Breakingviews

Disney puts faith and $4 bln in power of the Force

By Antony Currie and Rob Cox
The authors are Reuters Breakingviews columnists. The opinions epxressed are their own.

Bob Iger and George Lucas are either flaunting their California roots, or they’ve got something to hide. The Walt Disney boss unveiled a $4 billion purchase of the Star Wars and Indiana Jones creator’s homegrown studio, Lucasfilm, on a day when Wall Street and stock markets were shut down by Hurricane Sandy. It’s just as well: Iger is asking his shareholders to put lots of faith in the power of the Force.

Apple infighting may be sign of golden age waning

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Executive infighting at Apple may be a sign of a golden age on the wane. The company’s genius has always been the smooth integration of art and engineering. Steve Jobs’ force of will kept an uneasy peace between these two camps. With mobile software chief Scott Forstall out, design guru Jony Ive will have a say over hardware and software. That is a big ask, as Apple needs mastery of both.

UBS euphoria overdone

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investors are taking a rosy view of UBS’s ability to execute a radical strategy to hack back its investment bank. The Swiss wealth manager’s market capitalisation is up 4.4 billion Swiss francs ($5 billion) since the plan emerged. While UBS deserves applause, it may be getting too much credit up front.

Three reasons China’s banks deserve their derating

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s banks enjoy valuations most Western rivals would kill for. But compared with the earnings they are throwing off, their share prices look miserly. The country’s seven biggest banks trade at an average of 1.2 times their most recently reported book value, according to Reuters Eikon, despite aggregate returns on equity above 20 percent. Five years ago, lesser returns allowed them to command multiples above 4.5 times book. Though the derating is harsh, it’s justified.

UBS rethinks the impossible

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

UBS is going where no bank has yet dared to tread. The Swiss wealth manager and investment bank is poised to reveal a radical strategy that could see it pull out of fixed-income trading. Such a plan would be expensive and slow to execute – that’s why rivals typically think such moves are impossible. But the decision could prove an industry game-changer.

Pandit putsch is setback for U.S. board governance

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Separating the roles of chairmen and chief executives is good governance, as a rule. That’s why the practice is standard in the UK and has been gaining ground in the United States. But the logic is undermined by recent events at Citigroup. Chairman Mike O’Neill’s ouster of Vikram Pandit as chief executive last week is looking increasingly like a power-grab rather than a service to shareholders.

Cynthia Carroll’s departure won’t fix Anglo

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Cynthia Carroll is riding into the sunset. Anglo American and its chief executive are parting ways. Missteps early in her tenure hurt Carroll, but she did deliver needed cultural change. A new broom is unlikely to have an easier time. Anglo’s biggest problems are largely beyond the control of management.

Apple results shrink iPad mini’s relevance

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apple’s results have shrunken the iPad mini’s relevance to size. Hawking nearly 27 million iPhones last quarter dwarfs all the hoopla earlier this week surrounding the launch of the tinier tablet, which may sell about the same amount in a year. Moreover, iPad profit margins don’t compare – and the mini’s will be smaller still. The phone still energizes the Apple ecosystem.

Lazard advises Wall Street on how to take the pain

By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Lazard is showing Wall Street how to take the pain. The M&A advisory and asset-management firm will slice off $125 million of expenses, or some 8 percent of the total, by the end of the year. That means Christmas has come early for investors, chiefly activist Nelson Peltz, though not for some of Lazard’s employees. While the firm still shells out more on its staff than rivals, the move is consistent with Chief Executive Ken Jacobs’ goal to boost shareholder returns.

Credit Suisse keeps on finding more costs to cut

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Credit Suisse is used to leading the pack on cost-cutting. The Swiss bank has been ahead of its peers since last year, when it made the first of three announcements that will see it reduce expenses by a cumulative 3 billion Swiss francs before the end of next year. Like an over-eager surgeon, it’s at it again – opening the European banks’ results season by announcing another 1 billion francs of cuts by the end of 2015. But with unrelenting pressure for more capital, investment banking remains a tough business.