Source: http://pheed.upi.com/click.phdo?i=ed1106d1f4d874aea16317dc8d5d7026
latest news us news key news best news economic news finance news economic news world us news about us business
"I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it," Warren Buffett's business partner, Charlie Munger, once said. "And never a year passes but I get some surprise that pushes my limit a little farther."
For corporate boards, using bad incentives for management pay can be disastrous. (Think Lehman Brothers.) Incentives based on singular metrics such as revenue growth, EBITDA, return on equity, or earnings per share are easily manipulated and gamed. Fortunately, EVA momentum provides a better alternative.
Creator Bennett Stewart of EVA Dimensions, who also co-created EVA (Economic Value Added), calls EVA momentum "the only percent metric where more is always better than less. It always increases when managers do things that make economic sense."
So what does this mean for investors? A positive reading on EVA momentum means a company has created value by increasing its EVA, and a negative EVA momentum means EVA has decreased and less value is being created. EVA momentum is one of the few performance measurements, if not the only one, with such a clear dividing line between good and bad performance.
The best companies, then, create value in excess of their cost of capital, as reflected by positive EVA momentum. The higher the EVA momentum, the faster management is creating value.
Let's look at the pharmaceutical industry and see the most effective producers of value as measured by EVA momentum over the past quarter and year, as well as the three-year trend. The companies are ranked by percentile versus the Russell 3000. The limitations I've set are that the company must have more than a $500 million market cap and be traded on a major U.S. exchange.
|
� |
Company |
Russell 3000 Percentile |
3-Year Trend |
Past Year |
Past Quarter |
|---|---|---|---|---|---|
| 1 | Akorn (Nasdaq: AKRX��) | 100 | 12.2% | 39.5% | 64.6% |
| 2 | Jazz Pharmaceuticals (Nasdaq: JAZZ��) | 99 | 12.6% | 12.6% | 17.9% |
| 3 | Questcor Pharmaceuticals (Nasdaq: QCOR��) | 97 | 11.9% | 131.5% | 162.4% |
| 4 | Salix Pharmaceuticals (Nasdaq: SLXP��) | 96 | 2.9% | 13.4% | 12.6% |
| 5 | ViroPharma (Nasdaq: VPHM��) | 95 | 6.1% | 6.3% | 2.6% |
| 6 | Novo Nordisk (NYSE: NVO��) | 93 | 2.4% | 8.7% | 11.5% |
| 7 | Optimer Pharmaceuticals (Nasdaq: OPTR��) | 90 | 6.5% | 30.0% | (33.2%) |
| 8 | Dr. Reddy's Laboratories (NYSE: RDY��) | 88 | 2.4% | 3.3% | 2.8% |
| 9 | Bristol-Myers Squibb (NYSE: BMY��) | 88 | 3.3% | 2.9% | 5.1% |
Source: EVA Dimensions LLC.
Akorn leads the industry with a 39.5% EVA momentum in the past year, as well as with its three-year trend of 12.2%, placing the company in the top 1% of the Russell 3000.
Businesses with high EVA momentum are effectively creating value. It will be interesting to see how useful this extremely new metric proves to be for companies and investors. If it lives up to its promise, it will be an essential tool in investors' arsenals.
Another tool for better investing
Most investors don't keep tabs on their companies' fundamental value. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.
If you're interested in continuing your research on a stock mentioned here, add it to My Watchlist to stay abreast of all of our Foolish analysis.
finance news economic news world us news about us business business news news latest news us news key news
As Italian interest rates climb higher and higher, some financial experts wonder if the government of Prime Minister Silvio Berlusconi can survive the debt crisis.
NEW YORK (CNNMoney) -- European leaders may have "saved" Greece last week but investors are now worried about an even bigger problem: Italy.
Despite the fact that Europe plans to bolster its bailout fund -- the European Financial Stability Facility -- to the tune of about ?1 trillion, the market doesn't believe that will be enough to help Italy if its debt crisis deepens.
How do we know? The proof is in the pudding ... or zuppa inglese in this case. Just look at the Italian bond market. The yield on the benchmark Italian 10-year bond was 6.1% Monday following a disappointing auction for Italian bonds on Friday.
That's troublesome since the 6% level is viewed as an important psychological barrier. If yields stay north of 6%, that may make it tougher for Italy to find buyers for new debt issuances.
The yield on Italian bonds was as low as 5.41% in early October when the global markets first started to become enthralled by the notion the worst was over in Europe.
Even as recently as last Wednesday -- the day before the deal that will allow Greece to cut its debt burden was reached -- the yield was 5.87%.
This is not, as my ancestors would say, "Va bene!" The skepticism about whether the levered up EFSF can rescue Italy shows that the problems in Europe are not over by a long shot.
"Greece may garner the headlines but it only really matters because of what it symbolizes," said Steve Blitz, senior economist for ITG Investment Research in New York. "People need to be worried about Italy. It's always been the issue because it's such a big bond market."
For that reason, investors should be nervous. Lenders to Greece were obviously not thrilled by the 50% write-down on Greek debt that they agreed to last week.
But it's one thing to do that with something as small as Greece. A haircut of that magnitude is impossible with Italy. That's probably one reason why leading Italian banks are getting hit hard too.
Shares of UniCredit, the largest bank in Italy, sunk more than 4% on Friday in Milan and were down nearly another 6% Monday. Intesa, the second-largest Italian bank, slipped 7% Monday, while Mediobanca, Italy's third-largest financial institution, fell about 4%.
"While people are applauding the 50% haircut bondholders took on Greece, nobody can afford to voluntarily do that with Italy," said Jeff Sica, president and chief investment officer of SICA Wealth Management in Morristown, N.J.
"You don't need to be a serious economist to look at Italy and realize that its debt is compounding at an alarming rate," Sica added.
Part of the problem is that last week's debt deal did not go far enough. It's a step in the right direction, but it passes the buck to emerging markets.
The hope is that China and other sovereign wealth fund will invest in new special vehicles that will allow the EFSF to add leverage to increase the amount of funding available.
Without the help of China, Brazil, Russia and others, Europe is back where it started. And it still seems clear that the stronger northern European nations aren't keen on the idea of a full bailout of their southern siblings.
"The deal doesn't address any of the fundamental economic issues," said Blitz. "There was no backstop on Italy because there is a reluctance on the part of Germany and others to bail out a country that's not doing enough to reform."
Reform is key. But while some criticize the government of Silvio Berlusconi for not taking necessary steps to get growth back on track, others argue that the fear of the unknown (i.e. who could replace Berlusconi if he's forced out) is also adding to pressure on Italian bond yields.
"There is a lot of political uncertainty. The Berlusconi administration seems to be increasingly fragile," said Laura Sarlo, senior sovereign debt analyst with Loomis Sayles in Boston. "The prospect of early elections and a change in leadership in the next three to six months is out there."
But Sarlo said the biggest challenge facing Italy and other European nations is not politics. It's that their economies are not expanding quickly enough to make much of a dent on their bloated balance sheets.
"Even if interest rates come down a lot, Italy still has a high debt load," said . "It would be difficult to finance that even at rates of 4% to 4.5% if Italy can only manage nominal growth."
With that in mind, Sarlo said she's still worried about Spain as well -- even though some investors are starting to ignore it due to the worries about Italy.
"For the most part, people have been giving Spain a free pass and focusing on Italy," she said. "But house prices are sliding again in Spain and even though banks there getting fixed, they're not completely healthy yet."
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.�
Source: http://rss.cnn.com/~r/rss/money_topstories/~3/DrHZvKSGB64/index.htm
news latest news us news key news best news economic news finance news economic news world us news about us
Source: http://pheed.upi.com/click.phdo?i=56d9dfd0fcdc4e86fe9262b2904957de
news latest news us news key news best news economic news finance news economic news world us news about us
By Inyoung Hwang
Oct. 28 (Bloomberg) -- JPMorgan Chase & Co. is winning higher ratings from analysts than Apple Inc., the iPad maker that doubled since its low last year, after the European debt crisis battered the U.S. bank?s shares.
The two companies are among 15 in the Standard & Poor?s 1500 Composite where ?buy? recommendations made up 85 percent of analyst ratings and there were no ?sells,? data compiled by Bloomberg Rankings as of Oct. 24 show. Stocks with fewer than 15 analysts covering them were excluded. For JPMorgan, the total was 89.5 percent, compared with 87.5 percent at Apple.
JPMorgan shares are lagging behind the Standard & Poor?s 500 Index by 15 percentage points this year after investors sold banks amid concern the European crisis would prompt losses. Following its decline, no other financial institution in the U.S. has more support from analysts.
?It shouldn?t be beaten up,? Jeff Harte, a Chicago-based financial analyst at Sandler O?Neill & Partners LP, said in a telephone interview on Oct. 26. During the last financial crisis in 2008, JPMorgan ?capitalized on others? weakness.?
JPMorgan, based in New York, topped Bank of America Corp. as the biggest U.S. lender by assets as of Sept. 30 and posted more trading revenue than any other Wall Street firm for the fourth straight quarter.
The company posted profit every quarter during 2007 and 2008 as the collapse of the subprime mortgage market prompted $2.1 trillion in writedowns and losses at banks, brokerages and other financial firms worldwide. Chief Executive Officer Jamie Dimon bought Bear Stearns Cos. and the banking unit of Washington Mutual Inc. amid the turmoil three years ago.
JPMorgan?s Drop
JPMorgan has retreated 13 percent since Dec. 31, while the S&P 500 posted a gain of 2.1 percent, turning positive for the year yesterday for the first time since Aug. 3. The stock, which had 34 ?buy? ratings and four ?holds? as of Oct. 24, is beating its peers. The diversified financials group in the S&P 500 has slumped 20 percent in 2011.
?JPMorgan tends to be run more conservatively, which is probably why it?s liked by its analysts,? Craig Hodges, president of Dallas-based Hodges Capital Management Inc., who oversees about $700 million, said in an Oct. 26 phone interview.
Besides JPMorgan and Apple, the 15 companies include Google Inc. and Halliburton Co., according to Bloomberg data. The most- favored stocks in the S&P 500 beat the entire index since the last bear market ended 2 1/2 years ago, the data show. They returned 144 percent on average since March 9, 2009, versus 90 percent for the S&P 500. Since the index peaked this year in April, the 15 stocks have lagged behind, falling 3 percentage points more than the measure.
Fivefold Gain
Apple, the world?s most valuable technology company, rallied the most out of the group since the bull market began in March 2009, rising almost fivefold. The Cupertino, California- based company missed the average analyst profit estimate for the first time since at least 2004 last week. It had 49 ?buy? ratings and seven ?holds? as of Oct. 24.
While third-quarter revenue and earnings missed projections because of fewer-than-forecast iPhone shipments, Apple?s forecast for the first quarter was ?strong? and should benefit from the new iPhone 4S, said William Power, an analyst at Robert W. Baird & Co. who has an ?outperform? on the company and sees the stock climbing 33 percent to $540 a share in a year.
?We continue to view Apple?s growth prospects positively, driven by strong iPad and iPhone momentum,? Houston-based Power wrote in a note dated Oct. 24. ?With several upcoming potential catalysts, and an attractive valuation level, Apple remains our top overall pick.?
--With assistance from Laurie Meisler in New York. Editors: Joanna Ossinger, Nick Baker
To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
business news news latest news us news key news best news economic news finance news economic news world us news
Source: http://pheed.upi.com/click.phdo?i=ed1106d1f4d874aea16317dc8d5d7026
economic news finance news economic news world us news about us business business news news latest news us news
The Fed's decision to buy long-term Treasurys and sell short-term ones to help get the economy back on its feet was expected. Stocks sank anyway on fears the Fed's statement showed economy was in dire shape.
The Dow Jones industrial average lost 283.82 points, or 2.5 percent, and closed at 11,124.84.
The Standard & Poor's 500 index fell 35.33, or 2.9 percent, to 1,166.76.
The Nasdaq composite fell 22.59, or 0.9 percent, to 2,590.24.
The Nasdaq composite fell 52.05, or 2 percent, to 2,538.19.
For the week to date:
The Dow is down 384.25, or 3.3 percent.
The S&P 500 is down 49.25, or 4.1 percent.
The Nasdaq is down 84.12 or 3.2 percent.
For the year to date:
The Dow is down 452.67, or 3.9 percent.
The S&P 500 is down 90.88, or 7.2 percent.
The Nasdaq is down 114.68, or 4.3 percent.
latest news us news key news best news economic news finance news economic news world us news about us business
(Reuters) ? FedEx Corp (FDX.N), the world's No. 2 package delivery company, cut its full-year profit outlook, citing fuel prices and weak global economic growth, sending its shares down as much as 11 percent to a two-year low.
Chief Executive Fred Smith said he did not expect economic conditions to improve much any time soon, although he did not expect the United States to dip back into recession.
"We expect sluggish economic growth will continue, largely due to a lack of confidence that U.S. and European policy makers will effectively address current economic challenges," Smith said on a conference call to discuss quarterly results.
The sour mood of the consumer, which is compelling companies around the world to squeeze costs and hold down inventories, remains the biggest drag on the economic growth that FedEx needs to give its business a boost, company executives said on the call on Thursday.
With inventories low, FedEx expects to benefit if there is an uptick in demand in the run-up to the holiday shopping season and retailers needed fast delivery. Much is also riding on robust online orders. But for now, things remain subdued.
"Our customers' hair is not on fire," said FedEx Chief Financial Officer Alan Graf. "They're just saying, you know, we're going to be steady as she goes, so it just feels completely different than it did back in 2008."
The sheer volume of goods moved by FedEx makes its shipment trends a bellwether for consumer demand and economic growth. The value of packages handled by FedEx's trucks and planes every year is equivalent to about 4 percent of U.S. gross domestic product and 1.5 percent of global GDP.
FedEx, which is also being hurt by a slowdown in international trade, reported earnings of $1.46 per share, just beating the average analyst estimate of $1.45, according to Thomson Reuters I/B/E/S/.
FedEx shares were down 8.9 percent at $66.04 in afternoon trading, well below their year-high of $98.66 in July.
"It's a cheap stock, and if this is a slowdown it's probably an opportunity to buy. But if it's more an indication of recession then I would say you wouldn't want to own it," said Donald Porter at Dalton, Greiner, Hartman, Maher & Co, which holds shares in rival United Parcel Service (UPS.N).
To help counter falling volumes in the Express division, its biggest, FedEx said it would raise shipping rates by a net 3.9 percent on average for U.S. domestic, U.S. export and U.S. import services from January 2.
The company so far has had little resistance to rate increases, the latest of which went into effect this month.
Memphis, Tennessee-based FedEx reiterated its $4.2 billion capital expenditure plan for the year ending next May. The company is considering buying about 50 wide-body freighters from Boeing Co (BA.N) and Airbus (EAD.PA) to update its fleet to more fuel-efficient models.
ASIAN VOLUMES DOWN
At FedEx Express, which represents more than 60 percent of total revenue, domestic revenue per package rose 13 percent in the three months ended August 31, mainly due to higher fuel surcharges and increased weight per package. Average daily package volume dropped 3 percent.
Volume fell 4 percent in the division's international unit, mainly due to a decline in traffic from Asia. Revenue per package grew 16 percent, helped by favorable exchange rates.
FedEx is the world's biggest air cargo carrier, a fact that Fred Labatt, director of equity research at South Texas Money Management, said made it more vulnerable than UPS to weakness in international trade.
"The stock is going to be more sensitive than UPS, which has a lot more ground and less air," he said. "On the other hand, the yields were better pretty much across the board in all the segments, which means they're getting pricing and the company's doing a really good job of managing their costs," said Labatt, whose firm holds FedEx shares.
FedEx said fiscal first-quarter profit, which slightly beat forecasts, rose to $464 million, or $1.46 per share, from $380 million, or $1.20 per share, a year ago. Analysts, on average, had expected a profit of $1.45 per share.
The company cut its forecast for earnings for the year to May 2012 to $6.25 to $6.75 per share from its June estimate of between $6.35 and $6.85.
Revenue rose 11 percent to $10.52 billion from $9.46 billion a year earlier. That was above the average forecast of $10.32 billion.
With the stock down about 30 percent this year, FedEx said it planned to buy back 5.7 million shares under its existing repurchase authorization.
The Dow Jones Transportation average (.DJT) has dropped about 19 percent this year while UPS shares have fallen about 14 percent.
UPS, the world's biggest package delivery company, last week affirmed its call for record earnings in 2011, downplaying the likelihood of a double-dip recession.
Its shares were down 3.7 percent at $61.97 at midday.
(Reporting by Lynn Adler in New York, editing by Dave Zimmerman, Maureen Bavdek and Matthew Lewis and Ted Kerr)
Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20110922/bs_nm/us_fedex
economic news finance news economic news world us news about us business business news news latest news us news
Like this story, share it with millions of investors on M3
INSIGHT - How HP`s board presided over a train wreck
By Poornima Gupta and Peter Henderson
SAN FRANCISCO (Reuters) - To fire one CEO, or even two, may be regarded as misfortune; to fire three looks like carelessness.
When Hewlett-Packard Co named Leo Apotheker as its chief executive last year, the majority of the board that hired him had not even met the German executive.
That HP's board would appoint a CEO without insisting on an in-person interview with all directors is just one example of what critics say is a pattern of dysfunction behind the meltdown of the technology giant, which traces its roots to the beginning of Silicon Valley itself.
The board is expected to name former eBay Inc CEO Meg Whitman to replace Apotheker later on Thursday.
It's easy to blame Apotheker, who has cut financial forecasts for three straight quarters, U-turned on key aspects of HP's strategic roadmap, and failed to stem a nearly 50 percent plunge in the company's stock price.
But HP's problems go back much further than Apotheker's 11-month tenure. Interviews with insiders, former executives and experts paint a picture of an ever-changing roster of board directors who lacked a good grasp of the company's fundamentals and vacillated over what its business should be.
Not only did the full board not meet Apotheker before he was hired, many directors also did not interview Silicon Valley venture capitalist and former software executive Ray Lane, who became HP's chairman at the same time, according to a person familiar with the situation.
The board left the interviews to a four-member search committee, the person said, and gave no indication that they understood the tremendous change in strategy it had put under way by choosing two software experts to head HP, the world's largest personal computer maker. Apotheker was previously CEO of German software company SAP AG, where he lasted seven months before resigning abruptly amid customer complaints over software support fee increases.
"The company seems to have lost its way. It is sort of trying to commit suicide," said Tom Perkins, co-founder of venture fund Kleiner Perkins and a former HP board member who was also the one-time head of HP's research unit. "How did this happen? This is the fault of the board."
The 14-member board will on Thursday wrap up a two-day meeting to try to correct some of its mistakes. It will decide whether to oust Apotheker and examine a host of other strategic issues, according to another source.
If he goes, Apotheker would become the third CEO in a row to be ousted at HP. His predecessor Mark Hurd left in scandal after a female contractor accused him of sexual harassment and a board-commissioned investigation found discrepancies in his expense reports. Before Hurd, Carly Fiorina was fired in 2005 in a spat with the board over how to run the company.
Then there was Patricia Dunn, chairman of HP before Hurd. She left after facing a criminal probe into authorizing private investigators to impersonate directors and reporters in an investigation into boardroom leaks. Perkins resigned in 2006 over that scandal.
"I was trying to think of another company that had tripped up that often in this many years and I found it impossible to come up with another example," said Paul Hodgson, senior research associate at corporate governance advisers GovernanceMetrics International.
Hodgson and other experts did point to the many new faces the board has seen, a revolving door that means only four of the 14 directors joined before 2009. Six new directors joined this year alone.
While fresh faces can turn around a company in trouble, in this case the board turnover may have contributed to the problems.
Institutional knowledge rests primarily with Ann Livermore, who was relieved of her executive duties by Apotheker and promoted to the board after she was passed over for the CEO job. Now she is deliberating the future of the man who beat her.
WHO TO BLAME?
HP's problems started to brew during the tumultuous reign of Fiorina, but the real flare-up came with Hurd's departure.
A buttoned down, numbers-oriented executive known for his financial rigor, Hurd mostly kept directors insulated from the operational complexities of the day-to-day running of the hardware company, sources said.
He reinvigorated HP to become the largest tech company by revenue after Fiorina's departure, and he was much favored by the board prior to the eruption of the sexual harassment allegation, even though some members were cowed by his hard edge, the sources said.
The messy public brawl in the wake of Hurd's departure last year set the tone of HP coverage for months.
Critics of Hurd say he is also to blame for HP's trouble today, arguing that R&D budget cuts stifled innovation. Chairman Lane told Reuters in July that Hurd "burned the furniture to please Wall Street."
While cost-cutting and streamlining HP's massive operations made Hurd popular with investors, Hurd also presided over some major acquisitions including 3COM for $2.7 billion and Palm for $1.2 billion.
In the ensuing chaos during and after Hurd's departure, Silicon Valley heavyweight Marc Andreessen emerged as a key influential voice on the board, sources said.
The board believed HP was in good shape financially and needed an executive who would keep the company running efficiently but bulk up its software business, they said.
Enter Apotheker, who was deemed to have the best resume among a three finalists, and Lane, whose candidacy for the chairman role also came through the same recruiting channels used for the CEO search.
The search committee of four directors Andreessen, Lawrence Babbio Jr., John Hammergren and Joel Hyatt, focused on finding a CEO and a chairman who could expand HP into new growing markets and beefing up areas where it was weak, like software.
Internal candidates were passed over, deemed not ready for the task.
STRATEGIC SHIFTS
The board rarely understood the strategic implications of the decisions it was constantly asked to make, sources said, adding that some members seemed to go along without much involvement.
"There were pockets of smart people asking smart questions. There were pockets of extremely dysfunctional behavior," said one former executive. "There were only a few board members who would get into details."
In retrospect the hiring of Apotheker and Lane seemed like a major strategic shift by a board making a calculated bet.
While Apotheker began to learn the company he was running, Lane presided over the exit of four directors after discussions with the board on what the chairman called "looking forward" after the "incredible decision to terminate its CEO."
Joel Hyatt, John Joyce, Robert Ryan, and Lucille Salhany stepped down voluntarily, Lane said at that time, adding that Hurd's departure had no impact on the decision.
But both Hyatt and Joyce were seen as staunch supporters of Hurd during the crisis, and Ryan and Salhany were in charge of the investigation into the sexual harassment allegation against Hurd, which vindicated him, sources said.
Whitman and three others joined the board, but failed to stem the flow of bad news or concoct a clear strategy. The board is now considering appointing Whitman interim CEO.
"Our conversations with shareholders and investors over the past month revealed a level of exasperation that we have not seen directed at HP or any other company in our universe in our 13 years following the sector," Toni Sacconaghi, an analyst with Sanford Bernstein, wrote in a note published on Thursday.
"The potential sudden removal of Apotheker as CEO - and the fact that such Board discussions were once again leaked to the press - are likely to further undermine the Board's already fragile credibility."
BUNGLES CONTINUE
In recent months, HP has launched, killed, and then decided to bring back its TouchPad tablet. It also said it was considering spinning off the personal computer business - then followed by saying it may also consider keeping it.
And after facing criticism that it paid too much for a data storage company called 3PAR, HP decided to pay nearly $12 billion to buy software firm Autonomy, a 60 percent premium over its average stock price the previous month.
"The board was a big part of this," another person familiar with the situation said, referring to the software deal. As for the PC business? "They are trying to figure out whether they should or shouldn't. Leo said that himself - maybe they do, maybe they don't," that person said.
Recently, Lane abandoned his effort to keep the board quiet and in the background. Last week, he took the CEO's place at an industry conference to defend HP's change in strategy and try to clear the confusion that followed in the market.
So far it hasn't worked. Whatever vision it has, the board has not communicated it.
HP has declined so far to address Wednesday's reports that its board was considering replacing Apotheker. The company also had no immediate comment when contacted by Reuters for this story. Emails to Lane were not returned. Hurd declined through a representative to comment, as did Fiorina.
"Part of the problem here is communication. No one knows anything (among investors)," the person familiar with the Autonomy situation said.
The announcement of Apotheker's hiring last year gave no clue to what strategy would be. His speech in March didn't help: the CEO explained that HP was moving into 'the cloud,' which means basing computing services on the Web.
Many senior-level executives did not see the path to achieving that goal.
COMMUNICATIONS MELTDOWN
During his first few months at HP, Apotheker was more interested in holding long-term strategic conversations with his management team and preferred to leave the intricacies of running HP's various businesses and the financials behind them to other executives, one of the sources said.
Communication was another issue.
"It seems as though everything is being done a little bit on the seat of their pants," said the former HP executive.
The most telling example of a communications bungle - before Wednesday - was on Aug. 18.
In a rapid-fire series of announcements, HP disclosed acquisition talks with Autonomy; confirmed a deal had been done; said it was considering spinning off its PC business; announced quarterly results that missed forecasts; and said it was killing the TouchPad.
The day after the series of announcements, HP shares nose-dived 20 percent, wiping out $16 billion of value in the worst single-day fall since the Black Monday stock market crash of October 1987.
"There are boards out there that have made mistakes but they've generally learned from them, eventually. Maybe replacing the board all the time is not the thing to do," said Hodgson of GovernanceMetrics International.
He said he would have expected a board of such caliber to avoid so many mistakes.
"It doesn't seem to be the case, and it's difficult to come up with an explanation," he said.
(Reporting by Poornima Gupta and Peter Henderson in San Francisco, additional reporting by Ben Berkowitz in New York, editing by Tiffany Wu and Claudia Parsons)
news latest news us news key news best news economic news finance news economic news world us news about us
, On Friday October 28, 2011, 11:56 am EDT
WASHINGTON (AP) -- Pushing a campaign to act without Congress, President Barack Obama moved unilaterally Friday to boost private business.
He signed executive orders aimed at spurring economic growth, capping a week in which Obama sought to employ the power of his office as he struggles to make headway on his jobs bill on Capitol Hill.
Obama's orders direct government agencies to shorten the time it takes for federal research to turn into commercial products in the marketplace. The goal is to help startup companies and small businesses create jobs and expand their operations more quickly.
On the other front, Obama called for creation of a centralized online site, to be known as BusinessUSA, for companies to easily find information on federal services. The site, a recommendation of the president's jobs council, is to be up and running within 90 days and will be designed with input from U.S. businesses.
Obama announced both steps in presidential memos released Friday morning.
"Today, I am directing my administration to take two important steps to help American businesses create new products, compete in a global economy, and create jobs here at home," Obama said. The White House had no estimate for how many jobs would be created.
On a larger scale, the president himself announced two other executive actions this week, one offering help for homeowners seeking to refinance at lower mortgage rates and the other allowing college students to simplify and lower their student loan payments. The White House also issued a challenge to community health centers in a bid to help get veterans jobs.
White House aides expect more such actions in coming days. Obama, up for re-election, is waging a public campaign to show voters he is acting on jobs more than Republicans are.
The Republicans who control the House counter that their economic bills have not been considered in the Senate. And they question Obama's latest tactic.
"This idea that you're just going to go around the Congress is just, it's almost laughable," House Speaker John Boehner told radio talk show host Laura Ingraham on Thursday.
Follow Yahoo! Finance on ; become a fan on Facebook.
news latest news us news key news best news economic news finance news economic news world us news about us
By Dakin Campbell
(Updates with reason for the sale, share performance starting in the second paragraph.)
Oct. 28 (Bloomberg) -- John Havens, Citigroup Inc.?s president and chief operating officer, sold $3.52 million of the New York-based bank?s stock, according to a regulatory filing.
Havens sold 60,000 shares at an average price of $30.41 on Oct. 26, and 50,000 shares at $33.90 a day later, according to the filing with the U.S. Securities and Exchange Commission. The sale was done for tax-planning purposes, spokeswoman Danielle Romero-Apsilos said in an e-mail. Havens held more than 334,000 shares after the transactions, the filing shows.
Citigroup fell 1 cent to $34.16 in New York trading. The lender, ranked third by assets in the U.S., is down 28 percent this year, compared with the 20 percent drop for the 24-company KBW Bank Index.
--Editors: Rick Green, William Ahearn
To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net
To contact the editor responsible for this story: David Scheer in New York at dscheer@bloomberg.net
economic news finance news economic news world us news about us business business news news latest news us news
, On Friday October 28, 2011, 1:02 pm EDT
WASHINGTON (AP) -- Americans' incomes have stagnated for three straight months. Yet they boosted their spending in September 0.6 percent -- three times the increase in August.
Under normal circumstances, that would be a troubling sign for the economy.
But a closer look at Friday's report from the Commerce Department on September income and spending suggests another possibility: Many people are cutting their savings because the interest they are earning has become nearly worthless.
Consumers earned only 0.1 percent last month. And after adjusting for inflation, their after-tax incomes fell 0.1 percent last month -- the third straight monthly decline.
But the decline was largely because of a 1.4 percent drop in interest income last month, the third sharp monthly drop. Wages and salaries increased 0.3 percent in September.
Paul Ashworth, chief U.S. economist at Capital Economics, said the report could signal that there is a transfer of income from those who saved to those with high debts, which could result in more spending by consumers.
"The sharp decline in the saving rate doesn't concern us quite as much as it did, since it is possible that it partly reflects a sharp decline in debt servicing costs," Ashworth said.
Consumer spending is closely watched because it accounts for 70 percent of economic activity. A sharp rise in spending over the summer helped fuel annual growth of 2.5 percent in the July-September quarter, the best quarterly expansion in a year.
Still, the economy would have to grow at nearly double the third-quarter pace to make a dent in the unemployment rate, which has stayed near 9 percent since the recession officially ended more than two years ago.
In recent months, job growth has stagnated. Employers have added an average of only 72,000 jobs per month in the past five months. That's far below the 100,000 per month needed to keep up with population growth. And it's down from an average of 180,000 in the first four months of this year.
Employers added only 103,000 jobs in September, and the unemployment rate remained 9.1 percent for a third straight month.
The government releases the October employment report on Nov. 4.
And spending could tumble next year if Congress fails to extend a Social Security tax cut, which gave most Americans an extra $1,000 to $2,000 this year, or long-term unemployment benefits. Both expire at the end of the year.
The spending increases in September included a 2.2 percent jump in purchases of durable goods, reflecting strong car sales during the month. Sales of non-durable goods such as clothing were also up a solid 1.1 percent while purchases of services such as rent and utility payments edged up 0.2 percent.
Inflation, as measured by a price gauge tied to consumer spending, edged up 0.2 percent in September. But core inflation, which excludes food and energy, showed no gain at all. That left core inflation rising at a moderate 1.6 percent over the last 12 months.
Many economists worry that consumers won't be able to keep spending like they did this summer without earning more. For spending gains to be sustained, employers need to step up hiring.
Follow Yahoo! Finance on ; become a fan on Facebook.
about us business business news news latest news us news key news best news economic news finance news
Source: http://pheed.upi.com/click.phdo?i=4e50b3a59e74b5892366f548a7b0b801
economic news finance news economic news world us news about us business business news news latest news us news
Source: http:/blogs/daily-ticker/occupy-wall-street-uprising-response-bought-paid-politics-195616835.html
us news key news best news economic news finance news economic news world us news about us business business news
"If there had not been an agreement on Wednesday night, it was not just Europe that would have sunk into catastrophe, it was the whole world," he said.
"We took important decisions that avoided catastrophe."
Mr Sarkozy also met with Hu Jintao of China to discuss investment. He said that Chinese capital was not essential to saving the eurozone but there was no reason to refuse Chinese assistance.
"If the Chinese, who have 60pc of global reserves, decide to invest in the euro instead of the dollar, why refuse?" he said in national television interview, adding that "our independence will in no way be put into question by this".
Li Daokui, an adviser to China's central bank, said that helping the eurozone to overcome its sovereign debt crisis is in China's economic interests, but the country must be careful not to squander its reserves.
"It is in China's long-term and intrinsic interest to help Europe because they are our biggest trading partner but the chief concern of the Chinese government is how to explain this decision to our own people," Li was quoted as saying.
"The last thing China wants is to throw away the country's wealth and be seen as just a source of dumb money."
Mr Sarkozy also said that ring-fencing banks might not be the "best model".
latest news us news key news best news economic news finance news economic news world us news about us business
Violent street gangs that have historically focused on drug trafficking and gun running are expanding into white collar crime. According to a report released last Friday by the Federal Bureau of Investigation, members from a slew of gangs, including the Bloods, Crips, Gangster Disciples, Vice Lords and Latin Kings are branching out into mortgage fraud, identity theft, the manufacturing of counterfeit checks, and bank fraud, among other crimes. While there's no hard data on the growing involvement of street gangs in white collar crimes, a quick search of news headlines demonstrates the trend. According to National Public Radio, in the last four years in Chicago alone, members of the Black Disciples gang participated in mortgage fraud totaling $70 million, while the Vice Lords engaged in similar mortgage scams totaling $80 million. In Los Angeles, the Long Beach chapter of the Crips, as well as members of the Mexican mafia, have been involved with identity theft, reports the Los Angeles Times.
The Trentonian, a New Jersey newspaper, reported in 2009, that eight members of the Nine Trey Gangsters, a sub-group of the infamous Bloods, were charged in a counterfeit check scam valued at $654,000. "This investigation reveals the Bloods on new turf, defrauding banks of hundreds of thousands of dollars using counterfeit checks," said New Jersey Attorney General Anne Milgram. "Just as we have targeted the financial crimes of traditional organized crime through the years, we will crush any inroads by street gangs into these activities, which could bankroll more drug dealing and death."
White collar crime not only funds other gang activity, it can also be used to launder dirty money. "Depending on the gang's needs, if they want to detach themselves from the real money maker, for example, which would be dealing drugs or trafficking guns, they'll create some sort of front to launder the money," says Jason Boone, a research associate at the nonprofit National White Collar Crime Center. "It's a very classic gang and mob behavior. Like in the movies, the nice little restaurant with all sorts of guns and drugs in the back." Except now, the criminals are using drug money to buy and flip properties in fraudulent mortgage transactions, for example.
Internet Makes Crime Easier, Safer
The increase in white collar crime among street gangs is also explained by the shifting economic landscape. "Most criminals are opportunists," explains Calvin Shivers, assistant section chief of violent criminal threats at the FBI. "They seek to make money anywhere they can. With mortgage fraud, for example, with the economy over the last couple of years, there's an increase in mortgage fraud as a whole, and criminal organizations are taking advantage of that. If they're in a neighborhood where there are a lot of houses in foreclosure, there is a greater opportunity to engage in fraud."
According to Boone, technology has also paved the way for street gangs to expand into fraud like identity theft. "With the Internet, there's a lot more anonymity, in terms of your role in the scam, so it's perceived as safer than being out on the street."
Street gangs also consider white collar crime less risky in terms of potential punishment if caught. "If you have the choice between charges for some kind of violence, murder, assault, armed robbery, things like that, and some sort of fraud, like larceny, they're thinking that the potential consequences will be a lot less," explains Boone.
However, as Shivers cautions, the calculation isn't that simple. "Sentencing has an entire formula that considers a number of factors. Was there violence involved? What was the amount of money lost? Were there prior convictions? Drug sentencing tends to be stiffer, but it all depends on the magnitude of the crime. Look at Bernie Madoff."
Though street gangs are unlikely to rival Madoff's historic Ponzi scheme anytime soon, they are expanding their domain. "I wouldn't say that white collar crime is replacing drug dealing and other traditional street gang crimes," says Shivers. "It's more an issue of diversification."
Source: http://www.dailyfinance.com/2011/10/28/street-gangs-new-dirty-moneymaker-white-collar-crime/
business news news latest news us news key news best news economic news finance news economic news world us news
The financial world's fee fever may have abated -- for now. On Friday, Bank of America (BAC) seemed likely to add more ways for customers to avoid the $5 debit-card fee after coming under severe criticism since it announced the new fee in September.
A person familiar with the bank's plans said that the altered rules would allow many customers to avoid the fee by maintaining minimum balances, using direct deposit for paychecks, or by using Bank of America credit cards, Reuters reported.
Other big and medium-sized banks including J.P. Morgan Chase (JPM), Citibank (C) and Key Bank (KEY) say they're not implementing fees for debit card use anytime soon, reported the The Wall Street Journal.
Still, the banks are looking for ways to make up for the revenue lost under new federal regulations enacted earlier this month, and to compensate for low interest rates. (Banks aren't making much money off your money these days.) That has translated into cost-cutting at some institutions. For customers, that could mean fewer real people to help you bank and more emphasis on ATM and online banking.
Last June, Wells Fargo (WFC) announced plans for cost cutting through streamlining technology and by pushing customers to use more online and mobile services, which would reduce the need for staff.
Regional banks are on a cost cutting kick as well. Cleveland-based Key Bank has reduced processing costs associated with checking accounts, says David Bowen, its head of consumer products. The bank has also rolled out a rewards program to increase customer participation in automated banking.FirstMerit Bank, which has more than 200 branches in Ohio and Pennsylvania, also said it would undergo cost-cutting measures, The Plain Dealer reported, though what those will look like are not yet clear.
BB&T, the18th-largest bank in the United States, this week asked bank managers to to come up with ways to cut costs, but has not announced specific measures, Reuters reported.
Source: http://www.dailyfinance.com/2011/10/29/banks-back-away-from-new-fees-focus-on-cost-cutting-instead/
business news news latest news us news key news best news economic news finance news economic news world us news
Source: http:/blogs/daily-ticker/deal-no-deal-europe-getting-closer-closer-end-150323310.html
key news best news economic news finance news economic news world us news about us business business news news
, On Friday October 28, 2011, 9:27 am EDT
NEW YORK (AP) -- When France's top drugmaker lured Christopher Viehbacher away from a British rival in late 2008, the hope was he would be a savior.
The company, Sanofi SA, faced several daunting challenges, including repeated research failures and a deluge of generic competition starting to wipe out billions in annual revenue.
His predecessor had been replaced after less than two years, after failing to satisfy investors and the scuttling of a heralded obesity drug, Acomplia. The drug was pulled off the market in Europe and never got U.S. approval because of links to depression and suicidal thoughts.
Viehbacher had gained broad experience over two decades with Glaxo in Europe, the U.S. and Canada, including running its U.S. business for five years. His understanding of regulators, investors and the market in the U.S., where Sanofi needed to boost sales, made him particularly appealing. And while he was born in Canada to German parents, he was fluent in French.
Today, nearly 3 years after being tapped to shake things up at Sanofi, Viehbacher, 51, can take credit for reorganizing the company, divesting into growth areas and making enough smart deals that last month he promised investors 5 percent annual revenue growth for the next four years.
That tops the outlook for many rivals. Some will see their revenue decline over that stretch, as patents expire on drugs with billions in annual sales and patients switch to cheaper generic versions.
Sanofi, which reports its third-quarter results Nov. 3, has been hurt by a succession of its drugs getting generic competition over the past couple years. Sales fell for 13 of its 19 top drugs in the first half of the year, including blockbuster bloodthinner Plavix, blood pressure pill Avapro, insomnia treatment Ambien and Lovenox for preventing blood clots. Sales of Plavix and Avapro will fall further next year, when their U.S. patents expire.
Viehbacher has maneuvered to avoid another "patent cliff." He's shifted Sanofi's focus from blockbuster patented drugs to six growth "platforms" -- areas with products with indefinite lifespans, not the typical 10 years before prescription pills get generic competition.
Those areas are vaccines, consumer health products, medicines for pets and livestock, diabetes treatments and testing supplies, biologic drugs for rare or complex disorders, and products for emerging markets -- China, India, Brazil and other countries where a growing middle class is buying more medicine.
Some promising biologic drugs came with Sanofi's biggest deal under Viehbacher, the $20.1 billion purchase of Massachusetts biotech company Genzyme Corp., in April. Sanofi tapped into the U.S. consumer product market in 2010 by buying Chattem Inc., which sells nonprescription Allegra allergy pills, Gold Bond moisturizer and Unisom sleeping pills.
On top of the Genzyme deal, Sanofi has been spending 1 billion to 2 billion euros a year (about $1.4 billion to $2.7 billion) on small and midsize acquisitions that fit into existing businesses. And it's a leader in emerging markets.
Viehbacher restructured Sanofi's research organization to start more outside partnerships and focus on products with major commercial potential. In 2009 alone, the company scrapped 30 research projects, because the experimental drugs didn't work well, had bad side effects or weren't seen as big sellers.
Despite that, Sanofi will apply for approval of six drugs in nine months through next March, including two for multiple sclerosis and drugs for colon cancer, clot prevention, type 2 diabetes and extremely high cholesterol.
Like its rivals, Sanofi has been cutting sales and research jobs and trimming other costs. It's lopped off nearly 2 billion euros in annual spending under Viehbacher, and he just announced plans to cut another 2 billion euros by 2015. That's needed to adjust to the hits from generic competition, European government health programs reducing what they'll pay for drugs and declining success in the lab.
Viehbacher visited The Associated Press in New York recently to discuss his plans and his view of the industry.
Q: Are you nearly finished with the company's turnaround?
A: I'm actually feeling pretty good about the company. Now, when I came in, in 2008, it was a company where two-thirds of the sales were with 15 blockbusters and, you know, a lot of those things were going to go off patent, (with) no real plan to get through it. Sanofi had one of the most concentrated and one of the biggest (patent cliffs) ... When you think about being France's second-biggest company and recruiting, first of all, not only from outside but recruiting a non-French person from outside, it was pretty clear that the board was looking for some pretty significant change. ... So we decided to create what have become six platforms for growth and then to really align our resources.
Q: How are you going to deliver on your promise to produce 5 percent revenue growth through 2015, with key products such as Plavix and Avapro getting U.S. generic competition next spring?
A: The growth platforms are really the story of new Sanofi. In 2008, they represented less than 40 percent of sales. In 2011, they represent two-thirds of the company already. And by 2015, they're 80 percent of the business. So this has been a process of using the cash flow to invest, to ... really build these businesses. We are almost through the patent cliff, from the sales point of view, this year. And we will be through the patent cliff, from a profit point of view, next year.
Q: As Sanofi's leader, how do you drive the execution of your strategy?
A: The first thing is, people have actually got to know what you want them to do. You'd be surprised how difficult we sometimes make that. The second thing is ... you've got to get people to understand that what you're doing is important. Then you've got to make sure that what you're outlining has a number of key milestones, that you can actually define what success looks like. And if you can define what success looks like, you can tie a number of metrics to it. ... You want to empower people to actually go do these things. ... So there is a whole effort to find those people in organizations that can kind of overcome the bureaucratic odds and make things happen. Because if you can get the right person in the right job, you give him what's the mission, why is the mission important, what does success look like, and how am I going to reward you if you get there, you know, you can make things happen. It's not rocket science.
Q: What do you see as the biggest challenges for your company and the industry?
A: As we're looking at deficit reduction in both Europe and the U.S., there's huge threats to our industry. ... I think it's going to be extraordinarily important to preserve the ability of the NIH (National Institutes of Health) to invest in research, make sure the FDA (Food and Drug Administration) has the means that it needs. ... It's never been the case that science has been so promising in terms of what it can do for increased health. People are really starting to understand causes of disease, understanding the genomics behind this. ... But at the same time, it has never been more difficult to fund a new idea. Venture capital has pretty much gotten right out of healthcare. ... So I think there has to be a greater demonstration that we can convert a great idea scientifically into a patient benefit with increased frequency -- and faster.
Q: How does your accounting background affect your perspective?
A: I spent five years (as a CPA) with Price Waterhouse ... I had clients that were in oil and IT and banking and I actually chose to go into the pharmaceutical industry. I joined this industry the day (AIDS drug) AZT was launched. I was at Burroughs Wellcome. ... The first few years, you're totally intimidated by the scientists. Five years later when you're on the commercial side, you kind of realize that there are some aspects to how you get an idea transformed into the marketplace that's not all just about science and technology and that, often, as companies, we have been way too focused on science and technology and not even thought about it from a patient point of view. So that's also driven our vision of not just being a maker of pills but to becoming a company that offers healthcare solutions.
Q: What do you do in a typical day? How do you run things?
A: I don't spend very much time in an actual office. I do spend an awful lot of time on personal interaction. ... If we're going to go and invest in emerging markets, I want to be deeply versed personally in that. I want to actually go and spend time there and not just look at stats. I like to sit down with government members. I was in China and I sat down with 10 biotech CEOs in Shanghai. If we're talking about academic research collaborations, I like to go and ... I'll spend an afternoon with a bunch of MIT scientists. ... I like to know what's going on and I like to get out and see and talk to people.
Follow Yahoo! Finance on ; become a fan on Facebook.
business business news news latest news us news key news best news economic news finance news economic news
