Banks Behaving Badly; More Karma Headed Towards EpiPen Maker; Shamu Entertainer Ditches Dividend

D’oh!

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There are few things life more stupid than pissing off Senator Elizabeth Warren (D-MA). Yet Wells Fargo CEO John Stumpf managed to do just that with his prepared, yet sometimes absurd remarks that were carefully crafted for his much deserved beating by the Senate.  That beating came after the bank had to cough up a $185 million fine because employees opened up more than two million unauthorized checking accounts and credit cards. Senator Warren said, among many other colorful things, that Stumpf demonstrated “gutless leadership” and called for him to be personally criminally investigated by both the Department of Justice and the SEC. Yowza. Stumpf did attempt to explain that Price Waterhouse Coopers was brought in to review the accounts in 2015. The problem is that Senator Sherrod Brown (D-OH)  wondered very loudly why Wells Fargo didn’t do that immediately after a scathing L.A. Times article came out exposing the scandal way back in 2013.  In the meantime, Carrie Tolstedt, who headed the retail banking business that oversaw the fraudulent accounts, retired in July with $125 million from a previous stock compensation. Of course, the bank’s top executives attempted to point the finger at lower level employees who made between $35,000 – $60,000 a year. Wells Fargo fired 5,300 employees in the last few years for improper conduct tied to the fraudulent accounts. Senator Bob Menendez (D-NJ) made sure to ask Mr. Stumpf how much he took home last year: $19.3 billion was the answer. John Stumpf is still very much gainfully employed and is apparently “deeply sorry.”

Give a shot…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

West Virginia joins the list of states gunning for Mylan ever since the company hiked the price of their life-saving EpiPen drug to $600 for a 2-pack. Mylan argues that it recoups less than half of that $600 Epipen price tag yet the drug accounts for 40% of the company’s operating profits. The state’s attorney general, Patrick Morrisey is going after the drug-maker, filing a petition to find out information that might just lead to some very unpleasant Medicaid fraud charges for Mylan. The subpoena could determine whether Mylan underpaid on rebates so that it could participate in the state’s Medicaid program. And while Mylan has yet to comment, its CEO Heather Bresch has a very unpleasant date planned for Wednesday with the House Committee on Oversight and Government Reform. You might have heard that her father is Senator Joe Manchin (D-W.VA) Awkward. Also problematic, in terms of West Virginia’s Antitrust Act, is how Mylan sued Teva Pharmaceuticals for patent infringement when the latter wanted to make a considerably cheaper, generic version. The two companies settled but in the meantime, blame it on the FDA for not yet approving the generic version. This latest investigation, by the way, is completely separate from New Attorney General Eric Schneiderman’s investigation.

Nothing to sea here folks….

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Image courtesy of bandrat/FreeDigitalPhotos.net

More rough waters for SeaWorld Entertainment (SEAS) as the theme park company hit a new low today of $11.77. While it did rebound a bit, the company still plans to issue its last dividend – 10 cents a share – on October 7, which is down from the 21 cents it had previously issued. But after that, the dividend will be put on hold…indefinitely. Instead, SeaWorld will use that money to buy back shares as the company stares at a future without killer whales in captivity.  Starting next year, SeaWorld in San Diego will bid a salty farewell to its Orca shows, with San Antonio and Orlando following suit in 2019. The brutal publicity from the 2013 Orca documentary, Blackfish, has put a significant damper on earnings and attendance at the theme parks, with visitors down 8% to about 6 million for the year. Interestingly, SeaWorld thinks the drop in attendance has more to do with other factors like Tropical Storm Colin and a shift in holidays. Whatever the real reason is, the fact remains that revenue was down 5% to $371 million from last year’s $392 million for the same period.  Add to that a drop in profit of $5.8 million from $17.8 for the same quarter last year and you’ve got yourself a hot fiscal mess.

 

 

SeaWorld Earnings Tank; Unstoppable Facebook; Expedia’s Vacation Plans

Nothing to Sea here folks…

Image courtesy of bandrat/FreeDigitalPhotos.net

Image courtesy of bandrat/FreeDigitalPhotos.net

Once again, the life aquatic seems to be taking a hit. SeaWorld is still having a hard time trying to convince the world, and PETA, that its Killer Whales are much happier at the theme parks than in the wild where they’d have to fend for themselves. “Blackfish,” a scathing documentary released in 2013, continues to paint SeaWorld as the bad guy and even though there’s technically no such thing as bad publicity, this situation might prove to be the exception. The company’s third quarter earnings were short of estimates with profit – yes, it still made one – of $98 million adding $1.14 per share. While forecasts were for $1.18, the $1.14 added per share was still better than last year’s take of $87 million in profit with $1 added per share. Revenue also disappointed since it increased by just .2%, coming in at $470 million, when analysts predictions were for over $508 million. Brass at SeaWorld blamed the weather and legal fees for those digits. Can’t mother nature catch a break? Attendance took a .4% hit, dropping to 8.37 million people. Former Dollywood CEO Joel Manby has taken over the reins at SeaWorld and its 11 theme parks. That should be fun to watch. Despite the dismal earnings, SeaWorld San Diego is looking to expand its Killer Whales tank. Except, they have to promise not to breed them there. But SeaWorld has no intention of making any such promises. So stay tuned…

Facebank’d…

Image courtesy of  basketman/FreeDigitalPhotos.net

Image courtesy of basketman/FreeDigitalPhotos.net

Just when you thought Facebook couldn’t get any bigger, and I don’t know why you even thought that, the social networking company gave us some new and even more improved digits. For instance, Facebook’s new market cap is valued at $308 billion. More than Intel and Cisco, companies that produce actual tangible products.  From there Facebook continues its fiscal celebration by sharing that it sold $1 billion more in ads than it did a year ago. I did write billion. Facebook’s total ad revenue was up 45% and, mind you, 78% of Facebook’s ad revenue comes from mobile. Its revenue is also up 41% to $4.5 billion and is trading around $109 per share. By George, that’s three times more than its IPO price. The company also added 31 cent per share on $896 million in net income, just $90 million and one cent more than it did last year at this time. Of course, then there’s Facebook’s 1.545 billion total monthly active users. Just to clarify, Facebook gets over one billion visitors every single day.  Facebook is still blocked in China, yet it remains the company’s biggest advertising market. The ever industrious Mark Zuckerberg and his team of 12,000 are finding ways to get around the mainland. After all, the baby-faced CEO is determined to Facebook his way into one of the worlds biggest countries and is on a mission to bring the web to every single person on the planet. That could prove to be an impossible feat with out China in the mix.

Do not disturb…

Image courtesy of phasinphoto/FreeDigitalPhotos.net

Image courtesy of phasinphoto/FreeDigitalPhotos.net

Expedia went shopping today and picked up vacation home rental website HomeAway for the bargain price of $3.9 billion. Actually, I’m not sure how much of a bargain that was since Expedia is paying $38.31 per share, a 20% premium over Wednesday’s closing price. But no matter as this deal might just solidify Expedia’s status as an online travel superstar. Kind of like what Amazon is to e-commerce. Some, however, are a wee bit concerned that there might just be some antitrust issues involved since Expedia has been on a bit of a shopping spree having picked up Orbitz Worldwide – which also owns Cheaptickets.com –  for $1.38 billion, and Travelocity for $280 million. And while HomeAway boasts over one million vacation home rental listings in almost 200 countries, it’s not necessarily competition to Airbnb since Airbnb lists homes as opposed to vacation rentals. In any case, the alternative accommodation space industry is estimated to be worth about $100 billion so it’s probably safe to say that there is room for a little competition.

Unfit IPO Debut for Planet Fitness; Lost That Lovin’ Feeling…For Shamu?; If it Looks Like an Engineer, and Quacks Like an Engineer…

Fit to be fried…

Image courtesy of marcolm/FreeDigitalPhotos.net

Image courtesy of marcolm/FreeDigitalPhotos.net

Planet Fitness made its New York Stock Exchange debut but it looked more like Planet Fizzle as the stock, which tried to open at the high end of its range, stumbled on its very first day of trading. The company, notable for its $10 gym membership fees, offered 13.5 million shares and managed to raise $216 million despite its less than impressive open. The company, however, tried to give a good showing on Wall Street today, cleverly handing out all sorts of yummy, unhealthy goodies while engaging the crowds with games like musical hand chairs. That was not a typo. Laugh all you want, but Planet Fitness has over 7 million members, 1 million of whom joined within the last twelve months. Its membership is up over 24% from last year. There are very few companies who pulled that off recently. By the way, the company has 33 straight quarters of growth under its svelte fiscal belt, and saw $280 million in revenue. Add that to its 976 stores in 47 states, Puerto Rico and Canada. and that 9% hit the stock took today doesn’t seem so bad after all.

Was it something I said…

Image courtesy of Liz Noffsinger/FreeDigitalPhotos.net

Image courtesy of Liz Noffsinger/FreeDigitalPhotos.net

Things just keep getting fiscally uglier for Shamu and all his water-loving pals as Seaworld Entertainment cranks out yet another soggy quarter. Despite big promotions and a whale of a marketing campaign, attendance at the marine theme parks continued their downward slide. Brass at the company admitted they are continuing to deal with “brand challenges” which is basically code for the negative publicity the company suffered as a result of the very unflattering 2013 documentary “Blackfish.” And just how bad is attendance? Under 6.5 million people stopped by to hang out with the sea creatures, which was a 2% drop from the same time last year. Revenue, which was $391.6 million, is also down 3% from a year ago. But it’s the 85% plunge in profit, down to $5.8 million, that’s really got me questioning if people just don’t dig acrobatic dolphins and comedic sea lions.

If looks could kill…stereotypes…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

So what exactly does an engineer look like? Just ask 22 year old Isis Wenger. She’s got big plans to show the world on a billboard in San Francisco after some very rapid, enthusiastic crowd-funding. It all started when some people naively felt Wenger didn’t look like a “traditional” engineer. She then started the buzz-worthy hashtag #ILookLikeAnEngineer only to discover that there was a whole universe of engineers who also…look like engineers. 75,000 tweets later, including one from engineer and GM CEO, Mary Barra, not to mention a slew of other high-ranking female engineers from some of the world’s top companies, Wenger, together with engineer Michelle Glauser, started an Indiegogo campaign to put up a billboard in San Francisco featuring the diverse engineering community and its stereotypical misconceptions. Hoping to raise $3,500, they instead raised over $7,800…in less than 24 hours.

At Walmart, Black Fridays Isn’t Just For Fridays; Macy’s Third Quarter Mixed Emotions; SeaWorld’s Earnings Belly Flop

You didn’t get the memo?

Image courtesy of Feelart/FreeDigitalPhotos.net

Image courtesy of Feelart/FreeDigitalPhotos.net

Big things are happening at the world’s largest retailer, Walmart, just in time for the holiday chaos. Remember the day when Black Friday was just that? One single Friday? Well, at Walmart, those days are long gone as a new era of holiday shopping ushers in a  five-day Black Friday. Beginning the last week of November and through to the first week of December, Black Friday deals can be had for several days, beginning on Thanksgiving Thursday, at 6pm – that is, in case you’ve had your fill of tryptophan and pumpkin pie by then. Even better is the “urgent agenda” memo recently sent out to Walmarts 5,000 stores basically telling them to clean up their act in the “chilled and fresh” departments. Employees are advised to ask themselves, “Would I buy it?” when determining if meat, dairy and produce should be chucked from the shelves, discounted, or sold for full price to unsuspecting customers.

Tis’ the season…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Macy’s had a decent quarter. Sort of. The retailer scored a profit of over 30%, pulling in $217 million and $0.61 per share. A year ago Macy’s posted a $177 million profit at $.47 per share. However, its sales numbers failed to impress dropping to $6.2 billion from $6.3 billion a year earlier. But because the company is entering a 4th quarter with a potentially frenetic and lucrative holiday shopping season, it doesn’t feel a need to dwell too much on the disappointing numbers, hoping its fourth quarter digits will erase any fiscal anguish.

Tank’d…

Image courtesy of bandrat/FreeDigitalPhotos.net

Image courtesy of bandrat/FreeDigitalPhotos.net

Looks like people aren’t feeling the love for Shamu, or rather the fact that the Orca and his water-loving pals aren’t joyfully frolicking in a more natural habitat. At least, judging by SeaWorld’s third quarter earnings which tanked (slight pun intended) on all fronts. Earnings came in at at close to $496 million but that was a whale of a loss from the $538 million it took in last year at this time. Net income also took a dive taking in only $87 million, a more than $30 million loss of last year’s $121 million figure. It seems SeaWorld just can’t shake all the bad press it received courtesy of the “Blackfish” documentary. While 8.4 million people visited SeaWorld parks this quarter, it was still a 5% decrease over last year’s third quarter, and the ones who did actually grace Shamu with their presence didn’t spend as much money there as in previous years either. Then there’s issue of that lovable rodent we call, Mickey over at Disneyworld/land, who together with his pals Harry Potter and Cinderella, are definitely taking a big chunk out of SeaWorld’s dwindling attendance.

GM Gets Buffet-ed, Great Earnings Are Beautiful and Missed Earnings = Score for Killer Whales

Warren Buffet auto know…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

There’s no denying GM had nothing short of a disastrous year. Not quite as disastrous as it was for the victims of their faulty ignition switches, of course. But as far as Wall Street was concerned their earnings were a fiscal nightmare (and deservedly so for not being on its safety “A” game). But despite GM’s lousy earnings and even lousier – make that non-existent profits – Warren Buffet’s Berkshire Hathaway (BRKA) holding company picked up 3 million shares of the embattled auto maker, according to an SEC regulatory filing. Laugh all you want but they don’t call him the Oracle of Omaha for nothing. The stock is at what you would call a “discount” and Warren Buffet loves himself a good discount. The man knows a thing or two about investing, seeing as how his company’s stock just hit  $200,00 a share. He also happens to think GM CEO Mary Barra is friggin’ awesome. Just don’t expect a quick turn-around as Mr. Buffet is known for holding onto stocks for the long-term. And in this case, that term might just be longer than usual.

Make-up retail wake-up….

Image courtesy of keakguru/FreeDigitalPhotos.net

Image courtesy of keakguru/FreeDigitalPhotos.net

Apparently the quest for beauty is well…priceless. Estée Lauder Companies Inc. released really good and very attractive earnings, especially considering lots of other retailers posted less than glamorous earnings and the US Department of Commerce reported that July retail sales were virtually flat, effectively spooking plenty on Wall Street. Estée Lauder Companies Inc. also owns MAC, Clinique and La Mer (famous as much for the cost of its products as it is for the products themselves). The $28 billion make-up company pulled in $2.73 billion in revenues. Wall Street clearly underestimated the love for make-up and had pegged estimates at $2.66 billion. As for net income – it more than doubled coming up to $257.7 million. The company’s guidance also expects some nice growth hopefully adding a little height to a very unsightly, flattened retail graph.

A whale of tale…

Image courtesy of bandrat/FreeDigitalPhotos.net

Image courtesy of bandrat/FreeDigitalsPhotos.net

Nothing like some bad earnings to get killer whales some new and much bigger digs. Following its really bad earnings the other day, with shares of SeaWorld falling 35%, the amusement park company is pledging $10 million for killer whale research and ocean health. Its CEO is also hoping that doubling the size of its Orca tanks will attract more people to its park and boost revenue. SeaWorld attributed some of its losses to the unflattering film “Blackfish” which SeaWorld called a “propaganda film. Two California lawmakers are hoping get a ban on killer whale performances. Of course PETA entered the fray telling whoever that a “bigger prison is still a prison.”

Not-So-Splashy Earnings for SeaWorld, Retails Fails and Cisco’s Mixed Messages

Tanked…

Image courtesy of tor00722/FreeDigitalPhotos.net

Image courtesy of tor00722/FreeDigitalPhotos.net

Shares of SeaWorld (SEAS) appear to be evaporating by 33% today after the amusement park company forecasted a decline of 6-7% with a lot of help from the very unflattering docu-drama “Blackfish.” The film, which takes a look at how killer whales in captivity are treated, seemed to put a damper on traffic to SeaWorld, especially at its San Diego location. The film had its debut just two months before SeaWorld’s IPO. Coincidence? Hmm. This marks the first time “Blackfish” has actually been mentioned with respect to SeaWorld’s earnings. Wall Street had predicted the company would pull in revenues of $447 million. But no such luck as revenues came in closer to the $405 million mark. To make matters worse, revenue was $415 million this time last year.

July retail blues…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Just when things were starting to look up, leave it to the month of July to put a damper on our fiscal spirits. That’s because, according to the US Commerce Department, US retail sales disappointed. How much did they disappoint? Well…they flat-lined. Sales flatlined despite jobs growth. Yes all that exciting job growth that we have been seeing the last few months could not pull July out of its lousy retail funk. Apparently, even all those people cashing in all their brand new employment checks still need a bit more time before they decide to part with their funds. The other little issue at play is that even though sales did grow in the clothing, personal care and, of course, groceries categories, those gains were offset by losses in other retail sectors. Let’s just hope (and spend) that this was a minor hiccup in a major fiscal recovery and not some evil sign of things to come.

Speaking of unemployment numbers…

Image courtesy of xedos4/FreeDigitalPhotos.net

Image courtesy of xedos4/FreeDigitalPhotos.net

IT provider Cisco came out with its fourth quarter earnings and actually beat analysts’ estimates. The company pulled in about $12.4 billion in fourth quarter revenue while Wall Street expected $12.1 billion. But. There’s always a but isn’t there? This one is about the company also announcing its plans to cut 8% of its workforce. In case you were wondering, that translates to 6,000 soon-to-be ex Cisco employees who will need to redo their LinkedIn profiles.