Australia has adjusted the scales for judging the merits of M&A deals. On Tuesday the Australian Competition and Consumer Commission approved Brookfield Asset Management’s joint A$18.7 billion ($12 billion) bid with MidOcean Energy to buy and break up Down Under power company Origin Energy, even though the regulator remains concerned that the transaction could give the Canadian investment firm an unfair edge. Outweighing that was the prospect of a speedy reduction in the country’s greenhouse gas emissions that could result after completion from a deep-pocketed Brookfield building 14 gigawatts of renewables. Any wannabe robber barons of global warming need to cool their

As the world braces for a seemingly inevitable recession, commodities have taken a hit. The prices of oil, copper and iron ore are all sharply down from their peaks earlier this year. That’s not surprising, as demand for raw materials tends to move up and down with economic activity. But another factor is the capital cycle: the amount of investment entering or exiting an industry. Given the severe lack of money that has flowed into conventional energy and raw materials in recent years, it’s possible that commodities will deliver positive returns even as the economy contracts. Despite the energy crisis

Even the best-engineered devices sputter on occasion. Consider Danaher’s well-oiled M&A machine. The $200 billion conglomerate runs acquisitions through its signature kaizen-based system, delivering improvements which churn out model returns for shareholders. When parts are spun back out, however, they run less smoothly. It’s a timely lesson as Danaher prepares to separate another division. Boss Rainer Blair is carving out the Environmental & Applied Solutions unit, which generated $4.7 billion of revenue last year from consumer packaging and water purification kit, in a tax-free transaction by the end of 2023. Although the division grew more slowly and was less profitable than the parent’s core

No man is an island, but General Electric boss Larry Culp might wish he were. The industrial firm he runs was buffeted in the second quarter by inflation, war, supply-chain problems and politics. While earnings tripled year-on-year, much of the business is still shrinking, and Culp is likely to miss a key cash-flow target for this year. The consolation is that if it weren’t for his tireless tinkering, things would be worse. GE is preparing to split into three listed businesses starting next year, and their prospects couldn’t be more different. Revenue from the division that makes and services jet engines increased by 27%

Last Update: May 5, 2022 Click here to view the full report. Please note: if you use our earnings data, please source I/B/E/S data from Refinitiv. S&P 500 Aggregate Estimates and Revisions The 22Q1 Y/Y blended earnings growth estimate is 10.2%. If the energy sector is excluded, the growth rate for the index is 4.2%. Of the 413 companies in the S&P 500 that have reported earnings to date for 22Q1 79.9% reported above analyst expectations. This compares to a long-term average of 66%. The 22Q1 Y/Y blended revenue growth estimate is 13.2%. If the energy sector is excluded, the growth

Last Update: Apr. 29, 2022 To download the full This Week in Earnings report click here. Please note: if you use our earnings data, please source I/B/E/S data from Refinitiv Aggregate Estimates and Revisions 22Q1 Y/Y earnings are expected to be 10.1%. Excluding the energy sector, the Y/Y earnings estimate is 4.4%. Of the 275 companies in the S&P 500 that have reported earnings to date for 22Q1, 80.4% have reported earnings above analyst estimates. This compares to a long-term average of 66% and prior four quarter average of 83.1%. During the week of May 2, 160 S&P 500 companies are expected

U.K. large-cap equities continue to be resilient in the face of multiple headwinds, as the FTSE 100 is the third strongest performer year-to-date.  The index is up 4.7%, only behind to the Brazil Bovespa Index (+9.1%) and OMX Oslo All-Share Index (+10.5%). We note possible reasons for relative outperformance in a prior note which include index composition (higher tilt towards value), attractive valuations and higher dividend yields (A Case for U.K. Equities: Valuation and Yields Look Attractive, March 31, 2022).  However, we note that small-cap companies have underperformed as the FTSE 250 has declined 9.2% year-to-date in the face of

U.K. equities have generally underperformed its global peers consistently over the last decade.  The FTSE All Share has experienced a compound annualized growth rate (CAGR) of 4.7% and 7.3% over the last 5 and 10 years respectively.  In comparison, the Russell 1000 CAGR over this same period is 16.5% and 14.9%, while the Datastream World Market CAGR is 11.1% and 9.9% respectively. The start of 2022 has been one of the most volatile on record which we highlight in a prior note (Data Insight: A Turbulent Start to the Year for Global Equities, January 27, 2022).  To this point, the

In this ‘Product Insight’, we look at how correlation coefficients can potentially ‘break down’ during periods of extreme volatility. Refinitiv Datastream allows users to users to access a library of ‘functions’ which provide cloud-based calculations that are delivered instantly into either excel or charting environments.  A library of approximately 85 functions span across categories including logical, mathematical, statistical, and technical to name a few. For correlation, we need to use the CORR# function: CORR#(Variable1,Variable2,Period/frequency). While straightforward to use within the product, interpreting the end output can be challenging depending on the inputs used.  Certain considerations a user must consider include:

Larry Culp has described his management style as chief executive of General Electric as “common sense, vigorously applied.” His plan to break the company into three listed parts, unveiled on Tuesday, looks like common sense, belatedly applied. The 119-year-old GE will hive off its healthcare-equipment business in 2023, and then spin off its power and renewable energy division a year later. That will leave the jet engine business, which contributes more than half of GE’s operating profit – and which Culp will continue to run. One sprawling company will become three more focused ones. Under earlier GE bosses like Jack Welsh and

The 2021 United Nations Climate Change Conference (COP26) is scheduled to take place from Oct. 31 to Nov. 12 in Glasgow, Scotland. Therefore, we take a closer look at carbon emission levels within the United Kingdom. For this analysis, we look at Refinitiv ESG data for the current constituents of the FTSE 350 index (as of Sep. 30), which comprises the largest U.K. publicly listed companies by market capitalization and is home to many of the largest commodity companies globally. Using Refinitiv ESG data, we can extract the total Carbon Dioxide Equivalent Emissions (will be referred to as CO2) as

SES Holdings founder and Chief Executive Qichao Hu has picked a mixed moment to list his Massachusetts Institute of Technology car battery spinoff. Shares in New York-listed rival QuantumScape have crashed 72% this year as market mania over electric vehicles hit the skids. Yet global automakers continue to accelerate away from gas-guzzlers and need ever-increasing amounts of oomph under the bonnet. SES, which has two plants in the United States and China, uses lithium-based technology to make batteries that are lighter, cheaper and – crucially – cram in greater amounts of energy. Powered by one of his devices, Hu says