Disney’s ESPN Not the Happiest Place on Earth; SEC Looks to Salary-Shame; Netflix and Microsoft Maternity-Leave Shami

Squeak squeak…

Image courtesy of digitalrt/FreeDigitalPhotos.net

Image courtesy of digitalrt/FreeDigitalPhotos.net

The House of Mouse took quite the beating today on Wall Street but no animated rodents are to blame for this one. Instead we look to Disney-owned ESPN whose third quarter performance wasn’t victorious. The cable channel lost plenty of subscribers as consumers look to “cord-shaving” and “cord-cutting” their ever expanding cable bills. The fact is, when cable subscribers look to save money on their monthly expenses, ESPN is usually the first item to be sacrificed as it eats up $6 a month. Just ask the 3.2 million consumers who already dropped ESPN from their channel lineup. Of course, the network still has some 90 million subscribers but it’s not exactly sparking investor confidence because it’s got those investors wondering how ESPN could grow – and make money. At least Disney Chairman Bob Iger has some confidence left for the sports network. Someone should. But it wouldn’t be fair to only blame ESPN for the disappointing earnings. The strong dollar and declines at theme parks also added to the fiscal misery. So you see, it’s not all ESPNs fault. What a relief. Third quarter revenue hit $13.1 billion with $1.45 added per share, much to the disappointment of analysts who expected $13.2 billion. Disney hasn’t had an earnings miss in two years. You know what didn’t disappoint at Disney? “Age of Ultron” and “Cinderella.” That’s what. Together with sales of licensed products, those areas saw double digit percentage increases.

And you get to fly on the company jet?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s not everyday the SEC and drama can be found in the same sentence. But now that day has come all because of a new SEC ruling that is stirring quite a bit of trouble. Under the 2010 Dodd-Frank Act, public companies now have to issue a “pay ratio disclosure” detailing the compensation of its CEO and the median compensation of the its average employee. Pay gap, anyone? With a 3-2 vote for the ruling, Republicans are against it saying that it will only serve to “name and shame” CEO’s and companies and has no use or relevance to investors. Democrats feel quite the opposite feeling it’ll help investors determine and vote on pay packages for CEO’s. Of course the groups out there that protest income inequality love the new ruling because it’ll highlight and bring all the right attention to their cause. Between 1978 and 2014, the average CEO pay went up almost 1000%. That, my cyber-friends, is what you call a surge. Problem is, according to the Economic Policy Institute, pay for average employees classified as “non-supervisory” only went up by less than 11%. Talk about discrepancies. Commissioner Daniel Gallagher, who voted against the ruling, argued it will wastefully cost approximately $1.3 billion just to implement the compliance and said, “To steal a line from (Supreme Court) Justice (Antonin) Scalia, this is pure applesauce.” How poetic.

Bundle of joy…

Image courtesy  of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Netflix and Microsoft are trying to one-up each other only this time it has very little to do with tech and sales and more to do with babies. Microsoft just announced its updated maternity/paternity policy which now gives parents 20 weeks of full paid leave plus two weeks before a due date for short-term disability. But it’s not as generous as Netflix’s latest policy, dubbed “unlimited” which gives parents a whole year to be with their newest arrivals, allowing them to come and go and go and…well you get it, right? Netflix brass feel that it’s more important to “focus on what people get done, not on how many days worked.” These generous parental leave policies aren’t exactly trendsetting in Silicon Valley. Only for the rest of the country where the United States ranks dead last among 38 countries in government supported parental leave. But Netflix goes one further with its “unlimited vacation” policy too. “Netflix leaders set good examples by taking big vacations and coming back inspired to find big ideas.”  Great. Sign me up.

That’s Sue Bad! Wells Fargo Faces City Lawsuit; Disney’s Enchanted Earnings; Sprint One Step Forward, Two Step Backward

You don’t say…

Image courtesy of Stuart Miles/FreeDigital Photos.net

Image courtesy of Stuart Miles/FreeDigital Photos.net

Try not to get too emotional now, but Wells Fargo is getting sued by the city of Los Angeles for…get this...fraudulent business practices. I know. Hard to believe. According to City Attorney Mike Feuer, “The largest California-based bank had a culture of high-pressure sales that pushed employees toward “fraudulent conduct.” Apparently some of the bank’s employees allegedly opened unauthorized accounts, misused confidential information and charged fees all in the name of sales. Wells Fargo is also accused of failing to notify its customers that their information was breached. Customers were charged fees, many of which ended up in collections and damaged their credit reports. Unauthorized accounts were opened using money from existing accounts. Wells Fargo says that it did have a few misbehaving employees in their midst who were either fired or disciplined for engaging in such appalling practices. The lawsuit is seeking $2,500 – $5,000 per violation and an end to these practices. A statement from the bank said, “Wells Fargo’s culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members.” But when asked directly whether unauthorized accounts were opened, the bank was conveniently mum.

Charming…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

They don’t call it the happiest place on earth for nothing. Disney came out with its second quarter earnings which were up a very magical 10%. Much of that was from its parks and resorts, which were up 24% alone. It helps that Disney not so charmingly raised its prices on them. Shanghai Disneyland, scheduled to open next year, ought to add a little more drama in the fiscal quarters following its debut. Profit for the company came in at $2.1 billion and $1.23 per share. Analysts only expected $1.11 per share while last year the House of Mouse took in $1.9 billion. There was a downside. Sort of. ESPN’s carrying fees ate into a lot of that profit but because sports games are so insanely popular, Disney still managed to make some cash off of them. But no earnings report since 2014 would be complete without mention of the surprise runway hit movie from the magical kingdom of Arendelle. “Frozen” continues to be a constant source of fiscal joy as toys from the film keep flying off the shelves. Even though Disney has yet to repeat the magical quarter from whence “Frozen” was released, it is hoping “Avengers: Age of Ultron” will facilitate that, as its release of “Cinderella,” while taking in a charming $495 million, was no “Frozen.” But then again, what is?

Are you listening?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Perhaps you recall Sprint’s recent promotions to get customers to switch over from Verizon and AT&T? One involved cutting bills from other carriers in half. I recall chainsaws being used in these commercials. Then there was the promotion where Sprint even offered to eat the cost of customers’ early termination fees from the aforementioned carriers. Well, those tactics almost paid off. Sprint picked up 1.2 million new subscribers in its fourth quarter, bringing its total subscribers to 57 million, and keeping it comfortably perched at the number three spot amongst wireless carries. It just barely beat T-Mobile. But the math didn’t quite work out so nicely and Sprint also took a loss of $224 million losing 6 cents per share. It’s particularly harsh since Wall Street was only expecting a loss of about 4 cents. Revenue was down $8.28 billion when analysts expected $8.5 billion and was a 7% drop from last year. So I guess the promotions are over. Or will be.

Disney’s Magical Earnings; Staples looking to Buy $6.3 billion Worth of…More Staples; Ralph Lauren’s Earnings Not Looking Stylish

Let it surge…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Shares of Walt Disney Co. hit a spell-binding all-time high to just under $100 a share after it came out with its first quarter earnings. While the magical company behind the even more magical kingdom didn’t give all the credit to “Frozen,”  executives did mention the movie of sisterly love a whopping 24 times during the company conference call. One might think, based on that call, that “Frozen” is Disney’s only franchise. But in fact, the company has 11 of them raking in over $1 billion a year. Perhaps you’ve heard of one that goes by the name “Star Wars”? Or how ’bout the folks who call themselves, “The Avengers”? Then there’s that dude in spandex, who anointed himself “Spiderman” as he shares a lot in common with the arachnid community. Oh and don’t forget Cinderella either. But yeah, the “Frozen” phenomenon and all its related merchandise did do a lot for Disney’s record quarterly sales which saw major action during the holiday season. Walt Disney Co. also has tons of other stuff things going on and making money like say, theme parks, ESPN, and all sorts of (expensive) entertainment of the non-franchise variety. The House of Mouse pulled in a profit of $2.18 billion and $1.27 per share. Clearly analysts have yet to see “Frozen” as they only expected Disney to come in at $1.07 per share.

Man, that’s a lot of staples…

Image courtesy of anankkml/FreeDigitalPhotos.net

Image courtesy of anankkml/FreeDigitalPhotos.net

Staples is looking to add to its arsenal of staples by buying Office Depot to the tune of $6.3 billion at roughly $11 per share. It’s their second go at it. In 1996, the two companies tried to merge but the FTC put the kibosh on the deal over antitrust concerns.  Something about giving the American people a choice, I suspect.  This impending merger is still subject to regulatory approval however, it’s not expected to be challenged this time for two very nifty reasons: 1.) The FTC already approved the Office Depot/OfficeMax merger, so it would be so unfair if it didn’t approve this one and 2.) The internet has changed things so the FTC isn’t so worried about Staples being the only office supply game in town. Besides, even if the FTC says no to the union, it’s still a win for Office Depot as Staples will pay $250 million to OfficeDepot as a break-up fee. Gotta love a break-up fee. The two companies have 4,000 stores between them, though Staples has been in the process of closing down over 200 stores to boost profits while Office Depot has been closing unnecessary stores after its OfficeMax merger.

So passé…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Ralph Lauren’s clothes may be beautiful but its earnings sure aren’t. The famed iconic apparel company, which also owns Club Monaco and American Living, actually had to lower its full year revenue growth forecast. Again. Basically, the company is saying that it doesn’t expect to pull in as much money as its investors would like and they should brace themselves. Because it’s never the fault of the company when it posts bad earnings, Ralph Lauren is blaming that annoying strong dollar of ours and also the fact that people here aren’t buying the stuff. Except on Wall Street they say “weak consumer spending” like it’s our fault. Profit for the company was $215 million and $2.41 per share. Sounds decent except when you consider that last year, the  label pulled in $237 million and $2.57 per share. Meanwhile, revenue was up. A little. By 0.9%. To around $2.03 billion. Oh well.

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.