How did companies facing a make-or-break 2019 do?
The verdict on 15 faltering firms
At the beginning of 2019 we highlighted 15 troubled companies grappling with a number of challenges that were weighing heavily on their respective share prices, from legal setbacks, scandal fallout and strike action, to sagging revenues and shrinking profits, amid the backdrop of an intensifying US-China trade dispute, Brexit uncertainty, evolving markets and slowing global growth. So, how have these firms fared so far this year? Click through the gallery to find out.
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General Motors – hitting speed bumps as it strives to recover
Back in early January General Motors was gearing up for a major cost-cutting drive, which has translated in 2019 to a rash of factory closures and lay-offs of thousands of employees. These economies together with booming sales of pickup trucks and crossovers in North America have made for better-than-expected results for Q1, Q2 and Q3.
General Motors – hitting speed bumps as it strives to recover
Still, the auto giant isn't out of the woods just yet. Sales of its vehicles in China have plummeted, while a 40-day strike by staff affiliated with the United Auto Workers Union has cost the company an estimated $1 billion ($773m) for that quarter, with the overall cost expected to reach around $4 billion (£3bn). These factors go some way to explaining the GM share price, which has gone up and down like a yo-yo this year, though it's currently up 17% compared to the beginning of January.
Huawei – getting a boost from flourishing sales in China
The controversial Chinese telecoms company, which has been accused by the US government of facilitating cyberespionage via its development of 5G networks, had a bad start to 2019, having pulled out of the American market. To date, the enterprise has been banned from participating in 5G networks in the US, Australia, New Zealand and Japan, and faces potential bans or restrictions in Canada, India, Vietnam and some European nations.
Huawei – getting a boost from flourishing sales in China
Nevertheless, Huawei has managed to turn the West's hostility into a distinct advantage at home. Buoyed on by strong support from Chinese consumers who clearly see it as their patriotic duty to splurge on Huawei products, the telecoms titan reported 66% annual growth in the third quarter of this year and has eclipsed rivals like Apple on its home turf.
Find out more about Huawei and why the Chinese tech titan is so controversial
Facebook – trying to move on from its annus horribilis
Facebook had a nightmarish 2018. The social media behemoth faced a storm of criticism last year when it was revealed that British political consulting firm Cambridge Analytica had harvested personal data from millions of profiles. The fallout has continued into 2019 as regulators have lined up to sue the company for its role in the scandal. Facebook was hit with a record $5 billion fine from the Federal Trade Commission in July this year over the platform's privacy issues.
Facebook – trying to move on from its annus horribilis
Adding to its woes, the company is struggling to develop Libra, its dedicated cryptocurrency, and recently lost several high-profile partners. In spite of all these setbacks, Facebook reported healthier-than-anticipated results for Q1, Q2 and Q3, advertisers are still flocking to the company and monthly users increased by 2% in the third quarter, while the firm's share price has surged 47% since the start of January.
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Air France-KLM – contending with soaring fuel prices
Air France-KLM was plagued by a succession of strikes last year that resulted in months of disruption, millions of euros of losses and the resignation of the group's CEO. The industrial action came to end in October after new head honcho Ben Smith reached a deal with union bosses, but the airline's problems didn't end there.
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Air France-KLM – contending with soaring fuel prices
Rising fuel prices dented the company's profits in Q1 and Q3, though Air France-KLM reported an increase in profits for the second quarter and passenger numbers and revenues have been growing throughout the year. This is reflected in the company's share price, which is up 13.7% since the start of January.
RWE – powering ahead with its green transformation
RWE had a tough 2018 as the German power company began to get the ball rolling on phasing out its coal power plants, but hit a stumbling block when a court blocked a major lignite mining project in the 12,000-year-old Hambach Forest (activist Greta Thunberg is shown here attending a protest against the project). The company is in the process of transforming from a polluting fossil fuel-focussed business to one based on renewable energy that aims to be carbon neutral by 2040.
RWE – powering ahead with its green transformation
The transformation gained steam in September when RWE, which was bolstered by positive first half-year results, completed its acquisition of E.ON and Innogy's renewables concerns, making it Europe's third-largest renewable energy provider. The deal has worked wonders on the company share price, which has risen by 43.8% since the beginning of January.
Deutsche Bank – struggling to revive the business
Germany's flagship bank was in dire straits at the start of year. Its cost-cutting initiatives were failing to bear fruit and the financial institution was coping with the fallout resulting from its alleged involvement in a number of money-laundering and tax evasion schemes, which culminated in a police raid of its Frankfurt HQ in late 2018. The bank, however, did post its first full-year net profit since 2014.
Deutsche Bank – struggling to revive the business
In July Deutsche Bank embarked on a major "radical" restructuring plan, which entails the shutting down of its global equities trading arm and the axing of around 20% of its workforce – around 18,000 workers – by 2022. The project has eaten into the company's bottom line and losses are mounting up, impacting on profits. It could be some time yet before the bank gets back on track and this is evident in its share price, which is down 7.7% since early January.
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GlaxoSmithKline – enjoying a stellar 2019
GlaxoSmithKline shares took a hit at the end of the last year after the British pharmaceuticals giant announced that it would buy US cancer drugmaker Tesaro for a hefty $5.1 billion (£4bn), a move that didn't go down too well at all with investors who complained that the deal was overpriced. News of the deal saw GlaxoSmithKline's shares drop 8%, which was the largest daily fall in a decade.
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GlaxoSmithKline – enjoying a stellar 2019
Fortunately, the firm has managed to turn lemons into lemonade in 2019 beating analysts' expectations for earnings for all three quarters reported so far this year and reporting its biggest profit in six years thanks to bumper sales of its shingles vaccine and other drug treatments. As might be expected, the company share price is on fire, having recently hit a six-year high, and is up 17.4% since early January.
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Tata Motors – on the road to recovery slowly but surely
At the beginning of the year Indian car maker Tata Motors was battling with everything from sluggish sales in China, decreased diesel demand and even the threat of a hard Brexit. These issues were impacting severely on the performance of its Jaguar Land Rover subsidiary, and battering overall profits as well as the company's share price. Analysts were predicting that as many as 5,000 workers would lose their jobs.
Tata Motors – on the road to recovery slowly but surely
Jaguar Land Rover reported a painful pre-tax loss during the first quarter of 2019, tanking the Tata Motors share price. Thankfully, things are now looking up. Results for Q2 were better than expected based on improvements in the performance of Jaguar Land Rover, and Tata Motors stock has since been on an upward trajectory. In fact, the share price, which nosedived in July, has recovered impressively of late, though it's up by just 0.9% compared to early January. And the company is looking to the future, announcing its first electric car for personal consumers, as well as entering into a partnership with Lithium Urban Technologies, India's largest electric car provider.
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Ford – shifting gears to steer its way out of trouble
Following its poor performance during Q4 2018, Ford defied Wall Street's expectations in the first quarter of 2019, posting improved profit margins on the back of strong truck and utility vehicle sales in North America (mirroring rival General Motors in this respect), which inflated the US auto company's share price by 7%.
Ford – shifting gears to steer its way out of trouble
The second and third quarters of 2019 however have been marred by $11 billion (£8.5bn)-worth of restructuring, rising warranty and incentive costs, slowing sales in China and costs resulting from a joint venture with India's Mahindra. Be that as it may, the firm's major shake-up could potentially pay dividends, so it isn't all doom and gloom. Plus, the Ford share price has increased by 12.5% compared to early January.
EDF – experiencing a meltdown
Last year was a difficult one for EDF but 2019 is proving to be even more challenging. In 2018 the French power company, which is majority state-owned, was Europe's largest utility firm by market cap. It has since been taken over by Italy's Enel, RWE, and others. The business's problems are numerous.
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EDF – experiencing a meltdown
Construction costs for its new nuclear Flamanville plant in northern France have tripled, and the project is already seven years late. Costs to build other reactors have also ballooned and maintenance costs are spiralling for the firm's existing plants, which have been beset by issues including wielding anomalies, forcing the closure of several. EDF's electricity network is in desperate need of an expensive upgrade while much-needed restructuring has been delayed. Unsurprisingly, EDF stock is down 34% compared to early January.
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Goldman Sachs – having a mixed year
Goldman Sachs continues to weather the multibillion-dollar Malaysian 1MDB scandal, which it became embroiled in back in 2013. Charges have been filed against 17 current and former directors while the Malaysian government recently rejected Goldman's compensation offer of just under $2 billion (£1.6bn). Aside from the scandal, which refuses to go away, the company is having a mixed year.
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Goldman Sachs – having a mixed year
Results in the first and second quarters of this year were better than anticipated but the investment bank fell short of Wall street estimates during the third quarter of the year mainly due to its holdings in poorly performing companies such as Uber, Tradeweb and Avantor. Confidence in new CEO David Solomon is strong however, and the company share price is up a very respectable 26.4% since early January.
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Bayer – lumbered with Monsanto's (alleged) poisoned chalice
Bayer acquired the much-loathed agrochemical firm Monsanto last year for $63 billion (£48.7bn) and inherited its problems to boot, including the slew of lawsuits surrounding the company's glyphosate-based weedkiller Roundup, which is allegedly causes cancer. To date, 42,700 plaintiffs are suing Bayer, impacting on the firm's bottom line and reputation in a significant way.
Read more about Monsanto and the people that took big companies to court and won
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Bayer – lumbered with Monsanto's (alleged) poisoned chalice
While Bayer's revenues rose in the third quarter as a result of a successful restructuring programme and strong performance in the company's pharmaceuticals and crop science divisions, overall profits are down 60% compared to the same period in 2018. Bayer stock has performed fairly well considering with the share price up 14.9% since early January.
Sears – fighting to stay in business
After a disastrous 2018 during which the ailing US retailer filed for bankrupt protection, shuttered hundreds more stores and suffered the humiliation of being delisted from the Nasdaq exchange, Sears has been fighting to stay in business in 2019. Sales declined 11.9% during the first quarter and fell by 3.9% in the second.
Sears – fighting to stay in business
Yet it's not all bad news. Sears emerged from bankruptcy in May and is currently working to reinvent itself as a more modest retailer based around smaller format stores and link-ups with the likes of Amazon. Nonetheless, the company share price at the time of writing is an embarrassing 25 cents compared to 47 cents at the start of the year, and is down from the heady heights of $42.95 in May 2015.
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BT – enduring profit-eroding costs
The accounting scandal in BT's Italian unit that was exposed in 2017 remains a major headache for the British telecoms firm with prosecutors in Milan recently pressing for the division along with three former executives to be brought to trial. On another note, the company is presently engaged in a wide-ranging restructuring programme in a bid to cut overheads.
BT – enduring profit-eroding costs
The restructuring plan, which has met with union resistance, involves the shedding of 13,000 jobs, as well as the closure of 90% of BT's UK offices. Though the cost-cutting programme is saving money, profits for the six-month period ending in September were unimpressive with BT blaming 5G spectrum fees, content costs, investment in fibre optic broadband, and more for the dip. Needless to say, the BT share price is down 15.3% since the start of 2019.
Tesco – triumphing against the odds
The threat of a no-deal Brexit, increased competition from budget retailers such as Aldi and Lidl, and a drop in consumer spending were the major threats facing British supermarket chain Tesco in 2019. Much to the relief of investors, the company has enjoyed a decent 10 months based on the latest half-year results, which were released in early October.
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Tesco – triumphing against the odds
Profits are up 12.6% and net debt has fallen. Much of the credit for the turnaround goes to outgoing chief executive Dave Lewis who oversaw Tesco's takeover of supplier Booker in 2017 and the rollout of budget chain Jack's, the firm's answer to the likes of Aldi and Lidl. Lewis, however, resigned in October stating that he felt that the turnaround plan he implemented in 2014 wsa now "complete". Tesco's successful year is mirrored in its share price, which has grown by 24.2% since early January.
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