By Jessica Wohl
CHICAGO (Reuters) - Procter & Gamble Co. (PG.N: Quote, Profile , Research) said on Thursday that it should return to double-digit earnings per share growth in its next fiscal year and will cut the number of its distribution sites in half as it forges ahead with the integration of Gillette.
The company also stood by its sales and profit forecasts for the current fiscal second quarter as it met with analysts and investors at its headquarters in Cincinnati.
"I don't think there were any surprises to anyone," said SunTrust Robinson Humphrey analyst Bill Chappell, who attended Thursday's meeting.
Over the past few years, P&G has worked on expanding higher-margin businesses such as bringing the Olay line beyond skin lotions and creams into serums and peels. It has also worked on its relationships with retailers, moved some of its marketing spending away from television and taken a closer look at how to sell its products to lower income consumers, particularly in developing countries.
"These choices are paying off and our business is healthy," said Chief Financial Officer Clayt Daley during the company presentation, which was broadcast on the Internet.
At the same time, P&G has grown through acquisitions, most notably the October 2005 purchase of Gillette for $57 billion.
Shares of P&G, a component of the Dow Jones industrial average <.DJI> were up 15 cents to $63.55 after rising as high as $63.78 on the New York Stock Exchange.
Chappell said that while the company outlined how things are moving forward, such as plans for two new Gillette razors - a new version of Fusion for men and Venus Breeze for women - there were "no surprises, no real new information."
Thursday, December 14, 2006
Lehman profit rises 22 percent
NEW YORK (Reuters) - Investment bank Lehman Brothers Holdings Inc. (LEH.N: Quote, Profile , Research) on Thursday said fiscal fourth-quarter profit rose 22 percent with record revenue from virtually every business line, but investors expecting even better results sent its shares down in premarket trade.
Lehman, the fourth-largest U.S. securities firm by market value, said net income rose to $1 billion, or $1.72 a share, for the three months ended November 30, from $823 million, or $1.38, in the year-ago period. Net revenue rose 23 percent, to $4.5 billion.
The results exceeded the average analyst earnings forecast of $1.68 a share, according to Reuters Estimates, but it did so by the smallest margin in six quarters. Lehman shares fell 1.8 percent to $75.01 in premarket trading.
Wall Street firms in the quarter rebounded from a sluggish summer to cap off a record year amid robust M&A and leveraged buyout activity, stock and debt offerings and trading. For the year Lehman reported record profit of $4 billion with all-time high revenue and a return on equity of 22.3 percent.
Lehman's investment banking revenue rose 5 percent to a record $858 million, driven by strong debt and stock underwriting activity. Fees from merger and acquisitions, however, fell 7 percent.
Trading revenue rose 28 percent to $3 billion, fueled by robust fixed income markets and the firm's second-best stock trading quarter.
Money management and wealth management revenue surged 26 percent to a record $640 million, as managed assets grew to $225 billion from $207 billion in the third quarter.
These impressive results, though, paled when compared with Goldman Sachs Group, which on Tuesday reported a 93 percent jump in quarterly profit, record annual earnings and an ROE of 34 percent.
Bear Stearns Cos. ( which also reported results Thursday, said its profit rose 38 percent.
Lehman's shares were up 19 percent this year, compared with a 13 percent advance by the benchmark
Lehman, the fourth-largest U.S. securities firm by market value, said net income rose to $1 billion, or $1.72 a share, for the three months ended November 30, from $823 million, or $1.38, in the year-ago period. Net revenue rose 23 percent, to $4.5 billion.
The results exceeded the average analyst earnings forecast of $1.68 a share, according to Reuters Estimates, but it did so by the smallest margin in six quarters. Lehman shares fell 1.8 percent to $75.01 in premarket trading.
Wall Street firms in the quarter rebounded from a sluggish summer to cap off a record year amid robust M&A and leveraged buyout activity, stock and debt offerings and trading. For the year Lehman reported record profit of $4 billion with all-time high revenue and a return on equity of 22.3 percent.
Lehman's investment banking revenue rose 5 percent to a record $858 million, driven by strong debt and stock underwriting activity. Fees from merger and acquisitions, however, fell 7 percent.
Trading revenue rose 28 percent to $3 billion, fueled by robust fixed income markets and the firm's second-best stock trading quarter.
Money management and wealth management revenue surged 26 percent to a record $640 million, as managed assets grew to $225 billion from $207 billion in the third quarter.
These impressive results, though, paled when compared with Goldman Sachs Group, which on Tuesday reported a 93 percent jump in quarterly profit, record annual earnings and an ROE of 34 percent.
Bear Stearns Cos. ( which also reported results Thursday, said its profit rose 38 percent.
Lehman's shares were up 19 percent this year, compared with a 13 percent advance by the benchmark
Bear Stearns profits rise on merger fees and debt
By Tim McLaughlin
NEW YORK (Reuters) - Bear Stearns Cos. (BSC.N: Quote, Profile , Research) said on Thursday quarterly net income soared 38 percent, helped by gains from fees for merger advice and underwriting debt.
A Wall Street powerhouse in packaging home loans into mortgage-backed bonds, Bear Stearns said it turned in its best quarter ever, easily beating Wall Street expectations. Shares rose nearly 3 percent after the investment bank recorded its fifth straight year of record profit.
Net income was $563 million, or $4 a diluted share, for the fourth quarter ended November 30, compared with $407 million, or $2.90 a diluted share, in the year-earlier quarter. The average estimate was $3.36 a share, according to Reuters Estimates.
Net revenue rose to $2.41 billion over the year-earlier period. Compensation expenses fell 2.6 percentage points to 43.6 percent of net revenue.
Prudential Equity Group analyst Michael Mayo said the lower than usual compensation expense may have helped earnings by as much as 33 cents per share. That was partly offset by a higher tax rate, driven by increased profits.
Investment banking net revenue climbed 58 percent to $364 million on higher underwriting and merger and acquisition transaction volumes.
Bear Stearns Chief Financial Officer Sam Molinaro said the company's M&A backlog was at a record level at the end of the quarter.
On a conference call, analysts expressed concern about exposure to the subprime mortgage market, which involves loaning money to people with spotty credit histories.
NEW YORK (Reuters) - Bear Stearns Cos. (BSC.N: Quote, Profile , Research) said on Thursday quarterly net income soared 38 percent, helped by gains from fees for merger advice and underwriting debt.
A Wall Street powerhouse in packaging home loans into mortgage-backed bonds, Bear Stearns said it turned in its best quarter ever, easily beating Wall Street expectations. Shares rose nearly 3 percent after the investment bank recorded its fifth straight year of record profit.
Net income was $563 million, or $4 a diluted share, for the fourth quarter ended November 30, compared with $407 million, or $2.90 a diluted share, in the year-earlier quarter. The average estimate was $3.36 a share, according to Reuters Estimates.
Net revenue rose to $2.41 billion over the year-earlier period. Compensation expenses fell 2.6 percentage points to 43.6 percent of net revenue.
Prudential Equity Group analyst Michael Mayo said the lower than usual compensation expense may have helped earnings by as much as 33 cents per share. That was partly offset by a higher tax rate, driven by increased profits.
Investment banking net revenue climbed 58 percent to $364 million on higher underwriting and merger and acquisition transaction volumes.
Bear Stearns Chief Financial Officer Sam Molinaro said the company's M&A backlog was at a record level at the end of the quarter.
On a conference call, analysts expressed concern about exposure to the subprime mortgage market, which involves loaning money to people with spotty credit histories.
Heartland poised for entrepreneurial growth
Thanks to a booming organic market and increased communication technology, there is good reason to think the American Heartland will be the next entrepreneurial frontier, according to a new report.
The report by the New America Foundation, Rebuilding America's Productive Economy: A Heartland Development Strategy, found that increasing demand for organic alternative biofuels is creating business opportunities in the Plains states, while technology advancements and lower costs of living are driving a population shift to support these Heartland businesses.
"In contrast to the picture of emptying towns and embattled farmers so often portrayed by the media, we see the Heartland as a potential hotbed of capitalist creation and innovation," wrote co-author Joel Kotkin, who is also an Inc. contributing editor.
Kotkin and co-author Delore Zimmerman point out two booming industries that are especially dependent on Middle America's ample acreage -- organic agriculture and biofuel.
Consumer interest in organic food is on the rise, according to the report. Between 1992 and 1997, certified organic cropland in the United States doubled to 1.3 million acres. By 2003, 2.3 million acres of cropland and pasture were devoted to organic production.
The states with the most organic cropland include North Dakota, Minnesota, Montana, Wisconsin, Colorado, and Iowa.
The demand for biofuels is also rising. Between 2000 and 2005, worldwide ethanol production jumped 165 percent to 12.2 billion gallons a year, and the production of biodiesel more than tripled to 790 million gallons.
The American Heartland is well-positioned to meet that demand as well. A 2005 report from the Department of Agriculture estimated that the United States has the land to produce 1.3 billion dry tons of biomass -- enough to supply 30 percent of the nation's current demand for transportation fuels
The report by the New America Foundation, Rebuilding America's Productive Economy: A Heartland Development Strategy, found that increasing demand for organic alternative biofuels is creating business opportunities in the Plains states, while technology advancements and lower costs of living are driving a population shift to support these Heartland businesses.
"In contrast to the picture of emptying towns and embattled farmers so often portrayed by the media, we see the Heartland as a potential hotbed of capitalist creation and innovation," wrote co-author Joel Kotkin, who is also an Inc. contributing editor.
Kotkin and co-author Delore Zimmerman point out two booming industries that are especially dependent on Middle America's ample acreage -- organic agriculture and biofuel.
Consumer interest in organic food is on the rise, according to the report. Between 1992 and 1997, certified organic cropland in the United States doubled to 1.3 million acres. By 2003, 2.3 million acres of cropland and pasture were devoted to organic production.
The states with the most organic cropland include North Dakota, Minnesota, Montana, Wisconsin, Colorado, and Iowa.
The demand for biofuels is also rising. Between 2000 and 2005, worldwide ethanol production jumped 165 percent to 12.2 billion gallons a year, and the production of biodiesel more than tripled to 790 million gallons.
The American Heartland is well-positioned to meet that demand as well. A 2005 report from the Department of Agriculture estimated that the United States has the land to produce 1.3 billion dry tons of biomass -- enough to supply 30 percent of the nation's current demand for transportation fuels
Want to be an eBay millionaire? Consider moving to NJ
An estimated 750,000 Americans now make all or part of their living on eBay -- and many of those online entrepreneurs hail from smaller towns, according to eBay's "Community Counts" project, which identified the site's most active communities.
During a three-week period in November, the online marketplace tracked how many times people from each ZIP code listed, sold, bid on, or bought items in auction. They also tracked participation in community forums and charitable activity through eBay Giving Works. Some 52 million of these activities took place during the study.
Based on the number of transactions per capita during the sample period, eight of the top 10 most active eBay communities are smaller towns. Lumberton, N.J., was the most active community, followed by Nashville, Tenn., Henderson, Nev., Las Vegas; Talpa, Texas, Graton, Calif., Farmington, Ky., Coaldale, Colo., Indian Trail, N.C., and Walnut, Ind.
"The eBay community has changed the economic fabric of America by enabling entrepreneurs to compete globally, no matter where they make their home," Bill Cobb, president of eBay North America said in a statement.
As a prize for being named No. 1 eBay Community for 2006, the company will host a celebration in Lumberton, N.J., and make a $10,000 contribution on behalf of the ZIP code's residents to a local charitable organization they choose from a list of possible beneficiaries.
During a three-week period in November, the online marketplace tracked how many times people from each ZIP code listed, sold, bid on, or bought items in auction. They also tracked participation in community forums and charitable activity through eBay Giving Works. Some 52 million of these activities took place during the study.
Based on the number of transactions per capita during the sample period, eight of the top 10 most active eBay communities are smaller towns. Lumberton, N.J., was the most active community, followed by Nashville, Tenn., Henderson, Nev., Las Vegas; Talpa, Texas, Graton, Calif., Farmington, Ky., Coaldale, Colo., Indian Trail, N.C., and Walnut, Ind.
"The eBay community has changed the economic fabric of America by enabling entrepreneurs to compete globally, no matter where they make their home," Bill Cobb, president of eBay North America said in a statement.
As a prize for being named No. 1 eBay Community for 2006, the company will host a celebration in Lumberton, N.J., and make a $10,000 contribution on behalf of the ZIP code's residents to a local charitable organization they choose from a list of possible beneficiaries.
Most small-businesses don't offer retirement benefits
Only 14 percent of the nation's small-business owners offer a 401(k) plan to their employees, and 63 percent do not offer any retirement benefits at all, according to a new survey.
And those levels do not appear headed for change. Just 17 percent of respondents said they feel a strong obligation to offer retirement benefits, and 46 percent said they felt no obligation, according to the study by Harris Interactive, a Rochester, N.Y., market-research firm and ShareBuilder, an online brokerage.
The survey found that owners who do not provide retirement benefits fail to do so for a variety of reasons. Fifty-four percent said they didn't have enough employees to make it worthwhile, 28 percent cited a financial inability to match contributions, and 26 percent blamed unstable business circumstances.
"Small businesses employ half of all private-sector employees in America and serve as our economy's growth engine," ShareBuilder CEO Jeff Seely said in a statement. "Given the rising cost of health care, uncertainty about Social Security, and longer life expectancy, it's imperative that America's small business owners understand their crucial role in addressing the looming retirement crisis."
However, some companies have found that shelling out for retirement benefits helps them compete for talent against bigger competitors. Guy Stone, president of Blue Tech, a San Diego-based IT-consulting firm, now offers a 401(k) with employer contribution for employees with tenures longer than three months. "We're at a very competitive point in the IT-services business, and we're always competing with large corporations," he said. "We have to match or exceed their benefits."
Stone agreed that offering such benefits is an increased burden for smaller firms, but less of a financial one than many might think.
"It's the time commitment more than anything else," Stone said. "Someone needs to implement it, keep track of it all, and advise employees on what they can and cannot do."
And those levels do not appear headed for change. Just 17 percent of respondents said they feel a strong obligation to offer retirement benefits, and 46 percent said they felt no obligation, according to the study by Harris Interactive, a Rochester, N.Y., market-research firm and ShareBuilder, an online brokerage.
The survey found that owners who do not provide retirement benefits fail to do so for a variety of reasons. Fifty-four percent said they didn't have enough employees to make it worthwhile, 28 percent cited a financial inability to match contributions, and 26 percent blamed unstable business circumstances.
"Small businesses employ half of all private-sector employees in America and serve as our economy's growth engine," ShareBuilder CEO Jeff Seely said in a statement. "Given the rising cost of health care, uncertainty about Social Security, and longer life expectancy, it's imperative that America's small business owners understand their crucial role in addressing the looming retirement crisis."
However, some companies have found that shelling out for retirement benefits helps them compete for talent against bigger competitors. Guy Stone, president of Blue Tech, a San Diego-based IT-consulting firm, now offers a 401(k) with employer contribution for employees with tenures longer than three months. "We're at a very competitive point in the IT-services business, and we're always competing with large corporations," he said. "We have to match or exceed their benefits."
Stone agreed that offering such benefits is an increased burden for smaller firms, but less of a financial one than many might think.
"It's the time commitment more than anything else," Stone said. "Someone needs to implement it, keep track of it all, and advise employees on what they can and cannot do."
New search engine gives fast, easy access to info
IBM and Yahoo have partnered to provide a search engine for small businesses. Using Yahoo's search interface, the engine works within a business' internal network in order to give small and midsize businesses fast and easy access to their own information.
The engine can be used to search within the company's network, including databases and data-management systems, but also to search the regular Internet.
The service stands as a direct challenge to enterprise search software sold by Google and similar products offered by Microsoft, Oracle, and SAP.
Launched December 13, the basic search engine is free, but IBM plans to charge for advanced-search tools.
Personalized Gift Cards
With the holiday season in full swing, MasterCard Worldwide has unveiled a new online service that allows small businesses to personalize gift cards with their company logos.
Introduced December 12 at MasterCardGiftCard.com, the gift cards can also be customized to include the recipient's name and an embossed message, and are available in any denomination from $10 to $500.
"We know that small-business owners are always looking for creative ways to positively showcase their business," Bruno Perreault, the head of MasterCard's Global Small Business and Mid-Sized Enterprises group, said in a statement. The gift cards are a "direct and easy way" to do that, he said.
The engine can be used to search within the company's network, including databases and data-management systems, but also to search the regular Internet.
The service stands as a direct challenge to enterprise search software sold by Google and similar products offered by Microsoft, Oracle, and SAP.
Launched December 13, the basic search engine is free, but IBM plans to charge for advanced-search tools.
Personalized Gift Cards
With the holiday season in full swing, MasterCard Worldwide has unveiled a new online service that allows small businesses to personalize gift cards with their company logos.
Introduced December 12 at MasterCardGiftCard.com, the gift cards can also be customized to include the recipient's name and an embossed message, and are available in any denomination from $10 to $500.
"We know that small-business owners are always looking for creative ways to positively showcase their business," Bruno Perreault, the head of MasterCard's Global Small Business and Mid-Sized Enterprises group, said in a statement. The gift cards are a "direct and easy way" to do that, he said.
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