Economy

The U.S. drugmaker’s shares rose 4.3% to $48.55 in premarket trading as its third-quarter profit beat estimates, mainly due to better-than-expected sales of the vaccine. Sales of the COVID-19 vaccine have eased from pandemic highs on soft demand for the original shots, sparking concerns over demand over the next few years. In response, Pfizer (NYSE:PFE) plans to roughly quadruple the price of the vaccine, which it sells with German partner BioNTech, in the United States once the government stops buying doses and shifts to a private market. “Our COVID-19 franchises will remain multi-billion-dollar revenue generators for the foreseeable future,” Chief Executive Officer Albert Bourla said in prepared remarks ahead of a conference call.Meanwhile, Pfizer is also expected to face the loss of patents for some key drugs between 2025 and 2030. The company has turned to deals such as its recent $5.4 billion acquisition of Global Blood Therapeutics (NASDAQ:GBT) Inc and its $11.6 billion purchase of Biohaven to beef up its pipeline.While some will point to the massive Comirnaty beat as unsustainable, “we’re not yet throwing in the towel given an emerging pipeline and significant balance sheet flexibility,”, said BMO Capital Markets analyst Evan Seigerman. Third-quarter sales of the COVID-19 vaccine came in at $4.40 billion, blowing past estimates of $2.60 billion, according to five analysts polled by Refinitiv.However, $7.51 billion in sales of the company’s COVID-19 pill Paxlovid missed estimates of $7.66 billion.The company maintained its full-year sales forecast for Paxlovid at $22 billion.Pfizer earned $1.78 per share in the third quarter, beating estimates of $1.39.Separately, the company said its experimental respiratory syncytial virus (RSV) vaccine was found to be effective in a late-stage study in preventing severe infections in infants when given to expectant mothers. More

NEW YORK (Reuters) -Thomson Reuters Corp beat third-quarter profit forecasts on Tuesday, helped by higher sales at its three biggest divisions, and kept its outlook for this year and next.The information company warned, however, that any worsening of the global economic or business environment could impact its ability to achieve targets, and added that 2023 margins were trending toward the lowest end of their expected range.”Our results and our outlook speak to the resilience of our business, particularly in the big three segments and their recurring revenue,” Chief Executive Steve Hasker said in an interview, calling Thomson Reuters (NYSE:TRI) products essential and not discretionary spending for clients.But looking into next year, he said the company was monitoring cost-related inflation, in particular the cost of labor, and said technology vendors had demanded “significant” price increases.The Toronto-based company recorded $1.57 billion in sales during the quarter, up 3%, slightly below expectations of $1.59 billion. Adjusted earnings per share came in at 57 cents, 7 cents ahead of analyst estimates.Thomson Reuters, which owns the Westlaw legal database and the Checkpoint tax and accounting service, maintained its financial guidance for the rest of this year, and still sees 2023 sales growing 5.5% to 6%. But it noted that 2023 margins were trending towards the lower end of the 39%-40% range amid heightened inflation and investments.”The cost of labor is going up and it’s a very big part of our cost base,” Hasker said. The company’s three main divisions – Legal Professionals, Tax & Accounting Professionals, and Corporates – reported single-digit increases in quarterly sales, as did the Reuters News division.Reuters News makes about half its revenue from supplying Refinitiv, a data company spun off from Thomson Reuters and now owned by the London Stock Exchange Group (LON:LSEG) (LSE). Thomson Reuters holds a minority stake in the LSE, worth about $6.3 billion as of Friday.Thomson Reuters’ peers include RELX Group’s LexisNexis, Bloomberg LP, News Corp (NASDAQ:NWSA)’s DowJones and Wolters Kluwer.Hasker said valuations on potential acquisition targets were down 25% from their peak, calling these businesses, especially in the big three segments, a bit more reasonably priced. The company will be “quite a bit more aggressive in the next in the next few quarters in looking at acquisitions,” he said. More

TOKYO (Reuters) – Toyota Motor (NYSE:TM) Corp on Tuesday posted a worse-than-expected 25% drop in quarterly profit and cut its annual output target, as the Japanese firm battles surging material costs and a persistent semiconductor shortage.The world’s biggest automaker by sales also warned that it remained difficult to predict the future after posting its fourth consecutive quarterly profit decline, underlining the strength of business headwinds it faces.During the coronavirus pandemic, Toyota fared better than most car makers in managing supply chains, but it fell victim to the prolonged chip shortage this year, cutting monthly production targets repeatedly. “We’re out of the worst phase, but … it’s not necessarily a situation where we’re fully supplied,” said Kazunari Kumakura, Toyota’s purchasing group chief. “I don’t know when the chip shortage will be resolved.”Operating profit for the three months ended September fell to 562.7 billion yen ($3.79 billion), well short of an average estimate of 772.2 billion yen in a poll of 12 analysts by Refinitiv. Toyota sales reported a 749.9 billion yen profit a year earlier, and 578.6 billion yen in profit in the first quarter.Kumakura said the global auto chip shortage continues, as chipmakers have prioritised supplies for electronics goods such as smartphones and computers, while natural disasters, COVID lockdowns and factory disruption have slowed a recovery in auto chip supplies.He also said the supply of older-type semiconductors, that attract little capital investment currently, would remain tight. Amid the gloom, shares in Toyota closed down 1.9%, versus a 0.3% rise in the Nikkei average.’VERY UNIMPRESSIVE’Some analysts were underwhelmed by the performance, saying other positive factors beyond the chip shortage should have provided a boost.”The yen is weaker in the second quarter, the volume in the second quarter is much higher than in the first quarter, and the (COVID) lockdown in China does not affect (the volume in the second quarter),” said Koji Endo, an analyst at SBI Securities.”Considering these points … the absolute amount of profit in the second quarter has got to be higher than that of the first quarter. It is very unimpressive.”Production rebounded by 30% in the quarter, but the company warned last week shortages of semiconductors and other components would continue to constrain output in coming months.Toyota said it now expects to produce 9.2 million vehicles this fiscal year, down from the previously forecast 9.7 million but still ahead of last financial year’s production of about 8.6 million units.Reuters reported last month Toyota had told several suppliers it was setting a global target for the current business year to 9.5 million vehicles and signalled that forecast could be lowered, depending on the supply of electromagnetic steel sheets.MUTED YEN IMPACTThe yen has plunged around 30% this year against the U.S. dollar, but the benefit of the cheap yen – making sales overseas worth more – has been offset by soaring input costs. The weak yen boosted profit by 565 billion yen in the first half of this financial year, but the gain was more than wiped out by 765 billion yen increase in material costs, with the cheap local currency further inflating import costs, Toyota said.Toyota retained its conservative profit outlook, sticking to its full-year operating forecast of 2.4 trillion yen for the fiscal year through March 31 – well below analysts’ average forecast of 3.0 trillion yen. By comparison, South Korea’s Hyundai Motor raised its revenue and profit margin guidance last month to reflect a foreign exchange lift.Toyota, once a darling of environmentalists for its hybrid gasoline-electric models, is also under scrutiny from green investors and activists over its slow push into fully electric vehicles (EV).Just a year into its $38 billion EV plan, Toyota is already considering rebooting it to better compete in a market growing beyond its projections, Reuters reported last month.In a reputational hit, Toyota had to recall earlier this year its first mass-produced all-electric vehicle after just two months on the market due to safety concerns, and suspend production. It restarted taking leasing orders last month for domestic market.Toyota reiterated on Tuesday that battery-powered EVs are a powerful weapon for decarbonisation, but that there are various other options to achieve the goal.($1 = 148.3100 yen) More

Gold prices were down 8% in the quarter, their worst since March 2021, primarily driven by hawkish interest-rate hikes by central banks around the world in the face of unrelenting inflation.The miner said its third-quarter gold production rose to 1.49 million ounces from last year’s 1.45 million ounces, primarily due to higher ore grade milled at Ahafo, Akyem and Boddington mines. However, its realized gold price fell by $87 to $1,691 per ounce of gold.All-in sustaining costs (AISC) for the quarter, an industry metric that reflects total expenses, rose to $1,271 per ounce from $1,120 per ounce.The company’s adjusted profit fell to $212 million, or 27 cents per share, in the quarter ended Sept. 30, from $483 million, or 60 cents per share, a year earlier.Analysts on average had expected income of 36 cents per share.Newmont also reaffirmed its 2022 outlook. More

By Lisa Pauline Mattackal and Medha Singh(Reuters) – After months of tears and tantrums, bitcoin wants to split up with stock markets. The cryptocurrency, which has been closely correlated with tech stocks for much of its torrid 2022, is staging one of its strongest efforts yet to break away.Its 30-day correlation with the Nasdaq slid to 0.26 last week, its level lowest since early January, where a measure of 1 indicates the two assets are moving in lock step. The correlation, which shows the degree to which the two move in sync with each other over a 30-day period, has hovered above 0.75 for much of the year and at times has approached perfect unison – at 0.96 and 0.93 in May and September.For some crypto backers, any bitcoin break-up from Big Tech is a sign of strength. “The latter’s growth has been somewhat tapped out, and investors are looking for the next growth industry. Bitcoin and crypto is one of those ‘next’ growth industries,” said Santiago Portela, CEO of FITCHIN, a Web3 gaming ecosystem. The nascent uncoupling does indeed coincide with a period of comparative calm and consolidation for the teenage cryptocurrency a year after it began its epic nosedive from the heady heights of $69,000 hit in November last year. Bitcoin is hovering near one-month highs around $20,500 and rose over 5% last week, outperforming the Nasdaq’s 2% gain as dour quarterly results from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Meta and Amazon (NASDAQ:AMZN) weighed. GRAPHIC – Bitcoin tests linkage with stocks HODLERS HOLDING OUTThe crypto winter has been cold and hard, though. The total market cap for cryptocurrencies has shrunk by more than two-thirds to $984 billion from nearly $3 trillion in November 2021, according to CoinMarketCap.com.Market participation has also dwindled, with the average daily trading volume of digital asset products falling to $61.3 million as of Oct. 25, far from the daily volumes of around $700 million seen last November, CryptoCompare data shows.Nonetheless, months of persistent selling has failed to shake out the old hands, who are digging in despite a grim economic backdrop.The dollar wealth held in bitcoins that haven’t been traded for three months or more is at an all-time-high, indicating accumulation by long-term holders or “HODLers”, according to blockchain data firm Glassnode. The name for that group of diehard crypto investors emerged years ago from a trader misspelling “hold” on an online forum. Furthermore, a record 55,000 bitcoin were withdrawn from the largest exchange Binance on Oct. 26, according to analytics platform CryptoQuant showed, flows that typically signal coins are moving to wallets for longer-term storage.”The holder base of BTC has changed drastically from being heavily weighted towards speculators, which largely came in in 2021, to the near cult-like ‘HODLer’ community which would not sell their BTC in almost any macro circumstance,” said Stéphane Ouellette, CEO at crypto derivatives provider FRNT Financial.”The market is now looking to the Fed meeting next week for further confirmation of the risk asset/BTC correlation breakdown.”NEXT FOR FICKLE BITCOIN?Samuel Reid, CEO of consulting firm Geometric Energy Corporation said heavy outflows from exchanges could potentially indicate some large buyers were “sniffing out” the end of the bear market.Yet it’s anyone’s guess whether fickle bitcoin will begin to rally, or slide anew, or if it will swiftly rebound to the embrace of technology stocks. For the foreseeable future, macroeconomics remain the driver of a market that remains highly speculative in nature.”The more speculative crypto is, the more it is tied to macro,” said Alex Miller, CEO of blockchain firm Hiro Systems. “It comes back to, what are the use cases and what’s the productive capability of the asset? The more it’s being used for other things, the less it’ll be tied to macro.” More

ATHENS (Reuters) – Greece plans to raise up to 8 billion euros ($7.91 billion) from debt markets in 2023 by issuing new short- and long-term issues, two government sources told Reuters on Tuesday.The country emerged from a decade-long debt crisis in 2018 and since then has relied solely on bond markets to cover its borrowing needs. It expects to achieve a primary surplus again in 2023, three years since the COVID-19 pandemic which hampered its fiscal progress, and regain investment grade status despite the energy crisis engulfing Europe. Athens issued a 10- and a 5-year government bond this year and reopened several others maturities through auctions to inject liquidity at selected points of the yield curve. It has raised about 8 billion euros so far this year.It also plans to repay ahead of schedule 2.7 billion euros of bilateral Greek Loan Facility (GLF) loans due in 2023, owed to euro zone countries under the first bailout.”Our borrowing needs for next year are limited, especially after the early repayment of GLF loans. We will borrow 7-8 billion euros from the bond markets,” a finance ministry official told Reuters.A second government official confirmed the country’s borrowing plan for 2023.Greece also plans to issue its first green bond in 2023, an issue which was initially scheduled for this year.”We didn’t want to go ahead with such a sensitive issue in such a volatile market. We will do it next year,” the first official said.Greece posted a budget gap of 15.1% of gross domestic product in 2009, when its crisis broke out and forced it to sign up to three international bailouts that kept it afloat. Since then, its finances have improved. However, borrowing costs on the benchmark 10-year bond have nearly tripled since the start of the year, reflecting a broader rise in yields as the European Central Bank increases interest rates to tame record high inflation. The yield stood at 4.57% on Tuesday.Greece, still the euro zone’s most indebted country, has a cash buffer of about 38 billion euros, enough to cover its borrowing needs for at least two years without tapping international bond markets. More

NEW YORK(Reuters) – Private equity firm KKR & Co (NYSE:KKR) Inc’s after-tax distributable earnings fell 11% in the third quarter from a year earlier on a steep drop in transaction fees, although the result came in ahead of expectations.Initial public offerings and debt refinancings, which KKR’s capital markets unit helps arrange, were down sharply this quarter, while the Federal Reserve’s hiking of interest rates pushed about financing costs and fueled stock market volatility. After-tax distributable earnings – which represents cash used to pay dividends – fell to $823.7 million. That translates to after-tax distributable earnings per share of 93 cents, greater than the average analyst forecast of 85 cents, according to Refinitiv data.KKR said income from its capital markets unit tumbled 41% to $116.1 million a year earlier.Income from investments made out of its balance sheet fell to $285 million, a 36% slide as the firm cashed out fewer assets from its private equity portfolio amid the volatility.KKR said its private equity funds depreciated by 4% during the third quarter. Opportunistic real estate funds were down 1% while leverage credit funds gained 1%.By contrast, Blackstone (NYSE:BX) Inc reported a 0.3% decline in its corporate private equity funds and a 0.6% drop in its opportunistic real estate funds.KKR’s fee-related earnings rose 2% to $541.8 million due to an increase in management fees owing to strong fundraising and the closing of its acquisition of Japanese real estate asset manager Mitsubishi Corp-UBS Realty Inc.KKR struck deals worth $16 billion during the quarter, raised $13 billion of new capital, generated $496.5 million as carried interest, and held $113 billion of unspent capital.Total assets under management stood at $496 million. The firm declared a regular dividend of 15.5 cents per share. More

Some companies and restaurants have continued to raise prices on consumers even after their own inflation-related costs have been covered.A year ago, a bag of potato chips at the grocery store cost an average of $5.05. These days, that bag costs $6.05. A dozen eggs that could have been picked up for $1.83 now average $2.90. A two-liter bottle of soda that cost $1.78 will now set you back $2.17.Something else is also much higher: corporate profits.In mid-October, PepsiCo, whose prices for its drinks and chips were up 17 percent in the latest quarter from year-earlier levels, reported that its third-quarter profit grew more than 20 percent. Likewise, Coca-Cola reported profit up 14 percent from a year earlier, thanks in large part to price increases. Restaurants keep getting more expensive, too. Chipotle Mexican Grill, which said prices by the end of the year would be nearly 15 percent higher than a year earlier, reported $257.1 million in profit in the latest quarter, up nearly 26 percent from a year earlier.For years, food companies and restaurants generally raised prices in small, incremental steps, worried that big increases would frighten consumers and send them looking for cheaper options. But over the last year, as wages increased and the cost of the raw ingredients used to make treats like cookies, chips, sodas and the materials to package them soared, food companies and restaurants started passing along those expenses to customers.But amid growing concerns that the economy could be headed for a recession, some food companies and restaurants are continuing to raise prices even if their own inflation-driven costs have been covered. Critics say the moves are all about increasing profits, not covering expenses. Coca-Cola, PepsiCo and Chipotle did not respond to requests for comment.“The recent earnings calls have only reinforced the familiar and unwelcome theme that corporations did not need to raise their prices so high on struggling families,” said Kyle Herrig, the president of Accountable.Us, an advocacy organization. “The calls tell us corporations have used inflation, the pandemic and supply chain challenges as an excuse to exaggerate their own costs and then nickel and dime consumers.”So far, food companies and restaurants have been able to raise prices because the majority of consumers, while annoyed that the trip to the grocery store or drive-through for takeout costs more than it did a year ago, have been willing to pay. But there are plenty of shoppers, including those with lower incomes or retirees on fixed budgets, who say the higher prices have led to changes in their routines.Inflation F.A.Q.Card 1 of 5What is inflation? More