In a statement the airline said it had been forced to ground all its flights because "prolonged and sustained efforts with lenders and authorities did not yield the desired results".
The Indian government had asked state-run banks to step in with a bailout plan for the airline - which employs 23,000 people and was founded by Naresh Goyal more than 25 years ago. He stepped down as chairman last month
Pilots, engineers, and ground staff have not been paid for months, and passengers have been left stranded around the world as a result of cancellations.
"Late last night, Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian lenders, that they are unable to consider its request for critical interim funding," the airline said.
"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today," it added.
The banks have been seeking a bidder for the airline, which said it would continue to support them in their efforts.
Etihad Airways already owns 24% of Jet Airways and is reported to have expressed an interest in taking more control.
"Jet Airways is hopeful that it will be able to bring the joy of flying back to its guests as soon as possible," the airline said.
It operated 600 domestic and 380 international routes, including out of London, Amsterdam and Paris, and had grown rapidly before it started to lose market share after the entry of low-cost airlines like IndiGo & SpiceJet.
The UK's Civil Aviation Authority tweeted advice to customers, outlining different approaches for seeking refunds depending on how the flight was booked.
Jet Airways had said earlier on Wednesday it was working to "minimise guest inconvenience" by using its contact centres and social media teams.
"In parallel, the airline's management and its key stakeholders including its consortium of lenders, continue to work closely towards resolving the current situation," a spokesman had said.
"The airline regrets the inconvenience caused to its guests," they added.
Enlarge/ A 5G Intel logo is seen during the Mobile World Congress on February 26, 2019 in Barcelona.
Miquel Benitez/Getty Images
Intel says it is canceling a line of smartphone 5G chips that had been slated for 2020 launches. The announcement comes on the same day Apple announced a wide-ranging settlement with Qualcomm over patent issues.
Qualcomm has long been a dominant player in the wireless chip business for smartphones. Apple worries about becoming too dependent on a single supplier. So in recent years, Apple has encouraged Intel to expand its wireless chip offerings and offered Intel a significant share of its business for 4G chips in the iPhone.
Then last year, as Apple's legal battle with Qualcomm heated up, Intel became Apple's sole supplier for 4G wireless chips in the iPhone. Intel additionally was working to develop 5G chips for Apple to use in future versions of the iPhone. But recent reports have indicated that Intel was "missing deadlines" for the wireless chip that was slated to go into the 2020 model of the iPhone.
Fast Company reported earlier this month that "in order to deliver big numbers of those modems in time for a September 2020 iPhone launch, Intel needs to deliver sample parts to Apple by early summer of this year, and then deliver a finished modem design in early 2020."
If Intel had failed to provide Apple with 5G chips in a timely manner, that would have put Apple in an untenable position. The iPhone's competitors would be able to offer 5G capabilities using Qualcomm chips, while Qualcomm could have denied Apple access to 5G chips as long as the patent battle continued.
A bit of column A, a bit of column B...
Still, it's not clear whether Apple's settlement with Qualcomm forced Intel to leave the 5G market or whether Intel's impending exit from the 5G market forced Apple to settle with Qualcomm. It's likely that the causation ran a bit in both directions.
As long as Apple was battling Qualcomm, Intel could expect to supply chips for all of Apple's iPhones, providing enough scale to justify Intel's hefty investment in developing the technology. But now that Apple and Qualcomm are once again able to work together, Intel can expect Qualcomm to supply at least some of the 5G chips in the 2020 iPhone—and Apple would have had more leverage to negotiate better pricing.
"In the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns," Intel CEO Bob Swan said in yesterday's press release.
Intel says that it will honor existing contracts for 4G chips and is re-assessing "opportunities for 4G and 5G modems in PCs, internet of things devices and other data-centric devices." The company will continue investing in 5G chips for network infrastructure.
Shares of the streaming giant plunged 9 percent in extended hours trading after the report but by Wednesday morning had pared those losses to just over 1 percent.
Worries about churn are overblown according to analysts at UBS. "Chill about Netflix churn fears," analyst Eric Sheridan said.
"We see NFLX as a top pick as it capitalizes on the opportunity to be the global leader in streaming media & the competitive moat around its business widens (via a mix of content spend, marketing, & scale)," Sheridan added.
"NFLX's first quarter earnings may be controversial to some — mostly because of the light second quarter [subscription] outlook — but we think there's much more to like here than not," J.P. Morgan analyst Doug Anmuth said in a note to clients after the report. "We continue to believe that Disney+ will not be a major threat to NFLX subscriber numbers given NFLX's quality & quantity of content, & that Netflix/Disney+ will not be an either/or decision."
There's still room for shares to go higher, Goldman Sachs analyst Heath Terry said.
"As Netflix's content investments, distribution partnerships and marketing spend drive subscriber growth significantly above consensus expectations and the company approaches an inflection point in cash profitability, we believe shares of NFLX will continue to significantly outperform," he said.
The reaction from analysts at Credit Suisse was a bit more subdued.
"Overall, while not the net add beat many were hoping for, we believe outlook commentary was quite bullish, especially record first half paid net additions in the face of record price increases, revenue growth accelerating the next few quarters., and a very strong second half content slate," analyst Doug Mitchelson said.
Here's what else analysts think of Netflix's earnings report:
"Chill about Netflix churn fears. Pricing Moves On Full Display & Remains Key Positive Driver. Both for the Q1 EPS report and mgmt Q2 guide, the impact of recent pricing moves in a handful of countries was on full display. In particular, better revenue forecast and weaker sub guide (though we view this as a conservative framing by mgmt) will likely dominate the ST debate. Moving beyond that, we would focus investor attention on NFLX's key attributes: a) pricing power in developed mkts; b) potential for pricing tiers in developing economies to open up greater scale; c) compound revs at a 20%+ CAGR; d) expand OI margins; e) lessen its dependence on capital market fundraising; & f) has low/no regulatory headwinds. As a result, over the LT, we see NFLX as a top pick as it capitalizes on the oppty to be the global leader in streaming media & the competitive moat around its business widens (via a mix of content spend, marketing, & scale)."
"NFLX's 1Q19 earnings may be controversial to some—mostly because of the light 2Q sub outlook—but we think there's much more to like here than not. Key positives that stand out to us: 1) 1Q paid net adds of 9.6M, above expectations of ~9.5M, led by Int'l upside to the guide of 560k; 2) 1Q operating margin of 10.2% was well ahead of our & consensus 8.9% on lower than expected marketing, & even w/some spend shifting later in the year NFLX's margins should still move sequentially higher through '19; 3) 1H19 paid net adds are guided up 7% Y/Y—even w/2Q down Y/Y on price increases during a seasonally softer quarter—and NFLX expects 2019 paid net adds to be greater than in 2018. Pushback will come from: 1) a lighter 2Q sub guide, w/paid net adds of 5M below our/consensus 5.4M-5.5M, driven mostly by US, but NFLX is factoring in price increase impact related to the US, LatAm incl Brazil & Mexico, & parts of Europe; 2) Larger 2019 FCF burn at ($3.5B) on higher cash taxes, but NFLX reiterated improvements in 2020 (we think meaningful) & its push to become self-funding."
"Domestic growth concerns validated: We had highlighted (in an earlier report) the risk to Q2 sub guidance due to recent price increases over a compressed time line, in a seasonally weaker quarter. Q2 US guidance therefore came in lower at 300k vs our and consensus estimates. This guide is comparable to Q2-16 when NFLX's price increase resulted in higher churn. However, at that point, NFLX's US penetration rate was 46% compared to 60% today and the price increase was $1 vs $2 this year. Therefore, while the guidance does highlight higher churn, the implicit increase in churn is actually lower vs 2016, normalized for the degree of price increase, penetration rates and absolute price. This points to the fact that underlying US business trends continue to improve despite the headline. This impact should be further muted in 2H'19 given the new seasons of some of the most popular shows (Stranger Things, 13 Reasons Why, Crown) and movies."
"Netflix paid net add guidance missed Street estimates as price hikes both in the U.S. and in key international markets create a drag on subscriber gains. Guidance for negative free cash flow in 2019 was increased to -$3.5 billion from -$3 billion on higher cash taxes and investment in real estate and production facilities. Netflix guidance for a 13% 2019 operating margin remained constant. Average revenue per user is set to accelerate on price hikes globally, though FX remains a headwind."
"As Netflix's content investments, distribution partnerships and marketing spend drive subscriber growth significantly above consensus expectations and the company approaches an inflection point in cash profitability, we believe shares of NFLX will continue to significantly outperform. We remain Buy rated (on CL) and raise our 12-month price target to $460 from $450 to reflect faster subscriber growth expectations, particularly in international markets."
"We reiterate our Outperform rating and $480 price target in the wake of solid Q1 results. Global Paid Sub Growth is still on track to accelerate Y/Y. Management remains confident in recent U.S. pricing increase. AND NFLX still has premium Revenue growth and Operating Margin expansion. Long-Term Buy thesis FULLY intact"
"We expect HSD global organic ARPU growth in '19, and Netflix expects another year of record net adds. This pricing power is the result of years of investment in content, marketing and technology and speaks to Netflix's scale. It is also the key to driving improved FCF trends and ultimately shares."
"Netflix's 1Q19 revenues came in-line with forecasts, while 2Q guidance was softer than expected. As expected, both domestic (1.74mn) and int'l (7.8mn) paid sub net adds were above consensus, while adj. EBITDA margin of 12.9% was also above est. of 11-12%. Also as expected, 2Q19 total revenue guidance of $4.93bn is slightly below cons. forecast of $4.96bn, partially driven by the slowdown in 2Q domestic and intl paid sub net adds guidance (0.3mn and 4.7mn respectively), likely reflecting seasonality and the timing of price increases. Mgmt also reiterated its commitment to operating income margin expansion to reach a 13% target in 2019. With implied global penetration of only 23%, meaningful pricing power, and content expense leverage, we forecast ~$42bn in revenue and $18 in GAAP EPS in 5 years. We believe this continues to support a 12-month target price of $420 and, as a result, we maintain our Buy rating."
"Overall, while not the net add beat many were hoping for, we believe outlook commentary was quite bullish, especially record 1H paid net additions in the face of record price increases, revenue growth accelerating the next few qtrs., and a very strong 2H content slate – mgmt indicated they are "not seeing anything inhibiting a long run-way of growth". Investor consternation will now shift from price increase churn to competition, but Disney+ concerns are misplaced, in our view. Due to near-term tax structure changes, we lowered 2019 EPS $0.90y to $3.28 and 2020 $0.29 to $6.00."
"All said, 1Q19 results do little change our view on the trajectory of Netflix's fundamentals. We reiterate our In Line rating /$350PT and continue to view the risk / reward balance at these levels as fair (shares trade at 30x our 2022 EPS forecast, and we project three more years before the company becomes FCF-breakeven)."
"Netflix reported upside for Q1'19 and provided a mixed Q2 outlook. Most importantly, int'l sub adds were ahead of expectations for the quarter and essentially in-line for the Q2 guide. Q1'19 domestic subs were also ahead of consensus, but Q2 domestic sub guidance is below the Street. Q1'19 domestic and int'l contribution profit were each ahead of the Street driving EPS upside. The revenue outlook for Q2 is in-line, while the EPS outlook is below consensus estimates, but EPS is impacted by a change in accounting that results in a higher tax rate for the quarter. Despite an onslaught of new streaming services, we expect Netflix to continue to capture a significant portion of traditional content dollars as they migrate to streaming."
"Netflix's quarterly results read largely as expected, with upside to 1Q U.S. and Int'l Paid Net adds, and a soft 2Q guide for U.S. (~300k, roughly in line with us but below Street's 650k). While bears may nitpick that Int'l Paid Net add guidance was below at 4.7M, it misses the bigger picture. 1H19 Int'l Paid Net dds are projected to increase +19% y/y and tracking ~435k (4%) ahead of Street expectations. 2019E continues to shape up to be a record Paid Net dd year for Netflix. Reiterate Outperform."
"Lowering target to $410 from $425 on modestly weaker FY19/20 subscriber outlook, partially offset by higher APRU, but maintaining Outperform rating. 1Q global paid subs +25% y/y, modesty slower than +26% in 4Q, with streaming revenue +29% ex. FX, vs. 35% in 1Q, as global ARPU increased 3% ex. FX vs. +7% in 4Q. Higher US price causing modest churn. Margins exceeded guidance, but company maintained prior FY19E margin outlook. Despite new competitive entrants (AAPL and DIS), NFLX cites potential for further upside with only 2% of global downstream mobile internet traffic vs. 10% peak viewing share in US. Product bundles have helped mobile adoption and shown solid traction thus far. Testing various plan prices in India."
More store closures have already been announced in 2019 than in the entirety of 2018, according to new research.
A report from Coresight Research shows that the retail apocalypse is continuing, with 5,994 store closures announced so far in the US this year, compared to 5,864 store closures in all of 2018.
Some retailers including Fred's and Family Dollar are closing select stores in a bid to stay profitable while chains like Payless have announced that they are shuttering all of their stores.
One report predicted that 75,000 stores will have to close across North America by 2026 as reliance on e-commerce rises.
The retail apocalypse is raging on with almost 6,000 store closures announced so far in 2019 — more than the entirety of last year.
According to a new report from Coresight Research, US retailers have announced 5,994 store closures so far this year, compared to 5,864 store closures in all of 2018.
Pharmacy retailer Fred's recent announcement that it will close more than 150 underperforming stores sees it join a growing list of retailers that are shuttering bricks and mortar stores in a bid to save money during the rise of e-commerce.
And some brands are closing all of their stores completely. Payless announced in February that it was closing all of its 2,500 stores in North America.
Coresight Research CEO Deborah Weinswig predicted that this trend will continue. "The flood of store closures will likely continue for quite some time," she said.
An April UBS report predicted that 75,000 stores will have to close across North America by 2026 as e-commerce presentation is set to rise by 25%.
Coresight also noted, however, that some retailers are announcing new store openings. After going public earlier this year, Levi's announced plans to open 100 stores in its fiscal year, which ends in November.
There have been 2,641 store openings announced this year, Coresight said, compared to 3,239 openings in all of 2018.
UBS predicted that clothing stores would take the biggest impact, facing an estimated 21,000 store closures — 71% of all clothing shops across the US.
China's stock markets have been on a tear so far this year, amid optimism about a possible trade deal with the U.S. and hopes that the economy may be bottoming out.
As of Tuesday's close, the Shanghai composite has skyrocketed more than 30 percent since its last close in 2018. The Shenzhen component has also seen massive gains of more than 40 percent in the same period. The CSI 300, which tracks the largest companies listed on the mainland, has similarly jumped beyond 35 percent.
Beijing on Wednesday reported better-than-expected economic growth for the first quarter of 2019 — a move that could lift market sentiment even higher. The latest GDP numbers showed the world's second-largest economy grew 6.4 percent year-on-year in the first three months of this year, topping the 6.3 percent that analysts polled by Reuters had expected.
A slew of recent data — compiled privately and from official sources — have also pointed to an improvement in the Chinese economy, thanks in part to Beijing's raft of stimulus measures. In March, China reported export numbers that topped estimates, and manufacturing activity that unexpectedly grew.
Meanwhile, Beijing appears to be close to striking a trade deal with Washington, following a series of punitive tariffs that both economic giants slapped on each other in 2018.
Chinese negotiators made unprecedented proposals on forced technology transfers, a sticking point in the talks, Reuters reported in late March. But U.S. Treasury Secretary Steven Mnuchin said Monday the two sides still have lots of work ahead of them.
Investors have been increasingly optimistic that a deal could be struck between the two economic powerhouses that would end their protracted trade fight.
Looking ahead, one strategist said economic numbers and corporate sentiment need to improve in the next six months or so.
"We've started to see retail investors in China feel a little bit more optimistic but they've been busy trying to just take their money back after a terrible year in 2018, so the money is not really at work at the moment," Tai Hui, Asia-Pacific chief market strategist at J.P. Morgan Asset Management, told CNBC's "Street Signs" on Wednesday.
"I think the data, both in the economy and the corporate sector, is going to be pretty important to convince investors in China to come back into the market. And that could well be the key theme for the second and third quarter of 2019 for Chinese equities."
— CNBC's Yen Nee Lee and Fred Imbert contributed to this report.
Qualcomm invents breakthrough technologies that transform how the world connects, computes and communicates. When we connected the phone to the Internet, the mobile revolution was born. Today, our inventions are the foundation for life-changing products, experiences, and industries. As we lead the world to 5G, we envision this next big change in cellular technology spurring a new era of intelligent, connected devices and enabling new opportunities in connected cars, remote delivery of health care services, and the IoT — including smart cities, smart homes, and wearables. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio. Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, all of our engineering, research and development functions, and all of our products and services businesses, including, the QCT semiconductor business. For more information, visit Qualcomm’s website, OnQ blog, Twitter and Facebook pages.
Stocks rose Tuesday as a host of major companies reported quarterly results that beat Wall Street’s expectations.
The S&P 500 (^GSPC) gained 0.1%, or 2.85 points, as of 2:37 p.m. ET, led by advances in the Materials and Financials sectors.
The Dow (^DJI) rose 0.29%, or 77.14 points, as shares of component company Johnson & Johnson (JNJ) advanced following an upbeat quarterly report. Declines in shares of UnitedHealth Group, which had risen during early trading, capped gains in the index, however. The Nasdaq (^IXIC) advanced 0.39%, or 30.71 points.
Positive earnings results delivered Tuesday morning from major financial firms, including Bank of America (BAC) and BlackRock (BLK), helped fuel investor optimism at the start of another earnings season, offsetting some concerns after Goldman Sachs (GS) and Citigroup (C) earlier in the week posted disappointing results.
Investors are broadly expecting corporate profits to come in light over last year and are monitoring earnings results to gauge the extent of the slowdown. Earnings are expected to fall 4.9%, and aggregate S&P 500 earnings per share growth is expected to decline by 2.7% year-over-year for the first quarter 2019 earnings season, Jonathan Golub, Credit Suisse chief U.S. equity strategist, wrote in a note. However, Financials are one of four sectors analysts expect to deliver positive EPS growth, along with Industrials, Health Care and REITS, he added.
Companies including Netflix (NFLX), IBM (IBM) and United Continental (UAL) are set to report results after-the-bell on Tuesday.
Bond yields, which move inversely to prices, stabilized after several Federal Reserve officials delivered positive assessments of the domestic economy and suggested benchmark interest rates could remain on hold through part of next year.
Chicago Fed President Charles Evans told CNBC Monday he “could see” the benchmark Fed funds rate “flat and unchanged” into fall 2020 in order to help support the outlook for inflation, which has recently run persistently below the Fed’s 2% target.
Evans said he sees economic growth decelerating to around 2% this year, from 3.1% last year, but added that the U.S. labor market remains strong and that he is not worried about a recession.
Boston Fed Chairman Eric Rosengren, another voting member of this year’s Federal Open Market Committee, also pointed to lower-than-targeted inflation in a speech delivered Monday in North Carolina. However, Rosengren noted that the miss to the inflation target is “relatively modest,” and said that “in many respects the economy is doing quite well” in relation to the Fed’s dual mandate for stable prices and maximum sustainable employment.
Bond yields edged up across the curve, with the yield on the 10-year Treasury note rising 3.7 basis points to 2.59%, as of Tuesday afternoon.
STOCKS
Bank of America (BAC, +0.08%) reported quarterly earnings results that beat Wall Street’s expectations, buoyed by strong consumer loans and deposits activity. The company delivered record quarterly profit of $7.3 billion, or 70 cents per share, beating expectations for 66 cents per share. Revenue of $23.1 billion was in-line with expectations. The company’s consumer lending business – its largest segment – delivered a 25% increase in profit over last year to $3.2 billion. However, shares fell around market open as CFO Paul Donofrio said during a call with investors that net interest income is expected to decline over the rest of the year to about half of last year’s 6% growth.
New York, USA - April 7, 2018: Street view on Bank of America branch in NYC with people waiting, pedestrians crossing, crosswalk, bike, road in Manhattan
BlackRock (BLK, +2.96%) exceeded consensus expectations for quarterly profits as its assets under management grew sequentially. Earnings per share of $6.61 beat expectations for $6.13, while $3.34 billion in revenue was in-line with consensus estimates. Blackrock’s first quarter saw $65 billion in total net inflows across product types, higher than the $54.63 billion the firm brought in the year prior.
Johnson & Johnson (JNJ, +2.04%) beat consensus expectations for first-quarter earnings, after the company posted weak full-year guidance earlier this year amid ongoing lawsuits over allegations that its talc baby powder contained asbestos. First quarter adjusted earnings were $2.10 per share, higher than the $2.04 per share expected, while sales of $20.02 billion beat expectations for $19.61 billion. J&J now sees adjusted EPS in the range of $8.53 to $8.63, from between $8.50 and $8.65 previously, and full-year sales of between $80.4 billion to $81.2 billion.
UnitedHealth Group (UNH, -5.19%) exceeded Wall Street’s expectations on the top and bottom lines for the first quarter and raised its full-year forecast for 2019 as the largest insurer in the country grew its customer base. The company sees full-year adjusted earnings per share between $14.50 to $14.75, from $14.40 to $14.70 previously. First-quarter adjusted earnings of $3.73 per share beat consensus estimates by 13 cents, while first-quarter revenue of $60.3 billion was higher than the $59.76 billion expected. In the first quarter, the company added 880,000 new customers.
ECONOMY
Industrial production unexpected declined by a seasonally adjusted 0.1% in March, the Federal Reserve reported Tuesday. Consensus economists expected this measure of factory, mining and utilities output to rise 0.2% for the month. March’s results brought the index to a 0.3% decline for the first quarter of 2019. Last year, industrial production rose 2.8% in March.
Manufacturing output, which comprises the largest portion of industrial production, remained flat in March, following an upwardly revised 0.3% decline in February. Consensus economists were expecting a rebound to a 0.1% increase in manufacturing production in March.
