FT : Bank of America registers double-digit revenue growth

Bank of America registers double-digit revenue growth
US lender boosted by jumps in interest income and fees

Bank of America reported double-digit revenue growth on Thursday as big jumps in interest income and fees helped it to outperform megabank peers.

Though the largest US lenders have been able to report higher profits this year due to lower credit costs and strength in fee businesses like trading and investment banking, nearly all of them have struggled to increase the revenue they make from core lending due to rock bottom interest rates and a slowdown in borrowing.

Bank of America, the second-largest US lender, however, reported revenue jumped 12 per cent to $22.8bn.

It was able to increase net interest income by 10 per cent during the quarter despite a 3 per cent drop in average loan balances, as it was more aggressive than peers in redeploying excess liquidity into investments.

Wells Fargo, which also released quarterly earnings on Thursday, reported a 2 per cent drop in revenue. JPMorgan Chase’s revenue inched up 1 per cent.

Overall the Charlotte-based lender reported earnings of $7.7bn, or 85 cents per share, compared to earnings of $4.9bn, or 51 cents per share, a year earlier.

Profits were boosted by the bank; ’s release of $1.1bn in loan loss reserves of — due to an improving economic outlook meaning fewer defaults — and a strong performance by its equity trading division.

Analysts polled by FactSet had forecast earnings of 71 cents per share on revenue of $21.7bn.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

  • DPZ -4.7%, ETWO -4%, CMC -3%, KIDS -2.4% (guides Q3 revs slightly below consensus)

Other news:

  • KOS -3.7% (announces 37.5 share offering; acquires additional Ghana interests for $550 mln)
  • SRPT -0.6% (prices offering of 6172840 shares of its common stock at $81.00 per share)
  • GRPN -0.5% (CFO resigns)

Analyst comments:

  • CAR -4.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • BBBY -2.4% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • CTS -1.4% (downgraded to Market Perform from Outperform at Cowen)
  • ESPR -1.4% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • AIRG -0.8% (downgraded to Market Perform from Outperform at Cowen )
  • ACAD -0.7% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
  • BURL -0.7% (downgraded to Hold from Buy at Loop Capital)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:

  • TSM +3.8%, UNH +2.7%, BAC +2.2%, WBA +1.8%, WFC +1.7%, MS +1.7%

Other news:

  • NRXP +40.7% (announces the publication of results from trial of aviptadil for the treatment of respiratory failure in patients with Critical COVID-19)
  • GMED +8.7% (files patent infringement lawsuit against Life Spine)
  • STRL +6.8% (wins $40.4 mln aviation project at Utah airport)
  • WDFC +4.8% (approves new $75 mln share repurchase authorization)
  • HYZN +4.4% (expects capacity at its European facility to increase to up to 1000 trucks per year in 2022)
  • BCLI +4.1% (Phase 2 Clinical Trial Data of NurOwn in Progressive MS Will Be Presented at the 37th Congress of the European Committee for Treatment and Research in Multiple Sclerosis)
  • VET +2.7% (achieves certification under the EO100 standard for three natural gas sites in Canada)
  • SVM +2.4% (to acquire Kaunping silver-lead-zinc-gold project in China for $13.5 mln)
  • FBIO +2.3% (reports clinical data for CUTX-101 at American Academy of Pediatrics National Conference & Exhibition)
  • OXY +2% (to sell interests in Ghana offshore fields for $750 mln)
  • TPTX +1.7% (announces collaboration with EQRx)
  • NGD +1.5% (reports operational results for Q3)
  • FTI +1.4% (completes acquisition of Magma Global)
  • WGO +1.1% (authorizes $200 mln share repurchase authorization)
  • MTRX +1% (awarded multiple contracts worth $50 mln for electrical infrastructure work)
  • GOLD +1% (set to achieve 2021 production targets)
  • LULU +0.9% (gets into footwear with a new design according to Business Insider)
  • CNK +0.9% (names new CFO)

Analyst comments:

  • DK +5.3% (upgraded to Buy from Neutral at Goldman)
  • E +1.5% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)

>>> US After Hours Summary: Quiet after hours; WDFC +2.4% on share repurchase au

After Hours Summary: Quiet after hours; WDFC +2.4% on share repurchase authorization; HYZN +6.7% trades upon capacity increase; GRPN down -1.4% as CFO resigns

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: HYZN +6.7% (expects capacity at its European facility to increase to up to 1,000 trucks per year in 2022), WDFC +2.4% (approves new $75 mln share repurchase authorization), SVM +1.7% (to acquire Kaunping silver-lead-zinc-gold project in China for $13.5 mln), NGD +1.5% (reports operational results for Q3), TPTX +1% (announces collaboration with EQRx), A +1% (receives companion diagnostic approval from FDA for Ki-67 IHC MIB-1 in high-risk early breast cancer), WGO +0.9% (authorizes $200 mln share repurchase authorization), GMED +0.1% (files patent infringement lawsuit against Life Spine)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ETWO -2.5%, KIDS -2.4% (guides Q3 revs slightly below consensus)

Companies trading lower in after hours in reaction to news: KOS -4.9% (announces 37.5 share offering; acquires additional Ghana interests for $550 mln), GRPN -1.4% (CFO resigns), RMBS -0.7% (CFO to resign; co reaffirms previously issued guidance for Q3), CNHI -0.1% (to temporarily close several manufacturing facilities due to shortages of core components)

WSJ : Netflix Employee Group Calls for Walkout Amid Tensions Over Dave Chappelle

Netflix Employee Group Calls for Walkout Amid Tensions Over Dave Chappelle Show
Streaming giant stands by special that some staff said was offensive to transgender community; ‘There will always be content on Netflix some people believe is harmful’

Tensions are rising inside Netflix Inc. NFLX 0.77% over a Dave Chappelle stand-up special that some employees said was offensive to the transgender community, the latest clash between the streaming giant’s radical-candor culture and its embrace of creative freedom.

A Netflix transgender-employee group is encouraging staff to stage a walkout next Wednesday to protest Co-Chief Executive and Chief Content Officer Ted Sarandos’s recent defense of Mr. Chappelle’s special. The plans for a walkout were earlier reported by the Verge and confirmed by Netflix.

In “The Closer,” which was released last week and is currently among the most-watched programs on the service in the U.S., Mr. Chappelle said “gender is a fact” and said he identified as a “TERF,” an acronym that stands for “trans-exclusionary radical feminist.” Mr. Chappelle said he isn’t a favorite of the trans community, then added, “Someone told me, ‘They after you, Dave,’ and I said, ‘One they or many theys?’ ”

A day after the special’s release, Terra Field, a Netflix software engineer who is transgender, criticized the show on Twitter, saying Mr. Chappelle attacked “the trans community, and the very validity of transness.” The tweets went viral and led to a backlash inside the streaming giant over the special. Groups including LGBTQ-rights advocacy group GLAAD spoke up against the show, and the National Black Justice Coalition asked for Netflix to take the special off its platform.

On Monday, Mr. Sarandos issued a companywide email defending the special and saying the service wouldn’t pull it down. Mr. Sarandos said the company works hard to support creative freedom and this means “there will always be content on Netflix some people believe is harmful.” He also said he didn’t think the special incites hate or violence. Mr. Chappelle has a longstanding relationship with Netflix, having made multiple specials for the streaming service. In the end credits of “The Closer,” there is a picture of Messrs. Chappelle and Sarandos laughing together.

Addressing the criticism during an event in Hollywood last week, Mr. Chappelle said, “If this is what being canceled is like, I love it.”

Netflix said Ms. Field wasn’t punished for her tweets, but she and two other employees got into hot water at Netflix when they attended an online meeting of senior Netflix executives last week without permission.

The trio was suspended but promptly reinstated, according to Netflix. Ms. Field said Netflix told her it appeared there was no ill intent on her part and that she was unaware that the meeting was only for senior staffers at the company, according to a tweet from Ms. Field. Netflix confirmed that account.

Netflix stands in contrast to traditional studios and networks, where it is rare for employees to question content decisions—much less take to social media to negatively criticize those choices. At Netflix, radical candor and transparency are encouraged within the company’s hallways and meetings.

Among programmers, Netflix has stood out when it comes to carrying shows featuring transgender performers, including “Sense8,” “Orange Is the New Black,” “Sex Education” and “Control Z.” It also has a development deal with transgender producer Janet Mock.

This isn’t the first time a Chappelle special has caused anger inside Netflix. His previous stand-up special, “Sticks and Stones,” which also included commentary on the LGBTQ community, was found by some inside the company as offensive, according to people familiar with the matter.

Last year, a sex-filled movie called “365 Days” that was popular on the platform made some inside the company uncomfortable, as did the movie “Cuties,” which was accused of sexually exploiting young girls, the people said.

WSJ : Publicis Raises Full-Year Revenue Forecast After Third-Quarter Growth

Publicis Raises Full-Year Revenue Forecast After Third-Quarter Growth
Paris-based ad company reports 11% increase in quarterly organic revenue and expects 2021 growth of 8.5% to 9%

Publicis Groupe SA boosted its outlook for 2021 organic revenue growth thanks to strong demand for digital marketing services in the third quarter.

The Paris-based advertising company, which owns agencies such as Saatchi & Saatchi, Leo Burnett and Spark Foundry, said it expects organic revenue to grow 8.5% to 9% in 2021 from the previous year, up from an earlier forecast of 7% growth. Organic revenue growth is a common metric that strips out the effects of currency fluctuations, acquisitions and disposals.

Publicis nudged up its projected operating margin to slightly above 17% from an even 17%.

The company reported an 11% increase in organic growth for the third quarter. Chief Executive Arthur Sadoun said in a statement that the Publicis has recovered from the impact of the Covid-19 pandemic, noting that organic revenue in the third quarter was 5% higher than in the comparable period in 2019.

Third-quarter organic revenue was up from a year earlier by 11% in the U.S., 13% in the Asia-Pacific region and 10% in Europe. When compared with two years earlier, before the pandemic, third-quarter organic revenue was up by 8% in the U.S. and 2% in the Asia-Pacific region, while remaining flat in Europe.

The company said its data and technology capabilities in the third quarter benefited from clients’ investment in digital media, commerce and direct-to-consumer efforts, especially in the U.S.

In the U.S., third-quarter organic revenue grew 13% at marketing agency Epsilon and 20% at technology and digital marketing firm Publicis Sapient.

The results show continued momentum for Publicis as well as the marketing and advertising industry, which faced disruption during the pandemic as clients first paused spending, then had to navigate fluctuating conditions.

Most brands have resumed their marketing activities, albeit often with more emphasis on digital media and data and analytics to better understand and reach consumers.

For the second quarter, Publicis had reported a 17% increase in organic revenue.

>>> Stoxx 600 Pre-Market Indications

  • Symrise (SY1 TH) +1.8%
    • Arkema, BASF Among Buys as Jefferies Restarts Chemicals Coverage
  • Vodafone (VODI TH) +1.7%
  • Nibe (NJB TH) +1.6%
  • HeidelbergCement (HEI TH) +1.2%
  • ArcelorMittal (ARRD TH) +1.2%
    • ArcelorMittal Raised to Outperform at Credit Suisse on Valuation
  • Telenor (TEQ TH) +1.2%
  • Bank of Ireland (BIRG TH) +1.1%
  • Sartorius (SRT3 TH) +1.1%
  • Akzo Nobel (AKU1 TH) -0.6%
    • Arkema, BASF Among Buys as Jefferies Restarts Chemicals Coverage
  • Michelin (MCH TH) -0.7%
  • Siemens Gamesa (GTQ1 TH) -0.9%
  • RELX (RDEB TH) -1.3%
  • Zalando (ZAL TH) -1.4%

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

  • STIM -23.4% (lowers Q3 guidance, issues downside FY21 guidance), VOXX -6.8%, CTSO -4.2% (issues downside Q3 revenue guidance; also receives full FDA IDE approval to begin US STAR-D trial)

Other news:

  • SRPT -6.4% (announces $500 mln stock offering; also provides Q3 product revenue guidance)
  • NAPA -6.2% (stock offering)
  • CRSP -6% (announces positive results from Phase 1 CARBON Trial of CTX110)
  • EFC -3.9% (prices offering of 5 mln shares of common stock for gross proceeds of $91.3 mln)
  • WFG -3.2% (to acquire Angelina Forest Products lumber mill for $300 mln)
  • SWKS -2.6% (Apple reportedly to cut production on iPhone production targets)
  • SYBX -2.5% (announces publication of preclinical research demonstrating novel application of Synthetic Biotic platform)
  • RNR -2.2% (estimates Q3 catastrophic losses at $725 mln)
  • CME -2.1% (reports monthly ADV)
  • SBRA -2% (prices offering 6.8 mln shares of common stock for gross proceeds of $98.9 mln)
  • PYCR -2% (stock offering)
  • SNCY -1.9% (stock offering)
  • QRVO -1.1% (Apple reportedly to cut production on iPhone production targets)
  • CRUS -1% (Apple reportedly to cut production on iPhone production targets)
  • AVGO -0.9% (Apple reportedly to cut production on iPhone production targets)

Analyst comments:

  • BRBR -1.4% (downgraded to Hold from Buy at Truist)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:

  • SGH +12.8% SAP +5.3% PNFP +2% BLK +1.5% JPM +0.6%

Other news:

  • RVNC +10.1% (continues to anticipate FDA approval of DaxibotulinumtoxinA this year)
  • ALYA +7.3% (awarded a 3-year contract to accompany a major Quebec government ministry in accelerating its digital transformation agenda)
  • VMEO +6.7% (provides metrics for Sept; subscribers increased 14% yr/yr in the month)
  • VST +6.5% (announces new $2 bln share repurchase program)
  • AVXL +3.5% (Independent Data Safety Monitoring Board for the Company's Phase 2b/3 Alzheimer's disease study of its investigational compound ANAVEX 2-73 has completed its recent pre-planned review of the preliminary Phase 2b/3 study data)
  • CMCL +2.8% (reports record gold production in Q3)
  • BCYC +2.5% (prices offering of 3240741 ADSs at $54.00 per ADS)
  • FIXX +2% (announces pheEDIT Phase 1 clinical trial for HMI-103)
  • CRS +1.7% (names new Chairman)
  • QCOM +1.7% (approves new $10 bln stock repurchase authorization)
  • PEI +1.7% (reports continued strong metrics in traffic sales and collections)
  • ESTC +1.5% (expands integrations with Google Cloud)
  • DCT +1.4% (announces partnership with Safekeep)
  • NXPI +1.2% (names new CFO)
  • ANGI +1.1% (reports monthly metrics for Sep)
  • TEVA +1% (reports new safety data on treatment with COPAXONE)

Analyst comments:

  • PLUG +6.4% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • WEX +1.3% (upgraded to Buy from Neutral at BofA Securities)

(MAKOR) Vivendi - Update on the Buy-back program

Vivendi announced on September 20 that its board had approved an increase to its buy-back program up to 4.2% of its capital (on top of the 2.07% already owned).
Since then, Vivendi has been aggressively buying its own shares. The company has bought back 34.4m shares since UMG’s spin-off or 3.1% of its capital. They currently have 57.3m treasury shares or 5.2% of its capital.
When Vivendi will be done with the current buy-back program, they will have 67.3m treasury shares or 6.1% of its capital (an additional 9.9m shares or 0.9% of its capital still to be bought back)
In addition, the AGM approved a maximum buy-back of 10% of Vivendi’s capital. Hence, once Vivendi is done with the current buy-back program, they will most certainly initiate a new one for an additional 43.6m shares or 3.9% of its capital.
Vivendi has paid an average price of €10.87 and has bought back on average 10% of the volume. However, when excluding the 3 days following UMG’s spin-off, Vivendi has bought back on average 15% of the volume.
We believe the buy-back program has been executed as a VWAP order. Indeed, the average price paid matches exactly the average VWAP of €10.87 over the period.
We got confirmation from Vivendi that UMG’s spin-off is legally and fiscally considered as a distribution in kind and hence not a spin-off. As a result, the buy-back maximum price does not need to be adjusted and is still €29.
However, we note that the maximum price paid by Vivendi is €11.0. The company did not buy any shares on October 08th while the price was over €11.0 the whole day.
If Vivendi keeps on buying 15% of the volume (assuming an average daily traded volume of 17.2m shares or the average in the past 10 days), Vivendi will have exhausted its buy-back capacity by November 09th.
Any further buy-back over 10% of the capital would require the cancellation of some treasury shares but trigger Bollore passively crossing the 30% threshold (as he currently owns 29.7% of Vivendi’s voting rights) and hence launching a mandatory offer as he committed.