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.

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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.

Bitcoin Makes its Stateside Debut; Bad Day for Barbie; Fruity Pebbles Gets Some Company

It’s a bit time…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

The first US regulated bitcoin exchange has made its US virtual debut. San Francisco-based Coinbase raised $106 million with some of that backing coming from Andreessen Horowitz and even the New York Stock Exchange. Which must mean that this whole crypto-currency thing is super legit, despite the fact that there is no government backed regulation for it, nor is it backed by the FDIC. But no worries as Coinbase, which already has 1.9 million users, 2.2 million accounts and 40,000 companies signed up with it, says it is insured against hacking, internal theft and accidental loss.  How very forward-thinking. Especially considering that earlier this month, European bitcoin exchange, Bitstamp, suffered a hack attack that cost it about $5.2 million. Of course, nobody will forget how Bitcoin exchange Mt. Gox was forced to call it quits after getting brutally hacked…to bits. Coinbase is currently allowed to conduct business in 25 states and makes its money by taking 0.25% of Bitcoin transactions. How very industrious. But the exchange doesn’t take its cut for the first two months after opening an account because Coinbase very thoughtfully felt this would be a good gimmick to attract more business. Hey, sign me up. Now if I could just get myself some Bitcoins…

Just not that into you anymore…

Image courtesy of ratch0013/FreeDigitalPhotos.net

Image courtesy of ratch0013/FreeDigitalPhotos.net

Big changes are taking place at Mattel, the toy company famous for the ever-evolving “Barbie Doll.” Barbie is, in part anyways, the reason for the major power shift at Mattel. It seems girls are just not that into her anymore. Sales of the doll worldwide have been falling for the past few years with this last quarter, which included the holiday shopping season, ending on a particularly dismal note. Barbie, her friends and that malleable Malibu Dream House just can’t compete anymore with Disney’s Frozen dolls. Barbie also can’t seem to compete with electronic devices (and really, what can?). Mattel earned close to $150 million and $0.44 a share, which seems decent, unless of course that is a 60% drop from what the company pulled in last year. Mattel also said that because the dollar was so strong against other currencies, it affected sales. Except the dollar’s strength against other currencies didn’t seem to affect sales of the aforementioned Disney Frozen dolls and electronic devices.  Hence, Bryan Stockton, who up until this morning was Mattel’s Chairman and CEO, will be replaced by Christopher Sinclair , who will become interim chairman and CEO.

Man that’s a lot of cereal…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Post Holdings Inc., which is best known, in my most humble opinion anyways, for Fruity and Cocoa Pebbles, has decided to pick up MOM Brands to the crunchy tune of $1.15 billion. MOM Brands is best known, in my most humble opinion for Malt-O-Meal hot cereal – and perhaps, even better known for its seventies/eighties era commercial with that kid who asks for some more Malt-O-Meal, which was supposed to send our mothers into a tizzy to run out and buy boxes of the low-in-sugar breakfast (it should be duly noted that I didn’t fall for it). I wonder what became of him. In any case, MOM Brands is also known for ripping off other cereals and selling them for less, or as they say in the land of marketing, value brands. Laugh all you want, but those value brands brought in revenue of $760 million and $120 million in profit. This new crunchy company combo will take an 18% bite out of the market share for cereal, with General Mills and Kellogg’s still taking 30% of market share.

Can’t Cap the Apple; Let It Go, Barbie. There’s A New Disproportioned Blond In Town; Tiffany & Co.’s Luxe Earnings

In case you missed it…

Image courtesy of Ambro/FreeDigitalPhotos.net

Image courtesy of Ambro/FreeDigitalPhotos.net

Apple can breathe a sigh of relief now that it is officially king of the world. Sort of. The tech company has officially surpassed the $700 billion mark of its market capitalization meaning it is now the most valuable company in the world. Make that universe. ExxonMobil, on the other hand, is not-so-prominently perched at the number two spot.  What this all means is that Apple’s outstanding shares are worth way more than all of ExxonMobil’s outstanding shares – by $300 billion. To put it in perspective, a tech company whose gadgets many people do not even own, is more valuable than an energy company whose commodity is consumed constantly by nearly every single person on the planet. Sitting in third place is Microsoft, with Johnson & Johnson nipping at its heels in fourth.

Let It Go?

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Could it be? Is Barbie’s rock star status taking a hit? According to the National Retail Federation, the original, plastic, disproportioned blond has been unseated by “Frozen.” Anna, Elsa and company have become the number one go-to gift this holiday season putting Barbie in second place. The survey has been conducted for the last eleven years and this is the very first time in the survey’s history that Barbie is not  provocatively posed at the number one spot. The whole “Frozen” phenomenon has thus generated about $1.3 billion in sales, globally. Good news for Disney, bad new for Mattel, the company behind Barbie. What’s even worse news for Mattel is the fact that in 2016, Hasbro picks up the license for the “Frozen” dolls. If you happen to be  wondering what the number one toy boys will be getting, look no further than the Lego aisle.

Little blue boxes…

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Just as I chucked my Tiffany & Co. catalog into the recycling bin, the luxury retailer posted its third quarter earnings. Unlike myself, apparently, many of you are not only not chucking the catalog in the recycling bin, but you are actually going into the pricey retailer and plunking down major wads of money for its very expensive merchandise – just not so much for their cheaper silver lines, interestingly enough.  In fact, here in America, sales were up 10%. Which is especially good since Asia doesn’t seem to be sharing America’s enthusiasm for the luxe jeweler where sales there were down 12%. Revenue did rise 5.2% to $957 million and $0.76 per share. However, analysts were expecting the company to rake in $0.77 per share on $969 million. Maybe the holiday season will help add a little more brilliance to Tiffany & Co.’s fourth quarter.

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.

Oui Oui Disney; Bitcoin’s Being a Downer; HP is Happily Doing the Splits

Who needs Versailles anyways?

Image courtesy of TeddyBear[Picnnic]/FreeDigitalPhotos.net

Image courtesy of TeddyBear[Picnnic]/FreeDigitalPhotos.net

Apparently going to Disneyland in France is tres outré as the theme park is seeing less and less people coming to strut their stuff at the happiest place on earth…in Europe. But if you were just thinking that a walk along the Seine and a visit to the Eiffel Tower would not be complete without a trip to EuroDisney then fear not mon ami. Disney has decided to whip out $1.25 billion to help save EuroDisney…from itself. The park hasn’t exactly been the Disney epicenter of the world since it opened its doors in 1992, yet Disney alleges that it is the number one tourist destination in Europe. Who knew?

A bitcoin of a drag…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Bitcoin has reached yet another milestone but its nothing of which to be proud as the crypto-currency just hit a new low. In fact the virtual coins have been experiencing a steady decline since December of 2013 when its high reached an impressive $1,147.00 per coin. There is nothing impressive about the $290.00 mark it saw this weekend. Some experts think the drop in value has a “bit” to do with the fact that because more businesses have begun to accept the currency, more bitcoins are being generated and circulated. Of course, the more something becomes the available, the less valuable it becomes. Then there are those pesky regulatory hurdles that are also cramping bit coin’s style, but mostly its value. Others feel there are other more complicated reasons and explanations – the details of which I will gladly spare you. One of those “others” is Garrick Hileman, an economic historian with the pish-posh London School of Economics, who graciously informs us that “approximately 3,600 new bit coins” are welcomed into the world each day.

It’s not you, it’s me… 

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s splitsville yet again in the magical realm of corporate as HP has now decided to break up…with itself. It’s no secret (especially since it’s a publicly traded company) that HP’s computer and printer divisions were no match for its corporate hardware and services division. I can attest to this on a personal level for having recently junked out of an HP laptop that had a litany of “issues” which a six month old computer should not possess. But I digress. It’s true the corporate and hardware services division was/is growing a lot quicker and when that happens in a company, at least lately, companies decide to split ’em up. Case in point, last week’s not surprising announcement by eBay and its plans to bid adieu to PayPal. As for the shareholders, well now they’ll own shares of two companies. How very lucky for them. Not lucky, however, for the additional 5,000 employees who will need to brush up on their LinkedIn skills. The company employs over 300,000 people and rakes in $110 billion in revenue. Oh and by the way, HP is currently in year four of its five year turn around plan, in case you were wondering.

Disney Is Heating Up With Frozen, Alibaba Is Coming to Town and Candy Gets Crushed

The cold never bothered Disney anyway…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of Previewjscreationzs/FreeDigitalPhotos.net

Do you want to build some profit? Net income for Disney (DIS) soared 27% this quarter thanks in big BIG part to their animated feature Frozen. And also to Captain America. And because of increased spending at theme parks and then there was all that money made at ESPN and then…but mostly because of Frozen. In fact it was one Disney’s best quarters ever. Frozen pulled in a cool $1.2 billion and is the highest grossing film ever. It’s also the best-selling Blu-ray and digital download. Ever. Disney gained over a dollar per share. Analysts, however, only expected a $0.96 gain per share. But what do they know anyways when it comes to princesses and snowmen?

Biggest IPO ever. Ever?

Image courtesy of arztsamui/FreeDigitalPhotos.net

Image courtesy of arztsamui/FreeDigitalPhotos.net

Alibaba, the online retail service that powers 80% of all online commerce in China and has more active users (231 million) than Amazon and eBay combined is gearing up to become the biggest IPO in the US. Ever. It’s expected to raise at least $16 billion, looking to surpass what Facebook raised. It’d be the largest Chinese corporation to be listed on a US exchange and the Chinese government is over- eager to see one of their homegrown enterprises make a big entrance into the big league tech game. But oh the irony as Facebook and Twitter aren’t even allowed to operate in China. The same goes for Youtube. Alibaba was founded by its chairman Jack Ma, fifteen years ago, in a one room apartment in China. He is currently ranked by Forbes as the fifth richest person in China.

Candy Crushing…

Image courtesy of foto76/FreeDigitalPhotos.net

Image courtesy of foto76/FreeDigitalPhotos.net

King Digital, the force behind the supremely addictive mobile game Candy Crush released its first earnings report since its much (overly)hyped March debut. Its first quarter revenue jumped – really really high – with profits of $127 million which was a 142% increase over the same time last year. Yes that was a triple digit percentage gain. In fact King Digital had triple digit percentage gains all over the place. Those numbers were due in large part to their just released Farm Heroes Saga which helped triple their numbers from $205.9 million to $606.7 million. But – and this is a big sugar coated but, Wall Street is definitely losing its sweet tooth for the game as growth slowed and shares of King Digital took a very unappetizing tumble because the number of unique monthly visitors has begun to decline.