Industrials

GE boss could face his own goodwill writedown

12 Nov 2018

The firm’s stock sank anew on Monday despite Larry Culp’s vow to speed asset sales. Repeated failures to draw a line under power woes and other liabilities have shredded GE’s credibility. The new chief risks falling into the same trap, and losing investors’ confidence.

Thyssenkrupp’s tarnished revamp is still needed

9 Nov 2018

Shares in the German industrial group plunged 10 pct after its latest profit warning. The bad news has further rattled investors already lukewarm about its planned breakup. Still, hiccups from unpicking an unwieldy conglomerate don’t make the strategy any less valid.

DowDuPont needs its breakup more than ever

31 Oct 2018

Recession fears and a writedown have burned off a quarter of the chemical giant’s value. It’s too strong a reaction: its businesses won’t suffer equally in a downturn. Dow’s worth some $175 bln, 40 pct above its current value. Next year’s three-way split should crystallize that.

ABB belatedly succumbs to industrial revolution

19 Oct 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

Storage IPO makes sense in a smaller container

8 Oct 2018

Shurgard, which rents storage lockers to urban dwellers, is raising 575 mln euros to pay off debt and expand. It operates in more countries than UK rivals, with high occupancy rates and margins. At a valuation of 2 bln euros, the low end of the range, it should be a safe choice.

GE investors have been here before

2 Oct 2018

The conglomerate’s shares rose after it named Larry Culp as new CEO – much as they did after previous new starts. Once again, there’s room for disappointment. The weakness in GE’s earnings may go beyond its power division, and Culp may have to cut the dividend.

Royal Mail’s strategy gets lost in the post

2 Oct 2018

The delivery service partly blames its profit warning on poor worker productivity. While keeping a progressive dividend pledge will please investors irked by its new CEO’s pay, Royal Mail needs more investment to solve its operating issues. It could wind up doing the opposite.

Thyssenkrupp gets half a breakup

27 Sep 2018

The German conglomerate’s shares surged on plans to split the company in two. Thyssenkrupp’s businesses are probably worth more apart than together. But the separation will take time, and one of the units will still have a stake in the other.

Smiths wobble fortifies case for more surgery

21 Sep 2018

The $8 bln engineer reported its first sales growth in five years, but the shares fell due to a weaker-than-expected outlook. After rejecting a sale of its medical unit, CEO Andy Reynolds is pruning assets and investing. That may not be enough to close a steep valuation discount.

Saudi-Clariant chemical deal is murky concoction

18 Sep 2018

The Swiss group is setting up a joint venture with 25 pct shareholder Saudi Basic Industries. At the same time SABIC will contribute a new Clariant CEO and four board directors. Though the venture should make sense, the company’s governance becomes more complicated.

German giant adds heft to IPO starting line

17 Sep 2018

The billionaire owner of Knorr-Bremse plans to sell shares in the maker of brakes for trucks and trains. Outside investors will get little say, making a mooted $14 bln price tag ambitious. Yet the reassuringly solid business marks a welcome shift from dicey European offerings.

Gas mega-merger hubris deflated by regulators

22 Aug 2018

Linde needs to sell more assets to close its $83 bln tie-up with Praxair. That means hurried disposals and fewer savings. The rationale for creating the world’s largest gas supplier holds, but the mess shows shareholders should apply a hefty discount to ambitious dealmaking.

Greece needs a governance reboot

21 Aug 2018

International lenders forced Athens to clean up its banks. Yet non-financial companies and their boards are still often dominated by large shareholders. Better protections for minority investors would attract more foreign capital, and help the economy recover from its bailout.

Italy’s Atlantia hardball comes at a price

20 Aug 2018

The government may strip the group of a contract to manage Italy’s motorways after the Genoa disaster. Tough action is needed, but the move could cripple Atlantia and looks premature. The stock plunge is a reminder of why investors need to apply a bigger discount to local assets.

Italy bridge fallout will shape infrastructure fix

16 Aug 2018

Atlantia shares have fallen 30 pct on fears the government may cancel its contracts after a fatal bridge collapse. The tragedy reinforces the case for more investment. The government’s treatment of the toll-road operator will determine whether investors are willing to play along.

Cox: When commemorating crises, think 20 not 10

15 Aug 2018

As the decennial anniversary of Lehman’s systemic collapse approaches, it’s worth recalling the one that preceded it. Russia’s 1998 default led to LTCM’s demise. Shockingly, that fiasco’s lessons went mostly unheeded until 2008. The key takeaway: there are always blind spots.

Thyssenkrupp makes investors slightly less angry

9 Aug 2018

The ailing German conglomerate’s boss Guido Kerkhoff has set margin targets for its various businesses, after shareholder pressure. It’s a start, but the group has missed goals before. And Kerkhoff’s interim status makes it harder to tackle more radical solutions, like a breakup.

Siemens will pay a price for ducking breakup

2 Aug 2018

The trains-to-turbines group is dividing itself into three main units and holding onto stakes in non-core businesses. It’s a far cry from a GE-style restructuring. A more profitable, smaller company will emerge over time. But its conglomerate discount will take time to narrow.

GE put a little too much imagination to work

1 Aug 2018

The shrinking conglomerate may offload parts of its digital business. GE had targeted some $15 bln of revenue by 2020 on the back of the Predix software initiative, and a CFO once dangled the idea of “infinite returns.” It’s a sobering moment for the internet-of-things hype.

GE’s clean sheet reveals real turnaround challenge

20 Jul 2018

A 30 pct fall in earnings in the latest quarter represented a victory of sorts for boss John Flannery’s restructuring. There were no big writedowns, a rarity in recent times, and cost cuts are ahead of schedule. But two of his three core businesses are still in serious decline.