Twittered Out? Energizing Split and Not So Energized Economy

Twitter’s growing pains…

Image courtesy of smarnad/FreeDigitalPhotos.net

Image courtesy of smarnad/FreeDigitalPhotos.net

Twitter is losing its chirp. According to its quarterly earnings, the San Francisco based company showed growth of the social media platform was slowing. The company posted a loss of $132.4 million. Last year there was a time when it was once considered one of the world’s most prized and valuable stocks to own. But since the beginning of the year, the site has lost approximately a third of its value. It did boast 255 million users by the end of March – which is nothing to chirp at (or nothing at which to chirp, for those on patrol at the grammar police) especially since that’s a 25% increase over the same period last year. However, Wall Street felt that number should have been higher by about two million. And yes, that matters a lot…especially to shareholders.

Energizer can do the splits…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Big news today from the folks who brought you the chronically drum beating bunny. St. Louis based Energizer Holdings will officially split into two publicly traded companies. But they’ll still remain friends. It’s the trendy thing to do now. All the cool big companies are doing it. It’s an attempt to focus on their best assets. Energizer, naturally, plans to keep its focus on batteries and flashlights. The other company will concentrate on household items including Schick and Edge grooming products, Playtex and Hawaiian Tropic products – all very useful items. Energizer alone pulled in $1.9 billion in revenue last year while the household division pulled in $2.6 billion. The split will be a tax-free spinoff to existing shareholders. And doesn’t everything sound better when they’re tax-free.

Economy slowdown showdown…

Image courtesy of m_bartosch/FreeDigitalPhotos.net

Image courtesy of m_bartosch/FreeDigitalPhotos.net

The US economy slowed during the first three months of the year, according to a new report released by the Commerce Department. An unusually harsh the winter that shamelessly wreaked havoc on our psyches and our fragile economy is being blamed. But you’ve heard all this before. The real news here is just how badly it slowed to –  a 0.1% annual rate. Think grinding halt. Almost. In fact it was the worst performance in three years and came in way below expert predictions of 1.1%. The good news is that the numbers aren’t totally accurate because they are based on incomplete data. Allegedly. Also these figures tend to improve in warmer weather. Just like my moods.

Target-ing Hackers, No Love for the Coach and Warren Buffet’s Signature Bling

On target…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Target (TGT) is about to target your charge cards. With technology that sounds like it was ripped straight from a sci-fi/spy thriller flick, Target will be swapping your soon-to-be-obsolete magnetic strip cards for chip-and-pin cards that are supposedly far more secure and hacker-proof. With an embedded microchip that generates a different code every time it’s used, counterfeiters just might go bust. We hope. Even if the card is hacked (theoretically speaking, of course), it still couldn’t be used again. Incidentally, these cards have been the standard in Europe and several other parts of the world for some time. The US is a little late to the secure charge card party. The cost for this nifty little innovation runs in the $100 million range but what they’ll save in false charges…priceless – especially after that embarrassing data breach during last year’s holiday shopping season. By October 15, retailers and banks that don’t employ this new technology will be the ones liable for any counterfeit transactions.

Coached out…

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Image courtesy of Simon Howden/FreeDigitalPhotos.net

It seems Americans just aren’t feeling the love for Coach (COH) products anymore. The luxury retailer, famous for its leather and logo handbags and other assorted merchandise, took a nasty hit to its third quarter revenue over the same time last year. Experts in both fashion and finance suspect Coach’s stylish competitors, Kate Spade (KATE) and Michael Kors (KORS), have been taking a big chunk out of their sales. Coach took in $1.1 billion this quarter when this time last year it took in $1.19 billion. But outside the US, you’d never know Coach isn’t a fan fave. Overseas sales grew 14%, but China truly showed its affection for the brand with a 25% increase in sales there.

Bedazzling Buffet…

Image courtesy of Boykung/FreeDigitalPhotos.net

Image courtesy of Boykung/FreeDigitalPhotos.net

If you’re in the market for some bling, you might want to talk to the world’s second wealthiest person, Warren Buffet. He’s got some ice he wants to sell, provided you’re a Berkshire Hathaway shareholder who will be of the fortunate few to attend the annual shareholders meeting on May 3. These aren’t just any diamonds. These stones, from Borsheims Fine Jewelry and Gifts, have the Oracle of Omaha’s signature laser-etched into them, a souvenir of sorts that will range in size from .75 carat to five carats and could set you back anywhere from between $5000 and $200,000. After all, why buy jewelry from Tiffany & Co. when you can blow all that cash on jewelry that’s personalized…for Warren Buffet. But like I said, you still have to be a Berkshire Hathaway shareholder whose stock price closed at $192,545.00. Per share. No, that’s not a typo.

 

Flailing Birds, BofA Not As Healthy As It Thought and Toyota Makes A Brake/Break for Texas

Tired old birds?

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Just when you thought those mischievous Angry Birds were here to stay, their just released earnings tell a very different tail…er tale. Rovio, the company behind our avian friends posted earnings that weren’t exactly soaring. The company’s net profit fell over 50% in 2013 to $37.3 million. Back in 2012 those ubiquitous birds pulled in $77 million. Rovio sees this a as minor and temporary dip and expects to take flight again real soon with a theatrical animated release in July 2016 featuring our addicting feathered friends. However, others see this decline as the birds getting Candy Crush-ed, if you know what I mean. And I think you do. Released in 2009, the curmudgeonly birds and their tricked out slingshots have been downloaded more than two billion times.

Oops! Did I do that?

Image courtesy of digitalart/FreeDigitalPhotos.net

‘ Image courtesy of digitalart/FreeDigitalPhotos.net

Just when Bank of America ( or as the cool kids call it, BofA) was about to raise their dividend from a single itty bitty penny a share, to one whole shiny a nickel per share and then buy back $4 billion of its own stock, the Fed stepped in and said I don’t think so (of course in a much fancier way, I presume). Apparently a not so slight error was made by the Charlotte, North Carolina based bank when it over-stated exactly how much capital it had after it scooped up Merrill Lynch during the financial crisis of 2009. And to think it was just last month that BofA passed the Fed’s “stress test” – the government’s  way of checking to see if a big bank is healthy enough to financially weather another fiscal crisis. If a bank is not healthy, they are put on a strict financial regimen designed to help it achieve fiscal fitness. Got that? Good. Because, after all, taxpayers probably don’t want to see their taxes being used to bail out banks.

Everything’s bigger – and apparently cheaper and better – in Texas…

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Image courtesy of Craftyjoe/FreeDigitalPhotos.net

Toyota is strapping on its cowboy boots to leave Southern California and head on over to Texas. It will be joining Occidental Petroleum and Boeing, also transplants from the Golden State. And who can blame them? The great state of Texas has better tax incentives for big companies and they’re way more chillax about auto regulations than California. In fact, Forbes recently named the Lone Star State the seventh best state in which to do business. California ranked an abysmal 39th place. Naturally, a move like that will deal a hefty blow to the job market in southern California adding to the state’s already high 8.1% unemployment rate. Perhaps California ought to start thinking a little less about plastic bags and a little more about how to keep from losing more jobs…and creating new ones.

Going Postal Over Staples, Amazing Quarter for Amazon and Microsoft is Looking Up

Postal smackdown over staples…I mean Staples…

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Image courtesy of Gualberto107/FreeDigitalPhotos.net

Postal workers across the country are fuming over a new program to install postal counters in Staples (SPLS) stores. Yesterday union postal workers showed up at several of the chain’s locations to show they are so not into it. The program first began last year in Massachusetts and has spread to over eighty stores. But postal workers think the government is trying to privatize the post office and break up the unions – which may or may not be true. But what is true is that the United States Postal Service took a $5 billion hit in 2013, and Uncle Sam has been eagerly searching for ways to cuts costs and boost revenue for the struggling entity. Unions are also angry because they don’t want well-paid union postal workers to be replaced by low-wage non-union members. Union postal workers rake in about $25.00/hour. Yeah, nice work if you can get it. A Staples salesperson takes in about a third of that.

Amazing earnings…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like Amazon (AMZN) is having a good week. The online retailer announced its first quarter earnings and yeah, they were that good. Besides beating Wall Street’s predictions, which always leaves a company and its investors feeling giddy with joy, it also posted revenue 23% higher than it did for the same period last year while profits grew 18%. According to Jeff Bezos, founder and CEO of Amazon,“We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” Awww isn’t that sweet. Naturally the stock took a nice little bump on their shares from all the excitement. Then there were all those fun announcements from Amazon, like, for instance its deal with HBO to stream their older shows. And don’t forget Prime Pantry,where for a flat fee of $5.99 (a pittance, really) you can order all the groceries you need to your heart’s content – as long as it fits into a 45 lb. box.

This cloud’s got a green lining…

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Things are looking up for newly coronated Microsoft (MSFT) CEO Satya Nadella. You do remember Microsoft don’t you? It’s the company whose shares you always wished you had bought. Yeah me too. Especially since it beat analysts prediction by $0.05 this week earning $0.68 a share. Sure sales of Windows to businesses and cloud momentum helped pull in those nice figures. But never forget the power of gaming either as the very entertaining and highly addictive (at least in my home) Xbox console was a big contributor to this quarter’s success.

 

GM’s Future Is Looking Green, Big Mac Selfie Time and the Airline Industry Is Full of Surprises

Unstoppable…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

File this one under things that make you hmmm…Following a horrific year and quarter, GM and its CEO Mary Barra  came out…on top! Even after a massive recall fiasco that put a gaping $1.3 billion hole in General Motors financials, the automaker was still seeing green today. Profits for the company were down 85% yet it still beat the Street’s expectations by $0.02. Yes two cents, as in General Motors does in fact have two cents to rub together…and more. GM’s earnings were up by $0.06 cents a share when Wall Street only expected it to rise by $0.04. General Motors CEO Mary Barra, who has only been at the helm since January and took a brutal Congressional beating over GM’s disastrous recall debacle that cost several lives, was also just named one of Time Magazine’s 100 most influential people.

Not just clowning around…

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Image courtesy of Naypong/FreeDigitalPhotos.net

“Selfies…here I come.” No that wasn’t Miley Cyrus! But guess who is finally joining the Twitterverse? None other than everyone’s favorite big-mac shilling red-headed clown, Ronald McDonald. The official face of the Golden Arches is also getting a stylish (I’m being generous here) new makeover – replete with cargo pants, a striped rugby shirt and banging new red blazer. If that doesn’t scream Abercrombie & Fitch model, I don’t know what does. The clown’s last makeover was nine years ago and many suspect this new look has a bit to do with Taco Bell and its new campaign to corner the fast-food breakfast arena. Incidentally (or not), Ronald McDonald’s new look was unveiled a day after McDonald’s announced lower than expected sales and profits. You can find Ronald McDonald invading social media at the #RonaldMcDonald hashtag and @McDonaldsCorp.

Wingin’ it…

Photo courtesy of bplanet/FreeDigitalPhotos.net

Photo courtesy of bplanet/FreeDigitalPhotos.net

American Airlines scored huge when they announced their first quarter earnings beating the Street by almost $0.20 a share. Wall Street predicted they’d come in with earnings of $0.46 a share but (audible gasp) they came in at $0.65 a share! And if you’ve flown with American Airlines recently then you know that is nothing short of miraculous. They posted first quarter revenue of $10 billion and net income of $480 million. Last time I flew American (August), they still hadn’t updated their aircraft fleet and if you wanted to watch television you had to do so on their antiquated drop down televisions with lousy picture quality. A Snickers bar on the flight cost almost as much as the flight itself. So I suppose the numbers  do add up. Delta also pleasantly surprised Wall Street with a nice first quarter profit even though it had to cancel a whopping 17,000 flights due to severe weather. JetBlue and UnitedContinental, despite having newer fleets and presumably better…everything (than American Airlines) didn’t fare as well.

Not Paying Dues at the IRS, Wrinkle Free Buyout? and No Home Run This Month

Taxing behavior…

Image courtesy of sdmania/FreeDigitalPhotos.net

Image courtesy of sdmania/FreeDigitalPhotos.net

If you don’t feel like complying with Federal tax policies then be prepared to face the penalties. Except if you work for the IRS, in which case, expect a bonus and some time off. A just released report from the Treasury Inspector General for Tax Administration (TIGTA) is going to shatter all those boring, monotonous ideas you had about the IRS nor give you any comfort as you just sent in your tax forms. From Oct. 1, 2010 to Dec. 31, 2012 IRS employees – about 2,800 of them –  were getting big bonuses and other nifty perks even though they were written up for tax and misconduct issues. Apparently their bad behavior was no impediment to $2.8m in cash compensation and 27,000 hours in extra time off. I guess the tax code isn’t the only thing in need of a major overhaul at the IRS.

Botox this!

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Activist investor Bill Ackman, CEO of Pershing Square Capital,  just teamed up with J. Michael Pearson, CEO of Valeant Pharmaceuticals and what went down is the stuff that HBO original movies are made of. Sort of. Following his partnership with Pearson, Ackman goes and buys a 9.7 % stake in another pharmaceutical company. But not just any pharmaceutical company. Why buy into just any pharmaceutical company when you can buy into Allergan, the pharmaceutical company that makes everybody’s favorite wrinkle remedy, Botox! That’s what I’m talking about. Then Mr. Ackman and Mr. Pearson decided they wanted to purchase Allergan for  $46 billion. Of course, not everybody on Wall Street agrees that this does not violate securities law. But what’re you going to do? Anyways, Allergan doesn’t necessarily want a new boss, even if it is for $46 billion. So they adopted a “poison pill” aka a shareholder rights plan because they don’t want Ackman buying any more Allergan stock and with this “poison pill” they can buy themselves some time to decide how they’d like to proceed  A little convoluted, but that’s what makes a Wall Street drama so riveting.

Home not so sweet home…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

What do high mortgage rates, home shortages and bad weather have in common? If you guessed a 14.5% sales plunge (which, no offense, but I’m guessing you didn’t) then you are 100% correct. New single family home sales haven’t been this low in eight months. Experts originally predicted (and hoped) for an estimate of 440,000 home sales. But alas, that number only reached 384,000. Spring was supposed to bring with it tulips, daffodils and higher sales, but so far, just the flowers are the only things that have given us growth. The notable exception was in the Northeast where sales were up by 12.6%. Go figure. With that, median home prices rose to $290,000 from March of last year. Good news for the seller, I suspect.

Whale of a Fail at JPM, Yoga Mats: Nothing Tasty About Them and Bust Goes the Creek

JP Morgan’s not-so-good day…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

JPMorgan Chase’s chaiman and CEO Jamie Dimon said, “JPMorgan Chase had a good start to the year, given there were industry-wide headwinds in Markets and Mortgage.” That’s just what I was thinking as JP Morgan is looking a little less green today after its earnings fell for the second quarter in a row. The financial giant took a massive hit this quarter over the same time last year with profits making a huge nosedive. When JPM posts lousy numbers like that, you can expect others like it to perform similarly. Experts did expect a drop from the firm. Just not that bad. But let’s face it, handing over $13 billion to the Department of Justice to settle claims about some dubious business practices is harsh even for a giant firm like JPM. Then there was that $800 million legal bill they had to pay their lawyers to handle a number of problems including the incredibly embarrassing and infamously pricey London Whale Trading Scandal. Well, at least their lawyers had a good year.

Namaste Subway

Image courtesy of satit_srihin/FreeDigitalPhotos.net

Image courtesy of satit_srihin/FreeDigitalPhotos.net

Oh the wonders of blogging! You can thank FoodBabe.com’s Vani Hari if you’re Subway sub starts tasting a little less downward doggy. The food blogger started a petition back in February to get privately held Subway to stop using an ingredient found in its bread dubbed “Yoga Mat.” Also known as azodicarbonamide, you can find it in a number of food products from markets to McDonald’s and Starbucks. But unfortunately you can also find it in your yoga mat (hence the name), not that it makes your yoga mat any more (or less) edible. By next week, Subway’s bread should be “Yoga Mat” free in just about all of its 26,600 locations.

Busted Creek…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Coldwater Creek has run dry. The women’s retailer filed a Chapter 11 petition after failing to get a buyer for the Sandpoint, ID based company. With assets of $278.5 million and debt of $361.3 million, the chain will be shuttering its more than 360 stores by the summer. That gives you plenty of time to find some nice stuff for your mom for Mother’s Day at a fraction of the cost. But then again, seeing as how they’re bankrupt, there’s clearly a reason why you, and apparently your mother, didn’t shop at the chain to begin with. In any case, Coldwater Creek now joins the less than illustrious ranks of Loehmann’s Inc. and Sbarro’s Pizza who also went bust this year.