Tag Archives: Leisure/Arts/Hospitality

Business

Chevron Rides High Oil Prices to Record $35.5 Billion Annual Profit

Leave a comment

Chevron Corp.

CVX -4.44%

banked historic profit last year as the pandemic receded and the war in Ukraine pushed oil prices to multiyear highs, with its shares climbing 53% for the year while other sectors tumbled.

The U.S. oil company in its quarterly earnings reported Friday that it collected $35.5 billion in its highest-ever annual profit in 2022, more than double the prior year and about one-third higher than its previous record in 2011. Almost $50 billion in cash streamed in from its oil-leveraged operations, another record that is underpinning plans to pay investors through a new $75 billion share-repurchase program over the next several years.

That payout, announced Wednesday, is roughly equivalent to the stock-market value of companies such as the big-box retailer

Target Corp.

, the pharmaceutical firm

Moderna Inc.

and

Airbnb Inc.

Chevron, the second-largest U.S. oil company after

Exxon Mobil Corp.

, posted revenue of $246.3 billion, up from $162.5 billion the previous year. The San Ramon, Calif., company reported a fourth-quarter profit of $6.4 billion, up from $5.1 billion in the same period the prior year.

The fourth-quarter results came short of analyst expectations, and Chevron shares closed down more than 4% Friday.

For all of its recent winnings, though, Chevron and its rival oil-and-gas producers could face a rockier year in 2023, according to investors and analysts, if an anticipated slowdown in U.S. economic growth dents demand for oil, and if China’s reopening from strict Covid-19 restrictions unfolds slowly.

U.S. oil prices have held steady this year, but are off about 36% from last year’s peak. The industry is proceeding with caution, holding capital expenditures for 2023 below prepandemic levels and saying production will grow only modestly. Chevron has said it plans to spend about $17 billion in capital expenditures this year, up more than 25% from the prior year, but $3 billion less than it planned to spend in 2020 before Covid-19 took root.

Oil companies are still outperforming other sectors such as tech and finance, which have seen widespread job cuts in recent weeks. The energy segment of the S&P 500 index has climbed 43.7% over the past year, compared with a 6.7% drop for the broader index.

Chevron Chief Executive Mike Wirth said the company is unsure of what 2023 will bring after global energy supplies were squeezed because of geopolitical events last year, particularly in Europe following Russia’s invasion of Ukraine. He said markets appeared to be stabilizing.

“We certainly have seen a very unusual and volatile year in 2022,” Mr. Wirth said, noting the European energy crisis has proven less dire than anticipated thanks to milder winter weather, growing natural gas inventories in Europe. “China’s economy has been slow throughout the year, which looks to be turning around. It’s good that markets have calmed.”

Chevron projects its output in the Permian Basin of West Texas and New Mexico to grow at a slower pace this year.



Photo:

David Goldman/Associated Press

Chevron hit a record in U.S. oil-and-gas production in 2022, increasing 4% to about 1.2 million barrels of oil equivalent a day, stemming from its increased focus on capital investments in the Western Hemisphere, particularly in the Permian Basin of West Texas and New Mexico, where it boosted output 16% last year. Worldwide, Chevron’s oil-and-gas production was down 3.2% compared with the prior year, at 2.99 million barrels of oil-equivalent a day.

Its overall return on capital employed came in at 20%, it said.

“There aren’t many sectors generating the type of free cash flow that energy is right now,” said

Jeff Wyll,

an analyst at investment firm Neuberger Berman, which has invested in Chevron. “The sector really can’t be ignored. Given the supply-demand balance, you have to have some things go wrong here to see a pullback in oil prices.”

Even so, institutional investors have shown limited interest so far in returning to the energy sector, after years of poor returns and heightened concerns about their environmental impact prompted large financiers to sell off their stakes in oil-and-gas companies or stop investing in drillers outright.

Pete Bowden,

global head of industrial, energy and infrastructure banking at

Jefferies Financial Group Inc.,

said energy companies in the S&P 500 index are throwing off 12% of the group’s free-cash flow, but only account for about 5% of the index’s weighting—an indication their stock prices are lagging behind.

Investors’ concerns around environmental, social and governance-related issues are a constraint on the share prices of energy companies, “yet the earnings power of these businesses is superior to the earnings power of companies in other sectors,” he said.

Chevron and others have faced criticism from the Biden administration and others that they are giving priority to shareholder returns over pumping oil and gas at a time when global supplies are tight and Americans are feeling pain at the pump. On Thursday, the White House assailed Chevron’s $75 billion buyout program, saying the payout was proof the company could boost production but was choosing to reward investors instead.

Pierre Breber,

Chevron’s finance chief, said the company expects oil prices to be volatile but within a range needed to sustain its dividend and investments. There are some optimistic signs, he added, including that the U.S. economy grew faster than expected in the fourth quarter, at 2.9%.

“Supply is tight. Oil-field services are near capacity, and we continue to have sanctions on Russian production,” Mr. Breber said. “You’re seeing international flights out of China are way up, and low unemployment in the U.S.”

Mr. Breber said Chevron’s output in the Permian this year is expected to grow at a slower pace, around 10%, because it has exhausted much of its inventory of wells that it had drilled but hadn’t brought into production.

Exxon, which has typically posted quarterly earnings on the same day as Chevron, will report Tuesday. Analysts expect it will also post record profit for 2022, according to FactSet.

Both companies expect to slow their output growth this year in the Permian, considered their growth engine. The two U.S. oil majors, which had been growing output faster in the U.S. than most independent shale producers, are beginning to step up their focus on shareholder returns and allow output growth to ease, said Neal Dingmann, an analyst at Truist Securities.

“This has all been driven by investor requirements,” Mr. Dingmann said.

Write to Collin Eaton at collin.eaton@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Corporate Layoffs Spread Beyond High-Growth Tech Giants

Leave a comment

The headline-grabbing expansion of layoffs beyond high-growth technology companies stands in contrast to historically low levels of jobless claims and news that companies such as

Chipotle Mexican Grill Inc.

and

Airbus SE

are adding jobs.

This week, four companies trimmed more than 10,000 jobs, just a fraction of their total workforces. Still, the decisions mark a shift in sentiment inside executive suites, where many leaders have been holding on to workers after struggling to hire and retain them in recent years when the pandemic disrupted workplaces.

Live Q&A

Tech Layoffs: What Do They Mean?

The creator of the popular layoff tracker Layoffs.fyi Roger Lee and the head of talent at venture firm M13 Matt Hoffman sit down with WSJ reporter Chip Cutter, to discuss what’s behind the recent downsizing and whether it will be enough to recalibrate ahead of a possible recession.

Unlike

Microsoft Corp.

and Google parent

Alphabet Inc.,

which announced larger layoffs this month, these companies haven’t expanded their workforces dramatically during the pandemic. Instead, the leaders of these global giants said they were shrinking to adjust to slowing growth, or responding to weaker demand for their products.

“We are taking these actions to further optimize our cost structure,”

Jim Fitterling,

Dow’s chief executive, said in announcing the cuts, noting the company was navigating “macro uncertainties and challenging energy markets, particularly in Europe.”

The U.S. labor market broadly remains strong but has gradually lost steam in recent months. Employers added 223,000 jobs in December, the smallest gain in two years. The Labor Department will release January employment data next week.

Economists from Capital Economics estimate a further slowdown to an increase of 150,000 jobs in January, which would push job growth below its 2019 monthly average, the year before pandemic began.

There is “mounting evidence of weakness below the surface,”

Andrew Hunter,

senior U.S. economist at Capital Economics wrote in a note to clients Thursday.

Last month, the unemployment rate was 3.5%, matching multidecade lows. Wage growth remained strong, but had cooled from earlier in 2022. The Federal Reserve, which has been raising interest rates to combat high inflation, is looking for signs of slower wage growth and easing demand for workers.

Many CEOs say companies are beginning to scrutinize hiring more closely.

Slower hiring has already lengthened the time it takes Americans to land a new job. In December, 826,000 unemployed workers had been out of a job for about 3½ to 6 months, up from 526,000 in April 2022, according to the Labor Department.

“Employers are hovering with their feet above the brake. They’re more cautious. They’re more precise in their hiring,” said

Jonas Prising,

chief executive of

ManpowerGroup Inc.,

a provider of temporary workers. “But they’ve not stopped hiring.”

Additional signs of a cooling economy emerged on Thursday when the Commerce Department said U.S. gross domestic product growth slowed to a 2.9% annual rate in the fourth quarter, down from a 3.2% annual rate in the third quarter.

Not all companies are in layoff mode.

Walmart Inc.,

the country’s biggest private employer, said this week it was raising its starting wages for hourly U.S. workers to $14 from $12, amid a still tight job market for front line workers. Chipotle Mexican Grill Inc. said Thursday it plans to hire 15,000 new employees to work in its restaurants, while plane maker Airbus SE said it is recruiting over 13,000 new staffers this year. Airbus said 9,000 of the new jobs would be based in Europe with the rest spread among the U.S., China and elsewhere. 

General Electric Co.

, which slashed thousands of aerospace workers in 2020 and is currently laying off 2,000 workers from its wind turbine business, is hiring in other areas. “If you know any welders or machinists, send them my way,” Chief Executive

Larry Culp

said this week.

Annette Clayton,

CEO of North American operations at

Schneider Electric SE,

a Europe-headquartered energy-management and automation company, said the U.S. needs far more electricians to install electric-vehicle chargers and perform other tasks. “The shortage of electricians is very, very important for us,” she said.

Railroad CSX Corp. told investors on Wednesday that after sustained effort, it had reached its goal of about 7,000 train and engine employees around the beginning of the year, but plans to hire several hundred more people in those roles to serve as a cushion and to accommodate attrition that remains higher than the company would like.

Freeport-McMoRan Inc.

executives said Wednesday they expect U.S. labor shortages to continue to crimp production at the mining giant. The company has about 1,300 job openings in a U.S. workforce of about 10,000 to 12,000, and many of its domestic workers are new and need training and experience to match prior expertise, President

Kathleen Quirk

told analysts.

“We could have in 2022 produced more if we were fully staffed, and I believe that is the case again this year,” Ms. Quirk said.

The latest layoffs are modest relative to the size of these companies. For example, IBM’s plan to eliminate about 3,900 roles would amount to a 1.4% reduction in its head count of 280,000, according to its latest annual report.

As interest rates rise and companies tighten their belts, white-collar workers have taken the brunt of layoffs and job cuts, breaking with the usual pattern leading into a downturn. WSJ explains why many professionals are getting the pink slip first. Illustration: Adele Morgan

The planned 3,000 job cuts at SAP affect about 2.5% of the business-software maker’s global workforce. Finance chief

Luka Mucic

said the job cuts would be spread across the company’s geographic footprint, with most of them happening outside its home base in Germany. “The purpose is to further focus on strategic growth areas,” Mr. Mucic said. The company employed around 111,015 people on average last year.

Chemicals giant Dow said on Thursday it was trimming about 2,000 employees. The Midland, Mich., company said it currently employs about 37,800 people. Executives said they were targeting $1 billion in cost cuts this year and shutting down some assets to align spending with the macroeconomic environment.

Manufacturer

3M Co.

, which had about 95,000 employees at the end of 2021, cited weakening consumer demand when it announced this week plans to eliminate 2,500 manufacturing jobs. The maker of Scotch tape, Post-it Notes and thousands of other industrial and consumer products said it expects lower sales and profit in 2023.

“We’re looking at everything that we do as we manage through the challenges that we’re facing in the end markets,” 3M Chief Executive

Mike Roman

said during an earnings conference call. “We expect the demand trends we saw in December to extend through the first half of 2023.”

Hasbro Inc.

on Thursday said it would eliminate 15% of its workforce, or about 1,000 jobs, after the toy maker’s consumer-products business underperformed in the fourth quarter.

Some companies still hiring now say the job cuts across the economy are making it easier to find qualified candidates. “We’ve got the pick of the litter,” said

Bill McDermott,

CEO of business-software provider

ServiceNow Inc.

“We have so many applicants.”

At

Honeywell International Inc.,

CEO

Darius Adamczyk

said the job market remains competitive. With the layoffs in technology, though, Mr. Adamczyk said he anticipated that the labor market would likely soften, potentially also expanding the applicants Honeywell could attract.

“We’re probably going to be even more selective than we were before because we’re going to have a broader pool to draw from,” he said.

Across the corporate sphere, many of the layoffs happening now are still small relative to the size of the organizations, said

Denis Machuel,

CEO of global staffing firm Adecco Group AG.

“I would qualify it more as a recalibration of the workforce than deep cuts,” Mr. Machuel said. “They are adjusting, but they are not cutting the muscle.”

Write to Chip Cutter at chip.cutter@wsj.com and Theo Francis at theo.francis@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Entertainment

Vince McMahon Plots Return to WWE

Leave a comment

Vince McMahon,

the majority owner and former chief executive of

World Wrestling Entertainment Inc.,

WWE 2.26%

plans to return to the company following his retirement last year amid a sexual-harassment scandal to pursue a sale of the business, according to people familiar with the matter.

Mr. McMahon, who has majority voting power through his ownership of WWE’s Class-B stock, has told the company that he is electing himself and two former co-presidents and directors, Michelle Wilson and

George Barrios,

to the board, the people said. The move to reinstate Mr. McMahon, which the board previously rebuffed, and the others will require three current directors to vacate their positions.

Mr. McMahon, whose abrupt departure in July 2022 followed disclosures by The Wall Street Journal of multiple payouts to women who had alleged sexual misconduct and infidelity, expects he will be able to assume the role of executive chairman, though he would need board approval for that, the people said.

It isn’t clear where that would leave his daughter, Stephanie McMahon. After his departure, she took over as chairwoman and co-CEO alongside

Nick Khan,

the company’s former president.

The 77-year-old sent a letter to WWE’s board in late December detailing his desire to return to the company he ran for four decades, to help spearhead a strategic-review process, the people said. Mr. McMahon believes there is a narrow window to kick off a sales process because WWE’s media rights—including for its flagship programs “Raw” and “SmackDown”—are about to be renegotiated, according to the people.

Mr. McMahon believes the media landscape is evolving quickly and more companies are looking to own the intellectual property they use on their streaming platforms, making WWE an attractive takeover target, the people said. WWE, which generates most of its revenue from selling content rights, posted its first year of over $1 billion in revenue in 2021. The company currently has a market value of just over $5 billion.

The board responded last month in a letter to Mr. McMahon that it was prepared to initiate a review process and would welcome working with him on it. However, it said it unanimously agreed that Mr. McMahon’s return to the business wouldn’t be in shareholders’ best interest, according to people familiar with the letters.

The board also asked Mr. McMahon to confirm his commitment to repay expenses incurred by WWE related to an investigation of the allegations and requested that he agree not to return to the company during government probes of the matter, the people said. Mr. McMahon said in response that he remains willing to continue working to complete any reimbursement for reasonable expenses related to the investigation, to the extent they aren’t covered by insurance, but he declined to agree to not return to the company.

He has communicated to the board that unless he has direct involvement as executive chairman from the outset of a strategic review, he won’t support or approve any media-rights deal or sale, the people said.

Mr. McMahon retired as WWE chief executive and chairman in July amid a board investigation of sexual-misconduct claims against him. The Journal reported that he had agreed to pay more than $12 million in secret settlements since 2006 to his accusers.

The Securities and Exchange Commission and federal prosecutors launched inquiries into the payments. WWE later disclosed additional payments in 2007 and 2009 totaling $5 million that it said were unrelated to the allegations of misconduct that led to its internal investigation.

WWE’s board ultimately found that the payments, though made by Mr. McMahon personally, should have been booked as WWE expenses because they benefited the company.

Mr. McMahon had told people that he intended to make a comeback at WWE, the Journal reported last month. He said that he received bad advice from people close to him last year to step down, according to the people familiar with his comments.

—Joe Palazzolo and Ted Mann contributed to this article.

Write to Lauren Thomas at lauren.thomas@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Getting Results—and Money—When Airlines Cancel Flights

Leave a comment

Canceled or delayed flights can cost travelers money. Getting an airline to pay you back for expenses like hotel stays and rental cars isn’t impossible, but it can involve lots of legwork.

Southwest pledged to provide refunds to passengers on canceled or significantly delayed flights between Dec. 24 and Jan. 2, but the airline is also providing reimbursement for additional expenses including the cost of staying at a hotel or renting a car. Passengers were also given 25,000 frequent-flier points in a move by Southwest executives to win them back.

Airline passengers “have very few rights,” said

Paul Hudson,

president of FlyersRights, a consumer advocacy organization. Getting the remuneration that passengers believe they are entitled to can come down to perseverance and communicating extensively with the airline over an extended period.

Here’s what travelers need to know about their rights on domestic flights in the U.S. and how to get reimbursed.

My flight was canceled. Can I get a refund?

Airline customers are entitled to a refund if a flight is canceled for any reason or “significantly delayed” and they opt not to travel, according to rules from the Transportation Department. This policy extends to nonrefundable tickets. The DOT determines on a case-by-case basis whether passengers are entitled to a refund for a delayed flight.

While airlines are required to provide refunds in these circumstances if requested, they aren’t barred from offering other forms of redress first. Carriers will often offer a passenger the opportunity to rebook on another flight or a voucher or credit that could be used for future travel.

In these situations, customers will need to speak with an airline representative and request an “involuntary refund,” Mr. Hudson said. Not all customer-service staff will be familiar with this phrase, he warned, but he described it as “the magic words” to use to get a refund quickly.

I had to stay in a hotel because of a flight delay. Am I entitled to reimbursement?

Additional compensation beyond a refund of airfare and other fees isn’t required by the DOT. Still, most airlines have policies on what they will cover.

If a plane has a technical issue or the flight isn’t properly staffed, an airline’s compensation policy typically will kick in. If the delay or cancellation is due to weather, passengers may be out of luck getting assistance.

The DOT maintains a dashboard spelling out what is covered under the customer-service policies at the 10 largest domestic airlines in the U.S. in cases where cancellations or delays were under the carrier’s control. Each of these major airlines has put these policies in writing, making the commitments enforceable, a DOT spokeswoman said in an email.

My checked luggage went missing. What does the airline owe me?

If a checked bag is delayed, missing or damaged, the airline is liable and must reimburse the traveler. For domestic flights, airlines are only required to cover up to $3,800.

Apart from being required to reimburse passengers for the value of items that were lost or damaged, carriers must also compensate people for incidental expenses such as purchasing replacement clothing or medications. Airlines cannot set an arbitrary daily limit for those expenses, though they can require receipts or other proof for valuable items that were lost, according to the DOT.

I can’t rebook with my airline. Are they required to book me on another airline?

Before the airline industry was deregulated in the U.S. in the 1970s, carriers were required to rebook passengers with other airlines in instances where flights were canceled or delayed. “Now, it’s strictly voluntary,” said Mr. Hudson.

Some carriers have formal relationships with other airlines that allow them to rebook reservations at no additional cost, whereas others may buy tickets from competitors for stranded passengers. Southwest said it bought tickets on other airlines during its meltdown, and

Spirit

did the same during its 2021 meltdown.

I was bumped from my flight by my airline. Is that allowed?

Airlines have come under fire in recent years for the practice of overselling flights and then bumping passengers. The practice is allowed, as long as you haven’t boarded the plane. If you’ve already boarded, the airline can remove you from the flight for safety, security or health reasons.

If a passenger is involuntarily bumped, the carrier must provide a written statement of the flier’s rights and how the company decides who is bumped. They may be provided a refund, but they aren’t guaranteed additional compensation.

To be eligible for compensation, the traveler must have a confirmed reservation, have checked in on time and have arrived at the departure gate on time, the DOT states on its website.  

If all those conditions apply—and the airline cannot rebook the passenger on a flight that gets them to their destination within one hour of their original scheduled arrival—compensation is calculated based on the price of the original ticket, the length of the delay and whether the flight is domestic or international. Compensation ranges from up to $775 for short delays to no more than $1,550 for longer delays.

Write to Jacob Passy at jacob.passy@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Technology

FTC’s Tussle With Microsoft Puts Spotlight on Cloud Gaming

Leave a comment

Cloud gaming is an emerging technology that allows people to stream videogames to nearly any internet-connected device, similar to how movies and shows are viewed on

Netflix,

Hulu and other streaming platforms.

The business model being developed alongside cloud gaming is a subscription service, where consumers get to play a catalog of games for a flat monthly or annual fee. With cloud gaming, players can avoid downloading games to their devices, which takes up memory, and they don’t need to invest in hardware such as a console or high-end computer. 

The FTC and videogame industry participants anticipate cloud gaming will become a much larger part of the market in years to come. With its lawsuit, the FTC says it is protecting the videogame-distribution market—as it is today and how it is expected to evolve—from being dominated by a few companies.

Microsoft is an early leader in cloud gaming with its Xbox Game Pass subscription service. The company’s $75 billion deal for Activision would bolster its content library, adding several blockbuster franchises including “Call of Duty,” “World of Warcraft” and “Candy Crush Saga.”

Microsoft, which has pledged to fight the FTC’s suit, has said it is an underdog in the existing console market, with Xbox’s position trailing

Sony Group Corp.’s

PlayStation and

Nintendo Co.

’s Switch. The company doesn’t disclose Xbox sales by volume.

Shoppers are seeing more out-of-stock messages than ever, but inventory tracking websites like HotStock and Zoolert are giving people a better chance of finding the hot-ticket products they’re looking for. Here’s how those websites work. Illustration: Sebastian Vega

The technology giant has also said that it has no meaningful presence in mobile, the biggest corner of the overall videogame industry by revenue.

Apple Inc.

and

Alphabet Inc.’s

Google, makers of the predominant smartphone operating systems, play a critical role in how people access mobile games, and they take a cut of developers’ in-app and subscription sales.

Xbox Game Pass, which Microsoft launched in 2017, offers a library of hundreds of games for subscribers to play starting at $9.99 a month. The basic plan allows subscribers to download individual games on their Xbox or PC to play whenever they want. For $14.99 a month, subscribers can play some of those games via the cloud, all part of Microsoft’s ambitions to build a “Netflix of gaming.” The company in January said Game Pass had 25 million subscribers.

Global consumer spending on cloud-gaming services and games streamed via the cloud will reach a combined $2.4 billion by the end of this year, according to an estimate from Newzoo BV. That is a tiny fraction—1.4%—of the $184.4 billion in overall spending on videogame software.

Sony, which has aggressively lobbied governments around the world to oppose the Microsoft-Activision tie-up, and others have attempted to grow their own cloud-gaming subscription services. Microsoft, for now, is the dominant player, accounting for 60% of the overall cloud-gaming business last year, according to an estimate from research firm Omdia.

Microsoft is an early leader in cloud gaming with its Xbox Game Pass subscription service.



Photo:

etienne laurent/Shutterstock

The FTC appears concerned that it “can’t see the unintended consequences even just a few years down the road for an acquisition like this,” said

Paul Swanson,

a Denver-based antitrust lawyer at Holland & Hart LLP. “What they’re saying here is we’re going to err on the side of preserving as many independent competitors as we can.”

Over the past decade, Microsoft has poured billions into its cloud operations primarily for selling software and infrastructure for enterprise customers. It is now building out a separate cloud infrastructure to power its videogaming ambitions, which have been under development since it launched its first Xbox console in 2001.

Cloud gaming hasn’t been an easy business to navigate. The technology is difficult for companies to execute smoothly because games need to support multiple players with minimal delay regardless of where players are located. Earlier this year, Google shut down its game-streaming service, Stadia, after struggling to gain traction with users.

Microsoft remains heavily invested in its Xbox hardware, but cloud gaming gives it an opportunity to reach more gamers. It wants to build its own mobile app store, a move it says would create more competition in mobile videogames, not less. The Redmond, Wash., company has argued that Apple and Google’s app marketplaces have policies that pose technical and financial barriers to its goals.

Representatives for Apple and Google didn’t respond to requests for comment. Apple has said that it doesn’t prevent cloud-gaming apps from appearing in the App Store and that it isn’t trying to block their emergence. 

Industry researcher and academic

Joost van Dreunen

said Microsoft’s mobile move would likely benefit the videogame ecosystem by diminishing Apple and Google’s grip.

Microsoft has said it is an underdog in the console market, with Xbox trailing consoles such as Nintendo’s Switch.



Photo:

Guillaume Payen/Zuma Press

“It breaks down the so-called walled-garden strategy that has dominated the game industry for 20 years,” he said.

Since Microsoft announced its deal for Activision, which it values at nearly $69 billion after adjusting for the developers’ net cash, some videogame players have been concerned about what it means for industry competition. 

Steve Schweitzer of State College, Pa., is worried that Microsoft will raise the price of Game Pass over time. He said that it is affordable now but that in a few years, if Microsoft becomes more dominant, it could bump up the price and start cutting back on quality. Mr. Schweitzer, 55 years old, said he remembers back in the 1990s when Microsoft was able to use its market power to capture market share in the browser wars. “I’ve seen this game before,” he said.

Before its lawsuit, the FTC had been reviewing the deal for months. Regulators in other jurisdictions, including the European Union and the United Kingdom, are doing the same. The company has gained approval for the deal in smaller markets such as Brazil and Saudi Arabia.

Write to Sarah E. Needleman at sarah.needleman@wsj.com and Aaron Tilley at aaron.tilley@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Health

10 medical tests every older adult should get

Leave a comment

Maintaining your physical fitness and mental well-being is crucial to living a longer and happier life.

There are about two dozen tests or screenings older adults can get to help ensure optimal health and wellness, based on recommendations from the U.S. Preventive Services Task Force, an independent panel of experts in primary care and prevention, and on Medicare’s coverage of preventive health service.

Of course, exactly which tests you need depends on a variety of factors, including your age, weight, sex, family history and risk factors, as well as on your doctor’s recommendations.

The Affordable Care Act mandates preventive care with no cost-sharing, so in 2011, Medicare began offering a variety of free preventive-health services. Some services may need to be ordered during an annual wellness visit in order to be covered; otherwise, you may need to cover the costs out of pocket or with private insurance.

“People are living into their 90s, independently and in the community, and loving it. But in order to get there, you’ve got to do this stuff,” said Richard Besdine, a professor of medicine and public health at Brown University. “Not all of these are fatal diseases, but they can take the fun out of life. And what’s the point of that?”

Besdine said a Mediterranean-style diet and daily exercise are at the top of the list of the most important habits for aging well. Adequate sleep is also crucial, as are quitting smoking and limiting alcohol.

Mental health is equally important. Many older adults face depression, loneliness and isolation amid life changes such as the loss of a spouse. Ask a doctor for a depression screening if you or a loved one are showing any signs of depression.

And keep up with vaccines, such as those for COVID-19, shingles and the flu. Also consider getting the pneumococcal polysaccharide vaccine (PPSV23), which helps protect against meningitis and bloodstream infections, and the pneumococcal conjugate vaccine (PCV13), which protects against pneumonia.

Here’s a rundown of routine tests you should get as an older adult:

Eye test
Eye health may decline gradually as people get older, but the changes may not be noticeable right away. Poor eyesight can affect your ability to drive, get around the house and perform daily tasks. Also, as you age, the risk for eye problems such as cataracts and glaucoma increases.

In addition, recent research has found that up to 100,000 U.S. dementia cases could have potentially been prevented with improved eye care.

According to a study published this year in JAMA Neurology, one of the top things you can do to help reduce your risk for Alzheimer’s and related dementias is to get vision problems corrected with the help of eye exams, eyeglasses and cataract surgery.

Researchers found that about 1.8% of U.S. dementia cases were associated with visual impairment and projected that by 2050, that total would rise to around 250,000 cases. The investigators also found that incidence of impaired vision in older adults was higher for Hispanic people, at 11%, compared with 8.3% on average for Black and non-Hispanic white people.

Last year, a study published in the British Journal of Ophthalmology also suggested that certain eye conditions including age-related macular degeneration, cataracts and diabetes-related eye disease may be associated with an increased risk of dementia.

“Avoiding dementia is the No. 1 job of physicians and patients,” Besdine said. “Do everything you can to maintain your mental and physical health.”

Hearing exam
While we’re talking about dementia, get your hearing tested — and get a hearing aid if you need one.

If you have hearing loss, you have a greater chance of developing dementia, according to a 2020 Lancet commission report that listed hearing loss as one of the top risk factors for dementia.

People with moderate hearing loss were twice as likely to experience cognitive decline as their peers, while those with severe hearing loss faced five times the risk, research has found.

In the U.S., hearing aids are now available over the counter — and they cost just hundreds of dollars, rather than the several thousands that prescription devices can cost. The White House estimated that people could save nearly $3,000 by buying over-the-counter devices.

Also read: ‘It democratizes what you get’: Hearing aids are now available over the counter — what you need to know

Walmart
WMT,
+1.51%,
Walgreen
WBA,
-0.95%,
CVS
CVS,
+2.55%
and Best Buy
BBY,
+2.88%
are among the national retailers that now sell hearing aids.

Dental exam
Gum disease increases the risk of a heart attack. That alone should get you to the dentist, but gum health can also be a good barometer of your overall health. Your teeth, gums, mouth and throat need to be checked by a dentist, ideally twice a year. Medicare does not cover dental checkups, however, so private insurance or out-of-pocket payments are necessary.

Blood-pressure screening
High blood pressure, or hypertension, is common; more than half of the adults in the U.S. have it. As you age, your arteries change and become stiffer. Left untreated, hypertension can lead to strokes, heart attacks and heart disease.

Diabetes screening
After age 65, both men and women should be screened for diabetes regularly. The American Diabetes Association recommends that a fasting blood-sugar test be done at least once every three years in order catch diabetes early and manage it so it doesn’t become a life-threatening disorder.

Breast-cancer screening
The Mayo Clinic supports screening for breast cancer beginning at age 40. Women up to age 75 should get a mammogram every one to two years, depending on their risk factors. Risk factors include having started menstruation before age 12, a family history of breast cancer, dense breasts and genetic mutations. After age 75, women should discuss the need for continued breast-cancer screening with their doctor.

Osteoporosis screening
As you age, your bones become thinner, which can make you more susceptible to fractures or breaks, especially in the hips and spine. All women older than 64 should get a bone-density scan at least once a year. Men over 70 should also consider getting screened for osteoporosis, especially if the condition runs in their family.

Prostate cancer
Prostate cancer is a common disease among men, especially those over the age of 65. Doctors can check for prostate cancer with a physical examination and a blood test. Some signs of prostate cancer include difficulty urinating, unexplained weight loss or blood in the urine.

Colon-cancer screening
Colorectal cancer is more common among older adults, with an average age at diagnosis of 68 for men and 72 for women. If you experience changes in bowel habits, abdominal pain or bleeding, see your doctor.

The U.S. Preventive Services Task Force recommends that adults age 45 to 75 be screened for colorectal cancer. Types of screening include stool tests, flexible sigmoidoscopy, colonoscopy and CT colonography (virtual colonoscopy). Adults ages 76 to 85 should talk to their doctor about whether they should continue to get screened.

Skin exam
The American Cancer Society recommends regular screening for skin cancer. Be sure to ask your doctor to check your skin if you have any unusual moles or skin changes or if you’re at high risk with a history of skin cancer, have close relatives with skin cancer or have a weakened immune system.

Read original article here

Business

Apple, Amazon, McDonald’s Headline Busy Earnings Week

Leave a comment

Amazon.

com Inc.,

Apple Inc.

and

Meta Platforms Inc.

are among the tech heavyweights featured in a packed week of earnings that investors will probe for indicators about the broader economy.

Other tech companies scheduled to report their latest quarterly reports include Google parent company

Alphabet Inc.

and

Microsoft Corp.

Investors also will hear from airlines such as

Southwest Airlines Co.

and

JetBlue Airways Corp.

, automotive companies

General Motors Co.

and

Ford Motor Co.

, and energy giants

Chevron Corp.

and

Exxon

Mobil Corp.

Nearly a third of the S&P 500, or 161 companies, are slated to report earnings in the coming week, according to FactSet. Twelve bellwethers from the Dow Jones Industrial Average, including

Boeing Co.

and

McDonald’s

Corp., are expected to report as well.

The flurry of results from a broad set of companies will give a sense of how businesses are faring as they deal with inflation denting consumer spending, ongoing supply-chain challenges and a stronger dollar.

People awaited the release of Apple’s latest iPhones in New York last month. The company will report quarterly results on Thursday afternoon.



Photo:

ANDREW KELLY/REUTERS

One area holding up to the challenges has been travel. Several airline companies have reported that consumers still have an appetite to spend on trips and vacations. On Friday,

American Express Co.

raised its outlook for the year in part because of a surge in travel spending.

“We expected the recovery in travel spending to be a tailwind for us, but the strength of the rebound has exceeded our expectations throughout the year,” American Express Chief Executive

Stephen Squeri

said.

In addition to airlines reporting, companies such as car-rental company

Hertz Global Holdings Inc.

and lodging companies

Hilton Worldwide Holdings Inc.

and

Wyndham Hotels & Resorts Inc.

will offer reads into leisure spending.

Overall, earnings for the S&P 500 companies are on track to rise 1.5% this period compared with a year ago, while revenue is projected to grow 8.5%, FactSet said.

Other companies will serve as a gauge for how consumers have responded to higher prices and whether they have altered their spending as a result.

Coca-Cola Co.

and

Kimberly-Clark Corp.

on Tuesday and

Kraft Heinz Co.

on Wednesday will show how consumers are digesting higher prices.

Mattel Inc.,

set to report on Tuesday, will highlight whether demand for toys remains resilient. Rival

Hasbro Inc.

issued a warning ahead of the holiday season.

United Parcel Service Inc.

will release its results on Tuesday and provide an opportunity to show how it is faring ahead of the busy shipping season. The Atlanta-based carrier’s earnings come weeks after rival

FedEx Corp.

warned of a looming global recession and outlined plans to raise shipping rates across most of its services in January to contend with a global slowdown in business.

Results from credit-card companies

Visa Inc.

and

Mastercard Inc.

will offer insights into whether inflation has finally put a dent in consumer spending after both companies reported resilient numbers last quarter.

Wireless carrier

T-Mobile US Inc.’s

numbers on Thursday will give more context to mixed results from competitors

Verizon Communications Inc.

and

AT&T Inc.

AT&T

issued an upbeat outlook on Thursday after its core wireless business exceeded the company’s expectations, whereas Verizon on Friday said earnings tumbled as retail customers balked at recent price increases.

Other notable companies lined up to report include

Chipotle Mexican Grill Inc.

on Tuesday, chicken giant

Pilgrim’s Pride Corp.

on Wednesday and chip maker

Intel Corp.

on Thursday.

Write to Denny Jacob at denny.jacob@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

CVS Is in Advanced Talks to Buy Signify Health for Around $8 Billion

Leave a comment

CVS Health Corp.

CVS -0.49%

is in advanced talks to acquire the home-healthcare company

Signify Health Inc.

SGFY 1.34%

for around $8 billion, according to people familiar with the matter.

CVS appears to have beat out other heavy hitters including

Amazon.com Inc.

and

UnitedHealth Group Inc.,

which had been circling Signify for a deal that could be announced soon. UnitedHealth never submitted an official bid, one of the people said.

There is still no guarantee that CVS will reach a deal for Signify, which has been exploring strategic alternatives since earlier this summer.

Bids for the company were due Sept. 6, but people familiar with the matter have said that an eager buyer could make a move before then.

Signify’s valuation has ballooned since The Wall Street Journal reported in August that it was for sale. Shares of the company closed at $28.77 on Friday, giving it a market capitalization of roughly $6.7 billion.

Signify works with a large group of doctors to facilitate house calls. It uses analytics and technology to help physician groups, health plans, employers and health systems with in-home care. It offers health evaluations for Medicare Advantage and other plans.

At the close of its deal this year to buy Caravan Health, Signify said that it supported roughly $10 billion in total medical spending.

The company went public in February 2021, raising more than $500 million as a result of the offering. On the day of its initial public offering, shares of the company priced above its expected range, at $24.

New York-based New Mountain Capital has backed Signify since 2017. The firm—which had more than $37 billion in assets under management as of early August—has steadily expanded Signify through a series of mergers and acquisitions since its initial investment.

New Mountain is well-versed in the healthcare sector. It previously sold the healthcare payments firm Equian LLC to UnitedHealth for roughly $3.2 billion in 2019.

For CVS, the deal builds on an effort years in the making to transform itself into a major provider of healthcare services through acquisitions and expanded medical services. The company had been struggling to counter slowing revenue from prescription drugs, which drive the bulk of its sales, and to ward off competition from

Amazon

AMZN -0.24%

for retail dollars.

CVS, the nation’s largest drugstore chain by stores and revenue, acquired Aetna in 2018, arguing that melding the insurance company’s patient data with its network of nearly 10,000 bricks-and-mortar sites would squeeze out costs while improving care and convenience.

The strategy has paid off, buoyed by a surge in demand for Covid-19 vaccines and tests at the height of the pandemic. CVS’s market capitalization has grown to more than $130 billion from around $75 billion since the Aetna deal.

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at each other’s share, often by borrowing ideas. Photos: Amazon/Walmart

The company is outperforming

Walgreens Boots Alliance Inc.,

which opted against major acquisitions, in the years since. Walgreens, also racing to expand into healthcare, focused largely on partnerships rather than deals. But last year it bought a controlling stake in the primary-care network Village MD, giving it doctors’ offices that CVS had said it could do without.

CVS Chief Executive

Karen Lynch

has since said that the company must have a foothold in primary care if it is to become a full-service medical provider.

CVS had previously been interested in a deal for the parent of One Medical, people familiar with the matter have said.

Amazon

AMZN -0.24%

agreed to purchase the primary-care clinic operator for about $3.9 billion in July.

The Federal Trade Commission is currently investigating the deal. The parent company of One Medical,

1Life Healthcare Inc.,

disclosed the investigation in a securities filing. The disclosure said One Medical and Amazon each received a request for additional information about the deal from the FTC.

While Wall Street has largely focused on CVS’s efforts to acquire primary-care practices, executives have also discussed ambitions to expand its in-home health presence.

A deal for Signify would represent a bright spot in an otherwise lackluster run for deals lately. Deal volumes globally are down roughly 30% this year after a flurry of activity last year, because of a drop in companies’ valuations, market volatility and other factors including Russia’s war in Ukraine.

Healthcare deal making in particular has slowed more than many other sectors. Over $200 billion of healthcare deals announced so far this year has compared with over $400 billion at this time last year, according to Dealogic. The largest healthcare deal to date this year in the U.S. is

Pfizer Inc.’s

$11.6 billion agreement in May to purchase the rest of

Biohaven Pharmaceutical Holding Co.

Write to Laura Cooper at laura.cooper@wsj.com, Sharon Terlep at sharon.terlep@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

US

California Fast Food Wages Would Be Set by Government Under Bill Passed by State Legislature

Leave a comment

California’s Legislature passed a bill Monday to create a government panel that would set wages for an estimated half-million fast food workers in the state, a first-in-the-U.S. approach to workplace regulation that labor union backers hope will spread nationally.

The bill, known as the Fast Act, would establish a panel with members appointed by the governor and legislative leaders composed of workers, union representatives, employers and business advocates. They would set hourly wages of up to $22 for fast food workers starting next year and can increase them annually by the same rate as the consumer-price index, up to a maximum of 3.5%.

A previous version of the bill passed by the state Assembly in January also allowed the council to oversee workplace conditions such as scheduling and made restaurant chains joint employers of their franchise’s employers, potentially opening them to liability for labor violations.

Representatives for companies including

McDonald’s Corp.

,

Yum Brands Inc.

and

Chipotle Mexican Grill Inc.

succeeded in having those provisions removed in the state Senate via amendments over the past week, though they still oppose the bill.

“This is the biggest lobbying fight that the franchise sector has ever been in,” said

Matthew Haller,

president of the International Franchise Association, a trade group whose members own many fast food restaurants.

A University of California, Riverside School of Business study commissioned by the franchisee association found that setting minimum wages between $22 and $43 would generate a 60% increase in labor costs and raise fast-food prices by about 20%.

California’s current minimum wage is $15 and is set to increase by 50 cents on Jan. 1.

The final version of the Fast Act passed both houses of the Democratic-controlled state Legislature on Monday. In both the Assembly and the Senate, all of the “yes” votes came from Democrats and every Republican who voted opposed the bill.

Democratic Gov.

Gavin Newsom

now has until Sept. 30 to decide whether to sign or veto the bill.

Mr. Newsom hasn’t taken a public stance on the current version of the bill, but his Department of Finance opposed the original version.

Labor unions backing the measure have long struggled to organize fast food workers, in part because the industry’s franchise model means there are so many different employers.

California lawmakers first floated the bill last year, with proponents arguing that tighter regulations were needed to protect fast food workers, who are overwhelmingly Black or Latino and who they say experience unpaid overtime and other labor violations.

The average U.S. home earned more last year than the average American worker. Prices for homes, groceries and gas are rising faster than Americans’ wages and that may be why sentiment and confidence have been so low recently. WSJ’s Dion Rabouin explains. Photo: Joe Raedle/Getty Images

Despite the recent changes, proponents said the bill is still a significant step forward. Lorena Gonzalez Fletcher, a former Democratic legislator who introduced the bill when she was in the Assembly, said it moves California closer to a labor model used in Europe where unions negotiate for wages and work conditions in an entire sector, rather than company-by-company.

“It’s still a big bold idea. And just the notion of giving workers a voice at the table will be fundamentally different for those workers,” said Ms. Gonzalez Fletcher, who now leads the California Labor Federation, the state’s largest union umbrella group.

The recent amendments call for the council to shut down in 2028 unless it is renewed, though inflation-adjusted wage increases for workers would continue.

The bill covers fast food restaurants that are part of a chain, that have limited or no table service and where customers order their food and pay before eating. The chain must have 100 or more locations nationally, up from 30 in a previous bill version.

California accounts for around 14% of total U.S. restaurant sales, and policy in the state tends to affect the rest of the sector, Citigroup Global Markets Inc. analysts wrote in a client note earlier this month.

Service Employees International Union President

Mary Kay Henry

said she hoped the bill would be a catalyst for similar movements across the country.

Investors have begun to ask about the act’s potential implications for restaurant chains at a time when companies are struggling with high food and labor costs, Wall Street analysts said.

“Obviously, we think it’s problematic on many, many fronts,” said

Paul Brown,

chief executive of Dunkin’ and Arby’s owner Inspire Brands Inc., in an interview. “I think it’s actually trying to solve a problem that doesn’t exist.”

Chipotle, Yum Brands, Chick-fil-A Inc., In-N-Out Burgers,

Jack in the Box Inc.,

and Burger King parent

Restaurant Brands International Inc.

have together spent more than $1 million to lobby lawmakers between 2021 and June 30 of this year, primarily on the Fast Act, state records show.

The International Franchise Association, which represents some 1,200 franchise brands, has spent $615,000 lobbying against the Fast Act and other legislation in that time.

Disclosures for lobbying spending since July 1 aren’t due until later this year, but industry advocacy against the bill has ramped up considerably during that time, people familiar with the effort said.

Labor unions have collectively spent more than $5 million to lobby the Legislature since the beginning of 2021, mostly on the Fast Act, state records show.

McDonald’s has encouraged franchisees around the country to email California lawmakers urging them to vote against the bill, according to a message viewed by The Wall Street Journal.

State Sen. Shannon Grove, a Republican, said on the Senate floor Monday that McDonald’s representatives told her that if the Fast Act becomes law, the company could stop expanding in California or leave altogether.

“Could we really survive without the golden arches?” Ms. Grove said.

Write to Heather Haddon at heather.haddon@wsj.com and Christine Mai-Duc at christine.maiduc@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Elon Musk says he’s buying Manchester United — but if it’s a joke, the SEC is unlikely to laugh

Leave a comment

Last Updated: Aug. 16, 2022 at 9:27 p.m. ET

First Published: Aug. 16, 2022 at 9:09 p.m. ET

Elon Musk is either getting into international soccer or else may have scored an own goal and teed up more trouble from the SEC.

In a tweet late Tuesday, the Tesla Inc. TSLA chief executive said: “Also, I’m buying Manchester United ur welcome,” referring to the iconic English soccer club that may be up for sale.

It was unclear if Musk was…

Elon Musk is either getting into international soccer or else may have scored an own goal and teed up more trouble from the SEC.

In a tweet late Tuesday, the Tesla Inc.

TSLA

chief executive said: “Also, I’m buying Manchester United ur welcome,” referring to the iconic English soccer club that may be up for sale.

It was unclear if Musk was serious, as he’s well-known for tweeting jokes and frivolous statements.

Neither Manchester United nor the SEC immediately replied to requests for further information.

But if it was a joke, it may not be funny to the Securities and Exchange Commission, since Manchester United

MANU

is a publicly traded company. Musk’s tweet came at 8:01 p.m., just after the end of after-hours trading, so Man U’s stock was unaffected.

Musk is no stranger to tweets coming back to bite him. His 2018 tweet that he had “funding secured” to consider taking Tesla private at $420 a share became the subject of regulatory action by the SEC, ultimately resulting in $20 million fines each against Musk and Tesla.

Musk has sparred with the SEC on a number of other occasions over the years. He’s also embroiled in a bitter legal battle as he’s trying to pull out of a $44 billion deal to buy Twitter Inc.

TWTR

.

On the other hand, if the tweet is true, it would be a seismic deal for one of the most valuable sports brands on the planet. Manchester United’s current owners, the Glazer family, have been under pressure to sell the team after years of underperformance, mismanagement and a revolt by some fans. The team is currently in last place in the English Premier League, after their second straight loss to start the season, an embarrassing 4-0 defeat to Brentford on Saturday.

Last week, reports said British businessman Michael Knighton planned a formal bid to buy the team. The club has an estimated value of $4.6 billion, according to Forbes.

That price tag would be doable for Musk, who is the world’s wealthiest individual, with a fortune estimated around $267 billion, according to the Bloomberg Billionaires Index.

Manchester United went public in a 2012 IPO on the New York Stock Exchange. Its shares are down 10% year to date, in line with the S&P 500’s


SPX

10% loss this year.



Read original article here