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Growing demand from AI-backed data centers, along with homes and businesses using more electricity for heat and transportation, has brightened forecasts for utilities this year.The S&P index tracking utilities jumped 18.4% in the third quarter, compared to a 5.5% rise in the S&P 500.A strong push for cleaner energy is also benefiting companies like NextEra, the world’s largest renewables company.Its renewables business, NextEra Energy (NYSE:NEE) Resources, boasted of a project backlog of 24 gigawatts (GW) in the third quarter, up from nearly 22.6 GW in the second quarter.”We are also pleased to announce incremental framework agreements with two Fortune-50 customers for the potential development of renewables and storage projects, totaling up to 10.5 GW between now and 2030,” said CEO John Ketchum.The company’s regulated utilities business, Florida Power & Light, reported net income of $1.29 billion, compared with $1.18 billion a year earlier.NextEra’s overall quarterly revenue of $7.57 billion, however, missed estimates of around $8.10 billion, according to analysts’ estimates compiled by LSEG.The Juno Beach, Florida-based company, which maintained its 2024 adjusted earnings-per-share forecast, said it expects EPS in 2025 to be in a range of $3.45 to $3.70.On an adjusted basis, NextEra earned $1.03 per share in the quarter, compared with estimate of 98 cents, according to data compiled by LSEG.NextEra Energy Partners, a unit of the company created to acquire, manage and own contracted energy projects, said it would repower an additional 225 megawatts (MW) of wind facilities, bringing the total backlog of wind repowerings to around 1.6 GW through 2026.However, the unit reported a loss of $40 million due to higher interest payments and a loss on some continuing operations, compared to year-ago net income of $53 million. Its shares were down 5.3% in premarket trading. More

(Reuters) – U.S. homebuilder PulteGroup (NYSE:PHM) beat Wall Street estimates for third-quarter earnings on Tuesday, as declining fixed mortgage rates lured in skittish buyers to the market, while historically low housing supply kept demand strong.With the popular 30-year fixed mortgage rates down to about 6% at the end of September, compared with a high of about 7%, a few months ago, more buyers are returning to the housing market, further boosting demand for new construction. Homebuilders had already been benefiting from a shortage of existing homes on sale, a trend that is set to continue. “Years of underbuilding has created a structural shortage of homes and correspondingly high home prices,” said CEO Ryan Marshall, adding that the U.S. Federal Reserve’s pivot to lowering rates will address affordability issues. The U.S. Federal Reserve’s 50-basis-point rate cut in September, expectations of further cuts and the corresponding easing in mortgage rates have spurred shares of homebuilders to near all-time highs in recent weeks. PulteGroup, the third-largest U.S. homebuilder by sales, delivered 7,924 homes in the third quarter ended Sept. 30, 12% more than a year earlier. However, home sales gross margins came at 28.8%, below last year’s 29.5% as land and material costs remained elevated, while the average selling price was flat at $548,000 due to affordability issues. Shares of the company were up 1.2% in premarket trading. The company posted third-quarter revenue of $4.47 billion, above analysts’ average estimate of $4.26 billion, according to data compiled by LSEG. Its earnings rose 16% to $3.35 per share from a year earlier, beating estimates of $3.11 per share. More

(Reuters) -Boeing CEO Kelly Ortberg laid out a turnaround plan on Wednesday, calling for a “fundamental culture change” at the struggling planemaker as its quarterly losses surged to $6 billion due to a crippling strike.The company has now racked up losses of nearly $8 billion for the current year, as a halt in production of its 737 MAX, 777 and 767 planes following the strike and an ailing defense and space division hammer its business.Boeing (NYSE:BA) shares slipped 1% in premarket trading.In a letter, Ortberg stressed the need for improving performance in its defense business and its 737 MAX and 777 programs while broadly stabilizing Boeing, which is “at a crossroads” after lapses in its performance disappointed customers and eroded trust.”This is a big ship that will take some time to turn, but when it does, it has the capacity to be great again,” Ortberg told the planemaker’s employees in a message containing prepared remarks for his first earnings call as CEO.Ortberg’s call to arms follows sweeping plans for significant downsizing announced earlier this month as a strike by about 33,000 workers that has dragged on for more than a month hits production of its best-selling 737 MAX jet as well as 767 and 777 widebody planes.The former Rockwell Collins (NYSE:COL) executive, who took the helm of the U.S. planemaker in August, said he was hopeful that a new contract proposal being voted on Wednesday by more of the striking workers would be approved, though analysts say ratification is not certain.It is a crucial day for the planemaker, which was already struggling with the fallout from a regulator-imposed cap on production of MAX aircraft following a harrowing mid-air door panel blowout.Ortberg said in his remarks that culture change was discussed at a recent meeting with top company executives. “We need to prevent the festering of issues and work better together to identify, fix and understand root cause(s),” Ortberg said. “I’ve already introduced a much more detailed business cadence to drive this across the organization and this process of change is underway.”But even if the strike ends, restarting production of 737 MAX as well as 767 and 777 widebodies will be a fresh challenge given the supply chain is still struggling in some pockets.Boeing will also have to convince suppliers who have announced furloughs and put off investments over the last few weeks, to now reverse course and support its production plans. “It’s much harder to turn this on than it is to turn it off,” Ortberg said, referring to its factories and the supply chain.He noted that Boeing had a “lot of work to do” before developing a new airplane.”This includes stabilizing our business, improving execution on the development programs, streamlining the portfolio to do what we do well and restoring the balance sheet so that we do have a path to the next commercial aircraft,” Ortberg said.Ortberg did not address a possible capital raise, which Reuters has reported could be around $15 billion.”We view his (Kelly’s) comments as encouraging, as Boeing has historically been averse to recognizing that it has issues, let alone actually fixing them,” Vertical Research Partners analyst Robert Stallard said.Boeing on Wednesday reported a quarterly cash burn of $1.96 billion, compared with a cash burn of $310 million a year earlier.Quarterly revenue fell 1% to $17.84 billion.The company’s commercial aircraft business recorded a $4 billion loss, while its defense, space and security business lost $2.38 billion.Meanwhile, revenue growth in the company’s aftermarket business, Boeing Global Services, slowed to 2% in the quarter through September, compared with 9% growth last year and 7% in the first quarter of this year.The division has been a bright spot in recent quarters given the turmoil in Boeing’s other two businesses. More

MUMBAI (Reuters) – India cannot risk another bout of inflation and the monetary policy committee (MPC) must adopt a cautious approach to lowering interest rates, members of the rate-setting panel said in the minutes of the October meeting.The MPC, which consists of three Reserve Bank of India (RBI) and three external members, had kept the repo rate unchanged at 6.50% for a tenth straight policy meeting while changing the policy stance to ‘neutral’.The panel has three new external members, who were appointed for a four-year term earlier this month. “The arduous battle against inflation is far from won, but we are more confident of eventual success in bringing CPI inflation durably closer to the target,” external member Saugata Bhattacharya said in the minutes published on Wednesday.Michael Patra, RBI deputy governor, wrote that while the persistence of inflationary pressures could dissipate with a less restrictive stance of monetary policy, “reducing restraint too quickly may negate the progress made on disinflation”.India’s retail inflation in September accelerated to its highest in nine months at 5.49%, due to higher food prices, data released after the MPC meeting showed. The central bank targets inflation at 4%. Five out of the six MPC members had voted in favour of holding policy rates, while newly-appointed external member Nagesh Kumar voted to cut the policy rate by 25 basis points.”Given that inflationary expectations have been successfully anchored, and industrial demand in both domestic as well as export markets is flagging, a rate cut could help to revive demand and help boost private investment,” Kumar said.Demand deficits in both domestic and external markets could be the reason private investment has not picked up momentum despite companies’ healthy balance sheets and government reforms, he added. RBI Governor Shaktikanta Das reiterated his stance that rate cuts could be premature.”At this stage of the economic cycle, having come so far, we cannot risk another bout of inflation. The best approach now would be to remain flexible and wait for more evidence of inflation aligning durably with the target,” he wrote. More

The beverage company has been experimenting with pack sizes to drive growth. It offered 12-ounce slim cans to attract customers with tight budgets in the U.S., while launching reformulated versions of its Sprite and Fanta in India and South Korea.North America revenue rose 12% and it expects annual organic sales to grow about 10% compared with a prior view of 9% to 10% rise. Its average selling price rose 10%, while unit case volumes fell 1%.Shares of the company, however, slipped 0.5% in premarket trading as Coca-Cola (NYSE:KO) reiterated its growth forecast for annual adjusted profit of 5% to 6% despite price hikes.”The weakness of the stock a little bit here is that they’re leading more on price … (while) guidance is just being maintained here,” said Christian Greiner, senior portfolio manager at F/m Investments, which owns shares in Coca-Cola.Investors were expecting growth in volumes, which was impacted by price-conscious consumers in the Middle East and China, he said. Coca-Cola’s revenue in Europe, the Middle East and Africa fell 7% and in the Asia Pacific region it dropped 4%. Earlier this month, rival PepsiCo (NASDAQ:PEP) CEO Ramon Laguarta said price increases and borrowing costs were hurting consumer budgets. The Frito-Lay chips maker cut its annual sales forecast after posting quarterly revenue below expectations. Coca-Cola’s net revenue rose 0.3% to $11.95 billion. Analysts had expected a 2.62% drop to $11.60 billion, according to data compiled by LSEG.The company’s adjusted profit came in at 77 cents per share, compared with estimates of 74 cents. More

WASHINGTON/LONDON (Reuters) – The recent cascade of countries defaulting on their debt has brought back into vogue complex securities – born in the 1980s – that aim to speed up restructurings. The renaissance of so-called State Contingent Debt Instruments, which lure investors with new bonds that promise payouts if the country hits certain economic or fiscal targets, has helped countries from Ukraine to Sri Lanka resolve difficult debt negotiations.Some experts say they can help cash-strapped countries to persuade bondholders to accept the potential losses needed to get the countries back on track with their debts. “When SCDIs are used to address a fundamental disagreement on the prospects of a country … then I really believe this is a deal accelerator,” said Pierre Cailleteau, managing director at Lazard (NYSE:LAZ)’s sovereign advisory group, which advised governments in Sri Lanka, Suriname and Zambia on debt reworks. Privately, other debt experts worry that their use could boost borrowing costs down the line by making some investors reluctant to buy the bonds when they later trade on the market. Future debt strains could be trickier to navigate, they warn.COMPLEX BUT QUICKER Authorities in Ukraine, Zambia, Sri Lanka and Suriname did not immediately respond to a request for comment. The Global Sovereign Debt Roundtable – an initiative joining representatives from countries, private lenders, the World Bank and the G20 – will discuss SCDIs at a meeting on the sidelines of the International Monetary Fund/World Bank autumn meetings on Wednesday.Ukraine, whose lightning-fast wartime debt rework defied the odds, used SCDIs as part of a package to convince investors in August to swap their defaulted bonds for newer instruments – including a GDP-linked bond, which would pay investors more if the economy grows faster than anticipated. Economic growth is a common metric, though SCDI payouts can also be linked to revenue stemming from natural resources or tax receipts.These differ from the bulk of sovereign bonds, labelled “plain vanilla,” which pay a predetermined amount in interest over their lifetime before a final repayment.But SCDIs can be a double-edged sword. Investors are increasingly at odds with the International Monetary Fund’s economic projections, said Sergei Strigo, co-head of emerging markets fixed income at Europe’s largest asset manager Amundi. “The only way for investors to get some recovery is through these contingent instruments, but it’s not necessarily the best way to proceed in my view, because it’s very complicated,” Strigo said. Still, speeding up restructurings is crucial; Zambia took nearly four years to complete its rework, and Sri Lanka is still finalising an agreement with bondholders more than two years after defaulting. Whilst in default, the countries lose access to capital markets and funds for investments, from infrastructure to education.BRIDGING THE GAPSCDIs are not new; Latin American countries first used them in Brady bonds in the late 1980s after the region’s debt crisis. Argentina issued GDP-linked warrants in 2005, Greece used them as part of its 2012 restructuring and Ukraine added them to its 2015 rework.History paints a mixed picture on their success. Researchers at the Bank for International Settlements examining Argentina, Greece and Ukraine in a 2022 report found governments faced a “high and persistent” premium. The mark up demanded by investors, over and above the liquidity and default premium that affected issuers’ other bonds, was between 4.24%-12.5% on contingent instruments in the five years following issuance, BIS found.COURTS AND LACK OF CAPS Design flaws have also plagued past SCDI instruments. Hedge funds allegations that Buenos Aires manipulated data and payment calculations ensnared Argentina into lengthy legal battles over its 2005 GDP warrants, while cash-strapped Ukraine faces billions of dollars in payments for GDP warrants that did not cap investor payouts.The troubles helped shape newer instruments. Zambia’s 2024 bond, linked to its debt carrying capacity – an assessment of how much debt a country can carry before the burden becomes too much – as well exports and fiscal revenues, will depend on IMF readings, rather than government statistics. Experts say those designing new instruments also focus on making sure they are eligible for benchmarks, such as JPMorgan’s widely followed Emerging Market Bond Index (EMBI). This is key to keeping investors interested in buying the instruments – and thus government debt costs down. Ukraine’s GDP warrants, for example, were not index eligible, but its August-launched bonds are.Still, SCDIs come at “a price” for borrowers, said Stefan Weiler, head of CEEMEA debt at JPMorgan, one of the banks on Ukraine debt sales. “It does create for governments a level of uncertainty that is not really helpful,” Weiler said, adding Kyiv had little choice, given the enormous uncertainty surrounding its restructuring. “Sophisticated investors probably like it, because the chances of (markets) mispricing of the product are higher – there is an opportunity to make a return,” he said. Sri Lanka, which has yet to formally execute its rework, could be a test case. Its recently announced deal would include macro-linked bonds that connect debt repayments with how well it is hitting IMF growth targets, adjusting both principal and coupon payments to the upside and the downside and offering more breathing space in times of distress. But the country’s recent stronger-than-expected growth forecasts have raised questions around how payments will shape up. Lazard’s Cailleteau is optimistic.”If we succeed that will probably set a standard in terms of intellectual approach to the issue,” he said. More

WASHINGTON (Reuters) – Turkey should avoid a repeat of its last inflation-fuelling minimum wage hike when the next raise is due on Jan. 1 and focus on support measures for the poorest part of the population instead, the IMF’s mission chief for the country told Reuters.Jim Walsh, speaking on the sidelines of the IMF World Bank annual meeting in Washington, also said talk of interest rate cuts was “probably premature”, given that sequential inflation was still running well above 2%. Ankara is expected to announce in December by how much it will raise the minimum wage at the start of 2025 after delivering a 49% hike in January of this year, which pushed inflation sharply higher in the first quarter. “We would hope that doesn’t happen this year, because we know from experience in many countries with high inflation that wage-setting like this at a national level is a big anchor for inflation expectations,” said Walsh. “There’s a trade-off that the authorities have to make and they’re quite aware of it.”Instead, Ankara should focus on developing social programs that will provide support for low-income households through cash transfers or through better targeting government support to help bolster the income of workers on lower wages, Walsh said.Market expectations for the January minimum wage hike stand at around 25%, according to bankers.Inflation climbed sharply in the wake of the last hike, hitting a peak of 75% in May, but has been slowing since and fell to 49.4% in September – dipping for the first time in the current cycle below the benchmark interest rate of 50%. Turkey’s central bank held rates in October and warned a bump in recent inflation data lifted uncertainty, a hawkish signal that could reinforce views that policy easing will not begin until next year. While financial conditions had already tightened, Walsh said the central bank should further strengthen its communication and that more rate hikes may be necessary if the bank really wanted to hit its inflation target of 14% by year-end 2025. “The central bank has often sounded hawkish, and they say that they will keep rates where they are until they see that sequential inflation is on a downward trend,” said Walsh. However, markets were still ripe with speculation about when the central bank would begin to lower rates, he said. “When sequential inflation is still running at 2.5% a month, talk of cutting is probably premature.”The IMF expects inflation to stand at 24% by the end of next year – broadly in line with a Reuters poll that predicted inflation would fall to 25% by then.Turkey’s central bank is expected to wait until December or January to cut interest rates, according to a Reuters poll this month, as economists abandoned predictions of an earlier move. It is forecast to cut rates by 20 points to 30% by end-2025.A mix of unanchored inflation expectations and large energy import needs made Turkey more vulnerable to a quicker and broader feed-through to inflation from possible energy shocks, Walsh said, adding the country could counter that by ramping up renewable energy production. The IMF would also encourage Turkey to push ahead with further reducing costly energy subsidies, Walsh said, while buffeting poorer households against the fallout. “The sooner you do it, the more money you save from reforming the subsidies.” More