DAILY MARKET REPORTS
- Wall Street edged lower on Tuesday, weighed down by technology and consumer discretionary stocks, while investors awaited President Donald Trump’s decision on the Iran nuclear deal.
- Trump will announce at 1800 GMT (2:00 p.m. ET) whether Washington will withdraw from a deal that eased economic sanctions on Iran in exchange for Tehran limiting its nuclear program.
- A U.S. withdrawal would tighten economic sanctions on Iran, curtailing the country’s oil output that could bolster this year’s 13% rally in the commodity.
- Primary elections for the 2018 midterm kick off in earnest today, with Indiana, North Carolina, Ohio and West Virginia voting.
- Among stocks, Comcast fell 2.3% after Reuters reported the cable operator is preparing to make an all-cash offer for media assets that Twenty-First Century Fox has agreed to sell to Disney for $52 billion.
- Dish Network dipped 0.1% after its quarterly revenue came below expectations due to a drop in its legacy pay-TV subscriptions.
US FINANCIAL MARKET
Valeant Pharma to rename itself as Bausch Health, lifts revenue outlook
- Valeant Pharmaceuticals International decided to take the name of its best performing optical products unit as part of a turnaround plan and raised its 2018 revenue forecast.
- Valeant will become Bausch Health Companies from July as Chief Executive Officer Joseph Papa works to restore investor confidence after several investigations into the company’s accounting and pricing practices hit its shares.
- The name change reflects the company’s optical products business, Bausch and Lomb, which brought in sales of $1.10 billion in the first quarter and accounted for more than half of the company’s total revenue.
- Total revenues fell 5.4% to $1.96 billion.
- Net loss was at $2.69 billion in the quarter, compared with a profit of $628 million a year earlier.
- The company raised its full-year revenue forecast range to $8.15 billion–$8.35 billion from $8.10 billion–$8.30 billion, partly helped by performance of its Bausch and Lomb unit.
Summit Materials Beats Estimates on First Quarter Results
- Revenue increased to $314.4 million from $284.3 million a year ago.
- The company lost $62.9 million in the quarter, compared to a loss of $54.8 million in the year ago period.
- However, this exceeded expectations by analysts.
Aecom Reports Second Quarter Fiscal Year 2018 Results
- Revenue rose 8% to $4.8 billion from $4.4 billion in the year ago period.
- The company posted a loss of $107.8 million compared to a profit of $168.2 million a year earlier.
- This was due to an asset impairment charge of $168 million in the quarter.
Dish Network quarterly revenue misses estimates
- Dish Network reported first-quarter revenue that missed Wall Street estimates as subscriber additions to its cheaper online streaming service Sling TV failed to offset a drop in its legacy pay-TV subscriptions.
- Revenue fell to $3.46 billion from $3.68 billion last year. Average revenue per user in the company’s pay-TV business fell to $84.50 from $86.55.
- Net income fell to $368 million, for the quarter, from $376 million a year earlier.
Microchip fourth-quarter revenue rises 11%
- Microchip Technology, which is in the process of buying peer Microsemi, reported an 11% rise in fourth-quarter revenue, helped by higher demand for analog chips from carmakers and industrials.
- Revenue rose to $1 billion from $902.7 million.
- Net income rose to $146.7 million in the quarter, from $136.9 million a year earlier.
Comcast Lines Up Financing for Possible Hostile Bid for 21st Century Fox Assets
- Cable giant Comcast is getting the pieces in place to make a hostile bid for 21st Century Fox’s entertainment assets should it choose to do so, according to people familiar with the situation.
- Fox agreed in December to sell the assets in question to Walt Disney for $52.4 billion in stock.
- Comcast is considering making a play to break up that deal, and has lined up around $60 billion in financing to make an all-cash offer for the Fox assets, the people say.
- Comcast hasn’t yet decided whether to proceed with a hostile bid. One pivotal factor is the outcome of the government’s lawsuit to stop the pending merger of AT&T and Time Warner.
- The assets Comcast and Disney are seeking to purchase include the Twentieth Century Fox TV and film studio, cable networks and international properties including Fox’s 39% stake in European pay TV operator Sky.
Cohu Bags Rival U.S. Chip Tester Xcerra After Chinese Deal Thwarted
- Semiconductor-testing company Cohu has agreed to acquire rival Xcerra in a cash-and-stock deal valued at about $627 million, months after the latter company scrapped a plan to sell itself to a Chinese company over national-security hurdles.
- In February, Xcerra scrapped a planned sale to a Chinese group, Hubei Xinyan Equity Investment Partnership, citing difficulty in securing approval from the Committee on Foreign Investment in the U.S., or CFIUS, for the $580 million deal.
Lockheed resumes F-35 jet deliveries to Pentagon
- The U.S. Department of Defense resumed accepting F-35 jet deliveries from Lockheed Martin last week after reaching an agreement on covering the costs to fix a production error, the Pentagon told Reuters on Monday.
- Lockheed said an agreement had been reached with the Pentagon, adding that it expected to hit its F-35 delivery target of 91 aircraft for 2018.
- Terms of the agreement were not disclosed. The cost of the fix was $119 million, people familiar with the situation had previously told Reuters.
US ECONOMY & POLITIC
Employment Trends Index Rose in April
- Last month’s reading was 108.08 compared with March’s downward-revised reading of 107.37. The index rose 4.9% compared with a year ago.
- Gad Levanon, North America chief economist at the Conference Board, said in prepared remarks that the upward trend indicates that job growth should be strong throughout the summer.
U.S. Allies Push for Trump to Stay in Iran Nuclear Deal
- Washington’s European allies were bracing for the U.S. to withdraw from the Iran nuclear accord, after President Donald Trump said he would announce on Tuesday his decision on the landmark agreement that he has repeatedly condemned.
- U.S. and European diplomats have worked hard in recent weeks to close the gaps on several issues, including Iran’s ballistic missile program and the scope of inspections.
- But they have been at odds over the Trump administration’s insistence that sanctions should automatically take effect eight years from now if Iran begins to expand its capability to enrich uranium by installing more advanced centrifuges, as it now is allowed to do under the agreement.
- Europeans don’t know what specific steps the U.S. will take if Mr. Trump decides to leave the agreement, including whether he will allow more time for diplomacy and how he hopes to constrain Iran’s nuclear activities if the agreement is jettisoned.
- Mr. Trump tweeted Monday that he would announce his decision at 2 p.m. Tuesday.
New York Attorney General Schneiderman Resigns After Abuse Allegations
- New York state Attorney General Eric Schneiderman abruptly resigned Monday night after the New Yorker published an article in which four women alleged he physically abused them.
- His decision followed calls from New York leaders including Gov. Andrew Cuomo, a fellow Democrat, to step down. The governor said he would ask a district attorney to begin an investigation immediately.
- The New Yorker article quotes two women, Michelle Manning Barish and Tanya Selvaratnam, who said that Mr. Schneiderman choked and hit them and that they sought medical treatment.
- Two other women who spoke anonymously described violence in their relationships with Mr. Schneiderman as well.
Primaries to Test Trump’s Sway Over GOP Voters
- The heart of the political primary season begins Tuesday, with Indiana, North Carolina, Ohio and West Virginia holding contests to select candidates for November’s general elections.
- Eight more states will pick nominees in the next two weeks and 18 more have primaries in June.
- The two biggest races Tuesday are the GOP Senate primaries in Indiana and West Virginia. The winners of both will face vulnerable incumbent Democrats in states President Donald Trump carried by large margins in 2016.
- Mr. Trump has put his political capital to the test again in Tuesday’s West Virginia Senate primary, urging Republicans there to reject Don Blankenship —who served a year in prison and remains on probation following a conviction for violating mine-safety standards after 29 miners were killed in a 2010 disaster.
EUROPE & WORLD
Takeda Wins Battle for Shire With $62 Billion Deal
- Takeda Pharmaceutical reached an agreement to buy Shire, capping a monthslong battle for control of the European drugmaker and marking the biggest-ever overseas acquisition by a Japanese company.
- Shire’s board agreed Takeda could buy it at £49.01 or $66.21 a share—$30.33 in cash and 0.839 of a Takeda share for each Shire share—in a deal that valued the target at $62 billion. Both companies still need shareholders to sign off.
- The acquisition would create the world’s eighth-largest drugmaker with combined sales worth $30 billion, and bolsters Takeda Chief Executive Christophe Weber’s mission to gain a greater foothold in more lucrative markets such as the U.S. and Europe.
China’s JD.com misses on profits as logistics crops margins
- China’s JD.com missed earnings estimates, sending its stock down, as heavy spending on logistics and new business initiatives amid stiff competition cut into its bottom line
- The company reported a 33% increase in quarterly revenue, its slowest quarterly revenue growth since listing, indicating China’s second-largest e-commerce firm is feeling the heat from mounting competition as it looks to new businesses and technology investments to drive growth.
- It posted 101.1 billion yuan ($15.88 billion) in revenue for the first quarter, versus analysts’ average estimate of 98.9 billion yuan.
- Net income for the quarter was 1.52 billion yuan, compared to analyst estimates for 243 million yuan, which the company said was largely due to changes in the fair value of investments.
Asset sales help boost Petrobras profit by over half in 1st quarter
- Brazil’s state-controlled oil company Petróleo Brasileiro reported a 56.5% rise in net profit in the first quarter, helped by asset sales, a filing showed on Tuesday.
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a gauge of operational profit known as EBITDA, hit 25.669 billion reais, a 2% rise over the same period last year.
- Petrobras, as the company is known, posted a net profit of 6.961 billion reais ($1.96 billion) after raking in 3.223 billion reais by selling stakes in assets like the Lapa field, and the Iara area in the offshore Santos basin.
Xiaomi Cuts IPO Valuation Target to $70 Billion to $80 Billion
- The target is lower than the $100 billion that was previously discussed by people familiar with the IPO plans.
- The earlier target was too aggressive, some people familiar with the company’s plans said, and the IPO follows a period of share-price declines for global tech companies of 10% or more from their peaks this year.
- Xiaomi, headquartered in Beijing, is the fourth-largest vendor of smartphones worldwide and also sells an array of internet-connected gadgets like rice cookers and air purifiers.
Toshiba Pessimistic About Prospects for $18 Billion Chip Deal
- Toshiba has mostly given up on an $18 billion sale of its chip unit because its officials consider near-term Chinese antitrust approval unlikely, leading them to accelerate a review of alternatives, people involved in the matter said.
TODAY in HISTORY
- V-E Day marks the European victory of the Allies in World War II. (1945)
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