2024-05-16 17:28

WASHINGTON, May 16 (Reuters) - The Federal Aviation Administration said Thursday it has not approved any expansion of United Airlines' routes or fleets and is requiring the presence of FAA personnel when United conducts final inspections of new aircraft replacing older models. Earlier on Thursday, United Airlines (UAL.O) New Tab, opens new tab told employees it had gotten some "good news" saying the FAA has allowed the airline "to begin the process of restarting our certification activities, including new aircraft and routes." Some airline certification activities were halted after the FAA said in March it was increasing its oversight of United following recent safety incidents. The aviation regulator said then it was initiating a formal evaluation to ensure the Chicago-based carrier was complying with safety regulations. "The FAA has not approved any expansion of United Airlines' routes or fleets," the FAA said Thursday, adding the review, known as the Certificate Holder Evaluation Program, "is ongoing and safety will determine the timeline for completing it." The FAA said the evaluation is to ensure the Chicago-based airline "is complying with safety regulations; identifying hazards and mitigating risk; and effectively managing safety." United in an email to its employees on Thursday said the FAA was allowing the company to begin the certification process restart "after a careful review and discussion about the proactive safety steps United has taken to date." A United spokesperson declined to elaborate. The airline delayed the start of two new international routes last month, citing a pause on some certifications by the FAA. "We will continue to see an FAA presence in our operation as they review our work processes, manuals and facilities," United Airlines said. The FAA's Certificate Management Office for United had raised concerns about a series of safety incidents, officials said. In March, FAA Administrator Mike Whitaker told Reuters the agency was looking at United more closely following the recent incidents, saying United CEO Scott Kirby "knows we're going to be engaging a little more closely with them as we look into these." Sign up here. https://www.reuters.com/business/aerospace-defense/faa-allows-united-airlines-restart-certification-activities-2024-05-16/

2024-05-16 17:13

May 16 (Reuters) - Under Armour (UAA.N) New Tab, opens new tab on Thursday forecast a surprise fall in sales for the year and laid out plans to overhaul its business, as the sportswear maker looks to revive demand for its brand in the United States. Shares of the company reversed course from premarket losses to rise about 2%, after CEO Kevin Plank said he plans to pare back heightened promotions and control inventory, as well cut jobs to streamline operations. "Too many areas of our product strategy have been designated as priorities. This has caused operational inefficiency and a strain on resources, which has diluted our ability to have a consumer-centric point of view," Plank, who returned as CEO in April after leaving the role in 2019, said on a post-earnings call. Peers Nike (NKE.N) New Tab, opens new tab and Lululemon Athletica (LULU.O) New Tab, opens new tab also provided disappointing forecasts as weak discretionary spending casts a shadow on demand for sportswear in the U.S. Under Armour said it would add more premium price points in its direct-to-consumer channel, as it looks to revive brand appeal and counter a hit from the wholesale business that is grappling with weak demand from retailers. It would also aim to reduce its style count by roughly 25% over the next 18 months. "The changes being made are the most aggressive we have seen to overhaul Under Armour, showing management is willing to forego the short-term for the long-term health of the brand," said Telsey Advisory Group analyst Cristina Fernandez. As part of the restructuring plan, Under Armour expects to incur total pre-tax charges of up to $90 million, including employee severance costs. The company expects fiscal 2025 revenue to be down at a low double-digit percentage rate, versus LSEG estimates of a 2.1% rise. It sees annual adjusted earnings to be between 18 cents and 21 cents per share, below estimates of 59 cents. Under Armour's fourth-quarter adjusted earnings per share of 11 cents beat estimates of 8 cents. Its revenue of $1.33 billion also edged past expectations. Sign up here. https://www.reuters.com/business/retail-consumer/under-armour-forecasts-annual-sales-below-estimates-2024-05-16/

2024-05-16 15:57

May 16 (Reuters) - Deere (DE.N) New Tab, opens new tab on Thursday trimmed its annual profit forecast for the second time and projected steeper declines in sales of large agriculture equipment, as farmers balk at buying tractors and combines due to falling crop prices. Farm income is expected to slide 25.5% to $116.1 billion this year from 2023, according to the U.S. Department of Agriculture, set for a second consecutive annual drop, as corn and soy prices plummet and production costs increase. Higher interest rates have also piled pressure on farmers, prompting some equipment dealers to offer discounts or auction off machines at lower prices to manage bloated inventories, forcing Deere and peers to cut production. "Underlying the demand decline is a tougher backdrop in global (agriculture environment)," said Deere's Director of Investor Relations Josh Beal. "Uncertainty has caused a decline in farmer sentiment. As a result, we're seeing a softer retail environment today than we did just 6 months ago," he said. The world's largest farm equipment maker expects sales of large agriculture equipment to decline between 20% and 25% this year, compared with its prior estimates for a roughly 20% fall. "There were some signs (that guidance might be impacted), but I was still surprised to see them cut guidance for the industry... It was a bit more broad-reaching than I would have expected," M Science research analyst Alex Prudhomme said. Deere now expects fiscal 2024 net income of about $7 billion, down sharply from its prior expectations of $7.50 billion to $7.75 billion. Its shares were down 3% in mid-day trading. Still, the company topped second-quarter estimates. Net income fell 17% to $2.37 billion, or $8.53 per share, but beat estimates for $7.86 per share. Net sales declined 15% to $13.61 billion, compared with estimates of $13.28 billion. Sign up here. https://www.reuters.com/business/deere-cuts-2024-profit-forecast-demand-slowdown-2024-05-16/

2024-05-16 14:29

Savings from new plan 'far' above 100 bln lira estimate VP expects FATF to drop Turkey's grey-listing in June 'Serious break in inflation' to help hit year-end target Summer price reprieve to help convince sceptical Turks ANKARA, May 16 (Reuters) - Turkish Vice President Cevdet Yilmaz said he expects savings from the government's new efficiency plan to outstrip estimates as it continues the fight against inflation this summer with the full backing of President Tayyip Erdogan. Yilmaz, in an interview with Reuters on Thursday, said he expects an international crime watchdog to remove Turkey's "grey-listing" next month. Not upgrading Turkey in June would amount to a political decision by the Financial Action Task Force, he said. Yilmaz, who over the last year has spearheaded a dramatic U-turn toward a more orthodox economic policy, predicted that summer price relief would help convince sceptical Turks that inflation is dipping after years of soaring prices. To bolster the central bank's aggressive interest rate hikes, Yilmaz and Finance Minister Mehmet Simsek unveiled a "savings and productivity" plan on Monday focused on pausing construction of most new state buildings and public institutions' purchase of vehicles for three years. Though they did not outline expected budget savings, some analysts said it could amount to roughly 100 billion Turkish lira ($3.1 billion). "It looks like it will be far above that," Yilmaz said of the estimate, speaking in his office at the Presidential Palace in Ankara. "We believe we will experience a serious break in inflation especially in the summer period this year," he said. "The improvements in certain issues that affect daily life will positively impact our citizens' perception," and "create a different psychology in terms of inflation expectations." Inflation hit 70% last month - the highest in emerging markets except Argentina - and is expected to peak in May at around 75%, after which the central bank expects it to fall to 38% by the end of the year as the monetary tightening weighs. Many Turks remain sceptical that price relief is coming after years of eroded savings. Annual inflation expectations were near 120% last month and 95% for end-2024 based on the Turkey Household Inflation Expectations Survey by Koc University and Konda Research. 'POLITICAL UNCERTAINTY' A longtime member of the ruling AK Party (AKP), Yilmaz was appointed in June last year to help reverse years of policy unorthodoxy under Erdogan, who had in the past urged rate cuts to lower inflation. Loose monetary policy sparked a series of currency crashes and sent inflation soaring, economic pain that weighs on the president's popularity. But since Erdogan was reelected in May last year, Ankara has cut regulations to free up financial markets and sought to cool the overheated emerging market economy. The central bank has hiked interest rates to 50%, from 8.5% last June. Yilmaz told Reuters that last year's election lifted any "political uncertainty" about Erdogan's determination to lower inflation. "He states that he stands behind (the economic programme) and that he supports it at every opportunity... I believe there are no doubts left on this issue," Yilmaz said. He added he is confident the central bank will hit its inflation target even if it does not hit the "bulls-eye" exactly at year-end. Analysts said the savings and productivity plan would help rein in spending but that more cuts were needed, perhaps to public sector salaries or pensions, in order to help hit the inflation goal. GREY LIST The FATF, set up by the G7 group of advanced economies to protect the global financial system, grey-listed Turkey in 2021 over money laundering and terrorist financing concerns. Yilmaz confirmed a Reuters report that a FATF team held an "on-site" visit with Turkish authorities this month ahead of a June 28 decision whether to upgrade the country. "I think we will be taken off the FATF grey list in June. If we are not, I believe this will be due to political reasons, not technical reasons," Yilmaz said. "From a technical aspect, I believe there are no obstacles left. I think Turkey fully meets the technical criteria," he added. Research shows that an upgrade could lead to more foreign direct investment (FDI), which Yilmaz said is not yet at desired levels. Turkey's FDI inflows amounted to $1.5 billion in the first quarter of the year, down 52% from the quarterly average in the previous three years, according to the International Investors Association. ($1 = 32.1970 liras) Sign up here. https://www.reuters.com/world/middle-east/turkish-vice-president-yilmaz-sees-inflation-reprieve-with-full-erdogan-backing-2024-05-16/

2024-05-16 14:10

Currency is mostly trading freely, bankers say Government is reining in spending on big projects Fresh funding may reduce pressure for reform CAIRO, May 16 (Reuters) - Egypt appears on track to break with past practice and let its currency float in line with IMF-backed reforms, but structural changes that could pull the country out of a cycle of bailouts look less likely. After two years of chronic foreign currency shortages, Egypt has secured a windfall of funding since late February including $24 billion in new funds for a UAE project to develop a city on the Mediterranean coast and more than $15 billion from the International Monetary Fund, European Union, and World Bank. As part of a deal with the IMF in March, the central bank allowed the pound to depreciate sharply, a step it took repeatedly in previous years only to revert to tight control of the exchange rate when the pound came under pressure. This time could be different: while some restrictions remain in place, the currency is mostly trading freely, bankers and analysts said. After the float, foreign investors twice tested the central bank's commitment to a flexible exchange rate, on March 25 and April 15, by selling hundreds of millions of dollars worth of Egyptian pound treasury bills and repatriating the profits, three senior commercial bankers and one investment banker told Reuters. The central bank did not intervene either time, but rather let the pound weaken against the dollar, leading investors to believe the currency really was floating, the bankers said. 'TOO BIG TO FAIL' Observers see other signs of change. The government has been slowing spending on large infrastructure projects that have caused Egypt's foreign debt to surge, two bankers and several businessmen said. A Western diplomat said he believed the government would stick to payment plans on arrears accumulated with foreign companies. But some believe the new money could also remove pressure for structural changes that multilateral lenders say are needed to unleash the potential of an economy where the state and the military have reinforced their control over recent years. The funding influx reinforced the perception that against the backdrop of the war in Gaza on Egypt's border and fears over migration towards Europe, Western and Gulf states consider Egypt too big to fail, regardless of economic or political reform. "Our cash flow issue has been resolved temporarily, but we need to solve the root causes," said one of the bankers, speaking on condition of anonymity. "It's very, very tempting for everyone: we have the money now, let's go and spend it." The government thinks Egypt's problems are imported and remains focused on building cities and infrastructure, rather than investing in health and education and implementing reform, Abla Abdel Latif, head of Cairo think tank the Egyptian Center for Economic Studies, told a recent seminar. "We have always been trapped in our vicious circle of poor economic performance where only surface level symptom treatment takes place," she said. BLACK MARKET CRACKDOWN For now, some currency controls remain. Citizens trying to buy foreign currency need to show proof they need it for travel, healthcare, or education abroad, bankers said. The central bank continues to prevent banks from providing foreign currency to import 13 goods, including fully assembled vehicles, mobile phones and their accessories, fresh fruit, jewellery, televisions, electrical appliances and clothing, according to two of the bankers. The central bank did not respond to a request for comment. Some importers and travellers buy dollars on the black market and the police have been cracking down on trading, even though it differs little from the official rate. The IMF has tightened its monitoring of Egypt's exchange market, tying its semiannual disbursement of funds to currency flexibility. It says it will monitor backlogs in foreign exchange requests at banks, the spread between the official and black market exchange rates, and interbank foreign exchange turnover. But it was unclear Egypt's various funders could come together and agree on wider reforms that would avoid the need for future bailouts, said Amr Adly, an assistant professor at the American University in Cairo. "This is not an easy feat," he said. "And more importantly, who's going to enforce this?" Sign up here. https://www.reuters.com/world/africa/upturn-egypts-economic-fortunes-tempered-by-caution-reform-2024-05-16/

2024-05-16 12:30

BENGALURU, May 16 (Reuters) - Indian automaker Mahindra & Mahindra (MAHM.NS) New Tab, opens new tab is closely looking at hybrid technology, its managing director said on Thursday, adding that the company's focus remains on electric vehicles (EVs). "If it's (hybrids) required, we'll be ready for that. If there are significant changes in hybrid tech that cause it to be much more like an EV, then that's something we'll move into much faster," MD Anish Shah said in a post-earnings press conference. Automakers are increasingly diversifying their strategy to look beyond EVs, and Shah's comments come less than a month after Reuters reported that the Hyundai Motor Group plans to launch its first hybrid cars in India as early as 2026. Hybrids - which use a gasoline powertrain and electric motor - and EVs contributed 2% each to overall passenger vehicle sales in India in fiscal year 2024. Mahindra is India's third-biggest EV maker after market leader Tata Motors (TAMO.NS) New Tab, opens new tab and MG Motor India. It currently sells just a single EV model, the XUV400, and is slated to launch a new range of EVs next year. "At this point in time, we feel good about the focus on EVs," Shah said. Local carmakers currently do not offer competitive hybrid cars in the country, and the segment is dominated by Japanese rivals like Toyota Motor (7203.T) New Tab, opens new tab. Earlier in the day, Mahindra said it would invest 120 billion rupees ($1.44 billion) in its EV unit, while also topping quarterly profit estimates on steady sales of its sports utility vehicles (SUVs). The company also said it will sell some assets associated with its EV car business to its electric unit, Mahindra Electric Automobile, for 7.96 billion rupees. Shares of the company rose as much as 4% to a record high, before closing down at 3%. ($1 = 83.4873 Indian rupees) Sign up here. https://www.reuters.com/business/autos-transportation/indias-mahindra-mahindras-q4-profit-beats-estimates-2024-05-16/