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KPMG faces $18 million misconduct fine for misleading regulator

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© Reuters. FILE PHOTO: The logo of KPMG is seen at the high profile startups and high tech leaders gathering, Viva Tech,in Paris, France May 16, 2019. REUTERS/Charles Platiau/

By Kirstin Ridley

LONDON (Reuters) – KPMG faces a 14.4 million pound ($17.6 million) fine after admitting it misled regulators during spot checks on audits of construction group Carillion and software firm Regenersis.

The Financial Reporting Council (FRC), the British auditing regulator, told a London tribunal on Thursday that it was seeking a record 20 million pound fine, reduced to 14.4 million pounds because KPMG self-reported and cooperated.

“It was unjustifiable and wrong,” KPMG’s Chief Executive Jon Holt said in a statement, adding: “It was a violation of our processes and a betrayal of our values.”

KPMG, one of the Big Four auditors that dominate the market alongside EY, Deloitte and PwC, admitted to misconduct at an initial London tribunal in January and reiterated its apology at the start of a two-day hearing.

“I am saddened that a small number of former employees acted in such an inappropriate way, and it is right that they – and KPMG – now face serious regulatory sanctions,” Holt said.

The tribunal found five former KPMG employees guilty of misconduct during a routine FRC inspection of a Regenersis audit to end-June 2014 and a Carillion audit to end-December, 2016.

The FRC, which is seeking to fine them between 50,000 pounds and 400,000 pounds and ban them from the profession for up to 15 years, alleged they provided false or misleading information or documents to the regulator.

The five had contested the allegations.

The tribunal will rule on sanctions at a later date.

Because KPMG is liable for the conduct of its employees, it faced the same allegations.

The proceedings did not delve into the underlying audit work. The FRC is separately investigating KPMG’s audits of Carillion, whose collapse in 2018 led to recommendations of a sector shake-up, although legislation has yet to be brought before parliament.

KPMG has separately vowed to defend itself against a 1.3 billion pound ($1.6 billion) lawsuit by Carillion’s liquidators for missing “red flags”, in one of the largest claims against top accountants to date.

($1 = 0.8185 pounds)

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

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

Rocket Lab USA, Inc. (RKLB) shares were trading more than 5% higher after-hours following the company’s reported Q1 results, with EPS of ($0.06) coming in worse than the consensus estimate of ($0.04).

Revenue grew 124% year-over-year to $40.7 million, beating the consensus of $27.48 million, with Space Systems contributing 84% of total quarterly revenue, growing 1,873% year-over-year.

The company provided its Q2/22 outlook, expecting revenue in the range of $51-54 million, compared to the consensus of $41 million, with expected Launch Services revenue of approximately $19 million and expected Space Systems revenue of $32-$35 million.

The company also announced that the CAPSTONE spacecraft has arrived at the launch site Rocket Lab in New Zealand and begin the preparation for the launch to lunar orbit using the Electron launch vehicle and Lunar Photon spacecraft bus.

By Davit Kirakosyan

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United Airlines lifts second-quarter revenue forecast

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© Reuters. FILE PHOTO: United Airlines planes are parked at their gates at O’Hare International Airport ahead of the Thanksgiving holiday in Chicago, Illinois, U.S., November 20, 2021. REUTERS/Brendan McDermid

By Rajesh Kumar Singh

CHICAGO (Reuters) – United Airlines Holdings (NASDAQ:UAL) Inc on Monday raised its revenue estimate for the current quarter despite trimming capacity, underscoring a booming travel demand.

The Chicago-based carrier now expects total revenue per available seat mile to be up 23%-25% from the same period in 2019, up from a prior forecast of 17%.

Last month, the airline said it expects to generate the highest quarterly revenue in its history in the quarter through June, helping it return to profit.

While the surge in bookings is largely driven by leisure travelers, office repoenings and easing border restrictions have bolstered the industry’s outlook.

Last week, United said this summer is expected to be the busiest since the pandemic. It estimates nearly 5.3 million customers will fly with United during the Fourth of July holiday period.

Strong consumer demand is also helping United and other carriers deal with soaring fuel costs, which have more than doubled in the past year.

United also raised its fuel bill estimate for the quarter by 17%. It is now projected to increase by about 40% from the first quarter of this year.

Non-fuel operating expense is also expected to be higher than the previous estimate, the company said. United, however, still expects an adjusted operating margin of 10%.

The company has adjusted its plans to ramp up capacity. In the current quarter, it now expects its capacity to be down 14% from pre-pandemic levels.

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Tencent Music Reports Q1 Miss, Revenues Down 15.1%

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© Reuters. Tencent Music (TME) Tencent Music Reports Q1 Miss, Revenues Down 15.1%

Tencent Music Entertainment Group (NYSE:TME) reported its Q1 results, with EPS of $0.06 coming in worse than the consensus estimate of $0.07. Total revenues declined 15.1% year-over-year to $1.05 billion, missing the consensus estimate of $1.23 billion, due to the headwinds in an evolving market landscape.

Revenues from online music services in Q1 were down 4.8% to $413 million. Revenues from music subscriptions grew 17.8% year-over-year to $314 million, with online music paying users reaching 80.2 million (up 31.7% year-over-year) and paying ratio increasing to 13.3% from 12.4% and 9.9% in Q4 and Q1/21, respectively.

Revenues from social entertainment services and others in Q1 were down 20.6% to $635 million.

Shares of Tencent Music were down 40% year-to-date into the results.

By Davit Kirakosyan

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