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FedEx’s (NYSE:FDX) Acquisition of TNT Express NV Gets Brazil’s Approval

By
Carol Harper
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FedEx Corporation (NYSE:FDX)

FedEx Corporation’s (NYSE:FDX) proposed acquisition of TNT Express NV (TNTEY) has gotten unconditional approval from Brazilian regulators. The companies have disclosed that Conselho Administrativo de Defesa Econômica (CADE) gave its nod in connection with its January 8th offer. The European Commission had already given its unconditional approval last month.

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Acceptance Period Extended

TNT Express and FedEx disclosed on January 8th that the acceptance period of their offer was extended by two weeks. The law in Brazil allows any appeal within fifteen days of its publication of the decision. Both companies indicated that they would continue to work with regulatory authorities constructively so that they would be able to get the clearance for the transaction from the relevant jurisdictions. That includes China.

Any merger and acquisition should be approved by the relevant regulators from the respective locations that the involved companies operate. Both have also indicated that they are making progress and continue to expect that the offer would be completed before the first half of this year.

Management Comments

FedEx President and CEO David Bronczek said that he was pleased with Brazilian regulatory authority’s unconditional approval for the offer. He continued that after the acquisition iss completed, the company would focus on the opportunities that TNT could bring to its customers, shareholders, and employees not only in Latin America but also throughout the world.

Both FedEx and TNT need to get the approval of the antitrust authorities in China and the United States apart from the European Union and Brazil. Until now, the offer has gotten approval from three regulatory authorities, and still needs China’s regulatory approvals.

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BP (NYSE:BP) Reports 91% Plunge in Profit

By
Carol Harper
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BP plc (ADR) (NYSE:BP)

BP plc (NYSE:BP) suffered a wider loss of $2.23 billion in the fourth quarter than last year’s $969 million loss. On an adjusted basis, replacement cost profit plunged 91% to $196 million from $2.24 billion in Q4 last year. The sharp drop in earnings was mainly due to the significant fall in worldwide oil and gas prices. As a result, average price realizations plunged 46.3% on year over year basis.

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Price Realizations

BP realized $37.42 per barrel in the United States in the fourth quarter, $40.49 in Europe and $36.10 in rest of the world. Its average price realization was $37.05 a barrel globally. The drops were 47.6% in America, 43.05% in Europe and 45.8% in rest of the world. Sequentially, the average price realization fell 15.8% from $44.01 per barrel. That suggested damage done to the top line and bottom line.

The situation is no different for gas either. The company realized $3.47 per mcf. In America, it was $1.71 per mcf while  Europe delivered price realization of $6.06 and the rest of the world $4.00 per mcf. That represented a drop of 48.18% in the United States, 25.76% in Europe, and 36.81% in rest of the world. The average YoY drop was 37.36% in the fourth quarter.

Maintains Dividend

BP maintained its dividend rate of ten cents per ordinary share, which would be paid on March 24. The company’s net debt increased to $27.2 billion from $22.6 billion. The oil firm indicated that it would maintain its net debt ratio at around the 20% level compared to the current level of 21.6%, which was higher than the preceding year’s 16.7% level.

BP’s total revenues and other income plunged 34.45% to $49.23 billion from $75.1 billion last year. Gain on sales, fixed assets and businesses boosted overall revenue by $288 million. For the first quarter, the company sees price realization continuing a downtrend in line with global oil prices.

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Johnson & Johnson (JNJ), Opko (OPK) Linked to Transenterix (TRXC) Acquisition

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There are speculations that Transenterix Inc (NYSEMKTS:TRXC) could be a buyout target for companies Johnson & Johnson (NYSE:JNJ) and Opko Health Inc. (NYSE:OPK). The two companies have been trying to expand their markets in the medical devices sector. Transenterix is a maker of robotic surgical system SurgiBot, which is expected to be launched in the U.S. in the second quarter.

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The reason Johnson & Johnson is linked to a potential Transenterix buyout is that it recently hinted at plans to restructure its medical device unit. Johnson & Johnson’s medical device unit is struggling to cope with shrinking sales amid growing competition. Revenue growth in the division has been flat for quite some time and it is believed an acquisition of this nature could help bring strength back to the business.

Among the various assets that Johnson & Johnson could target to bolster its medical device business, Transenterix appears to stand out prominently. There are a number of factors that could picque Johnson & Johnson’s interest in Transenterix. Transenterix has an attractive surgery technology for hospitals, and the company’s market cap of just $276 million also makes it an affordable acquisition for them.

Partnership with Alphabet

Acquiring Transenterix could also help Johnson & Johnson attain the most out of its partnership with Alphabet Inc (NASDAQ:GOOG). Johnson & Johnson and Google are collaborating to develop robotic surgery systems, which is an area that Transenterix has already made huge strides in. Transenterix’s SurgiBot System is expected to launch in the U.S. in the coming quarter and the company also has another surgery equipment project in the pipeline.

Opko Health

Opko Health has also been linked to a possible Transenterix acquisition. The speculation appears to hinge on the fact that Opko’s CEO, Philip Frost, already owns a substantial equity stake in Transenterix. Frost owns about 4% of the stake in the company. Given Frost’s appetite for deal-making and the fact that Opko Health is also seeking growth through acquisition, there seems to be logical reason to believe Transenterix might interest him.

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HP Enterprise (NYSE:HPE) Printers Hard Drives Can Be Misused By Hackers

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With hacking on the increase, security measures need to be checked in case an office happens to have a Hewlett Packard Enterprise Co (NYSE:HPE) LaserJet Commercial series printer.

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Famous security researcher Chris Vickery has disclosed that HP LaserJet printers can be easily be taken advantage of by hackers. He discovered that the hard drives of HP Laser Jet Printers can be utilized as a surreptitious data storage unit by cyber criminals due to the existence of a default setting that can launch an FTP server through one of the ports.

This specific setting is usually part of HP Laser Jet’s business grade printers. It permits company personnel to store large amounts of data on the printer while printing.

The upload and download operations placed on this anonymous FTP server are done through port 9100. In the event that a system administrator forgets to secure the printer with a firewall or if it has an IP address that is publicly accessible then it is very easy for a malicious player to access the printer via port 9100 and use it as a surreptitious storage device to host malicious content.

It is possible to save and access such content without alerting the organization or any of the personnel. Also, it’s likely that the hacker’s will remain unidentified as the only evidence of such an activity that is left is contained in network logs. But few system admins scan for traffic that goes in and out of a printer.

As Vickery says, this type of printer is normally switched on and remains online the whole day. Even if the device is put in sleep mode, it still hosts files. According to him, the chances that any activity of this sort would be detected is remote.

Vickery advises that if one possesses such a printer to ensure that port 9100 is not open, and that printers are protected by a firewall. If one had been earlier unprotected then after taking preventive measures, he suggests examining the content on a printer’s drive as a precautionary step.

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Vodafone (NASDAQ:VOD) Offers Free Roaming To New Zealand

By
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Vodafone Group Plc (NASDAQ:VOD) has decided to give free roaming to its customers in New Zealand for the next year. The company would also ally with Australian airline Qantas for frequent flyer points as well as other traveller offerings.

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Vodafone’s Red Postpaid plans charge AU$5 a day roaming to 52 countries, and allows its customers to utilize their regular monthly allowances globally. It has been offering this service since 2013 to Australian travellers in New Zealand.

In a bid to attract more customers, Vodafone will waive off its normal AU$5 a day fee for customers to use their monthly data calls and text messages in New Zealand as part of a trial till February of next year.

Loo Fun Chee, Vodafone Australia CMO, said the company will look at adding other countries to its free-roaming list next year. He added the reason for doing the trial is to better comprehend customer reaction and how they use the service.

With Vodafone being the world’s second largest mobile network it could theoretically offer free roaming to all countries in which it has active networks. Vodafone will give 15,000 Qantas frequent flyer points to its customers when they start, renew or upgrade their two-year Red plan.

Qantas also will be providing prepaid phones and SIMS on certain international flights flying into Australia. The SIM will cost travellers AU$40 and comes with 4GB of data, unlimited number of calls as well as messaging to numbers in Australia, unlimited free international calls to Thailand, India, South Korea, Malaysia, the UK, Hong Kong, Singapore, the US, China, and New Zealand as well as 90 minutes of international calls to other nations.

Vodafone may also rope in Britain and Canada to its free-roaming offering in the coming days.

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Pfizer (NYSE:PFE) Guides below Expectations

By
Carol Harper
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Pfizer Inc (NYSE:PFE)

Pfizer Inc (NYSE:PFE) provided a tepid outlook for 2016 after delivering better than expected earnings, as well as, the revenue for the fourth quarter of 2015. Its guidance fell shy of the Street analysts’ estimations. However, its Chairman and CEO, Ian Read, expects to deliver another strong year due to its belief in key products that will continue to perform well. He also placed his bet on its product pipeline.

Profit Dips

Pfizer Inc reported net income of $613 million, down 50% from $1.23 billion while earnings plunged 47% to ten cents a share from 19 cents a share in the year-ago quarter. On an adjusted basis too, its net income fell 4% to $3.306 billion from $3.44 billion whereas adjusted earnings slackened 2% to 53 cents a share from 54 cents a share in the same period last year.

The company’s revenue grew by 7% to $14.05 billion from $13.12 billion. Foreign currency had an unfavorable impact of 7%. Its innovative products revenue increased 22% to $7.64 billion from $6.63 billion in the previous year quarter. On the other hand, established products revenue grew 5% to $6.26 billion from $6.41 billion. The pharmaceutical firm’s cost of sales as a percentage of revenue was 21.2% compared to 19.7%.

Outlook For The Year 2016

Moving ahead, Pfizer said that it was looking to deliver revenue of $49 – $51.0 billion for the current year. This was lower than the Street analysts’ expectations of $52.49 billion. While looking to deliver reported earnings of $1.54 – $1.67 a share, the pharmaceuticals firm expects adjusted earnings of $2.20 – $2.30 a share for the same period. This was also lower than the Street analysts’ predictions of $2.36 a share.

Pfizer said that it expects adjusted cost of sales as a percentage of revenue to be 21.0 – 22.0%. The company expects R&D expenses to be $7.3 – $7.8 billion. The company said that its guidance reflected the expected mid-to-high-single digit operational revenue uptick on an enterprises basis. However, the company also sees $2.3 billion as unfavorable impact from the generic competition for the products which have either lost patent or will it soon.

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Oil Prices Fall Below $30 as Oil Producers Refuse Production Cuts

By
Andy Parker
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The recent upward movement in oil prices could not be sustained as the commodity fell after demand outlook and oversupplies overwhelmed hopes of a production cut. Any expected action by OPEC and others has been played down.

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Brent and WTI extend losses

Brent crude for April delivery dipped by over 3% or just over a dollar and was seen trading around $33.19 per barrel. The front-month contract for West Texas Intermediate (WTI) fell by 2.93% or $0.93 to $30.70, briefly falling below $30 again.

The only major development yesterday was that Russia’s energy minister and Venezuela oil minister informally discussed the prospect of holding a meeting between OPEC and non-OPEC members during the upcoming days. However, the new information failed to soothe the anxiety of market participants.

Analysts take

Meanwhile, Goldman Sachs (NYSE:GS) reiterated that any cooperation between OPEC and Russia is ‘highly unlikely’. Some Russian oil companies have projected a fall in output this year, which could also prevent Russia from reaching an agreement with OPEC members. Saudi Arabia remains a tough producer to convince among all. Assessing the current scenario, analysts have even projected that oil could fall below $30 per barrel again for an extended period.

Meanwhile, the magnitude of the oil oversupply can be seen from a report by Russia’s Energy Ministry that showed oil output in the region had increased to 10.88 million barrels a day in January from 10.83 million barrels per day in December.

The picture is no different in the U.S., which saw its oil stock rising by 4.7 million barrels to 499.6 million barrels, as reported by Reuters. The data from the American Petroleum Institute will be awaited later today to further gauge oil supply conditions.

Weakness in oil prices has already done its damage to oil companies, as BP plc (NYSE:BP) has reported its worst annual loss in the last 20 years. iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) traded 5.08% lower now at $4.86.

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Wall Street Feels Oil’s Fall Today

By
Andy Parker
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U.S. stock were broadly down as the sell-off continued out of the gate today. Weakness in Asian and European indices coupled with fresh losses booked by oil jointly weighed over earnings positives from yesterday.

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Market points to lower opening

Before the opening, S&P 500 Futures had traded down by 14.50 points or 0.74% to 1,917. The S&P 500 is now trading at 1908. Both the Nasdaq and the Dow Jones are trading down more than 1.5%.

Up ahead, market participants are looking forward to monthly U.S. car sales data for January alongside earnings report from some significant names.  According to chief market strategist of ADS Securities, Nour Al-Hammoury, markets might pay more attention to oil prices in the absence of any major economic data release during the day.

Asian and European markets

In global markets, major Asian indices except China’s Shanghai Composite Index were in the negative. Shanghai managed to close 2.3% higher today after China’s central bank infused more liquidity into the system.

In Europe, disappointing unemployment data as well as the oil slide, guided markets lower. As the Eurozone jobless data hit a new four-year low, analysts have commented that quantitative easing by the European Central Bank is inevitable.

Yesterday, the U.S. stock market had recovered slightly after manufacturing data declined for the fourth straight month in a row. The disappointing number renewed hopes that the Federal Reserve may slow down its monetary tightening stance. These hopes found ground after Fed Vice Chairman, Stanley Fischer, indicated that the possibility of a rate hike this year could be pushed out further.

The Institute of Supply Management posted a January reading at 48.2, below expansion rate of 50. Also, the inflation dropped 0.1% in December and stood at 1.4% over the last year, below the Fed’s target of 2%. Following release of these data, CME Group’s FedWatch tool showed that the probability of rate hike in March declined to 14% in the afternoon from 21% in the morning.

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Global Markets Weaken After Disappointing Data

By
Andy Parker
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Major Asian indices except China’s Shanghai remained under pressure throughout the day, mirroring Wall Street sentiment. Softer factory activity across the globe kept investors anxious.

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Asian markets in trouble

Oil prices resumed their downward journey as mounting oversupply and the fading probability of a meeting between oil producing countries disappointed investor hopes. Australia’s ASX All Ordinaries fell by 1% or 50.30 to 5,044. Hong Kong’s Hang Seng was down by 0.76% to 19,446.84 while Nikkei 225 shed 0.64% to 17,750.68. Taiwan’s TSEC 50 Index too fell by 0.32% to 8,131.24.

In India, the Reserve Bank of India kept key interest rates unchanged but hinted at embracing a more accommodative stance. Mumbai’s Sensex was seen trading down by 0.50% to 24,700.09.

Data weighing over markets

Meanwhile, European markets lost momentum amid global uncertainties and weakness in oil prices. FTSE 100 lost 1.58% or 95.96 points to 5,964.14 while Euronext shed 1.39% to 858.33. CAC 40 and DAX too were down by 1.65% and 1.43% respectively. Switzerland’s Swiss Market Index inched down by 1.50% to 8,185.92. The building sector in Britain has slowed down to a nine-month low.

Construction PMI in Europe dipped to 55 in January from 57.8 in December, hitting the lowest level in nine months. US manufacturing data published yesterday also failed to relieve investors. The main piece of good new was in Germany where unemployment hit a low of 6.2%.

The U.S. markets ended down yesterday despite a mid day recovery after economic data consistently came in below expectations. Also, subpar results announced by BP plc (NYSE:BP) reinforced the fact that the oil sector is in bad shape. CEO Bob Dudley’s statement that oil prices are likely to remain volatile throughout the year has spiked concerns as well.

The Dow Jones Industrial Average closed the previous session 0.10% or 17.12 points lower at 16,449.18. S&P 500 Index too lost o.o4% or 0.86 points to 1,939.38. Futures are broadly down in the premarket session. Canada’s S&P erased 1.23% to close the day at 745.53.

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Currency Markets Jittery as Oil Heads Back Down

By
Andy Parker
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US-Dollar pro Packung

After slumping for a day the Japanese yen regained its momentum against the U.S. dollar and the euro. Strength in the Japanese yen came after oil prices slid further, impacting global markets and spiking demand for the safe haven assets even in the face of Japan’s new negative interest rate policy.

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Yen gains momentum

USD/JPY fell by 0.31% to 120.66 today, after touching a session low of 120.36. The currency had witnessed a sharp decline after the Bank of Japan adopted negative interest rates, but is now reversing. Stock markets across Asia and Europe fell in response to softening oil prices.

Meanwhile, the euro also traded higher against the U.S. dollar, up by 0.27% to 1.0917. The unemployment rate for December is scheduled to be released today in the Eurozone. It is estimated that the jobless rate will continue to be at 10.5%, little changed from November’s low.

Apart from this, Spain, the fourth largest economy in Eurozone has posted a record high jobless rate for the first time in three months. Spain’s Employment Ministry published a note where it said that the number of jobless people rose by 57,200 in January, which is below the forecast of an increase of 71,200. The country’s jobless count declined by 55,800 back in December.

At the same time, weakness in the dollar continues from a contraction in manufacturing activity in the US in January. The Institute for Supply Management reported that the purchasing managers’ index (PMI) stood at 48.2 in January versus 48.0 in December. Other than this, the Commerce Department had reported no change in the personal spending rate, contrary to expectations of an increase of 0.1%. However, personal income was up by 0.3%, better than the estimates of a 0.2% rise.

Back in China, economic data remained uninspiring as factory activity shrank to 49.4 from 49.7 in December, reflecting a decline for the sixth time in a row. Elsewhere, GBP/USD was in negative territory, sliding 0.56% to 1.4352. All eyes are set on Bank of England’s monetary stance during its meet on Thursday.

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