France Says Non Vive La Uber; Smuckers Jells Up Some Tasty Earnings; Is Larry Page Channeling George Jetson?

Let them eat cake…

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Uber, the multi-billion dollar company that operates in 60 countries and can’t seem to stay out of legal trouble is making headlines, yet again. The ride-sharing app just got slapped with an almost million dollar fine – half of which was suspended – for running an illegal taxi service in France. But that fine is the least of Uber’s problems considering it just raised another $3.5 billion in funding. The French court took aim at Uber POP, an app that connects riders with nonprofessional drivers who use their own cars to transport passengers. Licensed taxi drivers in France took exception to the app and put pressure on French officials to bid adieu to Uber POP by getting the service suspended there last year. Last week, a German court also gave a big nein to Uber, upholding a previous ruling that banned Uber POP there for violating local transport laws. Besides Uber getting slapped with a big fine, two Uber execs also got hit to the tune of 50,000 euros, which is nothing compared to the five years of jail time and million dollar fine that they could have received. This case marks the first time that actual executives from the company had to stand trial. The employees were found guilty of deceptive commercial practices, acting as accomplices in operating an illegal transportation service and, just for good measure, violating privacy laws. That’s in addition to being held responsible for inciting others to break the law by employing them, causing riots and taxi strikes. However, this latest ruling is far from the company’s first legal tussle since it was founded in 2009. The company continues to grapple with numerous regulatory issues in Europe and Africa and there is a long road ahead. And in case you didn’t see it coming, Uber is appealing the French court’s ruling.

I don’t think you’re ready for this jelly…

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It’s just jelly to you but to its shareholders, it’s a profit of $191 million. I am talking about J.M. Smucker Co., whose latest earnings positively dazzled Wall Street, sending shares jumping 25% today, to a record high of $142.27. Of course, it wasn’t just an increased urge for PB&J’s, with Smucker’s Jif peanut butter, that sent those sales soaring. Dunkin’ Donuts Brand Coffee, Folgers Coffee and…wait for it…pet food figured prominently in Smucker’s epic 39% profit surge. Smucker’s coffee products account for the company’s biggest market and pulled down a 9% increase in the fourth quarter, while its pet foods, that include Meow Mix and Milk-Bone, accounted for a third of all sales. It helped that the company offered up plenty of promotions to drive demand for its K-cup offerings. The company’s acquisition of Big Heart Pet Brands last year also helped a lot to drive up the impressive earnings. Revenue surged 25% to $1.81 billion when analysts only expected $1.75 billion and Smucker’s added $1.44 to its shares when predictions were only for $1.20. Those earnings were especially welcome since last year at this time, the company posted a 41% profit loss.

Just because he can…

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Alphabet CEO, Larry Page is into cars. Especially if they can fly. These days, the Google co-founder is funding two companies that are currently building and tweaking prototypes of small, all electric planes that can take off and land similar to helicopters. Just like the flying saucers you saw on the Jetsons. Page has already plunked down $100 million into Zee.Aero, a start-up launched in 2010, that has been testing two prototypes in Hollister, California. But why fund just one company when you have the means to fund two? That’s why Larry Page has also poured money into Zee.Aero competitor, Kitty Hawk, led by Sebastian Thrun, the Google X founder who is also behind Google’s self-driving car program. Coincidence? I think not. But it’s sure to be a crowded race to the finish as there are at least a dozen other companies around the world that are hoping to churn out a similar prototype, well before Larry Page’s darlings.

 

Jeff Bezos Hearts India; Lululemon’s Zen-tastic Earnings; Is Your CEO Listed? You Better Hope So

Next. Big. Thing…

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India is looking very flush these days as Amazon’s Jeff Bezos decided to throw $3 billion at it. That’s in addition to the $2 billion he gave the southeast Asian country back in 2014. He made this announcement at a meeting of business leaders in Washington DC that included Indian Prime Minister Narendra Modi. The reason why Bezos is showing India a lot of fiscal love is that it is Amazon’s fastest growing region, boasting 21 fulfillment centers and 45,000 employees. In other words, the e-commerce giant is banking on the “huge potential in the Indian economy.” Interestingly enough, Amazon can only sell its wares from its website through a third party, as mandated by Indian law. But that hasn’t been much of a problem for the e-tailer, who ironically, never seemed to adapt as easily to the local Chinese marketplace, and continues to struggle there and against the giant we call Alibaba. It’s worth noting that Amazon is not the only game in town, facing fierce competition from local e-commerce businesses, Flipkart and Snapdeal. But Amazon’s not sweating it since according to Morgan Stanley, it is estimated that consumers in India bought $16 billion worth of goods last year, more than $10.3 billion from the previous year. So clearly, there’s plenty of room on the Indian e-commerce playing field.

Lemonade mouth…

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Lululemon beat estimates and even raised its 2016 revenue forecast. So why is its founder and largest shareholder, Chip Wilson, in a snit? He’s probably still licking his executive wounds after being booted from his post for making stupid comments, among other short-comings. In a letter to shareholders last week, the 14.2% stakeholder ripped into the current directors because he feels that they can’t keep up the pace against other athletic apparel companies like Nike and Under Armour, to name a few. Wilson would like it very much if there was an annual election that would make the board of directors accountable for earnings results and, presumably, get him reinstated as CEO. As it stands, the current leadership, helmed by Laurent Potdevin, would probably be delighted to be held accountable for Lululemon’s latest earnings considering how well it performed. Sure, the retailer missed profits by just a penny, falling 5% to $45.3 million, yet still earning 30 cents a share. But shares are still up 27% for the year and the company had strong sales this quarter. It also found a way to control its inventory levels and, in the process, saw its revenue rise 17% to $495.5 million when analysts only thought it would pull down $487.7. So perhaps it’s time for Wilson to keep his thoughts to himself and just enjoy his burgeoning majority stake.

In case you were wondering…

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Glassdoor came out with its latest annual list, this time regaling us with the highest rated CEO’s. Bain & Company’s Bob Becheck tops the list with a 99% approval rating. Employees seemed to appreciate the support they receive from their boss, not to mention the company’s focus on professional development. And who doesn’t mind professional encouragement? But while Becheck scored the number one spot, two other CEO’s also received 99% approval ratings. So congrats to Ultimate Software’s Scott Scherr and McKinsey and Company’s Dominic Barton. Facebook’s Mark Zuckerberg kept his number 4 ranking from last year, while LinkedIn’s Jeff Weiner took fifth. Larry Page’s replacement at Google, Sundar Pichai, earned a 96% approval rating and the number seven spot, while Apple’s Tim Cook came in 8th, also with a 96% approval rating. Four women paved the way on this list, including Staffmark’s Lesa J. Francis, who took the 28th spot with a 94% approve rating, and Enterprise Holdings’ Pamela M. Nicholson, who graces the list at the number 31 spot, also with a 94% approval rating.

Fall-Mart; Twitter Fires, Twitter Hires; Feeling Spent

Execu-llent…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Even though Twitter announced yesterday that it is shedding 8% of its workforce, today the social media company announced that its adding someone new to that very same workforce. Enter Omid Kordestani who is jumping the Google ship in order to bring his fiscal talents over to embattled Twitter.  Omid will assume Jack Dorsey’s old title of executive chairman, which he dropped last week when he, once again, assumed the title of CEO. Omid Kordestani comes to Twitter from not-at-all embattled Google Inc. where he not only left the post of Chief Business Officer, but also $115 million in equity awards. That’s according to a regulatory finding, anyway. Omid, who was apparently employee number 11 at Google, and affectionately called Google’s “business founder” by Larry Page, left the company in 2009, but returned in 2014, only to head on off into the Twitter sunset.  Even though Omid Kordestani started his Twitter account back in 2012, his most recent tweet about his new post, was only his eleventh time using the platform. His lack of tweeting is, presumably, about to change.

Not “fine” by me…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Wal-Mart might be the mother-of-all retailers but, as they say, the bigger they are, the harder they fall, especially on Wall Street. And unfortunately, a big company like Wal-Mart has a nasty little way of taking the Dow Jones Industrial Average with it.  This particular fall was, unfortunately, rather epic. Wal-Mart took a $20 billion hit because it’s predicting a very disappointing forecast. The world’s largest retailer doesn’t expect to experience growth for fiscal 2016 (which ends in February, btw). Investors loathe bad forecasts. Well, who doesn’t? This bad forecast gave way to Wal-Mart’s biggest stock drop in 15 years and shaved 9% off the value of its shares. Of course, the strong dollar gets part of the blame as it’s hurting sales abroad. But then there’s the investment the company is putting into its e-commerce. Wal-Mart is looking to plunk down $900 million next year, and over a billion dollars the following year to beef its tech efforts. All that cash is going to gouge those much relished profits. Also eating into those profits are wage increases that the company is giving out to thousands of employees. But what really got Wall Street in a fit was when Wal-Mart CEO Doug McMillion told CNBC interviewers that Wal-Mart will do “fine” during the holiday season. And that one word means anything but to investors.

Save it for later, will ya?

Image courtesy of  FrameAngel/FreeDigitalPhotos.net

Image courtesy of FrameAngel/FreeDigitalPhotos.net

Retailers aren’t exactly giddy these days as more Americans decided to save up all that money from low gas costs instead of spending it. As a result, retail spending only experienced a .1% gain in September even though analysts predicted gains from .2% to .6%. Since consumer spending accounts for 70% of the economy, that .1% gain is nothing but brutal fiscal news. In fact, seven out of thirteen retail categories experienced declines. Ironically enough, gas stations took a 3.2% hit because…can you guess? Lower prices at the pump. Hence, they couldn’t pull in all that cash like they did in the past. What isn’t ironic, just annoying and mildly disconcerting, is that this .1% was the biggest drop since January and represented no change from August. So get out there and spend!

Google’d: Big Search Engine News; How Crude: Dow Gets a Pick-me Up From Oil and Omaha; Postally Spent

If you google alphabet…

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Image courtesy of blackzheep/FreeDigitalPhotos.net

In case you missed it, there’s a new head honcho at Google. Okay, maybe not as head honcho-y as Sergey Brin and Larry Page, but Sundar Pichai just became the new CEO of Google and now holds the keys to that very magical kingdom. There is also a little bit of restructuring going on at the almighty tech company. Okay. A lot. You see, Google has now become a subsidiary of a new publicly traded company called Alphabet Inc. – which will soon be trading under that name. Brin and Page are at the top of that executive food chain and, no doubt, always will be. Pichai is no rookie, though. He’s been at Google for well over a decade and his last role was as head of Android. So he’ll probably settle into his new digs quite comfortably. Apparently, Wall Street likes the new arrangements too. Google’s stock surged 6% on the news.

Take a dow…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

A big shout out goes to Warren Buffet today, who together with rebounding oil prices, got the dow to shake off a fiscally ugly seven day slump. First, crude finally climbed 2% to a respectable $44.74 a barrel after falling below a very unflattering $44 a barrel on Friday. Then the Oracle of Omaha reminded the world why Berkshire Hathaway is, in fact, the happiest place on earth (sorry Mickey) when his company announced a $37 billion deal to buy Precision Castparts. The company was purchased at a 20% premium, but no doubt worth every…billion. Precision Castparts took in $10 billion in sales with a $1.5 billion profit in 2014.

Going postal…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

It used to be that postal workers were unstoppable in their pursuit of mail delivery. As the saying goes: “Neither snow nor rain nor heat nor gloom of night…” Noticeably absent from this list is Congress, which just might be the one thing that could put a crimp in those mail deliveries. You see, the United States Postal Service just announced its quarterly earnings. It lost $586 million. But, that was still a major improvement over last year at this time when the agency took a $1.5 billion hit. Ouch. April-June, however, typically sees lower revenues, so that figure wasn’t totally alarming. Part of the reason why USPS didn’t lose as much is because of how the interest rates that are tied into worker compensation expenses. Go interest rates! Now let’s get back to Congress. Strangely enough, even though the USPS doesn’t receive any tax dollars, the agency is still under congressional control. Under that congressional control we find the Postal Accountability and Enhancement Act. Say that five times fast. The “Act” stipulates that USPS must pay between $5.4 billion and $5.7 billion toward future retiree health benefit costs. Until 2016. Unfortunately for the USPS, there have been a lot of changes in the mail and package delivery industry and the agency is facing stiff competition, including from many start-ups. Congress has yet to acknowledge these shifting postal tides and draft new legislation that would tweak that multi-billion requirement to a more attainable fiscal goal. Until that happens…well, it’s Congress so don’t hold your breath.

Awesome Intel; Who is America’s Favorite CEO?; Marriott’s Letting Guests Stream it Up;

Friggin’ awesome…

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Image courtesy of koratmember/FreeDigitalPhotos.net

“There are plenty of women- and minority-led startup companies, and we want to work with them,”  Lisa Lambert, vice president and managing director at Intel Capital. So why did she say that? Because Intel super-graciously – and presciently – announced its Capital Diversity Fund, specifically set up for women and minority-led start-ups in an effort to mix things up in Silicon Valley. It would seem that the locale already has a rather large presence of white, male CEO’s and Intel would like to make it a little bit more…colorful.  Intel CEO Brian Krzanich would even like to have Intel’s work force, which is currently 24% female and 12% black and Hispanic, come to resemble the U.S. workforce, which is 47% women and 26% black and Hispanic, by 2020. To qualify for some of this cash, the founder of the company must be a woman or minority, and the company must have at least three executives who are women and/or minorities.  There are already a few companies who are getting funding including cyber-security firm Venafi, CareCloud and MarkOne – which makes smart cups. If you’re curious about how smart those cup are, you’ll have to find out yourself. As Mr. Krzanich put it, “…as you seek out diverse points of view, you’re going to produce better returns.” And who doesn’t like better returns?

Did your boss make the list?

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

If your boss didn’t make the list, maybe consider taking your skills and LinkedIn endorsements elsewhere. You might consider finding gainful employment at Google since Larry Page takes the top spot with a 97% approval rating, according to online job and salary review site Glassdoor.com.  Nike’s Mark Parker, took second just barely missing the top spot by a few thousandths percentage points. Charles Butt, owner of the Texas grocery chain HEB  takes third, with help form a company philosophy that values the welfare of its workforce. And because of that awesome culture you are forbidden to make fun of his last name.  Billionaire Mark Zuckerberg came in fourth  while the aforementioned Brian M. Krzanich, who just announced Intel’s incredible new fund for women and minority-run startups, only came in at number 39. But he still had a 90% approval rating. Oddly enough, LinkedIn’s CEO Jeff Weiner rocked first place back in 2014 with an approval rating of 100%, yet this year his ranking plunged to number 12. However, even with that big drop, Weiner still scored a 93% approval rating. The question is: what exactly did Jeff Weiner do to tick off that other 7%? Hmmm. Something to think about.

Everyone’s a winner…

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Apparently, Marriott discovered that those super awesome televisions daintily mounted on the walls of the guest rooms weren’t getting much use, as more and more guests were using their tablet, laptops and phones (oh my) to access streaming entertainment. And with those handy, entertaining devices, guests found that that they didn’t have to go through the annoying process of acquainting themselves with a new remote and channel guide. Ugh. So what do? You can’t just chuck those state of the art electronics to the curb. Or can you? Well, no you can’t. Instead, Marriott is teaming up with streaming entertainment service Netflix that will allow Marriott guests to access their Netflix accounts or even sign up for new ones. So next time you need to choose between a Marriott Hotel and some other place to rest your head for the night, now you can take into consideration which hotel has the better in-room entertainment – and mini bar.

H&M Goes Haute on Profits; Google-gratulations; Taco Bell Gets Biscuit-y

So trendy…

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Image courtesy of sscreations/FreeDigitalPhotos.net

H&M posted some particularly impressive digits with profits up 36% to about $423 million. Of course, since it’s a Swedish company, those numbers came out to 3.61 billion kronors. I’m guessing analysts don’t do a lot of shopping at the world’s second largest retailer because they only expected 3.32 billion kronors. H&M attributes a lot of that success to some major online and store expansion activity. Whatever it was, it worked.  But here’s where things got dicey. Shares of the company fell over 3% because of one not so teeny tiny problem: Revenue for the first three weeks of March slowed to 9% from February’s 15%. This put a damper on the profit surge news. However, one analyst graciously pointed out that it was the first time in 17 months that growth even slowed to under 10%. So no one’s too concerned. It wouldn’t be right not to blame some of that on a winter that has overstayed its welcome. However, that strong dollar of ours is also going to be messing with H&M too, as it’s going to get a lot pricier to purchase goods and services to put out all those fabulously trendy and cheap clothes. Then there’s the not so minor issue that so much of its merchandise is purchased in dollars even though its sold in Euros. That might put a fiscal crimp on things, as well. Strong dollar or weak euro, H&M still has plans to open 400 stores worldwide.

Googled it…

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Image courtesy of Stuart Miles/FreeDgitalPhotos.net

Ruth Porat. Remember that name. That is, if you didn’t already, as she is regarded as one of the “most powerful women on Wall Street.” Except she’s ditching Wall Street for a new gig in Silicon Valley as Google’s new CFO. Just how big a deal is it? Well, Wall Street liked the appointment so much that Google’s stock went up almost 3% today because of it. Yeah, she’s that impressive. Ms. Porat has been at Morgan Stanley for 28 years but is no stranger to tech having worked on some major deals for both Amazon and eBay. During 2008’s nasty fiscal crisis, she advised the U.S. Department of Treasury on AIG, Freddie Mac and Fannie Mae.  She was even under consideration for the role of Deputy Treasury Secretary. Not too shabby. She’ll be replacing Patrick Pichette who said he’s retiring to spend more time with his family. So friggin’ sweet.  Ms. Porat gets to report to Google co-founder and CEO, Larry Page, who is presumably just as stoked about his new hire as Wall Street is.

Would you like that to go?

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

Is it a taco? Or is it a biscuit. Excellent question and for Taco Bell, whatever you decide probably won’t matter as long as you buy the darn thing. The fast-food chain is heating up the breakfast wars, yet again, armed with its latest weaponry – the taco biscuit, a biscuit in the shape of a taco. Got that? Last year Taco Bell took an advertising swing at McDonald’s with a campaign featuring people whose names were actually Ronald McDonald, devouring a Taco Bell breakfast and loving it. While it’s no doubt that McDonald’s did not care for this little shtick, the fact is that breakfast at the Golden Arches still accounts for 25% of McDonald’s sales when Taco Bell only sees 6% of its sales going towards the most important meal of the day (so they say).  Since traffic has been going up at fast-food establishments for the last four years, does the Taco Biscuit have what it takes to propel Taco Bell and its 6,000 U.S. establishments to hit its goal of seeing 20% of sales coming from breakfast? Time will tell, o’ fearless breakfast diner.