Bleak Report For IMS Health
April 16, 2008
The firm IMS Health has released information reflecting the state of the economy. The company participates in market research for drug and health care companies. However, IMS Health said that their 2008 first quarter profit was reduced by thirty-one percent, as compared to this time last year.
According to economic analysts, the company made about $59.2 US million, whereas last year it was earning $85.6 US million. This translates into a share value in the first quarter of 2008 equal to thrity-two cents, compared with a previous value of forty-three cents last year.
Only Three Year Refund For Mining Companies
April 15, 2008
In 1978, a tax on coal was placed, but this decision was vetoed within the Supreme Court about twenty years later. It was found that at least ten percent of the coal was being exported. As a result, coal exported to international countries could not be properly taxed.
However some of the mining companies continued to pay a coal tax, even after the tax was overturned. A lot of this companies were small businesses that did not keep themselves properly informed about the industry laws.
When the minin companies realised they were still pay taxes, they filed a lawsuit under the Tucker Act to dispute their right to claim back a refund for the past six years. The judge handling the case, however, decided against their six year claim and only granted the companies a three year refund. He stated that they were not eligible under the Tucker Act.
Chevron Posts Higher Earnings
April 9, 2008
Despite producing less oil this quarter than in the last, Chevron Corp. announced yesterday that they are expecting net income for the first quarter to be higher than earnings for the last year’s fourth quarter.
Production and exploration are being hailed as the reason behind the mild upward movement in revenues, along with higher prices on both oil and natural gas.
The interim quarterly report of Chevron closed at $89.95, which has led the company’s shares up by 0.7%.
Revenue Boost For Pall Corp
March 31, 2008
In a report issued late on Friday, Pall Corp., stated that their second quarter net income has seen a dramatic boost to reach $48 million, 0.39c per share, from $44.3 million, 0.36c per share this time last year.
These figures would be, if they did not take into account any financial commitments associated with the company’s current restructuring, 0.46c per share. This time last year, those figures would have been 0.35c per share.
First quarter revenues were $625.8 million, well up from last year’s fourth quarter earnings of $544.9 million.
Reduction In 1Q Profits For J.C. Penney
March 28, 2008
Friday saw J.C. Penney Co. announce a new, more conservative, estimate for their first quarter profits. The company revised their earlier estimate of between 0.75c and 0.80c per share, to more like 0.50c per share.
According the the statement released by Penney, the Easter holiday period brought less than expected sales, which the company predicts will continue throughout March with declines in the low double-digits for same-store sales. This will in turn lead to high single-digit diminution for the first quarter of this year, against earlier predictions of low single-digit reductions for both phases.
The CEO and Chairman of J.C. Penney, Myron Ullman, said that confidence in the company by consumers is at a low not seen for many years. Though analysts from FactSet Research had forecasted the company to bring in 0.75c per share first quarter earnings, Penney’s stocks have fallen in premarket trading by 13%, now selling at $34.90.
Delta and Northwest Resume Talks
March 28, 2008
Delta and Northwest Airlines have resumed talk again in regards to finding a suitable deal to merge the two major airline companies. However, this merger is taking place without first going through their pilots.
It is customary for airlines in merger talks to first have the union of pilots for both airlines “iron out” a deal that would be suitable for them for the merger to take place. This was done in the beginning, but the two groups were not able to come to an agreement. In this deal, the pilot were slated to get pay raises.
Instead Delta and Northwest are approaching the situation from a different angle, and if a deal is formulated, the expected pay raises for their pilots will not occur.
JC Penney Release First Quarter Results
March 27, 2008
The latest results released by J.C. Penney shows that the economy is really in a poor state. As many people within the general public loose faith within the economic situation, and with the increasing price of gasoline, the latest figures released by JC Penney confirm what analysts are have stated.
JC Penney is a large retailer that is one of the main stores in numerous malls across the United States. However, they published dismal first quarter profits. These profits were at least 33% less than predicted by economic analysts. CEO Myron Ullman had this to say,”Consumer confidence is at a multi-year low. While tax refunds might help for a while, we expect the continuation of a difficult environment over the course of 2008.”
Seven Of United Airlines 747s Have Altitude Indicators Reset
March 21, 2008
United Airlines released a formal response today, to rumors that some of their planes had been grounded due to technical issues. U.A. stated that the planes are currently having their altitude indicators reset, as the company had just become aware that the test equipment was overdue for re-calibration.
No issues have been found on any of the seven 747s which are having their altitude indicators reset, and the downtime for the planes in question has nothing to do with an air worthiness directive.
The Federal Aviation Administration announced earlier this week that they are raising their involvement in overseeing maintenance records of airline operations, both in and out of the country. This comes just a week after Southwest Airlines was fined $10.2 million by the FAA, for not checking for cracks in the bodies of their planes often enough.
A statement has been issued by the Teamsters Union, who are looking to also represent mechanics from U.A., in which they say that this new report by the FAA not only indicates the need for higher regulation of aircraft repairs within the country, but also serves to emphasize the importance of overseeing repairs at facilities oversees.
Reorganization Of EBay Leads To 125 Job Cuts
March 21, 2008
The online edition of The Wall Street Journal announced today that EBay is planning to cut 125 jobs as a part of the reorganization enacted by new CEO, John Donahoe.
The aim of the modification is to move both people and resources to parts of the world that are crucial to modernizing the online marketplace mogul. Currently Ebay employs 15,500 employees worldwide, and the cut of 125 jobs is less than 1% of employees.
Contaminant In Baxter Heparin Identified By FDA
March 19, 2008
The contaminant in Baxter International Inc’s blood thinning medication, heparin, which has led to the deaths of 19 people, has been identified by The Food and Drug Administration in the U.S.
The harmful addition to the medication has been identified as a chemical compound, quite similar to the intended drug, heparin, but is actually oversulfated chondroitin sulfate, which has never been approved by either the FDA or any other similar body internationally.
Sprint And China Telecom To Connect Internet Portals
March 19, 2008
A statement was released by Sprint, a wireless communications company, last Wednesday, in which they have announced plans between themselves and China Telecom Corp. to interconnect their internet portals to form a virtual private network.
Within the terms of the agreement is the establishment of multiple, redundant network-to-network interconnection agreements for Sprint and China Telecom in the Asia-Pacific region.
Sprint said that this partnership will give them the opportunity to extend their current capabilities, whilst getting a foot in the door with China, and giving their customers a broader range of capabilities which come with China Telecom’s Next Convergence Network and will allow Sprint to cover more than 200 cities and 600 routers throughout China.
The statement did not include any specifics regarding the finances surrounding the deal.
Dillard’s Receive Director Nomination Proposal
March 19, 2008
It has officially been confirmed by Dillard’s Inc., on Wednesday, that they have indeed received notice from two investment firms, Barington Capital Group LP and Clinton Group Inc., who are seeking to nominate four people to Dillard’s board which will be convening at the upcoming annual shareholders meeting.
Dillard’s released a statement saying that the notice they have received will be sent on to the Executive Committee of the Company’s Board of Directors for a review, and that at this stage nothing is required of stockholders.
This comes on the back of a statement being released by Barington Capital in which they say their intention to nominate directors is due to their overriding lack in confidence in the ability of those on Dillard’s board to generate increased shareholder value.
HR Head From Brocade Sentenced
March 19, 2008
The former head of human resources for Brocade Communications Systems Inc., Stephanie Jensen, was sentenced on Wednesday to 4 months prison and was also fined $1.25 million for collaborating with former CEO of Brocade, Gregory Reyes, in a scheme to backdate stock options.
Last December Jensen was convicted of both conspiracy and falsifying corporate records.
Reyes was sentenced in January to 21 months in prison and he has been fined $15 million for his part in the backdating scheme.
CNet May Appeal Court Ruling
March 14, 2008
In a statement released by CNet Networks Inc. last Thursday, the company is considering appealing a court ruling which has meant that a new board will be nominated for the company by a group of activists investors.
The activist group is comprised of Jana Partners LLC and Spark Capital.
In the statement, CNet - which is an online media company - said that they are reviewing the decision and will consider an appeal as they do not think that it would be in the best interest of the company and shareholders, for a proxy battle - which would be highly disruptive and costly - to take place at this stage. The ruling also does not comply with the by-laws of the company.
Charge Leads To Loss For Liz Claiborne
March 14, 2008
Liz Claiborne Inc. have reported a loss of $435.7 million, or $4.55 a share for the fourth-quarter - as compared to last years $73.2 million, or 71 cents a share - due to a high Partnered Brands impairment charge.
If it were not for the $451 million charge, Liz Claiborne Inc. would have brought in a profit of 0.20c per share in the fourth quarter. Revenue was slightly below last years, with $1.21 billion instead of $1.25 billion.
Liz Claiborne Inc. is sticking to its predicted profits of $1.50 to $1.70 a share for this year.
No Vacancy For SCA
March 14, 2008
Security Capital Assurance (SCA) have reported a $1.2 billion net loss in the fourth-quarter, leading the bond insurer to announce they will not be writing up any new business.
Other repercussions of the loss is that the company will not be paying dividends on either of their quarterly common stock or semi-annual A preference shares. Though the company reported the possibility earlier this year, at this stage, company auditors wont be attaching any going concern notices on their annual 10-K filing statements.
SCA’s report outlined the loss for the last quarter as $678.1 million or $10.57 a share; as compared to the fourth quarter in 2006 of $18.67 a share versus a net income of $35.8 million which or 56 cents a share.
Companies sued for import of toxic toothpaste
March 12, 2008
Criminal charges have been charged against a company in Los Angeles on the 6th, with the charge that they have been importing toxic toothpastes. The charge against the company is that they brought in and distributed almost 90,000 tubes of china-made toothpaste, which is believed to have poisonous substances. The charge was also against the wholesaler who distributed the toothpaste amongst the local stores. The news was let out by the city attorney of Los Angeles Rocky Delgadillo.
The company known as Selective Imports Corp. is the one against which the criminal charge has been filed. The company, it has been said in the file that, sold toothpastes which has in it Diethylene Glycol on a nationwide basis throughout the period of December 2005 to may 2007. Vernon Sales Inc. is also charged with the crime of buying these toothpastes and reselling them to numerous stores in the Los Angeles area.
According to many chemical experts the chemical Diethylene glycol is usually used as a solvent or as constituent in antifreeze. The Chinese manufacturers of the toothpaste is said to have used this chemical as an alternative to glycerin which is far more expensive than DEG. Glycerin is generally used in toothpastes to make it thicker. However DEG is a dangerous chemical and will cause damage to the kidney as well as the liver if there is prolonged exposure to the chemical.
There are 14 total criminal charges against the Vernon Sales and its officials for the selling, receiving and delivering of an adulterated drug. The president and the vice president of Selective Imports have also been charged with the selling, receiving and delivering of a product containing DEG. The Supervising deputy City Attorney said that the companies will be responsible for the distribution and import of the product as the companies in the nation are liable to make sure that the products they sell meet the safety standards. He went on to say that it would not matter even if the companies were unaware of the fact that the toothpastes were containing harmful toxics. The misconduct charges against the companies, which were charged on the 3rd, carry with it a penalty of a year of imprisonment as well as a $1,000 fine.
The selective imports vice president said that he was totally shocked by the filing as his company had been completely cooperative with the FDA in the destruction of all the products which had been alleged to have had toxic chemicals in them. He acknowledged the fact that the toothpastes might not have been of superior quality. But he pressed on the point that his company had not intention whatsoever to hurt anyone intentionally.
As a result of the suit that has been file the reputation of china as a reliable exporter ahs taken a hit. The country has been taking a lot of flak in the recent few years as a lot of their products which includes toothpastes, pet food, and lead toys have been recalled as they were either below the required standards or were having harmful substances in them.
Google shares recuperates slightly
February 28, 2008
On the 27th of February the Google shares were able to recover a bit after almost three days of massive selling. The company was able to do so as a result of the support of some analysts in the internet field. Some days back a report had come out saying that the ‘Pay-per-click’ advertising sector of the company is slowing down a bit. However the analysts of the field came to the rescue of the company to suggest that nothing of that sort is happening.
Throughout the year the Google shares has been on quite a slide. After starting the current year at a stock value near the $700 mark it has been falling steadily. By now it has lost almost one by third of that value. The slide was a bit too much in the last few days as it came down by almost 8 percent in the last couple of days. The main reason for this sudden drop was the report that comScore let out, which said that the growth of paid clicks that was happening in the Google supported site was declining. The growth rate is calculated by the number of times a Web user will click on an advertisement supported link.
Since most of the websites make a heavy chunk of revenue in this fashion, the news came out as a blow to the company. Just like any other Google also got a large amount of its revenue from these ‘paid clicks’. As the report came out saying that these clicks were reducing it led to worries amongst the investors that the company would be a victim of the economic slowdown if the consumers decided to put a check on their spending.
Many analysts came in defense of the internet giant as the report came out. Many of them admitted that the escalation of the company’s paid search had to slow down over a period of time. But they made it very clear that the company will not be affected by the present macroeconomic conditions that exist in the society now. Many believe that such things will in the least way affect the paid clicks of the company.
As an explanation to the report the company executives said that this was only a short term phenomenon that was happening and as a result of improved technology Google has implemented to make sure that accidental clicks by the users were kept to a minimum. This they believe would result in reduced revenues for a short period of time. This was the explanation the company used to justify the drop in the number of paid clicks as it came out with its fourth quarter earning report.
The shares of the Google based in Mountain View, California rose by $8.67 which is almost 1.9 percent to finish on the 27th at $472.86. This was the first time in three days that the shares increased. The stocks however are still at a very low level as compared to where it was one year back.
Chairman of American Express gets huge pay increase
February 26, 2008
The chief executive and chairman of the American Express Co. received a very huge boost in pay for the year 2007. On the 25th of February it was announced that Kenneth l. Chenault is getting a compensation which is approximated at a value of $53.2 million in the year 2007. This amount is almost twice the amount he got in the previous year. The news was let out in a regulatory filing on the 25th of February.
The main reason for him getting this big increase is because of a very high rise in the stock and options grant the American Express gave him. Chenault who is only 56 got an enormous amount of $42.8 million as stock awards for his performance in the year 2007. Apart from this he also got a special incentive stock option grant. This is way more than what he had got in the previous year in the form of stock awards. He had got only $16.9 million in 2006 as stock awards.
American Express also increased the base salary of Chenault in the year 2007 by an incredible figure of 13 percent to bring it to $1.24 million. Last year his base salary was only $1.10 million. Apart from the huge increase in base salary the company also gave him $6.5 million as bonus. He had received the same amount in the previous year as well.
He also got compensation in the range of $1.04 million for the year 2007. This amount however covers perquisites like a home security system worth $126,992, $323,884 for the personal use of the company plane as well as $102,601 for the personal use of company owned cars. For the time being the chairman was able to pull in $1.55 million above-market returns in the form of deferred compensation in 2007.
The total amount Chenault had received in the year 2006 was almost $27.3 million as per the statistics that was let out by the Associated Press. According to the calculations Associated Press has made the total pay which includes salary, incentives, bonuses, perquisites, and the approximate value of stock options and awards granted in a year. The calculations which are made do not include the changes in current value of pension benefits.
Chenault however might not be able to realize the 2007 grant–date value of his stock award unless American Express is successful in bouncing back from the tough consumer credit surrounding. In the year 2007 the American Express shares had fallen by more than 14 percent. The fall in 2008 till date has been 13 percent. The company however was able to gain 15 percent on the 25th of February to close at a price of $45.21.
The company however is doing rather well. They announced that the net income in the year 2007 rose from $3.71 billion to $4.01 billion. The revenue in the year 2007 also went up to $24.14 billion from $22.16 billion in the previous year.
EA pursuing its effort to take over Take-Two
February 25, 2008
On Sunday, the 24th of February Electronic Arts said that it was going to continue to push ahead with its effort to take over the rival company Take-Two. This is despite being rebuffed by the smaller company many times before. EA said that it is determined to bring Take-Two Interactive Software Inc. under its realm.
$2 billion was the latest take over bid that was offered by the Gaming giant to take over Take-Two. This is almost $26 per share and that too an all cash bid to get the New York based computer gaming company which is best known for the game known as “Grand Theft Auto” franchise.
Electronic Arts is the world’s largest single video game maker. They on Sunday said that, now that the Take-Two’ board has turned down its offer, it is going to try and get the attention of the shareholders in the company by releasing the details that were the in the take over proposal. This was the second time in two weeks the board of the smaller company had turned down an offer from EA.
The offer that was made by EA has given 64 percent premium over the smaller company’s closing stock price, which was only $15.83 on the 15th of February which was the last day of trading before EA made its offer. On the 23rd of February the shares of the Take-Two company had gone up to $17.36 as a result of the ongoing negotiations. On the amount that is being offered as premium the EA Chief Executive said that the Take-Two company is being stubborn as there is no guarantee that any other company might offer them a higher premium in the future. He said that it is not necessary that even EA might consider lowering the very high premium they are offering now after some time. This is what was there in the letter he had sent to Take-Two, which got published on Sunday.
He also added that if Take-Twp would accept the deal quickly his company would be able to use all its Marketing Skills to make the much awaited release of the Grand Theft Auto IV a huge success. In response to this comment by the EA official the Take-Two officials said that the offer that was made by the Electronic Arts was nothing but opportunistic trying to make use of the upcoming release of the hit game series. EA said that the offer of $26 dollars per share, which was made after Take-Two rejected the first offer of $25 per share, was more too huge an offer considering the shaky year Take-Two had gone through.
The gaming giant has made the offer at a ripe time as the smaller company had gone through a rough year in 2007 as many shareholders got rid off most of the company’s prime leadership in last spring. This was as a result of all the troubles and controversies that had sprung up due to the heavy violence and explicit sexual content that most of the company’s game withheld during the gameplay.