DailyFinance.comhttp://www.dailyfinance.comDailyFinance.com%http://www.blogsmithmedia.com/BlogURL%/media/feedlogo.gifDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Why Groupon Will Never Be Great Againhttp://www.dailyfinance.com/2012/02/09/why-groupon-will-never-be-great-again/http://www.dailyfinance.com/2012/02/09/why-groupon-will-never-be-great-again/http://www.dailyfinance.com/2012/02/09/why-groupon-will-never-be-great-again/#commentsFiled under: , ,

GrouponThe Groupon (GRPN) craze was great while it lasted.

The daily deals purveyor has never been more popular. Groupon closed out 2011 with 33 million active customers across 47 different countries. Quarterly results posted on Wednesday night show a company that is growing quickly.

However, there are more than a few signs that "Groupon fatigue" is kicking in.

First, the good news. Groupon saw its quarterly revenue soar 194% to $506.5 million, well ahead of the $475.2 million that analysts were expecting. The adjusted loss of $0.02 a share was less than the $0.03-a-share profit that Wall Street was forecasting, but the adjusted figure actually includes a $0.07-a-share hit on international taxes paid in countries where it is now profitable. Yes, Groupon is an international play now, with 63% of its revenue trickling in from outside North America.

Operating income actually clocked in at a positive $15 million. More impressively, free cash flow soared 248% to $155.1 million.

This certainly doesn't seem like a company on the way out. How dare anyone accuse Groupon of peaking?

Well, let's get to the darker side of this growth story.

Group Off

Groupon conveniently left out its subscriber count from Wednesday's report. When it went public late last year, the dot-com speedster let investors know that it had 142.9 million subscribers but only 29.5 million cumulative buyers as of the end of September. In other words, only roughly one-fifth of those receiving Groupon's daily blasts were ever wooed into actually buying one of the company's local deals.

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This time around, Groupon is letting us know that active customers are up 275% year over year to 33 million. It's an impressive number, but what do you think it means when the customer count is growing faster than revenue? Lower revenue per customer? Well, that's another metric found in November's S-1/A filing but not in Wednesday's 8-K.

If you're hungry for another big number that hints at something problematic, consider that gross billings soared 201% to $1.25 billion. This is the amount that Groupon charges customers for its deals after backing out any applicable taxes and refund estimates. The difference between gross billings and its reported revenue is what Groupon shells out to the 250,000 merchants offering city-specific deals on its website. Remember how revenue grew at a 194% clip? What do you think it means when gross billings are growing faster than revenue? Yes, Groupon is resorting to paying its merchants a bigger cut of the deals to keep them coming.

The 50/50 split that many assume takes place between Groupon and its lead-hungry merchants is a myth. Groupon's take is now closer to 40%. As distant silver medalist LivingSocial and even smaller rivals get more generous on their terms to win jaded merchants, Groupon will have little choice but to play along.

The Business Model Smells Funny

There's no shortage of horror stories from merchants who have experimented with the daily deals websites only to find that they attracted spendthrift one-time customers. There are also plenty of subscribers who have seen their pre-paid discount vouchers expire without being used. Maybe you didn't want that Brazilian wax after all. Maybe your wife wasn't impressed with the insinuation behind the pole-dancing classes voucher.

However, we still don't know if this will ever be worth it for Groupon. The company has accumulated a deficit of $676.6 million since launching less than four years ago. If the company were to curb expansion and scale back marketing costs, it would be pretty profitable, but what if this is a passing craze? Weren't radio stations and newspapers offering similar flash sales and discounted dining programs a few years earlier? Where did that get them?

With 632.8 million shares outstanding after November's IPO, Groupon went public with a market cap of nearly $13 billion at its $20 offering price.

Yes, it got the next laugh on Google (GOOG) after a reported deal to buy Groupon for $6 billion failed to materialize. But who will get the last laugh?

Facebook, restaurant reviews website Yelp, and dining reservations leader OpenTable (OPEN) have all bowed out of selling Groupon-like vouchers. They wouldn't be so quick to leave if there was potential in this niche.

Groupon's outlook for the current quarter is intriguing. The deal maker sees operating income of $15 million to $35 million, so there should be improvement there. However, the $510 million to $550 million in revenue that Groupon is targeting doesn't call for much of a sequential boost. We're looking at just 1% to 8% improvement over the fourth quarter it just wrapped up. Since Groupon's North American business is growing slower than its international operations, are we about to see Groupon's stateside business decline? At the low end of Groupon's guidance, that's probably what we will see.

Ouch!

Oh, and before bulls argue that sequential analysis isn't fair when pitting the holiday quarter against the seasonally lamentable first three months of the following year, it should be pointed out that revenue posted a 72% sequential burst during last year's freshman quarter.

Groupon isn't going away. Its debt-free balance sheet is flush with $1.1 billion in cash after the IPO and earlier financing rounds. As weaker players crumble -- and they will as consumers tire of handing over voucher printouts and mobile phones -- Groupon may appear to be the beneficiary.

Don't buy it. This is a harder model to pull off than it seems on paper and it may not be long before only merchants who need to deeply discount their food and spa services to attract customers will be participating. A year ago, Groupon shut down the social component where users could comment on deals. It was a great way to expose iffy merchants or question the advertised savings. Now Groupon limits the communication to questions that get answered.

What's Groupon hiding? You probably don't want to stick around to find out.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of OpenTable and Google. Motley Fool newsletter services have recommended buying shares of Google and OpenTable.

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]]>Daily dealDailyDealDealOfTheDayFinanceGoogleGroup BuyingGroupBuyingGroupongroupon outlookGrouponOutlooklivingsocialonline couponsOnlineCouponsOpenTableprofitsstocks to watchStocksToWatchThe Motley FoolRick Aristotle Munarriz, The Motley FoolThu, 09 Feb 2012 15:30:00 ESTVisa 1Q Profit Rises 16% as Card Use Riseshttp://www.dailyfinance.com/2012/02/08/visa-1q-profit-rises-16-as-card-use-rises/http://www.dailyfinance.com/2012/02/08/visa-1q-profit-rises-16-as-card-use-rises/http://www.dailyfinance.com/2012/02/08/visa-1q-profit-rises-16-as-card-use-rises/#commentsFiled under: , , ,

Visa first quarter profit rises 16 percent as card use risesNEW YORK (AP) - Visa Inc. (V) said Wednesday that its fiscal first-quarter profit rose 16 percent, as card use rose both in the U.S. and overseas.

The San Francisco-based payments processor posted a notable 10 percent increase in U.S. credit card use.

But debit card use rose just 6 percent. That's the slowest debit card growth rate in more than a year, and comes during the first three-month period that new rules were in place to limit the fees retailers pay to accept the cards.

The rules also require that starting in April, merchants get a choice on which network handles their debit transactions. In the last few months, Visa has been offering incentives to encourage stores to choose its network.

Debit growth has been slowing over the past few quarters.

"It didn't come totally out of the blue," said Edward Jones analyst Shannon Stemm. While it's still early to determine the impact of the new regulations, she noted that rival MasterCard Inc.'s (MA) results last week showed some apparent debit market share gains versus Visa, which still holds the bulk of the U.S. debit market.

Nevertheless, Visa's results for the quarter showed strong growth indicating consumers continue to shift away from cash and toward plastic and electronic payments.

Visa posted net income for the three months ended Dec. 31 of $1.03 billion, or $1.49 per share. That compares with $884 million, or $1.23 per share, in the year-earlier period. There were 4 percent fewer outstanding shares in the recent quarter due to buybacks, which increases per-share results.

Revenue for the quarter rose 14 percent to $2.55 billion, from $2.24 billion the prior year.

Analysts, on average, were expecting profit of $1.45 per share, on revenue of $2.47 billion.

Visa, the world's largest payment network, said the gains reflected higher card use, increased data processing revenue and a 19 percent boost in international transactions. It is aiming to increase its business overseas so that it eventually generates more than half of its revenue. For the quarter, international transaction revenue accounted for about 29 percent of total revenue.

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The company also said its board approved another $500 million share buyback program.

Visa now expects annual revenue growth in the low double digits, which removes the lower end of its prior forecast for high-single digit to low-double digit growth. It forecast earnings per share growth in the high teens, updating its prior projection for a high single-to low-double digit range.

The results buoyed the stock. In aftermarket electronic trading, Visa shares added $3.65 to $112. The stock closed the regular session up $1.37 at $108.35.


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]]>credit cardcredit card companiescredit card companycredit cardsCreditCardCreditCardCompaniesCreditCardCompanyCreditCardsmastercardmastercard incMastercardIncVisavisa profitVisaProfitThe Associated PressWed, 08 Feb 2012 17:16:00 ESTMcDonald's Key Revenue Figure Up 6.7% in Jan.http://www.dailyfinance.com/2012/02/08/mcdonalds-key-revenue-figure-up-6-7-in-jan/http://www.dailyfinance.com/2012/02/08/mcdonalds-key-revenue-figure-up-6-7-in-jan/http://www.dailyfinance.com/2012/02/08/mcdonalds-key-revenue-figure-up-6-7-in-jan/#commentsFiled under: , , ,

McDonaldsOAK BROOK, Ill. (AP) - McDonald's Corp. (MCD) said Wednesday that a key revenue figure climbed 6.7 percent in January as U.S. customers spent more on breakfast items, beverages and its new Chicken McBites.

The world's biggest hamburger chain's strongest January results were in the U.S., as revenue in restaurants open at least 13 months rose 7.8 percent there. The metric increased 7.3 percent in the region made up of Asia, the Middle East and Africa, and 4 percent in Europe.

The U.S. accounts for about 31 percent of McDonald's total revenue. Europe, which accounts for 40 percent of revenue, is McDonald's largest market.

McDonald's has fared well in the recession and its aftermath. It's added menu items like smoothies and oatmeal to try to draw in healthier eaters and pushed fancy coffee drinks to try to appeal to customers who might normally go to Starbucks. But it's still promoting itself as a cheap place to get a meal.

January's gain beat the 6.5 percent increase that analysts polled by FactSet expected. The company's stock gained 44 cents to $101.35 in premarket trading.

Revenue in restaurants open at least 13 months is a key measure of a restaurant chain's performance, because it excludes the impact of recently opened or closed stores. It does include the Oak Brook, Ill.-based company's temporarily closed restaurants.

The figures are a snapshot of money spent on food at both company-owned and franchised restaurants. They do not reflect corporate revenue.

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In the U.S., customers snapped up Chicken McBites. The menu item, which is only available for a limited time, is made with bite-size pieces of chicken breast that are smaller than Chicken McNuggets.

Restaurants in the U.K., Russia, Germany and France helped drive revenue in Europe, while the Chinese New Year and limited-time menu items gave a boost to the Asia, Middle East and Africa region.

McDonald's, which is based in Oak Brook, Ill., has more than 33,000 restaurants in 119 countries. The chain is also revving up growth by expanding in emerging markets. CEO Jim Skinner said last month that McDonald's plans to add a net of 900 new restaurants in the coming year, concentrated in Asia, the Middle East and Africa.


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]]>Chicken McBitesChickenMcbitesmcdonaldsMcDonalds CorpMcdonaldsCorpThe Associated PressWed, 08 Feb 2012 10:40:00 EST5 Things to Watch This Week: Pop, Streams, Mickey Mouse, Wireless, and DVDshttp://www.dailyfinance.com/2012/02/06/5-things-to-watch-this-week-pop-streams-mickey-mouse-wireles/http://www.dailyfinance.com/2012/02/06/5-things-to-watch-this-week-pop-streams-mickey-mouse-wireles/http://www.dailyfinance.com/2012/02/06/5-things-to-watch-this-week-pop-streams-mickey-mouse-wireles/#commentsFiled under: , , , , , , ,

Coca-colaThere's never a dull moment on Wall Street, especially now that the market is hitting multiyear highs. Let's go over some of the news that will help shape the week that lies ahead.

1. Cola wars: Pop goes the world this week as both Coca-Cola (KO) and PepsiCo (PEP) crack open their quarterly results.

Coke comes first -- and not just in market share -- with its report tomorrow. The Pepsi pourer follows two days later.

It's not just about carbonated fizz for either company. Both have broadened their portfolios over the years to include energy drinks, juices, and premium water. PepsiCo also owns Frito-Lay, the salty snack leader that saw a fair deal of play during Sunday's Super Bowl.

Analysts see both companies posting improved profitability.

2. Netflix brushes up on its Norwegian: Netflix (NFLX) officially dives into original programming this week with the debut of Lilyhammer.

The show stars Steven Van Zandt as a mobster sent to Norway as part of the witness protection program. The trailer looks promising.

Netflix is taking a fresh tack with this streaming show. Instead of stringing viewers along for the next couple of months with the first season's eight episodes, Netflix is making them all available right away.

"Netflix's brand for TV shows is really about binge viewing," CEO Reed Hastings explained during last month's conference call. "It's the ability to just get hooked and watch episode after episode. It's addictive. It's exciting. It's different."

Indeed. Logically one would think that it may be in Netflix's best interest to stretch this out over eight weeks, allowing viral momentum to build for the series. However, Netflix doesn't believe that folks will sign up -- hit all eight shows quickly -- and cancel the streaming service.

"We're not particularly focused on a single show for driving retention," Hastings said. "It's the expectation of more and more shows that really drives retention."

3. Mouse ears: Are you invested in a Mickey Mouse company? Disney (DIS) checks in with its fiscal first-quarter results Tuesday.

Disney's a steadier producer than you may think. Sure, its theme parks are susceptible to soft economies. If a movie bombs at the corner multiplex -- the way that Mars Needs Moms did last year -- the media giant will feel the pinch.

However, the steady trickle of cable revenue from its Disney Channel and ESPN juggernaut help smooth out some of the volatility elsewhere. Wall Street is banking on a profit of $0.71 a share out of the house of mouse, just ahead of the $0.68 a share it posted a year earlier.

4. Sprinting to the finish line: Which of the three largest wireless carriers is still offering unlimited data plans? Which of the three largest wireless carriers hasn't turned a quarterly profit in years? The answer's the same to both questions: Sprint Nextel (S).

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Sprint reports on Thursday, and it's no surprise to see analysts bracing for a widening deficit. The company has struggled to post a profit before, and it's not going to get any easier now with the low margins that accompany the iPhone given the meaty subsidization.

However, we need Sprint around to keep the other wireless giants honest. As long as Sprint is out there offering unlimited data plans on new accounts, there will be a limit on how much Verizon Wireless and AT&T (T) can charge for their smartphone plans.

5. Disc jockeys: One of the more intriguing quarterly reports this week will be Coinstar's (CSTR) results tomorrow.

Coinstar operates its namesake machines, which offer gift cards in exchange for your loose change, but its bigger business over the past couple of years has been its Redbox kiosks.

If you're not a Redbox customer, you've probably still seen them. Coinstar populates the entrances of busy stores with these automated kiosks that offer DVD rentals for just $1.20 a night.

Netflix lost more than 2 million DVD plan subscribers in the fourth quarter, and it will be interesting to see whether many of them switched to Redbox or Blockbuster for their DVD rental needs, or if they simply moved on from optical disc consumption.
After several years of growth, Wall Street sees Coinstar's profitability actually slipping a bit in tomorrow's report.

If this movie has a happy ending, Coinstar better serve it up soon.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article, except for Netflix and Disney. The Motley Fool owns shares of Coca-Cola and PepsiCo. Motley Fool newsletter services have recommended buying shares of Netflix, PepsiCo, Coca-Cola, and Walt Disney. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo.




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]]>AT&TCoca-ColaCoinstar IncearningsFinanceFrito-Lay IncLilyhammerPepPepsiCo IncRedboxSprint Nextelstocks to watchStocksToWatchstreamingThe Motley FoolVerizon WirelessWall StreetWalt DisneyRick Aristotle Munarriz, The Motley FoolMon, 06 Feb 2012 11:35:00 ESTNetflix Tells Amazon: 'Been There, Done That'http://www.dailyfinance.com/2012/02/01/netflix-tells-amazon-been-there-done-that/http://www.dailyfinance.com/2012/02/01/netflix-tells-amazon-been-there-done-that/http://www.dailyfinance.com/2012/02/01/netflix-tells-amazon-been-there-done-that/#commentsFiled under: , , , ,

AmazonAmazon.com's (AMZN) disappointing quarterly results Tuesday night may seem eerily familiar to Netflix (NFLX) shareholders.

We have an online giant seeing its margins contract as it replaces physical delivery with digital delivery. Revenue's growing. Profitability's shrinking. There's a gasp in the crowd when the dot-com darling reveals that it may post an operating loss during the first quarter of 2012.

Netflix went through this exact painful scenario a couple of months ago, and now it's Amazon's turn to fess up the bad news.

A Quarter to Dismember

Net sales climbed 35% to a whopping $17.4 billion during the seasonally potent holiday quarter, but earnings plunged 58% as Amazon sells low-margin Kindle e-readers and tablets and invests in its fledgling digital delivery platforms.

Despite the disparity, it was actually Amazon's top-line figure that sent bulls scurrying for the exits. Analysts were only banking on a profit of $0.17 a share, but they had expected a heartier $18.2 billion in net sales.

Amazon's guidance for the current quarter calls for net sales to grow at a 22% to 36% pace, just short of where the pros are perched. Its operating profit range for the current quarter rests between a deficit of $200 million and a profit of $100 million. Even if Amazon has historically been conservative in its guidance, it has to hurt to deliver an outlook when the midpoint calls for an operating deficit.

Kindle Shtick

Amazon didn't reveal exactly how many Kindles or Kindle Fires it sold during the period, though analysts have been projecting between 3 million and 6 million units of its $199 Kindle Fire tablets cleared during the quarter. This figure clearly pales in comparison to the 15.4 million iPad 2 tablets that Apple (AAPL) sold during the same quarter, but keep in mind that the Kindle Fire wasn't made available until the middle of November.

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Amazon investors have been patient with the leading online retailer since margins first began to deteriorate last year. Everyone understands that Amazon has to practically give its hardware away if it wants to one day reap the chunky profits that are available through the digital delivery of media. If Amazon wants to take on Netflix in premium streaming, it needs to establish the audience of Web-tethered couch potatoes and license the content that folks actually want to watch.

However, an operating loss during this new year's freshman quarter may be difficult to swallow. Decelerating sales growth will also be a sorry sight for those who have been paying a market valuation premium to own a piece of this dynamic dot-com mainstay.

Mr. Market's patience is wearing thin. Netflix could've probably told Amazon that this would happen, but why ruin the ending. They're competitors, you know.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Netflix. The Motley Fool owns shares of Amazon.com and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, and Netflix, as well as creating a bull call spread position in Apple.



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]]>amazonamazon earningsAmazonEarningsFinanceiPadKindle fireKindleFireNetflixprofitstreaming videoStreamingVideoRick Aristotle Munarriz, The Motley FoolWed, 01 Feb 2012 14:30:00 ESTWhat to Watch This Week: Malls, Kinect, Kindles, Homes and Newspapershttp://www.dailyfinance.com/2012/01/30/what-to-watch-this-week-malls-kinect-kindles-homes-and-newsp/http://www.dailyfinance.com/2012/01/30/what-to-watch-this-week-malls-kinect-kindles-homes-and-newsp/http://www.dailyfinance.com/2012/01/30/what-to-watch-this-week-malls-kinect-kindles-homes-and-newsp/#commentsFiled under: , , , ,

KinectThere's never a dull moment on Wall Street, especially now that 2012's first earnings season is well under way. Let's go over some of the items that will help shape the week that lies ahead.

1. People watching in the food court: Most retailers operate on fiscal years that conclude at the end of January, so we're still a few weeks away from their quarterly results. This doesn't mean that you should simply kill time at the shopping mall food court until those reports begin trickling in.

Simon Property Group's (SPG) latest reporting period ended in December. Simon is the country's leading mall operator. With 337 shopping destinations throughout North America and Asia, Simon collects rent on its 245 million square feet of gross leasable merchant space.

When the mall landlord posts its financials on Friday, it will give investors a great snapshot of the state of retail: How's the occupancy rate holding up? Are rents running higher or lower? Simon Property Group is a great gauge of the results of the holiday shopping season.

2. Kinect the dots: Microsoft (MSFT) has raised the bar of motion-based gaming and voice-activated functionality with its Kinect camera-based controller for the Xbox 360. The software giant has sold a whopping 18 million Kinect controllers since they hit the market just before the 2010 holiday shopping season.

Is Kinect ready for your desktop?

Microsoft is rolling out a PC version of Kinect on Wednesday. It won't be cheap at $249, roughly double the price of the Xbox 360 version. PC users will also be a harder sell until (and unless) Microsoft convinces computer owners that Kinect makes PC gaming and general computer navigation easier with gesture and voice commands.

It's a bold move for Microsoft, which typically just emulates what's working for others rather than trying to raise the bar itself.

3. Dry drywall humor: It seems that even historic low mortgage rates haven't been enough to get the housing market back on track. Sales of new homes fell in December after rising in each of the three previous months. There was also another report revealing that pending home sales have also softened.

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It's in this unpleasant climate that homebuilders are getting ready for their quarterly fiscal open houses.

Meritage (MTH), PulteGroup (PHM), and Beazer (BZH) will all be reporting later this week. All three residential developers are expected to post improving bottom-line results. Meritage and PulteGroup are projected to post modest profitability. Investors are settling for Beazer simply posting a smaller quarterly deficit.

However, it will be the collective outlook of the three builders that will move the sector. Are sales bouncing back in January? Are cancellation rates under control? Are homebuyers successfully lining up financing in this still-stingy lending market?

4. All the news that's fit to squint: These are challenging times for the newspaper industry. New York Times (NYT) recently sold off 16 of its smaller regional newspapers. USA Today parent Gannett (GCI) acquired a few sports-related websites last week, once again trying to diversify from its print stronghold with some digital-publishing firepower.

If you're hoping for a clearer snapshot of how the two newspaper giants are doing, this is the week for you. Gannet reports on Monday; New York Times checks in on Thursday.

Investors will naturally want to see how circulation rates are holding up, and how advertising is faring. Google (GOOG) shocked investors earlier this month by revealing that cost-per-click -- the amount that advertisers were playing for the average lead -- declined noticeably in its latest quarter. Google was able to make that up in volume, but newspaper companies won't be as fortunate if marketers are also skimping on what they're willing to shell out for print ads.

It should come as no surprise that analysts see both New York Times and Gannett posting lower quarterly earnings than they did a year earlier. Hey, at least they're still profitable.

5. Kindle Fires fire away: We already know that Apple (AAPL) sold a whopping 15.4 million iPads during the holiday quarter. Come Tuesday we'll hear from the company with the country's second-most-popular tablet maker.

Sure, Amazon.com (AMZN) is about far more than the Kindle Fire. It's the world's top online retailer. It was also cranking out traditional Kindle e-readers long before November's introduction of the $199 Fire.

However, Amazon has already revealed that it has sold "millions" of Kindle Fires. Analysts trying to be more specific figure it's moved between 3 million to 5 million of the entry-level tablets. Amazon is unlikely to give a hard number the way that Apple does every three months -- that's just not the Amazon way. However, it should still be an interesting quarter for the company that has been sacrificing near-term margins and earnings growth to get its Kindle products in the hands of as many consumers as possible.

Amazon turns the page on Tuesday after the market close.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Amazon.com, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Microsoft, Amazon.com, Meritage Homes, and Apple. Motley Fool newsletter services have recommended creating bull call spread positions in Microsoft and Apple.




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]]>Apple Incchristmas shoppingChristmasShoppingearningsFinanceGannettGannett Companykindle fireKindleFireMeritage Homes Corpnew home salesnew york timesNewHomeSalesnewspapersNewYorkTimesreal estateRealEstateretailSimon Property GroupXbox 360Rick Aristotle Munarriz, The Motley FoolMon, 30 Jan 2012 14:32:00 ESTThe Problem With Ford Isn't Fordhttp://www.dailyfinance.com/2012/01/28/the-problem-with-ford-isnt-ford/http://www.dailyfinance.com/2012/01/28/the-problem-with-ford-isnt-ford/http://www.dailyfinance.com/2012/01/28/the-problem-with-ford-isnt-ford/#commentsFiled under: ,

Ford logoShares of Ford (F) fell sharply on Friday after the company "missed," reporting a quarterly result that fell below analysts' expectations.

Not counting some "special items," Ford's profit last quarter was $1.1 billion, or $0.20 a share. That's significantly below the $0.26 a share expected by analysts, and well below the $0.30 Ford made a year ago. That strongly suggests some ongoing weakness in the auto giant's global operations.

But despite the disappointing profit number, Ford's core business is actually in great shape.

Ford, It's Not You!

First and foremost, automakers live or die by their products. Ford's product line is first-rate, maybe the best it has ever been -- and arguably among the best in the world.

Ford vehicles like the Focus and Fiesta are fully competitive with -- maybe even better than -- similar cars from Toyota (TM), Honda (HMC), and other global leaders. And for the first time in its history, Ford is selling the same basic lineup of cars in markets around the world.

The Ford Fiesta that is one of Europe's top sellers is the same Fiesta that you can buy at dealers in the U.S. The Ford Focus that has become a market leader in Russia -- and happens to be produced in a Ford factory in St. Petersburg -- is the same car that Ford also makes in Detroit and sells here.

That wasn't always true. For years, Ford made different versions of its cars for different markets. The Ford Mondeo, a midsize sedan sold in Europe, was a completely different car from the midsize Ford Fusion sold here. And the same thing was true for the Focus, the similar Ford Kuga and Escape SUVs, and other Fords in other markets.

Two huge budgets, two huge efforts, and two sets of parts and suppliers and engineers. For two cars that were basically the same.

As Ford CEO Alan Mulally told me awhile back, while talking about what he found when he arrived at Ford in 2006, "That just never made any sense."

'One Ford' Around the World

Needless to say, Mulally has ensured that Ford's not doing that anymore. The striking new Ford Fusion that was the hit of the Detroit Auto Show is the same car that will be rolled out -- wearing Mondeo badges -- in Europe later this year. The all-new 2013 Escape SUV is also the Kuga SUV that Ford will be building in Germany.

One set of designs, sold around the world. That allows Ford to maximize its investment in each new car and truck. That in turn makes for better quality, which allows Ford to get better prices, which gives Ford more money to invest in the next round of vehicles -- and strong profits, even during tough times.

Ford calls this its "One Ford" plan, and it's the key to the company's remarkable turnaround -- and the reason Ford continues to be solidly profitable in a tough economic environment.

And make no mistake: While things are looking up somewhat in the U.S., economic conditions around the world remain challenging.

Ford's Global Businesses Face Challenges

Ford's North American division actually posted a hefty profit increase -- $889 million for the fourth quarter, up from $670 million a year ago. Ford's selling more cars and trucks here, and it's selling more of its most profitable models (trucks, SUVs, and cars with lots of options). That's all great news.

The story around the world is less cheery. Ford lost money in Europe and Asia, and posted just a thin profit in South America. Europe, of course, is suffering from rough economic conditions due to debt crises and deep government cutbacks. Those conditions have forced other automakers, including rival General Motors (GM), to discount heavily or lose sales, making profits scarce for all of the major players in the region.

In Asia, Ford suffered some production losses as a result of severe flooding in Thailand, but the news isn't all bad -- the company is building new factories in China to meet demand there, and those costs cut into profits.

And in South America, particularly Brazil, Ford's in the middle of a major product transition. Within a couple of years, the region will be fully on board with the "One Ford" product lineup, and that should help increase both sales and profits. In the meantime, profits are slim.

The Upshot: All Ford Needs Is This

Long story short, Ford's mostly in great shape -- and if only the world's economies would cooperate, it would have the numbers to show for it. The company's debt is down, its cash position is strong, its products are excellent and continuing to gain traction, and its margins -- the amount of profit it makes on each sale -- continue to improve.

It might be awhile before the stock catches up. But for those with some patience, right now could be a good buying opportunity.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool also owns shares of Ford, and Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford.



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]]>Alan MulallyDetroitearningsEuropeFinanceFord FusionFord Kugaford outlookFordOutlookGeneral MotorsOne FordOneFordStocks to buyStocksToBuyJohn Rosevear, The Motley FoolSat, 28 Jan 2012 06:30:00 EST5 Things You Need to Know About Netflix Right Nowhttp://www.dailyfinance.com/2012/01/26/5-things-you-need-to-know-about-netflix-right-now/http://www.dailyfinance.com/2012/01/26/5-things-you-need-to-know-about-netflix-right-now/http://www.dailyfinance.com/2012/01/26/5-things-you-need-to-know-about-netflix-right-now/#commentsFiled under: , ,

NetFlixNetflix (NFLX) impressed skeptical investors with better-than-expected results on Wednesday night.

If you want to know why the stock rallied on the news but you don't want to get your hands dirty by scouring the report, let's cover five important takeaways from Netflix's fourth-quarter financials.

1. Netflix held up better than worrywarts were projecting.

Growth isn't dead at Netflix -- as long as you're willing to limit yourself to a top-line inspection. The video-rental and streaming giant generated $875.6 million in revenue during the final quarter of 2011 -- a healthy 47% improvement over where it was a year earlier.

With the turnstiles going batty earlier in the quarter after Netflix's poorly received price hike, the high costs of breaking into new international markets, and the migration of customers from high-margin DVD rentals to lower-margin -- for now -- streaming plans, a drop in profitability wasn't a surprise. Earnings declined 16% to $0.73 a share for the period.

The good news on both fronts is that analysts were expecting a profit of $0.55 a share on only $857.9 million in revenue.

2. There are a record 26.2 million unique Netflix subscribers worldwide.

After watching more subscribers bolt in anger during the third quarter than those nervously tiptoeing in, Netflix has returned to growing its base of unique subscribers.

The initial math may not make it seem that way. There were 600,000 net subscriber additions on the streaming end (220,000 domestic and 380,000 international). However, there were 2.76 million net cancellations from folks on the DVD plans.

Ouch!

However, most of the folks kissing the red optical-disc mailers goodbye are those who found themselves suddenly paying for both DVD and streaming plans after the summertime pricing change. The majority of those "cancellations" are actually people who have chosen to stick with just the streaming service to save money. The result is that the number of total unique domestic subscribers has grown from 23.79 million to 24.4 million over the past three months. Tack on the 1.86 million international streaming customers and you arrive at a record 26.2 million unique Netflix accounts.

3. If you want to stream Toy Story 3, Tron, or Tangled, do it soon.

Liberty Media's (LMCA) Starz has been the source of many of the popular new movies available through Netflix, but that deal is going away toward the end of next month.

One of the bigger voids will arise from Starz' rights for Disney's (DIS) new releases. In other words, Toy Story 3, Tangled, and other recent Disney releases will go back to being available through Netflix only on optical disc. A deal with DreamWorks Animation (DWA) won't kick in until next year.

So if your kids, grandchildren, or nieces have been enjoying a steady diet of Disney streams, it's time to let them down softly.

4. Latin America isn't growing as quickly as Canada.

When Netflix announced its plan to roll out in 43 countries through Latin America and the Caribbean, the excitement was easy to understand. There are four times as many broadband consumers through Latin America as there are in Canada.
However, Netflix's earnings letter reveals that Latin America has roughly as many subscribers as Canada did at this point in its launch. During last night's conference call, the company conceded that Latin America's streaming service is actually growing slower than Canada's.

The likely explanation is that Canada's proximity to the United States made Netflix well known in the country. It's more of an uphill battle to establish brand awareness in Latin America.

5. Video game rentals aren't coming.

Video game rentals were promised in September as an olive branch for putting subscribers through the Qwikster transition. However, the plans to separate the company's service into two distinct offerings and websites were nixed under a sea of subscriber unrest just three weeks later.

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Adding video games to its offerings was really the only good idea to have come out of the Qwikster fiasco. Redbox and Blockbuster already offer video game rentals on disc, and surely offering games by mail would help broaden Netflix's reach and popularity.

But the company conceded during last night's conference call that video game rentals are no longer in the company's plans.

Then again, that doesn't mean that the company itself won't be playing games. We've seen plenty of that in recent months, and thankfully for investors they've been winning games in recent weeks.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Netflix, Disney, and Liberty Media. Motley Fool newsletter services have recommended buying shares of DreamWorks Animation SKG, Netflix, and Disney.



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]]>CanadadisneyDreamWorks AnimationDreamworks Animation SKG IncDVD RentalsDvdRentalsLatin AmericaLiberty MediaNetflix earningsNetflixEarningsoutlookQwiksterRedboxstarzstreaming videoStreamingVideoRick Aristotle Munarriz, The Motley FoolThu, 26 Jan 2012 14:31:00 ESTWhat to Watch This Week: Trains, Baby Formula, iPhones, Netflix, and Latteshttp://www.dailyfinance.com/2012/01/23/what-to-watch-this-week-trains-baby-formula-iphones-netflix/http://www.dailyfinance.com/2012/01/23/what-to-watch-this-week-trains-baby-formula-iphones-netflix/http://www.dailyfinance.com/2012/01/23/what-to-watch-this-week-trains-baby-formula-iphones-netflix/#commentsFiled under: , , , , , ,

CSX trainsThere's never a dull moment on Wall Street, especially now that 2012 is tossing us into its first earnings season. Let's go over some of the items that will help shape the week that lies ahead.

1. I've been working on the railroad: It's hard to get investors excited about railway operators. Even in a friendly game of Monopoly, who gets excited about owning the four railroads?

However, the shortcomings of consumer rail aside, the railroads remain a cost effective way to move bulky goods around the country.

Investors will get a great snapshot of Dagny Taggart's throwback industry as CSX (CSX), Kansas City Southern (KSU), and Norfolk Southern (NSC) all report their latest quarterly results early in the week.

Don't laugh. There's a reason why Warren Buffett made a big bet on rail in acquiring Burlington Northern Santa Fe a couple of years ago. All three rail companies are expected to post healthy gains in profitability.

2. Raising a baby has no instant formula: Mead Johnson Nutrition (MJN) received the worst news possible for an infant formula maker last month: A 10-day-old baby had died from a bacterial infection, and the only thing that he had been ingesting was the company's Enfamil Premium Newborn formula.

Mead Johnson Nutrition's name was cleared a week later when tests conducted by the Food and Drug Administration showed that Enfamil did not cause the newborn's death.

This doesn't mean that it's return to business as usual for the company. Even though the stores that initially pulled the product from its shelves are back on board, consumers make take longer to be convinced.

We'll hear more from Mead Johnson Nutrition on the subject when the company reports on Thursday. Its actual numbers won't shed much light on the situation: The unfortunate event broke toward the end of the reporting period. However, the company should talk about how shipment trends are going so far this month.

3. Apple jacked: Three months ago, Apple (AAPL) stunned investors with a rare quarterly miss on the bottom line.
In its second quarterly report since Steve Jobs' untimely passing, the world's most valuable tech company will get a chance to prove that its fiscal fourth quarter slip was merely a fluke.

Analysts generally have been raising their iPhone targets, but lowering their iPad forecasts. The onslaught of $199 Kindle Fire tablets, as well as other manufacturers dumping their poor-selling tablets, has made Apple's once seemingly cheap $500 entry-level iPad one of the market's pricier offerings.

Apple's new digital textbook initiative may help spike iPad sales in 2012, but will that come at the expense of making the iconic tablet seem less cool?

4. Streaming our lives away: Netflix (NFLX) went from being one of Wall Street's biggest dogs two months ago to being one of the hottest investments.

Shares of Netflix have soared 55% since December, fueled primarily by the strong streaming trends that the video giant announced earlier this month. Rolling out in the U.K. and Ireland earlier this month also helped encourage skeptics into giving the company a second chance.

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Sure, we all hated the Qwikster fiasco and the summertime price hike. Netflix has already braced investors to expect rocky, near-term results. Just three months ago, analysts figured that Netflix would earn $1.09 a share for its final quarter of 2011. Now those same pros see a profit of $0.55 a share. If you think that's bad, Netflix has warned of outright losses for all of 2012.

Wednesday's report will either help soothe or confirm investors' fears that Netflix will continue to shed subscribers, after losing 800,000 domestic subscribers during the hectic third quarter.

We have all of the prime plot elements that make many of the movies Netflix rents out so captivating. Now it's time to see where its most recent cliffhanger leaves us.

5. Java junkies on parade: Two of the country's busiest barista barons -- Starbucks (SBUX) and McDonald's (MCD) -- report this week.

Did somebody say McDonald's?

Yes. Starbucks loyalists may cringe at the iced caramel mocha that the Golden Arches offers for pocket change, but it's clear that the McCafe makeover at McDonald's has made it cheaper, and typically more convenient, to enjoy specialty coffee drinks.

Besides, Starbucks investors already know that McDonald's isn't killing Starbucks. Both companies have been sporting healthy growth on solid comps since the McCafe initiative took off two years ago. If anything, McDonald's may be educating future Starbucks customers on the joys of upgraded java.

Both caffeinated reports are coming, though McDonald's numbers will naturally come with a dipping cup of honey mustard for those McNuggets you ordered.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article, except for Netflix. The Motley Fool owns shares of Starbucks and Apple. Motley Fool newsletter services have recommended buying shares of Starbucks, Apple, Netflix, and McDonald's.




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]]>apple earningsAppleEarningsbaby deathBabyDeathBNSF RailwayEnfamilFinanceipadiphoneKansas City SouthernKansas City Southern RailwayMcCaféMcDonalds earningsMcdonaldsEarningsMead Johnson Nutrition CoNetflix earningsNetflixEarningsNorfolk Southern Railwayrailroad stocksRailroadStocksstarbucks earningsStarbucksEarningsWall StreetWarren BuffettRick Aristotle Munarriz, The Motley FoolMon, 23 Jan 2012 14:40:00 ESTThe 10 U.S. Companies That Will Be Most Profitable in 2012http://www.dailyfinance.com/2012/01/19/the-10-u-s-companies-that-will-be-most-profitable-in-2012/http://www.dailyfinance.com/2012/01/19/the-10-u-s-companies-that-will-be-most-profitable-in-2012/http://www.dailyfinance.com/2012/01/19/the-10-u-s-companies-that-will-be-most-profitable-in-2012/#commentsFiled under: , , , , , , , , , , , , , ,

IBMEach January, 24/7 Wall St. makes its predictions about which publicly traded U.S. companies it feels will have the highest profits in the year ahead. Last year, Apple (AAPL) intermittently edged ahead of Exxon Mobil (XOM) for the highest market capitalization in the Fortune 500, and in 2012, Apple is likely to pass Exxon Mobil as the most profitable corporation. The market appears to anticipate Apple will keep up a rapid growth rate comparable to that it has enjoyed for the past two years. The stock has repeatedly hit new highs recently and now trades at $425, up nearly 25% in the past year.

Most of the largest U.S. companies won't produce large year-over-year earnings swings, with the notable exception of financial firms. Most banks and investment houses will suffer earnings declines in 2012 due to poor trading results and bad loans, notwithstanding the fact that JPMorgan Chase (JPM), arguably the best-run bank in America, made our most-profitable list, as did Wells Fargo (WFC). Corporations like IBM (IBM) and Procter & Gamble (PG) have such huge customer bases worldwide that they can hardly outperform the global economy. What differentiates them is their ability to manage their operations better than peers as they keep expenses low and take all the advantages they can of their significant market shares.

24/7 Wall St. looked at the top 200 companies in the Fortune 500 based on revenue in the past reported year. We then reviewed earnings and earnings forecasts from Thomson/First Call. There were some cases in which earnings appeared to be too low or too high because they failed to reflect more recent events. We took those into account when we produced the final numbers.

Gallery: Prediction: The Most Profitable Companies of 2012

12. (tie) Wells Fargo12. (tie) Proctor & Gamble12. (tie) Johnson & Johnson9. Berkshire Hathaway8. IBM


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]]>Apple IncExxonMobilFinanceFortune 500JPMorgan ChaseMost profitable companiesMostProfitableCompaniesNASDAQProcter & GambleWall StreetWalmartWells Fargo & Co24/7 Wall St.Thu, 19 Jan 2012 08:30:00 EST'Zumba Fitness' Maker Majesco Hits the Wallhttp://www.dailyfinance.com/2012/01/18/zumba-fitness-maker-majesco-hits-the-wall/http://www.dailyfinance.com/2012/01/18/zumba-fitness-maker-majesco-hits-the-wall/http://www.dailyfinance.com/2012/01/18/zumba-fitness-maker-majesco-hits-the-wall/#commentsFiled under: , , ,

ZumbaMajesco Entertainment (COOL) isn't living up to its ticker symbol.

Shares of the video game developer and publisher got crushed on Tuesday after the company posted disappointing quarterly results.

After three blowout quarters, fiscal 2011 came to a close with a whimper. Revenue inched 8% higher in the final period, a far cry from the 66% growth spurt that Majesco mustered for the entire year. More important, the company behind the Zumba Fitness and Cooking Mama gaming franchises posted a widening deficit of $0.07 a share. After it kicked off the year with three robustly profitable quarters, analysts were holding out for earnings of $0.04 a share.

An Unwelcome Surprise

One of the easiest ways to find winning stocks is to stick with companies that routinely blast through Wall Street's profit targets. Until this week's implosion, that was Majesco.
EPS est.
EPS
Beat
Q1 2011
$0.11
$0.20
82%
Q2 2011
$0.07
$0.13
86%
Q3 2011
($0.02)
$0.03
250%
Q4 2011
$0.04
($0.07)
(275%)
Source: Capital IQ.

What went wrong? Zumba Fitness continues to sell briskly on all three video game consoles. Zumba Fitness 2 -- which came out on the Wii shortly after the end of Majesco's fiscal fourth quarter -- has already sold a million units.

Majesco points out that Zumba Fitness 2 hit the million-unit mark ahead of the original a year earlier. The strong start and a healthy slate of releases scheduled for this year would seem to make fiscal 2012 another year of heady growth.

Unfortunately, Majesco's outlook isn't that aggressive. After posting $125.3 million in revenue this past year, the small gaming company is targeting $125 million to $140 million in revenue. After delivering adjusted net income of $0.28 a share in fiscal 2011, Majesco's guidance calls for profitability on that basis to clock in between $0.25 and $0.35 a share. There's a lack of growth on the low end of the range, and only a modest uptick on the high end.

Blame the Industry

Media tracker NPD Group's data for December wasn't encouraging at all. Industry sales fell 21%, as retail sales of new software suffered a 14% decline.

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We can argue that NPD's data is incomplete. It doesn't track online sales, app downloads, and other digital downloads. However, the news sent shares of leading video-game maker Activision Blizzard (ATVI) and retailer GameStop (GME) lower.
Majesco is lucky in retrospect. Its stock more than tripled during the 2011 calendar year. Its new fitness franchise is making the most of the growing popularity of motion-based controls that make workout titles more attractive.

However, you can only disappoint Wall Street once. Majesco will have to get back on track, hoping that it can grow its existing franchises or launch another sleeper hit this year. If Majesco wants to be worthy of its ticker symbol again, it's just what it will have to do.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of GameStop and Activision Blizzard. The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard and writing covered calls in GameStop. Motley Fool newsletter services have recommended creating a synthetic long position in Activision Blizzard.




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]]>Activision Blizzardcooking mamaCookingMamaFinanceGameStopMajesco EntertainmentNPD GroupPlayStationps3quarterly earningsQuarterlyEarningsThe FoolThe Motley FoolVideoGamesWall Streetwiizumba-fitnessRick Aristotle Munarriz, The Motley FoolWed, 18 Jan 2012 15:20:00 ESTPenney's Posts a 3Q Losshttp://www.dailyfinance.com/2011/11/14/penneys-posts-a-3q-loss/http://www.dailyfinance.com/2011/11/14/penneys-posts-a-3q-loss/http://www.dailyfinance.com/2011/11/14/penneys-posts-a-3q-loss/#commentsFiled under: ,

NEW YORK (AP) - J.C. Penney Co.'s (JCP) new CEO Ron Johnson, a former Apple (AAPL) executive, told analysts Monday that the department store chain is rethinking everything it's doing - from pricing to products. The message comes as the retailer struggles to turnaround its business after reporting a quarterly loss.

Johnson's comments offer valuable insights into the next chapter for Penney's, which like many mid-priced retailers, has been hurt because its middle-income consumers have been especially hard hit by the challenges of the weak economy. The Plano, Texas company has added popular brands like European clothing line MNG by Mango and Sephora cosmetics, but still struggles to make its stores more inviting places to shop.

Johnson's address comes on the day the company reported a third-quarter net loss due to costs related to restructuring, its management transition and a voluntary retirement program. The company also gave a fourth-quarter outlook that was below Wall Street forecasts.

"I am working with our team to rethink, really to reimagine everything we do," said Johnson, who was with Apple for 11 years before taking the CEO helm from Myron Ullman III. "I am investing considerable energy in a strategic review of our product, our pricing and our promotional strategies in order to create an exceptional, a new, a better way for people to shop."

Johnson, who took over merchandising and marketing responsibilities on Nov.1 and will assume the remaining CEO functions on Feb. 1, said during the conference call that he told employees on his first day of work that he was here to "transform," not to improve" the business.

Johnson, who joined the board in August and who has been traveling around the world visiting stores and partners since then, is already fast putting his stamp on the company.

As part of his changes, Penney on Monday announced that it has hired two of Johnson's former Apple colleagues. Daniel Walker, former chief talent officer at Apple, will start on Wednesday as Penney's chief talent officer, who will start Wednesday. And Michael Kramer, former president and CEO at Kellwood Co. who also worked at Apple, will be the company's chief operating officer, effective Dec. 5. That follows Penney's move last month to hire Target's top marketing executive Michael Francis as the company's new president.

Johnson and his revamped management team have a big task ahead of them.

Penney has closed stores outlets and a call center and discontinued its catalog business, while its middle-class customers have cut back on spending as they face high unemployment and higher costs for household goods. Penney's revenue at stores opened at least a year - an indicator of a retailer's health - fell 1.6 percent during the third quarter. That compares with increases of 4 percent at Macy's and 2.1 percent at Kohl's for the same period.

Penney said Monday it lost $143 million, or 67 cents per share, for the three months ended Oct. 29. That compares with net income of $44 million, or 19 cents per share, in the year-ago period. The latest results include costs of $179 million, or 51 cents per share, for a voluntary early retirement program and $27 million, or 10 cents per share, related to management changes.

Adjusted earnings without the one-time items amounted to 11 cents per share, topping the 9 cents per share that analysts expected. Revenue slipped almost 5 percent to $3.98 billion from $4.19 billion largely reflecting the discontinuation of its catalog and catalog outlet business. That was in line with analysts' expectations for revenue of $4 billion.

Since Ullman became CEO in December 2004, Penney has tried to become hipper. The company added more trendy offerings, including Sephora cosmetics boutiques and lines such as Cindy Crawford Style home furnishings and MNG by Mango. And last year, it became the only U.S. retailer to sell Liz Claiborne and Claiborne women's wear when Liz Claiborne agreed to sell to Penney the domestic and international trademark rights for both its Liz Claiborne brands and the U.S. and Puerto Rico trademark rights for the Monet jewelry brand.

Ullman told analysts that Sephora and other new fashion brands have done well, but shoppers have delayed buying the humdrum basics until they need them.

"While our more affluent customers continued to respond well to J.C. Penney's attractions, the moderate customer continues to have limited discretionary spending capability, and that was apparent during the quarter," said Ullman, who will serve as executive chairman during Johnson's three-month transition into the CEO role.

Going forward, many experts have been looking for Johnson, who led Apple's retail operations, to bring some of the magic of Apple's locations to Penney's department stores. So far, Johnson hasn't said much about plans to revamp Penney's more than 1,100 department stores.

But the company, which has been forced to discount heavily to get its customers to buy during the economic downturn, has said it will launch a new pricing strategy in the spring. Johnson said the chain will reveal details of the pricing tactic as well as other strategies to analysts in late January.

"My approach will be to only talk publicly about our actions at the time we are taking them, not before," Johnson said.

For the fourth quarter, Penney expects revenue at stores opened at least a year to be between unchanged to slightly up from a year ago.

It expects earnings for the fourth quarter to be between 64 cents to 74 cents per share, including restructuring and management transition charges. Excluding these charges, earnings are expected to be in the range of $1.05 per share to $1.15 per share. Analysts expected $1.17 per share, according to Factset.

The guidance doesn't include the financial impact expected to be incurred in the fourth quarter as the company executes changes to its pricing strategies. The company said it will disclose the effect during the fourth-quarter earnings call with analysts.


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]]>J. C. PenneyJ.C.PenneyThe Associated PressMon, 14 Nov 2011 09:44:00 ESTMcDonald's October Revenue Figure Riseshttp://www.dailyfinance.com/2011/11/08/mcdonalds-october-revenue-figure-rises/http://www.dailyfinance.com/2011/11/08/mcdonalds-october-revenue-figure-rises/http://www.dailyfinance.com/2011/11/08/mcdonalds-october-revenue-figure-rises/#commentsFiled under: ,

OAK BROOK, Ill. (AP) - McDonald's Corp. (MCD) said Tuesday that a key revenue figure rose 5.5 percent in October, fueled by the popularity of its Monopoly game in the U.S. and higher results in Europe and Asia.

The world's largest fast-food chain says revenue at stores open at least 13 months rose 5.2 percent in the U.S., 4.8 percent in Europe and 6.1 percent in Asia/Pacific.

In the U.S., products featured in the Monopoly game promotion including the Big Mac and Chicken McNuggets, were popular. In Europe, France, Russia and the U.K. posted the best results.

The revenue figure is a snapshot of money spent on food at both company-owned and franchised restaurants. It does not reflect corporate revenue. It is a key measure of a restaurant chain's performance, because it excludes the impact of recently opened or closed stores.

McDonald's shares rose 58 cents to $95.20 in premarket trading.



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]]>mcdonaldsMcDonalds MonopolyMcDonalds revenueMcdonaldsMonopolyMcdonaldsRevenueThe Associated PressTue, 08 Nov 2011 08:53:00 ESTDunkin' Brands' Net Income Falls on Chargeshttp://www.dailyfinance.com/2011/11/01/dunkin-brands-net-income-falls-on-charges/http://www.dailyfinance.com/2011/11/01/dunkin-brands-net-income-falls-on-charges/http://www.dailyfinance.com/2011/11/01/dunkin-brands-net-income-falls-on-charges/#commentsFiled under:

CANTON, Mass. (AP) - Dunkin' Brands Group Inc., the parent of Dunkin' Donuts and the Baskin-Robbins ice cream chain, saw net income plummet 61 percent in the July-to-September quarter, as the company paid charges related to going public and paying down debt.

Net income fell to $7.4 million from $18.8 million. Without the one-time charges, it would have risen 32 percent to $31.3 million.

Earnings were 28 cents per share without the special items, beating analysts' estimates of 25 cents, according to FactSet. Revenue grew 9 percent to $163.5 million, which also beat the Wall Street forecast of $159.3 million.

Dunkin' Brands went public in July, partly as a way to help pay down debt. It's now focused on expanding outside its home base in the Northeast U.S.


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]]>Dunkin BrandsDunkinBrandsThe Associated PressTue, 01 Nov 2011 07:54:00 ESTVisa 4Q profit rises 14 percent on heavy card usehttp://www.dailyfinance.com/2011/10/27/visa-4q-profit-rises-14-percent-on-heavy-card-use/http://www.dailyfinance.com/2011/10/27/visa-4q-profit-rises-14-percent-on-heavy-card-use/http://www.dailyfinance.com/2011/10/27/visa-4q-profit-rises-14-percent-on-heavy-card-use/#commentsFiled under: , ,

NEW YORK (AP) - Increased use of debit and credit cards throughout the world pushed Visa Inc.'s (V) fiscal fourth-quarter profit up 14 percent.

But its quarterly revenue came in shy of Wall Street expectations, in part because because the company has been cutting deals with merchants to hold onto or attract business as it tries to cope with new regulations.

The San Francisco-based company said Wednesday that it earned $880 million, or $1.27 per share, for the three months that ended Sept. 30. That compared with $774 million, or $1.06 per share, in the year-earlier period.

Revenue rose 13 percent to $2.38 billion, up from $2.12 billion last year.

After the company repurchased shares, there were 5 percent fewer outstanding, which also boosted earnings per share.

Analysts, on average, expected profit of $1.25 per share, on revenue of $2.4 billion, according to data from FactSet.

The rare revenue shortfall pushed Visa's stock down about 2 percent, or $2.20, to $90 in extended trading following the release of the earnings report. It had ended regular trading up $1.34 at $92.02.

Visa processed 13 billion transactions during the quarter, up 9 percent from last year. Card holders spent $970 trillion, with debit card use outpacing credit. That total was up 13 percent from the previous year.

The company said 65 percent of the quarter's revenue growth came from outside the United States, and revenue from abroad amounted to about 45 percent of the company's total. The growth abroad is important for Visa, which has stated a goal of generating at least 50 percent of its revenue from overseas by 2015.

"I think we're going to see them hit that target well before 2015," said Edward Jones analyst Shannon Stemm. She noted the prime areas for revenue growth were the emerging economies in Asia and Latin America, and not Europe.

Spending on Visa credit cards in the U.S. rose 15 percent to $228 billion, the seventh-straight quarter of growth after a sharp drop during the height of the recession. That increase came even as the number of outstanding accounts fell another 5 percent.

"While the growth is encouraging, much of this volume over the past year has been driven by affluent cardholders," said Chief Financial Officer Byron Pollitt. There has been no sign of higher use for the broader population, he added although Visa expects credit use to pick up as the economy improves.

Debit card use in the U.S. also continued to increase. U.S. consumers made $288 billion in purchases using debit cards, and accounts numbers continued to rise, adding 5 percent to 309 million.

CEO Joseph Saunders said there has been no sign of debit card use slackening because of the fees some banks are beginning to charge for using them.

Pollitt said it was "way too early" to comment on whether there are signs of changes in debit use related to new rules that took effect Oct. 1, which limit the fees that banks and networks like Visa can collect for processing transactions.

Also new is the option for retailers to choose which networks handle their transactions. To address the potential for lost business, Visa has been offering deals to merchants to get them to stick with or choose its system. The cost of such incentives shot up 37 percent during the quarter to $576 million.
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That increase was bigger than many analysts expected, and the main reason Visa's revenue fell short of forecasts. But analyst Glenn Fodor of Morgan Stanley said Visa's aggressive deal signing with merchants "is an important dynamic," though the costs were slightly higher than even Visa forecast.

Bernstein analyst Rod Bourgeois said the increase reflects a long-term worry about Visa, because the regulations create pressure to offer deals that can drag revenue.

For the full fiscal year, Visa earned $3.65 billion, or $5.18 per share, up from $2.97 billion, or $4.03 per share, for its fiscal 2010.

The company said it continues to expect fiscal 2012 earnings-per-share growth in the mid-to-high teens range, and net revenue growth in the high single- to low double-digit range.

Wall Street is expecting earnings of $5.73 per share for next year, on revenue of $10.12 billion in revenue.

Visa also plans to keep buying its shares back. Last week, the company said its board approved another $1 billion share buyback program. For the full fiscal year, Visa spent $3.2 billion to repurchase 43 million shares at an average price of $74.94.


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]]>credit cardsCreditCardsVisa earningsVisaEarningsThe Associated PressThu, 27 Oct 2011 08:33:00 EST5 Dates to Watch This Earnings Seasonhttp://www.dailyfinance.com/2011/10/11/5-dates-to-watch-this-earnings-season/http://www.dailyfinance.com/2011/10/11/5-dates-to-watch-this-earnings-season/http://www.dailyfinance.com/2011/10/11/5-dates-to-watch-this-earnings-season/#commentsFiled under: , , , , , , , ,

5 dates to watch this earnings seasonIt's been awfully quiet on the earnings front in recent weeks, and that's by design. This is the time of year when accountants are nailing down the financials for the fiscal quarters that ended in September.

The silence won't last long. Later this week, the conference calls will begin trickling in, and then it will be a deluge of quarterly reports until early November.

If you're eying a calendar, let's go over a few of the dates worth circling.

Oct. 13
Google (GOOG) reports on Thursday afternoon. Big G's global leadership in search and online advertising make it a meaty bellwether for the state of websites everywhere. Google sets the growth bar that smaller dot-coms are measured against.

JPMorgan Chase (JPM) also checks in with its latest quarterly financials on Thursday. These have been challenging times for JPMorgan's businesses, as investment banking and credit card issuing have dried up and banking in general is under the regulatory microscope.

Oct. 18
Conveniently scheduled just days after the iPhone 4S debut, Apple (AAPL) reports next week. The country's most valuable tech company will naturally be in the spotlight as this will be its first quarterly report since Steve Jobs' death.

Analysts will want an early read on the iPhone 4S, and Apple is usually pretty good about offering up early performance metrics on important rollouts.

Intel (INTC), Coca-Cola (KO), Yahoo! (YHOO), and Bank of America (BAC) also step up next week.

Intel is the world's leader in computer processors, and the challenge will be to make headway in tablets and smartphones as desktop and laptop sales languish. Coca-Cola is the global soda giant, but it's also one of the most valuable brands.

Things will be a bit more interesting for Yahoo! and Bank of America. Is Yahoo! really up for sale? If so, the company is unlikely to shed any light on any of the potential bidders. Can Bank of America overcome the negative backlash that's been building since it revealed that it will be charging extra fees to debit-card holders who swipe their plastic for anything other than ATM withdrawals?

Oct. 19
Speaking of swiping plastic, American Express (AXP) won't leave home without its latest quarterly report a week from tomorrow.

Things will probably be a bit more interesting at E*TRADE (ETFC) and eBay (EBAY). E*TRADE is the discount broker with the chatty E*TRADE Baby ads.

Sector consolidation has been a major theme among the discounters, and it will be interesting to hear if the broker has any plans to acquire a smaller rival or to be acquired itself. The growth story at eBay in recent years hasn't been its namesake auction website; PayPal has been the real driver at the company, and eBay is in the process of getting real-world retailers to begin accepting PayPal at the register.

Oct. 20
Microsoft (MSFT) may have handed the market cap crown in tech to Apple several quarters ago, but Mr. Softy is still the world's largest software company. It's been losing money on Bing, and it's been barely profitable with its popular Xbox business, but Microsoft is still a company that lives by the release of its Windows operating system, Office suite of productivity programs, and server-related software tools.

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Chipotle Mexican Grill (CMG) is also reporting next week. Chipotle opened a new concept -- the Asian inspired ShopHouse -- last month. This should be the burrito roller's first chance to address ShopHouse and reveal if it plans to turn it into a sister chain.

It's also worth keeping an eye on AT&T (T). For the first time in its history it has to share a new iPhone release with rival carriers. Is it still growing its iPhone business, or has the arrival of the country's first and third largest wireless carriers eaten into that once-exclusive stronghold?

Nov. 2
Comcast (CMCSA) is the country's largest cable provider. There have been conflicting reports on the "cord cutting" phenomenon over the past year, as couch potatoes cancel costly cable and satellite television services in favor of cheaper streaming solutions. Most of the players in this field claim that it's a myth, though Comcast has shed video customers in a few of its more recent quarters.

Garmin (GRMN), MasterCard (MA), and Whole Foods Market (WFM) also share Comcast's earnings day with their own financials.

Garmin is the GPS giant that's been trying to reposition itself now that smartphones and smarter cars are making its gadgets less necessary in getting around. As a plastic marketer, MasterCard doesn't have to take on the credit risk of its cardholders. It's the issuing banks -- like JPMorgan's Chase division -- that take the good and the bad on that front. Whole Foods Market is the organic grocer that's been posting several quarters in a row of positive comps.

As you can see, the next few weeks are going to get busy.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Coca-Cola, Google, MasterCard, JPMorgan Chase, Intel, Whole Foods Market, Microsoft, Yahoo, Chipotle Mexican Grill, Bank of America, and Apple. Motley Fool newsletter services have recommended buying shares of Whole Foods Market, Google, Chipotle Mexican Grill, Microsoft, Intel, eBay, Yahoo!, Coca-Cola, AT&T, and Apple. Motley Fool newsletter services have recommended creating a diagonal call position in Intel. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft and Apple. Motley Fool newsletter services have recommended creating a written covered strangle position in American Express. Motley Fool newsletter services have recommended creating an iron condor position in Garmin.


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]]>apple earningsapple earnings callAppleEarningsAppleEarningsCallBank of America earningsBankOfAmericaEarningscoca-cola earningsCoca-colaEarningsearningsgoogle earningsGoogle earnings previewGoogleEarningsGoogleEarningsPreviewIntel earningsIntelEarningsJPMorgan earningsJpmorganEarningsmicrosoft earningsMicrosoft Earnings PreviewMicrosoftEarningsMicrosoftEarningsPreviewyahoo earningsYahooEarningsRick Aristotle Munarriz, The Motley FoolTue, 11 Oct 2011 11:00:00 ESTFedEx Cuts Fiscal Year Forecast on Slowing Growthhttp://www.dailyfinance.com/2011/09/22/fedex-cuts-fiscal-year-forecast-on-slowing-growth/http://www.dailyfinance.com/2011/09/22/fedex-cuts-fiscal-year-forecast-on-slowing-growth/http://www.dailyfinance.com/2011/09/22/fedex-cuts-fiscal-year-forecast-on-slowing-growth/#commentsFiled under: , ,

FedEx Corp. (FDX) cut its earnings expectations for the fiscal year ending in May due to slowing global economic growth.

The outlook from the world's second biggest package delivery company may add to growing investor concern about the strength of the worldwide economy. It comes a day after the Federal Reserve gave a gloomy forecast for the U.S. economy.

The Memphis, Tenn. company said Thursday it now expects to earn between $6.25 and $6.75 per share for fiscal 2012, compared with a previous estimate of $6.35 to $6.85 per share. FactSet says analysts expect $6.39 per share.

For the fiscal first quarter that ended in August, FedEx Corp. says an increase in deliveries by truck offset a drop-off in shipments by air. Net income rose 22 percent to $464 million or $1.46 per share in the three-month period, compared with $380, or $1.20 per share, a year earlier.

Revenue rose 11 percent to $10.52 billion.

Analysts expected a profit of $1.46 per share on revenue of $10.32 billion.

Express shipments slowed most notably from Asia, where growth had been robust. FedEx said the slowdown in that segment outpaced its ability to cut costs, which it said it's doing aggressively to balance demand. As a result, Express unit operating income fell 19 percent, even as revenue rose 12 percent. Average daily express volume in the U.S. fell 3 percent. But revenue per package rose 13 percent as packages weighed more on average and FedEx tacked on higher fuel surcharges.

Operating income in FedEx's ground segment leaped 42 percent to $407 million. Revenue rose 16 percent to $2.28 billion. Average daily package volume grew 5 percent driven by an increase in shipments between businesses and FedEx home delivery service.

FedEx's freight segment, which hauls heavier shipments like refrigerators and car parts, posted an operating profit of $42 million compared with a loss of $16 million a year earlier. Revenue rose 6 percent.

When consumers and businesses are concerned about the strength of the economy, they tend to choose slower shipping options - like switching from overnight express service to slower ground shipping - to save money. It's the same move many made during the recession.

FedEx's larger rival United Parcel Service Inc. said last week that although it acknowledges that global growth is slowing, it's not forecasting another recession.

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]]>The Associated PressThu, 22 Sep 2011 09:15:00 ESTEarning Growth Strong Across Corporate Americahttp://www.dailyfinance.com/2011/08/30/earning-growth-strong-across-corporate-america/http://www.dailyfinance.com/2011/08/30/earning-growth-strong-across-corporate-america/http://www.dailyfinance.com/2011/08/30/earning-growth-strong-across-corporate-america/#commentsFiled under: , , ,

TiffanyS&P 500 companies have nearly completed the second-quarters earnings season, and overall, investors don't have much to complain about.

More than 70% of companies have beaten earnings estimates, the index's earnings have risen more than 19% from last year, and nine of 10 sectors have given us a positive earnings surprise. Telecom was the only sector that missed analyst expectations.

Consumer Companies Are Standing Strong

We found out last week that the consumer was alive and well across most of the S&P 500. This week that trend continued on the top and bottom of the consumer market.

Discount retailer Big Lots (BIG) reported earnings of $0.52 per share, topping consensus estimates by $0.08. And it was no surprise that premium jeweler Tiffany & Co. (TIF), serving the top end of the market, was even stronger in the second quarter. The company reported earnings per share of $0.86, crushing estimates of $0.70.

Consumer-focused companies are strong overall right now, but earnings have shown the top end of the market is holding on much stronger. Not that that should be a surprise.

Sector
Above
Match
Below
Surprise
Reported
Index
Consumer discretionary
78%
9%
13%
9.8%
78
79
Consumer staples
74%
11%
16%
1.7%
38
41
Energy
71%
0%
29%
6.9%
41
41
Financials
67%
9%
25%
12.4%
81
81
Health care
73%
19%
8%
5.0%
52
52
Industrials
66%
9%
26%
3.7%
58
60
Information technology
81%
8%
11%
12.8%
73
75
Materials
63%
7%
30%
1.2%
30
30
Telecom
38%
25%
38%
(4.6%)
8
8
Utilities
55%
12%
33%
2.6%
33
33
S&P 500
71%
10%
20%
7.3%
492
500

Source: Capital IQ Consensus Estimates, a division of Standard & Poor's

Focus Moving to the Third Quarter

There are only five S&P 500 companies reporting this week as we roll the calendar into the last month of the second quarter.

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Maker of mining equipment Joy Global (JOYG) is expected to report earnings of $1.55 per share, up from $1.13 last year. And analysts are expecting chicken noodle soup expert Campbell Soup (CPB) to report earnings of $0.38 per share.

After that, we get a breather for the next month -- until we start the game all over again.

With the market concerned about a possible double-dip recession, third quarter results may provide an even more important indicator. If earnings are strong again, we could see the market surge and confidence return. But if earnings flounder, we could be in for a long winter.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned.




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]]>big lots earningsBigLotsEarningsCampbell Soup CompanyCampbellSoupCompanycorporate earningsCorporateEarningsearnings reportEarnings reportsearnings seasonEarningsReportEarningsReportsEarningsSeasonJoy Global earningsJoyGlobalEarningssecond quarter earningsSecondQuarterEarningstiffany earningsTiffanyEarningsTravis Hoium, The Motley FoolTue, 30 Aug 2011 10:10:00 ESTStaples's Strong Results: Economic Indicator?http://www.dailyfinance.com/2011/08/17/staples-results-as-economic-indicator/http://www.dailyfinance.com/2011/08/17/staples-results-as-economic-indicator/http://www.dailyfinance.com/2011/08/17/staples-results-as-economic-indicator/#commentsFiled under: , ,

StaplesThis morning's better-than-expected report from Staples (SPLS) is probably more important than you think.

Maybe you aren't an investor in the office supply superstore chain. You probably don't care about how many reams of copy paper or toner cartridges Staples is selling. However, when it comes to checking the pulse of the country's economy, it's hard to find a better subject than Staples.

If companies and entrepreneurs are buying more office supplies, it's usually an encouraging sign that business in general is picking up. That's so simple you don't even need to tap one of the chain's signature "easy" buttons to figure it out.

The Results Are In

How good was Staples' fiscal second quarter? Well, the performance and the retailer's guidance were enough to send the stock opening 8% higher today.

Sales climbed 5% to $5.8 billion. This may not seem like much, but it was more than twice the growth that analysts were targeting. Reported earnings soared 36% to $0.25 a share, but that's a Jedi mind trick. Staples was on the receiving end of a juicy tax refund this quarter, and last year's fiscal second quarter was sandbagged by one-time integration and restructuring expenses. On an adjusted basis, earnings climbed 10% to $0.22 a share. Wall Street had settled for a profit of $0.20 a share.

Things aren't perfect. Operating margins were weak in the chain's North American stores, and stateside comparable store sales were flat. However, that's stuff for Staples shareholders to fret about.

Encouraging Signs for the Economy

In terms of gauging the state of Corporate America, Staples points out that delivery sales of facilities and breakroom supplies grew in the double digits.

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Nice! Your office manager is loading up on plastic cups and Purell!

This is historically Staples' weakest quarter. Business doesn't necessarily slow during the summer, but the steady trickle of students and teachers snapping up school supplies during the other three quarters of the fiscal year takes the summer off. If anything, it also makes this the best quarter to gauge Corporate America.

Staples is upbeat about the balance of the year. It's now forecasting an adjusted profit between $1.39 a share and $1.45 a share on sales growth in the low single digits. Wall Street had been betting on just $1.37 a share in earnings on 2% sales growth.

There are definitely some gloomy economic signs out there, but if we're to believe Staples, there's a potluck celebration taking place in the office break room that the naysayers don't see coming.

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Staples.


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]]>Economic IndicatorsEconomicIndicatorsoffice suppliesoffice supplyOfficeSuppliesOfficeSupplyStaples earningsStaplesEarningsStaplesOfficeSuppliesRick Aristotle Munarriz, The Motley FoolWed, 17 Aug 2011 15:30:00 ESTWalmart Profit Rises 5.7%http://www.dailyfinance.com/2011/08/16/walmart-profit-rises-5-7/http://www.dailyfinance.com/2011/08/16/walmart-profit-rises-5-7/http://www.dailyfinance.com/2011/08/16/walmart-profit-rises-5-7/#commentsFiled under: ,

Wal-Mart Stores Inc. (WMT) said Tuesday its second-quarter profit rose 5.7 percent, due to international sales growth and cost cutting. But the world's largest retailer still wasn't able to reverse a two-year sales slump at its Walmart stores in the U.S.

Wal-Mart's international business has consistently been strong, but its U.S. business has suffered as the U.S. economic downturn hit low-income Americans __ Wal-Mart's core customers__ particularly hard. Wal-Mart, which is considered a bellwether for consumer spending because it accounts for nearly 10 percent of all nonautomotive retail dollars spent, is considered a bellwether for consumer spending because it accounts for nearly 10 percent of all nonautomotive retail dollars spent.

"We remain concerned about the economic pressure on our customers and the uncertain impact on their shopping behavior," said Bill Simon,Wal-Mart's U.S. president and chief executive in a statement. "With this volatility, it is important as ever to deliver on Walmart's one-stop shopping promise for broad assortment and everyday low prices."

The retailer, based in Bentonville, Ark., reported net income of $3.8 billion, or $1.09 per share, in the three months ended July 31. That compares with $3.6 billion, or 97 cents per share, in the same period last year. Revenue, excluding Sam's Club membership fees, was up 5.5 percent to $108.6 billion.

Analysts had expected $1.08 per share on revenue of $108.08 billion.

Results were buoyed by Wal-Mart's international business, which produces 26 percent of its revenue, and has remained strong. The company's international division was up 16.2 percent.

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For its U.S. division, revenue at stores open at least a year were flat __ a key measure of a retailer's health in the U.S. __ as a 5 percent increase at Sam's Club but was partially offset by a 0.9 percent decline at Walmart stores in the U.S. That was the ninth consecutive quarter that revenue at its Walmart stores in the U.S. open at least a year declined compared with the same quarter a year before.

In the U.S., Wal-Mart customers have been pummeled by the economy. In June, company officials said after their annual shareholder meeting that they are seeing wider swings than ever before as shoppers pull back ahead of each payday and increase their spending afterward.

At the same time, it's facing more competition from dollar stores, online retailers and rival Target Corp., which is aggressively pushing into the grocery business.

To fight dollar stores, the company is opening 15 to 20 smaller Walmart Express stores this year. Less than one-tenth the size of supercenters, they carry essentials from groceries to general merchandise like hammers and pre-paid phones and they're meant to fit into both cities, where space is expensive, and rural areas that can't support a super store.

In its larger flagship stores, Wal-Mart is continuing to make up for an effort begun more than two years ago to de-clutter its stores. The move turned off shoppers who could no longer find their favorite brands or necessary items. Many went elsewhere. The company has said most of its grocery offerings are back but restocking general merchandise like clothing and home furnishings will take the rest of the year.

Wal-Mart also has gone back to its "Everyday Low Price" strategy, the bedrock philosophy of founder Sam Walton, instead of slashing prices temporarily on selected goods. But recent surveys show that Wal-Mart has lost its edge on price among shoppers.

The company raised its full year outlook to a range of $4.41 per share and $4.51 per share. Analysts had expected $4.46.

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]]>The Associated PressTue, 16 Aug 2011 08:03:00 EST