Best Buy talks end, source says; adjusted profit falls

NEW YORK, Fri Mar 1, 2013 — Best Buy Co. and founder Richard Schulze have ended their talks after Schulze and private equity investors sought three board seats in exchange for taking a minority stake in the company, a source familiar with the matter said on Friday.

Separately, the world’s largest consumer electronics chain posted quarterly results. Best Buy lost $409 million, or $1.21 per share, in the fourth quarter ended February 2, compared with a loss of $1.82 billion, or $5.17 per share, a year earlier.

On an adjusted basis, earnings from continuing operations fell to $1.64 per share from $2.18 a year earlier.

Revenue rose just 0.2 percent to $16.71 billion.

Schulze, who had made an informal proposal to buy Best Buy for $24 to $26 a share last August, failed to line up necessary debt and equity financing, the source said.

The founder’s efforts to negotiate a deal with private equity firms Cerberus Capital Management, TPG Capital and Leonard Green & Partners have also come to an end, the source said.

U.S. bank industry posts highest earnings since 2006

WASHINGTON,| Tue Dec 4, 2012 — The U.S. banking industry’s third-quarter earnings were the highest for any quarter since 2006 as revenue growth picked up and banks set aside less money to guard against losses, according to data released on Tuesday by the Federal Deposit Insurance Corp.

The FDIC quarterly report showed the industry earned $37.6 billion in the third quarter – up $2.3 billion, or 6.6 percent, from a year earlier.

That was the industry’s highest quarterly total since the third quarter of 2006, the FDIC said.

And while banks again reduced the amount of funds they set aside in case of losses, revenue growth contributed more to the earnings boost in the third quarter, bucking a recent trend, FDIC Chairman Martin Gruenberg said.

“Loan growth is becoming more established,” Gruenberg said. “Banks continue to clean up and strengthen their balance sheets.”

The report is an encouraging sign that the banking industry is slowly but surely healing after the 2007-2009 financial crisis, although some bigger banks are cutting jobs to cope with persistent pressures, including an industry-wide decline in trading volume.

Net operating revenues rose $4.9 billion, or 3 percent, from a year earlier, the FDIC said. Much of the increase came from asset sales, particularly loan sales.

UnitedHealth forecasts 2013 profit below Wall Street view

MINNETONKA, Minn., Mon Nov 26, 2012 – UnitedHealth Group Inc., the largest U.S. private health insurer, said on Monday it expected 2013 earnings of $5.25 to $5.50 per share, below analysts’ expectations.

Revenue should be $123 billion to $124 billion, the company said, higher than the Wall Street target. UnitedHealth gave the forecast in a statement ahead of a Tuesday meeting with analysts and investors.

Analysts had expected 2013 earnings of $5.58 per share on revenue of $119.12 billion, according to Thomson Reuters I/B/E/S.

UnitedHealth said during a quarterly conference call in October that analysts’ estimates for 2013 were too high, citing the weak economy and government efforts to rein in the deficit. At that time, the consensus was for earnings of $5.60 per share.

UnitedHealth has a history of exceeding its forecast, Oppenheimer analyst Michael Wiederhorn said in a research note. “Overall, we believe UNH’s outlook will prove conservative,” he wrote.

Wiederhorn said it was not immediately clear if the Wall Street consensus outlook for 2013 revenue was comparable and included sales from Brazil’s Amil Participacoes SA, which it acquired for $4.9 billion.

UnitedHealth also reaffirmed its 2012 outlook for earnings of $5.20 to $5.25 per share.

Pfizer beats forecasts, helped by cost cuts

NEW YORK, Tue Jul 31, 2012 – Pfizer Inc. reported higher-than-expected quarterly earnings, helped by cuts in research spending and other costs, and affirmed its 2012 profit forecast despite the negative impact of the stronger dollar.
The largest U.S. drug maker, whose shares rose 1.6 percent In premarket trading, said on Tuesday that it earned $3.25 billion, or 43 cents per share, in the second quarter. That compared with $2.61 billion, or 33 cents per share, a year earlier.
Excluding special items, Pfizer earned 62 cents per share. Analysts, on average, expected 54 cents, according to Thomson Reuters I/B/E/S.
Pfizer’s global revenue fell 9 percent to $15.06 billion, hurt by generic competition against its Lipitor cholesterol fighter, but topped Wall Street expectations of $14.87 billion.
The company said its earnings beat was fueled by better-than-expected sales of Lipitor, nerve pain treatment Lyrica and its Enbrel drug for rheumatoid arthritis. It also cited declines in research spending, selling and administrative expenses, and costs of goods sold.
Pfizer in June said it planned to separate its animal health unit into a standalone company, allowing it to focus on its core pharmaceuticals business. On Tuesday Pfizer said it plans by mid-August to ask regulators to approve a potential initial public offering of up to a 20 percent ownership stake in the new animal health business, to be called Zoetis.

KKR defies market with sterling second-quarter earnings

NEW YORK, Fri Jul 27, 2012 – KKR & Co. LP bucked a declining trend among alternative asset companies to report a sterling 73.4-percent jump in quarterly earnings on Friday, driven by successful exits from private equity investments and a rise in the value of its portfolio.
Fears over the euro zone’s debt crisis and faltering global economic growth have weighed on the valuation of private equity portfolios of firms such as Blackstone Group LP and Carlyle Group LP, often mirroring stock market declines. KKR’s portfolio has proved more resilient.
KKR’s private equity portfolio appreciated 5.1 percent in the second quarter, while Blackstone’s portfolio lost 4.2 percent of its value and Carlyle’s portfolio depreciated 2 percent.
“Against a challenging economic and capital markets backdrop, we are pleased with our results,” KKR co-founders and co-chief executives, Henry Kravis and George Roberts, said in a statement.
A major driver of KKR’s gains was Walgreen Co.’s investment in pharmacy group Alliance Boots GmbH. The biggest U.S. drug store chain said last month it would pay $6.7 billion for a 45 percent stake in the KKR portfolio company.
Although KKR has yet to book the money to be paid by Walgreens, the deal resulted in a huge mark-up of Alliance Boots in its portfolio, with the company’s value on its balance sheet jumping from $391.7 million as of the end of March to $650.6 million as of the end of June.

PepsiCo earnings top Wall Street forecast

PURCHASE, N.Y., Wed Jul 25, 2012 – PepsiCo Inc. reported a higher-than-expected quarterly profit on Wednesday, helped by price increases, and stood by its full-year outlook.
That the maker of Diet Pepsi, Frito-Lay snacks and Tropicana orange juice did not cut its outlook was viewed as a sign of strength at a time when many consumer products companies are suffering from a weak global economy.
“In a consumer group seeing negative second-half revisions, we consider this positive,” said Stifel Nicolaus analyst Mark Swartzberg.
PepsiCo said second-quarter net income had fallen to $1.49 billion, or 94 cents per share, from $1.89 billion, or $1.17 per share, a year earlier.
Excluding items, earnings were $1.12 per share, topping the analysts’ average estimate of $1.09, according to Thomson Reuters I/B/E/S.
Revenue fell 2 percent to $16.5 billion, in line with Wall Street estimates.
The decline resulted in part from a loss of revenue in China and Mexico after the company sold the bottling operations in those countries to franchisees. The stronger U.S. dollar, which reduces the value of overseas revenue, also cut into sales.
Excluding those items, organic revenue rose 5 percent, with contributions of 1 percentage point from volume and 4 percentage points from price increases.
Volume rose 6 percent in the snack business and 1 percent for the beverage business. In the Americas, volume rose 5 percent in snacks and fell 1 percent in beverages. In Europe, volume rose 1 percent in snacks and fell 2 percent in beverages.
The company affirmed its 2012 outlook, which calls for earnings per share to fall 5 percent from the $4.40 it earned in 2011. It expects revenue to grow by a mid-single-digit percentage rate, excluding the reduction from refranchising its businesses in China and Mexico.

General Mills to cut about 850 jobs globally; restructuring moves set

MINNEAPOLIS, Tue May 22, 2012 – General Mills Inc. will cut about 850 jobs, or 2.4 percent of its workforce, and take other restructuring measures to support growth, the company said on Tuesday.

The company, which has been facing higher costs of raw materials, will record total restructuring charges of about $109 million pretax, including about $94 million in the fourth quarter ending on May 27.

The remaining costs will be recorded in fiscal 2013, General Mills said.

The maker of Progresso soups, Cheerios cereal and Green Giant vegetables said the job cuts would occur across the company and would largely affect administrative and support positions.

General Mills said in March that third-quarter net income had fallen to $391.5 million, or 58 cents per share, from $392.1 million, or 59 cents per share, a year earlier.

On Tuesday, General Mills said it was backing its earlier forecast of earnings between $2.53 and $2.55 a share for the year.

The company’s shares were down 1 cent at $38.54 on the New York Stock Exchange.

Target raises annual profit forecast; shares inch up

MINNEAPOLIS, Wed May 16, 2012 – Target Corp. raised its annual earnings forecast after posting a bigger-than-expected rise in quarterly profit, even as it spends more on plans to open stores in Canada and has concerns about U.S. shoppers’ ability to spend.

The discount chain expects economic uncertainty to continue for the rest of 2012, Chairman and Chief Executive Gregg Steinhafel said on Wednesday.

Shares of Target were up 31 cents to $55.39 in midday trading after rising as high as $56.44 earlier in the session.

“Consumers are not buying more at Target. What’s driving their sales is maybe people are shopping a bit more often,” said Brian Sozzi, chief equities analyst at NBG Productions. “It’s not like people are going in and loading up their baskets as much as they were a couple of years ago.”

Target said it expects sales at stores open at least a year, or same-store sales, to rise about 3 percent this quarter and 3 percent or a little more for the full year. Last year same-store sales rose 3 percent.

Target, which sells basic goods such as soap and paper towels along with limited-edition items from the likes of designer Jason Wu, has been seeing more customers shop using its credit cards, which offer a 5 percent discount and free online shipping.

Cisco shares drop on tech spending concerns about European economy

SAN JOSE, Calif., Thu May 10, 2012 – Shares of Cisco Systems Inc. fell 9 percent in premarket trading on Thursday, after the network equipment maker forecast weaker-than-expected quarterly results on growing worries about the European economy and nterprise IT spending.

Brokerages including BMO, Deutsche, Nomura, Piper Jaffray and Mizuho cut their price target on Cisco’s stock.

Cisco reported higher-than-expected third-quarter earnings on Wednesday but said it was “really hard to read” what would happen in the second half of the year as customers were more cautious about Europe.

The company, which relies on government and corporate spending on Internet gear, could be in for further estimate cuts if economic trends deteriorate further, said Nomura.

Cisco’s comments will likely pressure stocks across the sector, analysts said.

“The weak fourth-quarter guide is indicative of near-term macro-driven uncertainty in enterprise IT spending,” said Deutsche Bank analyst Brian Modoff.

Cisco’s comments about its telepresence sales, which were hurt by spending cuts by governments as well as businesses, are also negative for videoconferencing company Polycom Inc., BMO Capital Markets analysts said.

Merck profit beats forecast, helped by cost controls; revenue lags

WHITEHOUSE, N.J., Fri Apr 27, 2012 – Merck & Co. reported quarterly earnings slightly above Wall Street forecasts, helped by cost controls, but revenue trailed expectations on generic competition and reduced proceeds from a joint venture with British drugmaker AstraZeneca Plc.

The No. 2 U.S. drugmaker on Friday said global revenue rose 1 percent to $11.73 billion, compared with Wall Street expectations of $11.82 billion. Revenue would have risen 2 percent if not for the stronger dollar, which hurts the value of sales in overseas markets.

Sales of the asthma treatment Singulair, whose U.S. patent lapses in August, edged 1 percent higher to $1.34 billion in the quarter. That marks a slowdown for Merck’s biggest product, whose sales jumped 8 percent in the prior quarter.

Singulair could lose half or more of its sales soon after cheaper generics arrive. But the company has a lineup of promising medicines in clinical trials that it hopes will be approved, and help fill the revenue gap.

They include a new type of insomnia treatment called suvorexant, osteoporosis treatment odanacatib and two drugs that have been delayed by regulators: Bridion, to reverse the effects of anesthesia, and Tredaptive, a form of niacin meant to raise “good” HDL cholesterol without causing facial flushing.

“Beyond earnings, we continue to believe Merck’s late-stage pipeline updates in 2012 and 2013 represent key drivers for the stock,” JP Morgan analyst Chris Schott said in a research note, referring to expected progress reports on the drugs.

Schott said Merck could generate compound annual earnings growth of 7 percent through 2017, the highest gains of any major drug company he covers. Even so, he said Merck shares are trading at only 10 times the company’s expected 2012 per-share earnings, a discount to most rival large drugmakers.