Transcripts For KQED Nightly Business Report 20240622

Walmart is in a slump. It reported a drop in Second Quarter profits and missed wall street earnings estimates and said growth for the full year wont be as strong as thought. On the bright side, more shoppers are shopping at walmart here in the u. S. And spending slightly more but costs are rising faster. Today, investors sent shares of the dow component down to a 52week low thinking walmart, the worst performer on the Dow Jones Industrial average for the day. Courtney reagan has more on the company that many consider to be a barometer of the consumer economy. Reporter while walmarts u. S. Comparable sales improved for the fourth straight quarter and sales traffic increased, it wasnt enough to keep the retailer from significantly lowering its full year earnings guidance. There are headwinds that cut into the quarter, many of which walmart expects to continue, including increased employee hours at now higher wages, lower reimbursements from prescription drugs. Walmart explains that shrink includes both theft and damaged goods which could include perishable grocery items. The retailer is working to rectify it but say it may take 18 months. Analysts say they are concerned about other pressures that the retailer didnt detail in its list of headwinds today. Theres a lot of costs associated with training, wages, i think theres a Ripple Effect up the chain in terms of when you raise the low end and folks at the middle that is now the low, they want an increase. I think theres unintended consequences there. I think there is pressures around trying to clean up these stores and make them more shopable. So really it runs through the organization. Reporter but the discounter says it is making strides. Offers faster checkout and improve inventory in stock levels. Plus, customers are responding to programs connecting us online and store operations, like order online and pick up in store. They are doing things to make sure they win with the consumer and ultimately they will manage their way to better earnings. Still, 16 , very healthy by any which way you want to measure it. But compared to expectations, which is what we all look at in the very short term, its a disappointment. But thats where the opportunity lays for investors willing to be a little patient. Reporter but asking for patience is a big request for walmart right now. Shares are down 20 year to date. The retail index is up 20 in that same time period. For nightly business report, im courtney reagan. It was the opposite story for home depot. That dow component reported better than expected revenue and earnings met expectations and profits for the full year will be stronger than previously thought, making it the second time this year the retailer has raised its profit outlook. The company is being helped by a recovery in the Housing Market and americans willingness to spend money on home improvements. The dow rose 2. 5 to a 52week high. Builders ramped up Single Family home sales in july to and homerelated companies to new highs. But permits considered a bellweather for future construction fell more than 15 and apartment construction, which has been on a terror, also declined. Home depots results in that positive housing data wasnt enough to lift stocks today. The Dow Jones Industrial average snapped its threeday winning streak as walmart weighed and investors watched a 6 drop in the shanghai composite overnight. By the close, the blue chip dow index went to 17,511, nasdaq shed 32 and s p 500 fell 5. A multibillier dollar deal in the Banking Sector plans to buy national pin bank shares for almost 2 billion in cash and stock and that sent the sales to 16 and bb t fell as part of the aggressive strategy to expand in the midatlantic region but as dominic chu reports, it may give way to more merger activity in the sector. Reporter banking customers in pennsylvania, new jersey and maryland will soon have a new Financial Institution in their backyard. North carolinabased Bb T Corporation signed a deal to buy pen for 1. 8 billion in cash and stock. The acquisition will help make bb t one of the biggest deposit collectors in the state. Its growth. The Banking Industry on the whole is struggling to find growth and acquisitions here to fore have been hard to accomplish because of regulatory winds and you are seeing them progressively pursue this strategy to jumpstart growth. Reporter while americas biggest lebd lenders havent been making these types of acquisitions, some are seeing opportunities. Smaller banks may become more attractive targets as regional banks expand in new markets in an effort to grow revenues and profits. National pen might be getting easier from a regulatory standpoint as well. I think the regulators have gotten comfortable with mergers. I know some of my peers disagree with that but i think they are comfortable with mergers as long as the institution has invested in the systems of processes to be able to run a larger institution. Reporter if regulators are becoming more open to deals, that mean morte targets are in play for traders and investors and some experts believe more deals are on the horizon for the Banking Industry. It certainly steeems that wa. Regulators have taken a very hostile view towards consolidation because, in part, their view was that consolidation up to that point has led to the problems that resulted. But were seeing now that somewhere below the 250 billion level, clearly much more open to deal making. Reporter financials as a whole and smaller regional banks specifically have been outperforming the market as a group so far this year. The big question is whether or not they will keep up that positive momentum giving more potential in Merger Acquisition activity. For nightly business report, im dominic chu. And now to washington where the government is proposing some changes for the oil and natural gas sector. The new rules issued by the Environmental Protection agency would require companies to cut methane emissions by nearly half over the next decade and the industry is already fighting back. Eamon javers is following this story from washington. Good to see you, eamon. What is the industry pursing . They want the oil and gas to cut emissions by 20 to 30 in terms of methane and want them to do it by going after, finding and repairing likes in their equipment and looking for m methane emissions as part of the drilling process. They say they could end emissions by 20 to 30 . Thats a good number to start with. Overall this is part of the Obama Administration Climate Change goal by getting emissions down to 40 . What does the oil and gas industry say . Tyler, they dont like it. They say its redundant, unnecessary and methane emissions are already coming down. All this is going to do is add new cost to the industry. But the epa says its going to bring costs down to the point where it will actually make money for the industry. This is the most interesting aspect of this announcement to me, anyway. They say its going to cost about 400 million to the industry to implement all of these changes but said that because the industry is going to be able to resell the methane that they gather as part of this process, they are going to make more than 5 500 million. They will net about 150 million in profit to the industry. The industry, though, says that is hogwash. They say there was an opportunity here to make money, theyd already be doing it and dont want the epa to tell them how to make money in this business. Does the executive branch have the power to impose these regulations on these companies . Remember a couple of weeks ago with the Climate Change stipulations, the states are going to sue. Yeah, they do. This is coming from the epa. This is an executive branch rule here. Now, the industry obviously, according to the regulatory process, have had an opportunity to weigh in across the board but at this point this is the epa saying this is what we want the industry to do and the industry is going to have to go and do it. Eamon, thank you, as always. Eamon javers in washington. Coming up, as the Telecom Industry under goes a massive transition, is the way you buy a cell phone about to change forever . American airlines will begin offering charter flights into cuba. The airline is partnering with Cuba Travel Services to fly out of los angeles and straight into havana. The carrier says it is going to be the first to offer nonstop service from the west coast to the island nations since travel restrictions were eased last month. Carnival airlines received approval to travel to cuba next year. Public safety is a multimillion dollar business and new companies are helping Law Enforcement. Today those companies gathered in washington, d. C. , to show off their latest products at the industrys biggest trade show in seven years. And Hampton Pearson was there. Reporter First Responder technology is now a 6 billion a year business. This week, nearly 6,000 Public Safety Communications Experts from across the country are in washington, d. C. , shopping for solutions. Everything from the next generation radios, from harris communications, the smallest device with both digital and broad band capability. This is unlike any other product on the market from a portable radio perspective, this offers more connectivity, more audio capabilities, more performance and a small form factor that First Responders have not had before. Reporter but civil unrest and Controversial Police tactics in baltimore, ferguson, missouri, and elsewhere has put the focus this year on Law Enforcement technology with transparency. Including a stateoftheart command center, equipped with computers and software that could take a 9 11 robbery in progress call with surveillance cameras and send snapshots to officers en route to the crime scene in a matter of minutes. It provides more information than ever before and provides the capability and get that information to actionable intelligence and enables the transparency. Reporter the future cop on the beat will not only have a body camera but special glasses flashing back to a command post as well as body sensors tracking what happens in realtime as the officer draws his weapon. The primary dilemma for local Law Enforcements, how do the humans manage all of the data for both protecting and managing Citizens Rights . For a body camera, its a nice solution to the transparency problem but when you break it apart, it does solve some of those issues but creates other problems. Reporter First Responders are actually testing a lot of the technology but the real Mission Impossible may turn out to be the deployment. For nightly business report, im Hampton Pearson in washington. Bargain hunters out in force at tjx companies. The discount retailer which hosts marshalls home goods report reported better than expected sales. Shares rose more than 7 today to 76. 78. Dicks Sporting Goods better than he cexpected profits after improved sales at its Namesake Stores and smaller declines at golf galaxy locations. The Company Raised its full year guidance slightly and will expand offerings of athletic wear. Shares up almost 4 to finish at 52. 61. And target and visa reportedly reached a settlement related to the massive data breach during the busy Holiday Shopping season in 2013. Target will pay visa card issuers up to 67 million and follow as rejection of a proposed 19 million year with mastercard. Target shares ended day up a little bit. Visa shares were up to 74. 47. Pharmaceutical company omera shares are surging today after positive test results of a phase two trial for a treatment of deadly blood clots. It involved three patients who showed positive reaction to that treatment. The news sent the stock up 72 to 25. 03. Getting extra cash today Nbc Universal announced a similar investment in vox media. Nbc universal, like cnbc, which produces this program, is owned by comcast. Chinese Solar Panel Manufacturing trina solar quadrupled thanks to stronger Global Demand for solar. The company also raising its full year shipment guidance by as much as 16 . Shares initially surging higher in premarket trading and closed the day up more than 1 to 10. 33. Twoyear contracts are going by the wayside and the subsidies that make buying the smartphone cheaper. At t is the only nationwide carrier to still offer those longer contracts. Sprints ceo says its a way to keep up with the changing nature of business. The 199, that is the thing of the past. The industry has changed. Consumers used to pay 199 for a phone but paid a much higher monthly fee. I think one of the great things about the industry, we have them bundle it. The Senior Editor joins us now to discuss what this really means for you and what everybody must be asking, dan, is, net, net, in the end, when im through with it, is it going to cost me more to buy a phone and operate that phone under a no contract system than it did under a contract system with a subsidized phone . I think at least your perception of what the phone costs is going to change because for years weve trained people to think that these new phones, they cost basically 200 and for that you get into this twoyear contract. They are getting out of that business and you have to buy the phone at full price but, guess what, you can just buy the phone over 24 monthly installments which adds up to the same as having the twoyear contract. They are changing how they are packaging everything but i think the end user, the differences are transparent. So its basically not going to save consumers a sizeable amount of money but its being marketed as a better plan for the consumer . You at least get more flexibility and transparency into what youre paying for and what each part of your plan costs including the cost of your phone. Year over year, youre probably not going to send these Companies Less money in aggregate because thats not their Business Plan to get less money out of you. They are going to try to get more money, i would suspect. And the way they are going to try to get it is by raising data charges. But let me ask you this question, dan, if i might. If i decide that i want to buy one of these new phones and im going to pay it off over 24 months and i decide i dont like my carrier anymore, i want to get rid of it, what happens then if i havent made all of the lease payment ors purchase payments on that phone . Just like when you used to leave your twoyear contract early, you had to pay an early termination fee, now if you leave your twoyear payment early, you have to balance of the money you owe on the phone up front. Tough walk away with the phone but depending on which carrier youre going to, youre stuck with the phone you may not be able to use. Where are they making the majority of their money, dan . Is it in the data . Thats the big shift thats happened over the last couple of years. Theyve gotten out of the business, in large part, of selling you kind of voice minutes and text messages. Everyone kind of gives you unlimited amounts of that by default now. They realize they are in the data business because weve driven people to these larger phones to view videos and websites and video calling. They realize that they are in the 3g, 4g data business and thats what they sell you in 5 gigs, 10 gigs a month. Dan ackerman, thank you. While people use their smartphones for a fast internet connection, half of the world remains unconnected but two billionaires want to change all of that. As jane wells reports, they are getting into a big fight in the process. Reporter elan wants to go to mars and Richard Branson wants to send tourists to space but right now both billionaires are engaged in a new race to provide Internet Access at fast speeds to the world. Others have tried and failed. This stuff is very hard, very complex and very easy to fantasize about all of the things that it could do and very hard to kick out all of the fantasy and come down to reality. Reporter greg whiler is founder and ceo of one web, a company which branson has invested in. They have raised 500 million to invest in 648 satellites to launch in two years. The satellites will be much closer to earth to cut down delays and one hopes to sell it to airlines or customers in remote areas. But if theres space, literally, for more than one player . Theres really no not a lot out there. Reporter last january in seattle, in this video, elon musk reported that spacex wanted to launch its own internet constellation and the company is now hiring, google and fidelity have invested 1 billion into the adventure. The fight over spectrum and if there is enough bandwidth for more than one player. Wiler says one web has priority because theyve gotten the green light from International Regulators and any other company that tries to do the same thing will have to take a number. That doesnt mean they cant use spectrum. That just means they have to be respectful and to the prior users. Reporter there is it debate whether the priority to spectrum goes over who goes to them first or gets their satellite up first. Spacex has applied to experimentally used the same spectrum one web has put dibs on with International Regulators and this could be one race with as many lawyers as rocket sciences. Jane wells, los angeles. Coming up, keeping the lights on. What one company is doing to make sure your home gets the power it needs when it needs it despite our aging energy grid. The second part of our series, the big fix, is next. Heres a look at what to watch for for tomorrow. The Consumer Price index is due out, a key measure of inflaktio, the minutes will be released from the july fed meeting at 2 00 p. M. Eastern and germany will vote on whether to approve the Greece Bailout plan. The cost of the California Drought is rising. A new study says more than 2. 5 billion have been drained from the states economy so far this year. Researchers at uc davis say most of the cost is being born by californias Agriculture Sector which stands to lose about 1. 8 billion and more than 10,000 seasonal jobs. The report was primarily funded by the California Department of food and agriculture. All week were looking at americas aging infrastructure with the American Society of Civil Engineers recently graded a d plus. The energy grid is no different. As new plants are built, updated transmission lines are needed to carry all of that voltage. One company is making a big investment to get the power where it needs to go. Reporter ad perfop operates than 40,000 miles of transmission line. They carry electricity from power plants to substations where it is then delivered to your home. The lines are big and building them is difficult, dangerous and expensive. The problem is half the nations transmission lines are more than 40 years old and some were built more than a hundred years ago. Adp is replacing the lines in the northeast and midwest. You basically want to make sure the system is as efficient as possible. Sometimes a new line and sometimes rebuilding an existing line. Its not a one size fits all approach. Reporter magnifying the need for grade upgrade is the new Emission Standard set by the epa. Coalfired plants are being shut. That powers millions of homes. That generation needs to be replaced with new plants which also means new transmission lines. But the new system doesnt look like they did a hundred years ago. They are meant to have higher capacity so they can work for another 60 to 80 years. In ft. Wayne, indiana, the company is upgrading its storm station bringing extra high voltage power to the region. Projects like this do a lot to improve reliability. They do a lot to ensure that we can withstand the loss of any components in the transmission system. Thats important to large customers. Reporter because when it comes to turning the lights on, reliability is the name of the game. For nightly business report,. Tomorrow, the series, the big fix, takes a look at air travel, the state of our airports and the need to make them a lot less crowded. And speaking of overcrowded airports, more people are expected to fly this labor day weekend. The Industry Group airlines for america projects more than 14 million passengers catch a flight during the holiday. Thats 3 gain from last year making this summer the busiest ever for the airline. And finally tonight, the tooth fairy isnt as generous as it once was. A survey shows American Children are waking up to 3. 19 under their pillow on average every time they lose a tooth. While they may seem like a sizeable payout, its 24 cents less than last year and down for the second year in a row. But if the current rate holds, kids can expect to earn a total of 64 for a mouth full of teeth. I got a quarter. 19 cents. Commodities are down this year. This is very true. Teeth, a commodity, is down. You say to your child, youre getting 3. 19, youre average. No better than average. We have to say good night. Thats nightly business report. Im sue herera. 3. 19. Im tyler mathisen. Have a great evening, everybody. Well see you back here well see you back here tomorrow. This program has been made possible by. Narrator on this episode of art and soul, an artist taking mobile photography to a whole new level. Woman im inviting the viewer to touch them, to play with them, to maybe pull on something to reveal a hidden image. Narrator behind the scenes with the talented puppeteers of war horse. Within minutes, this sort of almost skeletal horse becomes extremely real. Narrator exploring the works of renowned artist marc chagall during his time in exile. I always remember how he said that his way of fighting was by painting. Narrator one of the original Jurassic Park artists reveals his passion for the prehistoric. Man id always seen velociraptors as these kind of foulsmelling, evil chickens with switch blades, you know