Author: Reuters

By Jeffrey Dastin

SAN FRANCISCO (Reuters) – Google on Thursday renamed its Bard chatbot after the new artificial intelligence that is powering it, called Gemini, and said consumers can pay for better reasoning capabilities as it vies with Microsoft to win subscriptions.

U.S. customers can subscribe for $19.99 a month to access Gemini Advanced, which includes a more powerful Ultra 1.0 AI model, the Alphabet subsidiary said.

Subscribers will receive two terabytes of cloud storage that typically cost $9.99 monthly, and they will soon gain access to Gemini in Gmail and Google’s productivity suite.

This bundle, known as the Google One AI Premium plan, represents one of the company’s biggest answers yet to Microsoft and its partner OpenAI. It also shows growing competition over consumers, who now have several paid AI subscription options.

OpenAI’s ChatGPT Plus a year ago pioneered the market for buying early access to AI models and other features, while Microsoft recently announced a competing subscription for AI in programs such as Word and Excel. Both subscriptions cost $20 a month in the United States.

In an interview, Product Lead Jack Krawczyk said cloud storage, Gmail and other integrations would put Google’s subscription in harmony with how people work.

“When I pay $20 a month, access to a model alone is not really enough,” he said.

Krawczyk said the target market is people who want the most capable generative AI technology that can conjure new content on command and handle queries where no obvious answer exists online.

Google, hoping for another product with billions of users, will use its large base of Android phone customers to give it a leg up. The company said Android users can opt into Gemini as the default digital aide on their phones, accessing it through an app, the power button or by saying “Hey Google.”

“When you do that, it presents one of the lowest friction ways in the world to access AI,” Krawczyk said. Gemini is coming to the Google iPhone app as well, he added.

Gemini Advanced is available in English in 150 countries as of Thursday, Krawczyk said.

Gemini’s smartphone rollout, starting in the U.S., will expand internationally next week to Asia-Pacific, Latin America and other regions with additional language support in Japanese and Korean, he said. Users get a two-month subscription trial at no cost.

As for the name change, Krawczyk said Google’s AI approach had matured, bringing “the artist formerly known as Bard,” into “the Gemini era.”

(Reporting By Jeffrey Dastin in San Francisco; Editing by Jamie Freed)

(Reuters) – Zimmer Biomet Holdings Inc forecast 2024 profit above Wall Street expectations on Thursday, betting on resilient demand for its medical devices, and said it had initiated a restructuring program late last year to cut costs.

The company expects run-rate savings of about $200 million by 2025 through the initiative.

The Indiana-based medtech firm also beat fourth-quarter revenue and earnings estimates, driven by strong sales at its units selling sports medicine, robotic and surgical products.

“We don’t think investors are willing to give the company credit just yet, and think this still remains a show me story for Zimmer,” J.P.Morgan analyst Robbie Marcus wrote in a note.

Shares of the company fell nearly 4% to $123 in premarket trading.

Much like Abbott Laboratories and Boston Scientific, Zimmer is benefiting from people, especially older adults, returning for elective surgeries, such as joint replacements, deferred during the pandemic.

Analysts also remain bullish on medical device makers due to pent-up demand for non-urgent procedures, improving hospital staffing and capacity, better pricing and growing interest in robotics.

Zimmer expects full-year 2024 profit in the range of $8.00-$8.15 per share, above analysts’ estimate of $7.95.

The company projected full-year revenue to grow in the range of 5% to 6% on a constant currency basis.

Combined sales at Zimmer’s hips and knees units came in at $1.30 billion in the fourth quarter, compared to analysts’ estimate of $1.31 billion, according to LSEG data.

Apart from hip and knee equipment, Zimmer also makes sports medicine and trauma care products through its S.E.T. unit, which brought in sales of $453.3 million in the fourth quarter, above estimates of $447.6 million.

Zimmer’s fourth-quarter revenue rose 6.3% to $1.94 billion, above estimates of $1.93 billion.

On an adjusted basis, profit of $2.2 per share beat estimates of $2.15.

(Reporting by Mariam Sunny in Bengaluru)

MADRID (Reuters) -Spain’s high court has suspended 194 million euros ($209 million) in fines imposed on Amazon and Apple by the local antitrust watchdog in July, pending an appeal by the tech giants, an Amazon spokesperson said on Thursday.

CNMC, as the watchdog is known, fined Amazon and Apple for colluding to prevent dealers other than Amazon from selling Apple wares on Amazon’s websites in Spain.

Apple was fined 143.6 million euros and Amazon 50.5 million euros and both companies at the time said they would appeal.

The court decision to suspend the payment is part of the appeal process, the Amazon spokesperson said.

Amazon said in July that as a result of the deal with Apple, the number of discounts on Apple devices on Amazon’s websites increased, while Apple said the deal was intended to protect customers from fake devices.

The suspension of the fine does not anticipate the court will rule in favour or against the tech giants.

An Apple spokesperson declined to comment on Thursday.

CNMC said a contract signed by the two companies in October 2018 granting Amazon the status of authorised Apple dealer on its websites in Spain included anti-competitive clauses that prevented more than 90% of the existing retailers from selling Apple wares on Amazon’s market place.

Following these contracts, Amazon also reduced the capacity of retailers in the European Union based outside Spain to access Spanish customers, and restricted the advertising Apple’s competitors were allowed to place on its website when users searched for Apple products, the regulator said.

A similar case was opened in Italy against the two companies but was eventually dropped.

($1 = 0.9275 euros)

(Reporting by Inti Landauro; Editing by Sonali Paul, Kirsten Donovan)

By Federico Maccioni

DUBAI (Reuters) – Emirates airline has forged a multi-year sponsorship deal with America’s NBA basketball league, it said on Thursday, as the carrier seeks to raise its profile in the United States.

The airline, part of Dubai’s state-owned Emirates Group, has long been a sponsor of high-profile sports including some of the world’s most famous soccer clubs, with Real Madrid, Arsenal and AC Milan featuring the airline’s logo as the main sponsor on their kits.

“Our eyes have always been on the NBA,” said Emirates executive Boutros Boutros, during an event at the airline’s headquarters. The event was attended by NBA Hall of Famer Isiah Thomas, who won two NBA championships as a point guard with the Detroit Pistons in 1989 and 1990.

The NBA’s deputy commissioner and Chief Operating Office Mark Tatum said that the NBA in-season tournament will be renamed the Emirates NBA Cup from next season and referees’ kits will feature the airline’s logo starting from this year’s All-Star Game.

Neither executive disclosed the value of the deal, but Boutros said that the deal would generate $500 million a year in advertising revenue according to the company’s estimates.

Middle East sovereign wealth funds have also invested hugely in sports in recent years.

Saudi Arabia’s PIF, which is chaired by the crown prince, the kingdom’s de facto ruler, made massive investments in soccer including an 80% stake in UK Premier League club Newcastle United.

Saudi Arabia also brought some of the biggest names in the sport to its top domestic league and has invested heavily in golf, Formula One, boxing and tennis.

Last June, the Qatar Investment Authority (QIA) bought a passive minority stake in the parent of NBA’s Washington Wizards and NHL’s Washington Capitals.

Asked about the QIA deal and Middle East sovereign wealth funds turning their attention to NBA teams, Tatum said that interest was “amazing”.

“We know there have been other discussions with our teams and sovereign wealth funds in the region and outside the region as well,” he said.

“People now are looking at sports as an investment, as an asset class and I think we are going to continue to see that,” Tatum added.

(Reporting by Federico Maccioni; Writing by Tala Ramadan and Nadine Awadalla; Editing by Michael Georgy, David Goodman and Susan Fenton)

By Samuel Indyk and Brigid Riley

LONDON (Reuters) -The U.S. dollar rose on Thursday but held below a 12-week high reached earlier in the week, as traders digested comments from policymakers in the previous session that suggested rates would remain higher for longer.

On Wednesday, several Federal Reserve speakers gave a range of reasons for feeling little urgency to start easing policy in the United States soon, or to move quickly once they do.

“Central banks need to be convinced that, not only will inflation come down, but that it will stay down,” said Colin Asher, senior economist at Mizuho.

The market is pricing in around a 20% chance the Fed will begin to cut rates in March, down significantly from the start of the year, and around a 60% chance of a 25 basis point cut in May, according to CME Group’s FedWatch Tool.

The dollar index was last up 0.2% at 104.23, having reached 104.60 on Monday, its highest level since November 14, propelled by Friday’s blowout jobs report.

“Now that the dust has settled on non-farms, I think what we are seeing is a recalibration of the rates outlook through to next year which has lifted the dollar into a range that is a level higher,” said Kyle Chapman, FX markets analyst at Ballinger & Co.

Higher U.S. Treasury yields have boosted the dollar, particularly against lower-yielding currencies, such as the yen.

The yen was last down 0.7% versus the greenback to 149.18, its weakest level since November 27.

Bank of Japan Deputy Governor Shinichi Uchida said the central bank was unlikely to raise interest rates aggressively, even after exiting negative interest rates.

“Given that we see UST yields higher in the near term, we see USD/JPY remaining elevated,” Mizuho’s Asher said.

“Any decline will likely need to wait until closer to the March BoJ meeting. We see April as the more likely timing for a BoJ move and thus a better time to look for USD/JPY to move lower.”

The euro was down 0.1% at $1.0761, holding above its lowest level since Nov. 14 at $1.0722 hit on Tuesday.

Sterling was down 0.2% at $1.2602.

The yuan held steady despite data that showed China’s consumer prices fell at their steepest pace in more than 14 years in January.

CPI fell 0.8% in January from a year earlier, but rose 0.3% month-on-month, data revealed. Economists polled by Reuters had forecast a 0.5% fall year-on-year and a 0.4% gain month-on-month.

“We expect the Chinese authorities to favour maintaining stability in the yuan going into the Lunar New Year holidays, with dollar/onshore yuan likely to remain within the 7.18-7.22 range for now,” said Wei Liang Chang, currency and credit strategist at DBS.

The currency got support as China’s stock market stabilised following the appointment of a new securities regulatory head, buoying sentiment despite the disappointing data.

The offshore Chinese yuan was mostly flat at 7.2169 per dollar, while the onshore yuan stood at 7.1970.

(Reporting by Samuel Indyk and Brigid Riley; Editing by Stephen Coates and Christina Fincher)

By Anton Bridge

TOKYO (Reuters) – Japan’s SoftBank Group returned to profit for the first time in five quarters on Thursday, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies, sparking hope it was emerging from a period of retrenchment.

Net profit totalled 985.5 billion yen ($6.6 billion) in the three months to December, versus a 744.7 billion yen loss in the same period a year earlier.

Founded by Chief Executive Masayoshi Son, SoftBank and its Vision Fund investment arm have gone through a difficult period of slashing investment activity and selling assets. Stakes in high-growth startups were particularly hit as risk appetite waned during the pandemic and its aftermath.

While SoftBank’s results are often volatile, Thursday’s numbers could give investors some relief: quarterly net income surpassed market expectations and the closely-watched Vision Fund arm booked an investment profit of 600.73 billion yen.

SoftBank was again on a “growth trajectory,” Chief Financial Officer Yoshimitsu Goto told a briefing, adding that market conditions and the outlook were both “very positive”.

The Vision Fund business – which includes two funds by that name – was helped as valuations increased for holdings such as ride-hailing company Didi Global, TikTok owner ByteDance and robotics firm AutoStore Holdings. Meanwhile, its investment in office-sharing company WeWork was written down to zero in the quarter.

“There have been higher valuations in recent funding rounds for Vision Fund companies. It looks like the environment for tech startups is taking a positive turn,” said Rolf Bulk, an analyst at New Street Research.

While new investment activity in the quarter was minimal, Goto said this was simply a matter of timing and that the investment pipeline was building up.

He added that SoftBank’s first priority was to use its ample liquidity – including 4.4 trillion yen in cash, cash equivalents and liquid bond holdings – to make new investments.

Some investors had been looking to see whether SoftBank would return some money to shareholders via share buybacks, but Goto said that right now growth investment came first.

SoftBank shares jumped 11% on Thursday to their highest since September 2021, helped by an upbeat revenue forecast from chip design unit Arm on Wednesday.

Son is known for having made canny bets on emerging technology such as mobile internet and today’s big names such as e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.

However, some of his more recent wagers have turned sour, most notably WeWork that was once privately valued at $47 billion but filed for bankruptcy in November.

($1 = 148.6700 yen)

(Reporting by Anton Bridge; Editing by David Dolan, Jacqueline Wong and Mark Potter)

TOKYO (Reuters) -Japan’s Nissan Motor posted a lower-than-expected 6.4% rise in operating profit in the December quarter on Thursday, saying it will maintain its annual outlook as a more profitable product mix offset a lower full-year vehicle sales forecast.

Operating profit totalled 141.6 billion yen ($951.80 million) for the three months to Dec. 31, compared with the average estimate of 179.8 billion yen in a poll of nine analysts by LSEG.

The automaker maintained its operating profit forecast of 620 billion yen for the current financial year.

It revised its retail sales outlook for the current financial year down to 3.55 million vehicles from 3.7 million it had expected previously, due to lower forecasted sales across markets.

“We are managing our business with discipline,” Nissan CFO Stephen Ma told a press briefing.

The lower sales forecasts reflected challenges such as intensifying competition and logistics issues around the company’s key markets, including China, Ma added.

Nissan’s global sales grew 4.6% to some 3.3 million vehicles in 2023, it said last month, as a stronger performance in North America and Europe offset falling demand for its cars in the world’s top auto market China amid fierce competition from Chinese brands.

China sales slumped 16% in 2023 to less than 800,000 vehicles, a trend that helped the United States become the automaker’s most important market with its sales there rising 23% to almost 900,000 vehicles last year.

Nissan has previously committed to invest up to 600 million euros ($646.80 million) in Ampere, the electric vehicle business of its long-standing alliance partner Renault.

The French automaker’s decision to cancel the stock market flotation of Ampere would not delay investments into the unit from Nissan, Renault Chairman Jean-Dominique Senard said last week.

($1 = 0.9276 euros)

($1 = 148.7700 yen)

(Reporting by Daniel Leussink; Editing by Chang-Ran Kim and Jacqueline Wong)

By Padraic Halpin

DUBLIN (Reuters) – Boeing is “undoubtedly” making significant progress in getting on top of quality issues, the head of Avolon, the world’s second largest aircraft leasing firm and a major Boeing customer, said on Thursday.

Boeing was hit by the latest in a series of problems on Jan. 5 when a door panel flew off one of its 737 MAX 9 jets in the midst of an Alaska Airlines flight.

Avolon CEO Andy Cronin said preliminary findings from a U.S. regulatory investigation into the incident were “positive”, in not appearing to show any design implications for the aircraft or systemic production issues.

“I think undoubtedly they’re making significant progress on what they’ve been trying to achieve,” Cronin told Reuters when asked if Boeing was getting on top of its problems.

Boeing has been under fire from regulators and airlines over a succession of quality issues that have snagged production and development timelines. Aircraft lessors are major buyers of aircraft and Avolon has 116 737 MAX on order.

Cronin said Avolon had discovered a large number of “lower level” quality issues on aircraft recently delivered by multiple manufacturers, adding they were not confined to Boeing or the MAX.

“As supply chains are scrambling to reinstate production, we are seeing compounding factors impacting quality and delivery but not at a level where it’s impacting safety,” he said.

Examples of the issues might be around cosmetic items or “second, third order” type fittings, Cronin added.

Boeing, its main competitor Airbus and the big suppliers both manufacturers work with, are now playing much more of a role across the supply chain as a result, and that is having a positive impact, Cronin said.

The constrained supply of aircraft and increased demand for travel has benefited lessors over the last year, with average lease rates rising by 20%-30% in 2023 for current-technology aircraft that are increasingly in demand to rent.

Avolon reported a full-year core profit of $2.5 billion on Thursday and a 34% year-on-year increase in net income to $339 million, excluding the impact in 2022 of a heavy writedown on aircraft stuck in Russia due to Western sanctions.

Cronin said he saw “plenty of room” for a further increase in lease rates in 2024, though not at the “exceptional” pace of 2023.

(Reporting by Padraic Halpin; editing by Jason Neely and Mark Potter)

By Brigid Riley

TOKYO (Reuters) -The U.S. dollar was trading in a tight range on Thursday as traders digested less dovish remarks from policymakers overnight and looked ahead to fresh economic data from the United States.

Overnight, several Fed speakers gave a range of reasons for feeling little urgency to start easing policy in the United States soon or to move quickly once they do.

“For the moment, policy remains well positioned, as we carefully assess the evolving data and outlook,” Boston Fed President Susan Collins said, adding that she believes it will be “appropriate to begin easing policy restraint later this year.”

The market is pricing in an 18.5% chance the Fed will begin to cut rates in March, down significantly from the start of the year, according to CME Group’s FedWatch Tool. Traders see a nearly 60% chance of a 25 basis point cut in May.

“The markets will be guided by central banks (but) ultimately, market participants will draw their own conclusions based on the fundamentals,” said Kyle Rodda, senior financial market analyst at Capital.com.

“With all of that said, the fundamentals remain strong in the U.S.”

The greenback slipped somewhat after rising above its 100-day moving average on Monday and Tuesday for the first time since late November, propelled by Friday’s surging U.S. jobs data.

The dollar index, a measure of the U.S. currency against six major peers, was last hovered around 104.00.

The U.S. currency will need a fresh push to test resistance levels around 104.60 and 104.80, with the consumer price index (CPI) for January released on Feb. 13 the likely first opportunity, said Tony Sycamore, market analyst at IG.

The euro was up 0.1% at $1.0782 per dollar, holding above its lowest level since Nov. 14 at $1.0722 hit on Tuesday.

Sterling was little changed at $1.26325.

The Japanese yen weakened 0.25% versus the greenback at 148.53 after BOJ Deputy Governor Shinichi Uchida said the central bank is unlikely to raise interest rates aggressively, even after exiting negative interest rates.

The offshore yuan held steady despite data that showed China’s consumer prices fell at their steepest pace in more than 14 years in January.

CPI fell 0.8% in January from a year earlier, but rose 0.3% month-on-month, data revealed.

Economists polled by Reuters had forecast a 0.5% fall year-on-year and a 0.4% gain month-on-month.

The producer price index (PPI) slid 2.5% from a year earlier in January, compared with a 2.6% slide forecast in the Reuters poll.

“We expect the Chinese authorities to favour maintaining stability in the yuan going into the Lunar New Year holidays, with dollar/onshore yuan likely to remain within the 7.18-7.22 range for now,” said Wei Liang Chang, currency and credit strategist at DBS.

The currency got support as China’s stock market stabilised following the appointment of a new securities regulatory head, buoying sentiment despite the disappointing data.

The offshore Chinese yuan was mostly flat at $7.2100.

In cryptocurrencies, bitcoin rose 0.85% to $44,564.62.

(Reporting by Brigid Riley; Editing by Stephen Coates)

By Dawn Chmielewski and Lisa Richwine

LOS ANGELES (Reuters) -Walt Disney CEO Bob Iger hit back at activist investors on Wednesday with a slew of announcements, including a splashy investment in “Fortnite” maker Epic Games and plans to launch an ESPN streaming service in 2025.

Iger revealed the plans after Disney’s board of directors authorized a $3 billion share repurchase program for the current fiscal year, and declared a dividend of 45 cents a share, a 50% increase from the dividend paid in January. Earnings-per-share topped Wall Street forecasts.

Together, the moves helped boost Disney shares nearly 7% in after-hours trading.

The company has been under pressure from activist investor Nelson Peltz, who is seeking Netflix-like profit for its streaming business, better box-office performance of its movies and more details about its plans to make ESPN a dominant digital platform.

Peltz is asking shareholders to add himself and former Disney executive Jay Rasulo to the company’s board.

A spokesman for Peltz’s Trian Fund Management said of Disney’s earnings on Wednesday: “It’s déjà vu all over again. We saw this movie last year and we didn’t like the ending.”

Among the new initiatives, Iger said Disney would take a $1.5 billion stake in Epic Games. The companies will work together to create a “huge Disney universe” where consumers can interact with characters and stories from Disney, Pixar, Marvel, Star Wars and Avatar, he said.

“This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion,” Iger said in a statement.

The partnership signals another attempt at interactive entertainment for Disney, which in 2016 shut down its Disney Interactive Studios, publisher of the toys-come-to-life game series “Infinity,” and announced it would instead license its characters to outside game companies.

Iger also offered details about the long-anticipated streaming launch of the flagship ESPN sports network, which would be bundled with Disney+ and Hulu, and integrate features such as ESPN Bet, fantasy sports and e-commerce. He said it is likely to launch in August 2025.

A day earlier, Disney announced it would form a joint venture with Fox and Warner Bros Discovery to launch a streaming sports service that would combine their broad portfolios of professional and collegiate sports rights as well as their networks, including ESPN, Fox Sports 1 and TNT.

Asked if the moves would assuage Peltz, Iger said the quarterly results and new initiatives showed a team that was motivated, focused and “very optimistic.”

“The last thing that we need right now is to be distracted in terms of our time, our energy, by an activist or activists that, frankly, have a completely different agenda, and don’t understand our company, its assets, even the essence of the Disney brand,” Iger said on CNBC television.

For the just-ended quarter, Disney posted earnings of $1.22 per share, excluding certain items, ahead of analysts’ consensus forecast of 99 cents per share.

Quarterly revenue was comparable to a year ago, at $23.5 billion, but short of projections of $23.6 billion.

Disney said it cut $500 million in costs across its business during the quarter, and that it remains on track to meet or exceed $7.5 billion in savings by the end of the current fiscal year.

The company’s Experiences unit, which includes its theme parks and consumer products, posted record revenue, operating income and operating margins.

Disney reaffirmed guidance that its streaming business would reach profitability by September. It reduced streaming operating losses to $138 million in the quarter, a dramatic improvement over a year ago, when it lost nearly $1 billion. The average monthly revenue per Disney+ user, outside of India, rose 14 cents.

The Disney+ streaming service shed 1.3 million subscribers, nearly double the loss of 700,000 that analysts forecast, after an October price increase.

The company forecast it would gain 5.5 million to 6 million Disney+ subscribers in its second quarter, with positive momentum in per-user revenue.

The Entertainment unit’s streaming business, which also includes Hulu and Disney+ Hotstar in India, reported revenue of $5.5 billion, just above forecasts, and marking a 15% improvement from a year ago.

Overall revenue for the Entertainment segment, which encompasses Disney’s traditional TV business, streaming and film, dropped 7% from a year earlier to $9.98 billion.

Disney’s sports division, which includes ESPN, the ESPN+ streaming service and Star in India, reported an operating loss of $103 million from a deepening loss at Star in India.

Theme park results were buoyed by the opening of the World of Frozen attraction at Hong Kong Disneyland and Zootopia at Shanghai Disney Resort. Higher attendance at those parks helped offset a drop at Walt Disney World in Orlando, Florida. The unit reported revenue of $9.1 billion and operating income of $3.1 billion.

(Reporting by Dawn Chmielewski and Lisa Richwine in Los AngelesAdditional reporting by Akash Sriram and Pushkala Aripaka in Bengaluru and Svea Herbst in Rhode IslandEditing by Peter Henderson, Kenneth Li and Matthew Lewis)