Transcripts For KQEH Nightly Business Report 20240622 : vima

Bellwether companies of the new economy. The tech sector makes up 20 of the s p 500 by the way, tonight both companies, which you likely own through your mutual funds and 401 k s, they failed to wow investors. First, apple. The worlds most valuable company, reported earnings of 1. 85 a share. Revenue was slightly better at 49. 6 billion. Whats the problem . Despite selling more than 47 million iphones in the quarter, yeah you heard me right, it was the companys weak outlook that sent shares initially lower. A lot lower after that report. Josh lipton has the key takeaway from apples results. The big number in apples latest Earnings Report 47. 5 million. That is the number of iphones apple said it shipped in the quarter, now, that was up 35 year over year but was also basically in line with what wall street expected. Analysts had forecasted apple would ship some 47. 3 million iphones in a conversation with apples ceo tim cook. He told me that only 27 of the companys install base had moved those newer 6 and 6 plus models. That suggests plenty of upgrade head room ahead. At least in the after hours, investors seem to be focused on that inline number. For nightly Business Report im josh lipton in cupertino, california. Microsoft reported better than expected earnings in revenue, but took a hit from restructuring charges and soft demand from some of its products. The Worlds Largest Software Company reported earnings of 62 cents a share. The Company Reported revenue that was slightly more than 22 billion. But investors wanted more sending shares initially lower after the report. Kayla digs deeper into the results. From the face of it microsofts fiscal Fourth Quarter looks like a beat all around the problem was, the companys quarter was mahred by a massive write down of its nokia ago we saying that happened just a new years ago, it was forecast to be a 6. 7 billion writedown. When you peel away what the revenue story told us, itting looed weeker. Some currency head winds, especially in its overseas business namely for japan. When you look at its licensing, there was an expectation that as p. C. Shipments declined installs of windows and office would decline as well. They declined more than the pc shipments fell by. Thats leading people to wonder what exactly is going on there. Nightly Business Report new york. Yahoo missed Second Quarter earnings estimates, those sales narrowly beat those forecasts. The internet media companys results were way down by higher spending to attract users to its websites in order to better compete with google and facebook and others. Part of yahoos strategy has been to invest for its mobil platform. Shares of yahoo fell initially after the report as you see there. Lets turn to David Garrity now for more discussion about whats happening in the tech sector and what it may mean for you and your money. Hes principle at gvb research. So many people have some of these big tech names in their portfolio, either in their ira or perhaps in their mutual funds, in their 401 k. Were talking about names as big as apple. Is there really growth for these big stocks. Certainly looking at apple, were in a situation here where the expectations are for growth over the next five years. Probably better than 15 on a sick u lar secular rate and were in a situation where apple is gaining share. Apple products are being sold at they occupy the top of the market. And so from that standpoint we think apple remains the dominant player in a high growth segment, if we look at the valuation on the stock. Were still looking at a valuation which is below an overall market multiple. We think that apple in terms of what youre paying for its growth remains quite attractive might have been somewhat disappointing in the quarter that we didnt see the announcement coming out. The company certainly has the Funds Available to do that. On the Product Innovation side we would say that you know the iphone 6 upgrade cycle remains strong. May have been disappointing in terms of the quarter, there may have been concerns about the september quarters guidance. The opportunity to buy apple shares on this pull back remains attractive. Theres a long term bet, its twothumbs up for apple. You can use both thumbs there for apple, david. As a long term play how does microsoft look to you . Its a little trickier its a company which was successful in earlier generations of technology. Namely around pcs if we look at the shift over to mobil devices, microsoft is a far distant third behind apple and google in terms of the operating System Software thats being provided. Obviously, microsofts predicaments are somewhat underscored by the fact that were going to be giving away our windows 10 operating system to consumers. Something they won the have done in the past. A company that has substantial resources both financial and technical, nevertheless somewhat disconcerting to see a company go out and spend 9 billion to buy a company, and then within approximately a year and a half later, write off the full value of that as well as also fire the substantial number of employees related to that business. The hope here is under new ceo, the company will find a better direction going more toward Cloud Computing that will help to reignite the growth for the company, microsoft, a name that we like may not be so aggressive on a pull back as we may be with apple. A like not a love on microsoft, david. Thank you for joining us David Garrity with gba research. Sharon was just mentioning how many mutual funds own apple or microsoft. According to micro star. The top three holders of apple, the Vanguard Institutional Index Fund in a lot of 401 ks. As for microsoft, the institutional index are two of the biggest holders as is the American Funds group, Washington Mutual fund. Tyler, those weak after the bell results could sknd todays deep losses disappointing results from a handful of dow components weighed on the blue chip index. United technologies fell 7 . Verizon dropped more than 2 . Travelers was one of the bright spots after it reported results this morning, that dragged down the dow overall, which fell 181 points to 17,9119. The nasdaq was off 10 points and the s p 500 fell 9 points. Dom niks chuinick chu has more on todays earnings. Reporter the dive in the dow today was the result of a broader base selloff. A vast majority of which finished the day lower, the stock that drove much of the weakness was united technologies. The diversified Industrial Technology behind Pratt Whitney aircraft engines and carrier Aircraft Systems reported earnings that beat forecasts. Overall sales fell shy of expectations. The company said that orders from china for its otis elevators and Escalators Business fell. As a result of that it cut its full year forecast. Now, remember the company also recently announced the sale of its sikorski helicopter business to lockheed martin. Another decliner on the day was Verizon Communications americas Biggest Telecom company. It reported profits that beat wall street estimates, but it too reported sales that missed. While verizon did manage to add more Wireless Phone customers and boosted revenues for its fios high Speed Internet phone and tv service, average sales generated peruser fell, thanks to increased competition and promotions that was one of the reasons it lowered expectations for full year sales growth. One of the monthsest bright spots came by insurance giant travelers, it too reported profits that beat analyst estimates on sales that fell slightly below forecast. The company was aided by fewer losses tied to catastrophes that the company insures against and settlement of a prior tax issue. Shares were among a handful on the dow that rose on the day. With less than a fifth of companies having reported their quarterly results, a big focus will be on whether the rest of Corporate America can help drive earnings growth. Were still very early in earnings season. For nightly Business Report im dominick chu. Late today, dow jones reports that federal regulators are close to approving at ts 49 billion acquisition of direct tv that would clear the way for the biggest media deal of the past year, the Justice Department has already signed off on that deal. City group is being ordered to pay about 700 million to customers for deceptive marketing and billing tactics. The refund will go to more than 8 1 2 million credit card customers. The Consumer Financial Credit Bureau says citi took place from 2003 and 2012. Some big banks are setting aside more money to cover bad loans to energy companies. After oil prices dropped over the past year. According to reuters that raises the possibility that deteriorating loans could start to hurt bank earnings. Last week executives from jpmorgan and wells fargo told investors that they are increasingly concerned about loans to oil and gas companies. Today oil prices settled around 50 a barrel. One wall street strategist says the Federal Reserve had never hiked rates when commodities had been in a pronounced down trend. Hes larry mcdonald. Welcome, good to have you with us. Is it as simple as history, if it is, the crb i think is down about a third over the past year that would say the fed season the going to do anything this year. Thats the thing tyler, the crb is right on the 2009 recession lows and its very close to the 2002 recession lows. The Commodity Index is right on recession levels and you have to remember the United States in the 80s and 90s was 55 to 60 of global gdp. Today were 24 25 . The fed has to look at the global economy, much more so than he did in years past. Thats not the first thing larry that the fed will say theyre going to look at when it comes to what theyre going to do with interest rates. How important do you think are commiditity prices to their next move and when do you think theyre going to make that move . Remember they have a dual mandate, which was established think about how long the dual mandate, they have to look at unemployment and inflation. And ten years ago, chinese gdp would say 2 trillion now were up around 10 or 11 trillion. The dual mandate, if chinas slowing and thats hurting Commodity Prices thats going to leak over eventually to core inflation. It doesnt give them a reason to hike. On unemployment level. But the inflation level, if its ticking down a notch, certainly doesnt. Very interesting point. Larry bhk donald havent heard it made, appreciate it. Still ahead, the big hope big opportunity and big risks associated with developing new alzheimers drugs. Alzheimers, it affects more than 5 million americans today. It is the countrys sixth most deadly disease. And yet finding a cure or a treatment that slows the progression of the ailment has proved illusive now as meg terrell reports, there appears to be new hope. The quest to develop a drug that actually slows the course of alzheimers disease has been a long one, marked by failure. Since 1998 123 drugs have failed in development. Just four were approved. None slowed the declines in memory loss and sinking clearly that characterized alzheimers. This year though new hope has bloomed. The sign of the community has been given a boost by some recent positive news of different drugs. We are all very hopeful at this time, more hopeful than we have been before. Experimental medicines are under the spotlight this week with new data coming wednesday at the Alzheimers Association International Conference in washington, d. C. They work to remove the plaque buildups in the brain, thought to be toxic to neurons. Evidence from early studies shows that removing the plaques may help stem declines in cognition, results that still need to be supported by larger studies. A successful drug could mean big business. More than 5 million americans have alzheimers today, a number that could triple by 2050. Some analysts estimate the market for an alzheimers drug could be 20 billion a year. This disease is urgent and we need answers now. They cost us about 2 of medicare overall spending today. That number will increase almost 25 by 2040 if we dont stop this disease. The National Institutes of health spent about 65 million of its 30 billion budget on alzheimers disease last year. An amount some say isnt enough to address the size of the problem. It allocated more than a billion and a half to heart disease. And 5 billion to cancer. We need to have a war on alzheimers mentality here. Fred hassan led pharmaceutical companies which developed an alaska timers drug now owned by merck. Its imperative the patients cant speak for themselves. Thats why we as a society need to speak for the patients here and do more. Half a billion is not much. The results tomorrow could spur not just hope for medicine but big moves in drug maker stock prices as well. Biogen shares could swing 50 in either direction. For nightly Business Report im meg terrell. Chipotle beats estimates but misses on one key metric. Thats where we begin tonights market focus. Same store sales rose less than analysts were expecting, still it managed to top consensus on the top and bottom lines. Shares were lower, but managed to turn around. During the regular session, shares were off a fraction to 673. 07. Go pro saw its revenues surge by 70 . Earnings in revenue topped the streets consensus, shares were volatile initially in after hours trading. The stock was 2 higher to 62. 04. Novartis saw its shares after reporting a decline in profits. This was drug giant hit by the effects of a strong u. S. Dollar yet the ceo says hes optimistic about the companys pipeline. When you look at our results, the best part about the quarter was the innovation we just got approval to launch our new Heart Failure drug. This is a drug thats proven to reduce cardiovascular death by 40 . We think this is going to be a multimillion dollar drug for the company. Shares slipped to 103. 71. Baker hughes swung to a loss in its most recent quarter. The oil fueled Revenue Company saying it expects tumbling oil prices will persist for the rest of the year. Sales werent as weak as expected. Shares rose 2 to 6. 64. An increase in trading activity helped post an increase in profit. Shares flipped on this down day. Harleydavidson also reporting mixed quarterlies, the strong greenback weighed on its international sales. The cycle maker refused to keep pace with rival discounts. Shares revved up a little bit about 5 to 57. 67. Lifelong shares were halted after the ftc charged the Identity Theft Monitoring Company saying it failed to protect its consumers data. The charges say the firm is violating the terms of a previous settlement with the agency. Life law could disagree saying its prepared to take the case to court. When shares continue trading they plunged, plunging almost 50 lower on the day at 8 15. C. I. T. Group won approval for its pending deal to buy one west bank. The office of the comptroller currency gave the okay. The federal agency has to okay the agreement. Shares were more than 2 higher, they finished at 48. 18. Toshiba finds itself at the center of one of japans biggest accounting scandals. The ceo resigned after taking responsibility for inflating profits by more than 1 billion over several years. At a press Conference Today thes were seen vowing. A gesture meant to convey deep shame. The company will have to restate profits back to 20 o 8 when the coverup began. Uber the fast growing ride hailing app startup held a jobs tour for drivers today in new york city. The jobs tour comes as new york tries to crackdown on the companys expansion. The city council is expected to vote on a bill that would cap ubers growth while the city studies its impact on Traffic Congestion. Uber executives say the measure threatens its Business Model in one of its largest markets. Uber now valued at around 40 billion, is fast becoming a political lightning rod. Not just in new york but also on the national stage. Republicans have embraced it as a symbol of disruptive progression, democrats say it represents a new era of job in security. The temping of america. John harwood joins us from washington. Ubers not only changing the business world, but the political world. Why have so many politicians not just mayor de blasio here in new york latched on to it and made it the target of Political Warfare . Reporter what do they say about economics . Its about creative destruction. And when you have creative destruction. Some things get destroyed. Old models old incumbent firms, and in the case of bill de blasio in new york he is raising the issue of Traffic Congestion but the rise of uber is also threatening the incumbent taxi drivers who have relationships, Financial Relationships with the city with its politicians and so thats not an insignificant item. Secondly uber represents broader changes in the national economy, thats what Hillary Clinton and some democrats have pointed to. Although they are not to be fair to democrats, they are not saying uber is bad in and of itself it raises some problems and underscores some problems in th