Friday, December 16, 2016

Trivago's IPO falls below expectations

Trivago's IPO falls below expectations

CEO of Expedia, Inc. Dara Khosrowshahi attends the Allen & Co Media Conference in Sun Valley, Idaho July 13, 2012.  Reuters/Jim Urquhart   CEO of Expedia, Inc. Khosrowshahi attends Allen & Co Media Conference in Sun Valley Thomson Reuters
(Reuters) - Trivago, the hotel search platform that is majority owned by U.S. online travel firm Expedia, raised $287 million in an initial public offering (IPO) on Thursday, far below expectations, according to a person familiar with the matter.
The underwhelming pricing of the Düsseldorf, Germany-based company's offering reflects some concerns among investors, in a challenging year for technology IPOs, that it may be too reliant on a few online travel companies for its revenue.
Trivago priced 26.1 million American depository shares (ADS) on Thursday, fewer than its planned 28.5 million. At $11 an ADS, the pricing was also below its indicated range of $13 and $15, the source said, asking for anonymity become the details are not yet public.
Expedia and Trivago did not immediately respond to a request for comment.
The downsized IPO comes on the tail-end of a difficult year for IPOs. Amid investor jitters and poor post-IPO performances, the total amount raised by IPOs is down 42 percent so far this year, according to Thomson Reuters data. Proceeds raised by internet software and service companies such as Trivago are $450 million, down 41 percent from $762 million this time last year.
Hotel booking platforms such as Trivago allow customers to search through hotel deals aggregated across a variety of online travel sites. It makes much of its money from online travel agencies, which pay for each click a customer makes on their hotel offers.
Majority shareholder Expedia is one of its biggest customers, which along with brand affiliates such as Travelocity and Hotwire comprised 35 percent of its total revenue this year through the end of September. Priceline Group Inc and its affiliated brands such a Booking.com, contributed 43 percent of the company's revenue through the same time period.
Global travel spend grew to an estimated $1.1 trillion in 2015, excluding Canada, Latin America and Eastern Europe, a compound annual growth rate of 4.7 percent since 2010, according to Phocuswright Data cited in Trivago's prospectus.
Still, the industry has been challenged by the increasing number of hotels that encourage booking directly through their own websites.
Trivago rival Tripadvisor Inc  has seen its stock tumble in recent months, as its growth has slowed and it has sought to shift to a model that allows customers to book directly.
Expedia paid 477 million euros ($531 million) in 2012 for a 62 percent stake in Trivago.
Trivago will list on Friday on the Nasdaq under the ticker symbol "TRVG."
JPMorgan Securities LLC, Goldman Sachs & Co and Morgan Stanley & Co LLC are among the underwriters.
(Editing by Sandra Maler and Lisa Shumaker)
Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

Oracle beats on profits, misses on revenue, stock drops

Oracle beats on profits, misses on revenue, stock drops

Larry Ellison Safra CatzOracle executive chairman Larry Ellison and co-CEO Safra Catz.Business Insider
ORCL Oracle
 38.96 -0.98 (-2.40 %)
DisclaimerMore ORCL on Markets Insider »
Oracle just reported second quarter earnings.
It reported:
  • 61 cents earnings per share. Analysts were expecting of 60 cents, so that's a beat.
  • $9.0 billion in sales. Analysts expected $9.11 billion, so that's a miss.
Stock is down about 2% in after-hours trading.
Q2 SAAS AND PAAS CLOUD REVENUES UP 81%, AND UP 89% IN NON-GAAP CONSTANT CURRENCY

Total Quarterly Cloud Revenue $1.1 Billion -- First Quarter Over One Billion Dollar Mark

REDWOOD SHORES, Calif., Dec. 15, 2016 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2017 Q2 results. Total Revenues were $9.0 billion, flat in U.S. dollars and up 1% in constant currency. Non-GAAP Total Revenues were $9.1 billion, up 1% in U.S. dollars and up 2% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $878 million, up 81% in U.S. dollars and up 83% in constant currency. Non-GAAP SaaS and PaaS revenues were $912 million, up 87% in U.S. dollars and up 89% in constant currency. Total Cloud Revenues, including infrastructure as a service (IaaS), were $1.1 billion, up 62% in U.S. dollars and up 64% in constant currency. Cloud plus On-Premise Software Revenues were $7.2 billion, up 2% in U.S. dollars and up 3% in constant currency.
Operating Income was $3.0 billion and Operating Margin was 34%. Non-GAAP Operating Income was $3.8 billion and non-GAAP Operating Margin was 42%. Net Income was $2.0 billion while non-GAAP Net Income was $2.6 billion. Earnings Per Share was $0.48, while non-GAAP Earnings Per Share was $0.61. Without the impact of the U.S. dollar strengthening compared to foreign currencies and an unforeseen Egyptian currency exchange loss, Oracle's reported GAAP and non-GAAP Earnings Per Share would have been 2 cents higher.
Short-term deferred revenues were $7.4 billion, up 6% in U.S. dollars and up 8% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $14.2 billion, up 9% from the prior year.
"For four consecutive quarters our Cloud SaaS & PaaS revenue growth rate has increased," said Oracle CEO, Safra Catz. "As we get bigger in the cloud, we grow faster in the cloud. Our non-GAAP constant currency SaaS and PaaS growth rate is now up to 89%. This growth rate acceleration has driven our quarterly cloud revenue over the $1 billion mark. When salesforce.com crossed the billion dollar milestone their SaaS and PaaS subscription growth rate had slowed down to 36%, even after you include all their acquisitions."
"Oracle has now passed salesforce.com and become number one in SaaS cloud applications sales to customers with over 1,000 employees according to the latest IDC report," said Oracle CEO, Mark Hurd. "In other words, this year we are selling more enterprise SaaS than any cloud services provider in the world. We expect to book over $2 billion in new annually recurring cloud business this year alone. And, with the acquisition of NetSuite, we plan on being the #1 cloud applications service provider for companies with less than 1,000 employees as well."
"Our Database as a Service cloud revenue was $100 million for the quarter, driving growth in our overall database business," said Larry Ellison, Oracle Chairman and CTO. "We expect our Database as a Service and IaaS businesses will grow even faster than our skyrocketing SaaS business. A lot of people were taken by surprise when IDC ranked Oracle #1 in Enterprise SaaS, surpassing salesforce.com and overcoming their fifteen year head-start. Stay tuned. More surprises coming. I think we're going to do even better with IaaS and the Oracledatabase in the cloud."
The Board of Directors also declared a quarterly cash dividend of $0.15 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 5, 2017, with a payment date of January 26, 2017.
ORACLE  CORPORATION
 Q2 FISCAL 2017 FINANCIAL RESULTS
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
Three Months Ended November 30,

% Increase
% Increase
(Decrease)
% of 
% of 
(Decrease)
in Constant
2016
Revenues
2015
Revenues
in US $
Currency (1)
REVENUES
Cloud software as a service and platform as a service
$                   878
10%
$                   484
5%
81%
83%
Cloud infrastructure as a service
175
2%
165
2%
6%
9%
Total cloud revenues
1,053
12%
649
7%
62%
64%
New software licenses 
1,347
15%
1,677
19%
(20%)
(19%)
Software license updates and product support
4,777
53%
4,683
52%
2%
3%
Total on-premise software revenues
6,124
68%
6,360
71%
(4%)
(3%)
     Total cloud and on-premise software revenues
7,177
80%
7,009
78%
2%
3%
Hardware products
497
5%
573
6%
(13%)
(12%)
Hardware support
517
6%
550
6%
(6%)
(5%)
     Total hardware revenues
1,014
11%
1,123
12%
(10%)
(9%)
     Total services revenues
844
9%
861
10%
(2%)
0%
      Total revenues
9,035
100%
8,993
100%
0%
1%
OPERATING EXPENSES
Sales and marketing
1,960
21%
1,945
22%
1%
2%
Cloud software as a service and platform as a service
361
4%
280
3%
29%
31%
Cloud infrastructure as a service
111
1%
91
1%
22%
24%
Software license updates and product support
242
3%
293
3%
(17%)
(16%)
Hardware products
242
3%
325
3%
(25%)
(24%)
Hardware support
144
2%
174
2%
(18%)
(17%)
Services
697
8%
690
8%
1%
3%
Research and development 
1,510
17%
1,444
16%
5%
5%
General and administrative
303
3%
285
3%
6%
8%
Amortization of intangible assets
302
3%
423
5%
(29%)
(29%)
Acquisition related and other
40
0%
(7)
0%
713%
707%
Restructuring
86
1%
95
1%
(10%)
(5%)
      Total operating expenses 
5,998
66%
6,038
67%
(1%)
0%
OPERATING INCOME 
3,037
34%
2,955
33%
3%
3%
Interest expense
(451)
(5%)
(371)
(4%)
22%
22%
Non-operating income, net 
99
1%
84
1%
17%
2%
INCOME BEFORE PROVISION FOR INCOME TAXES
2,685
30%
2,668
30%
1%
1%
Provision for income taxes
653
7%
471
6%
39%
39%
NET INCOME
$                2,032
23%
$                2,197
24%
(8%)
(7%)
EARNINGS PER SHARE:
Basic
$                  0.50
$                  0.52
Diluted
$                  0.48
$                  0.51
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic
4,104
4,239
Diluted
4,195
4,316
(1)
We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2016, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended November 30, 2016 compared with the corresponding prior year period decreased our revenues by 1 percentage point and operating expenses by 1 percentage point.
More: Oracle Earnings

Britain will automatically be charged a £50 billion Brexit bill when Article 50 is triggered

Britain will automatically be charged a £50 billion Brexit bill when Article 50 is triggered

barnier1Michel Barnier, Chief Negotiator for the Preparation and Conduct of the Negotiations with the United Kingdom under Article 50 of the Treaty on European Union. Reuters
LONDON — Britain will be given a £50 billion ($62.1 billion) bill as soon as Prime Minister Theresa May triggers Article 50 and starts the official two-year Brexit negotiation process.
That is according to one of the European Union's chief Brexit negotiators, Michel Barnier, and other EU officials, says Sky News.
Sky News cited Barnier as saying that Britain will have to pay around €50 billion-€60 billion (£42 billion-£50 billion) to settle "outstanding liabilities." He has allegedly already mentioned the figure to EU leaders in recent weeks and in a meeting with 27 EU leaders last month.
Another source told Sky News: "We were told €50 billion-€60 billion. We were told informally at sherpa level."
The figure is believed to be derived from the fact that the UK has to keep contributing to the EU budget until the end of 2020, as well as meet "outstanding pensions liabilities, and other payments associated with loan guarantees."
It has been widely reported that the EU will serve Britain a Brexit bill and the Sky News report only reinforces that the bloc is set on enacting it when Article 50 is triggered. In November, the Financial Times was briefed by senior EU negotiators on plans for talks with Britain once Article 50 is triggered, which begins the official process of Britain leaving the 28-nation bloc. Those sources mentioned a hefty Brexit bill too.
Last month, European negotiators said they are unwilling to discuss transition arrangement or trade deals until a divorce settlement is reached, by mid-2018 at the latest. If Article 50 is triggered early next year, as Theresa May has signalled, this would leave Britain with just 6 months to negotiate a transition and trade deal.
Britain voted for a Brexit by a slim majority on June 23 and, since then, there has been much speculation on when the new prime minister, Theresa May, will trigger Article 50. March 2017 is the current target date but a Supreme Court case will rule in January 2017 whether she will have to get permission from parliament to do this. This could slow things down.
May says she will not give a "running commentary" on how negotiations are going but she has made it clear in various speeches that her government is prioritising immigration restrictions. This would imply a "hard Brexit" because the EU's official line is that it will not allow the UK to curb immigration and keep membership of the single market at the same time.
More: Brexit EU UK article 50 

Thursday, December 15, 2016

DIMON: If you put 'some of my liberal democratic friends' in charge of Singapore 'it would still be a backwater'

DIMON: If you put 'some of my liberal democratic friends' in charge of Singapore 'it would still be a backwater'

Jamie DimonJamie Dimon. REUTERS/Dylan Martinez
JPMorgan CEO Jamie Dimon is a fan of Singapore.
The Wall Street executive, who was recently said to be under consideration for Treasury secretary, advocated for the kind of heavy-handed leadership and public policy that country has seen in recent decades while speaking with Bloomberg Businessweek in Detroit Thursday.
Dimon was answering a question about whether Detroit's revitalization is replicable elsewhere. He pointed to Singapore as a model. 
"When it formed, it was partially Chinese, partially Malay, partial Indian; they didn't speak each other's languages," Dimon said. "A prime minister came in with the same kind of vision and strength to get it done. Its GDP is now higher than the GDP of the average American."
Singapore's GDP per capita was $55,182 in 2013, while GDP per capita in the US was $53,041 that year.
Dimon was describing the nation's first Prime Minister — Lee Kuan Yew — who turned the island city into a regional economic powerhouse in the years after its independence from Malaysia in 1965. Lee, who died last year at 91, is credited for the city's transformation from trading port into regional financial hub, but also sharply criticized by human rights groups for the policies that helped bring about that change, many of which persist after his death.
For example, Singapore imposes corporal punishment — specifically caning — for relatively minor crimes like vandalism. It also sharply curtails free speech and criticism of the government. 
"The prime minister is pretty tough," Dimon said. "He made them all learn English so it could become a back office for companies. He made sure the streets are clean. They have a lot of affordable housing, but he made sure there wasn't an Indian building and a Malay building and a Chinese building. He desegregated, not just by building and not just by floor, by apartment."
Dimon went on:
"I tell people, you put some of my liberal democratic friends responsible for Singapore, it would still be a backwater. 'Oh you can't force people to live where they don't want to live, you can't punish people for spitting on the streets, you can't make people learn English' — that's what would happen. So people have to think policy, what works and what doesn't work."
He pointed to a number of countries where he said populism has not worked, including Venezuela, Ecuador, Argentina, Cuba, and North Korea.
On the other hand, Dimon said, South Korea and Singapore — neither of which has much in the way of natural resources — are good examples of public policy experiments that have been successful. He also highlighted the success of Germany's vocational schools.
"I worry about bad public policy just causing constant damage out there," Dimon said.  "In America, you keep on hearing productivity is low, secular stagnation, it's a new normal. It's just not true: We've had multiple wars, we're not educating our kids, we had government shut downs, badly-spent money, failures in the health system, failures and an extreme amount of regulation — that's why we're going slow."
Watch the full segment:

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