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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HSBC’s Bankers Were Not Being “Franc”; No Toying With Hasbro’s Earnings; Netflix Says ¡Hola! to Cuba

Oops! Did I do that?

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

What do arms dealers and popstars have in common? They have bank accounts at HSBC. The British-based bank’s Swiss subsidiary now stands accused of the unthinkable: Helping some of its wealthy clients avoid paying taxes (cue audible gasp). So what’s HSBC’s excuse, because let’s face it, there’s always an excuse. HSBC blames it on the fact that even though the Swiss division was picked up by HSBC back in 1999, it hadn’t been fully integrated into the rest of the company and thus didn’t abide by the highest standards it could have. And by highest of standards I mean “significantly lower” standards. HSBC clients were able to walk out of the bank with “bricks” (their word) of cash – just like what you see criminals carrying in briefcases in the movies. Swiss bankers didn’t much care because those “bricks” were in foreign currency and not in francs . Also, bankers structured accounts in fiscally creative ways in order to help all these super-wealthy clients save tons of money by not paying all those irritating European taxes. See where I’m going with this? Talk about customer service.  And who must HSBC thank for all this embarrassing publicity? Enter Herve Falciani, a self-proclaimed whistle-blower and former HSBC IT employee, who graciously gathered all the juicy data and supplied it to officials, and of course, the media too – but that’s after he tried to first sell the information (a whole other blog entry). About 100,00 clients are on these lists with over $100 billion in assets swirling around. Names like Phil Collins, David Bowie, and Tina Turner turned up. John Malkovich’s name also made an appearance but he said he had no knowledge of the account and it may have been something done by Bernie Madoff who once handled some his assets.

Toy Score…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Hasbro, the second largest toymaker, just posted its fourth quarter earnings much to the delight of well…everyone. The company topped analysts’ expectations with more than a little help from the forces of Nerf and Transformer toys. No joke. Sales of those products and other selections geared toward the junior male consumer increased 21% and there’s nothing Frozen about it. Strangely enough, sales of its girl-focused toys, including My Little Pony and Nerf Rebelle, didn’t fare as well. And by “well” I mean sales slid down 10%. But the company did score a profit that was up 31% to close to $170 million adding about $1.22 to each share. Sales were also up 1.3% to $1.3 billion (nifty how those numbers matched up). However, analysts expected revenue to be $1.33 billion and Hasbro was very quick to blame that strong dollar of ours against other foreign currencies. Stupid dollar! Just kidding.  And bonus: The Hasbro board is even upping its dividend to $0.46 per share, which shareholders get to cash in on May 15 – provided they have those shares on record by May 1.

Bienvenido….

Image courtesy of Naypong/FreeDigitalPhotos.net

Image courtesy of Naypong/FreeDigitalPhotos.net

Nothing says diplomacy quite like Kevin Spacey.  Online video subscription service Netflix is seizing upon the easing of restrictions on Cuba to bring its premium entertainment to the shores of the Island Nation. Muy bien! Netflix has been in Latin America since 2011 and it already has 5 million subscribers there. While it’s still not clear just how involved the government will be in this new endeavor, with a little help from some broadband internet, international payment methods and a rate of $7.99 a month, “Orange Is the New Black” is set to make its way over to Cuba in no time – provided  subscribers are of the select 5% who have unfiltered access to the internet.

 

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.

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.