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TECHNOLOGY: NYSE ANTENNAS SPARK BACKLASH FROM HIGH-FREQUENCY TRADERS B

BUSINESS&FINANCE

BUSINESS

Adele, auto parts

and massages: Bond

deals dress up unusual

assetsB

FINANCE

Where you went

to college

maymatteronyour

loan applicationB

mance is improving after a

prolonged slump.

CBS, meanwhile, said its

revenue jumped 9.9% to $3.

billion, helped by growing

subscriptions from the com-

pany’s direct-to-consumer

streaming services—anchored

by CBS All Access and Show-

time.

Viacom and CBS are in ad-

vanced talks to merge and re-

cently reached a working

agreement on the manage-

ment team for the combined

company, The Wall Street

Journal reported last week. A

deal could be announced be-

fore the end of the month, ac-

cording to people familiar

with the matter.

Neither company addressed

the possibility of a merger on

their earnings calls.

Viacom Chief Executive Bob

Bakish said the advertising

growth marked a significant

Please turn to page B

ViacomInc. andCBSCorp.

both reported a rise in reve-

nue for the latest quarter, as

the sister companies are

locked in advanced merger ne-

gotiations.

Viacom said its third-quar-

ter revenue rose 3.7% to $3.

billion, boosted in part by its

first uptick in domestic adver-

tising in 20 quarters—a sign

that the cable giant’s perfor-

BYBENJAMINMULLIN

Viacom, CBS Boost Revenue

As They Pursue Merger Pact

S&P2938.09À1.88% S&PFINÀ1.66% S&PITÀ2.39% DJ TRANSÀ1.72% WSJ$IDXg0.14% LIBOR3M 2.181 NIKKEI (Midday)20743.35À0.73% See more at WSJ.com/Markets

booked charges reducing the

values of its assets by $1.

billion for the first six months

of its fiscal year. That included

$744 million related to busi-

nesses including international

divisions and its U.S. refriger-

ated-foods unit, along with

$474 million in declining value

reflecting the company’s lower

stock price.

“We’ve been too focused on

the present and literally on

firefighting,” Chief Executive

Miguel Patricio told investors

on a call. “We need to work on

our competencies for the fu-

ture.”

Kraft Heinz’s shares fell

nearly 9% to $28.22. The stock

is down 34% this year.

Food makers face enor-

mous pressure to improve

their products and add brands

as consumers gravitate toward

foods they perceive as fresher

and healthier. General Mills

Inc., Kellogg Co. and Campbell

Soup Co. are some of the com-

panies that have seen sales

suffer in recent years as cus-

tomers eschew their cereals,

soups and other packaged

foods. They have also been af-

fected by competition from

private-label products and

higher costs for ingredients

and other inputs.

Kraft Heinz, one of the

world’s largest packaged-food

makers, has been hit harder

than most. Some former em-

ployees and suppliers say the

company’s cost-cutting drive

left well-known brands too di-

minished to compete. Kraft

Heinz also hasn’t acquired

smaller brands more focused

on healthfulness or natural in-

gredients or updated its prod-

ucts to the same degree as

some competitors.

Kraft Heinz in February

wrote down the value of its

Oscar Mayer and Kraft Heinz

brands by $15.4 billion and

slashed its dividend. The food

company said in June that

Velveeta, Cool Whip, A1 steak

sauce and many other brands

could also face downward re-

visions if sales continue to de-

teriorate. The maker of Oscar

Mayer hot dogs, Heinz ketchup

and Kraft macaroni and cheese

said its net sales fell 5% in the

first half, compared with the

first two quarters of 2018 to

$12.37 billion. Organic sales,

which exclude currency fluctu-

ations and the impact of deals,

dropped 2%.

Weaker sales in the U.S. re-

flected lower prices that Kraft

Heinz implemented for some

products to gain market share

and reflect lower prices for

some ingredients, including

nuts and coffee, the company

said.

Other food makers, includ-

ing Mondelez International

Inc. and Hershey Co., posted

strong sales for the latest

quarter after raising prices.

Mr. Patricio said the com-

pany hasn’t done enough to

advertise its brands to poten-

tial new consumers, such as

Hispanic customers.

It also needs to do more to

Please turn to page B

Kraft HeinzCo. reported
falling sales and wrote down
the value of its brands for the
second time in six months, as
the food maker struggles to
improve its products to satisfy
shifting consumer tastes.
Chicago-based Kraft Heinz
said on Thursday that it had

BYHEATHERHADDON
ANDMICAHMAIDENBERG

Kraft Heinz Marks Down Brands Again

Shares fall 9% as CEO

says company has

been too focused on

present, ‘firefighting’

 Heard on Street: Kraft-Heinz

brand icons looking stale... B

when uncertainty among video-

streaming providers leads peo-

ple to subscribe to multiple ser-

vices. “Our whole business is

based on the belief that TV will

move to streaming,” Roku Chief

Executive Anthony Wood said in

an interview.

Still, Roku has had struggles:

It is no longer developing a pre-

viously announced voice assis-

tant, and it has been slow to roll

out an ambitious whole-home

entertainment platform. Depen-

dence on viewer data could hurt

its ad business amid new con-

sumer-privacy regulations, and

it has yet to make big moves

outside the U.S. As the company

figures out how to expand glob-

ally, its frenemies—particularly

Amazon—could see it as a big-

ger threat.

“I think a few years ago we

would have said [Roku’s] big

downfall would be if it doesn’t

evolve,” said Michael Greeson,

president of TDG Research. “It

overcame that and made

smart decisions.”

What Roku brings to the liv-

Please turn to page B

RokuInc. is tiny compared
with the tech and telecom gi-
ants spending billions to com-
pete in the streaming-video
world, but its stock has more
than tripled since Christmas
on the growing popularity of
internet videos.
The Los Gatos, Calif., com-
pany, which started making
set-top boxes more than a de-
cade ago to stream Netflix
movies, today has numerous
content partners. The operat-
ing system that Roku licenses
to smart-TV makers recently
surpassed Samsung’s as the
country’s top-selling smart-
TV platform, according to re-
search firm Strategy Analyt-
ics. And Roku’s media-
streaming sticks and boxes
regularly outsell players from
AppleInc.,Alphabet Inc.’s
Google andAmazon.comInc.,
Roku’s biggest competitor in
the U.S.
But Roku’s success isn’t
based on hardware sales. It
says it doesn’t really make any
money on sales of smart TVs
from its licensees, which in-
clude Hisense, TCL and Sharp.
It makes money when people
start watching.
Roku’s greatest source of
revenue since 2018 has been
advertising—in its partners’
ad-supported videos, on its
home screen and even on the
buttons of its remote.
Roku shares shot up more
than 20% Thursday following
its quarterly earnings report
late Wednesday that beat ex-
pectations, including $250.
million in revenue, 30.5 mil-
lion active accounts and a net
loss of $9.3 million.
Roku finds itself in a prime
position at a time when compa-
nies are increasingly looking to
advertise on platforms like Roku
instead of on cable TV—and

BYABIGAILSUMMERVILLE

Ad-Rich Roku Fends Off Streaming Giants

The Dow Jones Industrial

Average climbed 371 points and

investors sold safer assets such

as bonds and gold after China’s

latest currency move eased

concerns that its trade fight

with the U.S. was about to

morph into an all-out currency

war.

Stocks advanced globally af-

ter China’s central bank de-

cided to fix the midpoint for

onshore yuan trading at a less

aggressive level than analysts

had expected. The move was

perceived as a sign the country

is avoiding escalating tensions

with the U.S., at least for now.

That pushed major indexes,

including the Dow industrials

and Stoxx Europe 600, toward

their biggest gains since June,

while benchmarks in Asia

snapped multiday losing

streaks.

“Investors’ new daily ritual

will be watching the daily fixed

rate on the yuan,” said Keith

Lerner, chief market strategist

at SunTrust Advisory Services.

China may opt to avoid

weakening the yuan in the near

term, Mr. Lerner said. But in-

vestors should continue moni-

toring the situation in case the

yuan resumes its depreciation,

an event that would likely

spark a fresh bout of volatility.

The yuan’s moves offer a

“glimpse into the thinking of

China” on trade and relations

with the U.S., he added.

The Dow industrials rose

371.12 points, or 1.4%, to

26378.19, as all 30 stocks in the

Please turn to page B

BYMICHAELWURSTHORN

Dow Soars

As Beijing

Allays Fear

On Yuan

INSIDE

Rising subscriptions to streaming services helped CBS revenue climb 9.9% in the most recent quarter.

KEVIN ABELE/ICON SMI/GETTY IMAGES

STREETWISE|By James Mackintosh

It Is Hard to Find Safety

From a Market Storm

The bond

market is

holding up a

giant sign in

capital letters

warning of

trouble ahead. Investors are

on edge. The next big market

scare might not be far away,

but is hard to prepare for.

This week’s bout of vola-

tility highlighted some odd

breaks from what normally

counts as a haven asset: The

China-driven selloff was dif-

ferent from the usual market

freak-out, as the dollar didn’t

prove immune to fear. Mean-

while, high-quality stocks

with strong balance sheets

were punished as the outlook

worsened.

The normal pattern of

safety has worked for the

traditional trio of safety: The

yen, Swiss franc and gold

have all risen strongly, with

gold up 17% just since the

start of May.

But typically when inves-

tors flee for the hills, they

think of the dollar as a place

of safety behind only gold,

the franc and yen.

Instead, the euro proved

almost as safe as gold on

Monday and has risen almost

every day since President

Trump kicked off the latest

fears with surprise new tar-

iffs last week. Against signif-

icant developed currencies,

the dollar managed to rise

against only three on Mon-

day, all closely linked either

to China, as with the Austra-

lian and New Zealand dollars,

or to the plummeting oil

price, as with Norway’s

krone.

So has the dollar lost its

haven status? In one sense,

clearly not. The greenback

proved its worth against

emerging-market currencies,

rising against all of any note

following China’s decision to

let the yuan fall through 7 to

the dollar for the first time.

But against the euro, the

dollar’s position is much less

clear.

Dollar bulls might argue

that the euro benefited Mon-

day only because traders

were rushing to close out

bets against Europe’s com-

mon currency amid the unex-

pected volatility.

Negative interest rates in

Europe made it attractive to

Please turn to page B

Roku

Samsung

Vizio

LG

Google

Amazon

Other

33%

23

16

12

9

2

5

Roku

Amazon

Apple

Google

Other

39%

28

16

13

4

Althoughafractionofthesizeofcompaniesthatoffercompeting

streaming-videodevices,Roku’splayersaretopsellers.

Share-priceandindexperformance

sinceRoku’sIPO

Roku

S&P

*Sales volume †Includes advertising, subscription revenue sharing and licensing fees from smart-TV makers **Sale of devices

Note: Market cap as of Aug. 8

Sources: FactSet (market cap, performance); Strategy Analytics (sales); the company (revenue)

Roku’srevenue,bytype

Player**

Platform†

ShareofU.S.smart-TVOSplatform

sales,1Q2019*

ShareofU.S.streaming-media

boxandsticksales,1Q2019*

Note: 2019 data

through 2Q

Marketcapitalization

$

0

200

400

600

million

2015 ’16 ’17 ’18 ’

800

0

200

400

600

%

2017 ’18 ’

0

Amazoncom

   

Apple





Alphabet

$8billion

Roku