Company news in briefs

Embraer warns of little or no profit

Brazilian planemaker Embraer SA said on Wednesday it expects to keep US$1 billion in cash after paying off all of its debt once a proposed US$4.2 billion deal with Boeing Co closes, although it warned of little or no profit in the next two years.

Embraer expects earnings to break even before paying interest expenses and taxes in 2019, which UBS analysts said "falls below expectations". The measure, known as EBIT, is expected to rise to between 2% and 5% of revenue in 2020, the company said in a securities filing.

In 2018, Embraer failed to meet several of its projections, coming up at least US$250 million short of its revenue forecast in its executive jet division and US$200 million short in its defense division.

The company burned through twice as much cash as expected, with final negative cash flow of about US$200 million for 2018. But it hopes to reverse that trend with Boeing money, forecasting positive cash flow of US$1 billion if the sale goes through.

Embraer is finalising a deal to sell 80% of its commercial aviation division, its most profitable unit, to Boeing for US$4.2 billion, which would expand the intense competition between the US planemaker and Airbus SE in smaller passenger jets. – Nampa/Reuters

Market turmoil hits BlackRock's bottom line

BlackRock Inc, the world's largest fund manager, reported a smaller-than expected quarterly profit on Wednesday due to financial market turmoil, but investors celebrated the company's strong sales of relatively low-fee funds.

Sinking performance in late 2018 led investors to pull cash from the company's typically higher fee funds aimed at beating the market but people put record cash in the company's generally lower-cost exchange traded funds (ETFs).

Overall, the company sold US$43.6 billion in stock, bond and other "long-term" investment funds, more than the US$10.6 billion sold the quarter prior.

Still, weaker investment performance and the company's own price cuts hurt. The company collects fees as a percentage of assets under management, which are now just under US$6 trillion.

The S&P 500 fell more than 10% in the three months ended Dec. 31. – Nampa/Reuters

Ford sees weaker-than-expected Q4

Ford Motor Co forecast a weaker-than-expected fourth quarter profit and provided a cloudier 2019 outlook due to tariff costs and uncertainty over Britain's exit from the European Union, sending shares down more than 3.5% on Wednesday.

The No. 2 US automaker, which is restructuring its operations globally, disappointed analysts by not providing a detailed financial forecast for this year, simply saying earnings and revenue could improve. It said, however, that tariffs could erode 2019 earnings by about US$700 million.

This is in contrast to Ford's larger US rival, General Motors Co, which last week forecast higher 2019 profit that far surpassed analyst estimates.

A volatile U.S. trade policy environment and uncertainty around Brexit could impact its performance in 2019, said Ford CEO Bob Shanks.

Ford is the top selling automotive brand in Britain, and a no-deal British exit from the European Union, while unlikely, would be "catastrophic", he said. – Nampa/Reuters

EU would be wrong to block Siemens-Alstom deal

The European Commission would be making a mistake if it blocks the merger between Siemens's rail business and France's Alstom, France's government's spokesman said on Wednesday.

"A rejection by the European Commission would be an economic mistake but also a political failure. It would send the wrong signal to the people of Europe at a time Europe ... has failed to protect European citizens... its companies," government spokesperson Benjamin Griveaux told reporters.

Antitrust commissioner Margrethe Vestager in December voiced doubts over the impact that the Franco-German deal would have on other high-speed train sector. – Nampa/Reuters

Goldman Sachs reports higher trading revenue

Goldman Sachs topped analysts' revenue estimates on Wednesday as stronger equities trading revenue cushioned bond trading losses, making it the only Wall Street bank so far to show growth in fourth-quarter trading revenue.

By contrast, the trading units at JPMorgan Chase and Citigroup took a beating in the fourth quarter, as sharp losses in bond trading outweighed any gains from stocks trading.

At Goldman, which is more sensitive to market fluctuations than its peers, overall trading revenue rose 2% in the three months ended December.

Equities trading revenue jumped 17% to US$1.60 billion, while bond trading revenue slid 18% to US$822 million, far from its peak of more than US$6 billion.

Goldman's net earnings attributable to common shareholders reached US$2.32 billion or US$6.04 per share in the three months ended Dec. 31, compared with a loss of US$2.14 billion or US$5.51 per share a year earlier. – Nampa/Reuters

Marriott looks to reboot loyalty plan after cyber attack

Marriott International Inc will relaunch its loyalty programme under a new brand name, the company said on Wednesday, as it seeks to undo the damage to its name from a massive cyber attack that led to millions of customer records being stolen.

The world's biggest hotel chain said the new brand, Marriott Bonvoy, will replace the existing loyalty programmes’ Marriott Rewards, The Ritz-Carlton Rewards and Starwood Preferred Guest - integrating the three brands into one name, with the launch on Feb. 13.

The company, which owns the Ritz-Carlton and St. Regis luxury hotel brands, disclosed earlier this month that fewer than 383 million customer records were stolen in a cyber attack on its Starwood Hotels reservation system.

Marriott has phased out the Starwood reservations database after it acquired the hotel chain for US$13.6 billion in September 2016. The hack began in 2014, a year before Marriott offered to buy Starwood. – Nampa/Reuters