Earnings: Apple Gains in China
Earnings: Apple gains in China
Apple has finally found success in China, said Brian X. Chen in The New York Times. The Mac and iPhone maker reported a whopping $16.1 billion in first-quarter revenue from “greater China” this week, up 70 percent from the same time last year. Apple has traditionally struggled to gain “a foothold in overseas markets like China,” where rivals like Samsung led the way with their large-screen smartphones. But last year, Apple’s own large-screen iPhone exceeded analysts’ sales predictions by some 12 million units.
Travel: Expedia snaps up Travelocity
Expedia and Travelocity are joining forces, said Jeffrey Dastin in Reuters.com. The booking sites struck a deal last week for Expedia to purchase Travelocity for $280 million. “The merger marks further consolidation in the online booking space,” which has also seen Expedia—Priceline’s biggest rival—make a number of acquisitions, “including its $2.6 billion takeover of restaurant reservation website OpenTable.” The two companies inked an earlier marketing deal that helped boost Expedia’s airline ticket sales almost 30 percent.
Currency: Strong dollar drags on profits
The U.S. dollar is “soaring,” said Paul Ziobro, Josh Mitchell, and Theo Francis in The Wall Street Journal, but that’s “slicing sales and profits” at many big American firms. In earnings reports released this week, several major companies blamed their weak results on the strengthening dollar. One reason is that while “sales in overseas markets may keep growing in local terms,” the subsequent returns look “smaller” when converted back into stronger dollars. A robust dollar can also “lead to big mismatches between costs and revenues,” making it harder for exporters to compete.
Economy: Fed to remain ‘patient’ on rate hikes
The Federal Reserve is in no hurry to raise interest rates, said Jeff Kearns in Bloomberg.com. While the regulators were optimistic about the U.S. economy—thanks to strong job gains and falling unemployment— the central bank’s board of governors unanimously agreed to remain “patient” on raising the government’s key lending rate, which has been at near zero since 2008. Analysts say a rate hike could come as soon as June but acknowledged that “international developments” or low inflation could prompt the Fed to delay even longer.
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