Machinery

AI’s next feat will be its descent from the cloud

2 Oct 2024

Tech giants hoping to spend $1 trln on data centres are struggling to secure power supplies and space. That bolsters the case for smaller artificial intelligence models that can run on devices, not a remote platform. Phone and laptop makers from Apple to Lenovo stand to benefit.

Capital Calls: Burning Man, Intel/Tower

5 Sep 2023

Concise views on global finance: The festival’s mud-soaked disaster reveals tensions between libertarian ideals and providing infrastructure in a warming world; the $155 bln chip giant’s partnership with its former acquisition target salvages some of the benefits of a tie-up.

AI frenzy’s feedback loop stuffs Nvidia

23 Aug 2023

The $1.2 trln semiconductor designer’s second-quarter revenue doubled. Tech giants’ valuations are soaring on AI hype, so naturally companies are pouring money into it, including by buying Nvidia's chips. As long as investors quack for more, Jensen Huang's firm gets fed.

KLX purchase gives Boeing a boost over Airbus

1 May 2018

Paying $4.25 bln for the parts provider lifts the U.S. plane maker’s services arm. It’s the latest bolt-on enabling Boeing to bring more manufacturing in-house and maintain aircraft long after delivery. Yet CEO Dennis Muilenburg still has more to do to reach cruising altitude.

Deere deal is paved with good intentions

1 Jun 2017

The $40 bln U.S. farm-equipment maker is diversifying further into road building, paying $5.2 bln for Germany's Wirtgen. It's a big deal and overseas, but Deere's pitch on strategy and price sound reasonable. It will need to work out better than Caterpillar's Bucyrus bet, though.

Kion’s forklift deal assumes serious heavy lifting

21 Jun 2016

Europe’s largest forklift maker Kion is paying $3.3 billion for U.S. logistics tech company Dematic. That’s 20 times last year’s operating profit. To earn its cost of capital, the buyer might have to wait until 2020 and make rosy assumptions on revenues, margins and synergies.

Siemens’ M&A timing needs a spot of fine-tuning

20 Jun 2016

The German group overpaid for U.S. oil kit maker Dresser-Rand just before the oil price collapsed. Now it is to fork out $1.1 bln to team up with wind turbine rival Gamesa, whose shares have rallied in recent years. Had it got its timing better, Siemens could have saved $3 bln.

Terex turns controversial M&A fight into group hug

16 May 2016

The crane maker scrapped its merger with Finland’s Konecranes after new U.S. tax rules killed the deal’s logic. Konecranes is now just buying the ports business, the unit that raised security fears about a rival bid from China’s Zoomlion. It’s now free to buy the rest of Terex.

Caterpillar keeps on digging its credibility gap

22 Apr 2016

The $46 bln maker of earth-moving equipment added a fresh profit warning to a series of stumbles, including buying into mining at its peak and splurging on buybacks when stock prices were high. Boss Doug Oberhelman is turning out to be a poor judge of his own business cycle.

Smith & Wesson calls top of gun market

20 Jan 2016

The iconic weapons maker wants to go on a buying spree for sporting-goods businesses. That reflects industry worries that years of bumper sales stoked by fears of gun control are coming to an end. On past evidence, though, such diversification may not offer much relief.

Cox: How gun control is like zero interest rates

5 Jan 2016

A White House order to require more dealers selling their wares at gun shows to conduct background checks has kicked off the third firearms bubble of Obama’s presidency. As in previous booms, bringing forward future demand stores up trouble down the road for the weapons trade.

From Caterpillar an activist butterfly may hatch

10 Dec 2015

The $39 bln earth-moving machinery conglomerate is in a pickle. Deals struck at the peak of the commodities and Chinese investment booms trashed the stock and hurt management’s credibility. An investor seeking changes, even a breakup, could play well in Peoria and on Wall Street.

Market underestimating commodity bust hangover

23 Oct 2013

The end of the 10-year mining super-cycle was bound to cause pain. Yet equipment-maker Caterpillar surprised itself and investors with its fourth earnings miss in a row. The industry leader and rivals are trading at valuations that imply a recovery soon. That’s wrongheaded.

High-tech glass maker finds smashing way to grow

23 Oct 2013

Corning’s taking full control of its Korean LCD display unit from Samsung and other minorities. Samsung gets a chunk of the Gorilla Glass maker and a long-term partner to produce needed high-tech materials. And Corning strengthens its position against its rivals on the cheap.

Ferretti’s yachts find fitting berth in China

12 Jan 2012

The luxury yacht-maker embodies modern finance’s turbocharged highs and lows. Buoyed by the rise of the super-rich, it made one buyout house a fortune, then helped sink another. Ferretti is now being sold to a state-backed Chinese group for around a fifth of its peak valuation.

China’s IPO delays could worsen capital crunch

20 Sep 2011

Two heavy equipment makers, Sany and XCMG, delayed plans to raise a combined $5 billion. That suggests another door closing for Chinese companies hit by slowing demand and tighter credit at home. For those facing cash shortages, weak global capital markets may be the last straw.

Beijing should end heavy industry’s easy ride

9 Feb 2010

Chinese factories are humming, thanks to 2009's stimulus. The boom is not natural, since companies get an unfair boost from paying belowmarket prices for raw materials. Beijing worries about inflation, but charging fair prices may be the best way to curb reckless investment.

Investors right to doubt industrials’ optimism

23 Oct 2008

Large orders are falling and expansion plans under review. Yet Swiss engineer ABB and French electrical group Schneider are clinging to their optimistic forecasts. Rapid share price declines show shareholders don t believe them. They know what global recessions do to profits.

Trash deal shows market’s cleansing power

14 Jul 2008

Garbagecollector Republic Services launched a bid for Allied Waste that shareholders thought reeked. Now Republic is on the receiving end of a $6bn takeover from trash king Waste Management. It just goes to show markets work even when managers stink.

United Rentals recap looks too risky

10 Jun 2008

Buyout shop Cerberus paid $100m to slip out of a $7bn plan to take the equipment rental firm private. Now it wants to lever up, buying back a third of its stock at a 20%odd premium. That's a small return for loading a cyclical company with debt when the economy is sagging.