Infosys beats and ups its full-year sales forecast. The IT service provider reported earnings of $13.26 a share, topping analyst estimates by $0.12. Revenue jumped 12.4% to $14.35 billion, easily beating the $14.09 billion that was expected. The company upped its dollar revenue guidance to 9.2% from 7.2% as a result of contract wins. "I am very pleased with our performance in the first quarter," CEO Vishal Sikka said. "Our efforts in redesigning our clients' experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients."
Apple hired an auto executive. Apple has hired Doug Betts, an auto manufacturing executive from Fiat Chrysler, increasing speculation the company is looking to enter the auto industry. According to Betts' LinkedIn page, he has 30 years of experience in the auto industry. Betts' hiring follows reports from earlier this year suggesting Apple has hired hundreds of employees to work on a secret project called Titan, which is said to have the goal of giving electric-car maker Tesla "a run for its money."
Qualcomm is laying off workers and may break up. The chipmaker is expected to announce plans to lay off more than 10% of its 30,000 employees, according to The Information. The expected layoffs are part of what is likely to be a strategic review of the company, which could lead to the eventual spin-off of its chip business from the highly profitable patent-licensing business. According to Reuters, Qualcomm has been under pressure from hedge fund Jana Partners to spin-off its patent-licensing business.
Toshiba's CEO is out after an accounting scandal. Toshiba's president and CEO, Hisao Tanaka, has resigned after an internal investigation found the company has been cooking its books for several years. The company overstated its profit by 151.8 billion yen ($1.22 billion) over several years, almost triple its initial profit. According to the investigation, the scandal dates back to the post-2009 period when Atsutoshi Nishida was at the helm. Bloomberg reports that Nishida, the company chairman, will serve as interim president until a replacement is found.
The latest issue of EY’s Capital Insights magazine includes an interview with Deutsche Telekom's CFO and a look at M&A in the US. Read it now.
A Grexit is possible next year. A Bloomberg survey of 34 economists found that 71% of respondents thought Greece had a chance of exiting the euro next year. The economists think there are still unresolved issues. Specifically, the unwillingness to provide Greece with any debt relief, questions as to the viability of the 50 billion euros Greece must raise through asset sales and the impact of further austerity on the Greek economy. Greece's two-year yield is higher by 87 basis points at 21.49%.
Goldman Sachs likes European stocks over US stocks. Goldman Sachs says it's time toincrease exposure to Europe and cut back on US holdings now that Greece and its creditors are making progress. The investment bank upgraded European stocks to "overweight" for the next three months while lowering US stocks to "underweight." "While performance potential might be limited in the near-term after the strong rebound, several supportive fundamental factors should help outperformance of European vs. US equities until year-end," Goldman said.
Stock markets around the globe are higher. Japan's Nikkei (+0.9%) paced the gains overnight as it played catch-up after Monday's holiday. In Europe, France's CAC (+0.2%) leads a muted session higher. S&P 500 futures are up 0.50 points at 2,122.50.
There is no economic data. This week's data begins to flow Wednesday with FHFA Housing Price Index, existing home sales, and crude-oil inventories due out. The US 10-year yield is unchanged at 2.38%.
Earnings season kicks into high gear. Apple, Chipotle Mexican Grill, Microsoft, and Yahoo highlight the names set to report following Tuesday's closing bell.