Connect with us

Stock Markets

Boeing sees progress on 787, China, but supply chain risks loom

Published

on

2/2

© Reuters. FILE PHOTO: A model of Boeing 737 Max airliner is seen displayed at the China International Aviation and Aerospace Exhibition, or Airshow China, in Zhuhai, Guangdong province, China September 28, 2021. REUTERS/Aly Song

2/2

(Refiles to add first name and title of Chief Financial Officer Brian West in paragraph 4)

By Eric M. Johnson and Aishwarya Nair

SEATTLE (Reuters) -Boeing Co said on Wednesday it would study an equity raise after unlocking deliveries of its 787 and returning its cash-cow 737 MAX to service in China, but flagged supply chain risks amid broader certification and industrial problems.

Resuming deliveries of 787 Dreamliners and clearing inventories of its 737 Max are vital for Boeing (NYSE:BA)’s ability to emerge from overlapping crises. The pandemic and the grounding of its best-selling model after fatal crashes have drained its cash and saddled Boeing with debt.

China, one of the top aviation markets in the world, has been a holdout in clearing the 737 MAX to return to commercial service. Boeing sold a quarter of its jets to China before the grounding and the years-long tit-for-tat tariff war.

Boeing Chief Financial Officer Brian West said China was close to clearing the 737 MAX to return to service, but progress with regulators and customers was delayed by stringent COVID protocols, not by broader trade tensions with Washington that have curbed jet orders.

“With China, without China, there’s robust demand,” West said.

“We still want to make sure we’re very sensitive to that part of the world,” he added. But when Boeing raises production, “it will be a function of our confidence in our supply chain, not the demand signals.”

Boeing shares were flat on Wednesday afternoon against a fractionally lower Dow Jones industrial average. Boeing popped up 4% shortly after West made some optimistic comments, but then the stock pared gains.

West also said Boeing’s 737 MAX production and deliveries were hit by shortages of a particular wiring connector, as the industry grapples with broader supply chain disruptions worsened by war in Ukraine. Overall he said the factory was primed to produce 31 jets monthly to plan.

“It’s a reflection of a crazy supply chain world that we live in right now,” West said. “It’s fairly localized and isolated, but we have options and we’re working them hard.”

“These things usually get resolved in a short time, and then we catch up and get movement,” he added.

The 35 aircraft Boeing handed over to customers in April – 28 of which were its best-selling 737 MAX – fell from the 41 jets delivered in March. Boeing separately raised doubts in late April that it would hit a 500-aircraft delivery target for the 737 MAX this year. [L2N2X12RW]

UNLOCKING DELIVERIES

Boeing is battling certification and industrial headaches across its jetliner portfolio. Production flaws have halted 787 Dreamliner deliveries for a year, cutting airline capacity. It is separately working to clear more than 300 737 MAX jets parked in inventory since the crisis.

The logjams have hurt Boeing’s cash flow while debt has soared, raising fears among investors and analysts of a potential credit rating downgrade for America’s largest exporter.

West said Boeing did not need to tap credit lines or raise equity immediately, but “all options are on the table” such as an equity raise in the longer term as deliveries and production bounce back.

On 787, West said U.S. air-safety regulators were reviewing a comprehensive package of certification documents Boeing submitted, while the planemaker prepares to deliver the first jets – but he stopped short of predicting when deliveries would resume.

Industry sources say 787 deliveries were likely still weeks away.

“I can’t give you a date, FAA decides, but there continues to be good momentum and people are hard at work,” West said.

Stock Markets

Walmart stores expected to post high shopper traffic amid deepening inflation pain

Published

on

3/3

© Reuters. FILE PHOTO: A worker and a shopper are seen wearing masks at a Walmart store, in North Brunswick, New Jersey, U.S. July 20, 2020. REUTERS/Eduardo Munoz

2/3

By Arriana McLymore and Aishwarya Venugopal

NEW YORK, NY (Reuters) – Walmart (NYSE:WMT) Inc is expected to show a steady rise in gross margins and revenue when it reports first-quarter results on Tuesday as price conscious shoppers, feeling the strain of persistent inflation, increase visits to the low-cost retailer.

Walmart has averaged a 4.9% increase in monthly visits since the start of 2022 compared to the same period in 2021, Placer.ai data showed, despite supply chain challenges and pricier fuel that have led shoppers to make fewer grocery store trips.

Analysts have also been upbeat about Walmart’s ability to diversify its revenue base through advertising and to keep prices low when compared with rivals that are struggling.

“What we found is pricing is still lowest at Walmart and they’ve done a very good job of keeping prices low to maintain and widen the price gaps with the competition and providing the best value for the consumer, even in an inflationary environment,” Telsey Advisory group analyst Joseph Feldman said.

Guggenheim analysts said Walmart is a “top pick” during inflationary times, in a note on Monday.

“We believe Walmart will continue to deliver impressive top- and bottom-line performance amidst the evolving pandemic environment regardless of tougher consumer spending patterns.”

Investors are already piling in. Walmart’s stock is up about 2% on the year to Friday, in contrast to the S&P 500‘s nearly 16% decline.

Grocery prices shot up 10.8% in April, the largest year-over-year jump since 1980, while the cost of a gallon of gas fell 6.1% but was still up nearly 44% from a year ago.

Walmart Chief Financial Officer Brett Biggs in March said that consumers were keeping their eyes on inflation and that rising fuel prices would cause consolidation in shopping trips.

“You’ll tend to see fewer trips. You’ll tend to see bigger baskets, which again, bigger baskets is really our sweet spot,” Biggs said at a Bank of America (NYSE:BAC) Conference.

Refinitiv estimates the Bentonville, Arkansas-based retailer will eke out gross margins of 24.55% in the quarter, up from 24.43% in the previous quarter, with revenue rising 0.4% to $138.883 billion. Earnings per share are estimated to be $1.48, down from $1.69 last year.

“Walmart stands to benefit from increasing trip consolidation, a healthy price gap to national chains, and accelerating inflation trends,” Gordon Haskett analyst Chuck Grom said.

The company has set its sights on growing its $12.99-a-month Walmart Plus membership to challenge Amazon (NASDAQ:AMZN)’s Prime, priced at $14.99 monthly. Walmart Plus, which launched in September 2020, offers delivery services and gas discounts but is still struggling to make ground against Amazon.

A recent report by eMarketer citing Bizrate showed that only 15% of U.S. adults used Walmart’s Plus service compared to 62% for Amazon’s Prime.

(This story corrects last name of Walmart CFO to “Biggs” from “Briggs” in paragraph 9 and 10)

Continue Reading

Stock Markets

India’s Life Insurance Corp set for lacklustre market debut, analysts say

Published

on


© Reuters. FILE PHOTO: Life Insurance Corporation of India (LIC) logo is seen displayed on a smartphone in this illustration taken February 20, 2022. REUTERS/Dado Ruvic/Illustration

By Nupur Anand and Chris Thomas

MUMBAI (Reuters) – Life Insurance Corp is likely to see a lacklustre debut when it lists on Indian stock exchanges on Tuesday despite the $2.7 billion initial public offering being oversubscribed, analysts said.

India priced LIC’s record-breaking IPO last week at 949 Indian rupees ($12.20), the top of the indicated range. The government has raised around $2.7 billion from selling a 3.5% stake in LIC, the country’s top insurer, which is state owned.

But volatility in global markets and selling pressure in the domestic stock market are likely to cast a shadow on LIC’s listing, with the shares likely to start trading near the IPO price or at a slight discount.

“Unofficial grey premium is trading down into negative territory mainly on the back of depressed global markets which are in the bearish zone … We expect a soft listing at +/- 5% of the offer price,” said Prashanth Tapse, research analyst at domestic brokerage Mehta Equities.

New Delhi had planned to list LIC in March this year but had to defer it as market conditions were not favourable in the wake of the Ukraine conflict.

The offering is seen as being important to India meeting its ambitious target for selling off state assets. The debut performance will also set the mood for forthcoming issues after retail investors were badly burnt by India’s recent large IPOs.

The price range for the issue was set between 902 and 949 rupees per share. LIC offered a discount to employees and retail investors of 45 rupees per share, while policyholders were given a discount of 60 rupees per share.

In the grey market, LIC shares were trading at a discount of nearly 15 rupees compared with a premium of nearly 100 rupees earlier this month.

“Even if the shares list flat on Tuesday, retail investors will still be able to make gains due to the discount that was offered so I don’t see it as a bad bet as valuations are also attractive,” Narendra Solanki, fundamental research head at domestic brokerage Anand Rathi.

The 66-year-old company dominates India’s insurance sector, with more than 280 million policies.

IPO MARKET SLOWDOWN

The Indian IPO market, which saw dizzying growth in 2021, has had a significant slowdown this year. This shows the impact of geopolitical tensions, stock market volatility, a price correction in over-valued stocks from recent IPOs, plus concerns about rising commodity and energy prices, and slower economic growth, EY said in a report on Monday.

In the first quarter of 2022, proceeds raised through India’s primary markets were at $995 million via the three largest IPOs compared with $2.57 billion same period last year, EY said.

If market conditions improve there could be a robust pipeline of IPOs this year as more than 20 companies have filed draft prospectuses in first quarter of this year, Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India said.

($1 = 77.7840 Indian rupees)

Continue Reading

Stock Markets

Trump’s social media app may raise up to $50 million before deal closes -filing says

Published

on

2/2

© Reuters. FILE PHOTO: The Truth social network logo is seen displayed behind a woman holding a smartphone in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration

2/2

By Echo Wang

(Reuters) – Former U.S. President Donald Trump’s new social media venture disclosed in a regulatory filing on Monday it may raise up to $50 million through convertible notes before it merges with a blank-check acquisition firm.

Truth Media & Technology Group (TMTG) is set to receive $1.25 billion in funding once it merges with Digital World Acquisition Corp. But the deal, which was inked in October, has been under investigation by the U.S. Securities and Exchange Commission (SEC). The funds are inaccessible to Trump’s company until the SEC gives the green light and the transaction closes.

TMTG, which according to the filing posted an operating loss in 2021 of $4.3 million, had to secure other funding as a result. It raised $38.2 million as of March 31 through the issuance of convertible promissory notes, the filing shows.

The filing reveals that the maximum TMTG can raise though convertible notes is $50 million.

The rollout of Trump’s social media app, Truth Social, has been slow after it was launched earlier this year. Trump only started using the platform frequently this month. Two top executives left less than a year after they joined the company, Reuters previously reported.

Continue Reading

News

Stock Markets9 mins ago

Walmart stores expected to post high shopper traffic amid deepening inflation pain

3/3 © Reuters. FILE PHOTO: A worker and a shopper are seen wearing masks at a Walmart store, in North...

World9 mins ago

U.S. Rep. Liz Cheney blasts fellow Republicans after ‘great replacement’ mass shooting

© Reuters. FILE PHOTO: U.S. Representative Liz Cheney (R-WY) testifies before the House Rules Committee in Washington, U.S., December 14,...

Economy10 mins ago

Analysis-Alarmed by Solomon Islands-China pact, NZ finds its voice on security

© Reuters. FILE PHOTO: A car with a New Zealand flag waits for New Zealand Prime Minister Jacinda Ardern outside...

Economy10 mins ago

After delay, U.S. Senate edges toward passing $40 billion Ukraine war aid

© Reuters. FILE PHOTO: Military aid, delivered as part of the United States’ security assistance to Ukraine, is unloaded from...

Stock Markets10 mins ago

India’s Life Insurance Corp set for lacklustre market debut, analysts say

© Reuters. FILE PHOTO: Life Insurance Corporation of India (LIC) logo is seen displayed on a smartphone in this illustration...

Stock Markets39 mins ago

Trump’s social media app may raise up to $50 million before deal closes -filing says

2/2 © Reuters. FILE PHOTO: The Truth social network logo is seen displayed behind a woman holding a smartphone in...

Stock Markets39 mins ago

Abbott, FDA reach agreement to reopen baby formula facility in Michigan

2/2 © Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE)...

Stock Markets39 mins ago

Dow Futures Little Changed After Mixed Session

© Reuters. By Oliver Gray  Investing.com – U.S. stock futures remained little changed in Monday’s evening trade, after a mixed...

Stock Markets39 mins ago

Third Point’s Loeb turns back on Disney, cools on Amazon in first quarter

3/3 © Reuters. FILE PHOTO: A screen shows the logo and a ticker symbol for The Walt Disney Company on...

Stock Markets39 mins ago

Buffett-backed Nubank beats revenue estimates on strong client additions

© Reuters. FILE PHOTO: A banner for Nubank, the Brazilian FinTech startup, hangs on the facade at the New York...

Cryptocurrency40 mins ago

US federal judge approves of Justice Dept criminal complaint on using crypto to evade sanctions

US federal judge approves of Justice Dept criminal complaint on using crypto to evade sanctions The United States Department of...

World40 mins ago

An oasis in underserved Buffalo neighborhood became killing field

© Reuters. Mourners react while attending a vigil for victims of the shooting at a TOPS supermarket in Buffalo, New...

Stock Markets40 mins ago

GTA publisher Take-Two signals drop in demand from pandemic highs

© Reuters. FILE PHOTO: NBA 2K22 and Grand Theft Auto 5 by Take-Two Interactive Software Inc are seen for sale...

Stock Markets40 mins ago

Intel shareholders reject compensation packages for top executives

2/2 © Reuters. FILE PHOTO: Intel’s logo is pictured during preparations at the CeBit computer fair, which will open its...

Stock Markets1 hour ago

Tencent Music’s Q1 revenue underwhelms as competition heats up

© Reuters. FILE PHOTO: The logo of China’s Tencent Music Entertainment Group is seen next to an earphone in this...

Stock Markets1 hour ago

Tiger Global raised stakes in some tech names battered by year’s rout -filing

4/4 © Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in...

World1 hour ago

Suspect in Buffalo supermarket massacre visited city in March, police say

© Reuters. A Buffalo Police officer stands at the scene of a shooting at a TOPS supermarket in Buffalo, New...

World1 hour ago

U.S. revises Cuba policy, eases restrictions on remittances, travel

2/2 © Reuters. FILE PHOTO: Emigres wave American and Cuban flags outside Versailles restaurant, in reaction to reports of protests...

Cryptocurrency1 hour ago

BIFI gains 100%+ after Beefy Finance adds new vaults and stablecoin liquidity pools

BIFI gains 100%+ after Beefy Finance adds new vaults and stablecoin liquidity pools Winston Churchill’s statement to “never let a...

Commodities1 hour ago

Oil settles higher on demand optimism, gasoline strength

© Reuters. FILE PHOTO: An aerial view shows an Idemitsu Kosan Co. oil facility in Ichihara, east of Tokyo, Japan...

Stock Markets2 hours ago

Rocket Lab USA Shares Gain 5% on Q1 Earnings Beat and Raise

© Reuters. Rocket Lab USA Shares Gain 5% on Q1 Earnings Beat and Raise Rocket Lab USA, Inc. (RKLB) shares...

Stock Markets2 hours ago

United Airlines lifts second-quarter revenue forecast

© Reuters. FILE PHOTO: United Airlines planes are parked at their gates at O’Hare International Airport ahead of the Thanksgiving...

Cryptocurrency2 hours ago

MakerDAO price rebounds as DAI holds its peg and investors search for stablecoin security

MakerDAO price rebounds as DAI holds its peg and investors search for stablecoin security Its been a rough couple of...

World2 hours ago

Democratic frontrunner in Pennsylvania Senate primary to skip rally after stroke

© Reuters. FILE PHOTO: Lt. Gov. John Fetterman, U.S. Democratic Senate candidate for Pennsylvania, poses for a portrait at a...

Commodities2 hours ago

Moscow says G7 attempts to isolate Russia make global food crisis worse

© Reuters. FILE PHOTO: Ears of wheat are seen in a field near the village of Zhovtneve, Ukraine, July 14,...

World2 hours ago

U.S. rolls out revised Cuba policy, easing some restrictions on remittances, travel

© Reuters. FILE PHOTO: Emigres wave American and Cuban flags outside Versailles restaurant, in reaction to reports of protests in...

Sports & General2 hours ago

Johnny Depp’s attorneys challenge Amber Heard on abuse claims

3/3 © Reuters. FILE PHOTO: Actor Johnny Depp reacts as he leaves for a recess during a defamation trial against...

Stock Markets2 hours ago

Tencent Music Reports Q1 Miss, Revenues Down 15.1%

© Reuters. Tencent Music (TME) Tencent Music Reports Q1 Miss, Revenues Down 15.1% Tencent Music Entertainment Group (NYSE:TME) reported its Q1...

Stock Markets2 hours ago

Rivian Automotive CEO Purchases $1 Million Worth of Stock

© Reuters Rivian Automotive CEO Purchases $1 Million Worth of Stock According to SEC Form 4, on May 16, Robert...

Stock Markets2 hours ago

Buffett-backed Nubank swings to profit on strong client base, loan volumes

© Reuters. FILE PHOTO: A banner for Nubank, the Brazilian FinTech startup, hangs on the facade at the New York...

Trending