Covanta (CVA) has cut its annualized dividend by 68% while announcing a number of cost reduction measures. Amid headwinds related to COVID-19, the waste management company also withdrew FY20 guidance.Beginning with the dividend expected to be declared in the second quarter, Covanta plans to lower the annualized payout to $0.32 per share from $1 per share previously.According to Covanta’s calculations, this move will increase cash retention for other uses by $90 million on an annual basis.“Regarding the dividend, the payout already exceeded 100% of the FY20 guidance midpoint before the crisis, and given the organic growth investment opportunities, a rebalancing of capital allocation has logic” commented Oppenheimer’s Noah Kaye following the update.However, the analyst added that he was surprised by the timing (almost a month before the next scheduled board meeting) and the magnitude of the cut.Covanta also revealed that all its waste-to-energy facilities remain in operation with minimal disruption. It is also...
(Bloomberg) -- Gold traded near the highest close in more than seven years, supported by predictions for the deepest global recession in generations; expectations for prolonged, debt-fueled intervention by central banks and governments; and another charge by investors into bullion-backed funds.Spot bullion held its ground after a four-day surge, with the International Monetary Fund twinning a warning that the pandemic-induced global recession will be the deepest since the Great Depression with a plea for more even more stimulus. Later Wednesday, U.S. retail sales data for March will add more detail on the damage from the outbreak as earnings season rolls on.“Gold is the ultimate hedge against too much debt in the world,” said Rainer Michael Preiss, chief investment officer, equity, at The Global CIO Office in Singapore. Bullion will go on to hit a record, he said, citing balance-sheet expansions by central banks and large-scale fiscal stimulus.The precious metal has rallied...
Tesla (TSLA) has now settled a lawsuit with California-based robotics company Zoox, Reuters reports. In March 2019, Tesla lawyers filed a lawsuit against four former employees and Zoox.The company claimed that these employees stole proprietary information and trade secrets for developing warehousing, logistics and inventory control operations.“Zoox acknowledges that certain of its new hires from Tesla were in possession of Tesla documents pertaining to shipping, receiving, and warehouse procedures when they joined Zoox’s logistics team,” Zoox said.According to the settlement, Zoox will now pay Tesla an undisclosed amount and undergo an audit checking that none of its employees have retained or are using Tesla’s confidential information.At the same time, Credit Suisse analyst Dan Levy upgraded TSLA from sell to hold while boosting his price target from $415 to $580. Levy believes that Tesla now “competitively has more edge in the transition to EV [electric vehicles] as coronavirus disruption will make it more difficult...
(Bloomberg) -- Volatility in stocks and bonds has ebbed to levels that could boost markets rather than fuel more turbulence, according to JPMorgan Chase & Co.Price swings are getting muted as central banks and governments around the world provide unprecedented packages of stimulus to cushion the economic hit from Covid-19. That’s improving conditions in funding markets, market liquidity and deleveraging by value-at-risk sensitive investors -- three key areas for volatility -- according to strategists led by Nikolaos Panigirtzoglou.“Following the deterioration in market functioning and liquidity in March, with liquidity conditions in some markets worse than during the financial crisis, there are some tentative signs of improvement in liquidity across asset classes,” Panigirtzoglou wrote. The normalization of volatility is reversing “previous negative feedback loops.”The Cboe Volatility Index, or VIX, closed below 40 on Tuesday after having surged as high as 85 during the most chaotic period last month. The ICE BofA MOVE...
(Bloomberg) -- U.S. airlines reached preliminary deals with the Treasury Department to access billions of dollars in aid, securing a temporary lifeline as the industry waits for customers to start flying again.The agreements cover all major airlines, the Treasury said in a statement Tuesday, and position the government to start doling out $25 billion in assistance allocated for passenger carriers in the $2.2 trillion stimulus package signed into law March 27. American Airlines Group Inc. said it would get $5.8 billion in support, while Delta Air Lines Inc. said it would receive $5.4 billion.“This is an essential step, but just one of many that will get us through the next several months,” Delta Chief Executive Officer Ed Bastian said in a message to employees. “The funding, along with self-help measures we have taken, will prevent furloughs and pay rate reductions through the end of September, despite the 95% drop we’ve seen...
