious said Whittington After Brown s firing he said regional manager Bailey directed him to make sure the maintenance numbers met the incentive fee goals by massaging the records The company began taking advantage of a technicality known as the work order exception policy to keep winning incentive fees according to Whittington and documents Under the Pentagon s housing contracts when a maintenance request cannot be completed on time because of extenuating circumstances landlords can file an exception so the work order doesn t count against them Examples include having to order special parts jobs requiring multiple stages of labor or residents requesting a repair slot after the mandated response deadline Whittington said he combed through late maintenance requests and edited the records to include exceptions to the response time policy Shamefully I complied Whittington said The next spring April 17 2017 eight residents called in maintenance requests and the official records say all eight requested the work be done later than required on April 20 according to an email exchange with the Tinker housing office Without those exceptions all eight jobs would have been late counting against Balfour s incentive goals As recently as last year Balfour Beatty was still relying on exceptions Tinker had about 1 850 late work orders in 2018 more than 1 100 fell under a time policy exception the records show The company says it did often use exceptions at Tinker starting in 2016 In 2018 Balfour Beatty says it and the Air Force implemented a new process for recording work orders including the use of exceptions The Air Force Civil Engineering Command or AFCEC said it is working with Balfour Beatty to correct challenges Melody Marsh AFCEC s regional manager has defended the company In May 2017 a resident invited a Tinker housing official into her home to witness a persistent leak Marsh scolded the official for entering the home without a Balfour Beatty representative This isn t showing a partnering approach she wrote In August 2017 after Tinker s housing office provided AFCEC with evidence that Balfour Beatty was claiming fake exceptions Tinker staffers urged a curtailing of fees Marsh overruled the recommendation AFCEC does not agree that your response validates a decrease in the award incentive Marsh wrote Marsh did not reply to a request for comment The warnings continued In December 2017 AFCEC agreed to cut a small portion 3 8 of Balfour Beatty s incentive fees for the second and third quarters of 2017 Last November the Tinker housing office asked Marsh and the Air Force engineering center to investigate Balfour Beatty predicting dire consequences if action was not taken With continued inadequate maintenance our property will not withstand a 50 year lifecycle it wrote Marsh declined replying in correspondence that investigations were ineffective and extremely unproductive Some Tinker families continue battling the landlord In May neighbors gathered on Mundell Street to discuss those struggles with a Reuters reporter Derek Rouse a Navy flight engineer said he and wife Jennifer have asked Balfour Beatty for years to stop rainwater from penetrating their home In April Balfour Beatty marked a work order from the Rouses as finished on time claiming to have fixed the couple s back door by installing new weather stripping The reporter examined the door New weather stripping had not been installed
I get done flying at 4 a m and at 6 am I get a phone call from my wife saying the house is leaking again Derek said I put my life on the line and I shouldn t have to deal with this |
WMB | Glory days gone for Jamaican men but female sprinters still excel | By Kayon Raynor KINGSTON Jamaica Reuters As Jamaica prepares to select their world championship team the exhilarating days of the nation s male sprinters led by Usain Bolt dominating the world are gone two of the Caribbean island s top coaches say While the country s female sprinters continue to excel the men do not rank among the year s best in either the 100 or 200 meters It appears we are going through another one of those cycles coach Glen Mills who guided Bolt to eight Olympic gold medals and 14 world championship medals between 2007 and 2017 told Reuters I think that there is talent in the junior level that could develop which could move us once again to the forefront said the optimistic Mills two days before the June 20 23 national championships which will help determine the Jamaican team for the Sept 28 Oct 6 world championships in Doha Stephen Francis who brought two times world 100m bronze medalist and former record holder Asafa Powell to global attention blamed a variety of reasons for the recent decline You find that a combination of bad coaching bad environment bad influences and a lack of discipline and all that kind of thing are responsible for the fall Francis said in an interview with Reuters I stated a couple of years ago that there was going to be a problem with male sprinting in Jamaica The saving grace has been the female sprinters led by Shelly Ann Fraser Pryce a five times global champion at 100m and Rio double Olympic champion Elaine Thompson the coaches believe Our female program looks very lucrative with our top females over the years Shelly Ann Fraser Pryce and Elaine Thompson and of course we have quite a large number of youngsters including Briana Williams NYSE WMB World under 20 double gold medalist among others Mills said Francis added Shelly and Elaine are there but you have others in the pipeline who one expects in two or three or four years will replace them But not so for the men I don t know if anybody can say where the next good talent is coming from Still there is optimism that Jamaica could win as many as 10 medals in Doha I think we have at least three events where we have prospects on the male side obviously the discus 2019 world leader Fedrick Dacres the sprint hurdles Olympic and world champion Omar McLeod maybe the 400m and maybe the long jump Francis said On the female side there are a whole lot of events where we have medal prospects
Fraser Pryce and Thompson are among the year s fastest in the 100 Janeek Brown and Danielle Williams in the 100m hurdles and the women s 4x100m relay team |
WMB | Canada approves contentious oil pipeline expansion expects legal challenges | By David Ljunggren and Nia Williams NYSE WMB OTTAWA CALGARY Alberta Reuters Canada on Tuesday approved as expected a hotly contested proposal to expand the western Canadian crude oil pipeline it bought last year providing hope for a depressed energy industry but angering environmental groups Construction on the expansion of the Trans Mountain pipeline is scheduled to resume this year Prime Minister Justin Trudeau told a news conference A senior government official speaking on condition of anonymity said earlier that Ottawa expected legal challenges to the approval The project would triple Trans Mountain s capacity to carry 890 000 barrels per day from Alberta s oil sands to British Columbia s Pacific coast alleviate congestion on existing pipelines and diversify exports away from the United States Trudeau who faces a tough fight in a national election scheduled for October has been under pressure both from western Canadian politicians who accuse him of doing too little for the oil industry and from environmental groups which see the oil sands as a highly polluting source of crude production This isn t an either or proposition It is in Canada s national interest to protect our environment and invest in tomorrow while making sure people can feed their families today he said adding he knew some people would be disappointed The Liberal government previously approved the expansion in 2016 but that decision was overturned last year after a court ruled the government had not adequately consulted indigenous groups The approval was widely expected as the government spent C 4 5 billion 3 4 billion to buy the 66 year old pipeline from Kinder Morgan NYSE KMI Canada Ltd last year to ensure that the expansion proceeded Western Canada s oil production has expanded faster than pipeline capacity causing a glut of crude to build up Trudeau said the government would make a series of accommodations to indigenous concerns about the pipeline including on protections of killer whale and fish habitats in British Columbia One group of indigenous activists in British Columbia called Tiny House Warriors vowed in a statement that the expansion would not be built on their territory The Trudeau government does not have the right to put a pipeline through unceded Secwepemc land spokeswoman Kanahus Manuel said FURTHER OBSTACLES AHEAD The government s latest approval can be appealed through the courts Trans Mountain also requires various permits and route approvals in British Columbia where that province s left leaning New Democratic Party government opposes the project The B C government also plans to appeal a recent British Columbia Appeal Court ruling that the provincial government cannot restrict the flow of oil on pipelines that cross provincial boundaries British Columbia Premier John Horgan said his government was disappointed with the federal government s decision but would not unduly withhold construction permits Mike Hurley mayor of Burnaby where the pipeline terminates in a tank farm near the Westridge Marine Terminal on Burrard Inlet said his city was absolutely against the pipeline expansion It brings too much extra risk into our community and we don t believe the risk is worth the rewards There s risk of fire explosion chemical releases a natural disaster for our First Nations people who use the inlet so much and for business Construction is expected to take 2 1 2 years investment bank Tudor Pickering Holt Co said Assuming work on the expansion resumes this year the expanded pipeline could be in service in early 2022 We will measure success not by today s decision but by the beginning of actual construction and more importantly by the completion of the pipeline said Alberta Premier Jason Kenney a frequent critic of Trudeau This is now a test for Canada to demonstrate to the rest of the world we are a safe place in which to invest The decision will help create billions in economic benefits across Canada as it allows Canadian oil to reach higher paying international markets the Canadian Energy Pipeline Association said in a statement Eighty percent of the expanded pipeline s total capacity has been contracted to companies including Suncor Energy Inc Canadian Natural Resources Ltd and Exxon owned Imperial Oil Ltd according to a National Energy Board filing
The Canadian government has long said it planned to sell the pipeline once most of the obstacles to its construction have been cleared Numerous indigenous groups have said they are interested in investing in it |
WMB | The Fantasy of Modern Monetary Theory | Stephanie Pomboy founder and president of Macro Mavens joins Grant Williams NYSE WMB to discuss the emergence of MMT as the idea gains traction Pomboy discusses the multitude of economic and political factors leading to MMT s rapid expansion This clip is excerpted from a video published on Real Vision on April 18 2019 entitled The Startling Consequences off Monetary Policy |
BMY | Multiple Near Term Catalysts And Bullish Chart Point To A Higher Stock | Synta Pharmaceuticals Corp SNTA is a biopharmaceutical company focusing on discovering developing and commercializing small molecule drugs to extend and enhance the lives of patients with severe medical conditions including cancer and chronic inflammatory diseases The company has two drug candidates in clinical trials for treating multiple types of cancer and various drug candidates in the preclinical stage of development Its oncology product portfolio includes Ganetespib an Hsp90 inhibitor in Phase 2b 3 clinical trial for various types of cancers including non small cell lung cancer Also in development is elesclomol a mitochondria targeting agent in Phase II clinical trials for ovarian cancer and Phase 1 clinical trial for acute myeloid leukemia STA 9584 a vascular disrupting agent is also in preclinical development for prostate cancer After researching Synta I feel this is a rare company where the sky is the limit if its potential is reached For now it may be a company whose stock will be good to trade based on several catalysts Eventually it is possible for Synta to be a huge revenue producer Let s get into the reasons why I would like to start off with what the company refers to as its Galaxy trial In September Synta an update from an interim analysis of the Phase IIb portion of this trial It is a Phase IIb III study designed to evaluate the efficacy and safety of the company s lead Hsp90 inhibitor Ganetespib as second line treatment for advanced non small cell lung cancer NSCLC The results showed good tolerability for the combination of Ganetespib and docetaxel which was presented by the company at ASCO this year In addition there were meaningful improvements in overall survival in patients receiving this combination compared to those receiving docetaxel alone I found a from the company very interesting with regards to the Galaxy trial Synta spoke about the development of the Hsp90 inhibitors which is focused on in this study Its drug ganetepsib is a second generation hsp90 inhibitor which is showing a significantly better safety profile compared to the first generation inhibitors The first generation displays a lack of strength treating the cancer while being toxic in the liver Meanwhile ganetepsib has shown 10 100x more potency a low molecular weight and the absence of serious liver or common ocular toxicities Some characteristics of the upcoming study are as follows Number of patients to be enrolled 500 Treatment population Stage IIIB IV non small cell lung cancer adenocarcinoma Primary endpoint overall survival The company expects to complete enrollment and begin the trial by the end of this year and expects a mature data set in the first half of 2013 The timeline detailed in the above referenced presentation shows the final data from the Phase III trial in the first half of 2014 Many people have been asking Safi Bahcall the CEO about accelerated approval possibilities and trying to speed up the process of getting this drug to the market I was very impressed by his response where he firmly specified the goals in this trial They are acquiring a very rich data set which can make the Phase III trial very complete and without any problems The goal is the big picture and extending the survival of the patients The best way to demonstrate this is in Phase III The primary goal of Phase II is noted on one of the company s slides De risking Phase III In general I don t really like to write about cancer companies unless I really find something that separates them from the others In this case a comment from the CEO made me start to actually think this company could be reaching new heights in cancer research Mr Bahcall said one physician spoke to him noting they have something incredibly valuable and have a huge responsibility to get this drug to patients It was very clear by the comments made that Synta truly believes they have something very exciting in the works Synta notes that the response rate is currently only 8 9 in patients that ganetepsib could hopefully serve once approved When this happens the expectation is for a much higher number It is a highly unmet need In addition for the seven highly populated countries that could benefit from ganetepsib 160 000 new patients need treatment each year A drug currently used for treatment in combination with chemotherapy for lung cancer is bevacizumab This drug was initially approved in 2004 but has not been without issues At one point bevacizumab was approved for by the FDA but the approval was revoked in November 2011 The approval was revoked because although there was evidence that it slowed progression of metastatic breast cancer there was no evidence that it extended life or improved quality of life It also caused adverse effects including severe high blood pressure and hemorrhaging In 2008 the FDA gave bevacizumab provisional approval for metastatic breast cancer subject to further studies In July 2010 after new studies failed to show a significant benefit the FDA s advisory panel recommended against the indication for advanced breast cancer The manufacturing company Genentech requested a hearing which was granted in June 2011 The FDA ruled to withdraw the breast cancer indication in November 2011 Doctors may sometimes prescribe it for that indication although insurance companies are less likely to pay for it The drug remains approved for breast cancer use in other countries including Australia Another upcoming catalyst for Synta Pharmaceutical is the expected results from its Phase I compassionate use trial where a single patient with Elesclomol The study was designed as a dose escalation of elesclomol sodium in a single patient with relapsed or refractory acute myeloid leukemia AML The primary objectives of the study are to characterize safety tolerability and pharmacokinetics Elesclomol is a first in class investigational drug candidate that triggers programmed cell death apoptosis in cancer cells through a novel mechanism disrupting cancer cell energy metabolism by selectively targeting the electron transport chain in cancer cell mitochondria Elesclomol initially was developed in a partnership with GlaxoSmithKline GSK It was given fast track and orphan drug status from the FDA in 2008 for the treatment of metastatic melanoma Synta Pharmaceuticals announced on February 26 2009 the suspension of all clinical trials involving elesclomol due to safety concerns In March 2010 Synta announced that the FDA had approved resuming its clinical development In a small randomized Phase II study elesclomol was shown to significantly increase in people with metastatic melanoma when given in addition to paclitaxel Paclitaxel is a mitotic inhibitor used in chemotherapy developed by Bristol Myers Squibb BMY One company looking for similar leukemia treatment is one I ve written about in the past Ariad Pharma ARIA This company s stock price has soared over the last three years from about 0 45 to over 25 on speculation that its lead drug candidate Ponatinib will be very successful Ponatinib a BCR ABL inhibitor is designed for heavily pretreated patients with resistant or refractory chronic myeloid leukemia CML or Philadelphia chromosome positive acute lymphoblastic leukemia Ph ALL While the chemical make up of elesclomol is different than Ariad s Ponatinib the end goal remains common which is to help people with CML While Elesclomol is in the early stage of testing here any company that has a potential treatment for CML and other various cancers tends to garner a good deal of speculation value Another catalyst event for the company is the preliminary results from the Phase II CHIARA trial expected by the end of this year The trial is evaluating Ganetespib monotherapy for the treatment of ALK anaplastic lymphoma kinase NSCLC patients not previously treated with a direct ALK inhibitor such as crizotinib The CHIARA CHaperone Inhibition in Alk Rearranged lung cAncer trial is a single arm Phase II study evaluating Ganetespib monotherapy in patients with Stage IIIB IV non small cell lung cancer harboring an ALK gene rearrangement and who have not been previously treated with a direct ALK inhibitor The primary endpoint of the study is objective response rate Finally data from Phase II proof of concept trial of single agent Ganetespib in HER2 or triple negative breast cancer patients is expected in by the end of this year as well Some insiders appear to like the prospects of their company as they have been buying lately The stock has a 18 25 price target from the Point and Figure chart and six analyst buy ratings one neutral rating and 0 sell ratings with an average target price of 10 80 As insiders and traders seem to be positioning themselves for a nice entry point lately short sellers seem to be sleeping at the wheel with Synta Because the stock has a relatively low float a surge of buying volume is likely to cause a nice short squeeze here The chart above shows a positive MACD convergence and strong trend line support The stock is now wedged in a tight ranged pennant Any significant buying volume will break out the stock as high as 9 50 retesting the 52 week highs My 4 to 6 week Price target opinion is 9 50 10 My longer term target is uncertain as we need to see how all these programs goals turn out If positive then a price over 30 in 5 years is possible Disclosure I am long SNTA |
BMY | Big Potential In Cancer Immunotherapy | One of the new trends in the development of cancer therapy has been the involvement of the body s immune system which is our primary defense mechanism against disease The general idea is to develop new therapies that direct our immune system response against cancer cells which results in their destruction through a natural and highly effective system In stark contrast is chemotherapy which is today s standard of care for most cancer patients Chemotherapy is a poison that destroys normal and cancer cells in the hopes that most if not all of a patient s cancer cells are wiped out in the process While there are a number of new treatments being developed to improve chemotherapy through its actual delivery or through its ability to specifically target cancer cells cancer immunotherapy could be an entirely different level of safety and efficacy for cancer patients Since cancer immunotherapy is quite underdeveloped at this point there is still some skepticism over its viability but there is proof that it works Take Provenge sipuleucel t for instance While there is no question that Provenge was an extremely disappointing business decision for its developer Dendreon DNDN and the company s shareholders everyone generally agrees that it works very well as a supplemental treatment for metastatic castration resistant prostate cancer MCRPC The therapy has shown ability to extend MCRPC patient survival by a median of 4 1 months according to its Phase III IMPACT trial We saw another successful cancer immunotherapy drug approved for melanoma treatment in 2011 called Yervoy ipilimumab which is marketed by Bristol Myers Squibb BMY It is an inhibitor of a protein call CTLA 4 which keeps Cytotoxic T lymphocytes in check through one of the body s mechanisms Through its mechanism of action Yervoy basically frees one of the natural restrictions put on the immune system to allow for targeting of malignant melanoma cells to great success A very similar drug known as GCS 100 targets a protein called Galectin 3 which also restricts the immune system and impairs its ability to find and destroy cancer cells This drug is being developed by a tiny drug developer in San Diego called La Jolla Pharmaceutical Company LJPC GCS 100 is the company s flagship drug and is in phase I trials for three indications including cancer immunotherapy It seems that the company is going to first develop the drug as a treatment for melanoma alongside Yervoy This could be exciting for investors due to the extreme success of Yervoy in melanoma The drug generates roughly 179 million per quarter and takes a huge chunk of the melanoma market which is also expected to grow rapidly in the next few years due to growth in melanoma incidence rates While La Jolla s GCS 100 is in the very early stages of development still phase I trials I think that the melanoma market is a great target especially for budding cancer immunotherapy drugs Adding to this is a chance that there will be a partnership or acquisition by Bristol Myers Squibb The company s market capitalization of 820 000 makes it an extremely cheap but potentially lucrative acquisition for Bristol Myers that would make a lot of sense due to pairing potential with Yervoy |
BMY | Bulls Reach For These Drug Stocks To Ease Your Mood | I made the mistake of calling yesterday s 1 25 sell off in the S P 500 a smackdown earlier on twitter I was comparing it to the move in Treasuries which was a lot more muted but nonetheless it really was not a smackdown Although it probably felt like it to many with half of it coming after 2 30 and nothing like it happening recently If you are one of these people then I offer you a sedative or upper or viagra whatever you want These drug stocks are still poised to breakout Bristol Meyers Squibb BMY Bristol Meyers Squibb BMY has been consolidating in a bull flag since mid January It has now worked off a technically overbought condition on the Relative Strength Index RSI and negative Moving Average Convergence Divergence histogram MACD has stalled A move over 37 triggers a breakout with a target of 39 50 Of course a breakout can happen either way so watch the downside as well for a move under 36 for a retrace to 34 20 Celgene CELG Celgene CELG gave it a go at a break out early today and then got sucked back into consolidation It still has a strong set up for either direction though The MACD is improving and the RSI is bullish so lets focus on the upside A move over 102 is the trigger If you are skittish after today s pullback after the trigger just give it a little more room say to 102 50 If it loses support at 96 then you can become bearish with your sights on the gap at 87 50 or more Pfizer PFE Pfizer PFE is testing resistance at 27 80 after a pullback to 26 80 The Measured Move higher takes it through the resistance to 28 40 on the next leg up The bullish RSI and MACD about to cross to positive support a continued move higher Disclosure The information in this post represents my own opinions and does not contain a recommendation for any particular security or investment I or my affiliates may hold positions or other interests in securities mentioned in the Blog please see my page for my full disclaimer |
WMB | Williams WMB To Divest Canadian Business For Funding Needs | Williams Companies Inc NYSE WMB and Williams Partners LP NYSE WPZ have decided to divest their Canadian businesses to Inter Pipeline Ltd for a total consideration of U S 1 03 billion The deal will likely lower the requirement of energy infrastructure providers to depend on capital markets for raising funds From the sale after adjusting for certain items Williams Companies will get U S 209 million whereas Williams Partners is anticipated to obtain U S 817 million The transaction will likely be completed in 2016 According to Alan Armstrong President and Chief Executive Officer of Williams the accord marks significant advancement on this year s capital and financial program In other words the agreement will help the players to finance a considerable part of their growth projects like expanding the far reaching pipeline networks The proceeds will also be utilized to lower debts under credit facilities The need for capital got reflected when Williams Companies announced last week that it intends to reduce its dividend by 69 With the dividend cut the company will be able to invest about 1 7 billion in its arm Williams Partners that badly requires financing through 2017 Investors should know that the motive for lowering dividend stems from the prior event when the natural gas pipeline company failed to merge with Energy Transfer Equity LP NYSE ETE Tulsa OK based Williams Companies is a premier energy infrastructure provider in North America The company s core operations include finding producing gathering processing and transportation of natural gas Boasting a widespread pipeline system Williams is one of the largest domestic transporters of natural gas by volume Last week Williams Companies reported decent second quarter 2016 earnings courtesy of significant cost reductions and continued improvement in financial performance The company reported adjusted earnings from continuing operations of 19 cents per share in line with the Zacks Consensus Estimate Moreover the bottom line improved from the prior year figure of 15 cents per share Presently Williams Companies carries a Zacks Rank 3 Hold implying that the stock will perform in line with the broader U S equity market over the next one to three months Meanwhile a better ranked player in the energy sector is North Atlantic Drilling Limited NYSE NADL The stock sports a Zacks Rank 1 Strong Buy WILLIAMS COS Price Consensus and EPS Surprise Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
WMB | Is Debt Overshadowing Williams WMB Decent Q2 Earnings | We issued an updated research report on Williams Companies Inc NYSE WMB on Aug 10 2016 The company s large scale value creating projects position it for strong returns even in a low commodity price environment The positives led the company to report decent second quarter 2016 earnings However Williams Companies high debt level has been a concern This is reflected in Williams Companies current Zacks Rank 3 Hold which implies that the stock will perform in line with the broader U S equity market over the next one to three months Williams Companies midstream assets which are less sensitive to commodity prices help it to maintain a steady stream of revenue and cash flow even if natural gas prices stay low Moreover the company has been able to counter the challenging macro environment and improve its economics on the back of certain strategic initiatives These include cost reduction the exercise of capital discipline efficiency gains and consistent execution These are likely to have backed the company s adjusted earnings from continuing operations of 19 cents per share in line with the Zacks Consensus Estimate Moreover the bottom line improved from the prior year figure of 15 cents per share We appreciate the company s recently announced decision to divest its Canadian businesses Williams Companies and Williams Partners NYSE WPZ have decided to divest their Canadian businesses to Inter Pipeline Ltd for a total consideration of 1 03 billion We believe that the agreement will help the players to finance a considerable part of their growth projects like expanding the far reaching pipeline networks The proceeds will also be utilized to lower debts under credit facilities The high debt level is a matter of concern for Williams Companies which is vulnerable to an extended drop in commodity prices As of Jun 30 2016 the company had long term debt of 24 394 million which represents a debt to capitalization ratio of 84 On top of that the termination of the Energy Transfer Equity LP NYSE ETE merger deal against which Williams has appealed is a major dampener for the company and is likely to substantially affect its shareholders Most importantly the deal cancellation compelled Williams Companies to slash its quarterly dividend by almost 69 Stock to ConsiderA better ranked player in the energy sector is North Atlantic Drilling Limited NYSE NADL The company carries a Zacks Rank 1 Strong Buy |
WMB | Energy Transfer s Gift Is Less Than It Appears | Last week s blog post highlighted the different views of cash payouts by the MLP investors who hold Williams Partners NYSE WPZ and the C corp investors who hold Williams Companies NYSE WMB the General Partner of WPZ
WPZ investors value regular payouts whereas WMB investors are driven by total returns WMB neatly gave both types of investor what they desired by diverting WMB dividends to buy new WPZ units which provided cash to fund WPZ s capex program and thereby eliminated the risk to WPZ s distribution
One of the powerful features of the GP MLP structure is that it allows a business to access different classes of investors who can have different objectives As their appetite to provide capital fluctuates the GP MLP can access the more willing investor class
Continuing this theme Energy Transfer similarly found a way to make everyone happy with the same set of assets CEO Kelcy Warren is masterful at moving cashflows and businesses around to find value Aligning your interests with Kelcy Warren works most of the time even if he is occasionally ethically challenged see
On their recent earnings call Energy Transfer Equity NYSE ETE generously announced that it would waive 720MM of Incentive Distribution Rights IDRs due from Energy Transfer Partners NYSE ETP to ETE over the next 6 quarters IDRs are the payments an MLP makes to its GP and are somewhat analogous to the incentive fees a hedge fund manager earns from his hedge fund
ETP traded up following the announcement of this largesse and ETE traded down On the surface this is a straight transfer of value from ETE to ETP a movement of cashflow from one pocket to the other It s a zero sum transaction
The ostensible reason is to support ETP s stock price which will make it easier to sell new units of ETP
On the previous earnings call Kelcy said In order to support ETP with its cost of equity capital in light of ETP s current common unit price ETE has recently advised ETP that ETE intends to waive its rights to receive incentive distributions with respect to ETP s 2016 issuances of common units whether pursuant to the ATM or other offerings of common units through fourth quarter 2017 distributions As these potential IDR waivers have not been approved by the ETE board ETE is not formally bound to these proposed IDR waivers This reinforces ETE s commitment to support ETP
On the same call Kelcy noted that ETE will do what it needs to do to support ETP
ETP rose 10 on the day of the announcement
Although the conference call made it sound like an altruistic move by ETE the relevant SEC filing noted that in exchange for these IDR waivers ETP was granting ETE new Class J units which would transfer 1 8BN of ETP s depreciation depletion and amortization DD A to ETE over a period of three years 2016 18 Both ETP and ETE are partnerships issuing K 1s so the proportional share of depreciation runs through each investor s tax return
ETP investors will in aggregate have 1 8BN less in tax deductible depreciation expense approximately 3 44 per unit there are 524MM ETP units outstanding Assuming a 45 marginal tax rate K 1 tolerant MLP investors are usually in the top rate the taxable ETP investor is 1 55 per unit worse off The IDR waivers work out to be worth 1 37 pre tax per unit So it s at best a wash
Prior statements from ETE include an assertion that ETE would not suffer any reduction in cashflows from ETP and on the most recent conference call Kelcy confirmed that there would not be additional IDR waivers applied to new equity raised at ETP The IDR forgiveness is not equally spread over six quarters but is modestly back ended
Therefore we deduce that ETP will issue additional equity which will pay IDRs to make up for the shortfall from this IDR waiver The rise in ETP s stock price that followed this announcement makes it a little easier to issue equity It also shows that ETP is valued like other MLPs on a pre tax basis
While MLP investors are drawn to the sector because of the tax deferral that depreciation charges afford few calculate their effective after tax return on each individual security They just send the K 1s to their accountant who grumbles while charging a bit more and the investor winds up with a lower tax bill Figuring out which MLPs one holds are the most tax effective is beyond most investors interest or ability
After tax returns are notoriously quixotic and vary based on an individual s tax situation ETE management has insightfully spotted this For this reason most investment analysis relies on pre tax returns And sure enough Barron s quoted four analysts who gushed about the IDR waiver while ignoring the loss of tax shield see
Kelcy has figured out that if investors don t value something that highly you might as well give it to someone else ETE investors of which Kelcy is 18 value the tax shield more accurately which is clear since ETP s stock rose even though the after tax outcome for ETP investors didn t add any value
Meanwhile not only does the swap of tax shield for IDR waivers leave ETE investors better off after tax but ETP can now issue new equity more easily which will throw off additional IDRs for ETE indefinitely The IDR waiver is expected to be 130M in 4Q17 after which it expires Starting in 2018 ETE will receive 520M more in IDRs each year for its support in which it gave up no cash flows and received 810M of value in DD A units
Those Energy Transfer people are pretty clever
We are invested in ETE and WMB
Just so it doesn t seem as if we only pick on Energy Transfer here s a to a recent TV spot on hedge funds |
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