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EA signals gaming boom extending run with upbeat annual forecast

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By Tiyashi Datta

(Reuters) -Electronic Arts Inc on Tuesday forecast annual adjusted revenue above analysts’ estimates, betting that demand for its titles, including “FIFA 21” and “Apex Legends,” would stay strong even as COVID-19 restrictions ease.

The video gaming industry has been a big pandemic winner thanks to a surge in engagement from gamers staying indoors. U.S. consumer spending on video games rose 18% in March to a record $5.6 billion, according to data from research firm NPD.

But speedy vaccinations and easing curbs have encouraged people to head outdoors, raising concerns that the gaming boom would soon fade.

EA on Tuesday signaled it expected the momentum to continue, estimating full-year adjusted revenue to be $7.30 billion, higher than a Refinitiv IBES estimate of $6.61 billion.

“We expect to continue to drive strong organic growth in Apex Legends in fiscal 2022 and expand the franchise to new platforms with the launch of Apex Mobile in the back half of the year,” Chief Financial Officer Blake Jorgensen said on a post-earnings call.

The company’s shares were nearly 3% higher at $145.05 in extended trading.

EA has been expanding its customer base and mobile gaming footprint through deals for companies including UK-based Codemasters, known for racing titles “F1” and “Dirt”, and “Kim Kardashian: Hollywood” creator Glu Mobile.

However, the costs of the acquisitions and some minor tax changes impacted its fourth-quarter profit, Jorgensen said in an interview with Reuters.

Net income for the quarter ended March 31 fell to $76 million, or 26 cents per share, from $418 million, $1.43 per share, a year earlier.

Excluding one-time items, the company earned $1.23 per share, beating expectations of $1.05 per share. Revenue of $1.49 billion also exceeded estimates of $1.39 billion.

(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni)

Image Credit: Reuters

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Source: https://datafloq.com/read/ea-signals-gaming-boom-extending-run-upbeat-annual-forecast/14587

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Accenture revenue beats as pandemic boosts demand for cloud, IT consulting services

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(Reuters) -IT consulting firm Accenture Plc posted higher third-quarter revenue on Thursday that beat analysts’ estimates, as more businesses used its digital, cloud and security services to adapt to a hybrid work model in a post-pandemic world.

Accenture, which acquired a number of businesses during the quarter, witnessed higher demand for its IT consulting services as the pandemic forced more companies to shift towards a cloud-based digitization strategy.

Analysts say that the demand for IT consulting services is at a 20-year high and is likely to stay elevated, as businesses across sectors including finance and health depend on companies such as Accenture and its peers to adapt to a new hybrid work model.

Revenue rose to $13.3 billion in the quarter ended May 31 from $11 billion a year earlier. Analysts on average had estimated revenues of $12.8 billion, according to IBES data from Refinitiv.

The company forecast full-year revenue growth in the range of 10% and 11%, above its previous outlook. Analysts on average expected full-year revenue to be $49.17 billion, according to IBES data from Refinitiv.

(Reporting by Chavi Mehta in Bengaluru; Editing by Rashmi Aich)

Image Credit: Reuters

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Source: https://datafloq.com/read/accenture-revenue-beats-pandemic-boosts-demand-cloud-it-consulting-services/15760

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U.S. lobby group views India’s e-commerce plan as worrying, email shows

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By Aditya Kalra and Abhirup Roy

NEW DELHI (Reuters) – A top lobby group that is part of the U.S. Chamber of Commerce believes India’s proposed new e-commerce rules are a cause for concern and will lead to a stringent operating environment for companies, according to an email reviewed by Reuters.

India this week spooked online retailers like Amazon and Walmart’s Flipkart by outlining plans to limit “flash sales”, reining in a private label push and mandating them to have a system to address grievances.

The Washington-headquartered U.S.-India Business Council (USIBC), of which Amazon and Walmart are members, described the rules as concerning in an internal email, saying some provisions were in line with New Delhi’s stance on other big digital companies.

India’s draft plan “includes several concerning policies, including significant limits on platforms’ ability to organise sales and handle grievances,” USIBC said in an email to its members.

USIBC has in the past urged India not to tighten a separate set of rules governing foreign investment https://www.reuters.com/business/retail-consumer/exclusive-us-lobby-group-urges-india-not-tighten-foreign-e-commerce-rules-2021-01-30 in companies like Amazon and Flipkart, an issue that has often soured trade relations between India and United States.

USIBC did not immediately respond to a request for comment.

The new rules – open for consultation until July 6 – are expected to have an impact across the board in an online retail market forecast to be worth $200 billion by 2026.

They will also apply to Indian firms like Tata’s BigBasket and Reliance Industries’ JioMart, but the proposal comes after Indian retailers for years complained that market leaders Amazon and Flipkart used complex business structures to bypass India’s foreign investment law, hurting small businesses.

The companies deny any wrongdoing.

India’s new proposed rules have raised concerns they will force Amazon and Flipkart to review their business structures, industry sources and lawyers have told Reuters.

The USIBC email noted that India’s proposals “preclude (e-commerce) platforms from owning vendors“.

Amazon specifically holds an indirect stake in two of its top sellers and a Reuters investigation https://www.reuters.com/investigates/special-report/amazon-india-operation in February cited Amazon documents that showed it gave preferential treatment to a small number of its sellers.

India’s rules also will force e-commerce companies to reveal the country of origin of a product and suggest alternatives to ensure a “fair opportunity for domestic goods”.

Some of the new provisions align with India’s similar federal policies “for social and digital media companies … and will result in a more stringent e-commerce regime,” USIBC said in its email.

(Reporting by Aditya Kalra in New Delhi; Editing by Kenneth Maxwell)

Image Credit: Reuters

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Source: https://datafloq.com/read/us-lobby-group-views-indias-e-commerce-plan-worrying-email-shows/15759

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Visa to buy Swedish fintech Tink for $2.2 billion

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By Iain Withers and Anna Irrera

LONDON (Reuters) -Visa Inc said on Thursday it had agreed a 1.8 billion euro ($2.2 billion) takeover of European open banking platform Tink, months after it ditched a planned acquisition of the startup’s U.S. rival Plaid.

Founded in 2012, Sweden-based Tink enables banks and other financial firms to share and access consumer financial data more easily. It is used by more than 3,400 banks and other institutions, as well as over 250 million customers in Europe.

Visa terminated a planned $5.3 billion deal with U.S. data-sharing platform Plaid in January, following a U.S. government lawsuit aimed at blocking the deal on antitrust grounds.

European Union rules on open banking require banks to allow access to customer data by registered third party providers to boost competition.

The rollout of the rules has provided fertile ground for fintechs, such as Tink, which provide technology to help third parties and banks to access customer data.

Some financial technology experts said the Tink acquisition could face antitrust concerns, similar to the failed Plaid deal.

“Europe is a very different open banking market to the USA,” said Simon Taylor, head of ventures and co-founder at fintech consultancy 11:FS. “But Tink is one of the largest players, and many of the concerns that led to the investigation into the Plaid-Visa deal may apply here.”

The deal is part of Visa’s push to diversify revenues beyond credit card payments, where it is one of the world’s dominant players. Card companies have been facing increased pressure from regulators on fees, especially in Europe.

If completed, the transaction could mark another success for Sweden’s financial technology startup sector which has created several large companies over the past few years.

Buy now pay later company Klarna was valued at $46 billion in its latest fundraising round earlier this month, while Payments startup iZettle was acquired by PayPal Holdings Inc for $2.2 billion in 2018.

“With Tink and iZettle, Sweden has now produced two of Europe’s largest ever fintech M&A exits,” said Josh Bell, general partner at Dawn Capital, a venture capital firm who backed both firms.

(Reporting by Kanishka Singh in Bengaluru; Iain Withers and Anna Irrera in London; Additional reporting by Anna Ringstrom in Stockholm. Editing by Edmund Blair and Barbara Lewis)

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Source: https://datafloq.com/read/visa-buy-swedish-fintech-tink-22-billion/15758

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Siemens raises growth target with digital drive

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By John Revill

ZURICH (Reuters) – Siemens unveiled targets on Thursday to outpace the market by combining its core engineering business with digital expertise in the first strategic blueprint under new Chief Executive Roland Busch.

Busch, who took over as CEO from Joe Kaeser in February, wants to win customers and deliver growth by using Siemens’s software and hardware, the company said at its investor day.

The German engineering company aims to expand beyond its traditional industrial customers by boosting its digital offering used to improve the performance of their factories, trains and buildings.

“Digilitalisation, automation and sustainability are growth engines for our business. Here, our core business and our digital business reinforce each other in a virtuous circle,” Busch said in a statement.

Under the plan, Siemens raised its target for increasing its comparable annual revenue at a rate of 5%-7%, above global market growth and Siemens’s own previous target. Both ran at 4%-5%.

Digital technology is expected to lead, with a faster growth rate of 10% per year from the 5.3 billion euros ($6.33 billion) of revenues Siemens made in the area in 2020.

The company also hiked the profit margin targets for its mobility and smart infrastructure businesses, in the goals that will apply from October 2021, the start of Siemens’s 2022 business year.

BUYING INTO NEW MARKETS

Under the strategy, Siemens said it will develop digital applications for specific industries and launch products more quickly in areas, including automation, artificial intelligence and cyber security.

The company, which competes with Switzerland’s ABB, France’s Schneider Electric and General Electric and Alstom, also wants to enter additional markets with a value of 120 billion euros through organic growth and acquisitions.

No details were given on how much Siemens would spend, but its $700 million acquisition announced in May of U.S. electronic components company Supplyframe and the last year’s $16.4 billion purchase of Varian Medical Systems were examples of this approach.

Still, Chief Financial Officer Ralf Thomas said Siemens remained committed to keeping its investment grade rating.

Accompanying the targets will be a new 3 billion euro ($3.58 billion) share buyback, starting in October to run until 2026. The buyback is a slowdown from the company’s two 3 billion euro repurchases over the last five years.

Siemens also committed to a progressive dividend policy, which means a rising or stable annual pay out to shareholders.

Earnings per share, before the amortisation of goodwill for acquisitions would increase in the high single digit range, around 8% to 10%, the company added.

In an update on trading, Siemens said the favourable business development had continued, and it expected full year net income in the range of 5.7 to 6.2 billion euros.

The forecast included the impact of the 300 to 500 million euro integration costs associated with the Varian acquisition which had not been included in previous company outlook.

(Reporting by John Revill; additional reporting by Alexander Hubner in Munich; editing by Barbara Lewis)

Image Credit: Reuters

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Source: https://datafloq.com/read/siemens-raises-growth-target-digital-drive/15757

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