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Americans spend again and American Express profit surges

Americans spend again and American Express profit surges

American Express Co.’s second-quarter revenue surged as people started spending more at a time when many are getting vaccinated against COVID-19 and feel more comfortable going out to restaurants, shops and entertainment venues againBy MICHELLE CHAPMAN AP Business WriterJuly 23, 2021, 1:33 PM• 3 min readShare to FacebookShare to TwitterEmail this articleNEW YORK — Spending at restaurants, shops and entertainment venues has come back in force as vaccines become more common and it fueled a revenue surge at American Express during the second quarter.That momentum picked up as the quarter progressed, the company said Friday, particularly spending from younger customers.“We saw card member spending accelerate from the prior quarter and exceed pre-pandemic levels in June, with the largest portion of this spending growth coming from Millennial, Gen Z, and small business customers,” Chairman and CEO Stephen Squeri said in a prepared statement.Revenue, net of interest expense, jumped to $10.24 billion from $7.68 billion last year, stronger than the $9.47 billion that Wall Street was looking for, according to a survey by Zacks Investment Research.Shares of American Express Co. climbed 3.4% at the opening bell.Demand for fee-based Platinum cards is getting stronger, Squeri said, and American Express registered 2.4 million new cards in the quarter.The New York company earned $2.28 billion, or $2.80 per share, for the three months ended June 30. A year earlier it earned $257 million, or $0.29 per share. The current quarter included $866 million in credit reserve releases.This easily beat projections of $1.64 from industry analysts.American Express’ consolidated provisions for credit losses resulted in a benefit of $606 million benefit for the current quarter. This was mostly because of the reserve releases and lower net write-offs. The year-ago period had a provision expense of $1.6 billion, which was primarily due to significant credit reserve builds the company implemented as it contended with the repercussions of the pandemic.American Express took a hit in the pandemic, with fewer Americans traveling, dining out or shopping. Spending on corporate and individual charge and credit cards dropped, and those who kept a revolving balance paid off their debts.That spending freeze thawed as infections plunged during the vaccine rollout.Infections have begun to spike in some regions of the country where vaccination rates are low. COVID-19 cases nearly tripled in the U.S. over two weeks amid an onslaught of vaccine misinformation that is straining hospitals.At this point, rising infections in some regions of the U.S. does not appear to be of great concern with the rate of vaccination high and rising in parts of the country.“We are increasingly optimistic that the momentum we’ve generated will continue given the strength we see in our core business, particularly in the U.S., even as the pace of the recovery remains uneven in different regions around the world,” Squeri said. “Based on current trends, we are confident in our ability to be within the high end of the range of EPS expectations we had for 2020 in 2022.”Earlier this month American Express said that it was increasing the benefits — and the fee — on its flagship Platinum Card. The annual fee is going from $550 to $695.—————A portion of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AXP at https://www.zacks.com/ap/AXP

Robinhood sees valuation of up to $35 billion as public co.

Robinhood sees valuation of up to $35 billion as public co.

Online brokerage Robinhood is looking for a market valuation of up to $35 billionBy MICHELLE CHAPMAN AP Business WriterJuly 19, 2021, 9:01 PM• 3 min readShare to FacebookShare to TwitterEmail this articleRobinhood, the online brokerage that found itself embroiled in this year’s meme stock phenomenon, will go public next week seeking a market valuation of up to $35 billion.The company said in a regulatory filing Monday that it hopes to price 55 million shares in its initial public offering in a range of $38 to $42 per share. It could raise about $2.3 billion if the shares are sold at the high end of the range.Robinhood is offering about 52.4 million shares. The company’s founders Baiju Bhatt and Vladimir Tenev, and Chief Financial Officer Jason Warnick, are offering about 2.6 million shares. The company won’t receive any proceeds from shares sold by its officers and founders.The underwriters have an option to buy 5.5 million shares to cover any overallotments.Robinhood’s IPO will give investors a chance to own a big slice of a fast-growing company that has rocked the traditionally staid brokerage business. The company expects to offer up to $770 million worth of its shares to its customers via its platform. The estimate is based on an offering price of $40 per share, the company said in the filing.Meanwhile, the venture capital unit of business software company Salesforce.com has indicated an interest in buying up to $150 million in shares of Robinhood at the IPO price, Robinhood said.Since its launch in 2014, Robinhood’s popularity has forced rivals to get rid of commissions and to offer apps that make trading easy and maybe even fun.The company based in Menlo Park, California, said in its filing that it had 17.7 million monthly active users as of March and more than half of its customers are first-time investors.Many of those first-time investors have started trading on Robinhood due to the popularity of meme stocks like GameStop. The trading frenzy that followed forced Robinhood to limit some trades because of the massive volume and it drew some government scrutiny.Robinhood said in the filing that it expects that its revenue for the April-June quarter totaled up to $574 million, or a more than twofold increase from $244 million a year earlier. Even so, the company projects it slid to loss in the quarter ranging from $487 million and $537 million. Robinhood posted a profit of $58 million in the same quarter last year.The company projects revenue in the third quarter will be lower, citing lower levels of trading activity.The company is expected to make its stock market debut on July 29. It will list on the Nasdaq under the “HOOD” ticker symbol.

Robinhood sees valuation of up to $35 billion as public co.

Online brokerage Robinhood is looking for a market valuation of up to $35 billionBy MICHELLE CHAPMAN AP Business WriterJuly 19, 2021, 6:29 PM• 2 min readShare to FacebookShare to TwitterEmail this articleNEW YORK — Robinhood, the online brokerage that found itself embroiled in this year’s meme stock phenomenon, will go public seeking a market valuation of up to $35 billion.The company said in a regulatory filing on Monday that it hopes to price 55 million shares in its initial public offering in a range of $38 to $42 per share. It could raise approximately $2.3 billion if shares are sold at the high end of the range.Robinhood is offering approximately 52.4 million shares. The company’s founders Baiju Bhatt and Vladimir Tenev, and Chief Financial Officer Jason Warnick, are offering about 2.6 million shares. The company won’t receive any proceeds from shares sold by its officers and founders.The underwriters have an option to buy 5.5 million shares to cover any overallotments.Robinhood’s IPO will give investors a chance to own part of a fast-growing company that has rocked the traditionally staid brokerage business. Since its launch in 2014, Robinhood’s popularity has forced rivals to get rid of commissions and to offer apps that make trading easy and maybe even fun.The company said in its filing that it had 17.7 million monthly active users as of March and more than half of its customers are first-time investors.Many of those first-time investors have started trading on Robinhood due to the popularity of meme stocks like GameStop. The trading frenzy that followed forced Robinhood to limit some trades because of the massive volume and it faced some government scrutiny.The California company will list on the Nasdaq under the “HOOD” ticker symbol.

Pershing Square SPAC exits Universal Music deal

Pershing Square SPAC exits Universal Music deal

 A special-purpose acquisition company run by billionaire Bill Ackman’s Pershing Square is stepping away from a deal to buy a 10% stake in Universal Music Group, citing questions from the Securities and Exchange CommissionBy MICHELLE CHAPMAN AP Business WriterJuly 19, 2021, 11:25 AM• 2 min readShare to FacebookShare to TwitterEmail this articleBillionaire Bill Ackman is walking away from a deal announced last month that would have given him a 10% stake in Universal Music Group, the label that is home to Taylor Swift, Billie Eilish, Lady Gaga, and the Beatles.In a letter Monday to shareholders of his investment fund, Pershing Square, Ackman cited questions from the Securities and Exchange Commission about whether the structure of a special-purpose acquisition company would allow such an acquisition under the rules of the New York Stock Exchange.Vivendi SA last month confirmed that its Universal Music Group was in talks to sell a 10% stake to Pershing’s special-purpose acquisition company, or SPAC, in a deal that would value the record label at about $40 billion. The 10% stake would have gone for around $4 billion.A SPAC is typically a group of larger investors who raise money for acquisitions and then seek out acquisition targets. The deal announced by Ackman last month was unique because unlike a rush of SPACs that have rolled out this year, the intent was not to merge with Universal, but to take a stake in the company that had already announced plans to go public.On Monday, Vivendi Vivendi said that it had instead approved the acquisition of as much as 10% of Universal by funds associated with Ackman.Ackman’s SPAC, called Pershing Square Tontine Holdings Ltd., now has 18 months left to close a new transaction, unless shareholders vote for an extension. Ackman said that because of the experience with the proposed Universal Music transaction, its next business combination would be structured as a conventional SPAC merger.

ConAgra raising prices to help offset rising costs

ConAgra raising prices to help offset rising costs

ConAgra is cutting its fiscal 2022 outlook due to rising costs, which the food company will try to offset by boosting pricesBy MICHELLE CHAPMAN AP Business WriterJuly 13, 2021, 3:09 PM• 2 min readShare to FacebookShare to TwitterEmail this articleConAgra is cutting its fiscal 2022 outlook due to rising costs, which the food company will try to offset by boosting prices.ConAgra, whose brands include Duncan Hines, Slim Jim and Birds Eye, now foresees fiscal 2022 adjusted earnings of about $2.50 per share. It previously predicted earnings of $2.63 to $2.73 per share. Analysts polled by FactSet expect $2.62 per share.Shares of Chicago-based ConAgra fell nearly 5% in morning trading.The company said Tuesday that it expects consumer demand for its retail products will remain high compared with historical levels during fiscal 2022, as consumers have developed new habits during the COVID-19 pandemic.But President and CEO Sean Connolly said in a statement that fiscal 2022 costs are now seen as being materially higher than originally anticipated. While ConAgra is raising prices to help combat this, Connolly said that there will be a lag between the time the company is hit with the higher costs and when it realizes the benefits of its actions.For its fiscal fourth quarter, ConAgra Brands Inc. earned $309.5 million, or 64 cents per share. That compares with $201.4 million, or 41 cents per share a year earlier.The current quarter’s results were helped by tax benefits related to the restructuring of the Ardent Mills joint venture.Excluding certain items, earnings were 54 cents per share.Wall Street was looking for 52 cents per share.Sales fell to $2.74 billion from $3.29 billion, but still beat the $2.71 billion FactSet forecast.Organic net sales were hurt by a 12.8% volume decline, which was mostly due to the year-ago period benefiting from a surge in people eating food at home at the beginning of the pandemic. The prior-year period also included an extra week.

Glazed over: Krispy Kreme rises 23.5% in Wall Street return

Investors, it turns out, were in the mood for donutsBy MICHELLE CHAPMAN AP Business WriterJuly 1, 2021, 9:10 PM• 2 min readShare to FacebookShare to TwitterEmail this articleInvestors, it turns out, were in the mood for donuts.Shares of the Krispy Kreme chain returned to Wall Street and rose 23.5% Thursday, despite getting off to a bit of a lackluster start.The Charlotte, North Carolina-based company known for its glazed doughnuts priced its initial public offering of 29.4 million shares at $17 a piece. That’s well below the $21 to $24 it was seeking. It raised $500 million and plans to use proceeds to pay down debt.The stock trading on Nasdaq under the “DNUT” ticker symbol opened Thursday at $16.30 but then moved higher before finishing the day at $21.The initial tepid reaction may have been an indication that Wall Street was unsure if a business selling doughnuts and coffee is the right pick when people have become increasingly health conscious.Krispy Kreme announced in May that it was going to go public for a second time. After initially going public in 2000, the company was purchased in a $1.35 billion deal by JAB Holding in 2016 and taken private.The chain operates in 30 countries. In the quarter that ended April 4, its revenue jumped 23% to $321.8 million, while its net loss narrowed to less than $1 million, from $10.9 million in the same period a year earlier.The underwriters of the offering have a 30-day option to buy up to an additional 4.4 million shares at the IPO price, less underwriting discounts and commissions.

Tesla Model 3 regains top safety pick designations

Tesla Model 3 regains top safety pick designations

Tesla’s Model 3 has regained its top safety pick designations from two key groups after losing them recentlyBy MICHELLE CHAPMAN AP Business WriterJune 29, 2021, 4:53 PM• 2 min readShare to FacebookShare to TwitterEmail this articleTesla’s Model 3 has regained its top safety pick designations from two key groups after losing them recently.Last month Consumer Reports pulled its “Top Pick” status for Tesla’s Model 3 and Y vehicles built after April 27, while the Insurance Institute for Highway Safety planned to remove the vehicles’ “Top Safety Pick Plus” designation.The U.S. government’s National Highway Traffic Safety Administration was no longer giving the Models 3 and Y check marks on its website for having forward collision warning, automatic emergency braking, lane departure warning and emergency brake support. That prompted the ratings groups’ actions. Both require electronic safety systems for the top safety designations.But on Tuesday the IIHS said that it recently completed new evaluations of the camera-based front crash prevention system that comes with certain Tesla Model 3 vehicles. The camera-only system earned a superior rating for vehicle-to-vehicle front crash prevention and an advanced rating for pedestrian front crash prevention. The group said that the new ratings mean that the 2021 “Top Safety Pick Plus” extends to all Model 3s. IIHS hasn’t completed tests of the 2021 Tesla Model Y.Consumer Reports said that due to IIHS’ recent evaluations of Tesla’s new camera-based system on its Model 3 and Consumer Reports’ prior integration of IIHS ratings into its recommendations, it was restoring its Top Pick rating to the Model 3.Shares of Tesla, based in Palo Alto, California, declined about 1.4% in midday trading.

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