By Jetta! 800,000 More VW’s Offend; B(u)y Jeep-ers! U.S. Auto Sales Don’t Offend; Call of Duty About to Get a Whole Lot Sweeter

This thing just keeps growing and growing…

Image courtesy of  fantasista/FreeDigitalPhotos.net

Image courtesy of fantasista/FreeDigitalPhotos.net

Just when you thought it was okay to start thinking about buying a Volkswagen, the company announced that yet another 800,000 vehicles are getting caught in the toxic wind of the company’s emissions probe. This revelation was the result of an internal probe and while those cars are currently out and about, Volkswagen wants to reassure the public that the cars are still safe to drive. Just don’t breathe around them. The auto company set aside close to $7 billion hoping that amount will be enough to cover the repairs and lawsuits. It won’t be. It’s estimated that there are 11 million Volkswagens worldwide that currently have the illegal software installed. Now it’s up to newly crowned CEO Matthias Mueller, who came over from Porsche, to help save the embattled car company, which already lost a third of its value and reported its first quarterly loss in 15 years.

Speaking of cars…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

But on this side of the pond, car companies are having a much better day than Volkswagen. In fact, GM and Fiat Chrysler are currently in the wonderful throes of their best two month stretch. Ever. Well, in 15 years anyway. Even if you weren’t one of the lucky ones to have purchased one of those vehicles, it’s still good news since increased automobile sales indicate that the U.S. economy is in fairly decent shape. Ford did okay and Nissan did a little better. But nothing like GM, whose sales were up a nice beefy 16%, even though analysts only thought its sales would increase 12%. The company did especially well with a little help from its pricey truck lines and SUV’s. Fiat Chrysler’s sales were up a very respectable 15%, selling over 195,500 cars just last month. However, the company had a humongous boost from its Jeep brand which saw a massive 33% increase. This makes it the 67th consecutive month of increased sales for Fiat Chrysler. But, what exactly, is the reason why all these people are running out and buying up cars? If you answered low gas prices, then score one for you. The national average gas price hit a new low of $2.20 a gallon, 85 cents less than last year at this time.  But low interest rates and a slew of manufacturer incentives in order to move out the 2015 inventory also helped matters. A lot.

Call of Candy Crush Duty…

Image courtesy of foto76/FreeDigitalPhotos.net

Image courtesy of foto76/FreeDigitalPhotos.net

What happens when you cross the “Call of Duty” with a bunch of confections? You get the biggest acquisition of a mobile-game. Ever. Even bigger than the much-hyped Microsoft acquisition of Mojang, maker of the very beloved “Minecraft.” That’s right, Activision Blizzard, video-game maker of perennial fave games, including “Call of Duty” and “Skylanders,” scooped up King Digital Entertainment, the force behind the highly addictive “Candy Crush,” for a whopping $5.9 billion. Activision Blizzard is getting the mobile confection game maker for $18 a share, a premium over its $17.84 closing price and $4.50 less than its $22.50 IPO.  But many are wondering if Activision’s purchase will pay off. On the one hand, this is a great way for Activation to get into the $20 billion mobile gaming industry. On the other hand, King Digital failed to impress with Candy Crush follow-ups, Farm Heroes Saga and Pet Rescue, leaving many to wonder if the company’s got anything left to show.  After all, its third quarter earnings weren’t exactly sweet and monthly active users came in at 474 million, down from last year’s 495 million.

The Very Under-Performing Caterpillar; H&M’s Fashionable Earnings; Nein the Better for Volkswagen

Cocooning…

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Image courtesy of Supertrooper/FreeDigitalPhotos.net

Caterpillar took a brutal hit today on Wall Street, after cutting its sales outlook and whipping out bad news for some 5,000 employees who can expect a pink slip between now and the end of 2016. By 2018, that number is expected to reach 10,000. And there will be no transformation for this Caterpillar any time soon. There’s nothing flitty nor pretty this quarter about the fiscal health of this U.S-based company, whose performance tends to mirror that of the global economy as a whole. When Caterpillar fails to dazzle Wall Street, it’s safe to say something about the economy isn’t dazzling either. Caterpillar has even managed to take the Dow down with it today. The industries the company serves, namely mining, energy and construction, have been hit hard lately, especially in places like China, taking Caterpillar along for the unpleasant ride. This downturn has affected sales and revenue for the monster machines and shares of the company haven’t been this low since April 2010. It stands to be the first time in the company’s 90 year history that sales and revenue will decrease four years in a row. Caterpillar now expects to see $48 billion in sales, $1 billion less than what it was previously hoping to score. With the looming job cuts and big plans to restructure at over twenty plants, Caterpillar thinks it can cut $1.5 billion. Until then, the company hopes the industries it serves will break free from their fiscal cocoons and once again start pollinating the global financial markets.

Trending…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Maybe Caterpillar should consider going into fast-fashion for the time being. Clothing retailer H&M raked in some boffo earnings with sales growing a stylish 20%. The second largest clothing store in the world also has big plans to make its way into China with over 200 stores set to open there, despite the fact that its economy is currently experiencing a very unpleasant slowdown. This move will put H&M’s total store count at 700 in 28 markets. Can you believe the world needs so much fashion? Apparently, the retail sector in China hasn’t been hit as hard as other sectors. Hey, if you’re gonna have an economic downturn, you may as well do it in style. But even though revenue for the company surged to 46 billion kronor ( it’s a Swedish company, after all) from 38.8 billion kronor a year before, profits hardly moved, staying at very flat 5.3 billion kronor. Apparently, some of that is being blamed on the strong U.S. dollar, which seems to be responsible for higher garment costs. That poor U.S. dollar gets blamed for everything, I tell you. The rest of the blame goes to August. As in the month. A hot month, like its cooler counterpart, can negatively affect sales. Who knew?

Das boot…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Just as Volkswagen CEO Martin Winterkorn quit his post yesterday, three more top execs at the German car company will be getting axed in the wake of the company’s escalating emissions scandal. The board doesn’t even care if these execs had knowledge about the “defeat devices.” The fact is they were still at the top of the Volkswagen food chain as the scandal started (and continues) to unravel. Germany’s transport minister got in the action and discovered that, lo and behold, the emissions scandal even affects automobiles in Europe. Not to be outdone, everybody’s favorite German Chancellor Angela Merkel also entered the fray urging the company to get it together. In German, of course. VW is also staring at the wrong end of a potentially $18 billion penalty. And that’s just in the U.S. Criminal inquiries and lawsuits also loom large for the company. Ironically, Volkswagen had a scheduled board meeting to extend WInterkorn’s contract, who in his eight years with the German car company, managed to almost triple profits there. I guess he should make other plans and start updating his LinkedIn profile. No official word yet, but Porsche top dog Matthias Mueller might start slumming it in a Volksswagen as he’s apparently in the running for the top post now at the embattled company.