The daily business briefing: October 17, 2017
Airbus buys into Bombardier's C Series jet business, Netflix subscriber growth beats expectations, and more
Airbus to buy majority stake in Bombardier C Series jet program
Airbus announced Monday that it would buy a majority stake in Canadian aircraft manufacturer Bombardier's C Series business, and add a final assembly line for the planes at its Mobile, Alabama, plant. The news came in the middle of a trade dispute in which the Trump administration has hit Bombardier with a 300 percent tariff after rival aircraft maker Boeing complained that Bombardier was benefitting from illegal subsidies and dumping cheap planes in the U.S. The dispute has threatened Delta Airlines' deal to buy 75 Bombardier C Series CS100 jets. Bombardier CEO Alain Bellemare said Airbus' U.S. assembly line would make the aircraft "a domestic product" not subject to import duty.
Netflix stock gains as subscriber growth exceeds expectations
Netflix shares rose by 2 percent to touch a record in after-hours trading on Monday after the video-streaming company said it had added more subscribers than expected in the third quarter. Netflix added 850,000 subscribers, beating analysts' average estimates of 810,000. The growth was driven by the success of Netflix original shows such as the latest season of the popular Narcos. Netflix, which has seen its shares rise by 64 percent this year, also said it planned to spend $7 billion to $8 billion on original content in 2018 and focus on expanding internationally, as it comes close to saturating the U.S. market.
Weinstein Co. considers putting itself up for sale
The Weinstein Co., reeling from sexual assault and harassment allegations against co-founder Harvey Weinstein, said Monday it was considering putting a significant portion of its assets up for sale. The influential film studio, which produced such hits as Django Unchained, The Hateful Eight, and Lion, also said it would receive an immediate cash infusion from Colony Capital. The company's board last week fired Weinstein, who has faced an avalanche of accusations of sexual harassment and assault spanning several decades. The accusers include some of Hollywood's leading actresses.
Trump urges bipartisan health-care deal
President Trump this week urged Sen. Lamar Alexander (R-Tenn.) to push a short-term ObamaCare fix, although he insisted that the old health-care law is "dead." Alexander said Trump would accept a bill funding subsidies to insurance companies that lowered out-of-pocket costs for low-income Americans, which Trump abruptly cut off last week, in exchange for greater flexibility for states. Alexander and Sen. Patty Murray (D-Wash.) have been working on a bipartisan health-care plan for months, and could introduce it "within days." Sen. Ron Johnson (R-Wis.) is expected to introduce a more conservative alternative with a better shot in the Republican-held House. Many Republicans support a temporary fix of some kind. "We absolutely have to think about that family around the kitchen table," said Sen. Bill Cassidy (R-La.).
Stocks hold near record levels as major earnings reports roll in
U.S. stocks held steady early Tuesday as a flurry of big earnings reports rolled in. All three benchmark stock indexes reached new records on Monday. Dow Jones Industrial Average futures held steady early Tuesday while S&P 500 and Nasdaq-100 futures edged down by less than 0.1 percent. Morgan Stanley shares jumped by 1.3 percent in pre-market trading after the big bank reported earnings that beat expections. Goldman Sachs also reports third quarter earnings Tuesday. Johnson & Johnson shares surged, too, after it reported better-than-expected sales and profit. UnitedHealth Group reported earnings that beat expections, but revenue that fell just short of forecasts.