Overall revenue at Sony Corp. was up 3 percent at $22.6 billion, while operating profit was down 20 percent at $2.76 billion. Net profit for the October-to-December quarter was down 46 percent to $2.1 billion.
Sony's film unit recorded a $51 million (6.2 billion yen) profit for the October-to-December quarter, down from $107 million in the same quarter the previous year.
Sales for the division were down 12 percent to $2.17 billion.
Jumanji: The Next Level, which earned more than $750 million globally, contributed to profits, though its December release dates means around a third of that will be included in the current quarter's figures. Charlie's Angels severely underperformed, taking just over $70 million at the global box office, hitting the division's bottom line.
The surprise success of Venom, which took more than $855 million worldwide, boosted results for the same period the previous year.
For television, higher licensing revenue for season 3 of The Crown was offset by an increase in production costs for new U.S. network shows.
Sony left its full-year profit forecast at the pictures division unchanged at ￥70 billion, $643 million at current exchange rates.
Overall revenue at Sony Corp. was up 3 percent at $22.6 billion, while operating profit was down 20 percent at $2.76 billion. Net profit for the October-to-December quarter was down 46 percent to $2.1 billion.
Foreign exchange rates negatively impacted most segments.
PlayStation 4 console sales dropped from 8.1 million in the same quarter in 2018 to 6.1 million, while software sales fell slightly to 81 million units. This dragged down sales at the game division by 20 percent to $5.8 billion and profits down to $491 million.
Sales at the music division were up slightly at $2 billion, but profit fell sharply due to the gain in the same period of the previous year from the consolidation of its stake in EMI Music Publishing. Best selling artists included Harry Styles, TOOL and Celine Dion.
The electronics division saw a fall in sales of 9 percent to $5.97 billion on lower television and mobile phone sales, but a growth in profit to $74 million thanks to lower costs at its mobile phone operations.
The imaging and sensor business, which makes semiconductors for smartphones and other devices, continued to be a bright spot for Sony, registering sales up 29 percent to $2.7 billion and profits up sharply to $690 million.
Activist investor Daniel Loeb is once again putting pressure on Sony Corp. to spin off its entertainment and semiconductor businesses, despite the rise in Sony's share price over the last year.
Sony stock was up slightly at ¥7,700 ($70.82) in Tokyo trading late on Tuesday afternoon, before the earnings announcement. It is up more than 50 percent on this time last year.
U.S. stocks recovered some losses after a sell-off Friday that sent the Dow lower by 600 points. Equities in China, however, tumbled after an extended Lunar New Year holiday.
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11:20 a.m. ET: UBS sees China’s economic growth decelerating in 2020 as coronavirus impact spreads
China’s economic growth could come in below 5% in 2020 if the impacts of the coronavirus extend into the second quarter this year, according to UBS economists.
The UBS economists, led by Tao Wang, said consumption in China will likely be hit significantly, “especially in travel and tourism, hotel and catering, and transport” amid the coronavirus. “We think overall retail sales growth could weaken by 5 (percentage points) in Q1.”
Meanwhile, restrictions on transportation and factory closures could disrupt industrial production and exports, Wang added.
Quantifying the economic impact of the outbreak is extremely challenging at this stage. Assuming that the outbreak will be controlled in Q1 with few new cases thereafter, we estimate that Q1 GDP growth will drop to 3.8% y/y, while subsequent normalization of activities, release of pent-up demand and policy support should see growth rebounding in Q2-Q4. With this assumption, we downgrade China's 2020 GDP growth forecast to 5.4%. Risk to our forecast is biased on the downside. In the case the outbreak lasts well into Q2, GDP growth will likely fall <5% in 2020.
Prior to the outbreak, the Chinese government targeted 2020 GDP growth of around 6%, down from last year’s target of 6-6.5%. China’s 2019 GDP growth of 6.1% had been the slowest pace of expansion since 1990.
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11:00 a.m. ET: Here’s who has the edge in the Chicken Sandwich Wars
FILE - This Nov. 25, 2019, file photo shows McDonald's sign above the fast food restaurant near downtown Los Angeles. The Labor Department issued a final rule Sunday, Jan. 12, 2020, that clarifies when a worker is employed by more than one company, an issue that affects franchise businesses such as McDonald's and firms that have outsourced services such as cleaning and maintenance. (AP Photo/Richard Vogel, File)
A jam-packed January news cycle distracted consumers from what really matters: Restaurant chains and the ongoing war for chicken sandwich supremacy. On a battlefield dominated by Chick-Fil-A and Restaurant Brands’ (QSR) Popeye’s, McDonald’s (MCD) has now entered the fray.
Two new data points published on Monday show who’s got the edge. Data analytics firm Placer.ai said that since firing the first salvo last summer, Popeye’s shows no immediate signs of slowing down:
On Friday, January 17th, visits rose 59.3% above the baseline for the period between January 1st, 2017 and January 20th, 2020. Analyzing that same period, every week in January has come in at least 20% or more above the baseline for weekly traffic.
Early reviews of McDonald’s new chicken sandwich have been lackluster, at best. But Bank of America expects the Golden Arches to mount a challenge to both CFA and Popeye’s eventually, even though the path to victory won’t be easy:
MCD must rebuff a now formidable national competitor in Chick-Fil-A following years of 6% unit and double digit comp growth...The challenge for McDonald's is matching its chicken focused competitors on taste and quality despite a broader menu that makes it impossible to divert as much attention to the platform.
MCD could try to match them on quality with store changes and equipment investments but we expect a national rollout that moves MCD closer on taste and then leverages supply chain and marketing advantages to undercut its peers on price.
BofA says that gradual improvements in product quality will boost the stock, which the firm rates a “Buy” with a $240 price target. MCD traded up nearly 1% on Monday around $216.
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10:00 a.m. ET: U.S. manufacturing sector expands for the first time since July
Activity in the U.S. manufacturing sector expanded for the first time in six months in January, in a sign of life after domestic goods-producing industries had contracted for much of last year.
The Institute for Supply Management’s purchasing mangers’ index registered at 50.9 in January, popping just above the level of 50 to indicate expansion. In December, the ISM’s PMI had been 47.8, and consensus economists had expected the PMI to rise to just 48.5 in January.
“Global trade remains a cross-industry issue, but many respondents were positive for the first time in several months. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, followed closely by Computer & Electronic Products. Petroleum & Coal Products is the weakest,” Timothy Fiore, chair of the ISM Business Survey Committee, said in a statement. “Overall, sentiment this month is moderately positive regarding near-term growth.”
Employees and guests look on as President Donald Trump speaks at Dana Incorporated, an auto-manufacturing supplier, on January 30, 2020 in Warren, Michigan. (Photo by Brittany Greeson/Getty Images)
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10:00 a.m. ET: U.S. markets bounce to session highs, shake off China’s rout
Major benchmarks are picking up steam, effectively shaking off the rout in Chinese stocks. While coronavirus fears remain in the driver’s seat — and are undermining global growth prospects — investors appear to be driven by U.S. fundamentals (which still remain strong) and bargain hunting.
Barely half an hour into Monday’s trading session, and the S&P 500 (^GSPC), Dow (^DJI) and Nasdaq (^IXIC) are all perched at session highs over 1%.
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9:50 a.m. ET: Tesla keeps burning rubber
Wall Street has fallen back in love with Tesla (TSLA), which has been setting new records for the better part of two weeks. In early trading, the shares hit a new high above $709, up a whopping 9% on the session.
The rally picked up speed after the car marker posted Q4 earnings that broadly topped expectations, and has seen a steady increase in analyst upgrades — such as Oppenheimer, which last week rated Tesla as an “Outperform” (keep in mind the stock has already blown past its price target of $650.57). The dramatic move higher has also burned short-sellers, who S3 Partners estimated last week had lost over $4 billion.
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9:34 a.m. ET: Stocks open higher after Friday’s coronavirus selloff
The three major U.S. stock indices opened higher Monday morning, pushing the S&P 500 back into positive territory for the year-to-date.
Shares of Nike (NKE) led advances in the Dow, after a pair of bullish recommendations from UBS and JPMorgan pushed the athletic-wear maker’s stock higher. The consumer discretionary, communication and health-care sectors led the S&P 500 higher.
Here were the main moves in markets, as of 9:34 a.m. ET:
S&P 500 (^GSPC): +0.55% or +17.71 points to 3,243.23
Nasdaq (^IXIC): +0.67% or +61.75 points to 9,215.52
Crude oil (CL=F): -$0.37 or -0.72% to $51.19 a barrel
Gold (GC=F): -$4.60 or -0.29% to $1,583.30 per ounce
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9:21 a.m. ET: Oil prices stabilize after WSJ reports Saudi Arabia is mulling a production cut
West Texas intermediate and Brent crude oil prices hovered little changed Monday morning in New York after the Wall Street Journal reported that Saudi Arabia was considering a major, temporary oil production cut to put a floor on prices amid the coronavirus.
According to the report, Saudi Arabia is considering production cuts beyond the 1.7 million barrel-per-day reduction OPEC and its allies had agreed in December to enforce.
The coronavirus has sent prices for both commodities tumbling, as investors fear the outbreak’s impact on demand in China, the world’s largest oil importer. Prices of both West Texas intermediate and Brent are down about 15% for the year to date.
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7:36 a.m. ET: Stock futures rise as coronavirus spreads further
U.S. stock futures rebounded slightly after posting sharp declines Friday, which had wiped away the S&P 500’s year to date gains.
In China, the Shanghai Composite tumbled more than 7% as investors furiously tried to price in fears over the coronavirus after an extended market shutdown for the Lunar New Year holiday. Prior to Monday, Chinese markets had been closed since January 23.
China’s National Health Commission said Monday that the coronavirus had claimed the lives of 361 individuals among more than 17,000 confirmed cases. There have been 151 coronavirus cases in 23 countries outside of China, according to the World Health Organization’s Director-General Tedros Adhanom Ghebreyesus.
Here were the main moves during the pre-market session, as of 7:36 a.m. ET:
S&P futures (ES=F): 3,237.00, up 13 points or 0.4%
Dow futures (YM=F): 28,293.00, up 97 points or 0.34%
Nasdaq futures (NQ=F): 9,037.5, up 39.75 points or 0.44%
Crude oil (CL=F): $51.69 per barrel, up $0.31 or 0.25%
Gold (GC=F): $1,584.00 per ounce, down $3.90 or 0.25%
A trader works at the New York Stock Exchange (NYSE) in New York, U.S., January 31, 2020. REUTERS/Bryan R Smith
A Ford engineer hosted an “ask me anything” (AMA) thread on Reddit over the weekend. In it, they let us in on a few new bits of information about the car (including battery and charging specs), and talked about his opinion of it, particularly in comparison to the Tesla Model Y, which will target a similar market as the Mach-E.
The thread has since been deleted, but many of the questions and answers were archived by the folks over at Mach E forum.
There are no particularly Earth-shattering revelations, but it’s interesting to hear about the car in a fairly unfiltered manner from someone on the inside. Though some of his independently-verifiable statements were inaccurate, so take all of this with a grain of salt.
Regarding charging and battery specs, the engineer stated that Ford is being “conservative” in their statements about what the car will be capable of.
When Mach-E specs first leaked, we learned there would be 230- and 300-mile battery options – similar to the Tesla Model Y. It turns out those options translate to 75 and 98kWh battery packs, which are significantly larger yet provide less range than the Model Y (~75kWh, 315 miles).
Some companies hold back a large portion of their battery pack to protect against degradation, so this is likely part of the reason that Ford’s big battery doesn’t offer as much range as Tesla’s smaller one. While the engineer didn’t explicitly confirm this, they did say Ford wanted to be conservative in order to avoid problems down the line (like Tesla’s legal issues related to capacity).
In response to a question about the Mach-E’s 150kW charge rate and whether the car would ever be able to charge any faster than that, the engineer pointed out that it would be silly to build a car with wires capable of accepting 350kW and not use them.
The Mach-E does have slightly disappointing charging specs. Ford states that it will be capable of 150kW charging, which is more than most cars on the road these days. But Ford also says that the car will be able to add 47 miles of charge in 10 minutes. This works out to a peak charge rate of about 90-100kW based on the car’s battery size and range, not 150kW. This must be another thing Ford is being conservative on. In comparison, Teslas are currently capable of 250kW charging – and the engineer was highly complimentary of Tesla’s battery and charging capabilities.
Related to these battery and charging specs, the engineer said that the Mach-E has been built with the same operating temperatures in mind as the rest of Ford’s vehicles. Ford considers -50C to 60C (-58F to 140F) as their vehicles’ operating spec, and the Mach-E is being built with those temperatures in mind. So the Ford ought to be able to operate even in the coldest winters or the hottest summers.
The engineer was less complimentary of Tesla’s manufacturing capabilities. While they had great things to say about Tesla’s battery and motor engineering (which “outpaces the industry by 5yrs easy”), they were very negative about Tesla’s build quality. In contrast, they said that they think the Mach-E’s interior quality is “probably the nicest interior we offer outside of Lincoln, it’s jaw dropping.”
The engineer also stated that Ford’s warranty is superior, “with all powertrain components covered by 8yrs, instead of just the battery in Tesla” (this is not true, Tesla’s powertrain warranty covers both the battery and drive unit and has for several years).
In response to questions about the decision to call the Mach-E a “Mustang” and whether Ford is serious about this car, the engineer pointed out that Ford employees seem increasingly onboard with the Mach-E project. Even the skeptical among them have had their minds changed as they’ve learned more about the Mach-E. They specifically called out Dave Pericak, former chief engineer for the Mustang line, as being “really hard to convince, but he’s a Mach-E supporter now.”
Part of the reason the traditionalists came around is because the Mach-E is seen as the vehicle that could save the entire Mustang line. With stricter standards for fuel economy and emissions, and with the public coming around to the knowledge that electric is better for performance anyway, the big V8s of traditional muscle cars can’t really stick around forever. The engineer repeatedly pointed out that the Chevy Camaro is being discontinued (this may or may not be true), and that Ford wanted to avoid the same fate for the Mustang.
GM has explicitly stated this as their motivation for building EVs, saying that they need electric cars in order to sell more SUVs. It seems that Ford, despite all indications that the Mach-E project is being taken very seriously within the company, has the same mentality as GM in this respect. Not quite the best way to reduce emissions if all you’re going to do is offset your reductions by selling more gas guzzlers.
So, Ford employees seem to like the Mach-E. Why?
The engineer teased a few features which do seem novel. The Mach-E has a face camera in the steering wheel cluster which will be used for future autonomous driving purposes. It will be able to detect whether or not the driver is in the seat and paying attention to the road. The engineer suggests that this will be better than Tesla’s “autopilot nag” warnings which require steering wheel movement every once in a while, allowing a “more natural experience and you can rest your arms.”
Another way the engineer sees the Mach-E as being better than Tesla is in the infotainment cluster. As we pointed out in our Tesla Model 3 review, Tesla’s infotainment is just so much better, more responsive, more usable, etc., than every other car out there. The engineer stated that Ford’s infotainment has one-upped Tesla in his opinion. They consider the infotainment system the “coolest thing” in the Mach-E.
The reason for this is because of the physical control knob that Ford has added to the bottom of the screen, allowing easier operation without taking the driver’s eyes off the road.
Also, the Mach-E’s cluster will be capable of side-by-side displays of both Ford’s “sync” infotainment system and Apple CarPlay or Android Auto. Tesla does not use either CarPlay or Android Auto, and many owners have asked Tesla to add it. So for those who want access to it, or prefer having a choice between using the native car system or their phone’s system, Ford will provide more flexibility there.
The engineer said the car’s computer has been overengineered with more than enough processor power and memory for very fluid operation and plenty of futureproofing. This should help as Ford plans to put out over-the-air updates, in similar manner to Tesla, to improve the car after release. The engineer couldn’t confirm whether those over-the-air updates would be free, but said “it will be an analogous situation to the Tesla ownership experience,” which suggests they will be. They teased interesting updates, saying “The OTA is really going to bring some special things. Stay tuned!”
Finally, the engineer repeated a couple other points several times. First, they stated that what they like about the Mach-E is that it has so much more “soul” than any other electric car out yet. One can imagine that many electric car owners, who almost without exception love their electric cars and would buy one again, would disagree with the idea that EVs have no soul.
Second, the engineer said many times that the Mach-E shapes up well against the Model Y for one big reason: incentives. They stated that “our vehicle is more targeted at meeting federal and state rebates.” We are not sure what they meant by this, because there’s nothing specific in the design process required to meet those incentives (other than minimum battery capacities which are easy to meet).
But the Mach-E will qualify for incentives which the Model Y won’t qualify for. Because of the silly way that the US federal EV incentive is structured, companies that got a head-start on electrification and led the industry even when it was hard to do so are now disadvantaged against late movers. Every company gets 200,000 vehicles worth of credits before a gradual expiration of those credits begins, and Tesla has already worked through those credits (so has GM, but Ford has not).
So now that Ford shows up onto the scene about a decade late, they get a leg up on the company that paved the way for them. This means that, in comparison to the Tesla Model Y, the Mach-E has a big price advantage.
It should be noted that if Ford really is “targeted” at meeting incentives, this betrays a “compliance” mindset within the company. Ford told us that the Mach-E began as a compliance car and then changed into a more serious performance project, and the engineer echoed those comments in their AMA.
But we’ve seen other hints of this “compliance mindset” still existing in the Mach-E project. For example, Ford has already stated that they’ll send the majority of first-year production to Europe – for compliance with EU regs.
I’d like to reiterate that there were a number of inaccuracies in the engineer’s comments, and none of this is official from Ford, so it may or may not be true and of course, lots of things are subject to change before the car comes out at the end of this year. Do feel free to go and read the engineer’s full comments if you want to read some more rumors about this car. And let us know in the comments if you find anything else juicy.
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Luckin Coffee Inc.
LK, -10.74%
issued a statement Monday saying it "categorically denies all allegations" made in an anonymous report that claims the company is fabricating financial and operating figures. "The methodology of the report is flawed, the evidence is unsubstantiated, and the allegations are unsupported speculations and malicious interpretations of events," the statement says. The report, received by short seller Muddy Waters Research, was made public on Friday. MarketWatch could not confirm the authenticity of the report, but Luckin Coffee addresses a number of claims it says are in it, including one that says the items per store per day number was inflated in the third and fourth quarters of 2019. "Every single order that customers placed with Luckin Coffee is online and automatically recorded in its system, and payments for orders went through third-party payment service providers," Luckin writes. "Therefore, all the company's key operating data, including the number of items per store per day, items per order and effective selling price, are tracked in real time and can be verified." Citron Research, also known as a short seller, tweeted on Friday that it also received the report and thinks it will "fall short on accuracy." Luckin goes on to say that it "firmly stands by its business model." Luckin stock closed Friday down 10.7%, but it has bounced back 2.5% in Monday premarket trading. Luckin stock has skyrocketed 69% over the last three months, outpacing the benchmark S&P 500 index
SPX, -1.77%,
which is up 5.2%.
People enter a Forever 21 store at a shopping mall in Montebello, California on September 30, 2019 a day after the fashion retailer filed for Chapter 11 bankruptcy protection.
Forever 21 said in a bankruptcy court filing it is seeking approval to name the three as the lead, stalking-horse bidders in an auction.
Rival bidders have until Friday to make any counteroffers, the filing said. If other bids are made, an auction will be held on Feb. 10. Forever 21 is planning to seek approval of the sale by Feb. 11.
Forever 21 filed for Chapter 11 bankruptcy protection in September. The mall-based apparel chain, which caters to younger customers, got into trouble by expanding too quickly inside and outside the United States. Forever 21 has shuttered more than 100 locations since its bankruptcy filing. It still had more than 800 stores globally in September.
The fear for many of America's mall owners has been that a liquidation of Forever 21 would leave them with too much vacant space. Simon and Brookfield are two of Forever 21's biggest landlords.
While not common for a real estate company to acquire a retailer, the strategy has been successfully used before.
In 2016, Simon and mall owner General Growth Properties, which is now owned by Brookfield Property Partners, teamed up to rescue embattled teen apparel retailer Aeropostale. The two were part of a group that ultimately won an auction to buy the Aeropostale brand out of bankruptcy court, salvaging its real estate. At the time, Simon had about 160 Aeropostale stores in its portfolio, while GGP had 77. A liquidation would have left them with more than 200 empty shops.
Simon's malls have nearly 100 Forever 21 stores.
When asked in July about acquiring or investing in more of its own tenants, Simon Property CEO David Simon said: "We're certainly as good as the private-equity guys when it comes to retail investment. ... And so, I wouldn't rule it out."
Authentic Brands in late 2019 bought the rights in bankruptcy court to the Barneys New York brand name. Its retail portfolio includes Nine West and Nautica.
His death was confirmed by his attorney in a statement to CNN affiliate WAPT in Jackson, Mississippi. Ebbers had been granted an early release from prison due to poor health in January after serving just over 13 years of a 25-year sentence. He was 78 years old.
Ebbers was found guilty in 2005 of conspiracy, securities fraud and filing false statements in the case that brought down what was then the nation's No. 2 long-distance provider. The company eventually went bankrupt, leading to substantial losses for shareholders. Thousands of WorldCom employees lost their jobs and savings. At the time, the bankruptcy was the largest in US history.
Ebbers insisted during the trial that he had been unaware of the fraud that was taking place at his company, but Scott Sullivan, the company's chief financial officer, testified against him during his trial.
A federal jury in New York deliberated for eight days before finding him guilty on all counts against him.
Ebbers' attorney filed for his early release last year, saying that his health had deteriorated substantially, necessitating his transfer to a 24-hour nursing care unit. The filing said his weight had dropped from 200 pounds to 142 pounds in the previous 18 months, that he was having trouble walking. His attorney said Ebbers had fallen and suffered head injuries numerous times.
In the filing, his attorney said it was estimated he had only 18 months to live.
