American Airlines Wants You to Fly the Cramped Skies; New York Times “Trumps” Estimates; Tesla’s Big Losses and Bigger Gains

Low-class…

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As if customers aren’t irritated enough, and because American Airlines maybe just doesn’t give a hoot, the airline just announced plans to make its flights even more cramped and unpleasant. In economy class, mind you. And this un-strategically timed announcement comes the day after airline execs took a truly deserved congressional beating over how poorly they treat those customers. American Airlines spokesman Joshua Freed said, “We believe we’re still providing a good product for customers.” Of course they do. So if you didn’t feel squeezed and claustrophobic enough before, you can now look forward to even 1-2 inches less of legroom. In fact, that will leave so little legroom, that it will almost put American Airlines in the same legroom class as low-cost carriers like Spirit Airlines and Frontier Alines. That’s classy, alright. What’s worse, is that if American Airlines ends up getting away with these new seating arrangements, then you can expect other major airlines to follow suit. Because that’s how these cats work.

Sign of the “Times”…

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The New York Times whipped out some impressive earnings this quarter and they can thank its very own Public Enemy Number One: President Donald Trump. Oh, the irony.  The Newspaper of Record took in 308,000 new digital subscribers, a 60% increase over last year that marked the company’s best-ever quarterly growth, and now brings its total digital viewership to 2.2 million subscribers. But then it gets even more interesting. Print ad revenue took an 18% dive since apparently a lot of companies just don’t see the value in placing ads in newspapers anymore. However, lo and behold, digital ad revenue was up 19%. See how well that worked out for the media company? Even its revenue grew 5% to almost $400 million, with the company picking up 11 cents per share, a whole penny more than last year at this time. Bonus: it beat estimates of 7 cents per share. Despite the President’s insistence that the company is failing, the fact – not an alternative one, mind you – is that it enjoyed its best quarterly revenue growth in six years. Naturally, shares rose 12% on the not fake news.

Solar-ious…

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Tesla whipped out some quarterly earnings that were not exactly electrifying, given that it had losses that were much much bigger than expected, but also not bad. At all. The company took a $1.33 hit on it earrings, when estimates were for a less severe 83 cents per share loss. That’s where the bad news ends. Revenue came in at $2.70 billion, more than double last year at this time, and nowhere near the expected $2.61 billion. But then we get to the part about vehicle deliveries. Tesla delivered a record breaking 25,000 cars, a number that sent shares of the company up up and away. It was that impressive of a number. Elon Musk made sure to rub that into the faces of traders who were shorting the stock by tweeting, “Stormy weather in Shortville…” That’s just trading humor on Wall Street. Anyway, the stock is up 46% in the last twelve months, so they must be doing something right over at Tesla. One can only hope…

Oil-Vey! Glut Messing with Global Economies; Apple Sets its Sights on India; Who Will Represent the “World’s Most Hated Man”?

Dow-n and out…

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The Dow took a nasty 400 point fall today fueled (a little pun intended) in large part because of the oil glut that’s got barrels of the not-as-hot commodity trading at about $27.50 a pop – a very low low price. The S&P also fell as stocks were trading much lower. In fact, more than 1,000 New York Stock Exchange stocks hit 52 week lows, while on the other side of the pond, European and Asian markets followed suit, performing just as badly on seeing oil hit thirteen year lows. Experts (I am not one of them) are thinking we’re on the threshold of bear market territory – a nasty fiscal phase where market index prices are falling so much that people just want to sell off what they’ve got. Considering that the MSCI All Country World Index (which is basically a global market index mash-up) fell 2.4%, that just might be the case. China’s flailing economy and the United States’ strong dollar aren’t helping matters. Even Royal Dutch Shell is expecting profits to tank 42% to around $1.6 billion – a brutal cry from the $3.3 billion it reported last year at this time. But box-office fave Leonardo DiCaprio isn’t crying for Shell, or any other oil producers for that matter. At the World Economic Forum in Davos, Switzerland, where the A-lister was receiving some award, he graciously lashed out at big oil and corporate greed calling them, “Those entities with a financial interest in preserving this destructive system…covered up the evidence of our changing climate.” Hey! Maybe he’ll use that in his Oscar acceptance speech…

An Apple a day…

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It took awhile but Apple is now working to bring its tech magic to India where the Cupertino, California-based company finally finally filed an application with the Indian government to set up shop there. No word yet on how many stores it plans on opening or even how big of an investment it’s going to be. Of course, Apple products are already available in the country that boasts the second largest telecom market in the world. But in order to buy those products, consumers purchase the merchandise through a network of Indian-owned distributors. There are some who feel that Apple had been willfully ignoring India since it took this long to make the leap there. But Apple argues otherwise saying that restrictions on foreign investment in the retail sector weren’t exactly winning them over. India typically requires a single brand  – in this case, Apple – to locally procure 30% of its goods sold in the country. But rumor has it Apple brass had a little conversation with the Indian authorities to ease up on things.  Also India, unfortunately, doesn’t have the boffo spending power of say, China, where people pounced on iPhones from day one. In India, cheaper alternatives dominate the smartphone market while Apple only has about a 2% market share on the devices.  Apple, however, had been trying to make its products more affordable by offering buyback programs, installment programs and giving discounts on older phones. And then something wonderful happened – Apple sales in India crossed the $1 billion mark back in March and the tech company presumably began to see things differently.  The fact that India has the fastest growing smartphone market and is poised to take over the number two spot from the United States (China is first, duh) in 2017 might also have something to do with the change of heart.

Dumb and dumber…

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Martin Shkreli aka “Pharma bro”is switching lawyers though, why exactly remains a mystery. Marcus A. Asner, an attorney at the soon-to-be-ex firm of Arnold & Porter did not give an explanation as to why the change was being requested but he was probably not broken up that he will no longer represent what many call the world’s most hated man. Shkreli, 32, by the way, takes exception to that moniker, as he mentioned in a recent interview. But considering he raised the price of a life-saving drug by 5000% – well, what else are you gonna call him?  Perhaps we should give him the benefit of the doubt and assume he needed the extra cash so that he could buy the only known copy of a Wu-Tang Clan Album for $2 million. Just kidding. He has multiple accounts at multiple brokerage firms. Shkreli says that the lawyer switcheroo has nothing to do with the interview he did with The New York Times and called the explanation  a “dumb theory.” But you know what’s really dumb? Raising the price of a single pill from  $13.50 to $750.00. Shkreli, who is charged with blowing investors’ cash on some bad trades and then taking money out of his pharmaceutical company to pay for those trades said “the government’s case is fictitious.” He has pleaded not guilty to securities fraud and conspiracy.

Harley’s Rough Ride on Wall Street; Madoff Victims Pay Day; Amazon Wants You. Really.

Rough riding…

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Image courtesy of sritangphoto/FreeDigitalPhotos.net

Harley-Davidson is no match for Wall Street as the all-American bike gets whipped by yet another rough quarter.  With sales down 2.5% in the U.S. and another 1% worldwide, Harley-Davidson brass have made a brutal decision to cut a bunch of jobs and ship out 11,000 less bikes next year. Instead, the company will dish out $70 million to increase its 2016 marketing budget. The company is hoping (and presumably praying) that it can increase product and brand awareness. And get people to buy more bike, of course. But how is it even possible that a brand as iconic as Harley would need to do such a thing? While there’s no disputing that there’s nothing like a Harley, the company is facing increased competition from European and Asian bike makers, like Ducati, Royal Enfield and Triumph. Those companies are putting out some fierce machines, and in some cases, for a lot less money than a “hog.” The proof is that in the first nine months of the year, the number of registered bikes has surged 6.6%. Net income for Harley-Davidson came in at $140.3 million, a 6.5% decrease over last year’s $150 million. Harley added 69 cent per share when analysts predicted 78 cents instead. In fact, shares fell the most that they have in six years.  But that isn’t stopping Harley-Davidson from plans to open up 200 more dealerships abroad.

Lost and found…

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Image courtesy of bplanet/FreeDigitalPhotos.net

It’s been seven years since Bernie Madoff’s evil Ponzi scheme unraveled. But today, more than 1,200 of his victims (there were way more than that) can sort of rejoice and look forward to recouping at least some of their lost funds. Irving Picard, the trustee who has been hard at working recouping money on behalf of the victims of the largest Ponzi scheme in U.S. history, has managed to release $1.5 billion from legal reserves. Victims who invested up to $1,161,000 can expect to get back about $1 million. Those who unfortunately invested more can expect to recoup 61 cents on the dollar.  Much of this money is coming from the widow of Madoff’s deceased alleged co-conspirator Jeffery Picower.  She agreed to turn over $7.2 billion of her late husband’s ill-gotten stash. Of course, some of that cash, approximately $1 billion, will also go towards covering all those enormous legal fees of the law firm handling this case. U.S officials have so far recovered about $11 billion from the $17 billion that was lost. As for Bernie Madoff, he’s hitting year 7 of a 150 year prison sentence.

Hire cause…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

If you’re looking to score some extra cash this holiday season then don’t let the New York Times get in your way and  dissuade you from applying for a job at Amazon. I bet Amazon is hoping the NYT doesn’t dissuade you either since the company is looking to hire 25,000 full-time employees and 100,000 part-time employees for the holiday season. While the company has always hired more people for this time of year, this time the digits are pretty epic in that they’ve never been this high. It should be duly noted that plenty of people who had been hired specifically for the holiday season were subsequently kept on as permanent employees.  The jobs will be primarily in the sorting and fulfillment facilities across the country.  But Amazon’s not the only game in town as Target, Wal-Mart, Macy’s, Kohl’s and a slew of other companies are also looking to amp up their workforces this holiday season. Just be sure not to ask Bo Olsen for a reference.

Oprah’s Next Favorite Thing; The Force Does Not Awaken Hasbro’s “Girl” Toys; Amazon/New York Times Smackdown

Everything she touches turns to green…

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Image courtesy of Mister GC/FreeDigitalPhotos.net

Media titan-ess and Forbes’ 211th richest American, Oprah Winfrey, just added to her portfolio by scooping up a 10% stake in Weight Watchers. At $6.79 a pop, Winfrey snagged 6.4 million shares for a $43.2 million purchase.”I believe in the program so much I decided to invest in the company and partner in its evolution.” Awww. Apparently, her own personal experience with the company’s program led her to some very desirable results and now investors are hoping to see if the “Oprah Effect” can help turn around the struggling diet company, which has been in a perpetual slump for the last few years. So far it seems to be working as the stock soared 92% on the news of Oprah Winfrey’s involvement with a seat on the board as well as becoming an adviser to the company. Maybe that surge will help offset the 92% loss the shares have suffered since 2011, when the stock hit its peak of $85.76. The company had been losing ground to the tech age as dieting has been steadily going digital. Now Weight Watchers has begun to shift its program to focus on living a healthier lifestyle as opposed to just dieting and is jumping on the digital bandwagon by offering tech services to attract new customers and keep existing ones, Oprah and all.

May the force be with your profits…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The force is apparently with Hasbro as the toy company’s earnings are up 15% mostly thanks to licensing deals with Jurassic World and Star Wars. The toymaker was able to strike down analysts forecasts with profits coming in at $207.6 million and a $1.64 per share when predictions were for $1.52 per share. Hasbro easily beat last year’s same-period digits of $180.5 million and $1.40 per share. But the dark force still looms large for the toymaker and not just from the $132 million that was affected because of the strong U.S. dollar. Shares from its girl division fell 28% for the fourth straight quarter. Is it even P.C. for Hasbro to have a boys and girls category? Just wondering.  But the young consumers, to whom these girl toys are presumably marketed, have been shifting their preferences towards gadgets and tablets instead of blond hair and magic ponies. Which is too bad since that female-focused category accounts for 50% of Hasbro’s total revenues and remained at a very flat $.147 billion.

Right back at ya!

Image courtesy of digital art/FreeDigitalPhotos.net

Image courtesy of digital art/FreeDigitalPhotos.net

I’m guessing there will be no Amazon swag for the New York Times in the near (and distant) future. Still reeling from a scathing New York Times story from August, Amazon has finally fired back at the newspaper by calling into question its reporting capabilities.  Not that Amazon is the first entity to have to do this with the New York Times, but I digress. The story, published back in August, painted a very unattractive picture of the employee atmosphere at the e-commerce giant. Former White House Spokesman Jay Carney, who now serves as Amazon’s Senior Vice President for Global Corporate Affairs, strongly responded to the “newspaper of record” for blog Medium. Carney said it took two months to formulate its response to the New York Times because the tech giant was “hoping they might take action to correct the record. They haven’t, which is why we decided to write about it ourselves.” Among some of the pearls was the bit about former Amazon employee Bo Olsen who, when interviewed by the NYT, told reporters Jodi Kantor and David Streitfeld, that he saw many many employees crying at their desks.  Apparently he was making these observations while defrauding vendors and falsifying business records and subsequently resigned following an investigation. So much for the Pulitzer on that story.