There are things in life that just work as promised. Refrigerators. Clock radios. Flattery. Children's Motrin. FEMA. Velcro. Blue jeans. Big Macs. Seinfeld. Jack Daniel's.
These things make me happy. They consistently do their job. They do not inconvenience me. Except for FEMA [that's the Federal Emergency Management Agency]. I'm just kidding about that one.
As a small business owner, I'm happy to say there's also technology that consistently works. None of it is as good as, say, a Big Mac. But there's a bunch of stuff out there that helps me do things quicker and better. I previously weighed in on products that small businesses may find less effective than advertised [BusinessWeek.com, 1/4/08] and took a lot of heat from some very passionate readers.
Now I'd like to point out a few small business technologies [in no particular order] that I can proudly say are worthwhile, reliable, and will -- drum roll, please -- work.
1. Remote Desktop Technology
Morale was low that bitterly cold day in January. The troops were tired. They were no match for the enemy. Jonah, their leader, was desperate. And then, when all seemed lost, a lone soldier arrived at the front. "I come bearing a very special, top-secret weapon from HQ," he said. "It is called Microsoft (MSFT) Windows Terminal Server and it enables computers to be operated remotely. And it will vanquish the enemy." Though skeptical, Jonah gave the order to deploy. And suddenly -- information flowed.
The men tossed aside their overpriced laptops that were unable to synchronize the data they needed. They armed themselves with cheaper, more efficient models with good Internet browsers. They fought. They surfed. They uploaded and received customer information in real time. They were productive. The enemy faltered. Jonah had won this battle. But deep down he knew that remote desktop technology was the real hero.
2. Desktop Sharing Software
In December, Lake Superior State University published its List of Words Banished from the Queen's English for Misuse, Overuse and General Uselessness. Check it out for yourself. One of these words is Webinar. I couldn't disagree more. Webinars use desktop sharing software, a perfect storm of technologies that help small business owners decimate waste. In short, the software lets a user show the information on his or her computer simultaneously with others around the world.
Back in the day, face-to-face meetings had to be held. It was like waterboarding. Now, it's possible to meet without leaving your office. Desktop-sharing technology, authored by companies including Microsoft, Cisco (CSCO), Glance, and CrossLoop, gives back productivity to the business owner.
3. Free Conference Calling
Well, not exactly free, but pretty close. Try freeconferencecall.com. Once you sign up on this Web site [no credit card needed] you get assigned a unique conference code and a regular phone number to call. Mine starts with 712, which I'm told is in Idaho. Who cares? I pay for my call only. Everyone else calls the same number and uses the conference code I give them. They pay for their call. If their long-distance plan allows unlimited calls or cheap U.S. rates, then they're not even affected.
But man, I was affected. In one month, my cost of conference calls disappeared. Suddenly, I'm using the service all the time. I'm conferencing with my kids. I'm conferencing with my employees. I'm now getting yelled at by my clients in stereo. How do these guys offer something for nothing? Well, they've got other products to sell. More advanced services. Whatever. I'm not buying any of that stuff. I guess someone is. All I know is the reception is clear, the price is right, and this technology is saving me time.
4. Wireless Connectivity
I'm pretty sure there's a tumor growing somewhere in my brain. And I'm expecting my grandchildren will be born with three heads. But who cares! The wireless world is here and I'm loving it! Those invisible cancerous waves floating around our atmosphere let me watch a training video while sipping a mocha at the local coffee shop. I can check e-mail and look up a customer's order history while on the train. I'm quickly getting online at hotels, bookstores, and libraries. Embracing wireless technology enables more business to be done in more places more of the time. It's fast and mostly reliable. And if I wasn't blacking out so often nowadays I'd really be enjoying this technology to its fullest.
5. E-mail Marketing Services
Fred took his family on an RV trip to Niagara Falls a few years ago. He rented the RV from a place called RV Universe. The trip was a success, and the company was extremely professional. Problem is, RV Universe is probably missing out on a lot of extra business from Fred. Why? Because it never got back in contact with Fred after the trip. Not a peep! For well short of $100 per month, RV Universe could be sending out great-looking e-mails to happy customers like Fred with camping tips and special deals. Fred probably would've taken them up on one or two as well. These services are easy to use and work very well for the small business owner who wants to generate a continuous communication with people that can turn into potential business.
6. Contact Management Software
Ah, remember the good old days of the mid-1990s? Hillary was just the First Lady. Will Smith was just the Fresh Prince. And customer relationship management [CRM] was just contact management software. Things were so much simpler then. Apparently, Microsoft is a little misty-eyed for the old days, too. Its Office 2007 Small Business Edition includes the latest iteration of Outlook Business Contact Manager. Like the Spice Girls, contact management is making a comeback, and it's about time. Small businesses [and many large ones] don't need all the complexity of a CRM system. We just need a simple place to keep all of our business contacts, along with some notes, so that we can track who spoke to them last and what's scheduled next. Good software like the Outlook Business Contact Manager ably accomplishes that goal.
7. Hosted Phone Systems
Seth runs a marketing company from the basement of his house. He has two employees, two contractors, and a dog. You'd never know that Seth's in boxer shorts or that he sports an Ozzy tattoo. He's got an 800 number that's answered by a very professional-sounding attendant. His phone system is hosted. When a client calls his "office" in Boston, the call is actually going to a server in San Francisco. When a caller selects Seth's extension, the call is either bounced to his cell phone, a phone in his basement, or right to voice mail [which, in turn is made into a .wav file and e-mailed to him for storage]. How much? Twelve dollars per month per mailbox. Does it work? "Never failed yet," he told me the other day.
Other small business owners I know report the same. The leaders in hosted [or outsourced] phone systems are VirtualPBX and GotVMail Communications.
8. Messaging Software
Solutions Management Group has offices in Philadelphia and London. How they communicate still amazes me. Why? Because my wife is from London, too. In the seven years between when we met in 1984 and married in 1991 we corresponded via telegraph and carrier pigeons. Well, pretty close. The employees at SMG look at me with pity when I tell them this story. Life for them is much easier now.
For example, if someone in Philadelphia wants to, say, recommend a good tanning salon to a visiting Londoner, they just send an instant message. And don't leave out text messaging, either. Back in Philly, the SMG people frequently text each other rather than wasting time on the phone. Messaging software is a technology that works reliably and saves time.
9. SQL Server
Here are a few words you don't normally see in the same sentence: Microsoft, reliable, bug-free, worth the money. But Microsoft SQL Server 2005, used as a standard for so many applications, works and works well. Hopefully you've thrown Microsoft Access out the door by now, along with your cassette tapes and "Reverse the Curse" T-shirt. SQL Server, and its smaller but still attractive cousin SQL Server Express [which is free] makes all those older database systems obsolete. Nowadays, an SQL back end is a key component an IT person looks for when evaluating software systems.
10. Google Applications
Tony started a biotech company this year and, wanting to keep the cost of technology down, uses Google's (GOOG) free business word processor and spreadsheet applications. They do the job well. A client who's in the recruitment business needed a quick way to search thousands of resumes on file. So he downloaded Google's desktop search and solved the problem -- for free. I have other clients who use Google's calendar, e-mail, and analytics. This stuff works. And did I mention it's free? Hang on. Maybe this Web 2.0 stuff isn't so bad after all.
credited by: BusinessWeek.com
2008-02-04
Microsoft Bid for Yahoo Lifts Stocks
Stocks finished higher Friday after a surprise $44.6 billion bid by Microsoft (MSFT) for Yahoo (YHOO) and some encouraging news for beleaguered bond insurers offset a report showing that payrolls shrank by 17,000 in January a decline that renewed recession fears on Wall Street.
The tech deal news and labor-market downturn overshadowed what on any other day would have been top market headlines: Disappointing profits at Google (GOOG), Alcoas (AA) deal with a Chinese metals company to buy a stake in Rio Tinto (RTP), record profits for Exxon Mobil (XOM), and word that Motorola (MOT) may be mulling a split-up of the company. Finally, the Federal Reserve announced a plan to inject $60 billion into the banking system through two auctions in February.
On Friday, the Dow Jones industrial average gained 92.83 points, or 0.73%, to finish at 12,743.19. The S&P 500 added 16.87 points, or 1.22%, to close at 1,395.42, while the Nasdaq composite index gained 23.50 points, or 0.98%, to end the week at 2,397.37.
Activity in the broader market was positive, with 25 shares rising in price for every six that declined. Nasdaq breadth was 20-9 positive.
Recession fears have been mitigated recently by strength in financial stocks and upside in the equity market, notes S&P MarketScope.
.
The Dow and the S&P 500 have actually risen for two straight weeks for the first time since late November/early December, says S&P chief technical strategist Mark Arbeter, following the markets worst January in 38 years. The S&P 500 fell 6.1% last month.
While U.S. nonfarm payrolls fell 17,000 in January, Decembers figure was revised higher and Novembers lower for a net increase to the previous months of positive 9,000. The unemployment rate fell from 5.0% to 4.9%, while average hourly earning rose a weak 0.2%. Average weekly hours worked fell from 33.8 to 33.7.
The surprise decline in January employment suggests that the economy is contracting," said Ryan Sweet of Moodys Economy.com. Economists had been expecting a gain of 75,000 to 100,000. Januarys drop in payrolls was the first in five years.
John Ryding, chief U.S. economist at Bear Stearns (BSC), said the data wasnt conclusive. We will have to wait for the February report before drawing a conclusion on whether the economy has slipped into recession," he wrote, adding that the data still might be weak enough to push the Federal Reserve toward another half-point cut to interest rates in March.
Weak areas of the job market were manufacturing, with payrolls down 28,000, construction, off 27,000, and government, down 18,000. The service sector added 34,000 jobs.
The jobs report was only one of a series of marquee economic releases Friday. The University of Michigan reported that its consumer sentiment survey rose to 78.4 in January from 75.5 in December. The index did drop from its preliminary reading of 80.5, but was near the consensus estimate of 79. The current conditions component rose to 94.4 from 91.0 in December [but 98.1 in early January]. The expectations component increased to 68.1 from 65.6 [69.1 preliminary]. The rise from December contrasts with the drop seen in the consumer confidence report earlier this week.
U.S. construction spending fell 1.1% in December. The decline dwarfed expectations of a 0.4% fall and followed a revised 0.4% drop in November [previously 0.1%]. Private spending fell 1.0% after falling 1.0% in November. Residential spending fell 2.8% over November and is down 20.4% over last year.
The January Manufacturing Report on Business from the Institute for Supply Management jumped to 50.7 from 48.4 in December. The market had expected 47.3. Strength in orders and production brought the overall index up strongly. Employment dropped again, in line with the January payroll report today. With most components up and the index back over 50, the ISM release contradicts the extreme weakness in other recent data, and suggests the manufacturing sector may be in better shape than we thought", according to S&P Economics.
This report and the December durable goods data suggest that manufacturing activity is growing at a slow pace in early 2008 rather than contracting as appeared to be the case in late 2007," wrote Bear Stearns economists in a note Friday. This report, however, also underscores cost inflation pressures."
Next week, investors will be looking at reports on December factory goods orders [Monday], the January ISM Non-Manufacturing index [Tuesday], MBA mortgage applications and preliminary fourth-quarter productivity [Wednesday]. Initial jobless claims will arrive Thursday, along with December NAHB pending home sales and consumer credit\. Wholesale trade data will be released Friday.
Microsofts unsolicited bid prices Yahoo shares at $31. Thats a 62% premium over Thursdays closing price, but it is below the level Yahoo shares hit in October. Yahoo said it will evaluate the proposal, which one analyst, at Stifel Nicolaus, rates at more than an 80% chance of success.
This deal would give the combined company formidable scale and create a viable competitor to Google," said Ryan Jacob, portfolio manager of the Jacob Internet Fund, which owns Yahoo stock.
Yahoo shares rose 48% on news of the bid, while Microsoft fell 7%.
Tech investors were also pondering the prospects of one of Yahoo and Microsofts fiercest competitors. Google (GOOG) reported surprisingly weak earnings late Thursday. Google posted profits of $4.43 per share, vs. $3.91 per share as revenue rose 51%. But shares were down nearly 9% as investors were spooked by revenue and profit numbers that didnt quite meet expectations, as well as worries that an economic slowdown may hurt online ad spending.
Google chief executive Eric Schmidt tried to reassure analysts: We have not yet seen any negative impact from the rumors of a possible recession," he said.
Ambac Financial (ABK) shares rose 13% Friday after a CNBC report that said eight large banks have joined forces to seek a rescue plan for the troubled bond insurer, citing a person familiar with the talks.
Among other stocks in the news Friday, Alcoa (AA) announced a partnership with Aluminum Corp. of China to buy a 12% stake in Rio Tinto (RTP). Alcoa will contribute $1.2 billion.
Motorola (MOT) said it is exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value." Alternatives may include the separation of Mobile Devices from its other businesses. Separately, Carl C. Icahn said he is pleased" that Moto is exploring a separation of the Mobile Devices unit.
In energy markets Friday, March WTI crude oil futures fell $2.79 to $88.96 per barrel as a weaker than expected jobs report indicated the U.S. economy was close to a recession, which in turn, would reduce demand for oil and other commodities.
Still, the record oil prices in recent months have clearly helped oil company profits. Exxon Mobil (XOM) reported earnings of $2.13 per share, vs. $1.76 a year ago, as revenue rose 30%.
Chevron (CVX) posted earnings of $2.32, vs. $1.74 a year ago, as revenues also rose 30%.
Also in the news Friday, United Parcel Service (UPS) boosted its regular quarterly dividend to 45 cents per share, from 42 cents per share.
Capital One Financial (COF) raised its quarterly dividend from 2.7 cents to 3.75 cents per share, and announced a $2 billion stock buyback plan.
Beazer Homes USA (BZH) says it will stop its mortgage origination service immediately, and end a related mortgage services relationship with Homebuilders Financial Network. It says it has entered a deal with Countrywide Financial (CFC), which will become the preferred mortgage provider to the homebuilders customers.
Manpower (MAN) posted earnings of $1.63 per share, vs. $1.15 a year ago, as revenue rose 20%. It expects earnings of 78 to 82 cents per share this quarter.
European stock indexes rallied Friday. In London, the FTSE 100 index added 2.54% to 6,029.20. In Paris, the CAC 40 index rose 2.22% to 4,978.06. Germanys DAX index was up 1.71% to 6,968.67.
Asian markets were mixed Friday. Japans Nikkei 225 index fell 0.7% to 13,497.16. In Hong Kong, the Hang Seng index rose 2.85% to 23,123.58.
Treasury market
Treasuries rose on back of an unexpected 17,000 decline in January nonfarm payroll jobs. The 10-year note edged up 03/32 to 105-16/32 for a yield of 3.58%. The 30-year bond rose 12/32 to 111-18/32 for a yield of 4.30%.
credited by: BusinessWeek.com
The tech deal news and labor-market downturn overshadowed what on any other day would have been top market headlines: Disappointing profits at Google (GOOG), Alcoas (AA) deal with a Chinese metals company to buy a stake in Rio Tinto (RTP), record profits for Exxon Mobil (XOM), and word that Motorola (MOT) may be mulling a split-up of the company. Finally, the Federal Reserve announced a plan to inject $60 billion into the banking system through two auctions in February.
On Friday, the Dow Jones industrial average gained 92.83 points, or 0.73%, to finish at 12,743.19. The S&P 500 added 16.87 points, or 1.22%, to close at 1,395.42, while the Nasdaq composite index gained 23.50 points, or 0.98%, to end the week at 2,397.37.
Activity in the broader market was positive, with 25 shares rising in price for every six that declined. Nasdaq breadth was 20-9 positive.
Recession fears have been mitigated recently by strength in financial stocks and upside in the equity market, notes S&P MarketScope.
.
The Dow and the S&P 500 have actually risen for two straight weeks for the first time since late November/early December, says S&P chief technical strategist Mark Arbeter, following the markets worst January in 38 years. The S&P 500 fell 6.1% last month.
While U.S. nonfarm payrolls fell 17,000 in January, Decembers figure was revised higher and Novembers lower for a net increase to the previous months of positive 9,000. The unemployment rate fell from 5.0% to 4.9%, while average hourly earning rose a weak 0.2%. Average weekly hours worked fell from 33.8 to 33.7.
The surprise decline in January employment suggests that the economy is contracting," said Ryan Sweet of Moodys Economy.com. Economists had been expecting a gain of 75,000 to 100,000. Januarys drop in payrolls was the first in five years.
John Ryding, chief U.S. economist at Bear Stearns (BSC), said the data wasnt conclusive. We will have to wait for the February report before drawing a conclusion on whether the economy has slipped into recession," he wrote, adding that the data still might be weak enough to push the Federal Reserve toward another half-point cut to interest rates in March.
Weak areas of the job market were manufacturing, with payrolls down 28,000, construction, off 27,000, and government, down 18,000. The service sector added 34,000 jobs.
The jobs report was only one of a series of marquee economic releases Friday. The University of Michigan reported that its consumer sentiment survey rose to 78.4 in January from 75.5 in December. The index did drop from its preliminary reading of 80.5, but was near the consensus estimate of 79. The current conditions component rose to 94.4 from 91.0 in December [but 98.1 in early January]. The expectations component increased to 68.1 from 65.6 [69.1 preliminary]. The rise from December contrasts with the drop seen in the consumer confidence report earlier this week.
U.S. construction spending fell 1.1% in December. The decline dwarfed expectations of a 0.4% fall and followed a revised 0.4% drop in November [previously 0.1%]. Private spending fell 1.0% after falling 1.0% in November. Residential spending fell 2.8% over November and is down 20.4% over last year.
The January Manufacturing Report on Business from the Institute for Supply Management jumped to 50.7 from 48.4 in December. The market had expected 47.3. Strength in orders and production brought the overall index up strongly. Employment dropped again, in line with the January payroll report today. With most components up and the index back over 50, the ISM release contradicts the extreme weakness in other recent data, and suggests the manufacturing sector may be in better shape than we thought", according to S&P Economics.
This report and the December durable goods data suggest that manufacturing activity is growing at a slow pace in early 2008 rather than contracting as appeared to be the case in late 2007," wrote Bear Stearns economists in a note Friday. This report, however, also underscores cost inflation pressures."
Next week, investors will be looking at reports on December factory goods orders [Monday], the January ISM Non-Manufacturing index [Tuesday], MBA mortgage applications and preliminary fourth-quarter productivity [Wednesday]. Initial jobless claims will arrive Thursday, along with December NAHB pending home sales and consumer credit\. Wholesale trade data will be released Friday.
Microsofts unsolicited bid prices Yahoo shares at $31. Thats a 62% premium over Thursdays closing price, but it is below the level Yahoo shares hit in October. Yahoo said it will evaluate the proposal, which one analyst, at Stifel Nicolaus, rates at more than an 80% chance of success.
This deal would give the combined company formidable scale and create a viable competitor to Google," said Ryan Jacob, portfolio manager of the Jacob Internet Fund, which owns Yahoo stock.
Yahoo shares rose 48% on news of the bid, while Microsoft fell 7%.
Tech investors were also pondering the prospects of one of Yahoo and Microsofts fiercest competitors. Google (GOOG) reported surprisingly weak earnings late Thursday. Google posted profits of $4.43 per share, vs. $3.91 per share as revenue rose 51%. But shares were down nearly 9% as investors were spooked by revenue and profit numbers that didnt quite meet expectations, as well as worries that an economic slowdown may hurt online ad spending.
Google chief executive Eric Schmidt tried to reassure analysts: We have not yet seen any negative impact from the rumors of a possible recession," he said.
Ambac Financial (ABK) shares rose 13% Friday after a CNBC report that said eight large banks have joined forces to seek a rescue plan for the troubled bond insurer, citing a person familiar with the talks.
Among other stocks in the news Friday, Alcoa (AA) announced a partnership with Aluminum Corp. of China to buy a 12% stake in Rio Tinto (RTP). Alcoa will contribute $1.2 billion.
Motorola (MOT) said it is exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value." Alternatives may include the separation of Mobile Devices from its other businesses. Separately, Carl C. Icahn said he is pleased" that Moto is exploring a separation of the Mobile Devices unit.
In energy markets Friday, March WTI crude oil futures fell $2.79 to $88.96 per barrel as a weaker than expected jobs report indicated the U.S. economy was close to a recession, which in turn, would reduce demand for oil and other commodities.
Still, the record oil prices in recent months have clearly helped oil company profits. Exxon Mobil (XOM) reported earnings of $2.13 per share, vs. $1.76 a year ago, as revenue rose 30%.
Chevron (CVX) posted earnings of $2.32, vs. $1.74 a year ago, as revenues also rose 30%.
Also in the news Friday, United Parcel Service (UPS) boosted its regular quarterly dividend to 45 cents per share, from 42 cents per share.
Capital One Financial (COF) raised its quarterly dividend from 2.7 cents to 3.75 cents per share, and announced a $2 billion stock buyback plan.
Beazer Homes USA (BZH) says it will stop its mortgage origination service immediately, and end a related mortgage services relationship with Homebuilders Financial Network. It says it has entered a deal with Countrywide Financial (CFC), which will become the preferred mortgage provider to the homebuilders customers.
Manpower (MAN) posted earnings of $1.63 per share, vs. $1.15 a year ago, as revenue rose 20%. It expects earnings of 78 to 82 cents per share this quarter.
European stock indexes rallied Friday. In London, the FTSE 100 index added 2.54% to 6,029.20. In Paris, the CAC 40 index rose 2.22% to 4,978.06. Germanys DAX index was up 1.71% to 6,968.67.
Asian markets were mixed Friday. Japans Nikkei 225 index fell 0.7% to 13,497.16. In Hong Kong, the Hang Seng index rose 2.85% to 23,123.58.
Treasury market
Treasuries rose on back of an unexpected 17,000 decline in January nonfarm payroll jobs. The 10-year note edged up 03/32 to 105-16/32 for a yield of 3.58%. The 30-year bond rose 12/32 to 111-18/32 for a yield of 4.30%.
credited by: BusinessWeek.com
2008-02-03
Movers: MBIA, Amazon.com, Starbucks, AnnTaylor, Alliance Data Movers: MBIA, Amazon.com, Starbucks, AnnTaylor, Alliance Data
MBIA (MBI) posts $18.61 fourth quarter loss per share, vs. $1.32 EPS a year ago; posts $3.30 fourth quarter operating loss vs. $1.31 operating EPS. It says it's disappointed in its operating results for 2007 as performance of its insured prime, second-lien mortgage portfolio, three insured CDO-squared transactions led to unprecedented loss reserving, impairment activity. MBIA's CEO said the company will have real and significant losses, but nothing to justify the 80% decline in share price since last year. The CEO noted the company's capital plan will exceed all AAA rating requirements. The stock turned higher on the news.
Amazon.com (AMZN) posts fourth quarter EPS of $0.48, vs. $0.23 a year ago, on 42% sales rise. It sees first quarter sales of $3.95-$4.15 billion and 2008 sales of $18.75-$19.75 billion. It expects 2008 operating income of $785-$985 million, including $240 million for stock-based compensation and amortization of intangible assets. Separately, Amazon agrees to acquire Audible (ADBL) for about $300 million, or $11.50 per share. S&P upgrades to hold from sell. Bear Stearns ties the weakness in the stock to margin disappointment.
Starbucks (SBUX) posts first quarter EPS of $0.28, vs. $0.26 a year ago, on 1.0% higher same-store sales, 17% higher total sales. It views fiscal year 2008 as a "year of refocus and renewal." Expects low double-digit EPS expansion for fiscal year 2008.
Procter & Gamble (PG) posts second quarter EPS of $0.98, vs. $0.84 a year ago, on 9% sales rise. It sees $0.79-$0.81 third quarter EPS. For fiscal year 2008, it expects organic sales to grow 4%-6%, sees EPS of $3.46-$3.50. Plans to separate its coffee business and create an independent company named The Folgers Coffee Co. Assuming a split-off transaction, expects deal to be dilutive to EPS by $0.03-$0.05 on an annual basis. S&P maintains strong buy.
Pulte Homes (PHM) posts $3.54 fourth quarter loss per share from continuing operations, vs. $0.03 loss a year ago, on 34% lower revenue. Fourth quarter 2007 loss included $1.28/share of charges tied to inventory impairments, other land-related charges and impairment of goodwill; also, a $2.46/share non-cash charge to eliminate a tax loss-related asset on PHM's balance sheet. The home builder sees $0.15-$0.30 first quarter net loss from continuing operations, exclusive of a tax benefit and any add'l impairments or land-related charges. S&P narrows 2008 loss estimate, raises target price; reiterates hold.
Mattel (MAT) posts $0.89, vs. $0.75 a year ago, fourth quarter EPS on 3.8% revenue rise. S&P maintains strong buy.
AnnTaylor Stores (ANN) plans to cut 13% of staff at its headquarters and close 117 stores as part of a restructuring aimed at increasing its operating margin by more than 200 basis points over the next three years. Also says it is taking a conservative approach to new store growth in fiscal 2008, given the ongoing macroeconomic weakness and uncertainty in the retail sector.
Alliance Data Systems (ADS) posts $0.42, vs. $0.48 a year ago, fourth quarter EPS as merger, other costs offset 15% revenue rise. On purely organic basis, sees 2008 adjusted EBITDA in excess of $700 million, with operating EBITDA expected to be a minimum of $30 million greater than adjusted EBITDA and cash EPS of $4.30. Yesterday, ADS filed lawsuit against the Blackstone entities that are parties to the merger agreement. Wachovia reportedly upgrades to outperform from market perform.
Colgate-Palmolive (CL) posts $0.91, vs. $0.78 a year ago, fourth quarter operating EPS on 13% sales rise. It expects 2008 gross profit margin, excl. restructuring charges, to be up within targeted range of 75 basis points to 125 basis points. S&P maintains strong buy.
Bristol-Myers Squibb (BMY) posts $0.07 fourth quarter GAAP loss per share, vs. $0.09 loss on 33% revenue rise [including 5% favorable forex]. It revises 2008 GAAP EPS guidance to $1.36-$1.46 from $1.44-$1.54, primarily reflecting impact from sale of the Medical Imaging business. Notes guidance includes estimated charges of about $500 million related to implementation of the Productivity Transformation Initiative, which will be dependent on timing of implementation and accounting treatment.
MasterCard (MA) posts $2.26 [including after-tax gain of $1.37], vs. $0.30 a year ago, fourth quarter EPS on 28% revenue rise.
Cadence Design Systems (CDNS) posts fourth quarter EPS [non-GAAP] of $0.46 vs. $0.38 a year ago, on 6.2% revenue rise. It sees first quarter non-GAAP EPS of $0.03-$0.05 on revenue of $280-$290 million and fiscal year 2008 EPS of $1.11-$1.19. JP Morgan reportedly downgrades to underweight from neutral.
TurboChef Technologies (OVEN) says one of its customers announced modification of its North America food program which utilizes TurboChef ovens, which will reduce that customer's previously anticipated contribution to OVEN's 2008 results. OVEN says it comfortable with its previously announced commercial revenue guidance for 2008.
Advanced Medical Optics (EYE) says it has entered into deal with Bausch & Lomb, Inc. regarding AMO's patent relate to peristaltic pump fluidics used in phacoemulsification systems. Bausch & Lomb will pay AMO a royalty under the agreement. All other terms of the agreement are confidential.
JK Acquisition (JKA) postpones a special meeting of its stockholders from 10:00 a.m. CDT today to 5:00 p.m. CST today, in order to give JKA more time to solicit proxies and its stockholders more time to consider and vote on JKA's proposed merger with Multi-Shot LLC.
Starwood Hotels & Resorts Worldwide (HOT) posts $0.74, vs. $0.93 a year ago, fourth quarter EPS despite 2.4% revenue rise. Adjusts guidance to reflect economic uncertainty, possibility of slowdown in U.S. lodging demand. Now sees $0.22-$0.26 first quarter EPS, $2.32-$2.57 2008 EPS [both before special items].
ImClone Systems (IMCL) posts $0.23 fourth quarter loss per share, vs. $0.53 EPS a year ago, as patent litigation settlement expense, other items offset 14% rise in revenue. Posts $0.41 non-GAAP EPS [excluding items].
Cirrus Logic (CRUS) posts lower-than-expected $0.05, vs. $0.04 a year ago, third quarter EPS on 8.0% revenue rise. It says third quarter gross margin narrowed to 56% vs. 61% in the year-ago quarter. Sets $150 million stock buyback. It sees $44-$47 million fourth quarter revenue, gross margin of 55%-58%.
Alliant Techsystems (ATK) posts $1.65, vs. $1.53 a year ago, third quarter EPS on 17% sales rise. Based on continued strength in all three business groups, increasing visibility, ut raises fiscal year 2008 EPS guidance to $6.25-$6.35, expects sales in excess of $4.1 billion. It sees fiscal year 2009 EPS of $7.10-$7.30, expects sales of approximately $4.5 billion.
credted by: BusinessWeek.com
Amazon.com (AMZN) posts fourth quarter EPS of $0.48, vs. $0.23 a year ago, on 42% sales rise. It sees first quarter sales of $3.95-$4.15 billion and 2008 sales of $18.75-$19.75 billion. It expects 2008 operating income of $785-$985 million, including $240 million for stock-based compensation and amortization of intangible assets. Separately, Amazon agrees to acquire Audible (ADBL) for about $300 million, or $11.50 per share. S&P upgrades to hold from sell. Bear Stearns ties the weakness in the stock to margin disappointment.
Starbucks (SBUX) posts first quarter EPS of $0.28, vs. $0.26 a year ago, on 1.0% higher same-store sales, 17% higher total sales. It views fiscal year 2008 as a "year of refocus and renewal." Expects low double-digit EPS expansion for fiscal year 2008.
Procter & Gamble (PG) posts second quarter EPS of $0.98, vs. $0.84 a year ago, on 9% sales rise. It sees $0.79-$0.81 third quarter EPS. For fiscal year 2008, it expects organic sales to grow 4%-6%, sees EPS of $3.46-$3.50. Plans to separate its coffee business and create an independent company named The Folgers Coffee Co. Assuming a split-off transaction, expects deal to be dilutive to EPS by $0.03-$0.05 on an annual basis. S&P maintains strong buy.
Pulte Homes (PHM) posts $3.54 fourth quarter loss per share from continuing operations, vs. $0.03 loss a year ago, on 34% lower revenue. Fourth quarter 2007 loss included $1.28/share of charges tied to inventory impairments, other land-related charges and impairment of goodwill; also, a $2.46/share non-cash charge to eliminate a tax loss-related asset on PHM's balance sheet. The home builder sees $0.15-$0.30 first quarter net loss from continuing operations, exclusive of a tax benefit and any add'l impairments or land-related charges. S&P narrows 2008 loss estimate, raises target price; reiterates hold.
Mattel (MAT) posts $0.89, vs. $0.75 a year ago, fourth quarter EPS on 3.8% revenue rise. S&P maintains strong buy.
AnnTaylor Stores (ANN) plans to cut 13% of staff at its headquarters and close 117 stores as part of a restructuring aimed at increasing its operating margin by more than 200 basis points over the next three years. Also says it is taking a conservative approach to new store growth in fiscal 2008, given the ongoing macroeconomic weakness and uncertainty in the retail sector.
Alliance Data Systems (ADS) posts $0.42, vs. $0.48 a year ago, fourth quarter EPS as merger, other costs offset 15% revenue rise. On purely organic basis, sees 2008 adjusted EBITDA in excess of $700 million, with operating EBITDA expected to be a minimum of $30 million greater than adjusted EBITDA and cash EPS of $4.30. Yesterday, ADS filed lawsuit against the Blackstone entities that are parties to the merger agreement. Wachovia reportedly upgrades to outperform from market perform.
Colgate-Palmolive (CL) posts $0.91, vs. $0.78 a year ago, fourth quarter operating EPS on 13% sales rise. It expects 2008 gross profit margin, excl. restructuring charges, to be up within targeted range of 75 basis points to 125 basis points. S&P maintains strong buy.
Bristol-Myers Squibb (BMY) posts $0.07 fourth quarter GAAP loss per share, vs. $0.09 loss on 33% revenue rise [including 5% favorable forex]. It revises 2008 GAAP EPS guidance to $1.36-$1.46 from $1.44-$1.54, primarily reflecting impact from sale of the Medical Imaging business. Notes guidance includes estimated charges of about $500 million related to implementation of the Productivity Transformation Initiative, which will be dependent on timing of implementation and accounting treatment.
MasterCard (MA) posts $2.26 [including after-tax gain of $1.37], vs. $0.30 a year ago, fourth quarter EPS on 28% revenue rise.
Cadence Design Systems (CDNS) posts fourth quarter EPS [non-GAAP] of $0.46 vs. $0.38 a year ago, on 6.2% revenue rise. It sees first quarter non-GAAP EPS of $0.03-$0.05 on revenue of $280-$290 million and fiscal year 2008 EPS of $1.11-$1.19. JP Morgan reportedly downgrades to underweight from neutral.
TurboChef Technologies (OVEN) says one of its customers announced modification of its North America food program which utilizes TurboChef ovens, which will reduce that customer's previously anticipated contribution to OVEN's 2008 results. OVEN says it comfortable with its previously announced commercial revenue guidance for 2008.
Advanced Medical Optics (EYE) says it has entered into deal with Bausch & Lomb, Inc. regarding AMO's patent relate to peristaltic pump fluidics used in phacoemulsification systems. Bausch & Lomb will pay AMO a royalty under the agreement. All other terms of the agreement are confidential.
JK Acquisition (JKA) postpones a special meeting of its stockholders from 10:00 a.m. CDT today to 5:00 p.m. CST today, in order to give JKA more time to solicit proxies and its stockholders more time to consider and vote on JKA's proposed merger with Multi-Shot LLC.
Starwood Hotels & Resorts Worldwide (HOT) posts $0.74, vs. $0.93 a year ago, fourth quarter EPS despite 2.4% revenue rise. Adjusts guidance to reflect economic uncertainty, possibility of slowdown in U.S. lodging demand. Now sees $0.22-$0.26 first quarter EPS, $2.32-$2.57 2008 EPS [both before special items].
ImClone Systems (IMCL) posts $0.23 fourth quarter loss per share, vs. $0.53 EPS a year ago, as patent litigation settlement expense, other items offset 14% rise in revenue. Posts $0.41 non-GAAP EPS [excluding items].
Cirrus Logic (CRUS) posts lower-than-expected $0.05, vs. $0.04 a year ago, third quarter EPS on 8.0% revenue rise. It says third quarter gross margin narrowed to 56% vs. 61% in the year-ago quarter. Sets $150 million stock buyback. It sees $44-$47 million fourth quarter revenue, gross margin of 55%-58%.
Alliant Techsystems (ATK) posts $1.65, vs. $1.53 a year ago, third quarter EPS on 17% sales rise. Based on continued strength in all three business groups, increasing visibility, ut raises fiscal year 2008 EPS guidance to $6.25-$6.35, expects sales in excess of $4.1 billion. It sees fiscal year 2009 EPS of $7.10-$7.30, expects sales of approximately $4.5 billion.
credted by: BusinessWeek.com
The Billion-Dollar Losers
Big-name U.S. CEOs have taken a bath, but not the kind that leaves you feeling warm and relaxed.
As the bears took over Wall Street, chief executives, rewarded handsomely in years past with stock options, have seen the value of their holdings plummet.
The continuing financial crisis and fears of a U.S. recession have sent the broad Standard & Poor's 500-stock index down 15% since its peak in October. BusinessWeek asked financial information provider Capital IQ to analyze how this stock market correction has affected CEOs of major U.S. companies. [Capital IQ, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).]
The resulting data show that market forces have chewed up the portfolios of even the savviest chief executives. Capital IQ estimates that since October, five CEOs have lost more than $1 billion through holdings of their companies' stock: Larry Ellison of Oracle (ORCL), Michael Dell of Dell (DELL), Micky Arison of Carnival Corp. (CCL), Jeffrey Bezos of Amazon.com (AMZN), and Rupert Murdoch of News Corp. (NWS).
More than 20 CEOs on the list have lost more than $100 million. The pain is widespread, too. Of the 450 major company CEOs analyzed, only about 60 escaped the last three months without losses. The markets were so difficult that only five of that group were able to achieve what these CEOs would typically take for granted -- gains of more than $10 million each.
The methodology: Capital IQ analyzed the change in the value of CEO holdings in their firms' stock from the market peak on Oct. 11, 2007, through Jan. 29, 2008. The estimates are based on each company's annual disclosures of CEO stock holdings, so it does not reflect any buying and selling by CEOs since their last reports.
But the estimates do show how quickly CEO fortunes have shrunk in three months. In total, the bear-trapped CEOs identified by Capital IQ lost a combined $16.1 billion.
The Financial Storm
The U.S. economy's troubles began in the financial sector last summer, as bad mortgage debt caused havoc in the credit markets. As a result, some of the biggest losers are CEOs in the financial sector. The portfolio losses of top financial CEOs on the list total $1.8 billion.
Those at the center of the financial storm have been hit hardest.
Countrywide Financial (CFC) CEO Angelo Mozilo has seen his stock lose nearly two-thirds of its value, costing him more than $100 million. [Mozilo will step down as Countrywide's chief after the planned acquisition of the company by Bank of America (BAC) is completed.] Politicians, including Senator Hillary Clinton [D-N.Y.], have called Countrywide, the U.S.'s largest mortgage lender, a major culprit in the loose lending standards that led to the subprime crisis.
Subprime debt has also devastated the holdings of CEOs of bond insurers. Gary Dunton of MBIA (MBI) lost 76% of his holdings during the survey period, or $24.7 million, while Ambac Financial Group (ABK) CEO Michael Callen took an 82% haircut, bringing the value of his holdings in company stock down to little more than $400,000.
Performance Pay
Don't reach for the Kleenex just yet. Despite the recent market turbulence, CEOs are still quite wealthy in company stock. Capital IQ identified 16 CEOs who still own more than $1 billion in their firm's shares, and 73 who owned more than $100 million.
In the past, base salary was a much larger part of executive compensation, but starting in the 1990s corporate boards began to add a lot more stock to pay packages. Shareholder groups had argued that the interests of CEOs and shareholders weren't properly aligned, says David Leach, managing director of compensation consulting firm Strategic Apex Group. "Conventional wisdom says an owner is going to take care of something better than someone who is renting," he says.
By paying CEOs in stock or stock options, "the concept is they get paid for the performance of the organization overall," says Don Lindner of WorldatWork, a human resources nonprofit.
But this doesn't always work perfectly. When the economy is booming and the stock market is rising, even lackluster CEOs get rewarded. But now, while a recession threatens, CEOs of even top performers are hurt. For example, Amazon.com's Bezos has doubled profits in the past year, yet he has lost $1.6 billion since October. Bezos didn't fare too well when the company reported fourth-quarter results on Jan. 30 [BusinessWeek.com, 1/31/08]. Investors' concerns about the impact of an economic slowdown sent the stock tumbling 12%, to $65.29.
Tech Losses
The poor performance of technology holdings is a prime example of how broadly the stock market gloom has spread from its origins in the financial sector. While a few tech CEOs, such as Steven Ballmer of Microsoft (MSFT), have resisted the undertow, in total, top tech CEOs have lost more than $5.6 billion since October. The average U.S. tech CEO's portfolio has fallen 19% since October, according to the Capital IQ screen, not much better than the 20% drop for financial CEOs.
Part of the problem for these CEOs is Silicon Valley's love of stock options. Tech firms have typically used much more equity in pay packages than other companies. Tech chiefs have lost a lot, but past bull markets have made billionaires of Bezos, Ellison, and many tech executives. Also, tech losses are exaggerated a bit by the time frame of the analysis. Tech companies have faltered lately, but most had put in stellar 2007 performances up until November or so.
Still, the huge tech losses show there has been nowhere to hide from the recent stock market turbulence. Investors fled even from sectors that are traditionally havens in a tough economy. CEOs of health-care and consumer staples firms have also lost money -- an average of 6% and 7%, respectively -- though not nearly as much as in other sectors.
The Biggest Losers [and Winners]
Take a look at the accompanying slide shows for examples of CEOs who have won or lost big lately in the stock market. The biggest losers include some of the world's best known executives, including Apple's (AAPL) Steve Jobs, Howard Schultz of Starbucks (SBUX), and Google's (GOOG) Eric Schmidt. Concern about the U.S. economy and online ad spending pummeled Google's shares when it reported fourth-quarter earnings on Jan. 31 [BusinessWeek.com, 2/1/08].
The list of CEOs includes a variety of executives who have somehow found a way to make money in a tough market. Their outperformance usually reflects extraordinary circumstances: Surprisingly strong results that bucked an industry trend, or an outlook that suddenly turned from poor to favorable.
Of course, in today's volatile markets, the current winners could wind up in the company of their unlucky brethren in a heartbeat.
Check out the BusinessWeek.com slide shows for more about the CEOs who have lost the most and CEOs who have gained the most.
credted by: BusinessWeek.com
As the bears took over Wall Street, chief executives, rewarded handsomely in years past with stock options, have seen the value of their holdings plummet.
The continuing financial crisis and fears of a U.S. recession have sent the broad Standard & Poor's 500-stock index down 15% since its peak in October. BusinessWeek asked financial information provider Capital IQ to analyze how this stock market correction has affected CEOs of major U.S. companies. [Capital IQ, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).]
The resulting data show that market forces have chewed up the portfolios of even the savviest chief executives. Capital IQ estimates that since October, five CEOs have lost more than $1 billion through holdings of their companies' stock: Larry Ellison of Oracle (ORCL), Michael Dell of Dell (DELL), Micky Arison of Carnival Corp. (CCL), Jeffrey Bezos of Amazon.com (AMZN), and Rupert Murdoch of News Corp. (NWS).
More than 20 CEOs on the list have lost more than $100 million. The pain is widespread, too. Of the 450 major company CEOs analyzed, only about 60 escaped the last three months without losses. The markets were so difficult that only five of that group were able to achieve what these CEOs would typically take for granted -- gains of more than $10 million each.
The methodology: Capital IQ analyzed the change in the value of CEO holdings in their firms' stock from the market peak on Oct. 11, 2007, through Jan. 29, 2008. The estimates are based on each company's annual disclosures of CEO stock holdings, so it does not reflect any buying and selling by CEOs since their last reports.
But the estimates do show how quickly CEO fortunes have shrunk in three months. In total, the bear-trapped CEOs identified by Capital IQ lost a combined $16.1 billion.
The Financial Storm
The U.S. economy's troubles began in the financial sector last summer, as bad mortgage debt caused havoc in the credit markets. As a result, some of the biggest losers are CEOs in the financial sector. The portfolio losses of top financial CEOs on the list total $1.8 billion.
Those at the center of the financial storm have been hit hardest.
Countrywide Financial (CFC) CEO Angelo Mozilo has seen his stock lose nearly two-thirds of its value, costing him more than $100 million. [Mozilo will step down as Countrywide's chief after the planned acquisition of the company by Bank of America (BAC) is completed.] Politicians, including Senator Hillary Clinton [D-N.Y.], have called Countrywide, the U.S.'s largest mortgage lender, a major culprit in the loose lending standards that led to the subprime crisis.
Subprime debt has also devastated the holdings of CEOs of bond insurers. Gary Dunton of MBIA (MBI) lost 76% of his holdings during the survey period, or $24.7 million, while Ambac Financial Group (ABK) CEO Michael Callen took an 82% haircut, bringing the value of his holdings in company stock down to little more than $400,000.
Performance Pay
Don't reach for the Kleenex just yet. Despite the recent market turbulence, CEOs are still quite wealthy in company stock. Capital IQ identified 16 CEOs who still own more than $1 billion in their firm's shares, and 73 who owned more than $100 million.
In the past, base salary was a much larger part of executive compensation, but starting in the 1990s corporate boards began to add a lot more stock to pay packages. Shareholder groups had argued that the interests of CEOs and shareholders weren't properly aligned, says David Leach, managing director of compensation consulting firm Strategic Apex Group. "Conventional wisdom says an owner is going to take care of something better than someone who is renting," he says.
By paying CEOs in stock or stock options, "the concept is they get paid for the performance of the organization overall," says Don Lindner of WorldatWork, a human resources nonprofit.
But this doesn't always work perfectly. When the economy is booming and the stock market is rising, even lackluster CEOs get rewarded. But now, while a recession threatens, CEOs of even top performers are hurt. For example, Amazon.com's Bezos has doubled profits in the past year, yet he has lost $1.6 billion since October. Bezos didn't fare too well when the company reported fourth-quarter results on Jan. 30 [BusinessWeek.com, 1/31/08]. Investors' concerns about the impact of an economic slowdown sent the stock tumbling 12%, to $65.29.
Tech Losses
The poor performance of technology holdings is a prime example of how broadly the stock market gloom has spread from its origins in the financial sector. While a few tech CEOs, such as Steven Ballmer of Microsoft (MSFT), have resisted the undertow, in total, top tech CEOs have lost more than $5.6 billion since October. The average U.S. tech CEO's portfolio has fallen 19% since October, according to the Capital IQ screen, not much better than the 20% drop for financial CEOs.
Part of the problem for these CEOs is Silicon Valley's love of stock options. Tech firms have typically used much more equity in pay packages than other companies. Tech chiefs have lost a lot, but past bull markets have made billionaires of Bezos, Ellison, and many tech executives. Also, tech losses are exaggerated a bit by the time frame of the analysis. Tech companies have faltered lately, but most had put in stellar 2007 performances up until November or so.
Still, the huge tech losses show there has been nowhere to hide from the recent stock market turbulence. Investors fled even from sectors that are traditionally havens in a tough economy. CEOs of health-care and consumer staples firms have also lost money -- an average of 6% and 7%, respectively -- though not nearly as much as in other sectors.
The Biggest Losers [and Winners]
Take a look at the accompanying slide shows for examples of CEOs who have won or lost big lately in the stock market. The biggest losers include some of the world's best known executives, including Apple's (AAPL) Steve Jobs, Howard Schultz of Starbucks (SBUX), and Google's (GOOG) Eric Schmidt. Concern about the U.S. economy and online ad spending pummeled Google's shares when it reported fourth-quarter earnings on Jan. 31 [BusinessWeek.com, 2/1/08].
The list of CEOs includes a variety of executives who have somehow found a way to make money in a tough market. Their outperformance usually reflects extraordinary circumstances: Surprisingly strong results that bucked an industry trend, or an outlook that suddenly turned from poor to favorable.
Of course, in today's volatile markets, the current winners could wind up in the company of their unlucky brethren in a heartbeat.
Check out the BusinessWeek.com slide shows for more about the CEOs who have lost the most and CEOs who have gained the most.
credted by: BusinessWeek.com
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