2024-07-25 16:03

Posts smaller-than-expected drop in Q2 sales, beats profit view Shares jump 7% in early trade Q2 margins grow, helped by business recovery efforts Lifts FY24 core profit forecast driven by strong digital gaming July 25 (Reuters) - Hasbro (HAS.O) , opens new tab posted a smaller-than-expected drop in second-quarter sales and beat profit expectations, helped by cost-control measures and steady demand for digital gaming, sending shares of the toymaker up 7% in early trading on Thursday. The Nerf toy gun maker's turnaround strategy to limit expenses and maintain a tight inventory amid an industrywide slowdown in toy demand has helped its margins grow in the quarter to 21.3%, compared with a 15.6% decline a year earlier. "Hasbro has made great strides in reducing its inventory...which will lead to cost savings in various ways, including lower production costs, shipping, and storage, and reduced markdowns and close outs," said James Zahn, editor in chief at popular magazine The Toy Book. The company's move to hive off a chunk of its entertainment asset, eOne, last year to improve focus on toy sales, digital gaming strategy, as well as international publishing deals, has also helped. It now expects annual core profit to be between $975 million and $1.025 billion, up from its prior forecast of $925 million to $1 billion. Hasbro is seeing "encouraging" signs of early demand in its toy segment and "retailer support" for the back half of year, which includes the critical holiday shopping season, company executives said on a post-earnings call. Steady growth in its mobile and video games, including "Monopoly Go!" and "Baldur's Gate 3", led to a 20% jump in quarterly revenue from the company's "Wizards of the Coast" unit. Total quarterly revenue fell 18% to $995.3 million in the reported quarter, compared with a 22.02% fall estimated by analysts, according to LSEG data. On an adjusted basis, Hasbro earned $1.22 per share, above estimates of 78 cents. Barbie maker Mattel (MAT.O) , opens new tab also topped Wall Street estimates for second-quarter profit, aided by a tight control on costs even as it posted a surprise drop in sales. (This story has been corrected to change James Zahn's designation to editor in chief at The Toy Book, not senior editor, in paragraph 3) Sign up here. https://www.reuters.com/business/retail-consumer/toymaker-hasbros-turnaround-efforts-help-quarterly-sales-2024-07-25/

2024-07-25 15:24

July 25 (Reuters) - New York Community Bancorp (NYCB.N) , opens new tab reported second-quarter loss that was worse than Wall Street's expectations on Thursday, as it set aside more money to cover potential losses from its office and multi-family loan book. Its shares fell 11% as the downbeat results upset the poise that the lender had regained over the last few months after an investment from former Treasury Secretary Steven Mnuchin and a promise to return to profitability next year. Investors shrugged off a move by the bank's unit, Flagstar Bank, to sell its residential mortgage servicing business for $1.4 billion and comment from CEO Joseph Otting that it was looking to sell another $2 billion to $5 billion of loans. A stock rout since a surprise loss and dividend cut in January has wiped out nearly two-thirds of the bank's market value. NYCB stock is the second worst performer in the S&P 400 mid-cap index (.IDX) , opens new tab this year as investors fret over its exposure to New York's rent-regulated multi-family properties - apartment buildings with more than four units. Low occupancy due to the popularity of remote working has also pressured its office loans, especially as interest rates stay higher for longer. Its provisions for credit losses in the quarter rose to $390 million, compared with the estimate of $210.1 million, according to LSEG. Analysts said the bank may have to increase it further as it reviews its loan portfolio. "There are $11 billion of CRE loans that have yet to be reviewed, which will be critical to how much more reserve build is necessary," said Jefferies analyst Casey Haire. The bank's updated forecasts , opens new tab on Thursday suggested its turnaround could take longer. Losses this year could range between $2.20 and $2.30 per share, it said, worse than its earlier forecast of 50 cents to 55 cents. The bank lost $1.05 per share on an adjusted basis for the three months ended June 30 compared with expectations of a loss of 42 cents. Deposits grew 5.6% from the first quarter, but were costlier. "With the company seeing several teams depart prior to as well as during the quarter, it was active with promotional deposit campaigns which helped to support deposit balances but at the expense of interest expense coming in well above our projection," J.P. Morgan's Steven Alexopoulos said. OFFLOADING NON-CORE BUSINESS The sale of Flagstar's mortgage servicing unit would boost NYCB's capital and allow it to exit a business highly sensitive to interest-rate changes. "While the mortgage servicing business has made significant contributions to the bank, we also recognize the inherent financial and operational risk in a volatile interest rate environment," Otting said. It would also help fund the bank's expansion into commercial and industrial lending, and comes days after it offloaded a chunk of loans to JPMorgan Chase (JPM.N) , opens new tab as part of a pledge to sell some of its non-core assets. Non-bank mortgage platform Mr Cooper (COOP.O) , opens new tab will buy the business. The deal is expected to close in the fourth quarter. The sale would help NYCB's interest-earning assets drop to around $104 billion at the end of the year, compared to $113.2 billion in June, Otting said. But they would still be higher than $100 billion, which invites significantly more regulatory scrutiny and capital requirements. Sign up here. https://www.reuters.com/business/finance/nycbs-flagstar-sell-residential-mortgage-service-14-bln-2024-07-25/

2024-07-25 15:21

July 25 (Reuters) - Royal Caribbean Group (RCL.N) , opens new tab raised its annual profit forecast on Thursday and said it would reinstate its dividend, with the company coming a full circle from the pandemic as people flock to its cruises. Cruise operators have hiked ticket prices over the past two years on growing interest among Europeans and record demand from Americans splurging on experiences. "Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years," Royal Caribbean CEO Jason Liberty said. "We have seen strength for all key products and are already taking more bookings for 2025 sailings than 2024." However, the company's shares fell 4% in morning trade after Royal Caribbean said it expected stock-based compensation and an increase in dry dock days in the fourth quarter to increase its full-year net cruise costs by 0.5%. Investors are also concerned about lower-than-anticipated improvement in occupancy levels. "The company is now lapping quarters where the business was back to full operations, so we expected more tempered growth in yields and occupancy from those levels," Ken Kuhrt, portfolio manager at Ariel Investments, said. Occupancy levels during the second quarter were 108.2%, compared with 108.5% during the same period in 2019. Royal Caribbean also became the first U.S.-based cruise operator to reinstate quarterly dividend, starting October, at 40 cents per share. The company, along with its peers Carnival (CCL.N) , opens new tab and Norwegian Cruise Line (NCLH.N) , opens new tab, suspended dividends in 2021 due to the pandemic's impact. Royal Caribbean forecast annual adjusted earnings per share between $11.35 and $11.45, compared with its earlier expectations of $10.70 to $10.90. The Silversea Cruises parent also topped market expectations for second-quarter revenue and profit, and forecast current-quarter profit above analysts' estimates, according to LSEG data. On an adjusted basis, Royal Caribbean earned $3.21 per share in the second quarter, beating estimates of $2.75. The company also reported better-than-expected revenue of $4.11 billion. Sign up here. https://www.reuters.com/business/royal-caribbean-group-lifts-annual-profit-forecast-cruise-demand-thrives-2024-07-25/

2024-07-25 14:49

BRUSSELS, July 25 (Reuters) - Meta Platforms (META.O) , opens new tab is set to be hit in a few weeks with its first EU antitrust fine for tying classified advertisements service Marketplace with its Facebook social network, people with direct knowledge of the matter said. The move by the European Commission will come more than a year and a half after it accused the U.S. tech giant of giving its classified ads service Facebook Marketplace an unfair advantage by bundling the two services together. The EU competition watchdog also said Meta abused its dominance by unilaterally imposing unfair trading conditions on competing online classified ads services that advertise on Facebook or Instagram. Meta could face a fine of as much as $13.4 billion - or 10% of its 2023 global revenue - although EU sanctions are usually much lower than that cap. The Commission will likely issue its decision in September or October before EU antitrust chief Margrethe Vestager leaves office in November, although the timing could still slip, the people said. The Commission declined to comment. Meta reiterated comments made previously. "The claims made by the European Commission are without foundation. We continue to work constructively with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive," Meta spokesperson Matt Pollard said. The company last year sought to settle the EU investigation by curbing the use of competitors' advertising data for Facebook Marketplace but this concession was rejected by the EU enforcer, other sources told Reuters. A similar offer was accepted by the UK competition regulator. Separately, Meta was charged by the Commission this month of failing to comply with landmark tech rules because of its newly introduced pay or consent advertising model launched in November. Sign up here. https://www.reuters.com/technology/meta-be-hit-with-first-eu-antitrust-fine-linking-marketplace-facebook-sources-2024-07-25/

2024-07-25 14:30

July 25 (Reuters) - The performance of McDonald's and other fast food chains' value meal launches will be closely watched when the U.S. restaurants report quarterly results over the next few weeks. McDonald's (MCD.N) , opens new tab, Burger King and other chains have been scrambling to improve traffic as soaring menu prices put off diners, especially from the lower-income group. "The focus will be how consumers are responding to that (value and discounts) and more importantly or equally important, how long these discounts will have to go on for to get consumers back," said BTIG analyst Peter Saleh. In the past few months, McDonald's extended its $5 value meal into August after its launch in June 25, while rival Burger King began offering a $5 "Your Way Meal" and Wendy's (WEN.O) , opens new tab rolled out its $3 breakfast deal. While the promotions are in their early days, some analysts have said their benefit, if any, would be temporary. "Offering value through promotion is only limited to a couple of items such as McDouble or the McChicken sandwich which are not as enticing as a let's say, a Big Mac or maybe a Whopper Junior from Burger King," said Danilo Gargiulo, senior analyst at Bernstein. While these offers were rolled out only at the end of the quarter, companies are yet to see meaningful traffic growth. Foot traffic at McDonald's, Burger King and Wendy's rose 0.4%, 1.6% and 1.4%, respectively, between April and June, as per Placer.ai data. McDonald's, set to report results on Monday, is expected to post a drop in profit for the first time in six quarters, as well as record slower growth in same-store sales from the prior three months. Same-store sales at Wendy's, scheduled to report next week, and Burger King owner Restaurant Brands (QSR.TO) , opens new tab, which reports on Aug. 8, are expected to slow from the levels seen last year. "The problem in the broader sector right now, is that despite a lot being thrown at consumers, it doesn't seem to be catalysing demand that has been in a rut," Morgan Stanley analyst Brian Harbour wrote in a note. Sign up here. https://www.reuters.com/business/retail-consumer/us-fast-food-chains-bets-value-meal-set-face-investor-scrutiny-2024-07-25/

2024-07-25 14:05

July 25 (Reuters) - U.S. aerospace and defense company RTX (RTX.N) , opens new tab raised its full-year earnings forecast and beat estimates for second-quarter profit on Thursday, aided by a rebound in the broader commercial aviation sector. RTX stock hit an all time high, trading up 8% at $113 in New York. Airlines are flying older aircraft to meet the surge in air travel demand amid a shortage of new jets, leading to a bustling aftermarket business and benefiting companies such as RTX. "The strength in our end-markets and first-half performance gives us the confidence to increase our outlook for adjusted sales and adjusted EPS for the full year," said CEO Chris Calio. Meanwhile, strong demand for original equipment and aftermarket services led to a more than twofold jump in quarterly profit at Pratt and Whitney, a subsidiary of RTX, to $542 million. GTF COMPENSATION Pratt and Whitney — the maker of the popular Geared Turbofan (GTF) engines, which powers Airbus' A320neo jets — has been conducting an inspection drive to check for potentially flawed components in the GTF jet engines. RTX said it has reached agreements with more than 18 GTF engine customers. "We had 9 (agreements) that were completed at the end of the first quarter, we've more than doubled that," Chief Financial Officer Neil Mitchill told Reuters in an interview. According to a Bernstein note published this month, around 540 GTF-powered Airbus A320neo aircraft are currently grounded due to engine issues. RTX posted adjusted per-share net income of $1.41 in the quarter, beating analysts' average estimate of $1.30, according to LSEG data. The company's revenue jumped 8% to $19.72 billion during the period. It expects full-year adjusted profit per share to be between $5.35 and $5.45, compared with its prior forecast range of $5.25 to $5.40. GE Aerospace, which makes the competing LEAP engines, also raised its full-year profit forecast earlier this week, but flagged persistent supply constraints hurting new engine output. Sign up here. https://www.reuters.com/business/aerospace-defense/rtx-lifts-2024-profit-forecast-2024-07-25/