The largest utility in the U.S. has filed for bankruptcy as it faces billions of dollars in potential damages from wildfires in California and more in Tuesday’s Markets In Brief.
Pacific Gas & Electric Corp. filed documents in a U.S. court Tuesday seeking Chapter 11 reorganization. The move comes despite state investigators determining last week that the utility’s equipment was not to blame for a 2017 fire that killed 22 people in Northern California wine country.
The company cited hundreds of lawsuits from victims of that blaze and others in 2017 and 2018 when it announced this month that it planned to file for bankruptcy.
It’s already facing lawsuits over a November blaze in the town of Paradise that killed at least 86 people and destroyed 15,000 homes, though its cause is still under investigation.
MARKETS IN BRIEF
EU-Canada Trade Deal Gets Green Light
A key adviser to the European Union’s highest court said that a controversial element on dispute settlement in the free trade agreement with Canada complies with EU law and more in Tuesday’s Market In Brief.
Advocate General Yves Bot said in a legal opinion that the 2016 agreement does not impede the autonomy of EU law or question the exclusive right to interpret EU law. Critics of the law had maintained that the dispute settlement clauses would give too much power to multinationals at the cost of the independence of member states and force through trade practices against the will of nations.
The Court said in a statement, however, that Bot “considers that the safeguards surrounding the establishment of the dispute settlement mechanism are sufficient.”
The request for a court ruling was brought by Belgium, where the small region of Wallonia, population 3.6 million, long threatened to hold up the overall trade agreement between over 500 million Europeans and 35 million Canadians. The EU needed unanimity among its 28 nations.
As Wallonia grudgingly backed the deal, it did so on the condition that the European Court of Justice would check the legality of dispute settlement between multinationals and governments. The full court will rule on the case later this year and often follows the advice of its advocate general.
“The agreement does not adversely affect the autonomy of EU law and does not affect the principle that the Court of Justice has exclusive jurisdiction over the definitive interpretation of EU law,” the statement on the advice said.
The Canadian-EU trade deal, called CETA, provisionally entered into force last year and most of the agreement now applies. The deal eliminates almost all customs duties and increases quotas for certain key products in each other’s market.
Weak Outlook from Pfizer Overshadows 4Q Performance
Pfizer’s strong profit for the fourth quarter is being overshadowed by a tepid outlook for the year.
The drugmaker on Tuesday had a loss of $394 million, or 7 cents per share. Adjusted for non-recurring costs and costs related to mergers and acquisitions, however, per-share earnings were 64 cents per share, a penny better than expected, according to a survey by Zacks Investment Research.
Revenue was $13.98 billion.
Pfizer Inc. expects full-year earnings in the range of $2.82 to $2.92 per share. Industry analysts have been expecting annual per-share earnings of $3.04.
Shares are down more than a percent before the opening bell.
Greece launches first bond sale since emerging from bailout
Greece has launched a 5-year bond auction, the first time the country has tapped international capital markets for financing since it emerged from its bailout programs in August.
State-run ERT television said the initial guidance for Tuesday’s bond sale was a yield of 3.75-3.85 percent. Authorities are hoping the rate to be as low as 3.5 percent, raising 2.5 billion euros ($2.87 billion).
The government is planning a cautious return to bond markets after Greece ended its third international bailout last summer with a cash buffer aimed at covering financing needs for around two years.
The bond sale was ordered following visit to Athens by bailout inspectors and after the government survived the departure of its junior coalition partner over disagreement on a deal to normalize relations with Macedonia.
EU Approves US Soybeans for Biofuel Production
The European Union has approved U.S. soybean exports to be used in the production of biofuels in an effort to boost such imports following last summer’s trans-Atlantic meeting between President Donald Trump and his EU Commission counterpart Jean-Claude Juncker.
The summit meeting was able to stave off a tariffs war on industrial goods like cars but Juncker made a commitment to buy more U.S. soybeans.
Sales have doubled since, but mostly because of market forces. Tuesday’s approval that US soybeans can be used for biofuel is bound to boost sales even more.
EU Commission spokesman Margaritis Schinas says “today’s decision is new proof that the EU is delivering … this means that as of today it will be easier for US soybeans to enter the EU market.”
3M: 4Q Earnings Snapshot
3M Co. (MMM) on Tuesday reported fourth-quarter net income of $1.35 billion.
The St Paul, Minnesota-based company said it had profit of $2.27 per share. Earnings, adjusted for pretax expenses, were $2.31 per share.
The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $2.27 per share.
The maker of Post-it notes, industrial coatings and ceramics posted revenue of $7.95 billion in the period, also topping Street forecasts. Three analysts surveyed by Zacks expected $7.94 billion.
3M expects full-year earnings to be $10.45 to $10.90 per share.
3M shares have climbed slightly more than 1 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed 5.5 percent. The stock has fallen 25 percent in the last 12 months.
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