Business
Disney reported that its Disney+ and Hulu streaming services had made a combined operating profit of $47m in the three months ending March 30th, a huge improvement on the $587m loss in the same quarter last year. The overall loss from streaming, including ESPN, in the recent quarter narrowed to just $18m. To boost business Disney announced a new streaming bundle in America that will include programming from Warner Bros Discovery. But the lack of profitability at the streaming division remains a source of investor discontent. After the company dampened expectations for growth in the current quarter, its share price tumbled by nearly 10%.
By contrast, the stock of UBS leapt by 10% after it reported a quarterly net profit of $1.8bn, well above market forecasts. The Swiss bank gained from soaring revenues at its wealth-management business and investment banking. It also lowered the estimate of losses it expects to incur from the toxic parts of the business it inherited from Credit Suisse.
Banco Sabadell rejected a €12bn ($12.9bn) takeover proposal from BBVA. A combination of the Spanish banks would be the biggest European banking deal in years.
Sweden’s central bank cut its main interest rate by a quarter of a percentage point, to 3.75%, the first reduction in eight years. Central banks in the Czech Republic, Hungary and Switzerland have also been lowering rates and the European Central Bank is expected to follow suit on June 6th, as Europe’s monetary policy diverges from America’s.
The Bank of England kept its key rate of interest unchanged at 5.25%, but Andrew Bailey, the bank’s governor, said that inflation’s downward trend was “encouraging”. Markets speculated that a cut to rates could come as soon as June .
American stockmarkets rallied after figures showed that employers had created 175,000 jobs in April, which was below forecasts, suggesting that the labour market is cooling. The data provide more support for those investors betting on interest-rate cuts.
AstraZeneca withdrew its covid-19 vaccine, one of the first to be rolled out during the pandemic, because it would be no longer commercially viable as updated jabs hit the market.
The new neural engine
Apple launched new iPads powered by its next-generation M4 chip, for artificial intelligence. Apple says the M4 is capable of up to 38trn operations per second, faster than the neural-processing unit of any PC with specific AI capabilities. Meanwhile, Apple reported revenue of $90.8bn for the first three months of the year, down by 4% from the same quarter in 2023. Sales of the iPhone fell by 10%, to $46bn.
Tesla’s sales of cars it made in China dropped again, by 18% in April compared with April 2023, according to the China Passenger Car Association. That is despite a big rise in electric-vehicle sales in the same month. BYD sold the most pure-battery cars.
A weak yen helped boost Toyota’s 12-month operating profit to ¥5.3trn ($34bn). But the Japanese carmaker warned that it expects profit to fall by 20% this year as it steps up its spending on electric cars and artificial intelligence.
Attacks by Houthi rebels off the coast of Yemen are expanding farther offshore, warned A.P. Moller-Maersk, which forecast a 15-20% loss of capacity across the shipping industry on routes between the Far East and northern Europe and the Mediterranean this quarter. Vessels have been forced to make the long journey around South Africa rather than through the Suez Canal because of the risk. Last month the Houthis attacked a ship 600km (375 miles) out to sea.
TikTok filed its appeal against legislation that would ban its app in America unless it divests from ByteDance, its Chinese parent company, by January next year. TikTok says the ban is unlawful, and that it would be impossible to create a stand-alone app in the United States. On another front of the tech wars, America has reportedly rescinded the licences that allow Intel and Qualcomm to export chips to Huawei, a Chinese maker of network equipment.
The launch of Boeing’s first manned Starliner spacecraft was postponed because of a faulty oxygen relief valve on the rocket. The Starliner is contracted to NASA to ferry crew to the International Space Station. A new launch date has been rescheduled for May 17th at the earliest. In a less than stellar week for Boeing, the Federal Aviation Administration opened another investigation into the production of its passenger jets, this time the Dreamliner 787.
BS jobs
A leading venture-capital investor in Silicon Valley said that half of Google’s white-collar employees do no “real work”. David Ulevitch reckons that many could “probably be let go tomorrow” and the company wouldn’t notice. He also bemoaned the “growing professional managerial class” in America as a “weakness, not a strength”. Mr Ulevitch thinks the problem of “fake work” is widespread, and believes his comments were “one of the least controversial things I’ve ever said”.