2024-10-30 20:45

Robinhood Q3 revenue also misses expectations Analyst models overlooked incentives - CFO $27 mln hit to revenue from incentives Oct 30 (Reuters) - Retail trading platform Robinhood's (HOOD.O) , opens new tab third-quarter earnings fell short of expectations on Wednesday, a miss it attributed to an accounting quirk related to incentives that the company said Wall Street analysts had overlooked, sending its shares down 11% after the bell. Chief Financial Officer Jason Warnick said on a media call that the difference between Street expectations and Robinhood's earnings were due to analyst models not factoring in "contra revenue" on the brokerage's match promotions. Robinhood's third-quarter net revenue was reduced by $27 million due to the 1%-3% matches it pays to customers to incentivize them to shift their assets on to the brokerage from other platforms. "The match promotion dollars are recorded as an offset to revenue, and it looks like analysts just were not factoring that in enough for the quarter." Warnick said, adding that contra revenue rose $14 million sequentially. It is expected to grow sequentially by a similar amount in the fourth quarter and then grow much slower in 2025, Warnick told analysts. The contra revenue jump was mostly driven by the 1% gold deposit boost, which will be winded down in November, Warnick said. Meanwhile, Robinhood saw a surge in trading volumes as heightened market activity and volatility sent mom-and-pop investors into the online commission-free brokerage . Retail trading has recovered since bitcoin and U.S. stocks hit all-time highs earlier this year, buoyed by hopes of a soft landing for the U.S. economy. Crypto markets have also got a shot in the arm this year after the U.S. securities regulator approved exchange-traded funds to track spot prices of bitcoin and ether, boosting sentiment towards the industry. Robinhood's equity and crypto trading volumes jumped 65% and 112% in the quarter, respectively. Options contracts traded surged 47%. In October, Robinhood added futures and index options trading features to its mobile app and launched its long-awaited desktop platform, as it looks to compete with traditional brokerages catering to seasoned investors. Robinhood's transaction-based revenue surged 72% to $319 million in the quarter, primarily driven by strength in options and cryptocurrencies. Its net deposits fell to $10 billion from $13.2 billion sequentially. Running Point Capital's chief investment officer, Michael Ashley Schulman, said the sharp decline in net deposits may affect Robinhood's margins. Robinhood's profit was 17 cents per share, missing expectations of 18 cents per share, according to estimates compiled by LSEG. Net revenue jumped 36% to $637 million in the quarter, but missed expectations of $657.9 million. Sign up here. https://www.reuters.com/business/finance/robinhood-reports-quarterly-profit-retail-trading-strength-2024-10-30/

2024-10-30 20:38

Oct 30 (Reuters) - Fertilizer maker CF Industries (CF.N) , opens new tab on Wednesday reported a 68% rise in third-quarter profit, aided by strong prices for nitrogen fertilizers. Benchmark ammonia prices reached to about $530 per ton in September from $410 per ton at the end of June, aided by production shut-ins in Trinidad and Egypt. Prices of natural gas, a key feedstock for nitrogen fertilizers, remained subdued during much of the quarter, helping CF Industries' margins. During the third quarter, the average cost of natural gas was $2.10 per million British thermal unit (mmbtu), compared to $2.54 per mmbtu last year, the company said. The company's ammonia production volumes rose 8.7% during the third quarter, helped by its acquisition of the Waggaman facility in Louisiana. CF Industries, which makes ammonia and urea, posted an adjusted third-quarter core profit of $511 million, higher than Wall Street estimates of $509 million, according to data compiled by LSEG. "Global production is expected to remain constrained by continued challenges related to cost and availability of natural gas," the company said. It also said that urea exports from Russia have increased by 5% in 2024, aided by a rise in production capacity and willingness of countries like the United States and Brazil to purchase Russian fertilizers. The United States does not impose sanctions directly on Russian fertilizer, which is important to global food supplies and prices. The company also said that exports from China, one of the biggest fertilizer producers, have been down 91% compared to last year due to export curbs. The Northbrook, Illinois-based company reported net earnings of $276 million, or $1.55 per share, for the three months ended Sept. 30, compared with $164 million, or 85 cents per share, last year. Sign up here. https://www.reuters.com/markets/commodities/cf-industries-posts-higher-quarterly-profit-2024-10-30/

2024-10-30 20:28

Oct 30 (Reuters) - Starbucks (SBUX.O) , opens new tab CEO Brian Niccol on Wednesday told investors that he plans to overhaul Starbucks U.S. locations, adding more comfortable seating, ceramic mugs and a coffee-condiment bar, with customer wait times of less than four minutes. Faced with falling demand for its pricey beverages in the key U.S. and China markets as well as a slide in its share price, Starbucks' investors are counting on the new CEO to steer the company back to growth. The company last week suspended its forecast for its 2025 fiscal year. "Our financial results were very disappointing, and it is clear we need to fundamentally change our strategy to win back customers and return to growth," Niccol said. The CEO said he wanted to make it "easier for our customers to get a cup of coffee," and that the company would aim to reduce wait times to less than four minutes. To help with that, and to make prices clear, Niccol also said the company would be simplifying its menu. Niccol said staffing levels might increase, addressing a complaint that has often been voiced by baristas and by Starbucks Workers United, which is seeking to unionize Starbucks workers. "I want to make sure that the teams are staffed to win every transaction," he said. Investors are hoping that Niccol, an industry veteran and former Chipotle Mexican Grill (CMG.N) , opens new tab head, will simplify the company's leadership and operating structure, and reinvigorate the coffee-house culture at Starbucks' U.S. stores. Niccol said ceramic mugs would be offered to customers who are staying in the café, and that actions would be taken over the coming months to separate pick-up orders from sit-down orders. He said "common sense guardrails" would be placed on mobile ordering. Shares of the company have risen about 26% since Niccol replaced Laxman Narasimhan as CEO in a surprise announcement in August. They were little changed in extended trading on Wednesday. Starbucks posted a 7% drop in global comparable sales for the fourth quarter on Wednesday, after reporting preliminary results for the quarter ended Sept. 29 last week. Comparable transactions, which reflect traffic at its stores, fell for the third straight quarter in North America. The Seattle-based company's strategy to drive demand through promotions and improved loyalty program offers has fallen flat in the face of muted spending from cost-conscious consumers. Niccol acknowledged on Wednesday that the company had focused marketing too narrowly on rewards members. Growth in its loyalty program was tepid in the fourth quarter, with 90-day active members in the U.S. remaining flat sequentially. That compares with a 3% sequential rise reported in the third quarter. Starbucks is also facing an uphill battle in China, where it is dealing with a choppy macroeconomic recovery and stiff competition from local brands. Comparable sales in China, the company's second-largest market after the U.S., declined for three straight quarters, falling 14% in the fourth quarter. International comparable sales fell 9% in the fourth quarter, wider than a 6.5% drop expected by analysts, as per data compiled by LSEG. The company's net income fell to $909.3 million, or 80 cents per share, from $1.22 billion, or $1.06 per share, a year earlier in the fourth quarter ended Sept 29. Some menu simplifications are coming soon. A company spokesperson on Wednesday confirmed the chain will on Nov. 7 be removing from the menu its olive-oil-infused drinks, which were backed by former Starbucks CEO Howard Schultz, though the decision was made before Niccol became CEO. Sign up here. https://www.reuters.com/business/retail-consumer/starbucks-reports-drop-comparable-sales-earnings-global-demand-suffers-2024-10-30/

2024-10-30 20:26

California looks to boost incentives, speed permitting for aviation fuels Airlines, state will work together to boost availability US targets 3 billion gallons of SAF use a year by 2030, up from 24.5 million in 2023 WASHINGTON, Oct 30 (Reuters) - The state of California and a group representing major U.S. passenger and cargo airlines said on Wednesday they had reached an agreement to sharply boost the use of sustainable aviation fuel. The California Air Resources Board (CARB) and Airlines for America, an industry trade organization representing American Airlines (AAL.O) , opens new tab, Delta Air Lines (DAL.N) , opens new tab, United Airlines (UAL.O) , opens new tab, FedEx (FDX.N) , opens new tab and others, committed to a goal to increase the availability of SAF for flights within California to 200 million gallons by 2035. That would meet about 40% of intrastate travel demand and is more than 10 times current levels. One key goal is making SAF, a low-carbon alternative made from renewable biomass or waste, cost competitive to petroleum-based jet fuel. SAF accounts for only about 0.1% of aviation fuel used globally at present. "California and the aviation industry are joining forces to tackle emissions head-on," said California Governor Gavin Newsom, calling the agreement first reported by Reuters "a major step forward in our work to cut pollution." Airlines for America said the "partnership reflects the type of collaboration between government and the private sector that is necessary to achieve ambitious climate goals." In 2021, the White House set a goal of achieving net-zero greenhouse gas emissions from the U.S. aviation sector by 2050 and has targeted 20% lower aviation emissions by 2030, as airlines face pressure from environmental groups to lower their carbon footprint. The Energy Department this month approved conditional loan guarantee commitments totaling nearly $3 billion for two sustainable aviation fuel projects that would fund facility expansions to produce about 315 million gallons per year of biofuels, most of which will be SAF. The White House aims to meet all of the U.S.'s aviation fuel demand with SAF by 2050 - currently projected to be around 35 billion gallons a year - and to supply at least 3 billion gallons of SAF annually by 2030. The Environmental Protection Agency said just 24.5 million gallons of SAF was used by the United States in 2023, about 10 million more than 2022. CARB Chair Liane Randolph said the board and airlines will work together on incentives, timely permitting and other issues to accelerate the availability of SAF. "The agreement recognizes that there's multi-faceted ways that we can work together to support the deployment of sustainable aviation fuel so that includes considerable opportunities for enhanced existing incentives," Randolph told Reuters, saying California could consider new incentives. The agreement includes a SAF working group to report progress and address barriers to deploying the fuel. The board will also create a public website that will detail the availability and use of conventional jet fuel and SAF within California. Sign up here. https://www.reuters.com/sustainability/california-major-airlines-work-boost-sustainable-aviation-fuel-use-2024-10-30/

2024-10-30 20:01

TLAXCALA, Mexico, Oct 30 (Reuters) - An explosion at a Simec-owned (SIMECB.MX) , opens new tab steel plant in Mexico's central Tlaxcala state in the early hours of Wednesday killed at least 12 people, state authorities said. "At the plant of the steel complex located in the city of Apizaco, Tlaxcala, a liquid steel spill occurred with the loss of human lives, temporarily paralyzing operations," the firm said in a statement. Simec said it is investigating what caused the accident. The state civil protection office said in a social media post that the blast was likely caused after smelting apparatus collapsed. Those killed were workers at the plant, the state prosecutor's office told Reuters. One person is hospitalized in critical condition, the office added. Authorities say they are investigating what caused the incident. However, molten steel, when it comes into contact with water, causes an explosion. Sign up here. https://www.reuters.com/world/americas/steel-plant-explosion-central-mexico-kills-least-12-people-2024-10-30/

2024-10-30 19:57

Fraud involved data manipulation, inflated payments, and concealed overdue receivables External investigation confirmed fraud sum accumulated over five years Trafigura likely to restate prior financial statements Oct 30 (Reuters) - Trafigura will make provisions of $1.1 billion after an internal review discovered fraud by individuals in its Mongolian petroleum products supply business, the commodity trader said on Wednesday. The revelation comes less than two years since Singapore-headquartered Trafigura revealed it lost over $500 million in an alleged nickel fraud. "The misconduct included manipulation of data and documents, resulting in inflated sums being paid by Trafigura, and deliberate concealment of overdue receivables," its statement said. An external investigation followed the internal review and has confirmed the sum of the fraud was accumulated over five years, Trafigura said. Mongolia is a minor consumer of oil, with its annual demand roughly amounting to just over 0.03% of the global total, according to U.S. Energy Information Administration data. Trafigura's $1.1-billion provision is equivalent to the approximate value of Mongolia's oil-products consumption for an entire year, Reuters calculations show. Trafigura said it would likely need to restate prior years' financial statements when it reports its full-year results. Global trading houses are facing lower profits after two years of bumper earnings from energy price spikes and volatility following Russia's invasion of Ukraine. Trafigura said a big chunk of the total exposure in Mongolia has been acknowledged as debt owed to Trafigura by its main counterparty in Mongolia. "We intend to hold the counterparty to their repayment obligation," Trafigura said. It did not name the counterparty. "We are confident that this issue is isolated to a self-contained operation in Mongolia. Nonetheless, we are taking further actions to improve oversight and controls across the group," Trafigura Executive Chair and CEO Jeremy Weir said. Trafigura's metals business in Mongolia, which is handled from outside the country, has not been affected and is continuing as usual, the firm told Reuters. The announcement is the latest in a string of costly fraud and misconduct issues at the global commodity trading house. Trafigura booked a $577-million charge in the first half of 2023 after discovering that some nickel cargoes it received did not contain the metal, in a case of "systemic fraud." In May, Trafigura agreed to pay a $55-million civil fine to settle U.S. Commodity Futures Trading Commission charges, while in March it agreed to pay $127 million to resolve a U.S. Department of Justice probe into Brazil. Sign up here. https://www.reuters.com/markets/commodities/trafigura-warns-potential-11-bln-hit-misconduct-mongolia-2024-10-30/