The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
1356 ET - Sensata Technologies' business in China is veering off course. The reason? Carmakers there don't need as many sensors. The company, which makes sensors for use in cars, says on a call with analysts that local manufacturers in China are expected to have two-thirds market share by the end of this year, up from 55% last year. CEO Martha Sullivan says Sensata is still winning business with local OEMs in China, but those companies require about half as many sensors and other products from the company. Less content per vehicle will likely limit the company's growth in China, Sullivan says. Sensata falls 6%.(ben.glickman@wsj.com; @benglickman)
1340 ET - Sensata Technologies is bracing for impact from further cuts to auto production in the coming months. The company's 4Q guidance disappoints investors, with an expected drop in revenue partially due to reduced production expectations in automotive and heavy vehicle industries. Interim CEO Martha Sullivan says on a call with analysts that, based on customer conversations and current inventory levels, it is "highly likely" that third-party forecasters will reduce their production forecasts again in 4Q, following cuts earlier this year. Automotive markets were down about 5% year-on-year in 3Q, Sensata says. Sensata skids 6% in afternoon trading. (ben.glickman@wsj.com; @benglickman)
1213 ET - Policy dynamics stemming from the presidential election will have implications for big tech companies, Wedbush analysts say in a research note. Higher tariffs and a harsher stance on China under another Trump administration would significantly impact the supply chain, hurting companies including Nvidia, Apple and Tesla, and slowing the pace of the artificial-intelligence revolution, they write. The analysts view a Harris win as more bullish for the sector. "However, with many races on the Senate and House up for grabs, a gridlock result with a mix of blue and red in the Beltway would complicate any major policy changes for Big Tech in the near-term," they say. (connor.hart@wsj.com)
0831 ET - BCE's deal to buy Ziply Fiber for an enterprise value of C$7 billion was an expensive move, and the money could have been better spent elsewhere, according to TD Cowen. Analyst Vince Valentini says in a report that there are some positives to diversifying into the U.S. market, but he thinks ultimately the dividend freeze and the headwinds to organic growth weren't worth the price tag. "We do not like the move, simply doing nothing and paying down debt with the Maple Leaf Sports & Entertainment proceeds would have been better," he says. BCE sold its stake in MLSE to Rogers Communications for C$4.7 billion back in September. The news about the Ziply deal sent BCE tumbling 9.7% Monday to close at C$40.47. (adriano.marchese@wsj.com)
0810 ET - Vodafone U.K.'s merger with Three is a game-changer for the telecoms operator in terms of reigniting its growth, AJ Bell's Russ Mould writes in a note. Vodafone is relying on the merger to regain strength in the U.K., boost customer numbers and trigger investment in its user-experience, Mould says. "Assuming it agrees to the competition authority's demands, Vodafone could be at the forefront of a radical reshaping of the U.K. mobile network infrastructure." However, significant spending could lead to higher prices for consumers down the line, he says. Shares are up 1.4% at 73.22 pence. (najat.kantouar@wsj.com)
0532 ET - Three and Vodafone's U.K. merger clearance would be positive for the U.K. if mobile coverage were to improve, ING analyst Jan Frederik Slijkerman writes in a note. The U.K. competition authority CMA said that the merger could be approved if the companies implement appropriate remedies, which include a commitment to a network upgrade, among others. The merger is likely to get cleared under conditions, the analyst says. Additionally, clearance is expected to improve cash flows after investments for both companies, as the business case in the U.K. was challenged without the merger, Slijkerman adds. Vodafone shares are up 1.4% at 73.20 pence. (najat.kantouar@wsj.com)
2024 ET - Shares of Malaysia's mobile network operators may stay under pressure from continued uncertainty around the country's second 5G network rollout, Affin Hwang IB analyst Isaac Chow says in a note. The selection of U Mobile to lead the rollout offers some clarity, but question marks remain around partnerships and deployment plans, he says. U Mobile has said it wants to collaborate with stakeholders like the communications regulator and telco players CelcomDigi and Telekom Malaysia, he notes. CelcomDigi is reviewing its options, while Maxis plans to consult with regulators before deciding its next steps, he adds. Affin Hwang stays neutral rating on Malaysia's telecom sector, naming Telekom Malaysia as its preferred pick. (yingxian.wong@wsj.com)
1835 ET - Xero's bulls at Goldman Sachs are looking for the cloud-accounting software provider to report an 18% rise in average revenue per user at next week's first-half results announcement. They expect growth to come from the Australia-listed company's previously announced plan repricing and the retirement of inactive accounts. They tell clients in a note that they expect September-half revenue of NZ$1.025 billion. That's up 28% on a year earlier and higher than the average analyst forecast of NZ$998 million. Goldman Sachs has a buy rating and A$201.00 target price on the stock, which is down 1.5% at A$147.99. (stuart.condie@wsj.com)
(END) Dow Jones Newswires
November 05, 2024 16:50 ET (21:50 GMT)
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