Here is our latest business news roundup.
Ackman says he supports ADP but puts management on notice and more
NEW YORK (Reuters) – Billionaire investor William Ackman, who lost a proxy contest at Automatic Data Processing ( ADP.O ) last year, said on Tuesday that he wants the human-resources technology company to succeed but said he might be back with a fight if ADP fails to perform. FILE […]
Trade spat to dull expected tax cut boost to U.S. economy: Reuters poll
BENGALURU (Reuters) – The ongoing trade spat between the world’s two largest economies will restrain the roaring U.S. economy, dulling an expected boost to growth from massive tax cuts passed through Congress just a few months ago, a Reuters poll found.
The latest expectations from a poll of over 100 economists taken April 9-17 suggest the White House’s hopes for sustained economic growth above 3 percent will not be realized, which in turn may spawn future expectations for even bigger budget deficits over the coming years.
The Reuters poll consensus has growth averaging 2.8 percent this year, slowing to 2.4 percent next.
U.S. President Donald Trump’s most recent push to impose duties on imports from China have triggered fears of a global trade war and have fueled wild market gyrations in recent weeks.
Nearly 90 percent of 50 economists who answered an extra question said the trade row with China will hurt the U.S. economy.
IBM first-quarter margins miss estimates, shares fall
(Reuters) – International Business Machines Corp (IBM.N) posted profit margins that fell short of Wall Street expectations on Tuesday, a sign that its reinvention was taking time.
Shares of the technology company fell 6 percent in after-hours trade even as it reported the second quarter of revenue growth after a near six-year streak of declines.
IBM has in recent years shifted its focus to higher-margin businesses such as cloud computing, cybersecurity and data analytics, to counter a slowdown in its legacy hardware and software businesses, but the move is not going as fast as some shareholders had hoped.
While IBM’s revenue and profit beat expectations, the company’s adjusted gross profit margin fell to 43.7 percent from 44.5 percent a year earlier.
The company said the decline in gross margin was mostly due to “significant” one-time charges.
More heavy losses for Johnston Press
Johnston Press, which publishes newspapers including the ‘i’, The Scotsman and the Yorkshire Post, saw a pre-tax loss of £95m last year.
But that was better than the £301m loss sustained in 2016, after it had to cut the valuation of its titles.
In 2017, it further reduced the book value of those titles by £57m, to £84m.
The reduced value of the Edinburgh-based firm’s debt is also counted against profit, at a cost of £22m.
With £196m of debt, it has yet to find a way of rolling it over when it becomes due, in June 2019. That is after years of struggling to reduce debt from a peak of £751m in 2006.
Discussions with a committee of bondholders were announced last November, and there is no sign with the publication of the full-year financial results that chief executive Ashley Highfield is close to cutting a deal.
Toys ‘R’ Us turns down bid for stores from toy maker: source
NEW YORK (Reuters) – Bankrupt retailer Toys “R” Us has rejected an $890 million bid for some of its U.S. stores and locations in Canada from the CEO of Bratz doll maker MGA Entertainment Inc, a person familiar with the matter said on Tuesday.
Last week, MGA Chief Executive Officer Isaac Larian, who said the wind-down of Toys “R” Us would hurt the toy industry long-term, offered $675 million for the U.S. stores, and $215 million for Canadian stores.
“I haven’t yet been notified of the bid rejection but if this is true, it is very disappointing,” Larian said in a statement. “It is our hope and expectation that we can continue to participate in the bid process, so we can keep fighting to save Toys ‘R Us. We feel confident that we submitted a fair valuation of the company’s US assets in an effort to save the business and over 130,000 domestic jobs.”
The offer does not exceed the value of Toys “R” Us in a liquidation of its assets, said the person, who could not be identified because the decision to turn away the offer is not yet public.