>>> Airbus presses A320 suppliers for 10 pct price cut-sources - RTRS

-Airbus presses A320 suppliers for 10 pct price cut-sources - RTRS


25-SEP-2015 16:02:35

By Tim Hepher

PARIS, Sept 25 (Reuters) - European planemaker Airbus AIR.PA is pressing suppliers on its A320 jet programme to slash prices by at least 10 percent by 2019 in order to make the company's main cash cow more competitive, three people familiar with the matter said.

The enhanced efficiency plans echo rival Boeing's BA.N cost-cutting Partner for Success initiative, which has redrawn the relationship between suppliers and the world's biggest planemaker as the industry gears up for record output.

Airbus' cuts are just one part of an internal efficiency programme called SCOPe+ that also seeks savings through a close look at procurement, and the way planes are developed and sold.

Airbus has told suppliers that the prospect of increased volumes and a longer lifespan for its best-selling jet, which has enjoyed a surge in sales due to an important makeover, means it is time to "review all options" in its supply chain.

This includes a fresh look at the company's procurement strategy, that could include extra use of twin sourcing for crucial parts, a strategy designed both to reduce costs and to reduce the risks of shortfalls as production increases.

Airbus is also looking at further shifting its business model to allow airlines less choice over accessories that they previously ordered direct, known as Buyer Furnished Equipment.

Also involved is a longer-term effort to weave manufacturing costs into the design process to prevent unintended overruns in costs on the factory floor, a tool known as "Redesign to Cost".

SCOPe+ aims to achieve a new baseline for supplier costs in 2019 that is "at least 10 percent" lower compared with 2015, according to suppliers and an Airbus document seen by Reuters.

Though Airbus has confirmed the existence of the SCOPe+ initiative, its details have not been publicly disclosed.

The initiative "is part of Airbus’ long-term commitment towards boosting competitiveness through operational efficiency and continuous improvement," a spokeswoman said.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: INAP -20.7%, PIR -6.2%, BBRY -3.8%, SQNM -2.9%, BHLB -0.7%, (also announced the promotion of Richard Marotta to President of Berkshire Bank and Sean Gray to Chief Operating Officer of the Bank), SWFT -0.7%, BBBY -0.6%, FINL -0.5%

Select metals/mining stocks trading lower: EGO -3.4%, NEM -2.3%, GDX -2.2%, GG -1.9%, RGLD -1.4%, BHP -0.9%

Other news: EMES -17.7% (withdrew its previously announced distribution guidance for 2015 due to 'difficult' market conditions in its Sand and Fuel segments), ABGB -9.9% (cont volatility in name pre-mkt), PETX -8.5% (provided product update; co does not believe AT-004 or AT-005 in their current, first-generation forms will capture the desired lymphoma market opportunity),CTIC -3.9% (announced a 10 mln share registered direct offering at $1.57 per share), QTWO -3.5% (prices its offering of ~3.8 mln shares by it and its selling shareholders at $25.50/share), ABX -2.3% (reports that that restrictions on processing activities at its Veladero mine in San Juan province of Argentina, have been lifted), SLW -2.2% (received notices of reassessment from the Canada Revenue Agency relating to its 2005 to 2010 taxation years)

Analyst comments: N/
A

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: NKE +8.5%, JBL +7.4%, AEHR +6.2%, (thinly traded), CTAS +1%

M&A news: AEG +3.9% ( to acquire Mercer HR Services' US defined contribution administration book of business ), RAI +2.3% (Bloomberg reporting Japan Tobacco is in talks to acquire ~$5 bln of RAI's assets)

Select Semi related names showing strength: ARMH +2.9%, ASML +2.8%, STM +2.6%, MU +1.7%

Other news: BLPH +76.1% (positive data from an interim analysis of its Phase 2 long-term extension study of INOpulse for the treatment of Pulmonary Arterial Hypertension; receives SPA for its phase 3 PAH program), VSTM +11.9% (reports a study published in the journal Cell, which highlights the potential of FAK inhibition to enable the body's immune system to fight cancer),MRVL +5.8% (announces significant restructuring of mobile platform business ), CTCM +5.8% (divests 75% interest in operating business for $200 mln; plans to return cash to shareholders), ACI +5% (cont strength), BTU +4.3% (cont strength), WMIH +4.1% (received approval to list on Nasdaq effective September 28), SUNE +3.9% (rebounding after recent sell off), EXEL+3.9% (confirms European CHMP positive opinion for Cobimetinib in combination with Vemurafenib for the treatment of advanced melanoma), ADRO +3.7% (to acquire BioNovion for EUR 29 mln), HZNP +3.2% (confirms it received a Positive CHMP Opinion for RAVICTI Oral Liquid for the Treatment of Urea Cycle Disorders in Patients Greater Than Two Months of Age), UA+2.6% (on NKE results), OPK +2.6% (following CEO appearance on Mad Money), FCX +2.6% (cont strength from yesterday), SPWH +2.5% (prices its secondary offering of 6.25 mln shares of common stock at $12.25/share on behalf of selling stockholders), GPRO +2.2% (trading higher with futures pre-mkt), CNHI +2.1% (rebounding after yesterday's weakness), NVS +2.1% (receives CHMP recommendation for Entresto for EU approval), NVO +2.1% (reports second phase 3a trial with semaglutide in people with type 2 diabetes achieved its objective), SNY +2% (trading higher with peers), NFLX +1.9% (trading higher with futures pre-mkt), BIIB +1.9% (Biogen and Sobi confirm they received a positive recommendation from the CHMP for the marketing authorization of ELOCTA), GSK +1.4% (trading higher with peers), CELG +1.4% (receives positive CHMP opinion as new treatment for elderly patients with acute myeloid leukaemia), GILD +1.4% (European CHMP Adopts Positive Opinion for Gilead's Single Tablet Regimen Genvoya for the Treatment of HIV), AZN +1.2% (trading higher with peers), AAPL +1.2% (iPhone 6 released today), AMGN +1% (confirms the CHMP adopted positive opinions recommending marketing authorization for BLINCYTO and Kyprolis in combination with lenalidomide and dexamethasone)

Analyst comments: ARWR +6.1% (target raised to $20 from $12 at Piper Jaffray), CYBR +3.9% (upgraded to Buy from Neutral at Nomura), ARMH +3.4% (initiated with a Buy at Stifel), ERIC +2.3% (upgraded to Buy at Liberum), URI +2.1% (initiated with an Overweight at Barclays; upgraded to Neutral from Underperform at BofA/Merrill), ALV +1.8% (upgraded to Sector Perform at RBC Capital Mkts), INTC +1.5% (upgraded to Mkt Perform from Mkt Underperform at JMP Securities), NVRO +1.4% (initiated with an Outperform at BMO Capital), KO +1.1% (reinstated with a Buy at Deutsche Bank
)

>>> BlackBerry conference call update

BlackBerry conference call update

  • Shipped new version of BB10 with new anti-theft and security features; company has 2 new releases on schedule
  • Expects $160 mln in GAAP revenue from Good Technology in the first year; targeting 30% cost reductions at Good Technology
  • Co on track to reach $500 mln services and software revenue for the FY
  • Expects to maintain cash balance of $2.5 bln
  • Increases current buyback program by 15 mln shares.

>>> Atlantia’s ADR stake sale terms not yet showed to Adia

Atlantia’s ADR stake sale terms not yet showed to Adia
Atlantia [BIT:ATL] is expected to inform Abu Dhabi Investment Authority (Adia) about the terms agreed with Gingko Tree Investment on the sale of a 15% stake in Aeroporti di Roma (ADR) only after the transaction with the Chinese investment vehicle is finalized, it is understood.

Atlantia is selling a 30% stake in ADR. A first 15% stake is expected to be sold to Gingko Tree investment while a further 15% stake has been reserved to Adia, provided it can match price and conditions agreed with the other 15% buyer, it was noted.

But considering Adia has not been briefed so far about what these conditions are it might have some room for negotiation, it was said. For this reason, talks with the sovereign fund were said to be potentially taking some time.

Atlantia was described as being particularly keen to have commitments from investors on supporting ADR’s inorganic expansion and investments plans.

Meanwhile, closing of the 15% stake sale to Gingko Tree could be a matter of days, this news service has learnt .

The parties are just finalising some legal aspects of the contract but main negotiating points have been agreed upon, it was added. No firm deadline was said to have been fixed to reach an agreement.

Gingko Tree was said to have become the preferred bidder as it was the only potential acquirer able to meet Atlantia’s minimum price expectations. Atlantia had placed around a EUR 4bn price tag on the Rome airports operator, valuing the 30% stake at around EUR 1.2bn, as previously reported.

Floor price for the 15% stake was said to be around half that amount.

ADR manages the two main airports of the Italian capital, Fiumicino and Ciampino.

Atlantia could not immediately be reached for comment.

Reuter - Daimler says does not use defeat devices

German carmaker Daimler said it did not manipulate emissions data for diesel engines, after Volkswagen admitted to having deceived U.S. regulators about how much its diesel cars pollute.

A spokesman for Daimler said on Thursday the maker of Mercedes-Benz cars did not use so-called defeat devices employed by Volkswagen and complied with rules on nitrogen oxide emissions around the world.

German trade magazine Auto Bild earlier reported fellow carmaker BMW's BMW X3 xDrive 20d exceeded the Euro 6 limits on nitrogen oxide emissions more than 11-fold in road tests by the International Council on Clean Transportation (ICCT), sending shares in BMW and Daimler lower.

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BMW has denied the report.