American Airlines Wants You to Fly the Cramped Skies; New York Times “Trumps” Estimates; Tesla’s Big Losses and Bigger Gains

Low-class…

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As if customers aren’t irritated enough, and because American Airlines maybe just doesn’t give a hoot, the airline just announced plans to make its flights even more cramped and unpleasant. In economy class, mind you. And this un-strategically timed announcement comes the day after airline execs took a truly deserved congressional beating over how poorly they treat those customers. American Airlines spokesman Joshua Freed said, “We believe we’re still providing a good product for customers.” Of course they do. So if you didn’t feel squeezed and claustrophobic enough before, you can now look forward to even 1-2 inches less of legroom. In fact, that will leave so little legroom, that it will almost put American Airlines in the same legroom class as low-cost carriers like Spirit Airlines and Frontier Alines. That’s classy, alright. What’s worse, is that if American Airlines ends up getting away with these new seating arrangements, then you can expect other major airlines to follow suit. Because that’s how these cats work.

Sign of the “Times”…

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The New York Times whipped out some impressive earnings this quarter and they can thank its very own Public Enemy Number One: President Donald Trump. Oh, the irony.  The Newspaper of Record took in 308,000 new digital subscribers, a 60% increase over last year that marked the company’s best-ever quarterly growth, and now brings its total digital viewership to 2.2 million subscribers. But then it gets even more interesting. Print ad revenue took an 18% dive since apparently a lot of companies just don’t see the value in placing ads in newspapers anymore. However, lo and behold, digital ad revenue was up 19%. See how well that worked out for the media company? Even its revenue grew 5% to almost $400 million, with the company picking up 11 cents per share, a whole penny more than last year at this time. Bonus: it beat estimates of 7 cents per share. Despite the President’s insistence that the company is failing, the fact – not an alternative one, mind you – is that it enjoyed its best quarterly revenue growth in six years. Naturally, shares rose 12% on the not fake news.

Solar-ious…

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Tesla whipped out some quarterly earnings that were not exactly electrifying, given that it had losses that were much much bigger than expected, but also not bad. At all. The company took a $1.33 hit on it earrings, when estimates were for a less severe 83 cents per share loss. That’s where the bad news ends. Revenue came in at $2.70 billion, more than double last year at this time, and nowhere near the expected $2.61 billion. But then we get to the part about vehicle deliveries. Tesla delivered a record breaking 25,000 cars, a number that sent shares of the company up up and away. It was that impressive of a number. Elon Musk made sure to rub that into the faces of traders who were shorting the stock by tweeting, “Stormy weather in Shortville…” That’s just trading humor on Wall Street. Anyway, the stock is up 46% in the last twelve months, so they must be doing something right over at Tesla. One can only hope…

UnFriendly Skies Take a Well-Deserved Beating; FY-Infosys – Americans Getting on Payrolls; Paid Internships vs. Actual Job

Turbulent…

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The day of reckoning has finally come for airlines and their awful and questionably lawful treatment of its passengers. If you recall, the impetus for this day stemmed from a recent United Airlines flight, where a passenger, David Dao, was forcibly dragged off a plane and left with a litany of injuries including a concussion and broken teeth. So over at the House Transportation and Infrastructure Committee there was a hearing where airline execs insisted that they’ve been working to improve the situations that have been responsible for all the recent bad press. United CEO Oscar Munoz apologized again at the hearing for the recent tussle that cost his airline a presumably hefty settlement.  Of course plenty of blame has been pointed at unruly passengers. But then again who can blame them? Flights have gotten more crowded, equipment and tech failures have been resulting in delays on a fairly regular basis and obnoxious fees keep cropping up like a bad fungus. And don’t even get me started on the practice of over-booking flights. Apparently, a few airlines are rethinking their policies on that issue.  In the meantime, lawmakers are warning they’ll slap on major legislation if things don’t improve and they promise it wont be pretty.

Trump’d…

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A company based in India, with 200,000 employees worldwide, is now on the line to hire 10,000 workers in the U.S. Enter Infosys, one of a number of companies who engage in outsourcing – a four letter word according to the President – because the practice takes jobs away from Americans. Now, the company announced plans to open four new centers in the United States in the next two years. In the past, Infosys and other similar companies have relied on work visas for its employees. But now President Trump has ordered a major review and overhaul of that program. That’s expected to lead to some very unpleasant changes for companies who are used to employing foreigners in the United States, instead of tapping into the talent pool already present in the country. As for Infosys’s CEO, Vishal Sikka, who happens to be based in Palo Alto (oh, the irony), he explained that “…bringing in local talent and mixing that with the best of global talent in the times we are living in and the times we’re entering is the right thing to do. It is independent of the regulations and the visas.” Of course it is.

How do you like your coffee?

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If you’re not having the easiest time finding a job, maybe getting a position as an intern might be the better way to go. And leave it to Glassdoor to unearth the 25 highest paying internships in the United States. You see, the median annual salary in the U.S. for a full time worker is $51,350 – or about $4,300 a month. An internship gig at Facebook – provided you can even get one  – is worth $8,000 a month. Plus, as a Facebook intern, you get room and board, free food, transportation…Does it get any better than that? Just good luck. You’ll need it. Actually, you’ll really need computer science skills. But that’s besides the point. Microsoft comes in second with a paycheck that is about a thousand dollars less a month than what you’d get at Facebook. But former interns can’t stop raving about the projects they got to work on. Rounding out the third spot is ExxonMobil. While it’s not tech-related, it is a company that is highly focused on professional development of its interns. And who couldn’t use some of that? Amazon and Apple take spots fifth and sixth, respectively, and they’ll both keep you in style for about $6,400 a month. While the tech companies seem to dominate much of the list, there are still plenty of opportunities to map out a career in banking. If you’re sure that’s your thing.

Bob Marley’s Smokin’ Legacy; Oil Prices Are Down So Why Aren’t Airline Fares?; Urban Outfitters Unhip Earnings

Toke on this…

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Image courtesy of Paul/FreeDigitalPhotos.net

He’s been gone a long time, smoking a big fat joint in the sky, but Reggae icon Bob Marley still managed to score a worldwide exclusive, 30 year licensing deal for the “world’s first cannabis brand” appropriately dubbed Marley Natural. With the help of a Seattle-based, cannabis-focused (how industrious!) venture capital firm, Privateer Holdings, Marley Natural will feature strains of heirloom Jamaican cannabis. Kind of like heirloom tomatoes, except I’d never put tomatoes into a batch of brownies. But it won’t just be cannabis that you can purchase under the Marley Natural brand. The brand will also be putting out other useful stuff like lotions and containers (in which to store your cannabis to optimize freshess). No doubt those items will certainly make nice gifts (but again, you can’t smoke ’em). And bonus: the products will even have a “strong social conscience.” Expect to see the cannabis and other products in places where Federal law allows this sort of thing.

Up up and away…

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The joys of dropping oil prices will only carry you so far – by car anyways. Because even though airlines saved over a billion dollars in fuel costs last year, they seem to be pretending that they didn’t get the memo about dropping airfares prices. And why should they? After all, we’re still booking tickets at the prices the airlines set. Those prices are coming in at an average of over $370 per ticket, which by the way, does not include fees and taxes. Planes are still full – and often oversold. Airlines are posting great profits and would much prefer to order new planes and give their terminals face-lifts than pass those fiscal delights onto the very contingent that brought about those profits in the first place.

Time to move to the suburbs?

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Image courtesy of digitalart/FreeDigitalPhotos.net

Urban Outfitters is not looking as hip and cool as it used to be, at least according to its third quarter earnings. Sure the company posted growth, but mainly from its Anthropologie and Free People brands – not from its namesake. Which I suppose stings a bit in the portfolio. While the company beat its sales estimates by $1 million, coming in at $814 million, it was its earnings that provided the fiscal bummer. The company earned just over $47 million and $0.35 per share which might seem solid, but really Wall Street expected earnings of $0.41 per share. What made those earnings that much more fashion-backward was the fact that the same time a year ago the company pulled in $70 million and $0.47 per share. Some were wondering if maybe the company’s disappointing earnings had more than a little to do with some of its more offensive merchandising offerings, like the blood-spattered Kent State sweatshirt or the women’s “Eat Less” t-shirt. Even though the items were eventually pulled from the shelves, it still begs the question if they left an un-hip impression on the very consumers it tends to attract.