Morning News Call Reuters U.S
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MORNING NEWS CALL REUTERS U.S. Edition Wednesday, April 5, 2017 TOP NEWS ANALYSIS • Euro zone business activity at six-year high in broad recovery Euro zone businesses enjoyed their best quarter in six years at the start of Apple aims for more control, less 2017 and although growth was not quite as fast as a flash estimate, the upturn cost as it accelerates in chip de- was broad-based, a survey suggested. sign • N.Korea test-fires missile into sea ahead of Trump-Xi summit North Korea test-fired a ballistic missile into the sea off its east coast, South Apple Inc's decision to stop licensing Korea's military said, ahead of a summit between U.S. and Chinese leaders graphics chips from Imagination who are set to discuss Pyongyang's increasingly defiant arms program. Technologies Group Plc is the clear- • JAB Holding to buy bakery chain Panera Bread in $7.5 bln deal est example yet of the iPhone mak- JAB Holdings, the owner of Caribou Coffee and Peet's Coffee & Tea, said it er's determination to take greater would buy U.S. bakery chain Panera Bread Co in a deal valued at about $7.5 control of the core technologies in its billion, including debt, as it expands its coffee and breakfast empire. JAB Hold- products - both to guard its hefty ings offered $315 in cash per Panera share, representing a 20.3 percent pre- margins and to position it for future mium to the stock's closing price on March 31. innovations, especially in so-called • Actelion shareholders back R&D spinoff, keep J&J deal on track augmented reality. Shareholders in Swiss biotech group Actelion approved spinning off its drug The strategy, analysts say, has al- discovery and early clinical pipeline into a new company, keeping Johnson & ready reduced Apple's dependence Johnson's $30 billion takeover on track to close in the second quarter. on critical outside suppliers like ARM • Toshiba's Westinghouse replaced chairman two days before bankrupt- Holdings Plc, now owned by Soft- cy filing Bank Group Corp. Apple once relied Westinghouse Electric Co replaced its chairman two days before the U.S. nu- heavily on ARM to design the main clear construction unit of Japan's Toshiba Corp filed for bankruptcy last week, processor for the iPhone, but it now as it tries to draw a line under the travails of a business that has cost it billions. licenses only the basic ARM archi- tecture and designs most of the chip itself. BEFORE THE BELL More recently, when Apple bought U.S. stock index futures were little changed and the dollar remained under the headphone company Beats Elec- pressure as investors remained on the sidelines ahead of a meeting between tronics, part of a $3 billion deal in the U.S. President Donald Trump and his Chinese counterpart Xi Jinping 2014, it ripped out the existing, off- later this week. ADP employment data and latest reading from ISM and Markit the-shelf communications chips and on non-manufacturing activity occupies the day’s economic calendar. Europe- replaced them with its own custom- an stocks gained as oil and basic resource stocks strengthened, while Asian designed W1 Bluetooth chip. markets ended broadly higher. Oil prices rose after data showed a decline in "Apple clearly got rid of all the con- U.S. crude oil inventories. Gold prices steadied ahead of the minutes from the ventional suppliers and replaced Federal Reserve's March meeting due later in the day. about five chips with one," said Jim Morrison, vice president of TechInsights, a firm that examines STOCKS TO WATCH the chips inside electronics devices. "Today we do much more in-house Deals of the day development of fundamental tech- • Panera Bread Co (PNRA). JAB Holdings, the owner of Caribou Coffee and nologies than we used to," Apple Peet's Coffee & Tea, said it would buy the U.S. bakery chain in a deal valued Chief Financial Officer Luca Maestri at about $7.5 billion, including debt, as it expands its coffee and breakfast em- said at a February conference. pire. JAB Holdings offered $315 in cash per Panera share, representing a 20.3 "Think of the work we do on proces- percent premium to the stock's closing price on March 31, the last trading day sors or sensors. We can push the before media reports of a potential deal. The deal includes the assumption of envelope on innovation. We have about $340 million of net debt, JAB Holdings and Panera said in a joint state- better control over timing, over cost ment. and over quality." • Qualcomm Inc (QCOM). The smartphone chipmaker has received approval Most vendors of consumer electron- from U.S. antitrust regulators for its proposed $47 billion acquisition of NXP ics products rely on outside suppliers Semiconductors NV, Qualcomm said in a statement on Tuesday. The waiting for chip design and development, period required for companies under the Hart-Scott-Rodino Antitrust Improve- primarily because it is extremely ex- ments Act has expired, the company said. Additionally, Qualcomm said it is pensive. That has created huge op- extending its cash tender offer for all outstanding shares of NXP. The tender portunities for companies like ARM, offer is now scheduled to expire at 5:00 p.m. EDT on May 2, 2017. Qualcomm Inc and Nvidia Corp, MORNING NEWS CALL - U.S. EDITION April 5, 2017 which have developed core technol- Results ogies for processing, communica- • Walgreens Boots Alliance Inc (WBA). Drugstore chain operator reported a tions and graphics that are used by surprise drop in quarterly sales, citing "challenging market conditions in conti- scores of vendors. nental Europe" and as a strong dollar reduced the value of sales outside the Now, though, Apple is so big that it United States. The company also said it would repurchase $1 billion worth of can economically create its own de- shares till Dec. 31. Net income attributable to the company, rose to $1.06 bil- signs, or license small pieces of oth- lion, or 98 cents per share, in the second quarter, from $930 million, or 85 ers' work and build on it. As with cents per share, a year earlier. Net sales fell to $29.45 billion from $30.18 bil- ARM and Qualcomm, the actual lion a year earlier. manufacturing of the chips is still contracted out to a semiconductor In other news foundry, such as those run by Sam- • Acorda Therapeutics Inc (ACOR). The company will cut nearly 20 percent sung Electronics and Taiwan Semi- of its workforce as part of a cost reduction plan, the company said on Wednes- conductor Manufacturing Co Ltd. day, less than a week after losing certain patents for its multiple sclerosis drug, Ampyra. The company, which had 597 employees as of Feb. 20, said the job MOVE FAST, SAVE MONEY cuts are expected to result in cost savings of more than $21 million annually. Bringing more of the design work in- • Alphabet Inc (GOOGL). Google said on Tuesday it would roll out a mobile house cuts complexity, people famil- YouTube application designed for India, boosting the search company's pres- iar with the processes say. Instead ence in a burgeoning market with spotty Internet access. Google has been of managing one or more design conducting extensive tests in India of YouTube Go, which allows users to save teams and then a fabricator, Apple videos to watch offline and monitor their data use. A beta version of the app has only to manage the fabricator. has been released in the Google Play Store in India, and will be released in It may also help the company move other emerging markets later, company executives said in an interview. faster - and save money - as it fo- • Amazon.com Inc (AMZN). The company will live-stream games for the U.S. cuses on new technologies such as National Football League this year, a company spokeswoman said on Tues- virtual and augmented reality. Apple day, marking a high-profile push by the online retailer to attract fans to its CEO Tim Cook has indicated that Prime shopping and video-playback club. As part of the deal, Amazon will Apple plans to integrate augmented stream 10 Thursday-night games online for Prime members exclusively. The reality into its products, which makes same games will be broadcast by networks CBS and NBC on television. Ama- 3-D sensors and graphics chips like zon beat out Twitter Inc, Facebook Inc and Google's YouTube for the digital Imagination's especially important. distribution rights, according to a person familiar with the matter. The company Even before formally cutting off Im- agreed to pay the NFL five times what Twitter spent on the rights last year, agination, Apple had given hints that which was reported to be $10 million, the person said. it was preparing to design its own • Chevron Corp (CVX). Nearly a century after the company amassed the No. graphics processors. Specifically, it 2 stake in America's largest oilfield, Chief Executive John Watson is hitting the introduced a piece of its own code accelerator on developing the company's vast Permian Basin holdings. In an called Metal for app developers. App interview, Watson made clear his desire to put the West Texas to New Mexico developers use Metal to make their expanse in the ranks of Chevron's biggest ventures. The U.S. bank has en- apps talk to the graphics chip on the countered government probes and lawsuits, and its board recently said an in- iPhone. ternal review may uncover more problematic accounts.