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tv   Business Briefing  BBC News  July 19, 2019 5:30am-5:46am BST

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beating expectations. microsoft unveils upbeat results driven mainly by its azure cloud services. boeing profit warning. the world's biggest planemaker reveals the multi—billion dollar financial impact of the 737 max groundings. and on the markets, oiljumped in asian trading on growing geopolitical fears and sterling edges higher as british politicians backed a parliamentary manoeuvre designed to stop a no—deal brexit.
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there is only one tech giant that is valued at more than a trillion dollars. it's not amazon or apple — but microsoft. and it has just proved again why it is the world's most valuable publicly traded company. injust three months, this giant brought in almost $34 billion in revenue. about the same amount as the value of cyprus‘s entire economy. and unlike a number of the tech giants, this company is actually making money. lots of it. in fact, $13 billion of profits. how? office software and cloud computing are proving to be the big money—spinners for microsoft. the likes of microsoft 365 and the azure business in particular. what's powering all of this? an unexpected rise in the number of new desktops and notebooks being sold around the world.
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they're up by almost 5%. why? companies are trying to replace old machines still running on windows 7 before support for the software expires next year. there's also the fear that this could be a much more costly investment in the future if trade tariffs rise. all of this has helped the company cement its place at the top of the wall street tree. you can how this year it's overtaken rivals to be the only us company worth more than a trillion dollars. aaron shields, executive strategy director at fitch retail brand consultancy joins me now. this is extraordinary, isn't it? what this business has done. as cloud business is making it rain dollars. the timing is right. is
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focusing on fewer businesses but really investing them and the whole world is now switching over to cloud —based computing. thanks to companies like amazon and google, but he has his timing absolutely right. amazon 's clout is bigger but abc have just right. amazon 's clout is bigger but abc havejust done right. amazon 's clout is bigger but abc have just done a deal with microsoft. how is this game changing? how competitive are microsoft in this space? they are moving from wanting to have their name on every piece of software to becoming much more experience focused. so they are getting demand from the business side of things because they have the software that plugs into everything else but they also have demand from the consumer side of things. people want to use their services and software because they just work so they are signing on companies by the hundreds of thousands of users and getting a lot of companies signed on to as your.
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so if you search for cheap microsoft office you get a lot of different websites vying for your attention. i wonder whether you think microsoft is perhaps dropping the ball a little bit on software piracy? they are the trusted one. i recommended going to onedrive for our own company. they are an ethically based company. they are an ethically based company from the get go so they invest a lot in ensuring their softwa re invest a lot in ensuring their software is compliant and not harmful but they are trying to build trust over the years and i think they have been known for that while other companies have made more errors. how significant do you think this trade spat between the us and china will be for the business? it will start weighing on commercial business in china. it will, if it continues, and that seems to be more than sabre rattling at this point.
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but it will be an even playing field for everyone competing with that new dynamic so i don't think it will adversely affect microsoft compared to competitors. boeing has told investors it's setting aside $4.9 billion to compensate airlines for the disruption caused by the grounding of the 737 max jet. the 737 max was boeing's most profitable commercial airliner until it was withdrawn from service after two crashes in indonesia and ethiopia in which 346 people were killed. michelle fleury reports from new york. boeing has now put a number on how much it believes the grounding of its 737 max planes and the delivery delays will cost it when it reports its second quarter results next week. $4.9 billion will be spent compensating its customers, the airlines who use or have ordered the plane, for the disruption. boeing also raised how much it thinks it will cost to produce the aircraft by $1.7 billion in the second quarter and this
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is due to higher costs associated with producing the planes at a reduced rate. it shows again just how important the 737 max is to the aircraft maker's bottom line. but this is just a first estimate, the total cost to boeing could yet be higher which is why boeing is so focused in getting the troubled plane back in the air as soon as possible. in its release, boeing states its hope for the aircraft to return to service this autumn but that timeline has already been cast in doubt by america's top transportation officials who sais usa aviation regulators have no timeline in mind to retain the plane to service. boeing has been testing a proposed software fix that, along with extra training for pilots, well, it believes should address what probably went wrong in both crashes. in the meantime, southwest airlines and american airlines have both removed the 737 max from their schedules until early november.
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and we're going to stay on that story for a little longer. let's go to our asia business hub where karishma vaswani is looking at how boeing is doing in asia after the crisis erupted. what is the take on this? one of the caches —— crashes was in indonesia. and boeing is still suffering reputational damage but there is financial disruption from the grounding of its 737 max plains and a nalyst say grounding of its 737 max plains and analyst say it is far from maxed out. you will remember earlier in march a whole host of asian countries from singapore to australia, they suspended these planes from flying into and out of the country ‘s. it is unclear how much asia contributed to this $5 billion charge of the grounding of the planes but given how many airlines in this region use that model, analysts say it could well have been significant. the crisis is heading others as well. when boeing
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announced quarters —— results in april it said it delivered 149 in the first quarter four to 184 one quarter last year. it we will see more pain when boeing releases its results later on. i believe you are right. it is certainly not the end. now let's brief you on some other business stories. ross mcewan, the outgoing ceo of britain's royal bank of scotland has been hired as the new ceo of national australia bank. this follows the abrupt departure of its leaders this year in thefallout of a misconduct inquiry. mr mcewen is widely credited with turning around rbs after it was rescued by the uk government. german automaker bmw and chinese online gaming giant tencent holdings are teaming up to launch a computing center in china that will help develop self—driving cars. the computing center, which will start operations by the end of the year, will provide cars with data—crunching capabilities to help them drive semi—autonomously and, eventually, autonomously.
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every country has a version of this deep—fried sweet treat. the netherlands has the olykoek. france has the beignet. but only the united states could take the same simple dish and start selling it in its billions through giant corporations. here's aaron heslehurst with another million—dollar idea. hey! it's doughnuts. as american as coca—cola and burgers. and just as good for you. it comes from a dish brought over by dutch settlers called olykoek, fresh bread
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‘s wheat bread deep—fried. they were made for this man sees that maxime voyages did she put hazelnuts inside the dough hence the name doughnuts. in the 1920s, this russian emigrant invented this, the world ‘s first doughnut frying machine. so you can knock them out quickly for theatre—goers. but these ones had a hole in them. perhaps to save on nuts. he made $25 million from selling his machines all across america. giant franchises popped up everywhere. dunkin' doughnuts, crispy cream. who ate all the doughnuts? nowadays americans alone purchase 10 billion doughnuts every year, shelling out $3.5 billion. that is a lot of dough. before we go, here are the markets.
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sorry, idon't sorry, i don't know what that is but markets have jumped sorry, i don't know what that is but markets havejumped in sorry, i don't know what that is but markets have jumped in asian trading because of growing political fears. oil prices are rising as is the stirling. —— pound sterling. —— pound sterling. england's schools desperately need a multi—billion pound cash injection — that's according to a group of mps. the education select committee found schools were increasingly being asked to deal with growing pupil numbers and rising costs, without adequate resources. our education and family correspondent, frankie mccamley, reports. earlier this month, protest in westminster over school funding. in may, families take to the streets in
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cities across the country, demanding action on what they call a national crisis in special—needs funding. two months before that, thousands of head teachers in england wrote to pa rents head teachers in england wrote to parents saying that schools are facing a funding crisis. following their unprecedented march through westminster, where hundreds gathered. today, another call for action following an enquiry by a group of mps. we are calling for a ten year plan. the argument is simple. if the nhs can have a ten year plan and 20 billion extra, why should education be the poor relation in terms of public funding? the enquiry recommends that all schools and colleges get the multibillion cash injection they desperately need. specifically calling for more funding for special needs pupils, increasing money for post—16 education, extra funding for disadvantaged students up to the age
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of 19. the government says while it is accurate to say that funding is advertised level, it does recognise that schools are facing budgeting challenges. for that story and more, breakfast is coming up at six o'clock with charlie stayt and naga munchetty. they'll have all the day's news, business and sport plus in an attempt to cut deaths on britain's roads — drivers caught not wearing a seatbelt could face points on their licence as well as fines. this is the briefing from bbc news. the latest headlines: the us says its forces shot down an iranian drone that approached an american vessel near the strait of hormuz. but iran says it has no information about a downed drone. president trump has sought to distance himself from racist chanting aimed at a somali—born congresswoman, during his election rally on wednesday. he said he was not happy about people shouting
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"send her back". now it's time to look at the stories that are making the headlines in the media across the world. we begin with the metro, which focuses on the british house of commons voting on thursday to bar the next prime minister from potentially suspending parliament in attempt to force a departure from the european union without a deal. on to our own bbc news website now, and the announcement by boeing ahead of their quarterly results next week that the grounding of the 737 max aircraft has cost the company $4.9 billion. to the times newspaper, which looks at the story of new privacy concerns surrounding faceapp, which has gone viral in recent weeks with realistic images of how people may look in old—age. we return next to the bbc news website, and the world is starting to react
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to instagram's decision to remove the ‘likes' on posts in several countries in a move aimed at relieving pressure on users, making them feel ‘less judged' and finally we look at the world section of the times, which looks at a successful chinese experiment to eradicate a particular virus—carrying species of mosquito, which could have potentially huge positive repercussions for future disease prevention. with me is technology entrepreneur eileen burbidge, who's a partner at technology investment fund passion capital. let's have a look at this metro story, to be honest, as in all the british papers today. this story is about the majority vote aiming to prevent suspension of parliament in october. it was good news for the pound, but the bad news is for boris johnson who is not categorically ruled out suspending parliament in order to get a no deal brexit


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