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Despite NightmareLiner Problems $BA Kicks the Year Off With Record Orders and Backlog
“Boeing started the year ahead of its European rival Airbus, after clinching the industry’s top spot in 2012, with broadly higher orders and deliveries in January, data showed on Friday.
EADS unit Airbus said it had taken 140 orders during the month, or 121 after adjusting for cancellations, and also delivered 35 passenger jets to airline customers.
Boeing said on Thursday it had delivered 39 aircraft in January, beating Airbus despite a halt in deliveries of its 787 Dreamliner which has been grounded by battery safety concerns.
The U.S. company sold 145 aircraft between Jan. 1 and Feb. 5, the nearest comparable period for which data is available, and took no cancellations.
Both companies’ order books were unusually active for January as American Airlines won court permission to confirm large plane orders while in Chapter 11 bankruptcy protection.”
Comments »$MCD Same Store Sales Drop More Than Expected
“(Reuters) – McDonald’s Corp said on Friday that January sales at established hamburger restaurants around the world fell 1.9 percent, a steeper decline than analysts expected, as fast-food chains fight hard for diners.
McDonald’s warned last month that same-restaurant sales would be down. Analysts polled byConsensus Metrix had expected a decline of 1.1 percent.
Shares of McDonald’s, which had fallen earlier in the week, slipped 22 cents to $94.41 in premarket trading.
McDonald’s expected its sales and profit growth to be under pressure in the near term, as diners continue to spend cautiously due to lackluster economic growth in most major markets. At the same time, the leading fast food chain is also bumping up against strong results from a year ago, including a 6.7 percent gain in comparable sales in January 2012.
Comparable sales in Europe, McDonald’s top market, declined 2.1 percent last month, with weakness in countries such as Germany and France.
The United States, a close No. 2, posted a 0.9 percent gain, helped in part by the addition of the Grilled Onion Cheddar burger to the company’s Dollar Menu.
Asia/Pacific, Middle East and Africa (APMEA) turned in a 9.5 percent decline. McDonald’s cited issues such as continued weakness in Japan and in China the shift in the timing of the Chinese New Year.
Analysts expected Europe to be up almost 0.1 percent. They expected the United States to be down 0.3 percent and APMEA to be down 5.8 percent.
McDonald’s comparable sales track sales at all company-owned and franchised restaurants open for at least 13 months.”
Comments »$AAPL Issues Response to David Einhorn’s Suggestions
“$AAPL has issued a statement on its massive pile of cash.
The press release is a response to David Einhorn, who earlier today outlined a proposal for Apple to issue preferred stock as a way of leveraging its cash. In Einhorn’s proposal, he urged Apple investors to vote NO on an Apple proposal to prevent the issuance of preferred stock.
Apple’s cash is a source of consternation to many investors, who feel that Apple is hoarding its pile, and that the market isn’t properly valuing all that cash.
In Apple’s release the company says: We’ll evaluate Greenlight Capital’s proposal (Editors note: ha!) and nothing in the Apple proxy would foreclose the possibility of doing what Greenlight wanted. The release notes that management and the board of directors are in discussions about ways to return more cash to shareholders. The Greenlight proposal will be considered as part of that overall discussion.
Below the dotted line is the full release.
———————————————————————————
By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.
We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.
Apple’s management team and Board of Directors have been in active discussions…”
Comments »$YHOO Looks to Accelrate Revs Through $GOOG’s Ad Network
“Yahoo is counting on rival Google to help accelerate its revenue growth.
As part of a nonexclusive arrangement announced Wednesday, Yahoo’s website will begin drawing upon Google’s massive online advertising network to show marketing messages related to the content that’s being perused.
Google already distributes similar ads to thousands of websites, a service that has helped establish it as the Internet’s most prosperous company.
Yahoo has been struggling to attract more advertisers in recent years, even though more marketing budgets have been shifting to the Internet. The company’s revenue had fallen in three consecutive years before registering a small gain last year. Yahoo CEO Marissa Mayer, a longtime Google executive before being lured away nearly seven months ago, has pledged to produce more impressive growth in future years.
Google retains part of the revenue generated from the ads shown on its partners’ sites. The revenue split with Yahoo wasn’t specifically disclosed, but Google has previously said that website owners that display the kind of ads covered in this agreement usually get to keep 68 percent of the revenue.
Last year, Google’s ad sales on its partners’ sites totaled $12.5 billion. That amount includes ads shown next to the search results on other websites, a service it isn’t providing to Yahoo….”
Comments »David Einhorn Helps $AAPL To Gap Up on a Plan That Could Add $300+ to the Share Price
“…..Einhorn says Apple could create hundreds of billions worth of value:
For example, Apple could initially distribute to existing shareholders $50 billion of perpetual preferred stock, with a 4% annual cash dividend paid quarterly at preferential tax rates. Once a trading market is established and the market recognizes the attractiveness of a highly liquid, steady yielding instrument from an issuer backed by Apple’s unmatched balance sheet and valuable franchise, the Board could evaluate unlocking additional value by distributing additional perpetual preferred stock to existing shareholders. With this conservative action, Greenlight believes the Board could unlock hundreds of billions of dollars of latent shareholder value.
Assuming Apple retains its price to earnings multiple of 10x and the preferred stock yields 4%, our calculations show that every $50 billion of perpetual preferred stock that Apple distributes would unlock about $30 billion, or $32 per share in value. Greenlight believes that Apple has the capacity to ultimately distribute several hundred billion dollars of preferred, which would unlock hundreds of dollars of value per share. Further, Greenlight believes additional value may be realized when Apple’s price to earnings multiple expands, as the market appreciates a more shareholder friendly capital allocation policy….”
Comments »Gapping Up and Down This Morning
S&P May Face Massive Onslaught From States
“Standard & Poor’s Ratings Services could face a much higher legal bill than the $5 billion sought by the federal government as more and more states join the battle against the credit-ratings firm.
A raft of lawsuits this week from attorneys general from several states, including California and Iowa, is compounding S&P’s legal woes over its role during the financial crisis of 2008-2009.
On Tuesday, the Justice Department sued S&P for allegedly causing some banks and credit unions to lose $5 billion after relying on the company’s ratings of mortgage-linked securities.
However, the $5 billion claim, which S&P has dismissed as “meritless,” is only part of the legal battle being fought by the world’s largest credit-ratings firm by number of deals rated.
Thirteen states and the District of Columbia have followed in the Justice Department’s footsteps, filing separate lawsuits against S&P on Tuesday. The California attorney general alone is suing S&P for about $4 billion to recover funds for two of the country’s largest public pension funds, according to its lawsuit.
Other states, such as Colorado and Arkansas, are demanding S&P give back the revenue it earned on precrisis ratings of hundreds of securities. State prosecutors allege S&P presented its ratings as based on objective and independent analysis but actually were inflated to cater to the banks that helped arrange and sell the securities.
In a statement Wednesday, an S&P spokesman said “any allegations that we compromised our analytic integrity for business considerations are simply false.”
Not all of the states’ lawsuits specify the amount they are seeking. However, a 2011 Senate report pegged S&P’s revenue on mortgage-related securities at $2.3 billion from 2002 to 2007….”
Comments »$TGT Same Store Sales Beat Expectations at +3.1%
“MINNEAPOLIS (AP) — Discount retailer Target Corp. says Thursday that a key revenue measure rose 3.1 percent in January as shoppers bought holiday clearance merchandise.
Analysts had expected a 1.7 percent increase for the four weeks ended Jan. 26, according to Thomson Reuters.
The figure is based on revenue at stores opened at least a year and is considered an indicator of a retailer’s health because it excludes results from stores recently opened or closed.
Total revenue for the five weeks ended Feb. 2 were $5.97 billion, up 29.6 percent from a year ago.
In a statement, Gregg Steinhafel, chairman, president and CEO of the Minneapolis-based retailer says that customers continue to shop cautiously in the face of a slow economic recovery and new financial pressures like the recent payroll tax increase.”
Comments »$SD Allows CEO Wide Latitude on Oil and Gas Deals That Spark Conflict of Interest
“(Reuters) – SandRidge Energy Corp is giving its chief executive wide latitude to profit from personal oil-and-gas deals in ways that pose potential conflicts of interest with the company, according to a review of employment contracts and recent transactions.
SandRidge has lifted most restrictions on CEO Tom Ward’s ability to sell mineral rights or drill wells, through little-noticed changes to his employment agreement in 2011. (See Factbox.)
Before the changes, Ward was permitted to receive royalties from SandRidge, or jointly own wells with it, on land he had owned before joining the company in 2006. The 2011 agreement allows him to do deals with SandRidge competitors in the oil and gas business, and to do business with SandRidge on any land that he owns or acquires.
Ward started the independent energy producer in 2006 after leaving Chesapeake Energy Corp, which he co-founded with Chesapeake CEO Aubrey McClendon. At the two companies, both based in Oklahoma City, the CEOs have entwined their own finances with those of the publicly traded corporations they run. Last week, McClendon announced his resignation from Chesapeake after a year marked by a cash crunch and civil and criminal probes into his personal finances and other matters.
The new language in Ward’s employment contract allows “participation in outside operated oil andgas drilling” in areas not being pursued by the company. It also allows his “participation as a working interest owner in properties operated by the company” on land owned by Ward-related entities.
Taken together, the two privileges give Ward greater leeway to profit on private dealings.
According to land records reviewed by Reuters, a Ward-linked entity named 192 Investments LLC acquired mineral rights on thousands of acres in late 2011 in the Mississippi Lime shale formation in Kansas. The Ward-related company bought those mineral rights just months before SandRidge leased property in adjacent plots, the Kansas land records show.
Such deals could pose a potential conflict of interest. Buying personal mineral rights in land adjacent to acreage later bought by SandRidge could allow Ward to profit if SandRidge’s purchases help drive up values, for instance. SandRidge doesn’t disclose when its chief executive acquires new mineral rights in areas where it drills.
In 2012, the year after the employment contract was revised, royalties paid by SandRidge to TLW Land & Cattle – an entity in which Ward holds an ownership stake – rose by some $500,000 from the previous year to $1.4 million. TLW stands for Tom L. Ward.
It is unclear why the TLW royalties rose last year. Energy production simply could have increased at wells on land owned by TLW, increasing the royalties as well. The 2011 changes in Ward’s contract could also have enabled him to sell more mineral rights to the company….”
Comments »$QCOM Goes With Taiwan Over The U.S.
“WASHINGTON (MarketWatch) — When Qualcomm looked to build a multi-billion-dollar chipmaking plant several years ago, a bunch of countries offered incentives to win over the San Diego-based company.
The United States?
“Nothing,” said Greg Farmer, the company’s vice president of government affairs.
Qualcomm QCOM -0.06% , whose chips are used in millions of cell phones, built the plant in Taiwan instead. The U.S. lost out on a number of jobs.
The failure of the U.S. to exert its weight in the fierce global competition for business is all too common, executives say. The federal government does very little to promote business development in the U.S. — either by domestic or foreign companies — and some of its policies in areas such as corporate taxes and immigration drive entrepreneurs away….”
Comments »$FB to Develop App to Track You 24 7
“Facebook already knows who all of your friends are, when you broke up with your last girlfriend/boyfriend and what you did or wish you didn’t do on spring break last year. But if that wasn’t enough, Facebook may soon be tracking you at all times.
Bloomberg reported on Mondaythat Facebook is “developing a smartphone application that will track the location of users … even when the program isn’t open on a handset.” The purpose of such an app is to help Facebookers find friends when they’re out and about. Such an app,Bloomberg said, could be used to sell ads based off of where users go. It’s something that will be of huge value to advertisers, but may not go down easy with users for obvious privacy reasons….”
Comments »Pinterest Looks For Another Round of Financing, Eval of $2 Billion
“Online scrapbook Pinterest is trying to raise a new round of funding that would give it a valuation of $2 billion to $2.5 billion, the Wall Street Journal reported on Tuesday.
The company declined to comment on any fundraising efforts.
The talks are fluid with no investment finalized, the Journal said in its report.
(Read More: Pinterest Opens the Business Floodgates … Finally)
Pinterest, which allows users to create online bulletin boards based on various themes such as travel, decorating, or sports, is part of a group of Internet companies that offer twists on Internet networking among various groups. They typically have little discernible profit or revenue, but have landed some outsized investments from venture capitalists.
They include private social-network Path, which raised $30 million at a valuation of $250 million last year; question-and-answer site Quora, which raised $50 million at a $400 million valuation last year; and microblogging service Twitter, which raised $400 million in new funding and another $400 million to buy out existing investors at an $8 billion valuation in 2011….”
Comments »Gapping up and Down This Morning
$RBS Will Face Fines of $625 Million or More for Interest Rate Manipulation
“Royal Bank of Scotland Group Plc is set to pay about 400 million pounds ($627 million) in fines for manipulating interest rates, the second-largest penalty imposed in a global regulatory probe, two people with knowledge of the matter said.
An announcement will be made today, said the people, who requested anonymity because they weren’t authorized to speak publicly. An RBS unit will plead guilty to criminal charges as part of a deal with the U.S. Justice Department, a person familiar with the talks said. It’s the third fine to result from a global probe into whether lenders rigged the London interbank offered rate, or Libor. Investment banking chief John Houricanalso was expected to resign, the people said.
The penalty is the biggest blow to Chief Executive OfficerStephen Hester’s attempt to overhaul the Edinburgh-based bank after it took 45.5 billion pounds in a 2008 taxpayer bailout, the largest in history. The fine would exceed the 290 million pounds Barclays Plc paid in June, and be second only to the $1.5 billion UBS AG paid in December. Chancellor of the Exchequer George Osborne said this week that RBS should pay the U.S. fines by clawing back bonuses from its investment bankers.
‘Taxpayer Money’…”
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$UBS Experiments With Bonds as a Bonus to Lower Risk
“UBS AG’s plan to pay part of top employees’ bonuses in bonds that can be wiped out will give traders and bankers an unfamiliar incentive: limit risk.
UBS will compensate some workers with contingent capital bonds, which can be written off if the bank’s common equity ratio falls below 7 percent or the company needs a bailout, the Zurich-based firm said yesterday.
The shift satisfies calls by regulators for debt-based pay and helps UBS meet stricter capital requirements, while risking defections among top performers. It may also go beyond pay changes at other companies in tying employees’ rewards to the bank’s safety as UBS exits some businesses and tries to move beyond recent trading losses and low returns.
“It’s hard for people to step out of their worlds and think macro about these institutions,” said Sallie Krawcheck, a former Bank of America Corp. executive who called for bankers to be paid with debt in a Harvard Business Review article last year. “While a trader, an investment banker or a financial adviser might not think about UBS’s leverage ratio, they will think about the message they get from this about the risk tolerance of the company.”
About 500 million francs ($551 million) of bonuses will be paid in contingent capital bonds, which vest after five years. The securities will account for 40 percent of bonuses for executive board members and 30 percent for all other employees with total compensation of more than $250,000.
‘Paradigm Shift’…”
Comments »$GS On the Matter of New Tax Policies: “Each % Point Rise in Effective Tax Rate Would Lower S&P 500 ROE by 22 bp and EPS by $1.50
“Following today’s sequester-delay-seeking, tax-hiking, close-the-loophole speech by the President, it would appear that fiscal policy debates will be balanced a little more to raising effective rates on corporates (as opposed to the ‘statutory’ rate so many discuss). The US has the second highest global ‘statutory’ tax rate but less than 10% of S&P 500 firms have paid this rate over the last decade. Somewhat shockingly, since 1975,taxes have had the largest cumulative impact on S&P 500 ROE as effective rates fell from 44% to 30%. They estimate each percentage point rise in effective tax rate would lower S&P 500 ROE by 22 bp and EPS by $1.50, all else equal. Closing all the loopholes would smash year-end 2013 expectations from Goldman’s 1575 to around 1300 with Staples and Tech the hardest hit. With the ‘market’ the only policy tool left, it would seem not even the Fed could monetarily save us from this fiscally fubar action.
Via Goldman Sachs,
Political dialogue in Washington, D.C. has turned squarely to the nation’s fiscal health. The temporary resolution of the ‘fiscal cliff’ focused mainly on raising revenues through changes to personal tax rates, but delayed decision-making deadlines on the sequester and the long-term path of Federal spending.
Corporate tax rates will likely receive scrutiny as the debate continues. Corporate taxes contributed 8% of 2012 federal revenues. A recent Congressional Budget Office report suggested that policy adjustments such as eliminating foreign tax deferrals could increase US tax revenues by as much as $100 billion over the next decade….”
Comments »$BBRY Z10 Said to be Selling Like Hot Cakes
“The company formerly known as RIM is holding its first developer event in Europe since launching its new BlackBerry 10 platform last Wednesday. Speaking at the BlackBerry Jam event in Amsterdam, UK MD Stephen Bates said the launch of the first BB10 device —the full touch Z10 — has exceeded expectations, with some U.K. retailers selling out a few days after launch. Bates did not, however, put any concrete figures on early sales. The U.K. was the first market to get the Z10 but the device will launch in Canadian today, and additional European markets this week, including France, Germany, Switzerland, Spain and the Netherlands.
“The response we’ve seen exceeded all of our launch partners’ expectations. Customers are choosing to buy the BlackBerry Z10 in large numbers,” said Bates. “In fact some of our partners have told us that they sold out over the weekend in some of their key retail locations.
“The partners’ call centres are also flooded with calls, as people phone to ask for more information about the device, and also where and how to buy it.”
Yesterday, AllthingsD reported on channel checks conducted by Jefferies & Co. – quoting Jefferies analyst Peter Misek reporting lines outside a number of U.K. retailers selling the device, and describing sell-outs of the white Z10 as widespread.
Asked about early Z10 sales, U.K. carrier EE also declined to share specific figures but told TechCrunch: “We’re really happy with the interest so far.”
Historically, the U.K. has been a strong market for BlackBerry — especially with the youth sector. Orange commissioned research last November suggested close to half of U.K. teens still owned a BlackBerry. But of course the company needs to win over more than just the youth market with BB10 if it is to turn the platform into a sustainable mobile ecosystem and keep developers working for it generating the apps that are, in turn, needed to attract and grow the user-base….”
Comments »$AMZN Announces ‘Amazon Coins’, Virtual Currency for Apps
“Amazon has just announced a new virtual currency for Kindle Fire owners to use on in-app purchases, app purchases, etc. in the Amazon Appstore.
The service will launch in May, at which point Amazon will be giving away tens of millions of dollars worth of Amazon coins to customers. Users then have the choice of paying for apps or in-app purchases with their credit cards or with Amazon coins.
Developers who already have their app in the Appstore don’t need to do anything to leverage the Amazon Coin system, but if new developers would like to get in on the virtual currency they must have their app approved by the Appstore by April 25.
The idea is to take advantage of what Amazon calls already-high conversion rates from Kindle Fire users on the Amazon platform and give users a new way to spend money. Amazon has been giving developers more options to generate revenue in the Appstore, most recently with the introduction of in-app purchases….”
Comments »Flu Outbreak Helps $WAG to Crush January Same Store Sales
“Walgreen Co. WAG +3.58% posted its first monthly same-store sales gain in a year in January, aided by an active flu season and firmer prescription orders stemming from the resolution of a contract dispute with a major pharmacy-benefits manager.
The 3.7% increase in same-store sales in January came above the projected 1.5% increase, according to analysts surveyed by Thomson Reuters.
Results last year were hurt by a rate contract dispute with pharmacy-benefits manager Express Scripts Holding Co. ESRX +1.64% that led millions of customers to transfer their prescriptions to rival pharmacies. But since Walgreen and Express Scripts entered a new multiyear agreement that began in September, millions have returned to the fold.
The loss of the Express Scripts customers, as well as higher demand for lower-priced generic drugs, hurt Walgreen’s same-store sales throughout 2012. In 2012, January’s same-store sales dropped 4.6%.
Walgreen has also successfully courted some customers it had lost in the dispute and hopes to win back more, gains executives expect will be reflected in many of 2013’s monthly sales reports. In January, pharmacy sales grew 8.7% and same-store pharmacy sales increased 6.2%, compared with an expected 2.4% jump. Prescriptions filled at comparable stores soared 14%.
Overall, total sales in January grew 6.3% to $6.15 billion from a year ago. Front-end sales were up 1.3%, while same-store front-end sales slid 0.4%, compared with expectations of a 0.5% drop….”
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