Aurelia Butler

LOS ANGELES (Reuters) -Netflix Inc dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20% and wiping away most of its remaining pandemic-fueled gains from 2020.The world’s largest streaming service projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast, according to Refinitiv IBES data.Netflix (NASDAQ:NFLX) tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of “Bridgerton” and the Ryan Reynolds time-travel movie “The Adam Project.” Shares of Netflix plummeted nearly 20% to $408.13 in after-hours trading. Competitor Walt Disney (NYSE:DIS) Co, which has staked its future on building a strong streaming business, saw its shares sink 4%. Streaming device Roku (NASDAQ:ROKU) Inc fell 5%.Nasdaq futures dropped almost 1%, showing traders expect the tech-heavy index to open lower on Friday.Netflix added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies “Red Notice” and “Don’t Look Up” and a new season of “The Witcher.” Industry analysts had projected 8.4 million.The company’s global subscriber total at the end of 2021 reached 221.8 million.In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.COVID “created a lot of bumpiness” that made it hard to project subscriber numbers, “but all the fundamentals of the business are pretty solid,” Co-Chief Executive Ted Sarandos said in a post-earnings video interview.The company posted adjusted earnings per share of $1.33, crushing analyst consensus estimates of 82 cents. Revenue hit $7.71 billion, in line with estimates. Netflix last week raised prices in its biggest market https://www.reuters.com/technology/exclusive-netflix-raises-monthly-subscription-prices-us-canada-2022-01-14, the United States and Canada, where analysts say growth is stagnating, and is now looking for growth overseas.The company rode a roller coaster during the pandemic, with steep growth early in 2020 when people were staying home and movie theaters were closed, followed by a slowdown in 2021. Netflix picked up more than 36 million customers in 2020, and 18.2 million in 2021.Netflix’s subscriber growth in 2022 had been expected to stabilize and return to the pace logged before the pandemic, when it added 27.9 million subscribers in 2019, analysts say. The company’s upcoming slate includes new installments of “Ozark” and “Stranger Things” and a three-part Kanye West documentary. “The pandemic lockdowns pulled forward tons of demand and it is taking longer than expected to normalize,” said Pivotal Research analyst Jeff Wlodarczak.Competitors including Disney and AT&T Inc (NYSE:T)’s HBO Max, are pouring billions into creating new programming to grab a share of the streaming market.Netflix said competition “may be affecting our marginal growth some,” but added that it was still growing in every country where new streaming options have launched.”Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world,” Netflix said in its shareholder letter. In their video interview, executives sought to reassure investors that Netflix’s long-term prospects were bright. Sarandos said the service had not seen a decline in customer engagement or retention and he projected the switch to streaming from traditional television would continue to open opportunities worldwide. The stock remained down nearly 20%.”The pace of the migration may be a little hard to call from time to time when there are kind of very global events or even local conditions,” Sarandos said, “But it’s absolutely happening. There’s no question of that.”The company is looking for new ways to attract customers including with mobile video games. Netflix said it released 10 games in 2021, was pleased with the early reception and would expand its gaming portfolio in 2022. More

The Federal Reserve has for the first time launched a period of debate and public comment on the introduction of a central bank digital currency, as it seeks to keep pace with global financial innovation and maintain the supremacy of the dollar.After months of anticipation, the Fed on Thursday released a lengthy discussion paper that will serve as the basis of what is expected to be a heated and consequential debate at the heart of the central bank in the coming months — though it made clear it did not “favour any policy outcome” at this point.“We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency [CBDC] in the United States,” Jay Powell, Fed chair, said in a statement.The Fed had been hesitant to embrace a central bank digital currency in recent years, saying it would only do so if the benefits outweighed the costs. It has lagged authorities in China, which is piloting a digital renminbi. The European Central Bank has also made inroads with the technology.Powell has previously said any CBDC should serve “as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks”.“The Fed is finally wading into a topic that is unavoidable for central banks as they contemplate how to secure monetary and financial stability amid various innovations in financial technologies, including an accelerating shift to digital forms of payment, that are reshaping financial markets and institutions,” said Eswar Prasad, a professor at Cornell University with expertise on digital currencies.The Fed is asking for public comments on a potential CBDC over the next 120 days, and no decisions have yet been made about how it will be structured or if it will be rolled out.

“While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides,” the Fed said. “They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance,” it added.The Fed said it would not proceed without “clear support from the executive branch and from Congress, ideally in the form of a specific authorising law”.“The Federal Reserve’s report is a good first step toward designing a central bank digital currency that will bring more Americans into our banking system and help maintain the United States’ leadership in the global economy,” said Sherrod Brown, chair of the Senate banking committee.Pat Toomey, the Republican senator from Pennsylvania, applauded the central bank for “constructively” contributing to the ongoing debate and indicated his support for the Fed to look into such technologies. But he also voiced concerns about privacy issues, suggesting a possible sticking point in rolling out a CBDC.Jan Hatzius, chief economist at Goldman Sachs, told the Financial Times during a panel hosted earlier on Thursday by the Chicago Council on Global Affairs that the Fed was unlikely to be “very aggressive” in its plans to proceed if it chooses to do so.“There is room for introducing that cautiously, but you’re not going to anytime soon, I think, replace the core bank-centred system of financial intermediation,” he said.The Fed appeared attuned to the risks and acknowledged that a CBDC could “fundamentally change the structure of the US financial system”. It flagged the potential for bank funding expenses to increase should bank deposits fall as an interest-bearing digital dollar became more widely available. This is turn could raise the cost of credit for households and businesses.However, it noted certain design parameters that could help avoid this outcome, including capping the amount of CBDCs someone could hold. The Fed also said it would “best serve the needs” of the US to have the private sector offer accounts or digital wallets to “facilitate the management” of all related holdings and payments. They suggested commercial banks and regulated non-bank financial services institutions could lead that charge.“Individuals, businesses, and governments could potentially use a CBDC to make basic purchases of goods and services or pay bills, and governments could use a CBDC to collect taxes or make benefit payments directly to citizens,” the Fed said. Inaction also has consequences, the Fed said. Failure to develop a digital US currency might erode the country’s supremacy in global markets, the discussion paper warned.“It is important . . . to consider the implications of a potential future state in which many foreign countries and currency unions may have introduced CBDCs,” the Fed said. “Some have suggested that, if these new CBDCs were more attractive than existing forms of the US dollar, global use of the dollar could decrease — and a US CBDC might help preserve the international role of the dollar,” it added. More

Shares in Siemens Gamesa shed a tenth of their value today after a warning on earnings from the world’s largest offshore wind turbine maker, which it pinned on supply chain delays and cost pressures.The coronavirus pandemic has hit the Spanish-German wind engineering group hard, with its shares more than halving over the past 12 months. Its German parent Siemens Energy, which owns about two-thirds of the group, fell 13 per cent today.Madrid-listed Siemens Gamesa said that supply chain bottlenecks, which are expected to last longer than previously anticipated, added pressure on its costs, especially in its wind turbine unit.The “volatile market conditions” affected customers’ investment decisions, resulting in delays to some projects, it said in a statement yesterday outlining its preliminary first-quarter earnings report for fiscal year 2022.The group, at the bottom end of its guidance, has forecast a potential loss for its 2022 fiscal year. Its profit margin is now expected to range between minus 4 per cent and plus 1 per cent, down from its previous forecast rise of between 1 per cent and 4 per cent.Preliminary earnings for the first quarter of its financial year show sales of €1.8bn and a loss in earnings before interest, tax and extra costs, of €309m. Its total order backlog came to €33.6bn at the end of the quarter.The group adjusted its guidance for the full year for sales to fall between 9 per cent and 2 per cent, compared with its previous forecast drop of 7 per cent to 2 per cent. More

OTTAWA (Reuters) -Canadian consumers should soon see higher prices and some empty shelves in supermarkets and other retail outlets because of disruptions stemming from a COVID-19 vaccine mandate for cross-border truckers, top trucking executives warned this week.The mandate, imposed by Ottawa to help curb the spread of the virus, has cost six Canadian trucking companies about 10% of their international drivers, and many are hiking wages to lure new operators during what they said is the worst labor shortage they have experienced.Within the next two weeks, consumers will see “there’s not as many choices on the shelves,” said Dan Einwechter, chairman and chief executive officer of Challenger Motor Freight Inc in Cambridge, Ontario.”Eventually the prices will be passed on from the sellers of those products, because we’re passing on our increases to them,” he said.Canada’s inflation rate https://www.reuters.com/business/canadas-annual-inflation-rate-hits-48-dec-highest-since-sept-1991-2022-01-19 hit a 30-year high of 4.8% in December and economists said the vaccine mandate may contribute to keeping prices higher for longer. In the United States, inflation surged https://www.reuters.com/world/us/us-consumer-prices-increase-strongly-december-2022-01-12 7% on a year-on-year basis in December, the largest rise in nearly four decades.Prime Minister Justin Trudeau, who has championed vaccine requirements for federal employees, has resisted pressure from industry to delay or drop the mandate that was announced in November.The vaccine requirement to enter Canada started on Jan. 15, and the one to enter the United States begins on Saturday.Since more than two-thirds of the C$650 billion ($521 billion) in goods traded annually between Canada and the United States travels on roads, truckers were deemed essential workers until now and traveled freely even when the border was closed for 20 months.Trudeau defended the mandate on Wednesday, saying Canada was “aligned” with the United States, its largest trading partner.”We will continue to make sure that we are getting what we need in Canada while, as always, putting the safety and health of Canadians as our top priority,” Trudeau said. As many as 32,000, or 20%, of the 160,000 Canadian and American cross-border truck drivers may be taken off the roads by the mandate, the Canadian Trucking Alliance (CTA) estimates. The industry was short some 18,000 drivers even before the mandate, CTA said. “We raised our base rate for cross-border drivers effective Jan. 1 by almost 20% … and it didn’t gain us any drivers,” said Rob Penner, president and CEO of Winnipeg, Manitoba-based Bison Transport. “There’s more freight than there is people right now.”Canada’s transport ministry said in a statement the measure was not negatively affecting the supply of goods, while cross-border truck traffic had not varied significantly since the mandate came into effect.BAD TIMINGThe six executives who manage nearly 9,200 trucks between their companies and have a combined 173 years in the industry say strong demand for freight during a labor shortage will inevitably translate into higher prices for consumers.”We’ve been oversold by 5% or 10%, depending on the day, for the last four or five months … The timing of all this couldn’t have been worse,” said Mark Seymour, CEO of Kriska Transportation Group in Prescott, Ontario. Canadian firms see labor shortages intensifying and wage pressures increasing, according to a Bank of Canada survey https://www.reuters.com/world/americas/firms-see-increasing-labor-shortages-wage-pressures-bank-canada-survey-2022-01-17 released on Monday. Investors increasingly expect https://www.reuters.com/world/americas/even-omicron-slams-canada-bets-january-rate-hike-rise-2022-01-18 the central bank to raise interest rates next week for the first time since 2018.Fresh foods are particularly sensitive to freight problems because they expire rapidly, though all imports from the United States could be affected, the trucking managers said.”We have to move the milk, we have to move food. But the rates are going to be much higher,” said Doug Sutherland, president of Sutherland Group Enterprises in Salmo, British Columbia.”Inflation is going to be the biggest impact of what’s going on here.” ($1 = 1.2478 Canadian dollars) More

Nigeria plans to tax digital non-resident companies that sell products to local customers at 6% of turnover, Finance Minister Zainab Ahmed said this month, as part of fiscal reforms to boost revenues and diversify the oil-dependent economy.At around 4.5% of GDP, Nigeria has one of the lowest tax rates in the world, and has struggled to increase tax collection from its non-oil sector.The government has said it wants to modernise taxes for its digital economy and to improve compliance.”We will implement the published guidelines … to collect VAT on digital supply of services and intangibles to Nigeria,” Muhammad Nami, executive chairman of the Federal Inland Revenue Service (FIRS), said in a statement. Digital services include apps, high frequency trading, electronic data storage and online advertising, the minister has said.The World Bank said last year that Nigeria needed to boost non-oil taxes to at least 12.75% of gross domestic product to boost growth.The FIRS has deployed a digital interface to facilitate implementation and also determine companies that generate relevant turnover from Nigeria, Nami said. More

Washington has suggested Lithuania consider changing the name of Taiwan’s representative office in the capital Vilnius, in an effort to help ease tensions between the Baltic state and China since the mission was established.Lithuania has been embroiled in a spat with Beijing since it allowed Taiwan to open a mission called the “Taiwanese representative office” rather than “Taipei representative office”, after Taiwan’s capital city — a formulation that is used in most countries.China demands that countries avoid using language that suggests Taiwan, a self-governing country, is a sovereign state.According to several people familiar with the situation, US diplomats have floated the idea of changing the name with Lithuanian officials. They said the US thought the choice of name had opened the door to Chinese coercion that risked undermining the expansion of ties with Taiwan.China has retaliated by blocking imports from Lithuania and warning European companies, such as German car parts maker Continental, not to use components from the Baltic country.The White House denied the administration had suggested changing the name of the office. “Anyone who suggests otherwise is not reflecting actual discussions between the US and Lithuania,” said a spokesperson for the National Security Council, adding that the US had told Lithuania that it would support its sovereign decisions. “We respect and support Lithuania and Taiwan’s efforts to enhance their ties and practical co-operation,” the spokesperson added.The diplomatic row has created a headache for Washington, which wants to help Taiwan expand its international presence without giving Beijing an opportunity to accuse the US of violating its “one China policy”, under which Washington views Beijing as the sole legal government of China. Taipei last year asked the US for permission to include “Taiwan” in the name of its Washington, DC office, but the US has not acted on the request.The spat has also split officials in Vilnius. President Gitanas Nauseda called the name a “mistake”, while foreign ministry polling last month showed just 13 per cent of Lithuanians backed the government’s policy on China.In a meeting this week that included Nauseda in addition to the foreign minister and opposition members, business leaders said they had been “sacrificed” for an unpopular policy. But Prime Minister Ingrida Simonyte has been adamant that the government will not budge.One person familiar with the diplomatic discussions said: “One of the big problems is that Taiwan doesn’t want the name change and Lithuania has a very strong faction of people who don’t want the name changed either.” The Lithuanian foreign ministry said suggestions that the US had made a proposal to change the office’s name were “false” and a “disinformation campaign”. The Taiwanese embassy in Washington did not comment.Lithuania has been a vocal critic of China over human rights violations. Last year, it withdrew from the 17+1, an informal grouping of central and eastern European countries with which Beijing wanted to improve ties.Underscoring the tensions in Vilnius, Nauseda this week urged the foreign ministry to implement a de-escalation plan in agreement with EU partners. The EU has offered rhetorical support to Lithuania, but not provided an official joint response, as it looks to a planned summit with China in March. Brussels has repeatedly stated its commitment to the “one China policy”, while saying it is “ready to stand up against all types of political pressure and coercive measures applied against any member state”. While some argue that changing the name would be seen as caving into Beijing, others say the spat undermines the real achievement for Taiwan.“Letting this crisis fester is likely to have a bad outcome for Lithuanian interests, and perhaps for Taiwan’s as well,” said Bonnie Glaser, a Taiwan expert at the German Marshall Fund who added that Chinese economic coercion was unacceptable. “The establishment of a new office, and the rapid expansion of Lithuania-Taiwan ties is a big win for Taipei regardless of what they call the office.”Taiwanese officials said they were not aware of a US proposal. One said some Lithuanian and EU officials had considered changing the name to placate China, but had concluded that this would not solve the problem.“Once they start to compromise on Taiwan’s name . . . it would let the Chinese smell that what they are doing is working, and encourage China to put more pressure on Lithuania and others,” the Taiwanese official said. More