RY.TO - Royal Bank of Canada

Toronto - Toronto Delayed Price. Currency in CAD
97.60
-1.75 (-1.76%)
At close: 4:00PM EDT
Stock chart is not supported by your current browser
Previous Close99.35
Open99.00
Bid97.45 x 0
Ask97.62 x 0
Day's Range97.30 - 99.49
52 Week Range90.10 - 107.91
Volume2,148,658
Avg. Volume2,152,941
Market Cap139.967B
Beta (3Y Monthly)0.96
PE Ratio (TTM)11.14
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield4.20 (4.23%)
Ex-Dividend Date2019-10-23
1y Target EstN/A
  • Oil Sinks as China Targets U.S. Crude With Tariffs in Trade War
    Bloomberg

    Oil Sinks as China Targets U.S. Crude With Tariffs in Trade War

    (Bloomberg) -- Crude slid to a two-week low after China announced tariffs on U.S. oil for the first time and U.S. President Donald Trump signaled he may escalate the trade war.Futures dropped 2.1% in New York on Friday after China’s declaration of new levies on $75 billion of American oil and other goods. Trump tweeted Friday that he will respond to China’s tariffs in the afternoon. A meeting on trade took place around midday in the Oval Office, according to people familiar with the discussions.Last year, Beijing removed crude from a list of levied goods, signaling the importance of American oil in the global market. The decision to include it now shows how the trade spat has intensified, forcing Asia’s biggest economic power to use duties on the strategic commodity as ammunition.“We appear to be moving further away from a resolution” to the trade dispute, Noah Barrett, an analyst at Janus Henderson Investors, said during a telephone interview. “Ultimately, this exacerbates fears of slowing economic growth and slowing oil-demand growth.”Even before the tariffs were announced, Chinese orders for U.S. crude had been on the wane. The Asian nation’s refiners were the ninth-biggest destinations for American oil during the first five months of the year, down from third-largest in 2018.“We see today’s move as a knee-jerk reaction lower driven by sentiment rather than fundamentals,” said Michael Tran, a commodity strategist at RBC Capital Markets.The latest dust-up between China and the Trump administration came as leaders from the Group of Seven nations prepared to meet in France and central bankers gather in Jackson Hole, Wyoming, to discuss issues including fears of a global economic slowdown.In a speech, Federal Reserve Chairman Jerome Powell said “we’ve seen further evidence of a global slowdown” and would be watching developments for impact on the U.S.New York-traded crude futures have dropped more than 7% this month as the protracted trade dispute fanned fears about stunted demand. U.S. factory data declined for the first time in a decade, while domestic fuel stockpiles increased this week, aggravating concerns about a potential glut.West Texas Intermediate crude for October delivery declined $1.18 to settle at $54.17 a barrel on the New York Mercantile Exchange.Recession RiskBrent for October delivery dropped 58 cents to end the session at $59.34 on the ICE Futures Europe Exchange. Its premium to WTI for the same month traded at $5.17 a barrel.The Chinese tariffs will take effect in stages between Sept. 1 and mid-December, according to the announcement from the Ministry of Commerce. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300 billion of Chinese shipments.While the U.S. isn’t among the biggest crude suppliers to China, America’s shale boom has made it one of the top producers in the world along with Saudi Arabia and Russia. At a time of OPEC output cuts, sanctions that are strangling supplies from Iran and Venezuela, and rising geopolitical tensions in the Middle East, the import-dependent Asian nation needs reliable crude imports to sustain economic growth.“Escalating trade tension increases the risk of the world moving into recession,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “That could result in even lower oil demand next year, and an even more oversupplied oil market next year.”\--With assistance from Catherine Ngai, Grant Smith and Pratish Narayanan.To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.netTo contact the editors responsible for this story: Carlos Caminada at ccaminada1@bloomberg.net, Joe Carroll, Catherine TraywickFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Putin Allies Show Sympathy for Protests

    (Bloomberg Opinion) -- Russian President Vladimir Putin always fights back when under pressure. But, surprisingly for a system in which he reigns supreme, some of his close allies are daring to tell him that this is not always the best tactic with the Russian people.In recent days, three influential people from different strands of the Putin elite have publicly criticized the Kremlin’s harsh treatment of the protests set off by the refusal of the authorities to let opposition candidates run in next month’s Moscow city council election. This doesn’t mean Putin will listen or even that the elite representatives want him too. Rather, it shows that the people who have shaped the president’s policies are pondering the nature of the power transition that’s possible if Putin gives up the presidency in 2024, as the Russian constitution dictates.The first and perhaps most surprising criticism came from Sergey Chemezov, the chief executive officer of Rostec, one of the mammoth state corporations that have swallowed up much of the Russian economy during Putin’s rule. Chemezov, who served with Putin in East Germany in the 1980s, is part of a tiny circle of people Putin completely trusts. And yet on Aug. 19, he dared disagree with the Kremlin’s official line that the Moscow protests are instigated from abroad and need to be put down by force. He told the RBC website:It’s obvious that people are highly irritated, and that does no one any good. In general, my position as a citizen is that the presence of a reasonable opposition is beneficial for any representative body and ultimately for the state. There must be an alternative force which points things out and sends out signals, one way or the other. If everything is always going great, we can slip into a period of stagnation. And we’ve been there before.Chemezov, of course, isn’t directly backing the protesters -- mostly young people who’d like to dismantle the Putin system rather than just get a few candidates into Moscow’s weak city legislature. He’s only arguing that the government should let off some steam instead of practicing pure suppression. But coming from him, even that is serious dissent.On Aug. 21, Alexei Kudrin, the architect of Putin’s tight financial policy and currently head of Russia’s budgetary watchdog, the Accounting Chamber, also cautiously condemned police violence against the protesters, which has resulted in record numbers of detentions and disturbing footage of rubber stick beatings. “There was an unprecedented use of force at the recent protests,” Kudrin tweeted, posting a link to a press release on the violence from Putin’s largely liberal and mostly powerless Human Rights Council. “It is important publicly to investigate every episode. Everyone must always act within the law.”Kudrin counts as a so-called “system liberal,” a Putin loyalist who’s in favor of softer methods, so his statement is less unexpected than Chemezov’s. It’s important, however, that Kudrin, an economist who mostly keeps out of politics, has decided to weigh in this time.The third dissenting opinion also came on Aug.  21, from Sergey Karaganov, who has helped shape Putin’s anti-Western foreign policy in recent years as a key adviser to the Kremlin and who now heads the international economics and global policy department at the prestigious Higher School of Economics. In an article for the government newspaper Rossiyskaya Gazeta, Karaganov issued a warning:The ripples on the surface of the water can turn into a storm or a tsunami if, apart from suppressing protest, the authorities don’t start dealing with the deep-seated problems that are piling up in the nation.  These are the economic stagnation, which is among the factors that have caused a shutdown of social mobility mechanisms for an overwhelming majority of people, and the gap between government and society. Besides, the elite and the government haven’t presented the country with a set of ideas that would make the nation’s life meaningful and future-oriented. Quite obvious also is the high degree of inequality, especially indecent in Russia with its almost genetic yearning for justice.Karaganov goes on to pay lip service to the foreign interference theory, but the dominant idea of his article is that the protests should be a wake-up call to the elite to start tackling the root causes of discontent. As an academic without a government or state company post, Karaganov has more freedom to express such ideas than Chemezov or Kudrin. He uses it to tell Putin that it’s time to move on from relying on Russians’ patriotic impulses and think of prosperity and opportunity instead.Putin probably hears some of these arguments in private, too; in fact, he must have heard them before violence was unleashed on protesters in Moscow streets and foreign ambassadors were summoned to be told off for allegedly inciting disturbances. From his perspective, the government is already doing what’s necessary – that’s what the 12 so-called “national projects,” worth $400 billion over six years, are meant to achieve. It’s just that not everyone has felt their impact yet. In Putin’s view, stability must be maintained in the meantime, and anti-Kremlin loudmouths, prodded on by Americans and Europeans, must be kept in check.But even among Putin loyalists, faith in big government projects isn’t a given: These  people know better than most others how the system works and how inefficiently it distributes benefits because of corruption and nepotism. Even if the cautious dissenters can’t persuade Putin to go softer, they can at least signal that, once a softening becomes possible – for example, after a 2024 transition – they’ll be among its backers.No palace coup is brewing, but a preliminary alignment of forces for 2024 is taking place within the elite. This alignment shows there is a certain potential for a more liberal post-Putin regime.To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Stephanie Baker at stebaker@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Thomson Reuters StreetEvents

    Edited Transcript of RY.TO earnings conference call or presentation 21-Aug-19 12:00pm GMT

    Q3 2019 Royal Bank of Canada Earnings Call

  • Royal Bank of Canada (RY) Q3 2019 Earnings Call Transcript
    Motley Fool

    Royal Bank of Canada (RY) Q3 2019 Earnings Call Transcript

    RY earnings call for the period ending June 30, 2019.

  • Bloomberg

    RBC Misses Estimates as Capital Markets Weigh on Results

    (Bloomberg) -- Royal Bank of Canada posted fiscal third-quarter earnings that missed analysts’ estimates, hurt by a slowdown in the company’s capital-markets division.Canada’s largest lender by assets had C$653 million ($491 million) in profit from RBC Capital Markets, a 6.4% decline, the result of lower trading revenue and a drop in investment-banking fees, according to a statement Wednesday. Earnings from RBC Investor & Treasury Services also fell, sinking 24%, countering record profits in Canadian banking and wealth management.Canadian banks have been facing a slowdown in domestic investment banking, with fewer equity financings and corporate bond sales along with lower acquisition activity crimping revenue in their capital-markets divisions. Low market volatility and declining interest rates, meanwhile, put additional pressure on results.Royal Bank had “a modest miss against expectations as the macro environment weighed on its Capital Markets results as well as those from its Investor & Treasury Services operations,” Barclays Plc bank analyst John Aiken said in a note to clients. “Despite the miss, the results from its other segments were solid.”Across the Toronto-based bank, net income for the period ended July 31 rose 5% from a year earlier, with adjusted per-share earnings of C$2.26 missing the C$2.30 average estimate of 13 analysts surveyed by Bloomberg.“On the markets-related side, when clients are choosing to do less activity, that will follow through with lower results for us, and that’s natural,” Chief Financial Officer Rod Bolger said in a phone interview. “So as client activity picks up, as we move into the fall, perhaps our results will pick up as well.”Royal Bank is the first of the large Canadian lenders to report quarterly results, and Canada’s six biggest lenders are expected to post earnings growth of 5% for the quarter, the median of estimates compiled by Bloomberg Intelligence.Canadian BankingRoyal Bank is one of Canada’s most diversified banks, including worldwide operations in asset management and capital markets and ownership of Los Angeles-based commercial and private lender City National Bank. Yet Canadian personal-and-commercial banking remains the company’s biggest division. The operation posted a 7.9% jump in earnings to a record C$1.61 billion, representing almost half of overall profit at the bank. Wealth-management earnings rose 11% to C$639 million.The Toronto-based lender saw improvements in two areas of concern for investors and analysts: expenses and provisions. Growth in non-interest expenses cooled after three quarters of accelerated growth as the bank invested in technology and spent more on hiring, marketing and new initiatives. Still, costs reached a record C$5.99 billion, up 2.3% from a year earlier.“As the revenue headwinds might be picking up, given the interest rate outlook, we saw that we needed to slow that rate of growth,” Bolger said. “We expect to continue to grow expenses, albeit at a much slower rate than what we’ve been growing over the last couple years.”Royal Bank has been facing elevated levels of provisions and impaired loans this year, notably in its wholesale lending portfolio in areas such as the U.S. oil-and-gas industry. In the third quarter, the bank set aside C$425 million, little changed from the previous quarter and up 20% from a year earlier.Royal Bank’s shares were little changed at C$99.44 at 9:51 a.m. in Toronto. The stock has risen 6.4% this year, outperforming the 4.4% gain for the eight-company S&P/TSX Commercial Banks Index.Separately, Royal Bank said that Doug McGregor, group head of RBC Capital Markets and RBC Investor & Treasury Services, will retire on Jan. 31 after 37 years at the bank. Derek Neldner, global head of investment banking at RBC Capital Markets, will become group head of capital markets effective Nov. 1, while Doug Guzman, who oversees wealth management and insurance, will take over Investor & Treasury Services.Other takeaways from the bank’s quarterly results:The company routinely expands mortgage balances by about 5% each quarter, topping growth at its rivals. Domestic mortgage balances rose 5.9% to C$257.5 billion in the fiscal third quarter.Most Canadian banks increase their quarterly dividends twice a year. Royal Bank stuck to that tradition, boosting its payout 2.9% to C$1.05.(Updates with CFO’s comments starting in sixth paragraph, shares in 12th.)\--With assistance from Divya Balji.To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;David Scanlan at dscanlan@bloomberg.net, Daniel Taub, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Oil Rises to One-Week High as Traders Brace for Storage Drawdown
    Bloomberg

    Oil Rises to One-Week High as Traders Brace for Storage Drawdown

    (Bloomberg) -- Oil rebounded to close above $56 a barrel as traders looked ahead to a key government tally of stockpiles in the world’s biggest economy.Futures fell as much as 1.7% earlier Tuesday during a volatile session. U.S. Secretary of State Mike Pompeo told CNBC that Huawei Technologies Co. and other Chinese companies pose national security threats to the U.S. Oil gained before the close amid analyst forecasts that U.S. crude stockpiles last week fell for the first time in three weeks.Prices held steady after the American Petroleum Institute was said to report a 3.45 million-barrel drawdown of crude supplies.“This is normal intraday volatility,” Raymond James analyst Pavel Molchanov said in an email. Driving the fluctuations were forecasts about the Department of Energy’s weekly inventory report Wednesday, geopolitical news and shifting of funds in and out of the futures market, he added.Crude prices have been whipsawed this month amid conflicting indicators of whether the trade war will move toward resolution. Germany is preparing fiscal stimulus measures to head off the chances of a deep recession in Europe’s biggest economy, while more Federal Reserve rate cuts are expected to shore up American growth.West Texas Intermediate crude for September delivery settled up 13 cents to $56.34 a barrel the New York Mercantile Exchange. The contract expired Tuesday. The more active October contract fell 1 cent to $56.13. At 4:44 p.m. local time, October crude was down 7 cents at $56.07.Brent for October settlement erased its earlier losses and settled up 29 cents to $60.03 on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $3.90 a barrel to WTI.Huawei MoveWhile the White House’s move Monday to delay sanctions on Huawei was seen as encouraging for the prospects of a trade deal between the world’s two largest economies. The U.S. added more than 40 affiliates of the Chinese company to a trade blacklist. Huawei said in a statement the reprieve doesn’t change the fact that it has been “treated unjustly.”“The outcome of the next U.S.-China trade meeting will be the true litmus test for oil markets,” said Stephen Innes, managing partner at VM Markets Pte. in Singapore. “Oil traders don’t want to race too far ahead of the economic realities of the trade war narrative, so a bit of profit-taking is in order.”The Federal Reserve will hold its annual symposium in Wyoming later in the week, where Chairman Jerome Powell’s remarks will be closely watched.American crude stockpiles probably fell by 1.5 million barrels last week, according to the median estimate in a Bloomberg survey. The Energy Information Administration will publish its weekly inventory report Wednesday.\--With assistance from Alex Nussbaum.To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.netTo contact the editors responsible for this story: Carlos Caminada at ccaminada1@bloomberg.net, Catherine Traywick, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Parents Push One Rare-Disease Drug Through FDA, Not Its Successor
    Bloomberg

    Parents Push One Rare-Disease Drug Through FDA, Not Its Successor

    (Bloomberg Opinion) -- For a small biotechnology firm, Sarepta Therapeutics Inc. has made a lot of waves at the Food and Drug Administration. The 2016 approval of its first drug, Exondys 51 – which targets the deadly muscle-wasting disease Duchenne Muscular Dystrophy (DMD) – caused a schism at the agency. A highly organized and vocal group of parents and patients saw hope for boys otherwise resigned to a short and challenging life, helping it gain green-light status, while an agency detractor called the drug an “elegant placebo.” Sarepta’s second drug-approval attempt didn’t go so well. On Monday, the FDA rejected the company’s follow-up drug Vyondys 53, intended for another subset of DMD patients. According to the surprised company, the agency’s principal concerns were with infections related to ports used to infuse the drug, and kidney toxicity observed in pre-clinical models but not seen in the actual trial.If those are the only problems, Vyondys could be back on track in relatively short order. But we don’t know if that’s all there is to it or whether there’s a simple fix because Sarepta didn’t share the FDA’s full rejection letter. The truth is, Sarepta may have a longer, rougher path to further FDA approvals than it previously thought, and its struggles could have a bearing on other drug developers in similar situations.Vyondys likely won’t be approved until at least next year now. That’s not a deal-breaker; the drug was expected to contribute only a modest portion of Sarepta’s future sales. But analysts think the rejection could be about more than a few infections, which may be the reason the company’s shares plunged as much as 20% in early trading Tuesday. Royal Bank of Canada analyst Brian Abrahams suggested in a research note Tuesday that this decision may represent a backlash to Exondys’s approval. It also could be a signal that the agency is upping its safety bar in some cases. There may be something to that. Both Exondys and Vyondys appear able to produce tiny amounts of the protein that boys with DMD lack. It isn’t clear, based on Sarepta’s small trials, that this leads to a real-world benefit. Reliable confirmatory data may not arrive for years.Advocates argue that the FDA should be biased toward approval, when there are no good options even if the data is somewhat scant. Exondys tested the limits of that argument, and it can cost as much as $1 million per year. Potential safety issues for such expensive therapies can make the push for approval harder to support.In the case of Vyondys, the FDA appears to have dug pretty deep for a problem. But if Exondys was an exception and the agency continues to apply a higher standard through the inevitable criticism, another similar medicine of Sarepta’s in development called casamirsen could be in trouble as well. Investors also have to decide if they need to worry about the company’s crucial next generation of drugs, which are gene therapies. Unlike Exondys, which needs to be dosed for years, these medicines could have a long-term impact after just one treatment. Sarepta has produced promising early results for its lead DMD gene therapy, and analysts expect it to generate a billion dollars in sales in 2021. There’s no direct relationship between Vyondys and the gene therapies; the latter work in an entirely different way and don’t have the same kind of efficacy questions. But they are still risky bets that rely on small trials and may require some degree of FDA flexibility.The agency might be in an especially cautious mood in regards to gene therapies after a damaging data fracas recently related to a highly regarded drug made by Novartis AG. Any slowdown for Sarepta would give competitors including Pfizer Inc., Solid Biosciences Inc., and Audentes Therapeutics Inc. opportunities to catch up. At least a chunk of Sarepta’s multi-billion market value likely comes from the perception that it has the magic touch at a more flexible FDA. A previous strength may be turning into a weakness.To contact the author of this story: Max Nisen at mnisen@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Pandora Soars as New CEO Tells Market Strategy Shift Is Working
    Bloomberg

    Pandora Soars as New CEO Tells Market Strategy Shift Is Working

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Pandora A/S, a Danish jewelry company that spent much of last year under attack by hedge funds as it tries to relaunch its brand, jumped in Copenhagen trading after it delivered a smaller decline in operating profit than the market had expected.The stock soared as much as 9.9% during trading in the Danish capital, its biggest gain since February. The Stoxx Europe 600 index was little changed.“With no negative surprises in these results and relative to weak share price performance and bearish investor positioning, the shares may see some short-term relief,” RBC Capital Markets said in a note.Earnings before interest, tax and costs related to Pandora’s restructuring program fell 15% to 1.08 billion kroner ($160 million) in the second quarter, Pandora said on Tuesday. That beat the average estimate of 996 million kroner in a Bloomberg survey of five analysts.The company said it needs to expand its inventory buyback program as part of “additional important restructuring initiatives to improve the structural health of the business,” which will cost an extra 500 million kroner.“As expected, the financial results continued to be weak and impacted by the commercial reset” resulting from its Program Now strategy, Pandora said in a statement. The company reiterated its guidance for the full year and said it sees “early positive signs of the impact” of the new strategy, which envisages cost cuts, fewer discounts and a marketing boost, and whose impact is already “visible in the underlying gross margin, cost levels and cash generation.”The report was the first under Chief Executive Officer Alexander Lacik, who joined in April following a string of departures from Pandora’s top management. He’s under pressure to deliver on Program Now, which was formulated before he joined.Pandora has been hurt by fading consumer interest in its charms and bracelets and the company has also taken a hit from a decline in retail sales at shopping malls. The stock has roughly 75% of its value since a 2016 peak and is heading for a third consecutive year of losses on the Copenhagen stock exchange.“We have said it would get worse before it would get better. We’re just on the verge of getting better,’’ Lacik told Bloomberg.For more:See more on Pandora’s 2Q numbers hereRead Pandora’s full 2Q earnings statement hereRead a transcript of the conference earnings call hereRead Bloomberg Intelligence preview here(Adds CEO comment, updates share price.)\--With assistance from Hanna Hoikkala.To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.netTo contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Nick RigilloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Dropbox Bulls Keep the Faith Even as Results Fail to Stop Slide
    Bloomberg

    Dropbox Bulls Keep the Faith Even as Results Fail to Stop Slide

    (Bloomberg) -- Dropbox Inc. tumbled to an all-time low on Friday, extending a recent downtrend as the software company’s latest results failed to convince investors of the bullish narrative that analysts continue to push.The stock dropped as much as 14% on volume that was more than three times the daily average, and the move erased more than $1 billion from the company’s valuation. Friday’s decline not only marked the biggest one-day percentage loss in the company’s history -- it went public in March 2018 -- but it took shares to record intraday lows.Shares have been trending lower for weeks; Dropbox has only risen in three of the past 19 trading days, according to Bloomberg data, and it is down about 30% from a July peak.A weaker-than-expected read on billings was seen as the primary catalyst behind the decline, although analysts remain positive on the company, the decline notwithstanding.“It’s frustrating to face nearly ceaseless negativity and middling performance of the stock,” wrote Richard Davis, an analyst at Canaccord Genuity.“We haven’t broken the bears yet,” he added, but “we’re willing to stick with this name.” Among other factors, Davis cited a product redesign as something that could lead to long-term outperformance.Eleven analysts have the equivalent of a buy rating on the stock, compared with three firms with a hold rating and two advocating selling the stock. The average price target is a little under $30, or 60% above current levels.Here’s what analysts are saying about the results:Canaccord Genuity, Richard Davis“Every relevant forward-looking metric that matters was good for this print and guide.”The product redesign is focused on giving users a good experience, which Davis sees as a long-term tailwind. “It is more likely than not that Dropbox will be able to deliver long-term sustainable growth and, eventually, 30%+ [free cash flow] margins.”Buy rating, $35 price target.Jefferies, John DiFucciThis was a “solid” quarter, with revenue slightly ahead of expectations, “though billings was a bit shy due to a higher mix of monthly invoicing.”The product redesign integrates the service with Slack, Zoom, and Atlassian, and “a unified workspace approach should enable DBX to cross-sell additional products.”Buy rating, $32 price target.RBC Capital Markets, Mark Mahaney“Organic fundamentals remain very much intact,” although “fundamental trends were modestly less robust.” Expects margins to expand in the second half of the year.A product redesign “could lead to a stickier product in the workplace, which can drive robust revenue and fundamental growth trends going forward.”Outperform rating, $32 price target.Nomura Instinet, Christopher EberleThe results were “somewhat underwhelming,” and there “continues to be what we believe is a miscommunication between management and investors.”Raises earnings expectations for 2019 and 2020, but trims price target by $1 to $24. Neutral rating.KeyBanc Capital Markets, Rob OwensThe company’s “rapid innovation cadence and continuous improvement to Company-owned infrastructure justify further upside.”Overweight rating, $35 price target.Bernstein, Zane ChraneNotes a “strong beat” on net paid user additions, although average revenue per user fell short of expectations.Cites higher customer acquisition costs as a concern.Underperform, $19 price target.(Updates stock to show record low, adds KeyBanc commentary.)To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley, Scott SchnipperFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • RBA Ready to Ease Again, But Lowe Sees ‘Gentle Turn’ in Economy
    Bloomberg

    RBA Ready to Ease Again, But Lowe Sees ‘Gentle Turn’ in Economy

    (Bloomberg) -- Reserve Bank Governor Philip Lowe said he’s still prepared to reduce Australia’s record-low interest rates further if needed, though signaled the economy could be through the worst of its slowdown.The central bank’s own estimates, released as Lowe spoke, pushed back expectations for faster economic growth and inflation and a lower unemployment rate. Importantly, these were based on current market pricing for two more RBA cuts that would bring the cash rate to 0.5%. Nonetheless, the RBA chief struck a note of quiet optimism.“There are signs the economy may have reached a gentle turning point,” Lowe said in his opening statement to a parliamentary panel in Canberra Friday. “Consistent with this, we are expecting the quarterly GDP growth outcomes to strengthen gradually after a run of disappointing numbers.”The RBA undertook back-to-back rate cuts in June and July to a record-low 1% as it sought to revive a decelerating expansion and drive down unemployment. It joined developed-world counterparts in easing as the U.S.-China economic confrontation deepens, damping global confidence and investment.“While we might wish it were otherwise, it is difficult to escape the fact that if global interest rates are low, they are going to be low here in Australia too,” Lowe said in his semi-annual testimony. “Our floating exchange rate gives us the ability to set our own interest rates from a cyclical perspective, but it does not insulate us from long-lasting shifts in global interest rates driven by saving/investment decisions around the world.”The Aussie dollar has declined almost 8% in the past 12 months as the economy slowed and money markets boosted bets the RBA would resume easing. The currency climbed Friday morning in Sydney as markets read into the remarks that the governor was gaining confidence that growth could be turning up.Lowe’s remarks “confirmed an easing bias and willingness to cut further to meet the RBA’s objectives, but did not appear to signal any urgency,” said Su-Lin Ong, head of economic and fixed-income strategy at Royal Bank of Canada in Sydney. “Their base case appears to be a hope that monetary and fiscal stimulus will see firmer growth ahead.”Lowe also said it was prudent to be thinking about unconventional policies, though he reiterated that he believed this was unlikely in Australia.The key forecast revisions in the Statement on Monetary Policy released Friday in Sydney were as follows:Core inflation will be around 1.75% next year and reach the bottom of the RBA’s 2-3% target by June 2021, a year later than projected in MayUnemployment will be around 5.25% through 2020 and fall to 5% by June 2021, two years later than projected in MayGDP growth will be slightly lower this year, at 2.5% versus previous estimate of 2.75%Glass Half FullLowe’s gentle optimism expressed in his testimony is based on the RBA’s lower rates, recent tax cuts, a lower currency, a brighter outlook for investment in the resources sector, some stabilization of the housing market and ongoing investment in infrastructure.“It is reasonable to expect that, together, these factors will see growth in the Australian economy return to around its trend rate next year,” he said. Still, even an improving outlook won’t resolve the economy’s underlying challenges.“In the central scenario that I have sketched today, inflation will be below the target band for some time to come and the unemployment rate will remain above the level we estimate to be consistent with full employment,” Lowe said. “While this remains the case, the possibility of lower interest rates will remain on the table.”The governor also highlighted the elephant in the room: the political and economic uncertainty worldwide.“These disputes pose a significant risk to the global economy,” Lowe said. “Not only are they disrupting trade flows, but they are also generating considerable uncertainty for many businesses around the world. Worryingly, this uncertainty is leading to investment plans being postponed or reconsidered.”The RBA chief was pressed several times on the potential for unconventional policy. The cash rate is just 1%, a similar level to the Federal Reserve’s when it undertook QE, and New Zealand’s governor said this week it was possible he would have to consider alternative measures after cutting his rate to 1%.Lowe acknowledged that it was possible that the RBA would end up at the zero lower bound and spelled out the measures taken by international counterparts and some of his thoughts on their efficacy. He also provided a snapshot of his thinking about them for Australia.“I think the focus would be on trying to reduce the risk-free interest rate,” Lowe said. “If we reduced the cash rate down to a very low level, it’s possible as circumstances warranted that we could take action to lower the risk-free rates further out along the term spectrum.”(Updates with economist comment in 7th paragraph.)\--With assistance from Chris Bourke.To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, ;Nasreen Seria at nseria@bloomberg.net, Edward JohnsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Oil Rebounds From Seven-Month Low as Saudis Signal Export Curbs
    Bloomberg

    Oil Rebounds From Seven-Month Low as Saudis Signal Export Curbs

    (Bloomberg) -- Oil advanced for the first time this week after Saudi Arabia signaled it’s taking steps to stabilize the market, which has been rocked by the escalating U.S.-China trade war.While futures in New York rose 2.8% on Thursday, they are still down over 10% in August. Prices got a reprieve after officials from the world’s largest oil exporter said it will keep oil exports below 7 million barrels a day and allocate less crude than customers demand next month. OPEC’s biggest producer will also scale back output in September.That helped oil rebound from the lowest close since January, after it tumbled along with other risk assets this week on concern that the trade spat between Beijing and Washington will hurt the health of the global economy. Growth in world oil demand is slowing and won’t exceed 650,000 barrels a day in 2019, according to major commodities trader Vitol Group.“One of the world’s largest crude suppliers saying they’ll try to re-balance the market is providing traders some comfort,” said Michael Loewen, director of commodity strategy at Scotiabank. “The Saudis will do whatever is necessary to keep the market afloat. They have proven they will do so in the past by cutting supply, so there’s no reason to question whether they’ll do it again.”West Texas Intermediate oil for September delivery advanced $1.45 to settle at $52.54 a barrel on the New York Mercantile Exchange. Brent for October settlement climbed $1.15 to settle at $57.38 on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $4.92 to WTI for the same month.Saudi Arabia has already cut production more than required under an agreement between the Organization of Petroleum Exporting Countries and the group’s allies including Russia. Planned gatherings in Abu Dhabi early next month will be critical for leaders of the OPEC+ coalition to signal their intentions on production, said Helima Croft, chief commodities strategist at RBC Capital Markets.Meanwhile, U.A.E. Energy Minster Suhail Al-Mazrouei said on Twitter that “oil market fundamentals are good” and prices are undergoing a “temporary over-reaction, which is driven by speculation.”Financial markets across the globe were hammered over the past week after U.S. President Donald Trump on Aug. 1 threatened to impose 10% tariffs on another $300 billion in goods from China starting next month. The Asian nation’s move to let its currency weaken in response stoked fears of a currency war. The dispute pushed a widely watched Treasury-market recession indicator to the highest alert since 2007.“The market is worried about the broader trade war escalation, Donald Trump and his Twitter finger and indications sliding demand growth will impact the global economy,” said Michael Tran, commodity strategist at RBC Capital Markets.\--With assistance from Ben Sharples, Verity Ratcliffe, Heesu Lee, Grant Smith and Nayla Razzouk.To contact the reporter on this story: Kiran Dhillon in New York at kdhillon18@bloomberg.netTo contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Pratish Narayanan, Jessica SummersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Roku Spikes to Record High After Another Blowout Quarter

    (Bloomberg) -- Roku Inc. shares soared on Thursday, with the platform for streaming video extending a move into record territory in the wake of its better-than-expected results.The rally is the latest leg up for a stock that has already seen massive gains over the past several months. While some analysts expressed some trepidation over Roku’s valuation, the broad reaction to the print was widely positive. Rosenblatt upgraded its view while multiple firms boosted their price target by hefty percentages. Currently, the average target on Roku stands around $111, up from $88 on Wednesday, according to data compiled by Bloomberg.The stock gained as much as 22% to an intraday record and is up more than 340% from a September low.Here’s what analysts are saying about the results:Rosenblatt Securities, Mark ZgutowiczUpgrades to buy from neutral, price target raised by more than 70% to $134 from $77.This is the second straight quarter where Roku achieved the “trifecta” of strong growth in accounts, hours and average revenue per user.“While Amazon will always be an imminent threat, Roku TV is a runaway train,” and its brand positioning should continue to snowball. “ROKU’s brand and audience reach is essentially ‘out-scaling’ the unowned content model.”RBC Capital Markets, Mark MahaneyRevenue was “significantly” better than expected and it “cleanly” raised its full-year outlook. Fundamentals “were mostly positive,” but valuation remains a concern.Sector-perform rating, price target raised to $107 from $90.Macquarie, Timothy NollenThe company could have as many as 72 million international subscribers in three years.Price target lifted to $110 from $66, but neutral rating affirmed due to valuation.Needham, Laura MartinGiven the company’s growth in active accounts, “it would be foolhardy to try to launch a new [over-the-top] service without Roku, which should drive pricing power.”New streaming services from Disney, Apple, and Warner Bros. can drive value through new subscribers and ad revenue.Buy rating, $120 price target.William Blair, Ralph SchackartAs streaming video takes over for traditional television, “Roku is well positioned to take advantage.”Outperform rating. The valuation “leads us to believe there is upside to $145 through the next 12-18 months.”What Bloomberg Intelligence Says:“Roku is capitalizing on favorable over-the-top video-streaming trends,” and “there is room for growth as Roku broadens its ad platform.” The outlook “remains conservative.”\-- Analyst Woo Jin Ho\-- Click here for the research(Updates stock to market open in third paragraph.)To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley, Morwenna ConiamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Oil Regains Ground as Saudis Discuss Crude-Market Intervention
    Bloomberg

    Oil Regains Ground as Saudis Discuss Crude-Market Intervention

    (Bloomberg) -- Oil clawed back some losses after Saudi Arabia contacted fellow crude producers to discuss ways to halt the slide in prices.Futures in New York rose 2.4% in after-hours trading from Wednesday’s settlement. Bloomberg News reported the Saudis have decided the market slump is intolerable and all options are on the table, according to a kingdom official who asked to not be identified.As the world’s largest oil exporter, Saudi Arabia largely orchestrated historic output curbs by the Organization of Petroleum Exporting Countries and allies including Russia to prop up prices. Those efforts have been confounded by booming output from American shale fields and looming concerns about the health of the global economy.West Texas Intermediate oil for September delivery rose $1.23 to $52.32 a barrel in after-hours trading on the New York Mercantile Exchange. That followed a session in which the futures closed at $51.09 a barrel, the lowest level since Jan. 14.Futures fell during Wednesday’s session after the Energy Information Administration revealed the first rise in U.S. crude inventories since early June. Oil was also swept up in a global meltdown of stock and commodity markets after rate cuts in New Zealand, India and Thailand escalated recession fears and spurred a flight to U.S. treasuries and other safe havens.See also: U.S. Oil Likely in China’s Cross Hairs as Trade War DeepensIn the U.S., domestic crude inventories expanded by 2.39 million barrels last week, snapping a seven-week string of declines, according to EIA data. Gasoline stockpiles also expanded, an alarming development during what is typically the peak demand season.The “shocking” increase in U.S. fuel supplies, coupled with a flight from risky assets, means oil “will feel pressure in the days and weeks to come,” said Tariq Zahir, a commodity fund manager at New York-based Tyche Capital Advisors LLC.\--With assistance from Jessica Summers and Javier Blas.To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.netTo contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Joe Carroll, Carlos CaminadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • City National Bank acquires entertainment software firm FilmTrack
    American City Business Journals

    City National Bank acquires entertainment software firm FilmTrack

    City National Bank has acquired FilmTrack, a Studio City, California-based company that helps entertainment and media industry companies manage intellectual property rights.

  • The Royal Bank of Canada (TSE:RY) Share Price Is Up 29% And Shareholders Are Holding On
    Simply Wall St.

    The Royal Bank of Canada (TSE:RY) Share Price Is Up 29% And Shareholders Are Holding On

    When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking...

  • Chipmakers Tumble as Trade Tensions Add to Recent Concerns
    Bloomberg

    Chipmakers Tumble as Trade Tensions Add to Recent Concerns

    (Bloomberg) -- Semiconductor stocks tumbled in on Monday, extending a recent decline as the escalating trade war between the U.S. and China added to headwinds surrounding the sector.Chipmakers were broadly weaker, with the Philadelphia Semiconductor Index down 3.6% in its fifth straight daily decline, its longest such losing streak since October. The benchmark index has lost more than 10% over the five-day slump and trade tensions have been a primary driver of the recent decline, as many chipmakers count China as a major market or as a key part of their supply chainsAmong specific names, Intel Corp. fell 3.4% while Texas Instruments Inc. lost 3.3%; both were in their fifth straight negative session. Micron Technology Inc. was off 5% and Nvidia Corp. sank 5.9%. The VanEck Vectors Semiconductor ETF -- an exchange-traded fund that tracks a basket of chipmakers -- fell 3.2%, and its pre-market trading volume was the highest since May 31, according to data compiled by Bloomberg.Also in focus on Monday was the latest data from the Semiconductor Industry Association, which showed total semiconductor sales fell 17.7% in June.RBC Capital Markets said that within the sub-sector of DRAM memory chips, average selling prices were down 46% in June, “the worst decline since March of 2008.”Analyst Mitch Steves wrote that he was “surprised to see the severity of ASP declines across the board,” although he doesn’t think they are likely to get worse from current levels.While the SIA data showed month-over-month growth of 4.9%, Deutsche Bank described the report as “another soft month of data” and said it came in below the bank’s expectations. The firm affirmed its cautious stance on the sector, with analyst Ross Seymore writing that “headwinds continue in the semi space, corroborated by weak SIA data & 2Q prints/3Q guides in earnings season thus far.”Among notable results, Advanced Micro Devices Inc. cut its full-year forecast last week, while Qualcomm Inc. gave a disappointing fourth-quarter sales outlook. On the upside, Western Digital Corp. reported fourth-quarter revenue that missed expectations, but the company’s chief executive officer said it had “reached a cyclical trough.”Over the weekend, ON Semiconductor Corp. reported second-quarter revenue that missed expectations and gave a weak third-quarter outlook. The stock slumped 9.9% in its biggest one-day drop since November 2015.(Update share prices, adds Nvidia in third paragraph)To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will DaleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality
    Bloomberg

    Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality

    (Bloomberg) -- Russia is acting on a pledge by President Vladimir Putin to shrink the role of dollar in international trade as tensions sour between Washington and Moscow.The shift is part of a strategy to “de-dollarize” the Russian economy and lower its vulnerability to the ongoing threat of U.S. sanctions. But while the central bank was able to quickly dump half of its dollar holdings last year, progress in trade has been slow due to ingrained use of the greenback for many transactions.U.S. Imposes More Sanctions on Russia for Chemical Agent UseThe share of euros in Russian exports increased for a fourth straight quarter at the expense of the U.S. currency, according to central bank data. The common currency has almost overtaken the dollar in trade with the European Union and China and trade in rubles with India surged. The dollar’s share in import transactions remained unchanged at about a third.“There’s been a strong incentive to change, not just for Russia but for its trading partners too,” said Dmitry Dolgin, an economist at ING Bank in Moscow. “The European Union is also now facing trade pressure from the U.S.” pushing them to try to reduce dependence on the dollar, he said.The euro came close to replacing the dollar as the currency of choice for Russian exports to the European Union, with its share climbing to 42% in the first quarter from 32% a year earlier.Russia still relies on the dollar for more than half of its $687.5 billion annual trade, though less than 5% of those deals are with the U.S. Part of Russia’s motivation to shift is that companies suffer delays on as much as a third of international payments in dollars because Western companies have to check with the U.S. whether the transactions are allowed, Russian Finance Minister Anton Siluanov said in December.The euro’s share also increased in Russia’s $108 billion annual trade with China, jumping to more than a third of export settlements in the first quarter from almost nothing at the start of 2018. This shift, which covers commodity sales and big state contracts, has been accelerated by the development of payment infrastructure at the central bank and other lenders, according to Sofya Donets, an economist at Renaissance Capital in Moscow.Trade in yuan is difficult because of capital restrictions that limit foreigners’ access to Chinese assets, Dmitry Timofeev, who heads the Finance Ministry’s sanctions department, told the RBC newspaper.“The yuan isn’t completely convertible, which means it can’t play a significant role in world trade,” Timofeev said.The most dramatic shift is visible in Russia’s $11 billion trade with India. The ruble accounted for three quarters of total settlement in exports between the two emerging markets after they agreed on a new payment method through their national currencies for multi-billion-dollar defense deals.“The trend is likely to continue because the infrastructure for transactions in alternative currencies is improving,” Renaissance Capital’s Donets said. “Russia won’t be able to give up using the dollar completely though, especially for trade of oil.”(Adds link to fresh sanctions story after second paragraph)To contact the reporter on this story: Andrey Biryukov in Moscow at abiryukov5@bloomberg.netTo contact the editors responsible for this story: Mark Sweetman at msweetman@bloomberg.net, Natasha Doff, Gregory L. WhiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Amazon Advertising Is Just a Toll in Disguise
    Bloomberg

    Amazon Advertising Is Just a Toll in Disguise

    (Bloomberg Opinion) -- Investors are giddy about Amazon.com Inc.’s fast-growing pool of advertising sales, which largely come from merchandise sellers buying commercial messages to make their goods more prominent on Amazon’s website.Calling this “advertising” is true, but also a misnomer that leads investors to imagine a Google-like marketing machine inside Amazon. It’s not – or not yet, at least. Amazon’s advertising is better understood as an additional tax the company imposes on the millions of businesses that sell through its vast digital mall. It’s one more toll extracted from sellers to access the fast lane of Amazon’s beautiful freeway for shopping.Ads may be a justified expense for merchants to access Amazon’s hundreds of millions of shoppers, and it’s a common business tactic to juice revenue. But it’s also risky for Amazon to milk its merchants for a higher effective commission than most businesses of its kind can command. And as regulators and politicians question whether the superpowers of U.S. tech are using their popular services to unfairly advantage themselves, Amazon may pay a cost in reputation the more it squeezes cash from its hold on online shopping. More than half the items bought on Amazon come from independent merchants that sell slacks or bocce sets through the e-commerce king. Amazon in some cases handles a lot of the leg work, in exchange for commissions and other fees. In recent years, Amazon has given those “marketplace” sellers and product manufacturers more options to buy Google-like advertisements, in part based on product searches, for an additional cost. Someone typing "dog beds" into Amazon’s search box, for instance, might first see results from the FurHaven brand or a merchant that resells pet products on Amazon, with an icon that notes those listings are “sponsored.” RBC last year estimated that about one out of every six product results on Amazon’s app was a sponsored listing. Products from companies without paid listings are pushed further down the page.As Amazon kicks off its annual Prime Day fake shopping holiday, it appears the company is offering even more paid product promotions. All those advertisements make up most of Amazon’s $11 billion yearly sales in a category that also includes fees for its branded credit cards. In my conversations with businesses that sell products on Amazon or advise merchants, there isn’t much hostility about Amazon charging them for promotion on top of other fees. Companies realize that paying to make their merchandise front and center on Amazon is a cost of doing business, and they generally say those paid placements generate enough sales to justify the expense. In a survey of businesses that sell on Amazon, the merchant services firm Feedvisor found three-quarters of respondents were satisfied with Amazon’s advertising platform. Ads, of course, also transfer money from merchants to Amazon’s wallet. The company on average takes about 26 cents of each dollar of transactions made by its marketplace vendors, according to Bloomberg Opinion estimates from Amazon’s disclosures. Add in an estimate of Amazon's revenue from the merchants’ advertising — which, again, is mostly an added fee paid by goods sellers and product manufacturers as a cost of doing business — and Amazon’s average haul per transaction likely tops 29 cents on each dollar.(2) In 2015, the company’s take was closer to 20 cents. Other marketplace businesses that connect sellers with customers — eBay Inc., Airbnb Inc. and Grubhub Inc., for example — tend to take an effective commission of 15% to 25% on each transaction, including advertisements if available.(3) Consider that some makers of apps, including Spotify and the company behind the the Fortnite video game, have complained that Apple Inc.’s up to 30% commission on transactions in its iPhone app store is far too high. Amazon itself doesn’t sell its e-books, movie downloads or other digital goods in the company’s iPhone apps, to avoid giving Apple a cut of 30 cents on every dollar — about what Amazon takes from its merchants.To be fair, Amazon is doing a lot of work for its cut of sales. It provides a vast customer base for merchants, often stores inventory for them and handles shipments, and takes responsibility for customer service and payments. That’s arguably far more work than Apple does for its 30% commission on a purchase of an iPhone game.(1) And all advertising is, in a way, a toll levied by a powerful distributor. Businesses buy ads on Facebook and Google to ensure their products and services don’t get drowned out by a sea of other information. Frito-Lay pays a supermarket extra to ensure its chips are on visible spots on shelves. Alibaba and eBay sell ads similar to those that Amazon offers to merchants. There’s nothing particularly unusual about what Amazon is doing in carving out room for merchants to market themselves, for a fee.But there is also something perverse about paying Amazon a kind of  tax to make sure your product is seen on Amazon, so people will buy the item on Amazon. Even Google’s ad empire isn’t this kind of a closed loop. And if one Amazon merchant doesn’t purchase an ad, one of its competitors’ dog beds — or Amazon's own brand — might instead nab an eye-catching display and wrest a sale instead. Amazon is just different, in a way that makes typical business tactics a little icky. Amazon’s growing cut from its merchants is one reason why the company's revenue is increasing more quickly than its merchandise sales. Amazon is extracting a bigger share for itself. Like other powerful tech companies, Amazon is able to charge more to the partners that rely on it, because they don't really have a choice. (Updates the “Take a Cut” chart to include an average effective commission for Airbnb instead of the high end of listed commission rates.)(1) This estimate is based on recent company disclosures that for the first time enabled calculations of the total value of goods sold on Amazon's digital mall. My calculation of Amazon's effective commission is the company's 2018 reported net revenue from commissions and other fees paid by marketplace vendors, $42.7 billion, out of roughly $166 billion in total merchandise sales made by those independent merchants. The effective commission including advertising is a rougher estimate, because it assumes 58% of Amazon's "other" revenue of $10.1 billion in 2018 -- primarily ads but also other services -- are paid listings purchased by Amazon's marketplace merchants. (That percentage corresponds to the merchants' share of total sales on Amazon.) The figure may overestimate Amazon's take from merchants, but probably not by much.(2) These companies’ effective take of transactions in some cases isn't entirely comparable to Amazon’s, because they do more or less work for their commissions and other fees. But they each get paid for their role as middlemen.(3) Earlier this year, my Bloomberg colleague Spencer Soper wrote about the mixed feelings among companies that sell on Amazon. Many of them find customers they couldn't have reached without Amazon, but some also grouse about the growing array of fees they pay the e-commerce giant or other downsides of selling goods there. Some merchants told Soper that Amazon is taking upwards of 40% of each sale.To contact the author of this story: Shira Ovide at sovide@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.