Dell plans to IPO a company it bought for $612 million and make it worth $1.4 billion

• Eugene Kim
 
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• Apr. 11, 2016, 5:28 PM
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Oracle PR/FlickrDell CEO Michael Dell.

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Dell plans to spin off SecureWorks, the security firm it bought for $612 million in 2011, in an IPO that would give the business a market cap of $1.4 billion, according to new regulatory filings submitted to the SEC on Monday.

The documents said that SecureWorks would sell in the range of $15.50 to $17.50 a share. At the high end, SecureWorks would be worth roughly $1.4 billion once it goes public.

The filings said that the company expects to raise between $134.3 million to $154.9 million from the IPO. But it stressed that Dell won't transfer any of the proceeds to its affiliates, meaning that it won't be used to pay for Dell'smassive $67 billion acquisition of corporation EMC.

SecureWorks generated $339.5 million in revenue last year, up from $262.1 million the year before. It had a gross margin of $155.7 million last year, but posted a net loss of $72.3 million.

The company is almost entirely owned by Dell CEO Michael Dell, who gained it himself when he took Dell private in 2013. SecureWorks makes cybersecurity software that helps companiesmonitor their IT infrastructure to protect against hackers and malware.

Besides SecureWorks, Dell has been shopping around other units, like its SonicWall security business and Quest Software for a reported $2 billion each, and its outsourcing business, Perot Systems, for a reported $5 billion.

In February, Dell was given the Federal Trade Commission's green light to proceed with its planned $67 billion acquisition of EMC. If completed, the deal will be the largest pure-tech merger in history.

SEE ALSO: US regulators have approved Dell's $67 billion purchase of EMC

American Express beats big on earnings, shares jump

• Akin Oyedele
 
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• 18h
• 782

American Express posted a big beat on first-quarter earnings and revenues after Wednesday's closing bell. 

The financial-services giant earned $1.45 in adjusted earnings per share (EPS), on revenues of $8.1 billion. Analysts had expected EPS of $1.33 and revenues of $8.05 billion, according to Bloomberg. 

"Despite strong competition throughout the payments industry, we generated a 4 percent increase in FX-adjusted revenues," CEO Ken Chenault said in the earnings release. 

The company's revenues were also boosted by increased card-member spending. At the same time, aggressive marketing and reward offerings increased total expenses by 2% to $2 billion. 

The company reaffirmed its forecast for full-year earnings. 

Its shares had fallen about 15% over the last year through Wednesday's close. They rose by as much as 3% in after-hours trading.

Last year, American Express lost two key co-branding partnerships, with Costco and JetBlue. It announced the sale of the Costco portfolio to Citi in February. Google

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More: American Express Earnings

Yum Brands crushed earnings

• Bob Bryan
 
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• 18h
• 846

Othermore

Yum Brands, the parent company of Taco Bell and Kentucky Fried Chicken, announced earnings Wednesday and crushed expectations.

The company posted adjusted earnings of $0.95 per share against analyst expectations of $0.83 per share.

Revenue came in just a tiny bit below expectations at $2.62 billion versus analysts calls for $2.66 billion.

Additionally, the company raised its profit growth guidance to 12% growth in 2016 from 10%.

The company also posted comparable store growth of 2% worldwide and total sales growth of 5%.

In response, the stock jumped 5% in after-hours trading, before sliding down to a rise of around 3.75% as of 4:26 p.m. ET.

Here's what to expect from the ECB today

• Will Martin
 

• 5h
• 278

REUTERS/Kai PfaffenbachEuropean Central Bank (ECB) President Mario Draghi addresses an ECB news conference in Frankfurt January 22, 2015.

It's ECB day.

We'll get the European Central Bank's latest decisions on interest rates and fiscal stimulus, as well as hearing from president Mario Draghi this afternoon.

The bank will more than likely leave rates and QE programmes untouched, having well and truly fired the bazooka at its last meeting in March, cutting all of its base rates, as well as expanding its bond buying programme to include corporate debt.

At the moment, the bank's base deposit rate is minus 0.4%, meaning banks have to pay money to leave deposits with the ECB – something it hopes will stir the big lenders to pump money into the economy, rather than keep it back and reduce their own deposit rates, forcing savers to go out and spend or invest their money.

While it would be a huge shock if that changed today, markets will still be listening devotedly to hear what Draghi has to say about any further easing or rate cuts in the near future, and the general economic picture in the eurozone, when he speaks in Frankfurt at 12:30 p.m. CET (1:30 p.m. BST; 8:30 a.m. ET). Draghi is likely to reiterate the ECB's stance that it still has plenty of ammunition left to deal with sluggish growth and inflation.

Along with rates and bond buying, Draghi will likely have to focus on a wide variety of issues including:

• Concerns about the eurozone and global economies: While most indicators in Europe are pointing to a modest upswing in the continent's economic fortunes, there are still concerns about global and European growth, which Draghi will be expected to address.
• Criticism from Germany: German officials, particularly finance minister Wolfgang Schauble, have criticised the ECB's stimulus measures in recent weeks, questioning its independence, and even, at one point, blaming ECB policies for helping the rise of the right-wing Alternative for Germany party. Draghi will likely move to reiterate the ECB's total independence from politics.
• Worries about the banking sector: Concerns about the ability of the banking sector to cope with a persistent sub-zero interest rate climate are rife, and Draghi may have to try and soothe those concerns. There may be a particular focus on Italy, where a €5 billion fund has been set up to help solve problems in the country's weakest banks.
• Helicopter money: Discussions about the use of so-called helicopter money, which involves creating new money and giving it directly to people to spend on whatever they want, are becoming more frequent, and Draghi will likely be pressed on whether its a realistic option. Earlier in the week, Bank of England governor Mark Carney, distanced the bank from the policy, and said that introducing helicopter money could lead to "a compounded ponzi scheme."

As expected, analysts from across the financial sector have been giving their predictions for what will happen in Frankfurt this afternoon, and while the consensus is that rates will stay put, there are still some interesting insights as to what might happen out there:

Mike van Dulken from Accendo Markets says: "The big event of the day however will be the ECB policy update and while no change to rates or QE are expected President Draghi may have another go at some forward guidance to talk the EUR down in his press conference. Maybe he’ll be more successful than he was last month." 

Ilya Spivak, a currency strategist at forex firm Daily FX says: "Today’s meeting offers Draghi an opportunity to formally clarify forward guidance. If he uses it to unambiguously assert that the ECB is well-armed to deliver greater easing and is prepared to do it on short notice if necessary, the Euro is likely to weaken. Risk appetite may also improve, sending the Australian, Canadian and New Zealand Dollars higher alongside stock prices. The absence of a forceful dovish message may leave investors disappointed however, triggering the opposite results."

While Deutsche Bank's Jim Reid thinks the focus will be on corporate bond buying: "Perhaps of most interest to us today will be evidence of any logistical progress on the corporate bond purchasing program (CSPP). Since the announcement date details for the program have been thin with the hope that today will bring greater clarity around the potential size, split between primary and secondary markets and the finer details around bond eligibility. It might still be too early to hear much though."

Finally, here's what Dutch bank Rabobank has to say: "Our ECB watcher Elwin de Groot expects no new policy announcements but does think that President Draghi will emphasise that several easing measures are still in the pipeline. Elwin continues to think that an additional 10bp cut to the deposit rate is still a realistic and probable follow-up to these measures if the economic environment does not pick-up. However, we wouldn’t expect such a cut to be made until September at the earliest."

Sweden's currency is defying its central bank

• Ben Moshinsky
 

• 5h
• 453

REUTERS/Pawel KopczynskiMy Nordstroem of Sweden competes in the High Jump Women Qualification event at the European Athletics Indoor Championships in Gothenburg March 2, 2013.

Sweden's central bank added to inflation-boosting measures, saying it would buy an additional 45 billion kronor ($5.6 billion) of assets including bonds this year.

The bank, known as the Riksbank, kept rates at -0.5%.

It said the unprecedented easing measures were designed to "ensure the positive development of the Swedish economy and that the rising trend in inflation continues," in the statement published on Thursday.

Under normal circumstances, loosening monetary policy causes a currency to fall relative to peers. Lower interest rates attract less investment and lower future demand for the currency, which makes its value fall.

But in the past few months markets have been reacting the opposite way.

When Japan surprised markets with measures to ease monetary conditions earlier this year, the yen strengthened.

A similar thing happened today with the Swedish kronor against the Euro:

Investing

There are a few theories out there as to why this is starting to happen. Economists, such as former Pimco CEO Mohamed El-Erian, have said that central banks have gone as far as they can with loose monetary policy and negative interest rates. 

The market senses that a central bank is reaching the end, and, with the only way forward being to eventually raise rates to combat inflation in the future, funds flow into the currency in anticipation.

The Riksbank attempted to stop this happening by saying it hadn't reached the limit of easing.

"Even if it is less likely that further monetary policy stimulation will be needed in the period ahead, as economic activity strengthens and inflation approaches the target, negative surprises may lie ahead," the central bank said.

"In light of this, the Executive Board is still therefore highly prepared to make monetary policy even more expansionary if necessary, even between the ordinary monetary policy meetings. There is still scope to cut the repo rate further," said the Riksbank.

Although it doesn't look like the market believed it.

Mitsubishi Motors cheated on fuel tests to look more environmentally-friendly

• Reuters

• 3h
• 390
 
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Toru Hanai / Reuters

TOKYO (Reuters) - Mitsubishi Motors Corp said it falsified fuel economy test data to make emissions levels look more favorable, and its shares slumped more than 15 percent, wiping $1.2 billion from its market value on Wednesday.

Tetsuro Aikawa, president of Japan's sixth-largest automaker by market value, bowed in apology at a news conference in Tokyo for what is the biggest scandal at Mitsubishi Motors since a defect cover-up over a decade ago.

Shares in the company closed down more than 15 percent at 733 yen, the stock's biggest one-day drop in almost 12 years.

In 2000, Mitsubishi Motors revealed that it covered up safety records and customer complaints. Four years later it admitted to broader problems going back decades. It was Japan's worst automotive recall scandal at the time.

The company said on Wednesday the test manipulation involved 625,000 vehicles produced since mid-2013. These include its eK mini-wagon as well as 468,000 similar cars it made for Nissan Motor.

It said it would stop making and selling those cars, and has set up an independent panel to investigate the issue.

Mitsubishi Motors sold just over 1 million cars last year.

Mitsubishi Motors is the first Japanese automaker to report misconduct involving fuel economy tests since Volkswagen was discovered last year to have cheated diesel emissions tests in the United States and elsewhere.

South Korean car makers Hyundai Motor Co and affiliate Kia Motors Corp in 2014 agreed to pay $350 million in penalties to the U.S. government for overstating their vehicles' fuel economy ratings. They also resolved claims from car owners.

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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Oil is getting pounded because Middle Eastern workers have stopped striking

• Will Martin

• 5h
• 2,969
 
• 1

The price of oil is tumbling on Wednesday after the return of Kuwaiti oil labourers to work, and higher than expected US oil inventories led to renewed concerns about oversupply in the markets following Sunday's failed talks in Doha.

Just after 8:45 a.m. BST (3:45 a.m. ET) both major crude oil benchmarks, Brent and West Texas Intermediate, are off more than 2%, seeing the gains made on Tuesday virtually evaporate. Brent has slipped 2.45% to trade at $42.95 per barrel, while WTI is off 2.5% at $41.41. Here's how both benchmarks look in early European trading:

Investing.com

Investing.com

US inventory data, released by the American Petroleum Institute after markets closed on Tuesday, showed that crude stocks in America grew by 3.1 million barrels last week, nearly double the 1.6 million gain expected. This has added to the oversupply problem, plaguing oil right now.

Crude saw big gains on Tuesday, helped by striking oil workers in Kuwait, but the strike was ended late on Tuesday, and that has renewed fears about the state of the oil market in the wake of the Doha talks.

Kuwaiti workers went on strike on Sunday, and that led to production being slashed from 2.8 million barrels per day at March estimates, to just 1.5 million barrels a day, Bloomberg reported on Tuesday. Workers were striking over a plan to change the way public sector workers in the country are paid, which could lead to wage cuts.

However, workers are now going back to work according to reports in Kuwaiti media, helping oil return to losses. Here's what Deutsche Bank's Jim Reid had to say early this morning (emphasis ours):

That said it’s been a different story for Oil after the US close last night with the news that workers in Kuwait are set to end the 3-day strike which had caused a decent disruption in production levels and was largely attributed to the recovery from the early post-Doha lows at the start of the week. Local press (Al Jarida) are reporting the announcement from the trade union and the news comes just after Kuwait oil’s minister had announced that negotiations with workers would not commence until the strike is halted. On the back of the news WTI is currently over 2% lower this morning at a shade above $40/bbl.

Here's why Intel's CEO says they're laying off 12,000 people

• Matt Rosoff
 
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• 15h
• 9,524
 
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Ethan Miller/ Getty ImagesIntel CEO Brian Krzanich

Intel  $31.05

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On Intel's Tuesday earnings call, CEO Brian Krzanich explained why the company is restructuring,including laying off up to 12,000 employees. Basically, the PC business is hurting, and Intel knows it has to change fast to survive.

"Intel has typically been known as a PC company," Krzanich said. Now, it's going to be focused around the cloud and "all connected devices that connect to that cloud....That includes the PC but much more than that."

Krzanich said that the restructuring will give it "flexibility" to invest in the hottest areas for the otherwise slow-growing PC market:

• 2-in-1 laptop-tablet hybrids, which are growing more than 10% per year, Krzanich said.
• Gaming PCs, which he said are growing at a simlar rate.
• Home gateways, including TV set-top boxes, where Intel says it's gaining share.

And to invest in other areas outside PCs that are now "critical" to Intel's success:

• Datacenter
• Internet of Things, which Intel said grew 22% year over year
• Memory
• Connectivity.

As a result of this restructuring, Intel said, it would reduce its spending run rate by $1.4 billion a year by mid-2017, giving the company "the highest revenue per employee in Intel's history."

SEE ALSO: Intel to slash 12,000 jobs and take a $1.2 billion charge, stock drops

Yahoo says it’s made ‘substantial progress’ on selling or spinning off the company

• Eugene Kim
 
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• 17h
• 2,570
 
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Thomson ReutersYahoo CEO Marissa Mayer

Yahoo  $37.00

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Yahoo just reported its first-quarter earnings after the bell today.

The numbers show Yahoo's core business is continuing to shrink, seeing declines across the board from last year. Yet, expectations were already pretty low, and the stock is roughly trading flat in after hours.

Here are the most important numbers:

• EPS: $0.08 per share vs. $0.07 per share (non-GAAP)
• Revenue: $1.09 billion vs. $1.08 billion (down 11% year-over-year)
• Revenue ex-TAC: $859.4 million vs $846.3 millioin (down 18% year-over-year)

Yahoo's net profit dipped into the red in the first quarter, posting a loss of $99 million. That's down 12% from the same period of last year when it had $21 million in net profit.

Yahoo also gave second quarter guidance in the range of $1.05 billion and $1.09 billion, slightly below street estimates of $1.10 billion.

Yahoo's legacy business, including search and display, continued to slide this quarter. Search revenue was down 15% to $820 million, while display revenue dropped 1% to $463 million for the quarter.

Revenue from Mavens, which stand for mobile, video, native advertising, and social, was up 7% to $390 million. But that was significantly lower growth than previous years, when it saw high double digit growth. Last year, Mavens grew 26% year over year. Mavens growth has been a focal point of Mayer's 3-year turnaround plan.

"I'm pleased that we delivered Q1 results in line with our expectations. Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth," Yahoo CEO Marissa Mayer said in a statement. "In tandem, we made substantial progress towards potential strategic alternatives for Yahoo. Our board, our management team, and I are completely aligned on this top priority for shareholders."

Yahoo

Yahoo is currently seeking a buyer for its core internet business, while dealing with a proxy fight from activist investor Starboard Value. On top of that, Yahoo CEO Marissa Mayer continues to pursue her 3 year turnaround plan.

Yahoo's quarterly conference call is eagerly awaited on Wall Street, as it's the company's first big update since putting its core internet business up for sale in February. 

The deadline for placing bids was reported to be Monday, and companies like Verizon, TPG, and Bain Capital are rumored to be the main interested parties. Yahoo hasn't commented on the bidding process yet.

SEE ALSO: Here's what Wall Street really wants to hear from Yahoo's big earnings on Tuesday