Solar Jobs Have the Power; Michael Kors Sings the Retail Blues; GM Sets a Record, But Profit Disappoints

Sunshine days…

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Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

The sun is where it’s at these days as the amount of jobs in the solar industry jumped 25% in the last year, now employing over 260,000 workers. According to The Solar Foundation, the reason for the job growth in this field has to do with a massive decrease in cost to install solar panels, combined with rising demand. A perfect fiscal storm – but in a good way.  The solar industry is projected to grow significantly  as solar capacity  continues to grow. It’s actually looking like solar power will end up becoming the most widely used power source.  The U.S. Department of Energy, in its own study, found that there are more Americans working in the solar power industry, compared to the 187,000 employees toiling away at natural gas and coal power plants. In fact, one out of every fifty new jobs in 2016 was in the solar industry, and the number of solar jobs increased in 44 out of 50 states.  Women represent 28% of the solar workforce and that number is expected to climb.  In case you were thinking of switching careers, the  industry is expecting to add about 51,000 jobs in 2017.  And with a median wage of $26 per hour, that might not be such a bad idea.

It’s in the bag…

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No matter how much Michael Kors wants to blame department stores for its dismal performance, it can’t. Because it just wasn’t their fault. Entirely. The fact is, there were just a lot less shoppers at both department stores and at Michael Kors stores.  Shares of the company fell almost 15% as it announced that it earned $1.64 per share. That should seem impressive, since analysts forecasted that the company would gain $1.63 per share. However, the 6.4%  drop in sales was just too much to bear, especially because a 5.4% drop was anticipated. So you can imagine the collective disappointed sigh on Wall Street. Revenue for the quarter dropped 3.2% to come in at $1.35 billion, when estimates were for $1.36.  For the full year, the company now expects to take in sales of $4.48 billion, when it previously had its sights set on $4.55 billion. As for the $4.71 billion in sales Michael Kors took in last year, well, that’s now a sweet distant memory, isn’t it? As part of a big plan, Michael Kors’ brass explained that it’s going to scale back on its offerings in wholesale stores. With too much inventory and major discounts eating substantial chunks into its margins, the company has even decided not to participate in friends and family sales.  The theory is that by ditching these deep discounts, the brand will somehow get reinvigorated and finally gain back some of its value and prestige. Too bad it’s taking so long to find out if this plan will actually work.

It’s a record…

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General Motors just came out with its fourth quarter earnings bumming out Wall Street with news that its profit dropped $1.8 billion and earning $1.28 per share. Nothing says disappointing quite like a 71% year-over-year drop, which is exactly what this profit was. But apparently, that drop isn’t as tragic as it seems, since that figure was the result of a $4 billion tax gain from a one-time accounting change. Too bad that bit didn’t stop the stock from taking a 4.7% hit. Revenue for the quarter came in at $44 billion, an 11% increase over last year, even though estimates were for just over $40 billion and $1.17 per share. A year ago, revenues almost hit $40 billion, taking in $1.39 per share.  The big joyful news, though, is that GM scored a record $166.4 billion in revenues for 2016, a 9% increase from last year that brought in a profit of $9.4 billion and added about $6 per share. Estimates were for $163.5 billion. As for GM’s 52,000 hourly workers, they can look forward to a $12,000 bonus this year, up from last year’s $11,000. This little initiative will set GM back by $624 million, but hey, those folks deserve it, no? And while GM sold 10 million vehicles globally, Wall Street’s still uneasy about the company’s 845,000 ownerless cars that were sitting around at the end of 2016.

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Economy Cools on Coal; Saving Chipotle One Burrito at a Time; Morgan Stanley Made a Mistake and Admits It!

Hot or coal?

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Feel free to play it naughty this year as Santa may not be able to scrounge up some coal to put in your stocking anyway. That’s because Peabody Energy, the largest American coal miner, might just be going bust, joining a slew of other coal companies. The company announced that it will be delaying a $71 million interest payment that’s due this week – and that, my friends, often signals that a company could be on the brink of filing for Chapter 11 bankruptcy protection. Not that this would come as any great surprise since the stock lost over 95% of its value in the last twelve months and today tanked over 40%. Two years ago the company’s stock hit a high of $299.10. Now it’s barely hanging on as it closed at $2.20 today. The fact is that the global economy is slow enough to wreak havoc on major industries, in this case, coal. Only 33% of power came from coal in 2015. The coal industry has had to contend with stricter environmental standards that have put a major crimp in production. With natural gas being used more and more, seeing as how its cheaper and less polluting, several other coal companies have already gone under. And while nobody is crying over less pollution, it does mean that thousands of people will be out of jobs. Tens of thousands. As for Peabody Energy, the company has thirty days to make that $71 million or face default.

Burritos for all….

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It appears all is not lost at Chipotle as the food joint managed to recoup about 30% of its sales with the help of some free food – burritos, in fact. There is a lot of irony at work here. According to Chipotle CFO Jack Hartung, “Free burritos—turns out it works. It brings people into the restaurants.” It’s a good thing something is bringing folks back into the restaurants after that ugly E.Coli outbreak that sent millions of customers scrambling as far away from the restaurants as possible. As part of the company’s turnaround plan, Chipotle sent out coupons for free burritos to about 7 million customers. Then it decided that maybe sending out 21 million more coupons might not be such a bad idea. It wasn’t since 5.3 million customers already downloaded the first coupon and then, 2.5 million actually walked into a Chipotle, picked up their free burrito and, presumably, purchased a couple of other items off the menu as well. Hey, once you get ’em in the door…In any case, this quarter marked the first time that Chipotle actually forecasted a quarterly loss. Ever. Naturally, the company is still reeling from the losses over the outbreak. However, it’s also expecting to incur some heavy expenses for marketing and, of course, free burritos.

Um, about that price target…

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Wall Street insiders made a mistake and they are actually admitting it. Analysts at Morgan Stanley used to just love LinkedIn and thought the world of the platform. But that love has waned and thus the brokerage has downgraded the stock, savagely slashing the price target from $190 to $125. After all, LinkedIn’s earnings didn’t impress. Far from it, in fact, and the stock has gone down a whopping 54% in just the last three months. Morgan Stanley analyst Brian Nowak eloquently said of LinkedIn, “With its current product offering, LinkedIn isn’t likely to be as big of a platform as we previously thought.” That was harsh, I tell you. And just like that, shares of the company went down on all because the brokerages had a fiscal change of heart.

The Labor of LIBOR; Coal Company Not Energized by Obama’s New EPA Policies; Disgraced Bitcoin-er Busted

Don’t bank on it…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

From the most hallowed banking institutions of UBS and Citigroup, disgraced banker Thomas Hayes will now make his way to the halls of a correctional institution, all thanks to his role in the LIBOR scandal. On trial in the UK, Hayes pleaded not guilty, although jurors felt otherwise and now gets to spend the next fourteen years in prison contemplating his misdeeds. The U.S. already charged Hayes back in 2012 for his misdeeds at UBS and the Royal Bank of Scotland and a number of banks already had to cough up $9 billion in penalties over their involvement in rigging the benchmarks. Hayes was found guilty on all 8 counts of conspiracy to defraud. And it’s not everyday a trader gets convicted for rigging rates on the London Interbank Offered Rates. In fact, Hayes has the dubious distinction of becoming the first person to be convicted in the scandal, which makes sense, since he was apparently the ringleader for more than a dozen other brokers and traders who participated in messing with global rates for mortgages, loans and credit cards just so that they could profit. Those misdeeds affected some $350 trillion in global financial markets. Including ours. Talk about rude.

So un-coal…

Image courtesy of dan/FreeDigitalPhotos.net

Image courtesy of dan/FreeDigitalPhotos.net

Battered and broken is just one way to describe the coal industry as President Obama just announced the latest EPA policies which are supposedly going to reduce greenhouse gas emissions 30% by 2030. And of course that is splendid news. Just not for Alpha Natural Resources who made its own announcement today: bankruptcy. The natural gas boom combined with the new EPA rules have dealt quite the blow to the second biggest coal producer. While the company has over $10 billion in assets with around 8,000 employees, it also needs to ditch some $3.3 billion in debt. The once powerful coal supplier had to close more than 80 mines since 2011 as the shale boom began to take effect. And who can blame shale? After all, it is a cheaper, less polluting energy source.

Bit-fraud…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Mark Karpeles, the disgraced head of collapsed Tokyo bitcoin exchange, Mt. Gox, has, un-shockingly, been arrested in Japan on suspicion of (gasp) fraud. Who would have thought. Apparently, Karpeles falsified documents and manipulated the computer system over thirty times in an effort to fatten up his bank account by about a million bucks. If the 30 year old Karpeles is found guilty, he might just become pen pals (no pen-pun intended) with Thomas Hayes, except the French-born Karpeles would be idling his incarcerated says in Japan. If you recall, 850,000 bit coins – equal to about $480 million at the time –  went missing under Karpeles’ watch. But wouldn’t ya know it, 200,000 bit coins were subsequently recovered by Karpeles, who must have remembered where he had apparently misplaced them. As for the remaining missing cyber-currency, well, Karpeles conveniently blames the theft on a “bug” from a cyber-attack. You don’t say…