The daily business briefing: April 17, 2018
Netflix shares jump as new subscriber sign-ups beat expectations, China slaps a massive surcharge on U.S. sorghum imports, and more
Netflix shares soar after surge in subscribers
Netflix shares jumped by 7.5 percent in pre-market trading on Tuesday after the video streaming service reported that it added far more subscribers than expected in the first quarter of 2018. Netflix added 1.96 million domestic streaming customers, beating the 1.48 million expected by StreetAccount. It gained 7.4 million subscribers worldwide, exceeding the 6.5 million forecast by StreetAccount. Netflix also reported revenue of $3.7 billion, in line with the $3.69 billion expected by Thomson Reuters. It was Netflix's outlook that really impressed analysts, with the company saying it expected earnings and subscriber additions in the second quarter that exceeded analysts' estimates.
China imposes huge surcharge on U.S. sorghum imports
China on Tuesday said that it would impose a temporary 178.6 percent surcharge on U.S. sorghum after investigators found that the U.S. was dumping the grain in China and hurting domestic producers. The anti-dumping deposits will start on Wednesday, potentially ratcheting up trade tensions between the world's biggest economies. "The rate is quite high and some buyers may have to cancel shipments," said Li Qiang, chief analyst with Shanghai JC Intelligence Co. China launched the inquiry into U.S. sorghum imports, which totaled $957 million last year, in early February, just weeks after President Trump imposed tariffs on imported solar panels and washing machines.
Starbucks removes manager as CEO prepares to meet 2 black men arrested in store
Starbucks said Monday that the Philadelphia store manager who called police on two black men last week "is no longer at that store." The coffee chain's CEO, Kevin Johnson, told Good Morning America that he was calling for store managers to get "unconscious bias" training. He said the incident was "reprehensible," and repeated an apology, saying "what happened to those gentlemen was wrong." Johnson added that his duty was to go beyond the individuals involved and "look more broadly at the circumstances that set that up just to ensure that never happens again." Johnson is expected to meet with the two men, who were not charged. About 40 protesters returned to the store for a second straight day on Monday, chanting such lines as, "Anti-blackness anywhere is anti-blackness everywhere."
U.S. stocks gain as attention turns to strong corporate earnings
U.S. stock futures climbed early Tuesday, driven by optimism about corporate earnings. Futures for the Dow Jones Industrial Average jumped by 0.5 percent, while those of the S&P 500 and Nasdaq-100 rose by 0.4 percent. The gains came after the three major U.S. indexes went up on Monday, with technology, health care, and industrial stocks leading the way. The Dow gained 0.9 percent on Monday, while the S&P 500 rose by 0.8 percent and the Nasdaq Composite by 0.7 percent. The optimism is being fueled as earnings come in and S&P 500-listed companies are expected to post 17.3 percent earnings growth for the quarter, the best since 2011.
Tesla suspends Model 3 production for second time in 2 months
Tesla is temporarily suspending production of its Model 3 sedan for the second time in two months, just days after the electric-car maker's CEO, Elon Musk, said he was confident about the effort to speed up production of the company's first mass-market vehicle. Tesla first suspended production of the Model 3 line in late February in an effort to increase output. Tesla has been dogged for months by setbacks that have kept it from meeting its Model 3 production goals. At the end of the first quarter, Tesla reported that it was making 2,000 of the vehicles per week, short of Musk's goal of 2,500. The company now is aiming for weekly production of 5,000 by the end of the second quarter, a level it initially hoped to reach by the end of 2017.