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tv   Nightly Business Report  PBS  July 20, 2017 5:00pm-5:31pm PDT

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this is "nightly business report" with tyler mathisen and sue here. >> if you can't beat them, sell through them. sears will team up with amazon to sell some of its appliances. sears stocks soared, but some rivals lose billions in value on the news. >> cloud nine. microsoft's s growing fast proving to investors its new strategies are paying off. >> high fever. banks are charging more and more for routine products and services. beware, the fees fatten their bottom line, but trim yours. those stories and more tonight on "nightly business report" for thursday, july 20th. >> good evening, everyone and welcome. alexa, turn on my washer. in a first, sears will sell some
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large kenmore appliances outside its on stores on you guessed it, amazon. it will also sell some smart appliances that will respond to voice commands through amazon's alexa or echo device. the dole is a gamble. it might leave sears stores traffic, but could u inject new life into the kenmore brand. sears s the deal sparked a rally in shares of the iconic department store. sears stock up 10%. but it also knocked the wind out of other companies that sell appliances. like home depot, lowe's and whirlpool. courtney reagan has more. >> it's already been an active year for sears. most of it hasn't been good, but today's announcement the 124-year-old retailer will begin selling its kenmore products on
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amazon.com sent sears stocks soaring. it's also integrated alexa into kenmore's smart appliances, so consumers can say alexa, turn off the air conditioner. sears home service will still deliver and instahl, but on amazon.com. a blog post, sears ceo and largest shareholder says quote, this is the kind of innovative collaboration we strive for at sears, adding the retailer will look for other ways to expand the reach of its brands. it is one positive headline after a year of fighting to stay march, sears acknowledged its financial results indicate substantial doubt it would survive on its open. at the time, the chief financial officer said the retailer was take i e second cfo in six months to do so. around the same time, it sold its craftsman brand for nearly a
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billion dollars. after the sale, the retailer got into a public tussle with the chinese manufacturer when it threaten eed to break its contrt with sears because of its worry to pay for the merchandise. it was resolved. since january, t announ the closure of 260 sears and k-mart stores. trying to off set some of the pain from a 20% sales drop. most retail experts say a bankruptcy is inevitable, but as these moves show, sears doing everything it can to prove them wrong. >> late today, two dow components released earnings. microsoft and visa. we start with microsoft. the legacy tech company saw its quy profit more than double. outside growth in its cloud business and the results come amid a global org international
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space station. they earned 97 cents a share easily topping estimates. revenue was bert than expected and rose from a year ago, the tok which is at a high extended its gains initially in after hours trading. josh lipton has a look at microsoft's quarter. >> mic $18.9 billion in annual revenue in the cloud business took turn of every core isi, who covers the company, says that is the key number in this report that's up from 15.2 billion in fire quarter. gross margins also expanding over the ceo giant has pivoted between two formid bable player in the fast growing market with a stock at all time highs. returns says investors for committing capital at these levels are signing off on accelerating earnings growth. for "nightly business report", i'm josh lipton. >> here to discuss microsoft's later quarter and what may lie
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ahead is alex, the managing director and senior research analyst at piper jaffray. good to have you. to all appearances, this looks like a very good quarter. if i own microsoft, do i want to buy more here? >> yeah, i think it is. and look, i think this is the third really good quarte and it's important to realize that you know, sonya has really done a great job b turn turning the battleship and making thi leading business for the company and he's done it now really, while at the same time being able to expand margins, so what we're looking for on the earnings report is what kind of investments are they going to be making next year and how do we, how do they take advantage and trust their in this market because i think ta their scale and ability to emphasize with large customers, is something that set them apart from a lot of their competitors.
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>> is there anything in thei no might be viewed as a weakness? >> i think that for a long time, investors have wondered if the legacy businesses, the server business, dos business, was going to be something that derailed this story. microsoft has done a good job in recasting those businesses. they've turned on premise components into hybrid cloud, edge computing, so i think from our glance at the results, we didn't see any weakness in the current results. last quarter, weakness in surface and hardware business, but that r so, we're not seeing any major points of weakness. it's more of a question of how much of the earnings growth story do we see next year as they invest to press this advantage. >> seems like it was two areas that really came through. one was the cloud which you talked about don't break out the numbers there, and the
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other was the office 360 or 365, the yn line version of their productivity suite. tell me about had our desktops years ago, but now, has migrated cloud. >> thae important part there, you're not only seeing xaepings and customers go on to the cloud product, but you're seeing microsoft being able to sell a higher priced skew so office typically is sold in pack aungs and so when you go from an e1 and e3 skew, microsoft is able to get more dollars out of each customer while delivering more value. so it's more b about, it's become iing more about how do t get more value. we think that again, this is another story it's playing out, but it's still relativery early and both of these stories are pushing growth, but in the office case, what's more important in my opinion is the margin story, they're getting better margins at the same time.
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>> very quickly, very quickly. are you sud the been able to do as well as they have? stock is at an all time high. >> i think we underestimate what some companies can do. in the long-term. and we overestimate that they can do in the short-term. i think microsoft is an example of a company where they're at the right place at the right time with the right culture. you've seen them reorganize their sales force now. we think that's about delivering on a solution. it's about how do you stop selling efficiency to start selling growth and better products and i think that's where they're going. >> have to leave it there. thanks. >> and now, to dow component visa, which people seem to be using more xuan these days. the processor reported a sharp rise in revenue driven by a higher number of transactions and like most payment networks, visa makes a lot of its money from transaction fees. the company topped earnings in the most current quarter and also raised profit and revenue
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praft for the year. shares initially rose in afterhours trading. diedra is covering the story for us tonight >> visa continues to do all the right things by investors. it's growing its payment volume costco and usa partnership in rising consumer spending here in the u.s. it is also aggressively pursuing dinl tall and expanding its reach into europe. this week, the payments processo paypal to offer debit cards in europe. visa is one of the best performing dow components and expects a solid second half raising its full year target. >> the nasdaq rose for the tenth straight day. it wasn't a big gain, but it was enough to eke out its first ten-day win streak. the nasdaq and russell 2000 rose to fresh records. pulling back from th blue chip dow fell to
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21,611. nasdaq added about five points. s&p 500 fell less than a point. as for the price of crude, it retreated after hitting a seven-week high. >> and the price of crude isn't what many expected it to be. that could spell trouble for the energy sector next week. and as jackie tells us, the larngest risk to earnings i equation is energy. >> next week is the week for energy company earnings and these reports will be important because the s&p 500 energy sector is down double digits. so far this year. for the markets to mark higher this sector needs a boost. the second quarter average price for brent was about 8% higher than a year ago. that in theory should bode well for the group, but when you take into account the most recent drop, companies could run into trouble. with estimates already low, a weak report could be especially
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problematic for shareholders. >> i think if they come in worse than expected, i think a new down trend will ensue in the names of the big integrated and i think we could explore room to the outside. >> we'll hear from halliburton and anadarko on monday. he says on wednesday. shell on thursday then finish on friday with exxon and chevron. a glimmer of hope we could see positive surprises. the pri the price drop isn't a danger zone to many companies. exxon mobil was fined $2 million by the treasury department for reckless disregard in 2014. that was when secretary of state rex tillerson wexxon's ceo. the treasury says exxon signed eight documents with the head of the state-run -- just weeks
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after sanctions were imposed on moscow for annexing the crimea region. it sued the government in an efrlt to overturn the fine. how one company wants to make older dumb cars a little smarter.
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a trio of regional banks reported earnings today and had a few things in common. they all posted better than expected revenue and all three cited an increase in fees. this falls in line with a segment we brought you last night about how a number of different industries are getting a growing percentage from those fees. toni >> banks have been reporting earnings and one night of not getting enough attention is the line item called income, that's a boring word for fees that banks charge their customers. both businesses and consumers. it's a business that's growing like mad for some large banks, it's close to 40% of their income, now, some revenues may stem from the fact that customer accounts are growing, but banks have been pushing up what they charge for years now. they consume com in all shapes with dozens of transaction fees
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and inactivity fees and credit card fees. the list goes on and on. leets look at two of the most typical fees. first, overdraft fees. bank rate.com says the average fee for a checking account was 33.$33.04 in 2016. before that, it had been going up for seven straight years. jpmorg billi from overdraft charges last year. wells fargo made less than that. this despite the fact that by law, bank customers must choose to opt into atm overdrafts and in this fee, these fees are particularly high if you're taking money out of a bank that's not your own or out of your own network. bank rate.com p found that last year, the average withdrawal fee for a noncustomer bank was almost $3.
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this is get expensive. is there a limit? there doesn't appear to be chblt there is no regulatory limit on what banks can charge for service fees on deposit accounts. for "nightly business report", i'm bob pi sani at the new york stock exchange. >> a new rule forcing rules to write arbitration clauses in ways that would make it easier for consumers to bring class action lawsuits against banks. today, house and senate lawmakers spruced companion measur to repeal the recently issued arbitration rule, which we've been telling you about. the chairman of the house financial services committee is a vocal point anticonsumer. the speaker of the house said today that the trump administration and republican leaders in congress are nearing consensus on tax reform. speaking at a factory in
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massachusetts, paul d b possibility of a low corporate tax rate is very possible. >> our tax writers are running their numbers to look at how we can get these rates as low as b possib. that's the kind of angel is that the tax committee is doing. so i believe we can get our rates down low. we have to make the decision on he trade off that gets added the republican party is more united on tax reform than it is on issues like health care. on the same day that the speaker toured that factory, we learned that manufacturing growth in the philadelphia region in july slowed to the level of the year. many of the components of the philadelphia federal reserve's index showed growth, but fell from june's levels. >> bad weather cut into the profit at travelers. that's where we begin tonight's market foc they said its weaker than
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expegted earnings were due to tornado and hail activity. shares of the dow component fell 1.5% to 124.57. the railroad operator union pacific said rising cargo vol e volumes and higher fuel surcharges helped that company grow profit and the results topped expeck tases. >> we had a very good second quarter 5% volume growth is always good thing for a railroad to leverage. we also generated excellent productivity, about suh $0 million. we saw that growth, it was concentrated in coal and in frack sand, but there are other markets there were strong as well in grain and some others. >> shares were off 1%. philip morris cut its price for the year after cutting cigarette shipments. revenue grew but not at the clip analysts were expecting and
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profits came in light. down 1.86. and the snow mobile and poe lars sale s rose as the company said there was strong demand in its international market. >> a really good quarter. organic sales up, it's nice to get back to growth in the business. trz it's up to about 12%. >> growing demand for software subscriptions helped check point's bottom line come in bert than expected. despite the rise which is israel's biggest technology company, said it is seeing weakness in higher end deals.
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shares fell 7% to 107.41. scholastic has a plan to increase earnings. the global children's publishing company plans to focus on cost cutting and will use data analytics to guide market and sales decisions. in its most recent quarter, they reported a rise in operating income, but also warned investors that earnings could drop next year in the ab bceps of new h and quarterly sales of -- muscular dystrophy were much stronger than expected. that prompted the drugmaker to raise its full year revenue guidance. the drug was controversially approved last year despite a negative recommendation from a panel of outside advisers. reaction today was strong. shares soared 20% to 20.93. and after the bell today, e bay said higher costs caused profit to plunge.
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those results still managed to match expectationexpectations. the company said it would launch a $3 billion program. that news wasn't enough. shares initial ly fell in after hours trading, but fraction. at 37.18. while automaker rs racing to build smarter cars and trucks, there's another race for millions of other vehicles. tech companies are developing new deviceapps to connect older models and make them smart. phil lebeau has our story. >> the numbers are daunting. there are more than 271 million vehicles in the u.s. the average car or truck almost 12 years old. they may still run like a top, but most of these older models were built to be more connectivity took off. monitoring their performance or if they need maintenance is a challeng auto brain is try iing to chang that. consumer the device into the diagnostic cord under the
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steering wheel, load an app on their smart phone and then for a monthly fee, they can track where their car is located or how it's driving. >> knowing the behavior, , we could drive them back retailer for example, we know when a car hits 10,000 miles and needs that oil change. we could offer them a discount on an oil change or if their tires need to be changed, we could offer them a discount on that as well. >> for years, automakers and tech companies have talked about cashing in on connected cars. while some services like on star have developed a sizable customer base, the auto industry has yet to figure out how to drive big profits from smart cars. once they leave the showroom and are out on the roads. meanwhile, there are millions of older, so-called dumb cars or trucks, logging mile after mile. an untpo auto brain is not alone in
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offering a device offering real time monitoring of cars and trucks. verizon for example has a similar device. and for some time, insurance companies like progressive have offered ways for you to monitor ways for you to monitor how your vehicle is performing on the road. all to get ar on america's roads. phil lebeau, "nightly business report", 14ig. >chicago. a coming up, o.j. is making
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o.j. simpson will soon be a free man. this after the nevada parole board unanimously granted his release after nine years in prison for robbery, assault and other felonies. simpson now can still attract an audience. evidenced by today's wall to wall cable coverage of his parole hearing and hollywood last year profited from two award winning television shows about the simpson saga. e case, but still owes n who may millions in a wrongful death civil judgment in the murders of his ex-wife and a companion. jane wells has more from lovelock, nevada. >> correct. >> o.j. simpson learned today he will be a free man as soon as october. convincing a nevada parole board
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he deserved early release nine years after going to prison for an armed robbery in las vegas to retrmemorabilia. >> i knew pull a gun on me. i never have in my life. never been accused of it in my life. nobody's ever accused me of pulling any weapon on them. >> even one of his victims came to his de he made a mistake. >> simpson will leave prison to find an america where the o.j. saga is big business. >> o.j. in the car. >> fx's the people versus o.j. simpson won an emmy last year followed by an oscar for the made in america documentary, both reignited interest in his story, so the media descends on the city in nevada where the prison p is locateded selling out a handful of hotels. >> it gives us an opportunity to promote our town and make people realize there are small towns all over the country and there's a reason to get off the freeway. >> we have these fabulous
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lovelobs here and they put them on our plaza. but we've been told we should do o.j.'s picture on the back with lovelock on it. >> he will leave prison a wealthy man. he has pensions from his production company, the nfl and screen actor's guild totalling over $4 million. money protect ed by law from going towards the f he owes to the families of ron and nicole, but any money he might try to make on the outside would have to go to that judgment if the families can find example, simpson said he now possesses the memorabilia he tried to take by force in las vegas, potentially including the suit he wore that day he was acquitted of murder. that is the sort of value the goldmans and browns could take and when he walks out of prison on october 1th. >> i do grant parole when eligible. >> it will be one day before the 22nd anniversary of a jury
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deciding he was not guilo peopl. a crime for which in no. one has ever gonto prison. >> if he tries to earn money once released and trieds to hide it, that could potentially be a vilts of parole, which could land him back in prison. >> that is "nightly business report" for tonight. >> thanks from me as well. have a great evening, everyone and we'll see you tomo.
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