Business posts another loss, stock falls

By Charlene Zhang
Medill Reports

Shares of Chinese e-commerce giant Inc. (NYSC: JD) dropped 5 percent Monday after the release of continuing sluggish results on Friday.

The company reported a fourth quarter net loss of $139.7 million, or 10 cents per diluted share, down 27.9 percent compared to the same period year earlier. Technology-heavy investments in an artificial intelligence initiative with Stanford University and in big-data cloud-based solutions hiked expenses by 74.5 percent to $300 million.

But revenue jumped to $16.9 billion, up 38.7 percent.

Delivery technologies including drones, robots and automated warehouses will put JD Logistics at the forefront of “operational efficiency and technical sophistication,” said CEO Richard Liu in a conference call.

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Target shares fall following earnings miss

By Sarah Foster
Medill Reports

Target Corp. reported healthy increases in sales figures for the fourth quarter ended Feb. 3, but when it came to profits, the company barely hit its bullseye, and shares fell.

In accordance with GAAP, new U.S. tax legislation helped boost profits up 34.7 percent to $1.10 billion, or $2.02 per diluted share, in the fourth quarter, compared with $817 million, or $1.46 a share, in the year-earlier period. The company reported Tuesday a benefit of 64 cents per share related to the new tax law.

But adjusted earnings, which exclude tax-related savings, fell short of analyst expectations, causing shares to plummet nearly 5 percent. Adjusted diluted earnings per share reached $1.37 compared with expectations of $1.38.

Sales climbed 10 percent to $22.77 billion from $20.69 billion a year earlier, slightly beating expectations of $22.52 billion, thanks to robust consumer spending both in stores and online and an additional week in the quarter.

These gains, however, were offset by various company-wide investment efforts that ate into its fourth-quarter profit. The company aims to invest more dollars into its online shopping experience and increase wages to $15 by 2020, CEO Brian Cornell said at an annual gathering of Target analysts in Minneapolis.

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From solar to backyard birds – Find eco-friendly solutions at Going Green Matters

By Nathan Ouellette
Medill Reports

Going Green Matters, will feature more than 100 eco-friendly vendors this Sunday, offering everything from solar power to pedal power. Wilmette’s annual environmental fair has been showcasing clean energy solutions and technologies to Chicago area residents for 12 years.

The fair, co-sponsored by Go Green Wilmette and the Village of Wilmette, opens at the Michigan Shores Club this year and gives visitors one-stop shopping on how to introduce new sustainability practices into their everyday lives.

This year’s fair takes a special focus on solar.

“We want to get solar installed as cost-effectively as possible,” said Jack Ailey, co-owner of Ailey Solar. “We do it for environmental reasons and to be fair to our workers.”

You can meet these 10 vendors among dozens of others  at this year’s Going Green Matters.

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John Bean Technologies posts strong quarter but stock dives

By Charlene Zhang
Medill Reports

John Bean Technologies Corp. (NYSE: JBT), a Chicago-based technology solutions provider to food and air transportation industries, topped Wall Street’s earnings estimate but, surprisingly, its high-flying stock plummeted more than 8 percent.

Net income in the fourth quarter ended Dec. 31 decreased to $19.4 million, or 60 cents per diluted share, from $23.1 million, or 77 cents per diluted share, in the year-earlier quarter, but that was caused by a one-time charge of $15.5 million resulting from the 2017 tax law. Adjusted per-share earnings were $1.10 compared with Wall Street’s estimate of $1.08.

Revenue climbed 19 percent to $483.7 million from $405 million.

Even after its decline, the stock is priced at 41 times trailing 12-months earnings, well above the S&P 500 P/E of 25.

Acquisitions comprised 11 percent of JBT’s 19 percent annual revenue growth, compared with 6 percent organic growth. “Acquisitions remain a key element of our growth strategy,” said CEO Thomas Giacomini in the conference call.

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Kohl’s beats estimates but stock falls

By Richard Foster-Shelton
Medill Reports

Kohl’s Corp. (NYSE:KSS), based in Menomonee Falls, Wis., reported increases in revenues and net income, exceeding analysts’ expectations, for the fourth quarter ended Feb. 3. But the stock fell.

Helped by strong holiday sales, tighter inventory control and a tax benefit, the company reported net income of $468 million, or $1.87 per diluted share, up from $252 million, or $1.44 per share, in the year-earlier quarter. Analysts estimated $1.77 per share.

The department store chain generated revenues of $6.8 billion, a 10 percent increase from $6.2 billion in the same quarter the previous year. Analysts estimated $5.7 billion.

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Abbott buys rights to a vascular balloon, possibly confronting Medtronic

Roxanne (Yanchun) Liu
Medill Reports

Illinois-based healthcare giant Abbott Laboratories (NYSE: ABT) announced Tuesday that it would pay up to $92 million to secure global commercialization rights for SurVeil, a Minnesota company’s drug-coated vascular balloon designed to treat peripheral artery disease, or PAD, a niche market already occupied by muscular competitors including Medtronic PLC (NYSE: MDT).

The worldwide peripheral vascular devices market is estimated to surge to $12.63 billion by 2022 from $9.09 billion in 2017, according to a report by Research and Markets. The drug-coated balloon, also known as a drug-eluting balloon, is an alternative therapy to the market-dominating drug-coated stents. SurVeil, currently in clinical trials, would be the first PAD-targeted drug-coated balloon in Abbott’s portfolio.

SurVeil’s developer, medical device company Surmodics Inc. (NASDAQ: SRDX), has been conducting a pivotal clinical trial that tests the new device against the In.PACT Admiral drug-coated balloon, the current U.S. market-leading product manufactured by Minnesota-based Medtronic, one of the major rivals of Abbott in vascular care.

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Can robots solve the aging problem in Japan’s work force?

By Minghe Hu
Medill Reports

It’s getting hard for employers to find qualified workers in Japan, and a rapidly aging society is the reason for the worker shortage.

Robots may help.

In September 2017, 28 percent of the population was over 65 years old, according to the Ministry of Internal Affairs and Communications of Japan. The size of the working-age population declined 13 percent to 76.7 million from 86.6 million between 2000 and 2016, according to a research paper by Daiji Kawaguchi. The ratio of job openings to applicants is 1.59, up 11 percent compared with the same time last year.

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Chinese investment flows into Japanese housing despite tightening policies

By Jinman Li
Medill Reports

Tokyo–A Chinese celebrity venture capitalist, Manzi Xue, who has more than 11 million followers on Weibo, a Chinese social media resembling Twitter, announced in January that he had bought all 11 machiyas on a street of Kyoto to develop a rental lodging business. Machiyas are traditional wooden townhouses popular with Kyoto merchants and craftspeople.

Although Xue’s dramatic announcement triggered a new run of media coverage and public discussion, Chinese purchases of Japanese housing is not a brand new topic.

“Chinese investment in Japanese residential properties has been increasing rapidly since 2013,” said Toru Otaya, associate managing director at Japan Real Estate Institute (JREI), a global research, appraisal and consultation organization. Japan’s success in its 2020 Olympic bid, the recovering economy after the reelection of Shinzo Abe in 2012, and the cheap Japanese yen are identified by Otaya as the major drivers.

According to a survey conducted by JREI based on the expected return rate of the real estate market, Japanese housing prices dipped after the outbreak of the 2008 financial crisis, and the rate of return increased. The market remained dull until 2012 when Abe took office and implemented policies to stimulate the economy. The volume of transactions grew, prices went up, and the rate of return dropped, according to JREI.

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Japan uses robots in nursing home care; an example for America?

By Alexa Adler
Medill Reports

Tokyo–The Japanese nursing home industry, facing a demographic crisis that combines an increasing number of nursing home patients with a decrease of eligible caregivers, has turned to robots to provide patient care designed to be both more effective and safer, while making caregivers’ jobs a little easier.

Silver Wing Social Welfare Corp., a Tokyo-based nursing home operator, fueled by a 5.2-billion-yen fund provided by the Tokyo metropolitan government for robot use, is one of the leaders in nursing home robotic innovations.

Declining birth rates and increased longevity have made the Japanese population increasingly elderly. According to the Statistics Bureau of Japan, people aged 65 or older, the group from which nursing home patients generally come, constitute a staggering 27.3 percent of the population, and the proportion is rising. The U.S. Census Bureau says that only 14.9 percent of Americans are 65-plus.

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LSC misses estimate, shares drop

By Charlene Zhang
Medill Reports

Shares of commercial printer LSC Communications Inc. (NYSE: LKSD), one of two spinoffs from R. R. Donnelley & Sons Co., plummeted 7 percent as adjusted earnings missed Wall Street’s estimate and the company reported a GAAP net loss of $58 million, or $1.68 per diluted share, in the fourth quarter ended Dec. 31, compared with net income of $9 million, or 26 cents per diluted share, in the fourth quarter of 2016.

But sales increased 8.7 percent to $999 million from $919 in the year-earlier period, boosted by recent acquisitions of a supply chain solutions provider The Clark Group and a producer of envelopes and mailing supplies Quality Park.

The net loss was largely explained by goodwill impairment charges of $33 million and onetime provisional tax charges of $24 million resulting from the enactment of the 2017 tax reform legislation.

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