tv Nightly Business Report PBS August 5, 2015 6:30pm-7:01pm PDT
. this is "nightly business report" with tyler mathisen and sue herera. >> cutting the cord. investors dumped big media stocks on concerning comments from one of america's biggest company. >> on the water front. why it is proving to be a big windfall for those on the east. >> payday. how much do ceos work compared to their workers? we'll soon find out. all of that and more for wednesday august 5th. >> good evening. welcome. it was all about the media sector today and wasn't pretty. disney set the tone when its ceo suggested that more people than previously thought are switching to video streaming from traditional cable or satellite linked television. that set in motion a chain
reaction one that was focused on the changing ways people watch television. time warner reported a strong quarter. and they weren't concerned about cutting the cord. still the market didn't buy it. discovery also failed to impress when it missed both on earnings and revenue expectations. investors were alarmed. fears about cord cutting hit the sector hard with disney a dow come possibly faug more than 9%. time warner off off the same almost. discovery falling 10%. a television industry in flux. >> media giants future may hinge on corn cutting trends and stand alone media apps. disney's talk of subscriber losses and the company's outlook dragging shares lower. the ceo saying the pay tv bundle is still relatively strong and isn't going away. even as the handle scape
changes, disney is well positioned. >> look at what position. in material of how people watch television. it is still the dominant form of television. espn is fortunate that it is a brand that we believe ports well to any new platform. whether it is smaller bundle an over the top package of programming or whether it is a direct or consumer business. >> the question is wall street whether the shift away from a traditional tv bundle disney is grappling with will have broad impact across the whole media industry. >> disney is at the top of the food chain. if they get a cold, the others will be into the doctor pretty quickly. >> time warner which reported earnings this morning is taking a different tactic with its biggest brand. bringing hb omp direct to consumers with hbo now which launched the quarter. the ceo is bullish, saying more distribution partners and additional investment in programming is coming. does the company now expect to
generate losses this year and expect it to be highly profitable over time? as for the question of whether media companies new digital revenue streams having an unexpected negative impact on the legacy businesses both disney and time warner ceos said it is not cannibalizing their core business. for "nightly business report." >> and after the bell today, cbs reported a 24% drop in second quarter earnings amid weaker results that the revenues roughly in line. 21st century fox saw a 9% drop in revenue on softer ad sales in its television business. it also announced a $5 billion stock buyback. >> disney was far and away the biggest loser on the dow jones industrial average. the nasdaq rose 34. the s&p 500 gained 6. the energy sector was one of the worst performing as crude prices
hit a five-month low. >> a new report on the labor market raised questions about whether job market gains can continue to accelerate. the private pay roll company adp estimates that private sector pay rolls grew by 185,000 jobs last month. that's lower than a month ago. and 30,000 below the wall street forecast. investors tend to use this report to try to figure out what the government's monthly report will look like when it comes out on friday. in this case also to see, or the gauge what the fed may or may not do in september. >> an early indicator of the friday jobs report came in weaker than expected. the source of the weakness? the oil patch where jobs have been cut back due to lower crude prices and the export sector hurt by the stronger dollar. outside of those sectors, job growth looks pretty healthy. >> last year we were getting $250,000 on average and that's what it would be this year if it
were not for energy and what's going on in the nonvehicle manufacturing. i think fundamentally, we're still between 200, 225 k. >> a separate report the biggest part of the economy, services. it surged past in july and hit the best level since 2005. early indications are that growth in the third quarter may be closer to 3% than the anemic 2% that has been more the rule during the post crisis recovery. a leading policy maker says the better economic data makes the fed more likely to hike interest rates this year. >> most members at the june meeting believed it was time to raise interest rates. the that time is clearly coming. when we do that it will be if the economy continues to grow a process of raising rates gradually over time. that will happen. we've waited and i think been patient and i think that's been the right thing to do. >> powell says he is waiting on critical data to make up his
mine whether to hike in semi later this year or not at all of but a friday jobs number shows growth there at 200,000 could bring it a big closer to the rate hike for next month. the u.s. trade deficit widened more than expected in june as america buys more than it sells. solid consumer spending pulled in more imports. while the strong dollar tempered exports. the trade jumped 7% to nearly $40 pirs. ? trade has been volatile because of the west coast ports during first quarter of 2014. all that congestion on the west coast was seen as an opportunity on the east. we have two reports tonight. and morgan is at the port in newark new jersey. we begin with jane wells at the court of los angeles and long beach. >> reporter: what a difference a contract makes. business is back here in long beach and los angeles at this that port complex. here in long beach, volumes were
up 8%. up 14% to the three-year high. 40% of shipped goods to the u.s. comes through here. 12% of gdp. because of last winter's horrific slowdown, some business has shifted east. is it a blip? >> the port complex is perhaps one of the most valuable assets in the u.s. >> reporter: l.a. and long beach are back. a bee hive of activity. unclogging the nation's largest container port complex after a horrific slowdown. is everything back to normal? >> absolutely yes. we're well ahead of last year. >> reporter: perhaps. but the port has seen its reputation sink after dozens of ships were parked offshore for weeks during the stand-off between dock workers and shipping companies. port leaders are working to win back trust. not a moment too soon. retailers will shift for the holidays. >> we're seeing it for a variety of reasons. i think the ports on the west coast need to work on solving
some of the issues. >> reporter: there are still too few truck classies. while the truck turn-arounds are improving. >> 25%, the trucks get stuck in a port for more than two hours. >> reporter: they're rushing to complete the panama canal which will allow big ships to bypass the west coast. when the capital of plastic surgery, southern california ports are getting a $5 billion facelift. the terminal in l.a. has robotic cranes moving cargo along magnetic tracks. the long beach container terminal is being made into a fully automated area which can handle the biggest ships in the world. still panama canal givers shippers options. >> 10% of the volume we see would be migrating from the u.s. west coast to the u.s. east coast. >> we don't believe that. we think it is a nonevent. >> really? >> yeah. more than half the ships on
order in this industry too big to go through the expanded panama canal. we have customers with 21,000 ships on order. these are ultra large. mega ships and they can only come to this port complex. >> reporter: the bottom line is the bottom line. it costs twice as much to ship something from shanghai to chicago if you go to the east coast, rather than the west coast. and that is something the west coast ports are counting on. above the ports of los angeles in long beach. the bad news for west coast ports has been good news for east coast ports. many retailers are importing more goods through the east coast and shipping lines like merck are and panelling operations along the eastern corridor. in a long term bet, the business is here to stay. container volume at the major east coast hubs is at the that record levels. including the port of new
york/new jersey. the multi-billion dollar question, will it stay this way? >> we think that a certain percentage will stay in new york and new jersey and the east coast. we are in constant touch with shimmers throughout the and u.s. parts of the world. and there is no question that the issue of reliability has come into their equation. >> reporter: reliability is key. it takes about a week longer to ship to new york from asia instead of the west coast and can be double the cost. more containers means more congestion. that's particularly tough for truckers who sometimes wait hours to make a single pick-up. >> most of the truckers have implemented pier congestion were surcharges to their clients. unless we really do something dramatic, the congestion will prevail. it is discouraging to try to get more trucks on work. with you can't lure more trucks to go into a congested area.
>> chassis operators are work o'a proposal to share. >> we have to collaborate more and have a more united system. so what the steam shipment lines are doing, we have to coordinate with the chassis providers, the unions in terms gate that operations. so it is becoming more integrated and that takes a little time and it takes more communication. >> reporter: officials are hoping to have a sharing plan in place ahead of the panama canal expansion next year. that's where the focus is now. the panama canal is expected to drive down costs for goods headed to the east coast. the ports have to be able to accommodate the super size vessel. billion of dollars are being spent to dredge harbors, expand terminals and here in new jersey even lift the bayonne bridge. there's a lot at stake. they expect this complex to double over the next decade and
quadruple by 2040. the competition on both coasts and between individual ports is fierce. and it will all come down to which hub can handle the most the fastest. for "nightly business report," morgan brennan. boeing, a top u.s. exporter may be the first casualties from the shuttering. according to reuters, boeing lost a satellite contract worth several hundred million because of under certainty about the future of agency. boeing recently said it is looking to move pieces of the company to other countries. still ahead, how much more does the company ceo make than you do? and a new rule may shed some light on the disparity.
the securities and exchange commission wants to know more about how much ceos are paid compared to the average employee. today agency approved a contentious rule that would require most company to disclose that information. here's what we know. according to usa today, the ceo of an s&p 500 company is paid 216 times more on average than the average employee at their company. in 1950 it was 20 times. mary thompson has been following the story for us. what exactly is the s.e.c. pay ratio per se?
>> it was mandated by dodd frank. it compares the amount that a ceo makes eachier to the median pay of a worker at the company. the companies will have to start disclosing this in the fiscal year that begins january 1st 2017. >> what's the point? >> critics say there's no point prox opponents say it is a valuable tool for investors whether to approve or reject a pay package. they anticipate it can be used to help narrow the gap between ceo wages and average workers' wages. how? we'll expect to see some boycotts of products where the company has a high ceo pay ratio and in certain states like rhode island. advocates are already arguing that they not do business with company that have a high ratio. >> what's the argument against this particular rule? >> the critics say it is expensive for company to do every year. it is useless. it won't impact pay at all.
it. were it toaler the pay ratio and it is not intellectual honest. you include seasonal and part time workers' pay but you don't annualize it. so it is not really apple to apples. >> does that ceo total aggregate number include all of the compensation or just their salary? >> no. all their compensation. bone us stock options, et cetera. the number that you see in a proxy that's filed every year. >> thank you. this will be an interesting one to follow. a disappointing quarter sends shares of curry green mountain tumbling and that's where we begin focus. the company is cutting the work force by 5% as it grapples with the sliding sale of its brewers and single serve coffee pods. earnings top estimates but revenue missed. shares were down as much as 27% in initial after hours trading. during the regular trading, it was down 2%.
it closed the floor. >> revenue managed to top consensus but noticeably the company lowered the car delivery guidance for the year and ininvestigators couldn't look past that key figure. shares slimmed hard in initial after hours trading. the stock was up 1.5% to $270.13. price line group hit a new high on strong results. they booked more hotel room and rental cars at the start of the summer travel season. that helped it beat estimates on earning. they weighed on price line's bottom line. shares did surge 5% to 1351.21. that is just below the all time closing high. and lumber liquidators. the hardwood from china contains a carcinogen. sales fell more than expected
despite heavy discounting. it says it expects california will file a claim against it because of the allegations. shares tumbled 28% today to finish at 13.27. >> chems logged a big loss. this concerns over debt. the company did trays production outlook bum didn't seem to help. that shares tumbled. gen ware financial, the ceo said they would probably not sell the entire business. it complicates the company's goal to sell assetses. ralph lauren's earnings came in better than expected but foreign exchange impacted sales. it retailed environment and played a role in the mixed quarterlies. shares were off 1% to 121.50.
>> cyber crime is a $400 billion problem for the global economy. all businesses are spending a lot to keep their system safe. the mobile payments industry is paying especially close attention. so with a growing number of consumers who use to it pay for things. josh lipton reports from a major cyber security conference in los angeles. 10,000 hackers, security analysts and government agents have to spend it. one big theme this year mobile payments of that is a state that is expected to balloon from $52 billion last year to $100 billion by 2017 according. apple, google pay pal are all fighting hard for a piece of the massive pie. even with widespread adoption security risks still loom as a
concern. the latest involves moment payment companies. a hacker says she found a way to have a square reader so they can steal from customers. >> we found square reader has multiple possibilities. the hardware encryption bypass where you can turn it into a credit card scanner but it will look exactly like the latest version square reader. >> importantly, square says this hack does not pose a legitimate security risk saying our square register software contains a number of security precautions that protect cards that are swiped on unenkrimtd readers. if our readers are damaged, they will not work. in other words if the reader is modified or damaged, it wouldn't work with the square app. they just filed for the ipo.
one question is whether this hack will concern invest oz. square isn't the only a.m. remember another one came over security concerns. they they then acted to strengthen security for the users. cybersecurity says they don't expect any of this to slow town the adoption of these apps. the convenience of these services remain too compelling. for "nightly business report." josh lipton in las vegas. coming up, will the next generation be better than their parents? we asked you to think about it.
here's what to watch tomorrow. another read on the labor bharkt the challenger job cut report. that one tomorrow too. and more data with chain store sales. a look at what consumers are up to. that's what to watch thursday. a snap company made its wall street debut but amplify known for its skinny popcorn brand.
shares fell 10%. but amplify isn't just a popcorn company. it is part of growing fast growing better for you industry that wants to shake up the snack food business. as bob tells us its unique strategy has some big obstacles. >> amplify is the maker of the wildly popular skinny pop, popcorn which apparently every millennial woman in america is eegt. but a $1 million value for a popcorn company? what am i missing? it is not really about the popcorn. of course the popcorn matters but it is more about the branding and the relationship of the customers to the product. bits the name of the product and how you feel about it. i know it sounds touchy-feely and it is but it is kind of working. simply put, bits selling the natural food trend. or as it is now known, the better for you or the bfy market. skinny pop is about a cute name
that claims they're taking out stuff that's not good for you like gmo ingredients. and it is not the only one in the fast growing space which grew by the way 10% in 2014. blue buffalo, for example, is already working the bfy pet food space. they've been a strong performer. now this kind of growth does get noticed and that's the big problem. this is a highly competitive space that can be easily penetrated by larger competitors. frito lay has a division called smart foods. that's not stopping amplify from and panelling elth of other it recently acquired a chip brand. they expect to launch it nationally. thin doritos which they claim is what's bad for you. still, it is not at all clear that their brand expansion strategy will succeed with other products. so you have to admire how far they've come given the giant companies to compete against.
anyone who thinks the rent. innovation should pay attention to company like this one. for "nightly business report." >> the tech industry has announced new perks for expecting parents. netflix unveiled a new parental policy allowing new mothers and fathers to take an unlimited amount of time off at full pay in the first year after the birth or adoption of a child. microsoft basically followed suit and is expanding the parental leave rules to a full 12 week. speaking of kids are you worried about your children's financial future? if so you're not alone. an online survey found that just one in eight americans believe that the next generation will be more financial will you secure than they are. whether you believe those numbers or not, it got us thinking about the future as well. and the standard of living for the next generation. so we took our cameras out to see what you think.
>> i'm hoping they'll be better off. that my children will be better off than i am. >> they're smarter than we were. there are more advantages. the world is more connected. so i'm going to say better. >> it's hard out there. so i feel that my children's generation will be worse off. >> until we look at economic inequality you know i don't think it is going to be better. >> everyone is pretty much skragling for cash as far as what they're going to do next. people have a sense of security. i don't know if they have a real sense of actual financial security. >> i'm not old by any stretch of the imagination. i'm 30. i do okay. anyone who works hard will do okay. >> and this survey echos the results of reason studies. and universal pictures is the first studio to gross over $5.5 billion worldwide in one year. success of film like jurassic
world and furious 7 helped the company reach that record. we should note "nightly business report" is produced by nbc. don't forget minions. >> that was a big part of it. >> that's "nightly business report" for tonight. i'm sue herera. thank you for joining us. >> i'm tyler mathisen. have a great evening. we will see you back here.
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