tv Nightly Business Report PBS April 27, 2016 6:30pm-7:01pm PDT
this is nightly business report. status update blow out quarter, facebook strong profit profit makes it a stand out in a season filled with tech earning disappointment. turning up the heat why kom cast may put pressure on disney. a rare look at one of the most isolated economies in the world. all that and more tonight on nightly business report for wednesday april 27th. good evening and welcome. facebook shareholders are hitting the like button and whaegs not to like about a big earnings. the world's largest social
notework reported massive growth. the company earned 77 cents a share. revenue climbed 52% from a year ago thanks to newer mobile and ad products and its push into live video and shares took off spiking initially in after hours trading. we have more on what's working at facebook. >> reporter: bottom line for facebook it's mobile ads are working and drawing more advertising dollars. video ads are part of that mobile ad growth and facebook doesn't break out instagram. ads in the photo sharing service are contributing to growth. it's working to for him to be the company shareholders. they are creating a new class of nonvoting shares designed to help zach maintain control of the company and to sell shares
to donate to charity. so facebook good, the rest of tech not so much in terms of earnings. so why is tech trouble. let's ask the port fo low manager. why have the earnings reports been so variable and spotty? >> i think it's go factors. one is innovation and i think as you've seen facebook is the hot spot for innovation and we've seen good earnings release and after hours market movement. apple on the other hand currently not the big innovation right now. they brought out the smaller iphone, but we're all waiting and have been waiting for a long time for the next big apple product and it hasn't come. >> isn't that a long term very bad sign for those parts of technology? i mean that's how they made their mark was with all this
innovation and if that's drying up that doesn't seem like a good sign longer term. >> that's the evolution of these companies from the growth to mar of a value play so yes a growth or ented tech company needs to maintain that growth or it will then revert to more of a value type operation which is on priced earnings and dividend yield and things like that. >> so facebook at or near an all time high in terms of price, apple the worst performer in the dow so far this year. which one would you buy here? >> i think you should probably own both and in terms of you always buy -- if you understand the fundamental story you buy on full back so today i would probably look to apple as the potential purchase. >> i noticed under your recommendations for new technology you listed ge and i know they've been trying to position themselves as a technology company.
it sounds like you think they're succeeding. >> well, at the hensy tech fund -- ge has a lot of things going for it as it evolves and it's trying to evolve into more of a pure technology type play. it's in all the right fields, energy, health care, et cetera, so everybody thinks of ge, the refridge rater in the kitchen it really has become a high-tech company. >> am i better off going with older larger mature technology companies or maybe trying to find a fund like yours or some other one that can do the work to turn up the little really fast growing ones? >> well, i think a combination of both is good. that is the strategy we follow at the hensy technology fund. we do own some of the older more established tech names and we have a nice portfolio of the small aggressive growth names.
so you never really can predict the future no matter what everybody says so you want to have this diversified approach to see what happens. we're always just a headline away from some new technology event and you want to be in a position when it happens. >> you owe me a beer for giving you that layup question. >> thanks very much. facebook's results stand in contrast to apple's which we told you about last night. the stock was the worst performer on the blue dow index falling more than 6% today and a large part of the decline came from a slide of sales in china. but as we report from beijing the softness in that country may look worse than it actually is. >> reporter: the numbers weren't great, but that doesn't mean that apple's position in the china market as seriously deteriorated. part of the problem is that the whole smartphone market is
maturing and slow down. we used to see explosive growth, but it's estimated the market will pick up by .7%. in terms of market share apple hasn't deteriorated. in 2015 it ranked third here. tim cook made the point that apple's numbers look worse than they are because revenue grew by 81% a year ago. the iphone 6 plus had just hit the market the year before so by comparison the year looks worse but the company still sold a lot of phones. the real test will be with the iphone 7. traditionally when apple releases a product here you see a big boost this sales. however i spoke with an analyst who has been harg that the iphone 7 could have only minor technology upgrades and if that's the case it could disappoint fans here and lead to
worse sales and on social media that's been the buzz. people are asking if apple has lost the engineering heart at a time when chinese rivals have been picking up steam. on wall street stocks were mixed. apple weighed on the nasdaq, but the feds statement on its outlook for interest rates helped lift the dow and s&p 500. nasdaq down by 25, s&p 500 gained three. two components out with earnings. bowing report the first earnings miss in five years on higher cost. the world's largest plane marker saw a 9% in the market and backed its full year profit and revenue forecast. united technology has reaffirmed it's outlook but lower revenue.
both stocks finished the session higher. kom cast reported better than expect results. the largest u.s. cable provider saw its first biggest first quarterly jump in paid tv customers in nine years. it also saw growth in its high speed internet and entertainment units and that sent shares up fracti fractionally kom cast is in talks now to buy dream works animation. behind the studio st is in behind shrek and how to train your dragon. it would give universal not just more movies, but more scale and consumer products and characters to turn into tv shows to bring
in its parks and put on its apples. >> i think it would make sense. dream works has been very good at making short form content. kom cast is trying to role auou new services so dreamworks could be a content engine for that. >> neither company will comment and my sources tell me a deal is far from done, but a reported price tag of $3 billion sent dwa shares flying higher. now the question is whether any other buyers emerge for dreamworks animation. if the deal happens it could be a win for fans of shrek, kung fu panda and peabody and sherman. >> you would see a lot more
content from dreamworks and i think less in the way of movies but a lot more short form con at the present time. so you would see more tv series based on the dreamworks movie characters. >> this kind of deal would help kom cast become a disney 2.5 of building family friendly brands that work across its platforms. >> i love that movie. to the economy now where the number of contracts to buy homes sit the highest level since last may. the national association of real tors reported a rise in home sales. that report is considered a barometer of future home sales. the central bank decided it was best to stand pat on interest rates. we have more on the decision that pric
th sur almost no one. >> reporter: some changing las proflofrpting a discussion whether the interest rate could be hiked later this summer. among the changes in the statement it eliminated concerns over the global risks that have been prominent. it said growth appears to have slowed and that jobs have improved further. it eliminated concern of recent inflammation readings of picking up. bond experts said after the statement the fed is likely to hike just once this year. >> i think over the next six months and the balance of the year that we're going to see one hike and probably not two. so if you're asking relative to two i would take the understood. >> reporter: the survey pegged august for the next hike so it seems to be in line with a post meeting debate that argues between june and september. >> i don't think the feds going to be in any hurry to raise
rates because they don't wa to role it back. once they go forward they will want to keep going forward so i don't see them raising into june. there's too much contradictory information coming out, nothing that's actually pushing them to have to react. >> reporter: but economists say the more positive tone that in march is consistent with officials tightening again as soon as the june meeting but only if the data and markets are supportive. there are two more meetings before the meeting in june but the real question is the growth turn around. tomorrow they are expected to announce 0.7% growth for the first quarter and that compares to 0.97%. it's expected to be another weak first quarter after a string of weak first quarters and investors face the tough question of counting on a second
quarter dividends. the world's biggest oil understand gas company has increased the dividends to sharehol for 34 executive years and it comes one day after they lost their aaa rating in part because of the again rouse payout to shareholders. oil prices rose again today, but now that sanctions against iran has been lifted there's concern that crude coming back online could pressure prices again. we're on the island with a rare look of the workings of iran's oil industry. >> reporter: this place is iran's cash machine. it's the island of carg delaware ha dedicated to shipping oil. we were given rare access to the island as the count prepares for increased exports now that sanctions have been lifted.
they can store up to 28 million barrels of crude at any pun time, but they serve as a political billboard. oil and politics go hand in hand. look behind me. persian gulf written in english on this tank. why? the manager tells me every time a tanker pulls in he wants them to know they're in the persian gulf. the name of this body of water is disputed by saudi arabia. this is what the tankers are here for. slick, black crude. the head of exports from the national iranian company opened the spout for us. and then took us out to sea on a tug boat. this is where all the international oil tankers pull up so they can fill up with iranian crude. the iranians are hoping now with the lifting of the nuclear
sanctions they will fill up more of those tankers than they are for years. before the toughest sanctions were imposed iran was exporting more than 2 million barrels a day. the sanctions pushed them as low as 700,000. the workers insist the sanctions were never a problem instead calling them an opportunity because it forced the iranians to learn how to make their own replacement parts. for example this ptur bien mete they say was installed in 1984. once american companies were prohibited from doing business with iran they could not get the replacement parts so the engineers manufactured them themselves. on the walls in this room photos of the severe damage suffered in carg from bombs during the war in the 1980s. outside a tribute to the first victim of that war. side by side with the former and current leaders of that country.
the first and second muslim clerics to rule over iran since the islamic revolution in 1979, yet another reminder that politics and oil are deeply intertwined. for nightly business report, iran. boston scientific's heart business beats strong and that's where we begin the market focus. the maker of medical devices tops for revenue and earnings. the sales rose 11% thanks because of heart demands. shares finished the day up 11% to 21.89%. good year reported lower than expected revenue from weak sales in the u.s. in the absence of business operations in venezuela. profits beat analysts by a penny but that wasn't good enough for investors. sales fell more than 7%. health nominationer anthem
issued better than expected quarterly earnings. the results were helped by enrollment across the medicaid and medicare segments and the affordable care act. the ceo says the company remains cautious based on stainability concerns. shares fell more than 1%. and low commodity prices drag done oil expectations. revenue fell below targets. shares were down to $61.27. yahooo will give four seats on the board of directors. they will among the four newly elected members. the first round of bids for the core business ended last week with verizon communications emerging as the projected
front-runner. shares of yahoo down a fraction today. contractor general dynamics topped estimates. the company said results were helped by strong demand for its defense products. shares up to 143.41. oreo maker issued better than expected earns and revenue while reaffirming it's guidance for 2016. they are cautious though as overseas markets continue to impact results. shares up to $43.88. on capitol hill the coe of drug maker val yant says the company was too aggressive. there was testimony and the ceo offered this. >> i as its leader was also too
aggressive. in increasing the prices of am so of ur drugs in our large port fo low of products. in hindsight i regret pursuing transactions where it was based on an increase in price. >> the committee is investigating the drug price increas t high price of medicines is one of the hot topics on the campaign trail, but today attention turned to ted cruz with an attempt to change the course of race named his running mate, businesswoman and former presidential hopeful carly fiorina. why did he make this announcement. >> ted cruz lost five primaries by very large margins last night. he lost badly in new york before that. donald trump is on a path to getting to 1,237 delegates that he needs to be nominated. ted cruz has to do something to shake up the deck.
indiana votes next week and he's making that his last stand and by naming his vice president running mate he's hoping to magfy his support from women and hope that he can pull a victory out in indiana and perhaps deny donald trump those delegates that h convention. >> can it help them change the dynamic of the race? >> it's doubtful. it's like the cruz/kasich alliance we talked about earlier in the week. donald trump has a lot of momentum. very hard to see how this can make people reassess ted cruz. remember, vice presidential candidates don't do all that much in a general election. it's hard to see in a primary election how somebody like carly fiorina can make a difference. >> donald trump one with quite a margin. i expected he reacted in his
usual way. >> today he decided to act presidential and gave a foreign policy speech, read it from a teleprompter. he was tempered in his approach. it wasn't all that innovative in terms of substance, but donald trump is trying to take on the trappings of the presumptive nominee and accelerate the momentum he's been accumulating. >> what about bernie sanders versus hillary clinton? >> bernie sanders announced today that he's laying off hundreds of staffers, he's going to focus all his fire power on california. that's the last state that votes on june the 7th. his chances of overtaking hillary clinton have become almost nonexistent. it appears that he's looking for leverage to try to influence the party platform. it's not really about winning the nomination anymore for bernie sanders. >> thank you very much. john harwood in washington. coming up, what some in the medical community are doing to reduce the risk of becoming addicted to prescription pain
medications in the final part of our series" the business of pain." the business of pain a growing number of americans are becoming addicted to the pills that are supposed to help alleviate their discomfort. last night we told you one man's story and tonight what some in the medical community are doing to try to solve the problem. >> i don't want to keep taking this pain medication that could make me addicted to it.
if i get off of it, i'll go through with drauls. >> so it's a fear for you. >> uh-huh. >> robin, who asked us not to use her last name has been taking oxycontin every day for about seven years now because of her back pain. though she's not a lone, she is part of a growing number of patients seeing physicians who want to change how they treat pain patients. >> i want to do genetic testing. that will help us better identify what medications you do or don't respond to. >> a simple test can reveal genetic markers that can reveal a predisposition to misuse and abuse of medications. >> we can identify how they will respond more specifically than actually doing the normal trial and error methodology. we want to help relieve a patient's pain. that's been our goal to help relieve it, but now we're on task with being able to help take patients from their inner demons which makes thep suspectable to drug abuse.
>> some aren't convinced. from those who help run drug treatment centers. >> i know they've made great advances with genetics, but i would be skeptical if somebody said if we swab you we can tell you if you're going to be a drug addict or alcoholic. >> i think we have a long way to go to get to the point where we can do a simple blood test and say you better never get this because you'll become adiktsd. i don't think we're there yet. >> reporter: but those still in recovery from prescription pain pills are hopeful. >> there has to be a way to treat pain without getting the whole world adikted. finally tonight chabani employees got a surprise. the company's founder is awarding full time employees an ownership stake in the company. it awards around 10% and will be worth something if the company goes public or is sold. analysis says the company is
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