The daily business briefing: April 27, 2021
Apple announces plans for its first eastern hub in North Carolina, Tesla shares fall despite better-than-expected earnings, and more
Apple to build $1 billion hub in North Carolina
Apple announced Monday that it would build a $1 billion campus and engineering hub in the Raleigh-Durham, North Carolina, metropolitan area, its first in the East. The project, part of five-year series of investments, is expected to create at least 3,000 jobs in machine learning, artificial intelligence, software engineering, and other specialties. The positions are part of the iPhone maker's promise to add 20,000 U.S. jobs by 2026. The company currently has 95,000 employees in the U.S. Several other big tech companies already have hubs in the Raleigh-Durham area, including International Business Machines' Red Hat, Cisco Systems, and Epic Games, as the industry expands beyond California's Silicon Valley to find skilled workers in other parts of the country.
Tesla revenue beats expectations but shares fall
Electric carmaker Tesla on Monday reported first quarter revenue and earnings that were better than expected, thanks partly to strong demand in China, environmental credit sales to other carmakers, and sales of some of its investment in bitcoin. Without the regulatory permit sales, the report painted a dimmer picture. "Higher regulatory credits, lower taxes, and bitcoin sales buoyed financial results. Back these out, and it was a large miss," Roth Capital Partners analyst Craig Irwin said. Tesla shares fell by as much as 3 percent in extended trading after the results came out. Tesla also reported record deliveries in the first quarter despite a shortage of computer chips that has made it hard for rival automakers to keep production running smoothly.
Lyft to sell self-driving car division to Toyota subsidiary
Lyft has agreed to sell its autonomous vehicle division to Toyota subsidiary Woven Planet for $550 million in cash, the companies announced Monday. Woven Planet will pay Lyft $200 million up front, and the remaining $350 million over five years. The deal also will result in $100 million in annual savings for the ride-hailing company. Toyota also agreed to use Lyft's platform and fleet data for any eventual commercial service Woven Planet launches. The deal is expected to close in the third quarter of this year, ending Lyft's push to launch a fleet of self-driving cars it once hoped would provide most of its rides by this year. Lyft rival Uber last year sold its self-driving vehicle unit to startup Aurora as part of an effort to cut its losses.
UBS, Nomura report fresh losses from Archegos collapse
Wall Street's losses from the collapse of Archegos Capital Management rose above $10 billion on Monday after UBS Group and Nomura Holdings reported hits of $774 million and $2 billion, respectively. Swiss bank UBS's loss from Archegos' crash was bigger than analysts expected. Japan's Nomura's update on the damage brought its total losses from the implosion to $2.85 billion. Nomura said it has acted swiftly to revise its risk-management systems to avoid another such disaster. UBS CEO Ralph Hamers said the bank was taking the incident seriously and reviewing its risk-management practices. Archegos rattled Wall Street when it failed to meet margin calls in March. Credit Suisse and Morgan Stanley lost $5.5 billion and $911 million, respectively.
Stock futures inch up after S&P, Nasdaq close at record highs
U.S. stock index futures rose slightly early Tuesday following Monday's record-high closes for the S&P 500 and the tech-heavy Nasdaq. Futures for the S&P 500, the Dow Jones Industrial Average, and the Nasdaq were up by 0.1 percent several hours before the opening bell. The S&P and the Nasdaq rose by 0.2 percent and 0.9 percent, respectively, on Monday. The Dow dropped by 0.2 percent. Investors are bracing for a wave of corporate earnings reports on Tuesday that will include tech giants Microsoft and Google-parent Alphabet, as well as Starbucks. So far, a third of the companies in the S&P have reported first-quarter earnings, and 84 percent have posted surprisingly strong earnings, according to FactSet.