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Tesla reports another quarterly profit, but its growth may be slowing.

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Tesla Model 3 cars at the company’s factory in Shanghai. Sales in China slipped in September, despite price cuts.
Credit…Aly Song/Reuters

Tesla on Wednesday reported a profit for the fifth consecutive quarter, putting it on track to report its only annual profit since its founding in 2003.

Tesla said it made $331 million, or 27 cents per share, in the three months that ended in September. The company reported a profit of $143 million, or 16 cents per share, in the same period a year earlier.

The company delivered 139,600 cars in the third quarter. That was a roughly 50 percent increase from the second quarter, when sales and production were severely hampered by the coronavirus pandemic.

But Tesla faces questions about whether that strong sales growth is tapering off. Analysts believe Tesla’s sales in the United States have already slowed, and they have said it may be suffering from sluggishness in other parts of the world. In China, Tesla has cut prices several times this year and sales of the Model 3 sedans it makes in Shanghai declined slightly in September compared with August and July. And in Europe, the company faces growing competition from traditional automakers.

“Tesla is losing ground in Europe to fierce competitors” that have offered more affordable electric models, Vicki Bryan, the chief executive of Bond Angle, a research firm, said in a report before the company’s earnings report. Ms. Bryan also said Tesla’s Model Y hatchback seemed to be taking sales away from the Model 3 rather than adding to the company’s sales.

The company’s chief executive, Elon Musk, last month appeared to temper expectations when he forecast that sales would rise 30 to 40 percent this year, implying a range of 482,000 to 514,000 cars.

Tesla would have to sell 182,000 cars in the fourth quarter to sell more than 500,000 cars for the year. Most analysts expect sales for the full year to fall short of that mark, however. In the fourth quarter of 2019, the company delivered 112,000 cars.

While several automakers have introduced electric vehicles, Tesla so far has faced little serious competition. But that could change over the next year or so.

On Tuesday, General Motors offered a preview of a battery-powered and technology-packed Hummer pickup truck that it plans to begin selling in about 12 months. The Hummer EV is supposed to go 350 miles or more on a full charge — in line with Tesla’s top models. G.M. promised the truck will be able to charge enough in 10 minutes to travel 100 miles.

The first edition will start at $112,595. Other editions due in 2022 and later will be available for under $100,000.

The Hummer EV is meant to compete with Tesla’s pickup, the Cybertruck, which is supposed to go into production late next year. Ford Motor, Rivian and other automakers are also hoping to bring electric pickup trucks to the market soon.

Credit…Michael Reynolds/EPA, via Shutterstock

Speaker Nancy Pelosi and top White House officials said on Wednesday that they were continuing to narrow their differences on a sweeping stimulus plan to provide pandemic relief to struggling Americans and businesses, even as the California Democrat conceded that a bipartisan deal might not be possible before the Nov. 3 election.

A nearly one-hour conversation between Ms. Pelosi and Steven Mnuchin, the Treasury secretary brought the pair “closer to being able to put pen to paper to write legislation,” a spokesman for Ms. Pelosi said.

And Mark Meadows, the White House chief of staff, said he was “still very hopeful and very optimistic that we’re making progress.”

But with time waning to cement an agreement that could be enacted in time for Election Day, both sides remained wary.

Mr. Meadows, who met with Senate Republicans on Capitol Hill on Wednesday, told reporters that lawmakers in his party had grown suspicious of Ms. Pelosi’s tactics and were “starting to get to a point where they believe that she is not negotiating in a fair and equitable manner.”

Ms. Pelosi said she remained upbeat about the prospects for a compromise, but allowed for the possibility that it would wait until after the election.

“I’m optimistic that there will be a bill,” she said in an interview on MSNBC. “It’s a question of, is it in time to pay the November rent, which is my goal, or is it going to be shortly thereafter and retroactive.”

Across the Capitol, Senate Democrats blocked a move by Republicans to advance a $500 billion plan that would revive lapsed federal unemployment benefits and a popular federal loan program for small businesses, as well as provide additional money for testing.

Democrats, who have argued the package falls far short of the level of aid needed, unanimously opposed it, and it fell short on a party-line vote of 51-44, failing to clear the 60-vote threshold required to move forward.

Mr. Meadows said earlier Wednesday that a call by Democrats for hundreds of billions of dollars more in federal aid for states and cities and their resistance to a liability shield for businesses remained the toughest obstacles to a bipartisan stimulus deal.

“The biggest issue remains state and local assistance,” Mr. Meadows said on the Fox Business Network. “That remains a stumbling block.”

The White House has proposed providing $250 billion to states and municipalities, Mr. Meadows said, while House Democrats have called for double that. He also said that the liability protections were a crucial priority for Republicans, and he chided Ms. Pelosi for resisting them, saying she was being “disingenuous” if she believed that his party would agree to any deal without them.

Ms. Pelosi and Mr. Mnuchin are expected to speak again on Thursday.

Lael Brainard, a member of the Board of Governors of the Federal Reserve.
Credit…Erik S Lesser/EPA, via Shutterstock

Lael Brainard, a Federal Reserve governor who is seen as a possible future Treasury secretary if former Vice President Joseph R. Biden Jr. wins the election, warned in a speech Wednesday that “the easiest improvements” in the labor market “are likely behind us.”

Ms. Brainard pointed out that the share of permanent layoffs is rising — bad news because it takes longer to rehire those workers than people who have temporarily lost their jobs — and that unemployment insurance claims have ticked up. She also noted that participation rates for women in their prime working years have fallen.

That decline “could have longer-term implications for household incomes and potential growth,” she said.

A shortfall in government support could pose a major risk to the pace of the economic rebound, Ms. Brainard said, especially if additional help comes after hard-hit households burn through the savings they built up earlier in the crisis.

Apart from the course of the virus itself, the most significant downside risk to my outlook would be the failure of additional fiscal support to materialize,” she said.

Economists often refer to the economic rebound underway as K-shaped, meaning that it is sharply divided. Some people have held onto their jobs, watched their savings rise and maintained basically normal consumption patterns despite some pandemic-spurred modifications. But another broad segment of workers has lost jobs and seen its labor income dry up. While many such households are now living off savings from earlier government support, those funds will not last forever. Likewise, many big businesses are doing well, even as smaller companies and those in hard-hit sectors struggle.

“Further targeted fiscal support will be needed alongside accommodative monetary policy to turn this K-shaped recovery into a broad-based and inclusive recovery,” Ms. Brainard said. “The most important message is simply that we will have a much better, stronger, more inclusive recovery if we do continue to see that targeted fiscal support” alongside Fed policy.

Family and friends of people lost to opioid overdoses protested outside Purdue Pharma’s headquarters in Stamford, Conn., in 2018.
Credit…Jessica Hill/Associated Press

Purdue Pharma, the maker of OxyContin, has agreed to plead guilty to criminal charges of defrauding federal health agencies and violating anti-kickback laws, and faces penalties of roughly $8.3 billion, the Justice Department announced on Wednesday.

The company’s owners, members of the wealthy Sackler family, will pay $225 million in civil penalties.

Wednesday’s announcement does not conclude the extensive litigation against Purdue, but it does represent a significant advance in the long legal march by states, cities and counties to compel the most prominent defendant in the opioid epidemic to help pay for the public health crisis that has resulted in the deaths of more than 450,000 Americans since 1999, according to the Centers for Disease Control and Prevention.

Still, it is unlikely the company will end up paying anything close to the $8 billion negotiated in the settlement deal. That is because it is in bankruptcy court and the federal government will have to take its place in a long line of creditors. Typically, creditors end up collecting pennies on the dollar.

Credit…Patrick Semansky/Associated Press

One of the fronts in the Justice Department’s case against Google is a 13-year-old agreement between Apple and Google that has evolved into a multibillion-dollar deal with enormous consequences for both companies and many of their rivals.

When Apple introduced the iPhone in 2007, Google was the device’s default search engine. In return, Google paid Apple a chunk of the ad revenue it collected from the millions of Google searches conducted on iPhones.

Today that arrangement covers all Apple devices, which now account for nearly half of all Google search traffic, according to the Justice Department’s lawsuit. As a result, Google pays Apple an estimated $8 billion to $12 billion a year, according to the suit. That has made Apple and Google hugely reliant on one another, while edging out other search engines and, according to the U.S. government, protecting Google’s monopoly.

“By paying Apple a portion of the monopoly rents extracted from advertisers, Google has aligned Apple’s financial incentives with its own and set the price of bidding for distribution extraordinarily high — in the billions,” the Justice Department said in its lawsuit.

With billions of dollars on the line, the partnership is critical to both companies.

With billions of dollars on the line, the partnership is critical to both companies. Inside Google, losing its pole position on iPhones is considered a “Code Red” scenario, according to the lawsuit. At Apple, Google’s payments account for roughly 15 percent to 20 percent of Apple’s profits.

Google officials said they weren’t aware of the Justice Department’s “Code Red” allegation and that the company’s deal with Apple is no different than Coca-Cola paying a supermarket for prominent shelf space.

Apple did not immediately respond to a request for comment.

Judge Amit P. Mehta will preside over the Justice Department’s antitrust lawsuit against Google.
Credit…Mark Wilson/Getty Images

A federal judge appointed by President Barack Obama will preside over the Justice Department’s antitrust lawsuit against Google, according to a note posted to the case’s docket on Wednesday.

Judge Amit P. Mehta of the U.S. District Court for the District of Columbia was appointed to the bench in late 2014. He spent much of his career in private practice and worked a public defender in the early 2000s.

Mr. Mehta has handled some high-profile cases. Last year, he ruled in favor of Congress’s attempt to subpoena President Trump’s financial records. He partially ruled against the Trump administration’s freeze to visa programs earlier this year.

And he has supported a federal attempt to rein in business concentration. In 2015, he sided with the government’s plan to block the proposed merger of US Foods and Sysco, two prominent food distributors. The merger ultimately fell apart because of the opposition.

He did not immediately respond to a call seeking comment on Wednesday.

The Justice Department lawsuit filed on Tuesday argues that Google obtained a monopoly over online search services — and the ads that run on them — and then used contracts with phone makers like Apple to protect that power. Google has said that the lawsuit is groundless and denies it engages in anti-competitive behavior. The company expects it will be at least a year before the lawsuit goes to trial.

  • Stocks on Wall Street fell on Wednesday, after drifting back and forth from positive to negative territory, as investors sought clarity on the prospects of a stimulus deal in Washington.

  • Europe’s benchmark stock indexes headed lower as the region’s central bank warned of the risk to Europe’s economy from a second wave of the pandemic.

  • The S&P 500 ended 0.2 percent lower. Stocks in Europe fell, with major indexes down 1 to 2 percent as coronavirus cases continued to rise.

  • Netflix was lower after the company reported Tuesday that it had signed up fewer new subscribers last quarter than expected. Snap, the parent company of Snapchat, surged on its report that it had recorded a big increase in users.

  • On Tuesday, stocks were whipsawed by conflicting comments about the state of the stimulus talks, but ended the day up half a percent. Speaker Nancy Pelosi said she was “optimistic” a deal could be reached with the Trump administration in the coming days. A few hours later, Senator Mitch McConnell, the majority leader, told Republicans that he had advised the White House not to strike a deal. Later still, Ms. Pelosi’s spokesman said the speaker and Steven Mnuchin, the Treasury secretary, had found “common ground as they move closer to an agreement.”

  • On Wednesday, Mark Meadows, the White House chief of staff, said that a push by Democrats for hundreds of billions of dollars in federal aid for states and cities and Democrats’ resistance to a liability shield for businesses remained the toughest obstacles to a stimulus deal.

Netflix’s headquarters in Los Angeles.
Credit…Christian Monterrosa/EPA, via Shutterstock
  • Netflix attracted 2.2 million new subscribers for the third quarter, about one million lower than what investors were expecting and short of the 2.5 million Netflix itself had forecast, the company reported Tuesday. Consumer interest in Netflix accelerated earlier in the year as households in lockdown streamed films and shows more than usual, giving the company a record number of new subscribers.

  • Britain’s postal service, Royal Mail, announced it would start to pick up parcels from residential houses as the country sees a surge in online shopping. It will cost 72 pence per package, or nearly $1, for the service.

  • Pioneer Natural Resources, a leading shale oil producer, said on Tuesday that it would buy Parsley Energy for $4.5 billion to expand its operations in the Permian Basin, the oil field that straddles West Texas and New Mexico. A day earlier, ConocoPhillips announced that it was acquiring Concho Resources, another Permian producer, for $9.7 billion. These and other acquisitions signal that oil and gas companies are looking for ways to cut costs because they do not anticipate a quick recovery in demand for their products, which tumbled this spring when the pandemic took hold.

  • Snap, the parent company of Snapchat, said revenue for the third quarter was $678 million, up 52 percent from a year ago, exceeding analysts’ estimates of $559 million. While some analysts had predicted that Snap’s growth would tail off as people returned to school, its number of daily active users rose 18 percent to 249 million. But the company posted a net loss of nearly $200 million in the quarter, narrower than the loss of $227 million a year ago. The company’s stock jumped on the news.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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