COMPANY NEWS IN BRIEF

Aeromexico posts slimmer quarterly loss

Mexican airline Aeromexico posted a net loss of US$130.38 million in the third quarter under the strain of the coronavirus pandemic, yet said passenger demand had begun to revive.

The drag on profits was considerably narrower than in the prior quarter, when Aeromexico posted a net loss of US$1.19 billion.

"In spite of the complicated environment, the market has shown signs of recovery," Aeromexico said in a statement, noting that its passenger capacity increased 68% since the second quarter.

Aeromexico in June began a Chapter 11 restructuring process, becoming the third airline to file for bankruptcy protection in Latin America, and has since received approval for up to US$1 billion in financing.

Total revenues in the July to September period fell to 4.67 billion pesos from 18.35 billion pesos a year earlier, said Aeromexico, which is part-owned by Delta Air Lines. Its net loss in the quarter amounted to 2.88 billion pesos, compared with a net profit of 65.8 billion pesos a year ago. - Nampa/Reuters

Pioneer Natural to buy rival Parsley

Pioneer Natural Resources Co said it would buy smaller rival Parsley Energy Inc in a deal valued at about US$4.5 billion, the latest consolidation among US shale producers slammed by the rout in oil prices during the pandemic.

Many shale companies have been mired in losses due to weak crude prices, hovering around US$40 a barrel since June.

The all-stock deal would create the largest Permian Basin-only focused shale producer and is expected to add annual cost savings of US$325 million. Pioneer shareholders will own about 76% of the combined company.

The deal is being done to increase cost savings and cash flow, positioning Pioneer as one of "a few investable independents," Pioneer chief executive Scott Sheffield said on a call with analysts on Tuesday.

A combined company would hold around 930 000 acres in the Permian, the top US oil field, with production of about 328 000 barrels of oil per day. – Nampa/Reuters

Texas Instruments posts rare revenue rise

Texas Instruments Inc reported its first quarterly revenue growth in nearly two years on Tuesday, a rebound the chipmaker credited to people stuck at home splurging on electronic gadgets for remote work and entertainment during the Covid-19 pandemic.

Shares of the company, which also forecast current-quarter sales above estimates, were up nearly 2%.

TI, which supplies chips for everything from smartphones to automobiles, often reports quarterly results before its peers. Investors watch its numbers closely as a proxy for both the health of the industry and other sectors where semiconductors are key components.

The Dallas, Texas-based company said its sales also benefited from a notable rebound in demand from the automotive market, which grew 75% from the preceding quarter as North American and European vehicle assembly plants resumed operations.

"While visibility for the near-term demand has improved, we remain cautious as the broader economic impact of the global pandemic could continue for several years," Dave Pahl, head of the company's investor relations, told analysts.

TI also fielded questions on the repercussions of a US ban on sales to China's Huawei Technologies. - Nampa/Reuters

GM to build electric vehicles

General Motors Co said it will invest US$2 billion to convert its Spring Hill, Tennessee, factory to produce electric vehicles, starting with the new Cadillac Lyriq, alongside existing combustion-engine Cadillacs.

Spring Hill will be GM's third US electric vehicle factory, along with existing plants in Detroit and Orion Township, Michigan. The Tennessee plant was built in 1990 as the exclusive source for GM's now-defunct Saturn brand.

The Cadillac Lyriq crossover is slated to go into production in Spring Hill in late 2022, according to AutoForecast Solutions (AFS), which tracks industry production plans. AFS said it expects some electric vehicle production will be announced at a later date for a factory in Mexico.

Among additional investments, GM on Tuesday said it will spend US$32 million at its truck plant in Flint, Michigan, to increase production of the Chevrolet Silverado and GMC Sierra heavy-duty pickups.

GM shares were up 4.7% to US$34.90 in late morning trade. GM will spend US$100 million to shift production of the redesigned GMC Acadia crossover from Spring Hill to a plant near Lansing, Michigan. - Nampa/Reuters

Cathay Pacific to cut 6 000 jobs

Hong Kong's Cathay Pacific Airways Ltd will cut around 6 000 jobs or 18% of its workforce, and axe regional brand Cathay Dragon to help it weather the coronavirus pandemic, the South China Morning Post reported on Tuesday.

The airline said in June it was reviewing its strategy in light of the travel downturn, with "tough decisions" to be announced during the fourth quarter and analysts expected it would announce major job cuts.

In June, the Hong Kong government led a US$5 billion rescue package for the airline, which has been burning through around HK$1.5 billion to HK$2 billion of cash a month.

The South China Morning Post said the airline was expected to announce the job cuts on Wednesday, adding the figure had been reduced from 8 000 layoffs after government intervention.

The newspaper, citing sources, said the Cathay Dragon brand, would be sacrificed but staff and resources of the two airlines would be merged. Cathay did not respond immediately to a request for comment. - Nampa/Reuters