2024-07-24 20:59

July 24 (Reuters) - IBM (IBM.N) , opens new tab beat analysts' estimates for second-quarter revenue and raised its annual growth forecast for its software business on Wednesday, riding on higher AI-linked spending by clients looking to adopt the technology. The company has focused on expanding its Watsonx platform that allows users to deploy chatbots or enhance code for AI programs, while also making its Granite family of AI models open-source to help popularize its AI services. Big Blue's shares rose about 3% in extended trading, set to add to their year-to-date gains of about 12% from a rally in stocks of AI-linked companies. Software revenue increased about 7% to $6.74 billion in the quarter. The 113-year-old company now expects the segment to grow at a high-single-digit percentage in 2024, compared to its prior forecast of slightly above the high end of mid-single digit percentage. The company's AI Book of Business - a combination of bookings and actual sales across various products - grew to $2 billion, of which about $1 billion was added in the second quarter. "The commercialization of Generative AI is accelerating, positioning diversified enterprise technology companies like IBM to capitalize on the growing demand for AI integration," said Tejas Dessai, a research analyst at Global X. Meanwhile, IBM lowered its expectations for annual consulting revenue, estimating growth in low-single-digit percentages compared to its prior forecast of 6%-8%. Consulting revenue fell about 1% to $5.18 billion in the second quarter, as clients cut back on discretionary spending and short-term consulting projects amid higher-for-longer interest rates and inflationary pressures. "You're seeing an overall very dynamic macroeconomic environment, and underneath that, clients are choosing technology for competitive advantage. They are spending on GenAI," Chief Financial Officer James Kavanaugh told Reuters. "But they are making trade-off decisions and spending reprioritizations, and you see that play out within consulting." Companies have prioritized spending on longer-term consulting projects centered on their AI businesses - revenue from which is yet to be reflected in IBM's books. IBM reported revenue of $15.77 billion, compared with analysts' average estimate of $15.62 billion, according to LSEG data. Second-quarter adjusted profit of $2.43 per share beat estimates of $2.20, helped by robust sales in the high-margin software business. Sign up here. https://www.reuters.com/technology/ibm-beats-quarterly-revenue-estimates-software-strength-ai-demand-2024-07-24/

2024-07-24 20:57

WASHINGTON, July 24 (Reuters) - Democratic U.S. lawmakers on Wednesday introduced a bill to hold energy companies accountable if they are found by federal regulators to have colluded with the Organization of the Petroleum Exporting Countries to raise oil prices. The bill, introduced by Senator Edward Markey and Representative Nanette Barragan, says that if any energy company is found by the Federal Trade Commission to have colluded with OPEC, it would no longer be eligible for new oil and gas leases on federal lands and waters. WHAT IS THE BACKGROUND? In May, the FTC accused Pioneer Natural Resources CEO Scott Sheffield of exchanging hundreds of messages with OPEC officials to artificially inflate oil prices. The U.S. antitrust regulator approved Exxon Mobil's (XOM.N) , opens new tab $60 billion purchase of Pioneer, but barred Sheffield from Exxon's board. Sheffield has denied the FTC's allegations. Exxon, which has since bought Pioneer, did not immediately respond to a request for comment about the bill. But Exxon has said that it has submitted more than 1.1 million documents and other information and data to the FTC and that the agency has raised no concerns with its business practices. WHY IS IT IMPORTANT? While the bill has almost no chance of passing with Republicans controlling the House of Representatives and Democrats holding only a slim majority in the Senate, it shows that some lawmakers are keeping pressure on oil companies. Last month, the U.S. Senate budget committee launched a probe of domestic producers about any efforts to coordinate oil price with OPEC, in a move the American Petroleum Institute, a lobbying group, called an "election year stunt." Markey's bill was also co-sponsored by about 11 other left-leaning Democrats in the House, including Alexandria Ocasio-Cortz and Raul Grijalva. KEY QUOTE Markey said in a statement that the bill is a "first step towards ensuring Big Oil gets Big Consequences when they profiteer off the backs of hard-working Americans." Sign up here. https://www.reuters.com/business/energy/us-democrats-launch-bill-holding-oil-firms-accountable-any-work-with-opec-2024-07-24/

2024-07-24 20:52

NEW YORK, July 24 (Reuters) - A hefty U.S. stocks sell-off sent Wall Street's most watched gauge of market volatility to a three-month high and boosted options trading volume on Wednesday, though strategists saw little evidence of panic. The S&P 500 (.SPX) , opens new tab slipped 2.3%, on pace for its worst daily loss since late 2022, after Tesla (TSLA.O) , opens new tab and Alphabet (GOOGL.O) , opens new tab reported lackluster earnings, prompting investors to question if the 2024 rally fueled by Big Tech and artificial intelligence is sustainable. As stocks tumbled, the Cboe Volatility Index (.VIX) , opens new tab - known as Wall Street's fear gauge because it measures demand for protection against stock swings - shot to 18.46, the highest since late April. Options on the VIX changed hands at nearly twice the usual pace on Tuesday, Trade Alert data showed. The sell-off spotlighted the broader market's vulnerability to any weakness in Big Tech, which has boosted indexes even as it sparked concerns over stretched valuations and recalled the dotcom boom more than two decades ago. Still, the decline so far has been more an orderly retreat than a rout, options market participants said. "We're not seeing a whole lot of fear in the marketplace, meaning that people aren't going out and trying to buy protection aggressively," said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. "It's kind of very orderly and kind of passive, which indicates to me that nobody's in a bad spot right here yet." Despite the recent wobble, months of strong equity market returns have likely left investors in a strong position to stomach a modest uptick in volatility, Tym said. The S&P 500 is up 14% year-to-date, while the tech-heavy Nasdaq 100 - which fell 3.5% on Wednesday - has gained 13%. The indexes are off 4% and 8% from their all-time highs, respectively. Nvidia (NVDA.O) , opens new tab, whose blistering rally has fueled a big part of the broader market's gains, fell 6% on Wednesday but is still up about 130% for the year. The VIX index at 18 remains below the peaks touched during recent weak market episodes. In October the index climbed as high as 23 during a sharp sell-off. Big tech earnings is not the only thing on investors' minds. Political uncertainty, an expected shift in Federal Reserve policy and the seasonally weak stretch for stocks in September and October have raised the allure of portfolio protection , opens new tab for some investors. Others, however, were taking advantage of the greater market volatility to bet that calm will return soon. "While the crowd is hedging and hoping to time the in and out with that hedge, I'm shorting UVXY/VXX outright, as it climbs, and will simply await the inevitable plunge in volatility," said Seth Golden, president of investment research firm Finom Group. He was referring to ProShares Ultra VIX Short-Term Futures ETF (UVXY.Z) , opens new tab and the Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN , ETFs that rise in value when volatility rises. On Wednesday, UVXY was up 20% and the VXX rose 14%. Sign up here. https://www.reuters.com/markets/us/fear-gauge-hits-three-month-high-us-stocks-sell-off-2024-07-24/

2024-07-24 20:39

HOUSTON, July 24 (Reuters) - A bankruptcy court approved a Zachry Holdings (ZHII.UL) and Golden Pass LNG settlement on Wednesday that will allow Exxon Mobil (XOM.N) , opens new tab and Qatar Energy (QATPE.UL), the Golden Pass owners, to hire a new lead contractor to complete its LNG plant. The order would speed construction of the 15 million metric ton per annum (MTPA) LNG plant by releasing Zachry as lead contractor on project. Chiyoda International Corp (6366.T) , opens new tab will replace Zachry as the new lead engineering, procurement and construction contractor. The project, at the Sabine Pass site of a former gas-import terminal that was converted to process natural gas for LNG exports, is one of two large U.S. LNG facilities whose startups were expected to significantly expand supplies from the world's top exporter of the superchilled fuel in the next 12 months. Failure to approve the order could have left thousands unemployed and negatively impacted one of the largest global construction projects, Judge Marvin Isgur said in the bankruptcy court of the Southern District of Texas in Houston. "I find that the proposed settlement is clear and convincing evidence... (and) is a compromise that should be approved," Isgur said in his ruling. The order allows Golden Pass and its construction contractors McDermott and Chiyoda to ramp up site construction activities and progress its LNG terminal, Golden pass said in a statement. "Going forward, we are focused on getting people back to work, including local workers and vendors, and progressing this critical energy project," Golden Pass added. Under the order, Zachry Holdings will immediately give up control of the LNG project and cannot direct vendors or workers on what to do, court documents show. Zachry last Friday filed an emergency motion with the bankruptcy court asking it to approve the settlement with Golden Pass LNG, which would allow it to emerge from bankruptcy. Judge Isgur said he was happy the parties came to a settlement because there was a real risk to the survival of Zachry given the size of the claims. "The settlement resolves all of the issues we set out to address regarding the Golden Pass LNG project when we initiated our restructuring," said John Zachry, chairman and CEO of Zachry Holdings. In filing for Chapter 11 bankruptcy protection in May, Zachry said the Golden Pass project, known as GPX, was at least $2.4 billion over the original budget. Sign up here. https://www.reuters.com/legal/judge-approves-zachry-holdingsgolden-pass-lng-settlement-making-way-resumption-2024-07-24/

2024-07-24 20:30

July 24(Reuters) - Spanish glass bottle maker Vidrala (VID.MC) , opens new tab expects net profit this year to be slightly higher than in 2023 as the purchase of Brazil's Vidroporto will likely offset weakness in Europe, the company's head of investor relations said on Wednesday. The company booked a net profit of 233.4 million euros in 2023 ($253.43 million). "We have little visibility but our central scenario is a moderate demand. (...) We are expecting very slightly increasing volumes for the year as a whole," Inigo Mendieta said in an interview. European glassmakers have seen a softer-than-expected rebound in the first half of the year as customers cut their orders amid a fragile global economy. Vidrala's net profit fell 6% in the first six months of 2024 from a year ago to 120.8 million euros. Sales from January to June amounted to 830.4 million euros, showing organic growth of 0.7% from one year ago, as diversification into new markets offset weakness in its more mature markets. "Unlike in Europe, in Latin America population growth and the developing middle class should drive consumption," Mendieta said. The group said Brazil should account for 15-20% of its total sales at the end of the year from a 12% in the first six months. Mendieta did not rule out further acquisitions in the region, but said that the priority was to ensure the current sales capacity following the Vidroporto acquisition. Vidrala also reiterated its 2024 core earnings guidance of above 450 million euros, unlike its France-based peer Verallia (VRLA.PA) , opens new tab, which was forced to revise down its core profit target earlier this month due to faltering demand. Shares were up around 2% at 1422 GMT. ($1 = 0.9218 euros) Sign up here. https://www.reuters.com/markets/europe/vidrala-sees-slightly-higher-2024-net-profit-after-brazils-acquisition-2024-07-24/

2024-07-24 20:20

July 24 (Reuters) - Newmont Corp (NEM.N) , opens new tab beat Wall Street estimates for second-quarter profit on Wednesday, as the world's biggest gold miner benefited from robust production and higher prices. The company also said it would sell the entity holding its deferred payment rights linked to the Batu Hijau mine in Indonesia for about $153 million. Newmont, which completed its $17 billion acquisition of Australian miner Newcrest in November, has revealed plans to achieve at least $2 billion in gross proceeds from the divestiture of high-quality, non-core asset sales. Shares of the company were up 2.5% after the bell. Attributable gold production rose to 1.61 million ounces in the second quarter from 1.24 million ounces a year earlier. Analysts had expected production of 1.56 million ounces, according to LSEG data. Average realized gold price was $2,347 per ounce in the quarter ended June 30, compared to $1,965 per ounce a year earlier. Prices of the precious metal rose 4.2% in the April-June quarter. The rally is also expected to help Canadian peer Barrick Gold (ABX.TO) , opens new tab. Newmont's all-in-sustaining cost, an industry metric that reflects total expenses associated with production, rose to $1,562 per ounce of gold from $1,472 per ounce a year earlier. The precious metals miner continues to expect total annual attributable gold production of 6.9 million ounces. This compares to analysts' estimates of 6.8 million ounces. On an adjusted basis, Denver, Colorado-based Newmont posted a profit of 72 cents per share for the April-June quarter, compared with analysts' estimates of 62 cents, according to LSEG data. Sign up here. https://www.reuters.com/markets/commodities/newmont-beats-quarterly-profit-estimates-higher-gold-production-2024-07-24/