Tribune News Service
Business Budget for Tuesday, January 29, 2019
Updated at 6 p.m. EDT (2300 UTC)
Adds GAMESTOP-CEO:DA, USCHINA-HUAWEI:LA, DARDEN-CHICKEN-LAWSUIT:OS, WEA-RIDESHARE-POLAR-VORTEX:TB, KOHLS-WEIGHTWATCHERS:TB, 3M-EARNS:MS, APPLE-EARNS:SJ, CPT-AMAZON-BUSES:SJ, LOCKHEED-SHUTDOWN:OS
This budget is now available at TribuneNewsService.com, with direct links to stories and art. See details at the end of the budget.
^Sown in China, grown on high seas, 'Product of USA' mushrooms are killing American farms<
USCHINA-MUSHROOMS:PHI — That "locally grown" produce for sale in your neighborhood grocery store?
It may have started its life up to 6,000 miles away.
And that irks Gary Schroeder, who has been growing and packing specialty mushrooms for nearly 40 years in the so-called Mushroom Capital of the World, Kennett Square. Schroeder's Oakshire Mushroom Farms had annual sales of $37 million in 2017 and employed 65 people last year.
1200 by Sam Wood in Kennett Square, Pa. MOVED
^Big questions await Tesla and Musk on Wednesday's earnings call. Will stock analysts ask them?<
^AUTO-TESLA-QUESTIONS:LA—<The heat on Elon Musk is approaching full boil.
Tesla is low on cash. A $920-million debt payment comes due in March. Demand for Tesla cars appears to be softening. Thousands of workers just got laid off.
On Wednesday, Tesla is set to release fourth-quarter and full-year earnings data. Musk warned last week to expect a lower fourth-quarter profit. The next quarter might not be profitable at all, he said. The company scored a healthy profit last quarter, but that's looking like an aberration.
1150 by Russ Mitchell. MOVED
^Hopes riding high on US-China trade talks, but reality paints a dimmer outlook<
USCHINA-TRADE:LA — With a high-level Chinese delegation coming to Washington on Wednesday for trade talks, many on Wall Street and in America's corporate board rooms are hoping it will mark a turning point in President Donald Trump's trade war with China.
But there's little chance of a quick resolution, or an immediate removal of the tariffs that have been hanging over the fragile global economy.
1400 (with trims) by Don Lee in Washington. (Moved as a Washington story.) MOVED
^Apple's iPhone sales take big hit in holiday quarter<
^APPLE-EARNS:SJ—<Apple on Tuesday reported first-quarter revenue that managed to just surpass the company's own lowered estimates as it saw one of its biggest year-over-year declines in iPhone sales.
Following the close of trading, Apple said it earned $4.18 a share, on $84.3 billion in sales, for the quarter ending Dec. 29. During the year-ago period, Apple earned $3.89 a share on revenue of $88.3 billion.
550 by Rex Crum. MOVED
^MORE BUSINESS NEWS<
^Maker of Dragon Box to shut down and pay $14.5 million to settle copyright lawsuit<
^STREAMING-DRAGON-BOX:LA—<The sellers of Dragon Box, a streaming device allegedly used for pirating movies and TV shows, have lost their legal battle with Netflix, Amazon and the major Hollywood studios, according to court documents filed Monday.
Carlsbad, Calif.-based Dragon Media, which sells set-top boxes that allow people to stream video from the internet to their TVs, will shut down and pay $14.5 million to settle a lawsuit brought by a coalition of streaming services and studios, according to a proposed judgment and permanent injunction filed in U.S. District Court in Los Angeles.
400 by Ryan Faughnder. MOVED
^Big real estate moguls win as smaller investors denied tax break<
^REAL-TAX-BREAK:BLO—<A perk pitched as a boon for mom-and-pop businesses in President Donald Trump's tax law could shut out smaller real estate investors while benefiting the industry's largest property developers.
The Treasury Department released final rules recently detailing how owners of businesses such as limited liability companies and partnerships can claim as much as a 20 percent deduction. The 2017 law generally allows professional real estate firms to fully claim the deduction, while restricting most high-earning service professionals, such as doctors and lawyers.
900 by Lynnley Browning. MOVED
^Go into debt to pay rent? California startup finances your rent with high-interest loans<
^PFP-RENT-LOAN:SJ—<As soaring prices leave many Bay Area residents struggling to pay rent, one startup is offering an innovative but controversial option for tenants in a bind — finance your rent with a high-interest loan.
Santa Monica-based Domuso allows some local renters to take out six or 12-month loans at an average annual interest rate of 27 percent to avoid paying late fees to their landlords or risk losing their homes. The service is for tenants unable to cover hefty one-time move-in expenses like security deposits and first and last month's rent, or who fall behind on a monthly rent payment because of an unexpected sickness, layoff, or other financial emergency.
900 by Marisa Kendall. MOVED
^GameStop is no longer for sale, and it's looking for a new CEO<
^GAMESTOP-CEO:DA—<GameStop said Tuesday that its board has decided it's no longer for sale and investors who held shares waiting for a transaction are selling the stock.
The Texas-based video game retailer cited "a lack of available financing on terms that would be acceptable to a prospective acquirer."
GameStop, which operates 5,800 stores in 15 countries, apparently was seen as too risky by lenders. Private equity firms, which were rumored buyers, have had a poor track record with retail companies. Most of the recent retail bankruptcies had leveraged-buyout debt on their balance sheets.
350 by Maria Halkias. MOVED
^China says US charges against Huawei and its executive are 'immoral'<
USCHINA-HUAWEI:LA — The Chinese government Tuesday condemned U.S. indictments against the Chinese tech giant Huawei as "deep political motivations and manipulations," as relations between the world's two largest economies hardened on the eve of crucial trade talks.
U.S. officials Monday announced indictments filed in New York accusing Huawei Chief Financial Officer Meng Wanzhou and others of fraud in order to get around U.S. sanctions on Iran — and in Seattle alleging Huawei tried to steal robot technology used to test cellphones from T-Mobile.
850 by Robyn Dixon in Beijing. (Moved as an international story.) MOVED
^Owners of Olive Garden sue chicken industry, accuse it of conspiring to raise prices<
^DARDEN-CHICKEN-LAWSUIT:OS—<Darden Restaurants filed a lawsuit in federal court Friday accusing Tyson Foods, Pilgrim's Pride and other companies of a "conspiracy" to increase the cost of chicken meat.
Darden, the Orlando-based parent of Olive Garden and LongHorn Steakhouse, said the companies in the suit worked together to destroy breeder hens and eggs in a coordinated effort to drive down the number of chickens on the market and drive up prices.
550 by Kyle Arnold. MOVED
^Wednesday's polar vortex could bring boom or bust for ride-share and taxi drivers<
WEA-RIDESHARE-POLAR-VORTEX:TB — Bad weather usually brings ride-share and taxi cab drivers out in droves. But Wednesday's polar vortex has created a minor winter mystery: Will or won't those drivers brave the streets?
Earlier in the week, when several inches of snow fell on the city, some drivers said they made a killing, steadily making fares that were double, often triple the usual.
500 by Corilyn Shropshire in Chicago. MOVED
^Kohl's tries Weight Watchers with in-store studio, kitchen products<
KOHLS-WEIGHTWATCHERS:TB — Kohl's is joining WW — the company formerly known as Weight Watchers — in its latest experiment with giving shoppers new reasons to come to its department stores.
The retailer is opening a WW Studio in one Chicago-area store and will sell WW Healthy Kitchen products in certain stores and online, Kohl's said Tuesday.
350 by Lauren Zumbach in Chicago. MOVED
^3M shares rise as Q4 earnings beat expectations despite sales dip<
^3M-EARNS:MS—<3M reported fourth quarter results Tuesday that beat Wall Street expectations, despite unfavorable currency exchange rates that tamped down sales growth and a charge associated with costs from the Tax Cut and Jobs Act.
Sales fell 6 percent to $7.9 billion amid currencies exchanges that it said caused declines in 3M's largest business — industrial, and its electronics/energy unit.
400 by Dee Depass. MOVED
^Amazon looks to turn public buses into mobile delivery stations<
^CPT-AMAZON-BUSES:SJ—<Public transit systems suffering revenue losses as riders migrate to Uber and Lyft may be able to turn to another tech giant for salvation.
Amazon on Tuesday received a patent for transforming public buses into mobile delivery stations. Customers would simply meet the bus at a convenient stop, and pick up their items from a removable delivery module attached to the vehicle.
300 by Ethan Baron. MOVED
^Lockheed Martin CEO: Business could be hurt if shutdown reoccurs<
^LOCKHEED-SHUTDOWN:OS—<Lockheed Martin CEO Marillyn Hewson said Tuesday that the company averted major disruptions from the 35-day government shutdown but could face problems if Washington shutters itself again.
"Should (a shutdown) reoccur, it's possible we could see some delay in 2019 awards and orders," she said during a conference call announcing the company's quarterly and year-end earnings. "We continue to advocate for stable and consistent budgeting that enables U.S. government agencies and industry to plan and execute with confidence."
500 by Marco Santana. MOVED
^WORKPLACE & CAREER STORIES<
^A 'rising star' in a Dallas private equity firm sues its co-founders, citing a 'frat house' culture<
WRK-PRIVATE-EQUITY-FRATHOUSE:DA — A "rising star" recruited for her investment banking connections to help launch a Dallas private equity firm is being squeezed out of the company by her male partners, according to a lawsuit filed by co-founder Sarah Bradley.
Kainos Capital was turned into a "frat house," her lawsuit alleged, as her partners deceived and defrauded her of a 25 percent ownership stake in the firm that manages $1.3 billion in assets.
Bradley, a co-founder of the firm in 2012, asked the Delaware Court of Chancery to restore her 25 percent ownership stake. She also wants the money that she claims her partners withheld from her and paid to themselves.
850 by Maria Halkias in Dallas. MOVED
^DAILY MARKETS GRAPHIC <
Find here a daily Wall Street roundup graphic featuring Dow Jones Industrial Average, S&P 500 and Nasdaq data.
The 1-column x 4-inch graphic, Wall Street, will be posted by 6:30 p.m. EST Monday through Friday.
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^Susan Tompor: Fiat Chrysler joins those stepping up to help employees pay student loans<
^PFP-TOMPOR-COLUMN:DE—<A "Saturday Night Live" sketch in January generated plenty of laughs with a fake game show called "Millennial Millions" where twenty-somethings compete for prizes, such as a chance to pay off their big student loans.
But employers are increasingly recognizing that $35,000 or more in student loan debt is a serious matter that is stressing out many workers.
1400 by Susan Tompor. MOVED
^Michael Hiltzik: Online travel agencies, supermarkets, laptops: The hidden monopolies that may cost you money<
^HILTZIK-COLUMN:LA—<Let's say you'll be spending a night in San Francisco — the night of Feb. 19, to pick a date at random. You check for hotels on Expedia.com, find a room listed for $249 at the Hyatt Centric Fisherman's Wharf.
A little pricey. So you look for a better deal on a competing online travel website. Orbitz.com: $249. Travelocity: $249. Hotels.com: $249. Trivago: $249. The results could be a coincidence. Or it could be that the websites aren't competitors at all.
900 by Michael Hiltzik. MOVED
^Consumer Confidential: Soaring healthcare costs: Oh, my aching feet!<
^CNS-CONFIDENTIAL:LA—<After I had a foot condition diagnosed, the doctor immediately launched into a sales pitch for a specialized medical product he could provide that can cost up to $800. The actual manufacturing cost reportedly is below $100.
It is, in other words, a major revenue generator thanks to an absurd markup (see: last week's column on prescription eyewear).
But look what happened next. I asked about generic alternatives, and the doctor was clearly primed to recommend a specific (and costly) brand, with marketing materials within reach that presumably were provided by the manufacturer.
1000 by David Lazarus. MOVED
These features regularly move on Tuesday:
^WRK-REYER-QA:MS—<By Liz Reyer
Not moving this week.
^Your Office Coach: Power struggle with boss won't end well<
^WRK-COACH:MCT—<My manager, "Bethany," is undermining my relationship with my staff. Shortly after I was promoted to supervisor, my employees began going to Bethany with work-related concerns. Instead of involving me in these discussions, she tells me afterwards how I should handle their issues.
550 by Marie G. McIntyre. MOVED
^Help Wanted: Worker asked to testify after colleagues' scuffle seeks reimbursement<
^WRK-HELPWANTED:ND—<A colleague was fired and has filed a wrongful-termination lawsuit. His lawyer has asked me to testify for his client.
The problem is that I will have to take the day off and I will incur traveling expenses because the trial will be in New Jersey, where the company is based. And I am not sure I will be reimbursed. My colleague who is suing said the company should reimburse me. That doesn't seem right. Who should pay for my expenses and my lost day of income?
650 by Carrie Mason-Draffen. MOVED
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