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Uber Loses License to Operate in London, Again

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Uber News

In just two years, Uber Technologies Inc (NYSE:UBER) lost its license to operate in London due to a pattern of failures in both safety and security. London is one of Uber’s most vital markets, sadly for its black cab drivers who even blocked streets as part of their protest, arguing their existence is harmed by an inferior service. London authorities revoked Uber’s license, the second time in less than three years as the company failed to adequately verify drivers’ identities and safeguard the service for passengers.

Key Market

Uber’s rapid growth in London is often quoted as a successful expansion story. It supposedly has as much as 3.5 million regular users in London. But Uber is constantly dealing with frictions from the iconic black cab industry as well as regulators, putting in question the company’s long-term future in the United Kingdom. And this latest decision could even impact the company’s 2021 outlook. Consequently, its shares dropped after this “loss” at a record-low in pre-market trading, taking down nearly $2bn off the company market cap.

Competitors

As for London, Bolt and India’s Ola who just got its licence to operate in London during summer are in the air and on the roads, using any opportunity to increase their market share. But it is its smaller but main US competitor Lyft (NASDAQ:LYFT) that just got an upgrade from analysts on Monday due to competitive positioning. While stock Uber’s stock has slipped 9.6% over the past month, Lyft’s stock rose 4.3%. And the company did achieve record revenue driven by both better than expected active rider growth and revenue per active rider in its second quarter, raising outlook for the whole 2019 fiscal year. And after beating both its top and bottom lines for its third quarter earnings $955.6 million in revenue, its stock price also rose despite losing $1.57 per share. The company again increased its full year outlook, this time in the range between $3.57 billion and $3.58 billion. Despite its weak IPO debut in March, the company expects to achieve profitability by the last quarter of 2021 fiscal year. But Lyft just found a partner as its Israel-based rival Gett shut down its New York City ridesharing app Juno. With this strategic alliance, Lyft will not only get Gett’s corporate rides in NYC, but this only leaves Uber and Via as established competitors, with opportunity to gain even more market share. Juno provided 14 million rides in 2018 which is a tiny fraction of Lyft’s 600 million rides so even if it takes over the whole base, it’s not that of a big deal. But being able to scale up its service in New York that is biggest ridesharing market in the US is an entirely different story with a lot of potential! And more importantly, this only shows a continued pattern that Lyft is a preferred partner over Uber. Being second is actually Lyft’s advantage as many will choose it over Uber to avoid the giant to gain a monopolistic throne.

Outlook

Uber will appeal against the decision and will be able to continue operating in London in the meantime. And the process could take years. The global ride-hailing giant insists that it fundamentally changed its business over the last two years and that it is setting standards on safety. The company will also use facial recognition technology for its drivers. But, regulatory authorities don’t think this is enough.

Whichever the outcome, Uber will not disappear from London’s streets any time soon- so sorry, black cabs. But, as Lyft’s path to profitability continues to clear up and with the uncertainty regarding its long-term future in a market that vital as London, Uber’s top and bottom lines are surely in for some strong headwinds.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

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BenzingaEditorial

Bed Bath & Beyond’s Stock Plunges With Hard Times on the Horizon

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On Wednesday, January 8, third quarter earnings and revenue miss caused the share price of Bed Bath & Beyond Inc (NASDAQ:BBBY) to plunge 8 percent with the retailer withdrawing fiscal 2019 outlook. On Thursday, stock was down 11 percent in premarket trading.

Third quarter earnings

Oh, how the mighty have fallen seems as the appropriate phrase to describe net earnings from of $24.4 million from one year ago dropping to a net loss of $38.6 million. Refinitiv expected earnings of 2 cents whereas the retailer delivered an adjusted loss per share of 38 cents. Revenue dropped 9 percent and amounted to $2.76 billion with same store sales dropping 8.3 percent versus the 5 percent expected. Both sales and profitability are expected to remain under heavy pressure in the fourth quarter as well. The retailer found that its results were significantly impacted by the fact Thanksgiving fell later than usual, resulting in one week less of holiday sales.

Tritton’s shakeup

On Monday, the retailer announced that it accomplished a real estate deal that netted the company $250 million in proceeds, what according to Tritton is the first step towards unlocking valuable capital. And only in December, Tritton decided to let six senior executives go and is currently in the recruitment process for their roles. Bed Bath and Beyond’s turnaround strategy is well underway with these swift changes but surely, there are many more to come as some of these executives have been with the company for more than 20 years – so “out with the old, in with the new” it is.

Intense competition

Amazon (NASDAQ:AMZN) has vigorously shaken up the retail landscape, but Target Corporation (NYSE:TGT) and Walmart Inc (NYSE:WMT) are by no means, left behind, but are in fact doing beyond great as they are successfully luring customers with more attractive websites and speedier shipping. And all of them are selling pretty much all the products that Bed Bath & Beyond has in store, leaving the struggling company in quite a turmoil.
But Amazon is by no means still the emperor sitting on the e-commerce throne as it is literally bleeding out to retain its crown. The world’s biggest online stores is losing money on its sales in order to achieve its shipping policy and in the world of ‘free-shipping’, it seems it could soon be beaten by Walmart, world’s third largest store but America’s largest retailer. And it is growing fast into online retail with its online sales exploding 78 percent up since 2016, but more importantly, now growing twice as fast as Amazon. And here’s the trick, Walmart is using its physical stores as warehouses for online sales. And since these stores are already turning a profit, maintaining extra warehouse space is nothing but a small addition to costs and that makes its strategy far different. Amazon only has 110 warehouses across the US so Walmart will soon have the biggest and more effective shipping network. Although both have great growth potential, Walmart is going full speed ahead in the online retail wars. Not good news for Amazon and especially for poor old Bed Bath & Beyond.

Outlook

CEO Mark Tritton, a Target veteran who started commanding the ship in October has announced that strategic plans for creating a long-term profitable growth will be revealed within the next two months, showing his discontent with these unsatisfactory results which are more than an imperative for change of the current business model. Bed Bath & Beyond desperately needs a new vision and hopefully, Tritton will be able to deliver it, otherwise things could get even worse.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Walgreens Isn’t Getting Closer to Turning Sickness to Health

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Walgreens News

Walgreens Boots Alliance (NASDAQ:WBA) reported its first fiscal quarter earnings on Wednesday, January 8 before the market opened. Its profits were harmed by increased competition from online and discount retailers, resulting in less prescriptions. Despite the slow start of 2020, the company hopes to be one of the rare survivals of the intense shakeout that is upon the pharmacy sector and is expected to wipe out thousands in the years to come.

Earnings report

Wall Street expected $34.6 billion in revenue and earnings per share of $1.41. And results fell short of expectations with revenue of $34.34 billion. Net profits declined sharply, 25 percent to be exact to $845 million for the period ended November 30th, 2019. Despite rumours that that the global pharmacy chain could be taken private in a massive leveraged buyout but Chief Executive, Stefano Pessina, didn’t address this speculation but rather emphasized that the company is making a progress in reinventing new services and digitizing its drugstore chain. The company is investing hundreds of millions of dollars in this reinvention while under a massive cost management program. And at least sales went up 1.6 percent. But the weak pharmacy spots cost its shares a consequent fall of 7 percent after the earnings report and even dragged those of rival CVS Health Corporation (NYSE:CVS) down 2 percent as investors are concerned that the pressures on reimbursement rates from insurers is likely to make further damage to profits.

Miserable 2019

The pharmacy and retail company ‘won’ the award of worst performer for 2019 when it comes to Dow Jones Industrial Average. S&P gained 27% over the last 12 months whereas Walgreens fell 16 percent. During this everything but memorable fiscal year, Walgreens sales grew just 4% and earnings per shares were down from fiscal 2018.

Along with its rival CVS Health Corp., Walgreens is managing to help itself somewhat by benefiting from many closed up pharmacies and acquiring their customers and consequently, their prescriptions. But, Walgreens itself has closed some of its stores as the company announced in August it will close an additional 200 stores to the already announced shutdown of 750 stores. But Walgreens’ strategy is different to of its rival that aims to attract customers with lower cost personal care items and primary care services. Yet, Pessina is more than confident in Walgreens’ strategic partnership approach, which most recently included expanding its relationship with The Kroger Co (NYSE:KR) in order to include a new group purchasing organisation and simply, cushion the impact from all those blows.

Outlook

The two strong headwinds that have hampered the company—the falling reimbursement rates insurance companies pay for prescription drugs and the struggles of its retail business aren’t going to change direction anytime soon. Giants known as insurers are pressuring pharmacies on margins and Amazon.com Inc (NASDAQ:AMZN) along with many other digital competitors are already doing a great job in luring customers. Surely, Walgreens cannot be saved by LED lighting that will save money, which was mentioned by one of its executives during the conference call, but long-term, maybe a very long and severe flu season can help Walgreens in turning its own sickness into health. Yet, Wall Street remains sceptical. Since news broke in November about a possible LBO, the pharmacy chain has now lost all the gains it made since then. One thing is for sure, whoever you are, if you are anywhere near being a pharmacy, it is a very difficult place to be at.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Xerox Continues Pursuit of HP by Showing the Money, $24 billion That Is

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Xerox News

On Monday, Xerox Holdings Corp (NYSE:XRX) revealed a financing commitment with the aim to ease concerns that it is unable to fund its HP Inc (NYSE:HPQ) buyout proposal. In order to remove any doubt and prove it is capable to take over its much larger rival, Xerox secured binding financing commitments worth $24 billion from Citigroup Inc (NYSE:C), Mizuho Financial Group Inc (NYSE:MFG) and Bank of America (NYSE:BAC).

The Takeover Saga

Xerox has a market cap of $8 billion whereas HP’s kingdom is valued at $30 billion but this isn’t the common ‘big fish eat little fish’ scenario. The $33.5 billion takeover bid was daringly offered by Xerox in early November. This cash-and-stock offer was rejected twice HP who felt that $22 per share is not in the best interest of its shareholders and furthermore, that it significantly undervalues their company. When the executives rejected the proposal yet again in late November, they criticized Xerox’s aggressive approach and questioned its 10 percent decline in revenue since last year, further showing concerns about Xerox’s financial abilities to pursue this merger. But Xerox has now shown publicly its capability to pursue this value enhancing opportunity. And although profitable for now, when it comes to printing, earnings are dropping year after year as both companies are struggling and spinning off different ventures in order to leave this aging business behind. According to Xerox, this deal would save both companies $2 billion in costs over the next two years and would boost revenue for $1.5 billion over the next three years.

Outlook

Xerox strongly believes that this union would result in valuable synergy to both parties: increasing the addressable market as well as shareholder returns, ease debt and drive innovation that both companies desperately need to survive in the new era as the printing business continues to age. Moreover, Xerox also finds that it is strong in areas where HP has key market gaps, such as managed services. It obviously presented its value-creating case successfully to the big banks, winning their vote of confidence. But what will it take to win over HP? Now that the major concern is resolved, some shareholders might rethink Xerox’s proposal. But here’s an even bigger question. If successful, what does Xerox intend to do with HP’s PC business which accounts for the majority of HP’s revenues, and moreover, why does it want to get further into not only one but two markets that are slowing down? Or maybe Xerox knows something about printing and PCs that we don’t and this very same reason could also be behind HP’s self-confidence. But Xerox has now shown the money and the ability to get its agenda though so this saga is far from over.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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