Tesla files for a shelf offering to raise capital - CNBC

NEW YORK, NY - APRIL 4: Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City. A federal judge will hear oral arguments this afternoon in a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) that seeks to hold Musk in contempt for violating a settlement deal. (Photo by Drew Angerer/Getty Images)

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Tesla filed for a mixed shelf offering for an undisclosed amount on Thursday, a week after Chief Executive Officer Elon Musk suggested a capital raise could be imminent.

Many analysts had predicted the electric-car maker would need to raise funds for its expansion, including building a factory in Shanghai, the upcoming Model Y SUV, and other projects.

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2019-05-02 11:08:36Z
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US futures signal a muted open after Powell comments send stocks lower - CNBC

U.S. stock index futures edged higher on Thursday morning, as market participants digested comments from the Federal Reserve.

Around 6:20 a.m. ET, Dow futures indicated a positive open of about 30 points. Futures on the S&P and Nasdaq were both marginally higher.

Wall Street closed lower on Wednesday on the back of new comments from Chairman Jerome Powell. The central bank kept rates unchanged, but it dented some speculation about a potential rate cut on the horizon.

Ahead of the meeting, President Donald Trump had asked the central bank to cut rates and increase stimulus.

In the corporate world, Kellogg, Under Armour, CBS, Expedia, and Gilead Sciences are due to report.

On the data front, there will be jobless claims, productivity data, and unit labor costs at 8:30 a.m. ET, followed by factory orders at 10 a.m. ET.

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2019-05-02 07:36:41Z
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VW profits meet expectations, warns of rising economic risks - CNBC

The Volkswagen logo is displayed at Serramonte Volkswagen on November 18, 2016 in Colma, California.

Justin Sullivan | Getty Images

Volkswagen reported first-quarter earnings in line with expectations on Thursday, as the automaker attempts to increase the pace of its transformation.

The German firm posted operating profit of 3.9 billion euros ($4.4 billion) for the first three months of the year. That compared with operating profit of 4.2 billion euros a year earlier. Analysts polled by Reuters had expected first-quarter operating profit to come in at 3.9 billion euros.

Volkswagen, which is still battling to recover from a 2015 scandal over emissions test cheating, also said it had decided to take a 1 billion euro charge in the first quarter, as a result of legal risks.

"It is certainly very unfortunate that we had to book more provisions but we assess every single risk and exposure we have continuously and it was the point in time to make those provisions," Frank Witter, chief financial officer of Volkswagen, told CNBC's "Squawk Box Europe" on Thursday.

The company confirmed its full-year guidance and said it expected sales to increase as much as 5%. It projected an operating return on sales between 6.5% and 7%.

Revenue advanced 3.1% to 60 billion euros for the first three months of 2019, despite a drop in deliveries.

The company did not provide a net profit figure.

'Optimistic but realistic' over potential US tariffs

Earlier this year, Volkswagen CEO Herbet Diess said the carmaker would need to redouble its efforts in 2019 in order to meet its ambitious annual targets.

Diess told the Financial Times in February that the biggest risk to Volkswagen's 2019 profit would be potential tariffs from President Donald Trump's administration.

At the time, he estimated the worst-case scenario regarding potential U.S. tariffs could cost around 2.5 billion euros a year — roughly 13% of expected earnings.

"We certainly hope that the trade disputes can be resolved but it is no secret that 100% of the Porsche cars are being exported from Europe to the United States," Witter said.

He explained that approximately 70% of all Audi products were sold in the U.S., while for Volkswagen passenger cars it was a very small percentage being exported from Europe to the U.S. since most of their cars were built in North America.

"So, we still hope for the best, we do whatever we can but we are not party to the negotiations … We continue to be optimistic but also realistic," Witter said.

In February, Trump said he would impose tariffs on cars imported from the European Union if U.S. talks with the bloc can't produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.

Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.

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2019-05-02 05:56:08Z
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S&P 500 soars to record as Apple becomes $1T company - Fox Business

The S&P 500 hit an all-time high Wednesday as surging Apple shares turned the iPhone maker into a $1 trillion corporation.

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Apple reached that milestone when, in intraday trading, shares reached $212.07.

Ticker	Security	Last	Change	%Chg
AAPL	APPLE INC.	214.08	+13.41	+6.68%

Stocks also got a boost from a surprisingly strong ADP report on April job creation. ADP said U.S. employers created 275,000 jobs, far higher than the 180,000 analysts had expected.

Wall Street's gains came ahead of an interest rate announcement by the Federal Reserve, which is expected to hold the cost of money steady.

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Without Apple, which had added about 100 points to the Dow Jones Industrial Average in midday trading, the index would be slightly negative.

Energy companies and Google were weighing on indexes.

Ticker	Security	Last	Change	%Chg
GOOGL	ALPHABET INC.	1,174.18	-24.78	-2.07%
XOM	EXXON MOBIL CORPORATION	79.41	-0.87	-1.09%
CVX	CHEVRON CORP.	118.73	-1.33	-1.11%
OXY	OCCIDENTAL PETROLEUM CORPORATION	58.26	-0.62	-1.05%

Crude oil fell to $62.94 per barrel as U.S. inventories rise sharply. The Energy Information Administration said the nation's crude oil inventory jumped by 9.9 million barrels last week to 470.6 million barrels.

Treasury yields were fractionally lower ahead of the Fed's announcement on interest rates, which was set for 2 p.m. ET.

Ticker	Security	Last	Change	%Chg
I:DJI	DOW JONES AVERAGES	26606.72	+13.81	+0.05%
SP500	S&P 500	2945.23	-0.60	-0.02%
I:COMP	NASDAQ COMPOSITE INDEX	8123.050188	+27.66	+0.34%

Investors are coming off a big trading day: The S&P 500 on Tuesday notched a record high for the third straight session on unexpectedly strong quarterly results from General Electric and biopharmaceutical company Pfizer.

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Many bourses outside the U.S., including those in China, Korea and Japan, as well as continental Europe, were closed Wednesday for May Day observances.

One exception is Britain’s FTSE 100, which slipped 0.03 percent.

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2019-05-01 15:44:32Z
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CVS Health raises full-year profit forecast on Aetna strength - Yahoo Finance

FILE PHOTO: Logos of CVS and Aetna are displayed on a monitor above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 5, 2017. REUTERS/Lucas Jackson/File Photo

By Manas Mishra and Caroline Humer

(Reuters) - CVS Health Corp on Wednesday raised its full-year profit forecast and reported first-quarter earnings that topped Wall Street estimates due to growth in its Aetna health insurance business, and as drug prices fell within its expectations.

Shares rose more than 5 percent to $57.35. They had fallen 17 percent this year, hurt by a weak forecast in February and a cut to rival Walgreen Boots Alliance's full-year outlook last month due to lower generic drug prices.

Aetna, CVS's health insurance unit, beat analysts' consensus by more than a billion dollars in the quarter, helped by its accounting for lower medical costs than anticipated during the fourth quarter.

The company, which bought Aetna for $69 billion in November, said 2019 cost savings from the deal were tracking near the high end of its $300 million to $350 million range, and that 2020 savings would likely exceed its $750 million target.

The company said a handful of new "HealthHub" pharmacies launched in Houston this year that provide healthcare services, such as chronic care management for diabetes, have drawn more customers than expected. It plans to launch more such stores in Houston and plans to provide details of a national roll-out next month.

"Consumerism in healthcare is here to stay," CVS Chief Executive Larry Menlo said. "We are beginning to see this evolution through the HealthHubs. We are not just selling hundreds of products, it's a combination of products and services."

Menlo also said the company would take part in a pilot project announced by the U.S. Center for Medicare and Medicaid Services to expand point-of-sale rebates to patients in Medicare plans. The government has also proposed a rule that would require health plans to pass on all rebates, but it is not clear if it will be finalized for 2020.

Sales in its health care benefits unit rose by $16.55 billion to $17.78 billion with the addition of Aetna to its operations.

Sales of prescription drugs at its pharmacies were hurt as the company gets paid less for filling prescriptions. That was offset by higher volumes and higher prices of brand name drugs.

CVS in February had cautioned that rebate payments it guaranteed to customers were larger than what it has received from drugmakers due to lower-than-expected increases in drug prices.

"Considering that expectations have been low, we see this as the first positive catalyst that restores investor confidence in this management team," SVB Leerink analyst Ana Gupte said of the first-quarter profit and raised 2019 forecast.

CVS said it now expects full-year adjusted profit of $6.75 to $6.90 per share, compared with its prior forecast of $6.68 to $6.88.

Overall sales at its retail unit, which also sells over-the-counter-drugs and consumer health products, rose 3.3 percent to $21.12 billion.

The drugstore chain operator and pharmacy benefits manager said it earned $1.62 per share excluding items, beating analysts' average estimate by 12 cents per share, according to IBES data from Refinitiv.

Net income rose 42.4 percent to $1.42 billion in the first quarter. Revenue rose 34.8 percent to $61.65 billion.

(Reporting by Manas Mishra in Bengaluru and Caroline Humer in New York; Editing by Saumyadeb Chakrabarty and Bill Berkrot)

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2019-05-01 15:24:00Z
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Why that strong ADP jobs number could be painting an inaccurate picture - CNBC

A store front window in Miami Beach.

Joe Raedle | Getty Images

Moody's Analytics chief economist Mark Zandi said technical issues may have made ADP's report on the April job market look much stronger than it actually was.

Earlier Wednesday, ADP's report with Moody's said private sector hiring hit an eye-popping 275,000 in April, just about 100,000 more than expected.

But Zandi said on CNBC shortly after the release that technical factors may have inflated the number. He also said, in the ADP release, that the number overstates the strength of the economy.

"Bottom line, I don't think it's going to come in at 275,000. My sense is its going to come in pretty close to consensus 175,000 to 200,000," he later said in a telephone interview.

ADP's payroll number sometimes tracks close to the actual government nonfarm payroll report, and sometimes not. Still, it is monitored by Wall Street as one metric to watch ahead of the monthly jobs report, typically released two days later.

Zandi said he doesn't normally qualify the number. "I did that because there are three technical issues going on that conspired to pump it up," he said.

"We take the ADP number, other economic variables and use that to estimate the BLS number. The ADP number came in unusually soft compared to what we've been seeing in recent history. Relative not only to last couple of months but last couple of years," he said.

At the same time, very low jobless claims in the survey week counterbalanced the weak ADP payroll number. And that inflated the number. Another factor is the 275,000 ADP number includes some actual history of the government reports.

"When trying to predict this months' change we also look at recent history. If you're in a period of strong job growth, that will affect your estimate. If you're in a period of weak job growth, that will affect your estimate. And if you have a period of extraordinary volatility, that's also going to show up in the number, and that pumped up the [ADP] number," he said.

Zandi said there are often technical factors surrounding the number, but this was an extreme case.

"It's an estimate. I could adjust it, but I didn't' want to do that. I didn't' think that was appropriate," he said. "I thought it was important to provide context."

Nonfarm payrolls, released by the government, have been extremely volatile this year. January job gains totaled 312,000; February was 33,000 and there were 196,000 jobs created in March.

As for the government's report Friday, Zandi said it may contain its own quirks. For instance, the government report theoretically could be inflated by census workers added to the government payrolls in April or May.

"That could be a couple hundred thousand people," he said.

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2019-05-01 14:43:49Z
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Apple's iPad is the hidden gem in the company's earnings - Business Insider

Reuters/John Gress

• Coverage of Apple's second-quarter earnings has focused on lower iPhone sales, strong growth in services and accessories, and the company's bullish revenue forecast. 
• The tech giant's hidden gem was the iPad with sales growth of 22% in the period, the biggest increase in six years.
• iPad revenues returned to growth in Greater China and rose by at least 10% in all other regions.
• Sales of iPhones and Macs fell last quarter, while services revenue grew at a slower rate.
• The iPad appeals to first-time buyers, giving Apple more users to target with its services and accessories.
• Watch Apple trade live.

Coverage of Apple's second-quarter earnings has focused on the record slump in iPhone sales, rising sales of services and accessories, and a bullish revenue forecast for the current quarter.

But stock-watchers may have missed a hidden gem in the tech giant's results: the iPad.

Sales in Apple's tablet division soared 22%to about $4.9 billion in the first three months of 2019, the fastest pace of growth in six years, CEO Tim Cook said on the company's earnings call. More than half of its customers were first-time iPad buyers, he added, which boosted the base of active iPad users to an all-time high.

The iPad's "blockbuster quarter" saw it return to top-line growth in Greater China, Cook said on the call, and post "strong double-digit growth" in revenues across the Americas, Europe, Japan, and the rest of Asia Pacific. Moreover, its sales surged to a second-quarter record in Japan, and more than doubled in South Korea, Thailand, and Mexico. 

The product line's performance is striking relative to Apple's other offerings. Sales of iPhones fell by 17% to about $31 billion in the second quarter, shrinking from 61% to 54% of turnover, according to Apple's earnings report. Mac revenues slid 5% to $5.5 billion too.

Sales in the services business rose 16%, slower than iPad revenues. Only the wearables, home, and accessories segment — which houses numerous products including Apple Watch, Apple TV, Air Pods, Beats, and HomePod — expanded faster, with sales growth of 30%. 

Strong tablet sales were "fueled primarily by the great customer response to our new iPad Pros," said CFO Luca Maestri on the earnings call. The latest model's resolution, processing power, and support of Apple Pencil and Smart Keyboard make it a popular replacement for laptops with both consumers and professionals, he added.

The iPad is also helping Apple to capture the enterprise market.

"Across 450 airlines, iPad is overwhelmingly the preferred solution for the pilot's electronic flight bag," Maestri said on the call, adding that it's also used for ground operations and flight maintenance.

"One of the largest airlines in the world tells us that the adoption of iPad has cut maintenance delays in half."

Still, the iPad's appeal to first-time buyers could generate the most value for Apple. Adding more users to its ecosystem allows the company to flog more cables and covers, as well as hawk subscriptions to Apple Music, Apple News+, and the upcoming Apple Arcade, boosting accessories and services revenue.

The iPad's resurgence could prove temporary, but as Apple races to offset plunging iPhone sales, it shouldn't be ignored.

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2019-05-01 13:55:36Z
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