Can a Former Home Depot Exec Renovate J.C. Penney?

October 23, 2014, 11:00 pm

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Filed under: JC Penney, Retail, CEOs, Stores, Investing

Marvin Ellison, the incoming boss of J.C. Penney (JCP), has a big project ahead of him in renovating the troubled 112-year-old department store chain.

Since 2007, when the stock hit a high of $82.16, to its recent closes at about $7, the company has reported quarter after quarter of millions in losses, a trend that accelerated in 2012 after Ron Johnson, formerly of Apple (AAPL), took over. Longtime customers fled the store in droves as he swept away promotions, coupons and their favorite private brands -- like St. John's Bay, Stafford, Ambrielle and Worthington. He made the stores cleaner and brighter, but that was far from enough.

Ellison, formerly Home Depot's (HD) executive vice president of U.S. stores, will need to both win back the older shoppers and attract millennials and minorities. And this without a recent background in fashion retail. (He did work for Target (TGT), but that was a dozen years ago.) A cautious board is starting Ellison in the job of president (he starts Nov. 1), and giving him until August to learn the business before he's fully in charge of supervising "Extreme Makeover, Retail Edition" as CEO.

Some of the prep work is already done. Mike Ullman (the current CEO, who was brought out of retirement as an interim leader) brought back the promotions and coupons that its shoppers love. And those private brands that Johnson gave the ax? They now comprise half of Penney's merchandise.

What's the Plan of Attack?

At the company's most recent analyst day in October, Ullman and other executives unrolled blueprints for the turnaround: more soft goods (such as towels, bedding and window coverings); a stronger presence in the center of the store selling lingerie, fine jewelry, fashion accessories and shoes; and increased competitiveness in online and mobile.

Penney has 1,060 stores, enough to give it, as Ullman put it, "a footprint in every state except Hawaii and in virtually every little town in America."

Hoping to trade on nostalgia from its older customers -- the boomers who fondly remember the J.C. Penney catalog, introduced in 1961 and discontinued in 2001 -- J.C. Penney is bringing back the catalog in digital form.

Although the chain has reported $3.16 billion in losses over the last three years, it has reported sales growth in the last three quarters. Active customers are within 1 percent of 2011 levels before Johnson's tenure, and customer satisfaction levels are at all-time highs. Yet, even so, the store managed to trip on its ladder when a pricing scandal surfaced earlier this year: Managers were marking up items -- sometimes to double the original price -- then sell the items at their original prices, but advertising them as sale prices.

Building On Its Strengths

The stores do have in-store Sephora cosmetics shops and Disney (DIS) brands, in addition to popular brands like Nike (NKE), Dockers, Izod and Carter's (CRI) for the entire family. J.C. Penney is the No. 2 big and tall men's clothier in the U.S.

According to Ullman, half of America's families are J.C. Penney customers -- but more likely, those customers are the older family members. Young marrieds, college kids, teens wanting clothes or young people furnishing a first apartment are shopping at Macy's (M), specialty boutiques, Urban Outfitters (URBN), and of course, Target.

J.C. Penney also faces indirect competition from the likes of Samsung (SSNLF) Apple and Amazon.com (AMZN) as well for the total consumer dollar, Ullman said at the Analyst Day. Morgan Stanley (MS) analyst Kimberly Greenberger iterated the theme that consumers are spending their discretionary income in restaurants and on tech, not fashion, rating J.C. Penney and its rival Kohl's (KSS) a sell on Oct. 21.

Shoring Up the Walls

Ellison is moving to the chain's headquarters in Plano, Texas, something Johnson refused to do. Ellison is expected by analysts and retail watchers to work on day-to-day operations and mend a broken trust with its customers. Deb Berman, J.C. Penney senior vice president of marketing, called it "the fine line between love and hate."

Ellison's strengths at Home Depot included experience in digital platforms and customer service, both areas where J.C. Penney needs more work. Home Depot had been in a similar slough with poor or nonexistent customer service, and Ellison is partly to credit for that turnaround.

Ellison will be the first African American to head a major American retailer, and coverage of his appointment was often reported with the cynical intimation that he is expected to help bring in minorities. Ellison needs to bring in everyone to get J.C. Penney back to sales figures like 2007's $19.9 billion.

He'll have a tough job -- hamstrung by more debt, more expenses, fewer stores and less revenues than previous CEOs at J.C. Penney. And he has barely 10 months to learn the new nuts and bolts of soft goods before he'll be on the hook to bring this project in under budget.

 

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7 Reasons to Be Wary of Financial Advice from Almost Anyone

October 23, 2014, 11:00 pm

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Filed under: Personal Finance, Financial Advisors, Planning, Financial Education

In the corner of the room there was a small, round man, with Coke bottle glasses, beckoning me to sit next to him. If not for the red plaid vest and Santa cap he wore so proudly, he could have passed for a wise old owl. I saw my great-uncle rarely -- usually only at holiday gatherings like this one -- and I as I made my way over I knew I was in store for a slice of his worldly wisdom.

"Brian," he began. "You will be graduating soon and making choices about your future. I want to give you some advice. Unless you are planning on being a doctor, a lawyer or an engineer -- professions where you have to follow a specific path -- chances are your life will take many twists and turns before you settle on your ultimate career, so just take them in stride."

It was good advice, the type that you rarely come across and are grateful for when you do. The dynamic is the same when it comes to financial matters -- everybody wants to give you advice, but most of it isn't good for you -- even if it would be for somebody else. Consider these seven situations.

1. Different Things for Different Stages

When I was in my early 20s, my grandfather told me that I should invest my money in certificates of deposit and money market funds to get a safe and steady rate of return. Initially I did that, until I realized that his strategy was tailored specifically to a person in his twilight years.

With 40 to 50 years of investing in front of me, I could afford to be more aggressive in my investments and would do better to have more exposure to stocks. We were at different life stages; what he saw as sensible advice would have been a terrible plan for me.

2. Are You Getting Advice or Being Sold Something?

It's often assumed that when you walk into the office of a professional money management company, the person behind the desk is always going to have your best interest at heart. If only that were the case.

If you are dealing with salespeople who work on commission, their top objective may be selling you on the investment that yields them the biggest compensation. Instead of putting you into the most appropriate low-fee or no-load mutual fund, following their advice might land you might in an annuity that benefits them more than you, with a big back-end bonus, and marginal returns.

3. Ignorance Isn't Bliss -- Especially in an Adviser

If you clean yourself up nicely, put on a well-tailored suit or other smart business attire, and walk into a car dealership, chances are you'll get escorted to the VIP area where the top of the line models are showcased. It will be assumed that you are a person of means, ready and willing to purchase the best that money can buy.

If a financial planner only looks at you superficially, but doesn't make an effort to fully understand your financial picture, he or she won't give you the advice that fits you best, and you might end up being put in the investment equivalent of a Ferrari, when you would be better suited for a Ford (F).

4. Is Your Expert Really an Expert?

Ever get into a conversation with someone where you get the sense that they don't quite know what they are talking about -- but you can't be sure, because you definitely don't? The same thing happens when discussing finances, where talking fast and resolutely can sometimes mask a lack of competency.

What makes it worse is that most people are intimidated by financial matters and assume that the person giving them advice knows more than they do, which can result in them ending up in a less than optimal fiscal situation.

5. Misery Loves Company

Perhaps the most dangerous financial advice you can get is the type that is passed around at the water cooler, at cocktail parties or -- with no disrespect to my great-uncle -- at holiday get-togethers. Friends, co-workers and even family members who want to give you "tips" about their "great" investments should be avoided at all costs.

A strange component of the human condition is that when suffering, we tend to think that others people suffering with us will lessen our discomfort. That advice about a great stock your buddy bought or your cousin's can't-miss investment might be an attempt to get you into something that already has them underwater, so they can have somebody to share their pain.

Conversely, people will sometimes wait until they have a "win" on an investment before bragging about it and urging you to join in with them. Ironically, by that time, the gains are usually peaking, which means you end up getting in at the top.

6. Are You Experienced?

"Don't buy real estate," was the advice my great-grandfather gave me when I was in my late teens. "It's not worth it. Renters are a pain, property taxes will kill you, and prices never go up." He was correct, to a degree, having had experience with three rental properties in his hometown of Salt Lake City. But his real estate experience was specific to -- and thus only applied to -- his location.

I lived in Southern California, where you could hire property managers to deal with renters, taxes were capped by law, and there was a history of year-over-year price appreciation. Though his advice was totally appropriate -- based on his own experience -- in a certain context, it did not apply to my situation and thus would have been wrong to follow.

7. No Risk, No Reward

By far, the most common reason that you should be skeptical of financial advice from others is that everybody has a different view of risk, and how much of it they are willing to put up with. Age, financial savvy and economic status all play a part in our risk tolerance profile, but there is also an intangible component to risk -- the thrill that some get just by taking it.

Some people will invest in pork belly futures and Afghan ice cream parlor franchises just for the excitement it brings them. If you take financial advice from them, you may find yourself staring at the ceiling during the middle of the night more often than you would like.

Do Your Own Work and Avoid the Advice

The bottom line is that taking financial advice from others, either professionals or amateurs, is a risky endeavor, but fortunately one that you don't have to take. Thanks to technology, there has never been a better time than now in which to be able to educate yourself financially.

The Internet is full of resources (like DailyFinance) where you can do research, allowing you to determine your financial path without relying on anyone else's advice. But if your great-uncle gives you some anyway, just give him a hug and say "thanks."

Subscribe to my newsletter The Lund Loop a free once-weekly curated slice of what I'm writing, reading and hearing about in the stock market.

 

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11 Simple Steps Toward Earning More Than Almost Everyone

October 23, 2014, 11:00 pm

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Filed under: Careers, Personal Finance, Career Change, Professional Development, Financial Education

What does it take to be in the top 5 percent of American earners? The amount required is just $167,700 in adjusted gross income (gross income minus a few specific deducted expenses), according to the Internal Revenue Service.

But what would it take for you to get hit that income mark -- or the $389,000 that would put you into the much-discussed 1 percent? Read on.

1. Believe that you deserve to be highly paid. Tens of millions of Americans have a core belief that they can never earn a high income. That core belief controls all that they do, and unfortunately becomes a self-fulfilling prophecy. There is a deeper problem of not being worthy or equating high incomes with being greedy or gaudy. Money will flow to people who take consistent actions to attract it. How you use it after that is up to you.

2. Model someone who is making that high income in your chosen profession. Don't tell me that "nobody in my profession makes that kind of money." That's usually a myth that makes people feel better about their low income. You can find top 5 percenters in almost any field if you look for them. Find the ones in yours, then study -- and copy -- their beliefs and actions.

3. Learn that love of money, not money itself, is the root of evil. If you make more money (assuming you handle it properly), it will give you so many more options to influence positive outcomes in all areas of your life and the lives of others

4. Eliminate those nagging voices holding you back. Answer these questions: What would my life be like if I made $200,000 a year? What small changes could I make that would have a huge difference over time? What self-sabotaging fears are causing me to not achieve my goals?

5. Start your own business, even if it has to be part time. If your job won't lead you to big paycheck, make a 12- and 24-month plan to get your own business on the road and earning enough to replace your job income. Imagine how it would be to spend all day, every day chasing your dreams instead of helping someone else achieve their dreams. In 12, 24 or 36 months you will surely have arrived. The only question: Will you be in a new place living your dreams or will you be where you are today? The choice is yours.

6. Take 100 percent responsibility for your life and income. Stop blaming your boss, spouse, kids, lack of education or one of the thousand other crutches we all use to justify why we are not achieving our dreams. I am a high school failure and college dropout who has entered the ranks of the top income earners. Many people started out ahead of me and have not figured out a way to high incomes.

7. Take 30 minutes, minimum six days a week to study your written goals. Your goals must be written with dates and in a place you can access every day. Otherwise, time gets away from you, and the excuses pile up until you are left with no progress. Use a time planner for scheduling and to write down great ideas and form action plans.

8. Hang out with like-minded, successful people. It is said that if you want to figure out a person's income, take the average income of the five people they hang around the most. Hanging out with achievers will help you stay positive and expose you to ideas you would never get from your normal spheres of influence.

9. Read. Cut out one hour a day of television or Internet time to read books that teach you about successful people. It is estimated that 90 percent of Americans do not read a non-fiction book cover to cover after they finish their formal schooling. Then they wonder why they don't have the level of financial abundance they desire. Successful people have huge libraries (on paper and other formats) that they use to learn key strategies and keep motivated. The average American watches more than five hours of television per day -- which when multiplied over seven days is basically our other full-time job. Surely you could give up at least one of those hours going for your dreams.

10. Go for proven sectors. It is difficult to make $200,000 a year or more weaving baskets or sweaters. It is much easier to make that income in real estate, consulting, manufacturing, selling goods and services, financial services, franchising and dozens of other high-potential businesses and professions. Find a vehicle that you would like (even if it's new for you) and search out people who achieved results you admire and model what they did (remember success and failure both leave clues that can be studied).

11. Take massive action every week until it becomes a habit. Action is truly the key to success. Even the wrong action creates motion, and that motion can be altered until you are moving in the direction you desire. More dreams die in the dreamers' minds before any action is ever taken. Don't let fear stop you from moving forward.

John Jamieson is the best-selling author of "The Perpetual Wealth System." Follow him on Facebook and Twitter.

 

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Grandma Taught Me Just How Expensive Old Age Can Be

October 23, 2014, 11:00 pm

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Filed under: Life Stage Lessons

Every one of us has had "aha! moments." Epiphanies. Days when we reach a crossroads and realize that we have to make some changes. For the next two months, we're sharing moments like those in our Life Stage Lessons series: Real stories straight from the financial lives of our DailyFinance contributors about times when they realized they were due for a serious course correction. So read on, learn from our mistakes, and get inspired to improve your relationship with your money.

Nobody wants to die, but if there was a perfect script for exiting this world, most people would agree that it should involve a long life, with a quick, painless passing that takes place before one suffers from any of the serious health issues that can be so common among the elderly. That was pretty much the way that my paternal grandfather shuffled off this mortal coil.

After a night out at his favorite Chinese restaurant with a group of good friends, he sat up in bed one morning, said "Owww," lapsed into a coma and was gone less than 24 hours later. He was 88 and had been in excellent health up until that day. An autopsy later determined that he died from a burst stomach aneurism -- not some bad kung pao beef -- much to the restaurant's relief. I think it is fair to say that he "won" at the game of life.

Grandmother's Costly Final Decade

His wife, my grandmother, took a different path during the last decade of her life, a path that showed me just how expensive long-term elder care can be -- and why I needed to plan for it.

Initially, she was able to take care of herself and lived alone in her house. But after a few years, it was clear that age was taking its toll, and her family decided it would be best for her to move to a senior community, where she could live independently in her own apartment, with access to a support staff if needed. The cost was $4,700 a month.

When her health began to decline, she moved to higher-level care, into something that could best be described as mini-suite, not unlike what you would find at a hotel, but on a floor that had full-time assistance, allowing her to live semi-independently. At this point, the price jumped to $5,500 a month.

When she was 93 and no longer able to live without full-time care, we moved her into the highest level of care, which was a room -- with a roommate -- on a medical floor with medical staff on duty 24/7. The price came in at almost $6,900 a month until she passed away 10 months later, shortly after her 94th birthday.

The Numbers Are Only Going Up

Her eight years of elder care cost close to a half a million dollars. Her monthly income from Social Security and a small pension covered less than a third of that, and the difference had to be made up from the proceeds of selling her home. And in the ten years since she passed, the cost of long-term care has only gone up.

According to Genworth Financial (GNW), one of the largest providers of long-term care insurance, the national average cost for a semi-private room in a nursing facility will run you $77,380 per year. Want to be in a private room? Then it goes up to $87,600. Over the next five years, these numbers are expected rise by 4 percent annually.

I hope that I meet my demise in a similar fashion to my grandfather -- though I'd prefer my final meal to be surf and turf -- or that I have family members willing and able to take care of me in my twilight years. But if not, I'll be OK, because after watching what happened with my grandmother, I got long-term care insurance to make sure I am financially prepared when the time -- hopefully a long time from now -- comes.

The Lund Loop is a free once-weekly curated slice of what I am writing, reading and hearing about in finance, tech, music, pop culture, humor and the good life. But not sports or knitting ... ever!

 

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Amazon's Huge Loss Makes Holidays a Question Mark

October 23, 2014, 11:18 pm

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Filed under: Amazon.com, Earnings, Retail, Holiday Shopping, Internet

By MAE ANDERSON

NEW YORK -- Amazon's trademark smile icon is becoming more of a grimace.

The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

Investors are increasingly irked by Amazon's strategy of investing heavily in new products and services to spur revenue growth while reporting quarter after quarter of losses or thin profit. Amazon's (AMZN) stock price tumbled 11 percent after the results came out Thursday. That's on top of the 22 percent decline the stock has already suffered this year.

Chief Financial Officer Thomas Szkutak said the company had to be "selective" in taking on new projects. For years, Amazon's strategy has been spending the money it makes to grow and expand into new areas. It launched a smartphone, the Fire, this summer and has been offering a set-top video-streaming device, a streaming video service and several tablets and e-book readers.

The company has also been investing in services for its $99-a-year loyalty program, Prime. It has added a grocery delivery services and music streaming for Prime members as well as offering original TV shows such as the critically acclaimed "Transparent" starring Jeffrey Tambor.

But all of those initiatives cost money and time to develop. And not all of them have been hits.

The company's splashy launch of its Fire phone was quickly followed by mediocre reviews and a steep price cut to entice buyers. Amazon said it took a charge of $170 million related to "inventory evaluation and supplier commitment costs" for the Fire, although it didn't give further details. Amazon has about $83 million of Fire phone inventory at the end of the quarter.

So investors are increasingly signaling that Amazon needs to work harder at turning a profit.

"The market was looking for more in terms of revenue and operating income and the fourth-quarter outlook," said Morningstar (MORN) analyst R.J. Hottovy. "It's going to be a competitive landscape for retailers this holiday season and retailers will compete aggressively for consumers."

Choosing Priorities

In a conference call with analysts, Szkutak said the company is focused on "using its capital wisely so that over time we get good returns on invested capital."

But he agreed the company needed to choose new projects carefully.

"We certainly have been in several years now of what I will call in investment mode," he said. "There's still lots of opportunity in front of us but we know that we have to be very selective about which opportunities we pursue. "

Net loss for the quarter was $437 million, or 95 cents a share, far steeper than the loss of 76 cents a share analysts were expecting, according to FactSet. Revenue jumped 20 percent to $20.6 billion, but that fell short of expectations as well.

Amazon.com said it expects holiday quarter revenue of $27.3 billion and $30.3 billion, below analyst expectations of $30.9 billion. That's an increase of 7 percent to 18 percent -- slower growth than the prior-year holiday quarter when sales rose 20 percent.

Szkutak said the stronger dollar will hurt fourth quarter revenue by about 2.5 percentage points.

The holiday period is crucial because retailers make a chunk of their annual profit, about 20 percent, in November and December. Overall, the National Retail Federation expects sales during the period to be up 4 percent to $617 billion.

Amazon CEO Jeff Bezos said the company was focused on making the holidays "easier and more stress free" than ever.

The company has hired 80,000 seasonal workers and has expanded its Sunday shipping service. It now has more than 50 distribution centers in the U.S., up from 40 last year. And in July it announced it was opening eight smaller sorting centers for a total of 15 by the end of the year.

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Ebola in New York: Will U.S. Stocks Follow Europe Lower?

October 23, 2014, 11:40 pm

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Filed under: Market News, Stocks, World Markets

By Leslie Shaffer | @LeslieShaffer1

The diagnosis of an Ebola case in New York sent U.S. futures into a tizzy, spurring worries Wall Street may give up recent gains, as Europe stocks fell Friday.

The pan-European FTSEurofirst 300 was around 0.4 percent lower in early trade, following the reports of the first Ebola case in the U.S.'s financial hub.

"Even though you hear what health workers or the government is saying, that you don't catch Ebola as easily, it's just the fear that would probably drag markets down," said Song Seng Wun, head of research at CIMB in Singapore. "Anxiety is not good for economic activity, especially coming up to the festive holiday [season]."

U.S. futures indicated a slightly lower open Friday.

But Asian stock markets remained sanguine Friday, and Song said he expects them to keep their cool: "We've been through SARS and bird flu from Hong Kong ... We're a bit more level-headed."

A doctor in New York City, identified as Craig Spencer, has tested positive for the Ebola virus after returning from treating patients in West Africa. He had contact with four other people, rode the city subways, went for a three mile jog and even visited a Brooklyn bowling alley within the past week, city officials revealed Thursday, although they also issued reminders that Ebola isn't an airborne disease and transmission requires contact with bodily fluids.

In the wake of the news, Dow Jones industrial average (^DJI) futures dropped more than 70 points and the Japanese yen, generally considered a safe-haven play, strengthened by around 0.3 percent against the greenback, but most Asian shares didn't react much.

But Song cautioned that the "picture could well change here in Asia" if U.S. futures continued to fall. "It's the weekend. You don't want to appear too heroic," he added.

Some noted that they don't expect much of a fundamental market impact from Ebola.

"It's really a sentiment issue," said Hans Goetti, head of investment for Asia at Banque Internationale a Luxembourg. "Part of the reason for the short sell-off last week was possibly Ebola, but it's impossible to quantify the impact on the economy at this stage."

Read More Paul Allen pledges $100 million to fight Ebola

He expects some near-term volatility in markets, but noted that clients aren't expressing any concerns at this stage.

"It weighs on sentiment, but I really fail to see the real threat," Goetti said. "If Nigeria can get Ebola under control, the U.S. should be able to and Europe as well."

On October 20, the U.N.'s World Health Organization declared Nigeria free of the virus after 42 days passed without a new infection.

Others are looking to any potential declines as a chance to profit.

"If the stock market were to take a little bit of a step back because of the news we got out of New York today, that would certainly be unfortunate, but the goal here is to buy good stocks at great prices," Scott Nations, chief investment officer at NationsShares, told CNBC.

To be sure, some stocks are getting a boost from the latest Ebola scare.

In intraday trading in Japan, Fujifilm jumped 4 percent on hopes that its influenza drug will cure the virus. Makers of air purifiers and protective clothing, such as Azearth and Teikoku Sen-I, rallied 17 percent each intraday.

 

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How Much Billionaires Really Spend Each Month

October 24, 2014, 12:02 am

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Filed under: Bankruptcy, Personal Finance, Divorce, People, Financial Education

By Robert Frank | @robtfrank

Being rich is getting expensive. Just ask Sam Wyly and Anne Dias Griffin.

Court filings related to different cases involving Wyly and Griffin offer a rare look into the real spending habits of billionaire families. While all billionaires are different, with some living large and others more frugal, the filings show the so-called burn-rate, or monthly spending, for many of today's upper crust can dwarf most people's annual incomes.

Take Wyly, a former billionaire who made his fortune from Michael's Stores (MIK) and Sterling Software. He declared bankruptcy this week in the wake of a potential nine-figure forfeiture order from the Securities and Exchange Commission. The judgment stems from a jury decision that found Wyly and his now-deceased brother, Charles, liable for violating securities law by using offshore trusts to hide stock trades.

In court filings, Wyly filed his monthly expenses for the court's approval and the SEC is asking for an asset freeze. The SEC said Wyly has spent a total of $450 million over the past 10 years, "a burn-rate of approximately $3.75 million a month."

Of course, much of that may have been lawyer fees to battle the SEC. But the SEC says his everyday expense include $2,200 a month for "pool, home maintenance and landscaping," $2,000 a month for groceries, and $32,000 a month for "two personal writing assistants" (he's written several books). The salaries for the writing assistants and his housekeeper total $523,345 a year.

He pays $29,000 a month for the mortgage on his wife's bookstore, Explore Booksellers in Aspen, which is for sale. He also spends $7,000 a month "to support family and friends."

Wyly also reports paying more than $100,000 a month to his family office, which runs his investments and his finances.

The SEC said these expenses "would boggle the average homeowner" and are unjustifiable."

Wyly's attorneys declined comment.

In a similar vein, court filings from billionaire hedge funder Ken Griffin against his estranged wife Anne Dias Griffin seek to seek to paint a picture of a woman with a large personal budget. She's seeking to break their pre-nup and said Ken has cut off her credit cards and fired her staffers. She said he has an annual income of around $900 million a year.

Ken Griffin said he's already given her $40 million and continues to pay all expenses for the children.

In filings, Anne Dias Griffin said she and their children have come to "enjoy a lifestyle reserved only for the very wealthy," including houses in Chicago, Aspen, Hawaii, Miami Beach and New York. They also have "unrestricted access" to two private jets "to travel to the aforementioned homes" as well as other destinations.

She said the family has a "large group of staff members assisting the family, including extensive household, security and family office employees," and their own company that employs staffers, called "Griffin Family Services."

Ken Griffin said Anne "cannot support her claim that she has a clearly ascertainable right to have Ken fund the purchases of couture clothing, helicopter rides, private air travel and whatever lifestyle she chooses based on Ken's 'total financial resources.' "

 

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Ford 3Q Earnings Lower, but Still Beat Street Estimates

October 24, 2014, 1:20 am

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Filed under: Company News, Earnings, Automotive Industry, Ford, Manufacturing

By Bernie Woodall and Ben Klayman

DETROIT -- Ford Motor reported Friday a 34 percent drop in third-quarter earnings, and revenue fell due to the cost of introducing the F-150 pickup truck.

Ford, which affirmed its full-year profit outlook, said earnings suffered from lower wholesale vehicle volumes and recall costs, as well as supplier parts shortages. While a strong performance in North America helped push earnings above Wall Street estimates, analysts and investors were not impressed.

"No compelling new reason to either buy or sell the stock," Morgan Stanley (MS) analyst Adam Jonas said in a research note. "On the substance of the results and outlook itself, we don't believe consensus forecasts need to change materially."

Shares of Ford (F) were off 3.3 percent at $13.93 in morning trading.

The launch of the aluminum-bodied F-150 is on track, and Ford has completed about half of 23 global introductions planned this year, it said. The pickup is a key profit driver for the No. 2 U.S. automaker.

A 3 percent drop in third-quarter revenue to $34.9 billion is largely linked to the planned shutdown of the F-150 plant in Dearborn, Michigan. Ford also said wholesale volumes fell by 3 percent, partly due to the parts shortages.

Chief Financial Officer Bob Shanks didn't identify the suppliers or the vehicles affected but said there were four different problems across several North American plants that had been resolved. He said Ford wouldn't recoup all of the lost production in the fourth quarter.

Excluding one-time items, Ford reported earnings of 24 cents a share, which beat expectations of 19 cents from analysts polled by Thomson Reuters I/B/E/S.

Shanks attributed that beat to North American operating results and lower tax rates.

Ford's profit margin of 7.1 percent in North America lagged the 9.5 percent that crosstown rival General Motors (GM) reported Thursday. Excluding recall costs, Ford's margin would have been 10.2 percent.

The last time GM's North American margin was higher than Ford's was the fourth quarter of 2011, according to Barclays.

Higher vehicle prices added nearly $600 million to Ford's earnings, almost half of that derived from North America.

Ford last month warned that its pretax profit this year would be $6 billion, down from a previous forecast of $7 billion to $8 billion, and that recall costs in North America would be $1 billion. About $630 million of those costs came in the third quarter.

Net income fell to $835 million, or 21 cents a share, from $1.27 billion, or 31 cents a share, a year earlier.

Ford continued to lose money in Europe and in South America while being profitable in Asia as well as North America.

The loss in Europe widened to $439 million from $182 million a year ago, mainly due to weakness in Russia.

Ford continued its gains in China, where it reached 4.7 percent market share, its highest yet.

 

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AMC Networks Enters Joint Venture to Run BBC America

October 24, 2014, 1:39 am

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Filed under: Company News, Media, Mergers & Acquisitions, Entertainment Industry

By Sudarshan Varadhan and Lisa Richwine

AMC Networks has agreed to pay $200 million for a 49.9 percent stake in BBC America and would take operational control of the cable television channel.

BBC Worldwide will retain a 50.1 percent stake in BBC America, which is available on cable and satellite TV in 80 million U.S. homes and airs popular drama series such as "Doctor Who" and "Orphan Black."

AMC Networks (AMCX), home of "The Walking Dead," "Mad Men" and "Breaking Bad," will have operational control of BBC America, including affiliate and advertising sales. AMC will consolidate the results of the joint venture in its financial statements.

We were attracted together by what a potent force we could become as the home of smart TV and really top-end television.

AMC Networks owns IFC, SundanceTV and WE tv in addition to its flagship AMC network.

"We were attracted together by what a potent force we could become as the home of smart TV and really top-end television," Tim Davie, chief executive of BBC Worldwide, said in an interview Thursday.

BBC America will be managed as a stand-alone channel within the AMC Networks portfolio, and BBC Worldwide North America will continue as a wholly owned regional business within BBC Worldwide, the commercial arm of the British Broadcasting Corp.

The deal is expected to provide the networks with a stronger position in negotiations over the fees paid by cable and satellite TV distributors, which are in the midst of a wave of consolidation.

BBC America's programming also has proven appeal with online video viewers in the United States, said Josh Sapan, chief executive of AMC Networks, noting its success on platforms like Netflix, Amazon.com Inc and Hulu. The networks are considering their future digital strategy, he said.

"This is a long-term marriage," Sapan said. "Wherever the digital world goes, we will go together."

AMC will also handle U.S. distribution and advertising sales for BBC World News.

AMC and BBC have worked together in the past on productions like "Top of the Lake" and "The Honorable Woman."

 

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Evenflo Recalls Infant Car Seats to Fix Sticky Buckles

October 24, 2014, 2:30 am

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Filed under: Recalls, Transportation, Consumer Goods, Consumer Protection

DETROIT -- Evenflo is recalling more than 202,000 rear-facing infant seats because the buckles can become difficult to unlatch.

The recall affects Embrace 35/9999 models with an AmSafe QT1 buckle. Documents posted by U.S. safety regulators say that if the buckles don't release easily, it may be difficult to get a child out of the seat in an emergency.

The recall comes after an investigation by the National Highway Traffic Safety Administration.

Not all Embrace 35 models are covered by the recall. For others, the company will provide replacement buckles if requested by customers. Affected model numbers include:

• 30711365
• 31511040, 31511323, 31511400, 3151198, 3151953, 31521138
• 46811205, 46811237
• 48111200, 48111215, 48111215A, 48111218, 48111234, 48111235, 48111235A, 48111462
• 48411391, 48411391D, 48411392, 48411504, 48411504D.
• 52911307A, 52921040
• 55311138, 55311238, 55311292.

The seats were made at various times from December 2011 through May of 2013.

Owners with questions can call Evenflo at 800-490-7591.

 

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New Home Sales Hit 6-Year High; Recovery Still Fragile

October 24, 2014, 3:12 am

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Filed under: Mortgages, Real Estate, Housing Market, Materials & Construction, Home Buying

By Lucia Mutikani

WASHINGTON -- Sales of new single-family homes rose to a six-year high in September, but a sharp downward revision to August's sales pace indicated the housing recovery remains tentative.

The Commerce Department said Friday that sales increased 0.2 percent to a seasonally adjusted annual rate of 467,000 units, the highest reading since July 2008. August's sales rate was revised down to 466,000 units from 504,000 units.

Economists polled by Reuters had forecast new home sales at a 470,000-unit pace last month.

U.S. Treasury debt prices held on to gains after the data. U.S. stocks were slightly up, while the dollar edged down against the euro.

The housing sector index was down 0.78 percent. U.S. homebuilder PulteGroup (PHM), which Thursday reported a 4 percent rise in quarterly revenue from home sales, was trading more than 1 percent lower.

"We expect the housing market recovery to remain relatively gradual over the coming months," said Gennadiy Goldberg, an economist at TD Securities in New York.

New home sales, which account for about 8 percent of the housing market, tend to be volatile month to month and large revisions aren't unusual. Compared to September last year, sales were up 17 percent.

Housing is slowly regaining its footing after activity stalled in the second half of 2013 as mortgage rates soared. With the 30-year fixed mortgage rate falling this week to its lowest level since June of last year, sales could pick up.

Falling Mortgage Rates

Mortgage rates have declined in tandem with a sharp fall in U.S. Treasury debt yields as slowing global growth and a sharp sell-off in international stock markets prompted traders to push back expectations for an interest rate increase by the Federal Reserve.

Slow wage growth, however, remains a constraint for an acceleration in home sales. Data this week showed sales of previously owned homes touched a one-year high in September.

Last month, new home sales fell 8.9 percent in the West, handing back some of August's 28.1 percent surge. In the populous South, sales rose 2 percent, while they increased 12.3 percent in the Midwest. Sales were flat in the Northeast.

With sales rising modestly, the stock of new houses available on the market rose 1.5 percent to the highest level since July 2010. Builders have been ramping up construction and the improvement in inventory should provide buyers with more choices and temper house price increases.

At September's sales pace it would take 5.3 months to clear the supply of houses on the market, unchanged from August. Six months' supply is normally considered a healthy balance between supply and demand.

The median new home price fell 4 percent to $259,000 from a year ago.

 

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As Multiplexes Slump, IMAX Thinks Big, and Grows Bigger

October 24, 2014, 3:39 am

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Filed under: Company News, Earnings, Industry News, Entertainment Industry, Investing

Americans aren't going to the movies the way we used to. There were 1.34 billion multiplex tickets sold in this country last year. That's a big number, but attendance has generally been shrinking since peaking at 1.58 billion in 2002. In fact, over the past 15 years there has only been one year -- 2011 -- in which exhibitors drew fewer customers than they did in 2013.

This year is shaping up to be even worse, but one company is making the most of the situation. IMAX (IMAX) has been able to grow its fleet of super-sized projection systems, thanks to theater patrons willing to pay a premium for the experience.

IMAX posted hearty third-quarter results on Thursday. Revenue climbed 18 percent, fueled in part by a 12 percent uptick in the number of theaters around the world with IMAX screens. Adjusted earnings grew ever faster, soaring 83 percent to a better-than-expected showing of 11 cents a share. IMAX has now beaten analyst profit targets in four of the past five quarters.

You're not seeing this kind of growth at traditional multiplex operators. AMC (AMC), Cinemark (CNK), and Regal (RGC) are all expected to post declining quarterly revenue when they report in the next few days.

Bigger Than Life

The secret to IMAX's success is that it's able to offer something consumers can't come close to duplicating at home, no matter how big an HDTV they own, or how good their speakers are. The extra large screens and booming sound systems are far more immersive than the traditional multiplex experience, and this has led exhibitors to team up with IMAX to outfit some of their multiplex screens.

IMAX now has 880 screens in operation worldwide, and orders continue to come in faster than it can fulfill them. It installed 20 new screens during the third quarter, but it received orders for 36 new systems and another half-dozen orders for upgrading existing platforms. The company now has a backlog of 439 screens, up from 356 a year earlier. To be fair, this isn't IMAX dropping the ball. Many orders coming in are for theater installations slated for a couple of years out. It's still an encouraging sign for a platform that seemed to be struggling with a small base of museums and science centers showing documentaries until IMAX hopped on the hot niche of remastering Hollywood releases.

Things got off to a slow start. A few years ago, IMAX was only being offered a movie or so a month. If that one was a dud, IMAX screens had to wait it out. That has all changed now that studios understand the enhanced dynamics of a premium IMAX screening. A whopping 38 movies were remastered for IMAX last year. Now, a studio won't put out a high-profile action flick without making sure that it's going to be simultaneously screened on IMAX.

Nothing but Netflix

IMAX doesn't think like an exhibitor, even though it often enters into joint ventures with leading multiplex chains through which it gets a healthy piece of the box office sales. It marches to its own beat, a point that became even more clear earlier this month when it struck a deal with Netflix (NFLX) to bring "Crouching Tiger, Hidden Dragon: The Green Legend" -- the sequel to Ang Lee's critically acclaimed wire-fu classic -- to more than 800 theaters next summer at the same time as it debuts on Netflix.

The movie won't be presented in traditional movie format: What is likely to be one of next summer's biggest blockbusters will only be available at home on Netflix or on the super-sized IMAX screens. Conventional exhibitors may have balked, figuring that folks wouldn't pay more for a movie ticket than it would cost to get a month of Netflix that would allow the whole family to see it at home. However, IMAX is banking on being enough of a differentiator that it can hold up well even as Netflix implodes the conventional wisdom of release windows.

The future is uncertain for AMC, Cinemark, Regal, and other multiplex operators outside of the screen space that they have set aside for IMAX. The future should continue to be rosier for IMAX. It's already lining up an impressive slate of IMAX-enabled movies next year, including the next "Avengers" and "Star Wars" movies. It's the new feature presentation. It could also be the last hope for exhibitors to stand out in an era of affordable home theaters and high-def streaming.

Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of IMAX and Netflix. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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Microsoft Quarterly Earnings: By the Numbers

October 24, 2014, 4:42 am

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Filed under: Microsoft, Earnings

Microsoft (MSFT) sales soared 25 percent in the last quarter, largely from cloud computing. But sales of the Xbox, tablets, and Nokia smartphones also contributed to the strong performance, which handily beat Wall Street expectations as the company maintained profit margins.

Microsoft's business of selling cloud services to other businesses -- in which companies store their data run their major software on remote Microsoft servers -- doubled, and is now the primary focus of the company, according to the new CEO Satya Nadella.

This earnings release follows the earnings announcements from the following peers of Microsoft: Adobe Systems (ADBE), Oracle Corporation (ORCL), International Business Machines (IBM), Google (GOOG), Apple (AAPL), Nokia (NOK) and Yahoo! (YHOO).

Microsoft stood out from peers IBM and SAP who recently reported negative earnings results after strong warnings about operating profits while they move into cloud-related businesses, which generally yields lower margins than technology companies are used to.

Highlights

• Summary numbers: Revenues of $23.201 billion, Net Earnings of $4.540 billion and Earnings per Share (EPS) of $0.54.
• Revenue rose, helped by outstanding performance in the cloud segment and the phone business it bought from Nokia, beating analysts' estimates.
• Gross margins narrowed to 70.5 percent from 77.5 percent from same period last year.
• At the same time, Microsoft reported gross margin improvements in its cloud business, despite the cost of building and operating new data centers.
• Performance focus was more on revenue than the bottom-line: increase of revenue of 25.3 percent vs. decline in earnings of -13.4 percent from same period last year.
• Ability to declare a higher earnings number? Rise in operating cash flow of 1.8 percent versus same period last year--better than change in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	15.9%	14.3%	-0.3%	17.8%	25.3%
Earnings Growth (YOY)	17.4%	2.8%	-6.5%	-7.1%	-13.4%
Net Margin	28.3%	26.8%	27.8%	19.7%	19.6%
EPS	$0.62	$0.78	$0.68	$0.55	$0.54
Return on Equity	26.1%	31.5%	26.2%	20.8%	20.2%
Return on Assets	14.7%	17.7%	14.6%	11.2%	10.6%

Market Share Versus Profits

Investors should look at revenue growth to understand a company's ability to grow its market share, and earnings growth to look at the company's ability to generate profits, because companies sometimes focus on growing their top-line-(sales or revenues) more than their bottom-line-(earnings or net income).





Microsoft's change in revenue compared to the same period last year of 25.3 percent is better than its change in earnings which was -13.4 percent - suggesting perhaps that the company's focus is on sales and revenue at the expense of profits. However, this revenue improvement beat the announced results thus far by its technology peer group - pointing to some likely market share gains and helping us to overlook the weaker earnings performance this period. (In comparison to the second quarter, revenues declined by 0.7 percent and earnings declined by 1.6 percent.)


Earnings Growth Analysis

Microsoft's lower earnings compared to the same period last year has been influenced by the following factors: (1) Narrowing of company-wide gross margins from 77.5 percent to 70.5 percent and (2) issues with cost controls. As a result, operating margins (EBITDA margins) went from 39.3 percent to 36.3 percent in the past three months. In the second quarter, by comparison, gross margins were 74.9 percent and EBITDA margins 35.6 percent.


Cash Versus Earnings

In order to determine if a company's performance is sustainable, Capital Cube lifts the veil behind a company's cash versus earnings numbers.



Companies often post earnings numbers that are influenced by non-cash activities. One way to gauge the quality of the reported earnings number is to compare the growth in earnings to the growth in operating cash flows. Microsoft's rise in operating cash flow for the same period this year of 1.8 percent is better than its change in earnings, which suggests that the company might have been able to declare a higher earnings number. But, this increase in operating cash flow is less than average among the declared results thus far in its peer group, cautioning us about its performance versus its peers in the future.



One-time charges

Microsoft had a one-time charge of $1.1 billlion related to announced layoffs, mostly from the integration of Nokia. This charge is largely what caused profits to slip to 54 cents a share compared to 62 cents a share in the year ago quarter.




EPS Growth Versus Earnings Growth

Microsoft's year-on-year change in Earnings per Share (EPS) of -12.9 percent is better than its change in earnings of -13.4 percent. Despite its strong performance in its cloud and device business segments noted above, this loss in earnings is worse than the average of its peer group who have reported earnings thus far, suggesting that the company may be losing some ground in generating profits for some of its business segments compared to its peers.



Gross Margin and Efficiency Trend

Companies sometimes offer easier terms to customers and vendors even at the cost of improvements in revenues and margins. Capital Cube checks this out by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without working capital sliding, the company's performance might be a result of truly delivering in the marketplace, and not simply a gimmick using the balance sheet.


Microsoft's lower gross margins are offset by some improvements on the balance sheet side - working capital management shows progress. The company's working capital days have dropped to 267.4 days from 316.8 days for the same period last year, and suggest that the overall company-wide gross margin decline is not altogether bad.

Supporting Data

The table below shows the preliminary results along with the recent trend for revenues, net income and other relevant metrics:

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	15.9%	14.3%	-0.3%	17.8%	25.3%
Peer Average Revenue Growth (YOY)	-0.9%	-1.7%	-0.5%	4.4%	1.8%
Earnings Growth (YOY)	17.4%	2.8%	-6.5%	-7.1%	-13.4%
Peer Average Earnings Growth (YOY)	6.7%	1.4%	-2.0%	14.0%	0.6%
Operating Cash Flow Growth (YOY)	-4.0%	-10.3%	12.7%	15.9%	-21.2%
Peer Average Operating Cash Flow Growth (YOY)	5.9%	-18.3%	-9.5%	11.3%	-9.8%
Gross Margin	77.5%	71.3%	77.0%	74.9%	70.5%
Peer Average Gross Margin	70.5%	66.7%	72.7%	71.7%	70.1%
EBITDA Margin	39.3%	37.6%	40.2%	35.6%	36.3%
Peer Average EBITDA Margin	27.0%	28.9%	27.4%	28.8%	22.7%
Net Margin	28.3%	26.8%	27.8%	19.7%	19.6%
Peer Average Net Margin	20.0%	22.5%	23.1%	20.2%	18.9%
EPS	$0.62	$0.78	$0.68	$0.55	$0.54
Peer Average EPS	$0.55	$0.67	$0.62	$0.82	$0.51
Return on Equity	26.1%	31.5%	26.2%	20.8%	20.2%
Peer Average Return on Equity	17.1%	19.5%	19.6%	17.9%	19.3%
Return on Assets	14.7%	17.7%	14.6%	11.2%	10.6%
Peer Average Return on Assets	10.9%	12.2%	9.8%	11.5%	10.2%

Company Profile

Microsoft Corp. develops and markets software, services and hardware that deliver new opportunities, greater convenience and enhanced value to people's lives. The company's products include operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing environments; productivity applications; business solution applications; desktop and server management tools; software development tools; video games; and online advertising. It also designs and sells hardware devices including surface rt and surface pro, the Xbox 360 gaming and entertainment console, Kinect for Xbox 360, Xbox 360 accessories, and Microsoft pc accessories. The company operates its business through two segments: Devices and Consumer and Commercial. The Devices and Consumer segments develop, market, and support products and services designed to entertain and connect people, increase personal productivity, help people simplify tasks and make more informed decisions online, and help advertisers connect with audiences. Its Devices and Consumer segments are: D&C licensing comprise of windows, including all original equipment manufacturer licensing and other non-volume licensing and academic volume licensing of the windows operating system and related software; non-volume licensing of Microsoft office, comprising the core office product set, for consumers; windows phone, including related patent licensing; and certain other patent licensing revenue; D&C hardware comprise of Xbox gaming and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox live subscriptions; surface; and Microsoft pc accessories; and D&C other, comprise of resale, including windows store, Xbox live transactions, and windows phone store; search advertising; display advertising; subscription, comprising office 365 home and office 365 personal; studios, comprising first-party video games; its retail stores; and certain other consumer products and services not included in the categories above. The Commercial segments develop, market, and support software and services designed to increase individual, team, and organizational productivity and efficiency, including simplifying everyday tasks through seamless operations across the user's hardware and software. Its Commercial segments are: Commercial licensing comprise of server products, including windows server, microsoft sql server, visual studio, and system center; windows embedded; volume licensing of the windows operating system, excluding academic; microsoft office for business, including office, exchange, sharepoint, and lync; client access licenses, which provide access rights to certain server products; microsoft dynamics business solutions, excluding dynamics crm online; and skype; and Commercial Other comprise of enterprise services, including premier support services and microsoft consulting services; cloud services, comprising office 365, excluding office 365 home and office 365 personal, other microsoft office online offerings, dynamics crm online, and microsoft azure; and certain other commercial products and online services not included in the categories above. Microsoft was founded by William Henry Gates III in 1975 and is headquartered in Redmond, Washington.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of MSFT.

 

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UPS May Hike Charges for Holiday Package Surges

October 24, 2014, 4:56 am

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Filed under: Transportation & Logistics

Justin Sullivan/Getty Images

By Nick Carey

CHICAGO -- United Parcel Service (UPS) may charge major customers more for a surge in late, unplanned packages or turn down the business if it threatens disruptions during the peak holiday season, a top executive said Friday, trying to avoid a repeat of last year's delivery meltdown.

UPS and main rival FedEx (FDX), both considered U.S. economic bellwethers, are approaching their busiest time. Last year a last-minute surge in online consumer promotions left an estimated 2 million express packages stranded on Christmas Eve.

If it [a late surge] creates challenges and adds costs we would charge a premium.

"If it [a late surge] creates challenges and adds costs we would charge a premium," Chief Financial Officer Kurt Kuehn told Reuters. "If it puts our service at risk, we would have to deny [the business]."

Kuehn spoke after UPS, the world's largest package delivery company, posted higher-than-expected third-quarter profit, driven by rising U.S. consumer and business demand plus strong growth in Asia.

Kuehn said UPS remained concerned about U.S. railroad service problems -- UPS is a major rail customer -- saying "they need to improve their service metrics." The major railroad have struggled this year to meet demand due to a growing economy, rising oil-by-rail freight and a record harvest.

The problems especially affected UPS, which has invested $500 million to boost its infrastructure to handle the coming holiday season.

Like Memphis-based FedEx, UPS has worked with major retailers this year to get a clearer forecast for package volumes and online promotions to avoid a repeat of last year's debacle.

FedEx has said if a major retailer decides to offer a last-minute online promotion without notifying the company, which threatens its service, the company won't be able to handle the business.

Earnings Roundup

UPS reported earnings a share of $1.32, up 14 percent from $1.16 a year earlier. Analysts expected $1.28 a share.

UPS shares rose 1.1 percent to $101.57.

Atlanta-based UPS confirmed its full-year profit outlook, predicting earnings a share of between $4.90 to $5. Analyst expected $4.95 a share.

UPS said annual package shipments should increase 11 percent year over year in December.

The National Retail Federation predicted U.S. holiday retail sales will rise 4.1 percent this year to $616.9 billion. Other forecasts are less rosy.

A survey of shoppers by PwC US and Strategy& projects the average household will spend $684 during the holiday season, down from $735 in 2013, although 41 percent of shoppers indicated they will spend more online than last year.

Citi Research (C) analyst Christian Wetherbee wrote in a research note that the company's profit outlook "looks a bit soft" and is below Citi's estimate. This implied that "while holiday volume will grow 11 percent, costs may be elevated," he added.

UPS posted quarterly revenue of $14.29 billion, up 6 percent from $13.52 billion last year, slightly above analysts estimates of $14.2 billion.

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Nokia Quarterly Earnings: By the Numbers

October 24, 2014, 5:30 am

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Filed under: Nokia, Earnings, Telecommunications

Nokia (NOK) swung to a profit in the third quarter as Networks revenue jumped 13 percent. Profits from July through September more than quadrupled from a year ago, soaring to $959 million, mostly due to a one-time tax-related gain. However, the company successfully deployed high-speed mobile networks in North America and China, influencing its strong quarterly performance.

The former mobile phone leader globally, Nokia sold its handset business to Microsoft in April and now focuses on telecommunications, navigation systems, and licensing and innovation in the mobile business.
Since it sold its mobile phone business to Microsoft, the company has focused on a cost-cutting program.

Nokia reported 13 percent revenue growth in its Networks business, beating third quarter Wall Street hopes and leading it to forecast a rosier financial performance for the rest of the year.

This earnings release follows the earnings announcements from the following peers of Nokia: Ericsson (ERIC), Huawei, Apple (AAPL), BlackBerry (BBRY), Microsoft (MSFT) and Amazon (AMZN).

Highlights

• Summary numbers: Revenues of $4.36 billion, Net Earnings of $461.1 million and Earnings Per Share (EPS) of $0.12.
• Performance focus on earnings: same period compared to last year change in earnings of 480.0 percent, better than decline in company-wide revenues of 42.5 percent.
• Revenue growth of 13.0 percent in Nokia's Networks business segment.
• Gross margins now 69.7 percent from 33.9 percent compared to the same period last year.
• Operating margins (EBITDA margins) now 13.8 percent from 3.9 percent.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	-17.2%	-54.7%	-52.6%	-45.6%	-42.5%
Earnings Growth (YOY)	90.1%	-8.8%	141.3%	87.0%	480.0%
Net Margin	-1.6%	5.1%	4.1%	-1.0%	10.6%
EPS	-$0.03	-$0.01	-$0.08	$0.84	$0.12
Return on Equity	-4.7%	10.4%	6.6%	-1.6%	18.3%
Return on Assets	-1.4%	2.7%	1.8%	-0.5%	6.5%

Market Share Versus Profits

Profits sometimes come at the expense of market share, and vice versa. Capital Cube looks at revenue and sales growth to understand a company's ability to grow its market share, and earnings or net income growth to look at the company's ability to generate profits.






Nokia's full-company decline in revenue compared to the same period last year of -42.5 percent underperformed its change in earnings, which rose 480 percent. The company's performance this period suggests an effort to boost bottom-line profits. While this is good to a point, the fact that the company's top-line performance is less than average among the announced results thus far in its sector may not bode well from a long-term market share perspective. Also, for comparison purposes, from July through September, revenues changed by 7.5 percent and earnings by 1,299.0 percent.


Earnings Growth Analysis

The company's earnings growth has been influenced by the following factors: (1) Improvements in gross margins from 34.0 percent to 69.7 percent from the year earlier period, and (2) better cost controls. As a result, operating margins improved from 3.9 percent to 13.9 percent so far this year. In the second quarter, on the other hand, gross margins were a loftier 45.9 percent and EBITDA margins 12.9 percent.


EPS Growth Versus Earnings Growth

Nokia's change in Earnings per Share (EPS) of 540.5 percent compared to this time last year surpassed its change in earnings of 480 percent. At the same time, it is worth noting that its change in earnings performance beat the average change of the announced results thus far of its peer group, suggesting that the company is gaining more ground in generating profits among this group.



Gross Margin and Efficiency Trend

Companies sometimes offer easier terms to customers and vendors even if it means lower revenues and margins. Capital Cube probes for this by comparing the changes in gross margins with any changes in working capital. If the gross margins rose without working capital going down, the company's performance might be a result of truly delivering in the marketplace, and not simply an accounting prop using the balance sheet.



The company's improvement in gross margins have come at the expense of a deterioration in working capital management, suggesting that some of the improvements in gross margins are not from operating decisions but rather accounting trade-offs with the balance sheet. Its working capital days have risen to 182.3 days from last year's levels of 62.4 days.


Supporting Data

The table below shows the preliminary results along with the recent trend for revenues, net income and other relevant metrics:

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	-17.2%	-54.7%	-52.6%	-45.6%	-42.5%
Peer Average Revenue Growth (YOY)	4.3%	5.3%	-0.3%	6.5%	12.7%
Earnings Growth (YOY)	90.1%	-8.8%	141.3%	87.0%	480.0%
Peer Average Earnings Growth (YOY)	17.4%	0.0%	7.1%	12.3%	12.7%
Operating Cash Flow Growth (YOY)	179.2%	-68.5%	-154.8%	-239.6%	N/A
Peer Average Operating Cash Flow Growth (YOY)	-4.0%	-10.3%	7.6%	14.0%	11.1%
Gross Margin	33.9%	44.7%	48.8%	45.9%	69.7%
Peer Average Gross Margin	33.9%	41.7%	48.8%	45.9%	58.0%
EBITDA Margin	3.9%	11.9%	12.1%	12.9%	13.7%
Peer Average EBITDA Margin	4.8%	11.9%	24.2%	19.6%	15.5%
Net Margin	-1.6%	5.1%	4.1%	-1.0%	10.6%
Peer Average Net Margin	-0.2%	5.1%	4.1%	2.4%	10.6%
EPS	-$0.03	-$0.01	-$0.08	$0.84	$0.12
Peer Average EPS	-$0.03	$0.51	$0.23	$0.55	$0.12
Return on Equity	-4.7%	10.4%	6.6%	-1.6%	18.3%
Peer Average Return on Equity	-1.8%	10.4%	6.6%	2.5%	18.3%
Return on Assets	-1.4%	2.7%	1.8%	-0.5%	6.5%
Peer Average Return on Assets	-0.5%	2.7%	1.8%	1.3%	6.5%

Company Profile Nokia provides network infrastructure, technology and software services. The company operates through three businesses: Networks, HERE and Technologies. The Networks business consists of Mobile Broadband and Global Services units. The Mobile Broadband unit provides mobile operators with radio and core network software together with the hardware needed to deliver mobile voice and data services. The Global Services unit provides mobile operators with a broad range of services, including network implementation, care, managed services, network planning and optimization, as well as systems integration. The HERE business focuses on the development of location intelligence, location-based services and local commerce. The Technologies business focuses on technology development and intellectual property rights activities. Nokia was founded in 1967 and is headquartered in Espoo, Finland.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of NOK.

 

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Amazon Quarterly Earnings: By the Numbers

October 24, 2014, 6:08 am

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Filed under: Amazon.com, Earnings

Amazon's (AMZN) growth ambitions led to a big operating loss in the quarter that ended Sept. 30. Despite a 20 percent jump in revenue to $20.6 billion, Amazon's spending on product development, original video content, music, and other parts of its expansion ambitions, netted a third quarter loss of $437 million, worse than its year earlier loss of $41 million.

Amazon releases few details about some of its best known business segments, such as Prime, making it hard to judge its spending strategy. However, projections for holiday season sales were lower than expectations. As investors wondered how its ambitious spending would lead to future sales, they punished Amazon's stock, which slid 12 percent after its earnings announcement, on top of the 21 percent the company's shares have already sunk since January.

This earnings release follows the earnings announcements from the following peers of Amazon.com: eBay (EBAY), Google (GOOG), Barnes & Noble (BKS), Overstock (OSTK), Costco (COST), IBM (IBM), and Microsoft (MSFT).

Highlights

• Summary numbers: Revenues of $20.6 billion, Net Earnings loss of $437 million and EPS of -$0.95.
• Performance focused on revenue over profits; 20 percent revenue increase well below Wall Street estimates
• Third quarter net loss widened to 95 cents per share, compared to 9 cents a share net loss a year ago
• Ability to declare a higher earnings number? Year-on-year change in operating cash flow of 27.2 percent, better than change in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	23.8%	20.3%	22.8%	23.2%	20.4%
Earnings Growth (YOY)	85.0%	144.9%	31.7%	-1700.0%	-965.9%
Net Margin	-0.2%	0.9%	0.5%	-0.7%	-2.1%
EPS	-$0.09	$0.51	$0.23	-$0.27	-$0.95
Return on Equity	-1.8%	10.2%	4.3%	-4.8%	-16.7%
Return on Assets	-0.5%	2.6%	1.1%	-1.4%	-4.5%

Market Share Versus Profits

Amazon is a classic case of the need to analyze revenue growth versus profitability, because it faces a tension between growing its top-line (Sales and Revenues) more than its bottom-line (Earnings or Net Income).







Amazon's change in revenue compared to the same period last year of 20.4 percent is better than its change in earnings, which were down 965.9 percent -- confirming that the company's focus is on revenue at the expense of profits. However, this change in revenue beat the average revenue performance among the declared results of its peer group -- pointing to some likely market share gains. Also, compared to the second quarter, the past three months saw revenues grow by 6.4 percent and earnings decline by 246.8 percent.


Earnings Growth Analysis

As emphasized above, the company's earnings declined year-on-year largely because of the increases in operating costs. Amazon's operating margins (EBITDA margins) narrowed from 4.8 percent to 3.4 percent. The decline in earnings would have been worse, were it not for the fact that the company showed improvement in gross margins, from 27.7 percent to 34.9 percent. For comparison, gross margins were 30.7 percent and operating margins 5.8 percent in the immediate last quarter.



Cash Versus Earnings

Companies often achieve good performances that are not sustainable, or underperform in a way that is not likely to be repeated. In examining a stock, Capital Cube assesses the quality of the announced earnings number, as earnings numbers can be influenced by non-cash activities. By comparing the growth in earnings to the growth in operating cash flows, we can tease out the likely trend. In general, an earnings growth rate higher than the operating cash flow growth rate implies a higher proportion of non-operating or one-time activities, which are typically not sustainable over long periods.



Amazon's year-on-year change in operating cash flow of 27.2 percent exceeds its change in earnings, suggesting that the company might have been able to declare a higher earnings number. In addition, this change in operating cash flow is better than average among the declared results thus far in its peer group.


One-time Items

The company's Fire phone, which went on sale over the summer, was a big flop and Amazon announced a $170 million charge on inventory and supplier commitments to cover the failure.



EPS Growth Versus Earnings Growth

Amazon's year-on-year steep decline in earnings of -965.9 percent is worse than the -955.6 percent decline in Earnings per Share (EPS). In addition, this change in earnings is worse than the peer average among the declared results thus far in its peer group, confirming the market's belief that the company is losing ground in generating profits in this group.





Supporting Data

The table below shows the preliminary results along with the recent trend for revenues, net income and other relevant metrics:

	Q3 2013	Q4 2013	Q1 2014	Q2 2014	Q3 2014
Revenue Growth (YOY)	23.8%	20.3%	22.8%	23.2%	20.4%
Peer Average Revenue Growth (YOY)	10.3%	14.1%	8.2%	11.4%	11.8%
Earnings Growth (YOY)	85.0%	144.9%	31.7%	-1700.0%	-965.9%
Peer Average Earnings Growth (YOY)	16.4%	14.8%	1.6%	4.3%	-7.9%
Operating Cash Flow Growth (YOY)	87.6%	92.5%	8.5%	17.5%	-10.4%
Peer Average Operating Cash Flow Growth (YOY)	11.7%	3.5%	-3.2%	15.8%	-1.3%
Gross Margin	27.7%	30.3%	28.8%	30.7%	35.0%
Peer Average Gross Margin	40.1%	43.0%	40.9%	42.8%	41.8%
EBITDA Margin	4.8%	5.9%	6.0%	5.8%	3.4%
Peer Average EBITDA Margin	14.5%	17.3%	14.9%	15.3%	11.2%
Net Margin	-0.2%	0.9%	0.5%	-0.7%	-2.1%
Peer Average Net Margin	9.5%	10.2%	6.8%	8.6%	8.7%
EPS	-$0.09	$0.51	$0.23	-$0.27	-$0.95
Peer Average EPS	$0.58	$0.72	$0.96	$0.54	$0.31
Return on Equity	-1.8%	10.2%	4.3%	-4.8%	-16.7%
Peer Average Return on Equity	18.7%	15.5%	17.3%	14.5%	13.1%
Return on Assets	-0.5%	2.6%	1.1%	-1.4%	-4.5%
Peer Average Return on Assets	8.5%	8.2%	6.8%	6.2%	7.4%

Company Profile

Amazon.com, Inc. provides online retail shopping services. It provides services to four primary customer sets: consumers, sellers, enterprises, and content creators. The company also provides other marketing and promotional services, such as online advertising and co-branded credit card agreements. It serves consumers through its retail websites with a focus on selection, price, and convenience. It designs its websites to enable its products to be sold by the company and by third parties across dozens of product categories. It also manufactures and sells the Kindle e-reader and strives to offer customers the lowest prices possible through low every day product pricing and free shipping offers, including through membership in Amazon Prime. The company offers programs that enable sellers to sell their products on its websites and their own branded websites, earning fixed fees, revenue share fees or per-unit activity fees from these transactions. It also serves developers and enterprises of all sizes through Amazon Web Services, which provides access to technology infrastructure that enables virtually any type of business. The company operates in two principal segments: North America and International. The North America segment consists of retail sales of consumer products and subscriptions through North America-focused websites such as www.amazon.com and www.amazon.ca. The International segment consists of retail sales of consumer products and subscriptions through internationally focused locations. This segment includes export sales from these internationally based locations, including export sales from these sites to customers in the U.S. and Canada. The company was founded by Jeffrey P. Bezos in July 1994 and is headquartered in Seattle, Washington.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of AMZN.

 

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FTC Bans Diet Pill Seller from the Weight-Loss Business

October 24, 2014, 7:50 am

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Filed under: Consumer Ally, Consumer Protection, Ripoffs & Scams

The maker of a line of diet supplements sold at the nation's largest pharmacies with the false promise that the pills would magically make users slender (they didn't) was banned -- at least, for now -- from selling weight loss products under a just-finalized agreement, the Federal Trade Commission said on Friday.

HealthyLife Sciences and its principal sold Healthe Trim supplements with the claim you could "get high school skinny." Apparently, it only worked as advertised if its users had never gained weight after graduation.

John Matthew Dwyer III (aka Matthew Dyer), the co-founder of the Atlanta-based company, agreed to stay out of the weight-loss industry under the terms of the settlement of deceptive advertising charges. Dwyer claimed the pills had ingredients that combined to burn fat, speed up the metabolism and suppress appetite.

No Penalty, No Restitution

The FTC said the company took in about $76 million between 2009 and 2013. Healthe Trim supplements were sold at CVS (CVS), Walgreens (WAG) and at GNC (GNC) stores. It cost consumers who bought into the spiel $50 to $65 for a month's supply, the FTC said. The key to the sales were customer testimonials featuring claims that, for example, using the pills helped one user to drop 54 pounds and go from a size 12 dress to a size 2.

"Losing weight is rarely easy, and it would be a miracle if a pill made it so," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Consumers should be skeptical when a product like this one claims to make weight loss easy."

The company itself (if it continues to operate without Dwyer) is barred from making a host of what the FTC describes as "scientifically infeasible" claims about its supplements. And it can no longer make any weight-loss-related claims at all about them until it has in hand two legitimate, scientifically rigorous human clinical-trial studies to support its statements.

Unlike many settlements of this type, there is no financial penalty and no provision for consumer restitution.

 

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Week's Winners and Losers: Tough Sell for Some Gadgets

October 24, 2014, 9:01 am

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Filed under: Company News, Technology, Earnings, Market News, Investing

There were plenty of winners and losers this week, with a leading toy maker posting strong growth across its product lines and one of this year's most hyped smartphone rollouts struggling to connect with consumers. Here's a rundown of the week's smartest moves and biggest blunders.

Fire Phone -- Loser

It has been widely assumed that Amazon.com (AMZN) hasn't gained a lot of traction with its first foray into proprietary smartphones, but now we have confirmation directly from the leading online retailer. Amazon took a $170 million accounting hit on Thursday to write down the value of its Fire Phone inventory and supplier commitment costs.

Amazon isn't ready to throw in the towel on the smartphone, but it clearly miscalculated in a big way by not pricing it more aggressively. It may not have much of a choice now.

Chipotle Mexican Grill (CMG) -- Winner

The restaurant industry's market darling lived up to the hype with another blowout quarter. Revenue and earnings climbed 31 percent and 56 percent, respectively, over the prior year. The most stunning nugget in Chipotle's report is that comparable-restaurant sales soared 19.8 percent during the quarter. Yes, the average Chipotle rang up 19.8 percent more in sales than it did during last year's third quarter.

A springtime menu price increase has helped spice up sales, but Chipotle continues to be a fast-casual rock star. The stock did disappoint the market by initiating a lackluster outlook for 2015. That was enough to find the bears outnumbering the bulls. However, it's hard to generate a nearly 20 percent spike in store-level comps without being called a winner.

3D Systems (DDD) -- Loser

3-D printing may be one of the coolest technologies to arise in years, but consumer adoption has been slow. Printing physical objects sounds cool -- and there are plenty of consumer and industrial applications -- but the high prices of printers have kept 3-D printing from cracking the mainstream market.

3D Systems is a leader in 3-D printing, but lately the leader has been a bleeder. 3D Systems has shed nearly 60 percent of its value this year. Its latest tumble came on Wednesday after it announced preliminary third-quarter results that show sales and profitability falling short of expectations. 3D Systems blames the shortfall on delays in new consumer printers and weak sales of its metal printers.

If you ever see a 3-D printer in action, you'll come to appreciate the potential of printing out everything from figurines to medical products. However, until the printers get cheaper and, ideally, faster, the revolution will be slow in coming around.

Hasbro (HAS) -- Winner

Traditional toys aren't dead just yet. Hasbro kicked off the week with a better-than-expected quarterly report.

Revenue moved higher after Hasbro posted top-line gains in all seven of its leading toy franchises. Hasbro's strong report came a trading day after rival Mattel (MAT) missed Wall Street's profit target. Mattel has come up short on the bottom line every single quarter over the past year. Hasbro is clearly getting the better of its longtime rival.

Sears Holdings (SHLD) -- Loser

Things are going from bad to worse at Sears Holdings. The parent company of Kmart and Sears is closing more of its fading department stores. Sears said that at least 5,457 employees will be let go as the struggling retailer will close 46 Kmart, 30 Sears and 31 Sears Auto Centers.

Sears Holdings has already closed nearly 100 stores this year. The carnage continues, but the real problem is that the company won't make the necessary investments to update its remaining stores -- 1,077 Kmart stores and 793 Sears stores in the United States as of Aug. 2 -- to make them relevant to modern shoppers.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Amazon.com, Chipotle Mexican Grill, Hasbro, and Mattel. The Motley Fool owns shares of 3D Systems, Amazon.com, Chipotle Mexican Grill, and Hasbro. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

 

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ZeekRewards Founder Charged in $850 Million Scam

October 24, 2014, 9:49 am

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Filed under: Investment Fraud

CHARLOTTE, N.C. -- A North Carolina man that prosecutors say masterminded an $850 million Internet-based Ponzi scheme faces charges of wire and mail fraud, conspiracy and tax fraud.

A federal grand jury in Charlotte on Friday indicted Paul Burks, the 67-year-old president of ZeekRewards and the online penny auction site Zeekler.com. The company was shut down by the U.S. Securities and Exchange Commission in 2012, but not before prosecutors say Burks and his conspirators used the promise of massive profits to lure more than 1 million investors, including nearly 50,000 in North Carolina.

Authorities say Burks diverted more than $10 million to himself. The former nursing-home magician and country music disc jockey told The Associated Press earlier this year he never asked people to invest more money than they could afford.

For a detailed account of this massive fraud, read this article we published last year:
"ZeekRewards: A $600 Million Ponzi Scheme Born in a N.C. Town"

 

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Market Wrap: U.S. Stocks Have Best Week in Nearly 2 Years

October 24, 2014, 10:07 am

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Filed under: Earnings, Market News

By KEN SWEET

NEW YORK -- The stock market closed out its best week in nearly two years on a positive note Friday, helped by strong quarterly earnings from Microsoft (MSFT) and other big U.S. companies.

Investors were able to set aside dismal third-quarter results from Amazon (AMZN). The giant online retailer's shares took a beating, but that wasn't enough to drag the rest of the market down.

After weeks of speculation over the fate of Europe's economy, Ebola fears and plunging oil prices, investors were able to get back to basics. Wall Street is in the midst of one of the busiest times of the year, when companies report their quarterly results. Ultimately what drives stock prices higher is the potential for that company to earn more profits, so higher profits generally mean higher stock prices.

"What matters most to the market are earnings expectations and corporate fundamentals, and so far they're looking pretty good," said Michael Arone, chief investment strategist at State Street Global Advisors.

Profits for S&P 500 companies are up 5.6 percent from a year ago so far this earnings season, according to FactSet, which is better than the 4.6 percent growth the market was looking for before the season began.

Quarterly results from Microsoft and UPS (UPS) helped lift the market Friday, but there have been other strong earnings reports all week. Caterpillar (CAT), 3M (MMM), Apple (AAPL) and others have all came in well above expectations.

Microsoft reported sales and profits that were well above analysts' expectations. Cloud services, a business that Microsoft has been focusing on, also grew. Microsoft's stock rose $1.11, or 2.5 percent, to $46.13.

UPS also reported strong quarterly results and expects December shipments to be up 11 percent from a year ago. Many investors consider UPS a bellwether for how the U.S. economy is doing, particularly during the crucial holiday shopping season. UPS rose 11 cents, or 0.1 percent, to $100.59.

The Dow Jones industrial average (^DJI) rose 127.51 points, or 0.8 percent, to 16,805.41. The Standard & Poor's 500 index (^GPSC) added 13.76 points, or 0.7 percent, to 1,964.58 and the Nasdaq composite (^IXIC) rose 30.92 points, or 0.7 percent, to 4,483.72.

With Friday's gains, U.S. stocks had their best week in nearly two years. The S&P 500 rose 4.1 percent for the week, the biggest gain since January 2013. But volatility can go both ways. Just as the market jumped sharply this week, it plunged just as sharply last week. Even with this week's gains, the S&P 500 is still down 0.4 percent for October.

"We've seen the market sell-off and we saw people buy on the bounce, and that looks like it will continue," said Brad McMillan, chief investment officer at Commonwealth Financial.

One company that fell well short of investors' expectations was Amazon. The company reported a steeper-than-expected quarterly loss despite soaring sales. Investors have grown impatient with Amazon, which has been unable to deliver profits even as it gains ground as one of the world's largest retail companies. Amazon fell $26.12, or 8 percent, to $287.06.

Investors are turning their focus to next week's Federal Reserve policy meeting for hints about the future of the central bank's bond purchases. The program has kept long-term interest rates extremely low to keep markets fluid and to encourage investment and hiring. Recent mixed signals about the strength of the U.S. recovery have prompted speculation that the Fed might let the program continue for longer than previously anticipated.

Investors will also get another large batch of quarterly results from U.S. companies next week, when 159 members of the S&P 500 index report results, including Merck (MRK), ExxonMobil (XOM), Chevron (CVX) and Visa (V).

The price of oil fell Friday on further evidence of ample supplies and weak demand. Benchmark U.S. crude fell $1.08 to close at $81.01 a barrel on the New York Mercantile Exchange.

Brent crude, a benchmark for international oils used by many U.S. refineries, fell 70 cents to close at $86.13 on the ICE Futures exchange in London. In New York, wholesale gasoline fell 2.5 cents to close at $2.182 a gallon, heating oil fell 1.7 cents to close at $2.482 a gallon and natural gas rose 0.1 cent to close at $3.623 per 1,000 cubic feet.

The price of gold rose $2.70 to $1,231.80 an ounce, silver rose two cents to $17.18 an ounce and copper was flat at $3.04 a pound.

AP Business Writer Steve Rothwell contributed to this report from New York.

What to Watch Monday:

• The National Association of Realtors releases its index of pending home sales for September at 10 a.m. Eastern time.
• The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas for October at 10:30 a.m.

These major companies are scheduled to release quarterly financial results:

• Amgen (AMGN)
• Buffalo Wild Wings (BWLD)
• Canon (CAJ)
• Hartford Financial Services Group (HIG)
• Franklin Resource (BEN)
• Masco (MAS)
• Merck (MRK)
• Regal Entertainment Group (RGC)
• Roper Industries (ROP)
• Seagate Technology (STX)
• T-Mobile US (TMUS)
• Tenneco (TEN)
• Twitter (TWTR)

 

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