General Electric Beat Revenue and Profit Estimates

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General Electric (GE) has reported 1st quarter revenues of $27.66 billion which exceeded Wall Street’s estimates of $26.4 billion. However, the revenues it earned for the quarter represents a 1% decline. The company got lower sales from its oil and gas and lighting businesses.

Earnings per share (EPS) for the quarter were at 21 cents while analysts were expecting an EPS of 17 cents.

Jack De Gan, chief investment officer at Harbor Advisory, described the earnings report as a “great report.” De Gan said, “Jeff at the end of the day is going to be viewed as a guy who stepped into a really difficult situation and spent his career fixing it.”

Earnings from continuing operations that is attributable to GE shareholders increased to $858 million, up from $248 million last year. EPS from continuing operations grew from 3 cents to 10 cents.

However, GE had a negative $1.6 billion in cash flow from industrial operating activities. GE’s aviation business posted revenue growth of 9% to $6.8 billion. Its’ power division had a 17% increase in sales to $6.09 billion.

Quarterly orders are also up by 10% to $25.7 billion. Equipment orders have reached $12.3 billion while services orders reached $13.4 billion. Regarding equipment backlog, it stands at $83.9 billion while the services backlog is at $240.4 billion. In totality, order backlog has risen 3% year over year.

Its’ renewable-energy business enjoyed a 22% increase in revenue. This includes wind turbine sales. Its total industrial operating profit increased by 11%.

In the 1st quarter of this year, GE got two HA gas turbine orders, one of which was from China, its’ very first from it. In total, it has 30 HA gas turbine units as backlog.
For the full year, the company expects to reach its cash target of $12 billion to $14 billion.

Jeff Immelt, Chairman, and CEO of GE said that the company’s merger with Baker Hughes is moving and remains on track. Immelt said, “We expect the deal to close in mid-2017. We are executing a $2 billion cost out program over 2017 and 2018 to deliver more value to our customers, shareowners, and employees.”

Significant savings through synergies are expected when GE’s oil and gas business combine with Baker Hughes. The merger will allow them to compete with Schlumberger, the industry’s leader.

Immelt said, “We expect cash flows to improve throughout the remainder of the year, with no change to our full year cash flow framework. We reaffirm our 2017 operating framework for Industrial operating + Vertical EPS, organic revenue growth, and industrial operating margin expansion.”

In recent years, GE has shifted its business towards industrial businesses by exiting low-margin businesses like home appliances.

GE has continued its exit from GE Capital. For the 1st quarter, it has closed $7 billion in asset sales to reach $198 billion based on its original GE Capital Exit Plan. According to GE, the company said that all major transactions that it has planned are now completed.

General Electric makes a variety of industrial equipment including jet engines and power plants.

Apple Earns Victory Over Australian Banks With Apple Pay Access

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Apple has won one of the important global fights in restricting banks from taking control of the Apple Pay Access. A group of Australian banks collaboratively bargained to gain access to Apple Pay so that the banks could use their own wallets in mobile iPhone payments. However, Apple wants to keep its NFC chips private by ensuring that Apple wallet is always used while making payments through iPhone. The Australian Competition and Consumer Commission (ACCC) has taken the side of Apple, rejecting the plea of the banks.

The Apple Pay service is developed based on the Near Field Communication (NFC) technology used in iPhones. NFC is strictly private and no bank in the world has gained access to it. While making payments, iPhone users must always use the Apple Pay service. Google, on the other hand, allows banks to use their digital wallets on android platforms. The Australian banks wanted to avoid the Apple’s transaction fees by using their own banking apps. The banks wanted to engage the customers more and take advantage of the contactless payment market which is estimated to be $84 billion.

Apple has more than 3500 banking partners in about 15 global countries. None of the banks have access to the NFC technology which forms the basis of the payment system. The Australian banks argued that the access is required not to circumvent the transaction fees, but to make the mobile payment platform user-friendly. The ACCC was worried that bargaining power to the banks may reduce a stiff competition between Apple and Google. When the banks collaborate on providing the service, it will reduce the competitiveness in the market as well. The regulator pointed out that the banks didn’t provide sufficient information to support the claim that their action won’t affect the competition in the market.

The Australian authority strongly believes that third party digital wallets such as Apple wallet keep the choices open for customers due to the inherent competition. The regulator is also worried that the move proposed by the banks would result in more NFC controlled smartphones in the future. The banks now can’t collectively negotiate with Apple. However, the banks are free to negotiate with Apple separately to make a deal to gain access to Apple Pay.

The banks are unhappy about ACCC siding with Apple because the ruling will hinder the development of banks specific mobile wallets. In Australia, the move will effectively mean that Australian mobile wallet will be dominated by an overseas organization. The spokesperson for the banks said that the regulator didn’t see the bigger picture here. The banks strive to promote choices for customers by offering different digital wallets. Android users can still use digital wallets of the banks to pay for the services while using their smartphones and iPhone users won’t have the same choice. A spokesperson from Apple has commented that it is best for Australians who want the best and easiest mobile payment experience using their iDevices.

Investors Shaken By The Policies of The Trump White House

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After the announcement of the results of the election, the US stocks were enjoying profits as positive economic growth was promised by the Trump campaigns. However, the reaction is not just the same after president Donald Trump took his office. The Wall Street has been pinning its hopes on reformative economic policies, and the investors were hoping for a big change. The recent executive orders have affected the investors as the US stocks continue to slide. There is a lot of uncertainty in the economy when Trump has plans to build a wall on the border and ban several Muslim immigrants from entering the country.

The immigration crackdown by the president has affected the US stocks in new ways. In fact Wall Street has recorded its worst day in this year just after the executive order was issued by the president. Several leaders in the technology sector have criticized Trump for his ban on immigrants. This could disrupt the business of several tech companies and they are now focused on helping their employees to minimize the consequences. The firing of attorney general, Sally Yates added much to the controversy.

A new analysis by David de Garis surfaced discussing controversial currency valuations. The trade adviser for Trump, Peter Navvaro has accused Germany of undervaluing Euro to exploit the EU partners. The dollar’s strength is questioned and it can lead to severe implications in the market.

UPS, the leading delivery firm lost 6% after it posted details about quarterly loss. The sales forecast for Armour was also undesirable and the shares tumbled as a result. Nike was also experiencing some problems with stock values. The Customer Confidence Index fell greatly resulting in losing the 15-year high position.

Both Nasdaq and S&P 500 experienced loss consecutively for three days. The DOW also closed below the 20,000 mark. Several US markets opened very low on Tuesday. The economists fear that the Trump rally may be over and the fall may be worse. The Wall Street had hoped that the president would focus more on economic growth and tax reforms as he promised. However, Trump issued administrative orders for building a wall and banning immigrants. The immigrants from Iran, Iraq, Syria, Sudan, Somalia, Yemen and Libya can’t enter United States as their visas are cancelled and no new visas will be issued for the next 90 days. Several protestors continue to flood the airports to support immigrant victims who lost their sense of belonging with just a single signature.

The economists believe that White House has already spend too much of the political capital for building a wall on the US-Mexico border. They also have to spend a lot of capital to defend the immigration vetting policy. This can result in major disruptions with Mexican trades and affect the tech companies on a much wider scale. Trump has however said that these promises are an integral part of his campaign. The Wall Street could only hope that Trump executes tax cuts and economic reforms with the same enthusiasm.

CEO of Fiat Chrysler Rubbishes Allegations By EPA

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The Environmental Protection Agency (EPA) of the United States has alleged that Fiat Chrysler Automobiles (FCA) violated the Clean Air act. The FCA was accused of increased nitrogen oxide emission from its Ram 1500 EcoDiesel and Jeep grand Cherokee SUVs 2014-16 due to the installation of undisclosed software. The assistant administrator of EPA, Cynthia Giles said that FCA is causing illegal pollution by violating the Clear Air act. The devices make the vehicle perform differently on road and during testing.

The stocks of FCA quickly dropped after the allegations by the EPA. FCA stocks lost about 10% and closed at $9.95 per share. The FCA may be asked to pay $44, 539 per vehicle for a clear violation of the Clean Air act. The CEO of FCA, Sergio Marchionne has disputed the alleged charges. He commented that FCA would be compared to Volkswagen in an unfair way and people may draw unjustified conclusions. In the press conference, he called the allegations to be absolute nonsense and he said that it is impossible to compare FCA with Volkswagen.

The German automobile manufacturer Volkswagen admitted that the vehicles are equipped with software that is exclusively designed to cheat on the government emissions testing for diesel vehicles. The company is ordered to pay $2.8 billion as criminal fine and $1.5 billion as civil penalties. The company was found at fault for meddling with the software and intentionally lying about the conspiracy to the US investigators. The case is not over yet as the settlement is waiting for approval from Detroit federal judge. Volkswagen also agreed to bear the civil settlements that can cause $1.7 billion loss for the company to help the car owners and dealers affected by the scandal. The manufacturer has agreed to authorize buybacks of the associated vehicles and offer free fixes.

FCA is worried about being compared to Volkswagen as FCA hasn’t involved in a deceptive act. Many experts said that FCA may be at fault in not disclosing the software, but it can’t be charged with deception like the Volkswagen. It is very common in the automobile industry to use a software to adjust engine emissions. However, FCA has failed to disclose information about this software and this is the reason for the allegations of EPA. Analysts commented that there is no evidence that FCA purposefully cheated.

The FCA vehicles don’t meet the standards with the included software, but it can’t be compared to the deliberate and deceptive act of Volkswagen. Marchionne said that he was disappointed by EPA’s public move when they are discussing the acceptance level of calibration. He also questioned the possible political motive. The disagreement associated with engine calibration is not similar to the defeat devices found in Volkswagen. EPA rebutted to this statement saying that EPA along with CARB committed to enhanced testing when the Volkswagen was found guilty. Marchionne also said that he believes that the EPA has requested the support of the US Justice Department to continue with the investigation.

Will CFPB Weaken Delaware’s Payday Loan Regulations?

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The state of Delaware has problems with payday loans, despite the alternative financial product banned from lending in the marketplace.

Delaware is one of the states that has joined the crusade against short-term, high-interest loans. However, a recent study came out that found a large number of the unbanked and underbanked use payday loan, and the numbers of those not using the traditional banking system are higher than the national average, which is a development that has troubled many Delaware officials and financial institutions.

Over the past few years, Delaware officials have implemented new rules and regulations to rein in payday loans in Delaware and ensure that borrowers are protected from so-called predatory lending.

However, Delaware is one of many states wondering: what will happen if the Consumer Financial Protection Bureau (CFPB) imposes its proposal of federal regulatory rules? Will the states’ initiatives be null and void? Will states be required to follow the federal government’s own rules and regulations?

Everything remains foggy at this point, and it is even more so now that Donald Trump is the president-elect. It is unclear if he will restrain the federal consumer watchdog agency or allow it to move ahead.

Despite the tough measures already in place in Delaware, critics fear that the lenders of short-term, high-interest loans will be able to get through the loopholes and operate without any fear of reprisal. If that happens then it could open the window to other states’ legislation being ignored by lenders.

This was brought up by Liz Coyle, executive director of Delaware Watch, in a letter last month.

“Dangerous loopholes in the proposed rule could provide payday lenders a license to creep back into our state, eroding protections developed through decades of work that save Delaware consumers millions of dollars each year,” she wrote.

Delaware has had a ban on payday loans since 2004, though the occasional lender pops up. The biggest problem as of late has been the proliferation of payday loan companies online. This is something that is giving states and provinces across North America and Europe a major headache. Nonetheless, the payday loan ban gives lenders a prison sentence of up to 20 years if they’re caught and convicted.

It is true that many expect a Donald Trump administration and a Republican-controlled Congress will toss out many of the provisions in the often lambasted Dodd-Frank bill. However, it remains uncertain what will happen to the CFPB, which was established in the wake of the economic collapse.

Critics have often argued that payday loans target the most vulnerable and send low- and middle-income households into a never ending debt trap. Proponents purport that payday loans are necessary because many of the impecunious consumers do not have access to conventional forms of credit or even banking options due to language barriers, criminal records or even something miniscule as the lack of funds.

Jurisdictions around the world have imposed new rules and regulations that either limit how payday loan stores operate or restrict them from entry or expansion entirely.

Lockheed Martin Comes Up With A Plan To Reduce The Cost Of F-35

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The F-35 fighter airplane made by Lockheed Martin is a single engine, single seat fifth generation aircraft that can participate in stealth multirole fighters. The F35 fighter aircraft has not participated in any combat missions, but they were announced to be combat ready after intensive testing. The f-35 program is undeniably the most expensive defense system weapon system that has received criticism all over the world. The USA predominantly funds the F35 program while many allies and partners also contribute to the development of the airplane.

The F35 program is several billion dollars over the budget and it is behind the schedule. The critics argue that the design is flawed and the manufacturer shouldn’t be allowed to enter the production stage without adequate testing. The defense system program has already gained enough political momentum and the huge sunk cost make it impossible to kill the deal at the moment. The president-elect Donald Trump expressed his disappointment in the involved cost and delay of the F35 program in his first press conference. This immediately affected the stocks of Lockheed Martin on Wednesday. Immediately after the comments by Donald Trump, the shares fell by 1%.

Donald Trump said to the press that his government will take measures to bring the cost of the F35 way down. He said that the project is long overdue and it has already consumed several billion dollars. Trump said that the new government will do some big things on the F35 and F18 program to bring down the cost of the defense weapons system. The F35 program has been questioned by several experts ahead of Trump.

On 13th January, the chief executive of Lockheed Martin, Marilyn Hewson met with the new president-elect Donald Trump to discuss the details about the F35 program. She said that the company is focusing on closing a deal that will bring down the cost of the aircraft. Hewson said that Lockheed Martin also wants to provide the best capability to the soldiers at the lowest possible price. She added that the new deal will reduce the price of the aircraft compared to the previous lot and it will also bring new jobs to the country.

According to Hewson, the new contract deal will allow Lockheed Martin to create 1800 jobs in Fort Worth. It will also create 38900 jobs in Texas. The supply chain used in the manufacture of the F35 program also influences 45 states. The stocks which were facing a tough time gained 1% after these comments from Hewson.

In early December, president-elect Donald Trump tweeted that the cost of the F35 program is out of control. He also added that he had a talk with Boeing to make an F18 Super Hornet which is comparable to F35. The new meeting is expected to resolve the conflicts between the new administration and Lockheed Martin. The defense secretary pick by Trump, James N. Mattis told the lawmakers that Donald Trump truly supports the F35 program, but he wants the best bang for the buck.