Thanks to a report on IBM which I read yesterday, I found a new English language trap for foreigners. The analyst wrote that with its new cloud offering after a takeover, IBM's existing customers might decide to “resign contracts” they had with Big Blue and increase its revenues. The writer meant to say that its customers would renew its contracts, or sign them again. But resign is not the right word for this process.

This snafu joins the trick word “oversee” which means both administering something, and missing a part of something.

As more and more financial analysis is left to cheap labor in Ouagadougou, the need for editing increases. My business is still in demand.

I am also chuffed because the lead article in today's NY Jewish Week was written by my great-grand-niece, Shira Hanau. She covered what is known so far about synagogue bombing in Pittsburgh, the longest article in the issue.

Two quarterly reports from drug companies headed by a Dane, one of whom was much better than the other on the conference call. The first Dane's share rose 4.2% and the second rose 12.9%. We have an earnings report from Canada and a Belgian recovery to report and a whopping short-term gain in South Africa and another in Mexico.

There will be no blog Friday as I am undergoing a surgical procedure, but I will try to catch up Sunday.

Canada Telco Results

*BCE  reported revenues in-line and profits 3 loony cents higher at 90 cents than consensus which boosted the telco's share price on the Big Board by 3.73% following US patterns. Adjusted EPS was 96 loony cents. Net earnings clocked in at C$867 mn, up 2%.

The main rise was because of wireless additions, mostly post-paid, by 21% and 16% respectively. Total wireless customer numbers came to 178,000. BCE reaffirmed its guidance for the full year bringing in revenues up 2-4%, EPS up 1-4%, and free cash flow up 3.7 %... However free cash flow in Q3 (earnings before interest, taxes, depreciation, and amortization) fell by 1.4% to C$1.014 bn.

It also boosted its internet and other revenues by 3.2% with broadband and internet protocol TV up 8.7% to 88,000 households. It has Canada's most advanced fiber-optic and wireless networks and aims to be the leader in communications overall.

It also added new executives and reduces lower tier management by 700 jobs, about 4%. BCE is up 4.2%.

Danish and Other Drugs

*The first Danish-headed drug company is Novo Nordisk (NVO) which reported a large unexpected drop in profits because of initial higher costs from a round of layoffs, and global competition in insulin and diet drugs. Net for Q3 fell to Danish kroner 9.04 bn (~$1.37 bn, off 7.5%. It also missed the FactSet analysts' forecast of DKK9.41 bn.

Sales actually beat at DKK27.76 bn, up y/y from DKK26.61 bn, so results were mixed. NVO is gaining business with new diabetes and obesity treatments, just not making money from them.

Free cash flow is now anticipated at DKK29-33 bn this year, up from earlier forecasts by the company of DKK 27-32 bn. It upped its growth sales estimates for the full year to 4-5% vs an earlier level of 3.5%, both in local currencies.l Its operating profits estimates were confirmed at 2-5% for the year. It renewed its share buyback program and added another DKK 1 bn, bringing the total to DKK 15 bn going forward. The big problem, in fact, is US sales of diabetes meds.

CEO Lars Fruergaard Jørgensen stated in a TV interview that most of the job cuts are done, and that it will gain against Eli Lilly in diabetes meds. He also said that inventories are being stockpiled in Britain in case there is a no deal Brexit. All this created headlines which did not reflect NVO's results

*The second Danish-headed company is Israeli Teva whose CEO is a rare extrovert Dane, Kåre Schultz who took command of the conference call and claimed credit for cutting spending by the company by $1.8 bn YTD and to get to $3 bn by the end of 2019. He also raised full year guidance. And dazzled the analysts by using a new and non-comparable geographic presentation of its financial results: North America; Europe; and rest of the world, including Israel itself.

Here too manning levels have been cut, by 9000 employees out of a planned 14,000 by the end of next year. TEVA is cutting its debt burden which is expected to fall to $27.6 bn at the end of the year from $31.5 bn,

Teva sales beat consensus at $4.53 bn, but were down overall by 10%. The GAAP loss was $273 mn, vs a profit of $530 mn a year before.

Here too it was the North American market (including Mexico and Canada as well as the US) which cratered. Sales were $2.265 bn y/y vs $3.043 bn in 2017, down 26% blamed on Copaxone going off-patent. Gross profits lagged even more, off by a third to $1.232 bn, and even R&D was cut by 10%, a nono in normal drug company presentations. Yet in the end, North American profits excluding items and amortization fell by 45% to $649 mn y/y. US revenues fell 27% to $772 mn.

EPS (diluted) was minus 27 cents in Q3 vs a profit of 68 cents a year ago (using GAAP), an overall loss of $208 mn vs $595 mn. Non-GAAP accounts turn the loss into a fictitious $1.022 mn gain or 68 cents/sh.

Teva also upped its guidance to $18.6-19 bn from $18.5-19 bn, much less than the NVO rise. Of course, the non-GAAP figures bedazzled the analysts.

Mr. Schultz used the FDA belated approval for its Ajovy migraine drug to forecast upward sales going forward, but it is not covered by a major drug prescription service, Express Scripts, arguing that it is more likely to be administered in a doctor's office than other migraine drugs and is forecast to become a blockbuster after a fast take-up mostly for quarterly jabs. He also said he is in talks with Express.

He also predicted that 2019 would be “an EBITDA trough year.” (EBITDA is defined in the BCE note above, a measure of cash flow. He also warned of “currency headwinds.” But he raised the 2018 EPS guidance to $2/80-2.95 from the earlier $2.55-2.80. Teva is now boasting of its generics side, a change from a decade of trying to become a full pharmaceutical house with real drugs like the multiple sclerosis drug now off-patent, and Ajovy. He also said Teva will launch a generic epipen for allergies in the current quarter.

In the end, it came down not to stock performance but to CEO performance and Schultz aced that. TEVA now trades at $22.40. Credit Suisse was not in on the conference call.

*Swiss parent Roche should gain from new Genentech studies of Hemlibra for hemophilia to be presented early in Dec. at the American Society of Hematology in San Franciso.

Industrials

*As I anticipated, Jaguar Landrover losses are causing the crash in its Indian parent Tata Motors, TTM. The UK arm produced negative free cash flow of £600 mn in the quarter and £2.3 bn in FY H1. We sold after I visited London and saw the price hikes after the Brexit vote.

*Japanese robot maker Fanuc gained 2.53% in Tokyo today on optimism about auto sales. FANUY here only is up 1.5%.

*Cemex rose 5.95% in US trading after the market finally realized that cement for the new airport is a side issue; Pres. Lopez Obrador wants to boost wages for Mexican workers and they will add to their houses using CX products. More on Mexico under funds below.

*Hopes of a Trump deal with China boosted railroad builder Hollysys (HOLI) 2.7%.

*India's Azure Power Global won another 300 megaWatt solar power deal from India's largest public power ute, NTPC Ltd., with a IR2.59 bid. The plant can be located anywhere in India. AZRE also revealed that it had raised over $400 mn in new capital from equity and fixed income issues since the close of the FY Q1 (June 30). Most of the new money came from existing institutional shareholders like Canada's Caisse de dépôts, German and Dutch development finance bodies, the International Finance Corp. of the World Bank, two parts of the International Finance Corp. and Helion Vernture Partners, a private firm. All these are supporting green energy. It now has a weighted average tariff 17% over the low bids in India for over 2 gigaWatts of new power plants not including the NTPC one.

*China Eastern Airlines rose another 4.4% and is 20 cents below the black for us at $29.37.

*Canadian fertilizer giant Nutrien continues its upward move, another 3.4% rise after its Chile sale of a stake in Soquimich won Santiago's approval. SQM rose even higher, up 7.12% despite losing its fight against Tianjin Lithium. It reports next Nov. 21 when I have jury duty.

*Post spinoff Autoliv of Sweden is up another 2.7%. ALV was downrated to neutral from buy today by Longbow Research.

Food and Housing

*Anheuser-Busch InBev, BUD, trades at an estimated 18x forward earnings which analysts forecast are growing 7.1%--mostly in lower margin markets outside the developed world. This produces a very appealing PE/G rate even in the beer business. BUD is Belgian and its US shares are up 3.5% today. It pays 5.78% in annual dividends which may be cut. I bought more last month but am still down.

*Cosan of Brazil gained 2.6%+ today as more enthusiasm over the election results hit. CZZ makes sugar and ethanol from cane, runs gas station there and in Argentina, and handles logistics.

*Irish Greencore reported that FMR, a US fund group, held 846% of its shares outstanding as of yesterday. FMR earlier owned 8.67% of GNCGY. Other fund groups like Axxion SA of Luxembourg own 3.75% in the ready-meals firm which is exiting the US by divesting its business here. Greencore's primary listing is in London.

*Thai restaurant. Hotel, and real estate firm Minor International plc (MNILY) fell over 7% in US trading today. It is run by an expat American and is now near its 12-mo low.

Tech & Tel

*Tencent Holdings of Hong Kong rose 9.21% today on hopes for spending to resume in China and bargain-hunting. TCEHY.

*Naspers, the recommended backdoor into Tencent, via South Africa, rose 11.65%. NPSNY is easier to buy in the US than its 31%-owned TCEHY and gains from any enthusiasm for emerging markets.

*NTT Docomo of Japan lost 9.28% for no reason I can find. DCMYY.

Funds

*Central bank buying of gold topped $5.8 bn in Q3, the highest level since 2015, with the big buys by Russia, Kazakhstan, Turkey, India, Hungary, and Poland. All are getting reserves in for a rainy day and to stop political interference with the CB. Look to a rise in SPDR Gold, GLD, if this continues. It is up 1.6% today.

*REIT Fibra Uno gained 3% in Mexican trading after the brouhaha over the shelving of a new airport calmed down. What happened will lead Pres-elect Lopez Obrador to be more cautious going forward. It may indicate that US troops on the border—planned by Pres. Trump—will not hurt local malls, stores, offices, and factories which are largely leased to non-Mexican firms and will not affect the cross-border movement of goods.

*Sweden's Investor has now converted its shares in Electrolux back down to under 30% after a capital increase. IVSBF is not a closed-end fund but a holding company founded by the Wallenberg family, and it had no choice but to follow the refinancing of the maker of vacuums and appliances which is losing market share to top-level competition from Britain and low-level competition from China. IVSBF lost 0.77% on these moves.

*Templeton Emerging Markets Fund today hit my break-even level. EMF.