TheChek News Flow

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Reports Q2 (Nov) earnings of $1.57 per share, $0.08 worse than the Capital IQ Consensus Estimate of $1.65; revenues rose 2.6% year/year to $11.4 bln vs the $11.46 bln consensus. Co raises FY14 EPS growth guidance to 8-14% from 7-13%; remains in line (Approx $6.73-7.10 vs. $7.05 Capital IQ Consensus Estimate).

•Operating income of $827 million, up 15% from $718 million last year

•Operating margin of 7.3%, up from 6.5% the previous year

•Net income of $500 million, up 14% from last year's $438 million.

FedEx Express Segment

•Revenue of $6.84 billion, down slightly from last year's $6.86 billion

•Operating income of $326 million, up 42% from $230 million a year ago

•Operating margin of 4.8%, up from 3.4% the previous year

•Revenue decreased slightly due to lower express freight revenue and lower fuel surcharges, mostly offset by increased base package yields.

FedEx Ground Segment

•Revenue of $2.85 billion, up 10% from last year's $2.59 billion

•Operating income of $424 million, up 3% from $412 million a year ago

•Operating margin of 14.9%, down from 15.9% the previous year

•FedEx Ground average daily volume grew 8% in the second quarter, as growth in both business-to-business and FedEx Home Delivery services was driven by market share gains.

FedEx Freight Segment

•Revenue of $1.43 billion, up 4% from last year's $1.38 billion

•Operating income of $77 million, up 1% from $76 million a year ago

•Operating margin of 5.4%, down from 5.5% the previous year

•Less-than-truckload (LTL) average daily shipments and weight per shipment increased 4% and 2%, respectively.

FY 2014 Outlook

•FedEx is increasing its forecast of full-year earnings per share growth to 8% to 14% above last year's adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. Share repurchases are expected to continue, but the timing will be at the company's discretion. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion.

--> Read Across for Continental,m Valeo & Faurecia

Co issues in-line guidance for FY14 (Sep), sees EPS of $3.15-3.30 vs. $3.30 Capital IQ Consensus Estimate; sees FY14 (Sep) revs of $43.8 bln vs. $43.85 bln Capital IQ Consensus Estimate.

•In fiscal 2014, the company expects global automotive production to increase across all the key geographies, led by an expected 11 percent growth rate in China. European production is expected to grow 2 percent versus 2013, with a North American market outlook of 6 percent growth.

•Based on those market assumptions, Automotive Seating 2014 sales are expected to increase 1 to 2 percent reflecting higher volumes in North America with stabilizing volumes in Europe. The company noted that the growth in its China business is not reflected in the revenue forecast as most of the Chinese business is represented by non-consolidated joint ventures. Automotive Electronics sales are expected to decrease 2.5 to 3 percent, while Interiors sales will be level to down 1.5 percent.

•Mid-term financial outlook (through 2018): Automotive Experience revenues are expected to be flat (excluding non-consolidated China) over the mid-term reflecting the impact of lower capital investments in the business and new financial performance hurdles that will lower the number of new vehicle programs the company will pursue. Margins are expected to expand an average of 40 to 50 basis points annually to approximately 7 percent due to the benefits of vertical integration, operational improvements and commercial disciplines.

•"We are focused on market leadership in our core businesses and driving sustainable performance where we believe we can win...This is reflected in our expectations for a successful 2014 as well as the positive outlook we have provided through 2018. Johnson Controls has a heritage of consistent execution and innovation and today we will outline our plans to leverage that foundation to maximize shareholder value and continue to build our strategic position."

A China Mobile office is seen in downtown Shanghai December 18, 2013.

(Reuters) - China Mobile Ltd said it's still in talks with Apple Inc to sell iPhones amid mounting industry speculation that the pair are about to announce a deal to net the technology giant hundreds of millions of potential new customers.

Xi Guohua, the chairman of the world's largest mobile phone carrier, said on Wednesday morning that his company had no announcement to make on any deal to carry Apple's smartphones. Xi was speaking to reporters on the sidelines of a conference in Guangzhou, a southern city of China.

A tie-up between the pair in the U.S. company's second-largest market after its home turf has been expected for some time and would boost Apple in its global rivalry with South Korea's Samsung Electronics Co Ltd.

The Wall Street Journal reported earlier this month that an announcement would be made "around December 18". Xi's comment on Wednesday that talks were continuing was first reported by local media and later confirmed by company spokesman Ge Qi.

A deal with China Mobile could potentially be worth billions of dollars in revenue for Apple. Up to 759 million potential new China Mobile customers could gain access to iPhones, generating up to $3 billion in extra 2014 revenue - nearly a quarter of Apple's projected revenue growth in its current fiscal year.

But after an expected initial surge, Apple is likely to find itself back in a battle with its main smartphone rival, South Korea's Samsung Electronics Co Ltd.

Xi also told the conference China Mobile aims to sell between 190 to 220 million handsets next year. He said the company plans to step up subsidies to cover the cost of handset sales after spending 27 billion yuan ($4.5 billion) in 2013, according to the company's official account on the Sina Weibo microblogging service.

BOE Warns Further Sterling Gains Could Threaten Recovery

U.K. Unemployment Rate Falls to 7.4%

LONDON—The Bank of England's Monetary Policy Committee Wednesday said any further "substantial" appreciation of sterling could slow the U.K.'s economic recovery, as a surprise decline in the unemployment rate pushed the currency higher.

The minutes from the MPC's December meeting showed that all nine members supported the decision to leave the central bank's benchmark interest rate at a record low of 0.5% and its bond purchases unchanged at £375 billion ($609 billion).

In August, the MPC pledged not to consider an increase in the benchmark rate until the unemployment rate had fallen to 7%, unless there were signs that inflation or expectations of future price rises were picking up strongly.

MPC members agreed there were no such signs, with government efforts to slow a rise in home energy prices likely to bring the annual rate of inflation closer to the BOE's target of 2.0% in the first quarter of next year.

Figures released Wednesday by the Office for National Statistics showed the unemployment rate fell unexpectedly to 7.4% in the three months to October, indicating the central bank may raise its benchmark rate sooner than anticipated.

BOE Gov. Mark Carney conceded in November that the unemployment rate was falling more quickly than the committee members had expected when they initiated forward guidance, and could hit the 7% threshold by mid-2015. The drop reported Wednesday, however, suggests that rate could now be reached even sooner.

The ONS said the unemployment rate fell to the lowest level since the three months to April 2009, from 7.6% in the three months to September. The total number of unemployed people fell by 99,000 in the three months to October, the biggest drop since August 2000. That pushed the unemployment level down to 2.39 million, the lowest total since May 2009.

The data came as a surprise, as economists had forecast no change from the September rate of 7.6%.

In addition, the more timely claimant count measure of the number of Britons claiming jobless benefit fell for a 13th consecutive month in November, indicating that the unemployment rate could continue to decline.

In response to the surprise fall in the unemployment rate, sterling appreciated on the currency markets, rising to $1.6350 from $1.6315 before the data were published.

The MPC said the most recent economic data points to a "burgeoning recovery," but warned that might be vulnerable to further gains in the pound, which has already risen 2% over the previous month and 9% since March.

"Any further substantial appreciation of sterling would pose additional risks to the balance of demand growth and to the recovery," the MPC said.

The U.K. economy grew at the fastest rate in more than three years, outpacing its counterparts, in the three months to September, and the BOE forecasts a growth rate of 0.9% in the final three months of 2013, according to the minutes. The U.K.'s strong performance has led investors and traders to believe the BOE will begin raising its benchmark interest rate well before the European Central Bank does the same.

The MPC has long believed that for a recovery to be sustained, exports will have to play a bigger role. But with demand from the euro zone still weak, an appreciating currency would make that less likely.

Recent data indicates that the U.K.'s recovery is being driven by consumer spending, with business investment yet to pick up. According to the minutes, the MPC worried that without an increase in productivity and real incomes, consumer spending may weaken. The ONS data showed that while the jobs market is showing increasing signs of recovery, personal earnings growth remains subdued and held at the record low rate of 0.8% in the three months to October, unchanged from September and August.

"There had been some signs of softness in recent consumer spending data and confidence surveys," the minutes said.

The minutes revealed that MPC members continued to be puzzled by the absence of a rise in productivity as the economy recovered, but agreed it is too early to conclude that rising demand will generate inflationary pressures.

"It was…too soon to draw firm conclusions on the responsiveness of effective supply to stronger demand," the minutes said.

Much celebrating (and some amazement) about the stellar stock market debut of Moncler on Monday, with some analysts attributing the excitement over buying into the brand to the idea that it could be “ the next Burberry”. But is that true, or wildly optimistic? I can see where they are coming from, but am not necessarily convinced.

The main parallel, of course, is that both brands are built on essentially one coat, which they like to call the “iconic” coat: the trench for Burberry and the puffa jacket for Moncler. It allows them to paint themselves as “lifestyle” brands, the coat representing outdoorsy, athletic, exploratory.

Both also have historic roots, though I tend to think Burberry’s story of the trench, as worn by British soldiers in the first world war, Edward Shackleton and various royals, trumps Moncler’s ski jacket, which dates from the 1950s, when it outfitted various Alpine expeditions, and the 1968 Grenoble Winter Olympics, for which Moncler designed the French national team’s kit. These brands have proven that by treating said iconic item imaginatively – making evening trenches/puffas, lace trenches/puffas and so on – they can sell a lot more than anyone would ever have imagined.

And both have triangular structures, wherein a luxury pinnacle (Burberry Prorsum and Moncler Gamme Rouge – Autumn/Winter show pictured above left – and Gamme Bleu), which involves clothes shown on the fashion calendar, is supported by much broader sales of more accessible clothing. In Burberry’s case, Burberry London and Burberry Brit, and for Moncler, the basic skiwear line. But there’s also no question that Burberry has been significantly more successful at convincing both consumers and critics of the validity of its fashion offering.

Moncler’s shows, which are half fashion and half performance art, occasionally involving snow and wolves and scantily clad young men working out, are lots of fun to watch, but don’t really set, or even speak to, any trends. While Burberry has a successful handbag offering, Moncler has no bag or shoe lines to speak of – bags and shoes being, as we know, a crucial route to fashion profits (though it is branching out into sunglasses and luggage). And that’s before the beauty and perfume that Burberry has to round out its brand.

Even more crucially, Burberry has that key element: a name designer/frontman (and soon to be CEO) in the form of Christopher Bailey, who serves as a personal entry point to the brand. And Moncler, while it has Giambattista Valli designing Gamme Rouge and Thom Browne on Gamme Bleu, has no face to attach to its identity other than that of CEO Remo Ruffini, which is not the same thing.

All of which means that if it is to be the next Burberry, especially in markets such as China and the US, where brand-watchers see opportunity, Moncler’s got some work to do, especially on the clothes and the entry-point accessories. After all, there is a limit to how many puffa jackets one needs, no matter how varied; ditto winter-ready gloves and shoes. It needs to demonstrate that it can create products for the summer months, too. It needs a designer to stand up and be counted. (Young British designers, take note! Opportunity calls!) And as another shortcut to personality, it could use, much as it pains me to say, some “official” celebrity ambassadors (not just celebrities who wear it, of which Moncler has many).

Also, probably, to sponsor the Met Ball. Can’t you just see it now?