Archive | May, 2014

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Toll Brothers profit more than doubles

Toll Brothers Inc. said its fiscal second-quarter profit more than doubled as the home builder continued to benefit from higher home prices and more deliveries.

Toll Brothers, with its higher-end offerings, has benefited from lower interest rates to post relatively strong results amid a muted recovery in the housing market. Chief Executive Douglas C. Yearley Jr. on Wednesday said demand over the past year has been solid, if somewhat flat, compared with what results demonstrated after the recovery began in 2011. Yet, the company sees another upturn coming, Mr. Yearley said.

“We note that last cycle’s recovery, in the early 1990s, began with a period of rapid acceleration, followed by leveling, before further upward momentum,” he said. “We believe that we are in a similar leveling period in the early stages of the housing recovery with significant pent-up demand building.”

For the quarter ended April 30, Toll posted a profit of $65.2 million, or 35 cents a share, up from $24.7 million, or 14 cents a share, a year earlier. The company’s pretax income was $93.5 million, up from $41 million a year earlier.

Revenue surged 67% to $860.4 million.

Analysts polled by Thomson Reuters had expected per-share earnings of 26 cents and revenue of $828 million.

The company said it delivered 1,218 units in the period, up 36% from the year-ago quarter. The average price of homes delivered was $706,000, compared with $577,000 a year ago.

The cancellation rate was 3.7%, up from 3.4%.

Net signed contracts was 1,749 units, about flat from a year earlier.

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McDonald’s to return $18-$20 bln to shareholders

McDonald’s Corp. said it plans to increase its payout to shareholders by 10% to 20% over the next three years, rewarding investors at a time when the company is under pressure to improve sales performance in its core U.S. market.

The burger giant plans to return between $18 billion and $20 billion to shareholders through stock buybacks and dividends through 2016, McDonald’s said on Wednesday. Between 2011 and 2013, McDonald’s buybacks and dividends totaled $16.4 billion, according to securities filings.

The announcement came as McDonald’s Chief Executive Don Thompson offered other details of plans to bolster the company’s business after a stretch of weak growth and lackluster stock performance at an investor conference on Wednesday in New York.

McDonald’s last month reported that its profit for the first three months of 2014 dropped 5.2% from a year earlier. Also in April, the company said same-store sales in the U.S. declined 1.7% for the quarter and 0.6% for March, the fifth straight month of declines in the company’s biggest market in terms of restaurant numbers. Global same-store sales rose 0.5% for both the quarter and March.

McDonald’s share price has risen about 15% since Mr. Thompson became CEO on July 1, 2012, roughly half the increase of the Dow Jones Industrial Average during the same period. In midday trading Wednesday, after the company’s announcement, its shares edged down 0.4% to $101.90.

Many companies have increased cash returns to shareholders in recent years, some under pressure from investors. McDonald’s had telegraphed its cash move, with Chief Financial Officer Pete Bensen recently telling investors that the company would look at financial means of improving its performance, including selling more company-owned restaurants to franchisees and cutting costs.

Mr. Thompson on Wednesday went into more detail about some of its refranchising plans, saying McDonald’s aims to refranchise at least 1,500 restaurants by the end of 2016, mainly in its Asia/Pacific and Middle East, Africa and Europe business segments. The target reflects an increase in refranchising of more than 50% over the previous three-year period.

McDonald’s reported $2.74 billion in cash and equivalents as of March 31, compared with $1.87 billion a year earlier.

However, the company told Wednesday’s investor conference that the targeted cash returns aren’t all coming from existing cash, according to David Tarantino, an analyst at Robert W. Baird & Co. McDonald’s is expected to fund the moves by ongoing operating cash flows, proceeds from planned sales of company-owned restaurants to franchise and license partners, and additional debt, he said.

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Sony signs video-game deal with Oriental Pearl

TOKYO– Sony Corp. plans to form joint ventures with a Chinese firm to re-enter that country’s game-console market, as it bets on strong PlayStation sales to help turn around its troubled consumer-electronics division.

Sony’s bid to enter China follows the lifting of a decadelong ban on videogame-console sales there, and an announcement last month by rival Microsoft Corp. to start selling its Xbox One device in what many experts see as a promising but challenging market.

In a filing with the Shanghai Stock Exchange on Monday, Sony said it has signed a deal with state-run Shanghai Oriental Pearl Group Co. to form two joint ventures in the city to make and sell PlayStation consoles in China. A Sony spokeswoman didn’t provide details on when and which PlayStation consoles would be released.

The Japanese tech giant’s latest effort in China comes as it faces its sixth annual loss in seven years because of restructuring costs for its television and personal-computer businesses.

The PlayStation division is one of Sony’s three growth areas, along with smartphone and imaging technology, and one of its strongest-performing businesses. Through early April, Sony sold more than seven million units world-wide of its new PlayStation 4 game console in its first five months on the market, beating Microsoft’s new Xbox One console. For the year ahead, Sony expects to sell 17 million console systems world-wide, up from 14.6 million in the previous year.

Sony previously ventured into the Chinese market with PlayStation 2 consoles in early 2004. Yet it later withdrew amid the tough environment that followed strict sales restrictions to counter youth exposure to online gaming.

Last September, China scrapped a ban on the sale of videogame consoles in the country and said that foreign companies can sell consoles and games only if they operate within the free-trade zone in Shanghai, an area that allows for some foreign investment and business. Microsoft in the same month invested $237 million in a joint venture with BesTV New Media, a subsidiary of state-run Shanghai Media Group, to develop games within the zone.

Both of Sony’s ventures will also be located in the Shanghai free-trade zone. The Japanese firm will have a 49% stake in one venture and 70% in the other, according to the statement.

In addition to Microsoft and Sony, Nintendo Co. has also said it would aim to expand sales in emerging markets although it hasn’t formally announced plans to enter China.

Still, even without the ban, companies like Sony and Microsoft face hurdles selling their PlayStation and Xbox consoles there. Many Chinese prefer to play videogames on personal computers, in Internet cafes and on smartphones rather than use consoles. Moreover, the black market for gaming consoles is active–with popular games that come preloaded on hard drives–and offers customers a much lower price tag.

It also isn’t clear how many popular titles the companies will be able to offer. Under the new regulations, Chinese authorities will have broad say over violent or adult content.

Rose Yu in Shanghai contributed to this article

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Stocks to watch Tuesday: AutoZone, Workday

SAN FRANCISCO (MarketWatch) — AutoZone Inc., Workday Inc. and JinkoSolar Holding Co. are among the shares likely to see active trading on Tuesday, with all three companies on tap to report quarterly results the day after Monday’s Memorial Day holiday.

Shares of Durata Therapeutics Inc. DRTX +5.50% may also actively trade Tuesday. The company said late Friday that the U.S. Food and Drug Administration approved the company’s Dalvance antibiotic to treat adults with certain skin infections. Trading in shares of the pharmaceutical company were temporarily halted ahead of the announcement Friday.

AutoZone AZO -0.14% is scheduled to report financial results for its third quarter before the market opens. The automotive replacement parts retailer is expected to report earnings of $8.46 a share on sales of $2.33 billion, according to consensus estimates from FactSet.

AutoZone Inc. reports quarterly results Tuesday.

“We see more upside than downside risk for shares” into the company’s third-quarter earnings report, said Seth Basham, an analyst at Wedbush, in a recent note.

Basham said Wedbush believes “the weather benefits into the summer may be larger than expected based on the hot forecast, the low-end consumer’s health is likely to weaken from poor levels and car demographic headwinds can be partially mitigated by the benefits of industry consolidation.”

Also before the stock market opens on Tuesday, JinkoSolar JKS +3.81% will issue its first-quarter report, with analysts expecting the China-based solar-panel maker to post earnings of 40 cents a share on revenue of $289 million. Earlier this month, the company kept its first-quarter and full-year 2014 guidance intact.

After Tuesday’s market close, Workday Inc. WDAY +1.91% will report first-quarter results, with analysts expecting the business-software maker to report a loss of 15 cents a share on revenue of $152 million.

Qihoo 360 Technology Co. QIHU +1.17% will also report first-quarter results late Tuesday. Analysts predict the Chinese Internet company will post a profit of 31 cents a share on revenue of $230 million.

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Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.


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L Brands profit rises but outlook lowered

L Brands Inc.’s LB +0.07% fiscal first-quarter profit rose 10% as the retailer reported higher sales at both its Bath & Body Works and Victoria’s Secret brands.

The company, formerly called Limited Brands Inc., lowered the top of its full-year earnings outlook range by five cents, saying it now expects earnings of $3.00 to $3.15 a share, compared to its prior forecast for full-year earnings between $3.00 and $3.20 a share. The updated outlook includes a negative effect of 10 cents to 12 cents a share related to the company’s exit from certain non-core categories in the Victoria’s Secret direct and beauty businesses.

For the fiscal second quarter, the company forecast per-share earnings of 57 cents to 62 cents. Analysts polled by Thomson Reuters were expecting per-share earnings of 61 cents.

The retailer, which operates the Victoria’s Secret and Bath & Body Works chains, dominates the intimate-apparel and personal-care markets, though growth for the company’s major store formats slowed last year.

Overall, L Brands reported a profit of $156.9 million, or 53 cents a share, up from $142.5 million, or 48 cents a share, a year earlier.

Earlier this month, the company boosted its earnings outlook, saying it expected to post per-share earnings of 50 cents to 52 cents for the most recent quarter.

The company at that time also reported that sales rose 5% to $2.39 billion for the quarter, topping the $2.38 billion expected by analysts. Same-store sales, meanwhile, edged up 2% for the same period.

By brand, same-store sales rose 2% at both Victoria’s Secret and Bath & Body Works during the latest quarter.

Gross margin narrowed to 41.1% from 41.5%.

Shares of the company edged down six cents to $55.80 in after-hours trading. Through Wednesday’s close, the stock has risen 7.5% in the last 12 months.

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NetApp profit bolstered by lower expenses

NetApp Inc. NTAP +0.87% said its fiscal fourth-quarter profit rose 13%, as lower costs and expenses masked a dip in revenue.

For the fiscal first quarter, NetApp forecast adjusted per-share earnings of 53 cents to 58 cents, and revenue of $1.42 billion to $1.52 billion. Analysts polled by Thomson Reuters had expected earnings of 62 cents a share and revenue of $1.52 billion.

The company also increased its quarterly dividend to 16.5 cents a share from 15 cents.

NetApp, which builds storage and data management solutions for its clients, has been facing an increasingly challenging business environment because of continuing competition from flash memory and the cloud.

NetApp’s strategy over the last quarters was to try to deliver cloud-integrated, flash-accelerated storage and data-management solutions to meet customers’ infrastructure requirements.

For the quarter ended April 25, NetApp reported a profit of $197 million, or 59 cents a share, versus a year-earlier profit of $173.8 million, or 47 cents a share. Excluding stock-based compensation and other items, adjusted per-share earnings were 84 cents, up from 69 cents a year earlier. Revenue fell 3.9% to $1.65 billion.

The company in February had forecast adjusted per-share earnings of 77 cents to 82 cents, and revenue of $1.62 billion to $1.72 billion.

Total operating expenses fell 1.2% to $818.2 million.

Product sales, the major contributor to the company’s top line, decreased 8.3% to $1.04 billion.

Software revenue was essentially flat at $227.5 million and service revenue climbed 7.7% to $378.7 million.

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Campbell Soup lowers sales, profit outlook

Campbell Soup Co. said its profit rose 1.7% in its latest quarter, with its U.S. simple meals segment making up for weaker international sales.

The company revised its full-year guidance, now predicting sales from continuing operations will grow about 3%, compared with its prior estimate of 4% to 5% growth. Campbell also said it expects its earnings on an adjusted basis will come in at the low end of its current outlook of $2.53 to $2.58 a share.

Campbell has boosted revenue lately thanks to turnaround efforts in its soup and simple meals business. In the most-recent period, the U.S. simple meals segment posted 7% higher sales, though soup sales were “comparable” to a strong quarter a year earlier, the company said.

International simple meals and beverages sales shrank 17%, on weaker volume and negative currency changes.

For the period ended April 27, Campbell posted earnings of $184 million, or 58 cents a share, up from $181 million, or 57 cents a share, in the prior-year period. Excluding restructuring charges and other items, earnings were flat at 62 cents a share.

Sales edged up 0.4% to $1.97 billion.

Analysts polled by Thomson Reuters were expecting per-share earnings of 59 cents and revenue of $2 billion.

Sales for the global baking and snacking segment, which includes Pepperidge Farm and other brands, fell 1%.

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Urban Outfitters profit down 20% as costs rise

Urban Outfitters Inc. said its fiscal first-quarter profit fell 20% as the clothing, accessories and home furnishings retailer reported higher expenses that masked a rise in revenue, though sales continued to fall at the company’s namesake brand.

Urban Outfitters in March had issued a light warning, saying that while customer reaction to new spring fashions at the company’s Anthropologie and Free People brands had been strong, continued challenges facing the Urban Outfitters brand led the company to remain very cautious about the latest quarter’s performance.

Chief Executive Richard Hayne reiterated on Monday that the company was pleased with the strong performances at both Anthropologie and Free People, but said the Urban Outfitters brand had a disappointing quarter.

Comparable retail segment sales, which includes the company’s catalog and online businesses, were flat in the first-quarter, compared to the year-earlier period. Same-store sales rose 25% at Free People and climbed 8% at Anthropologie, but fell 12% at the company’s namesake brand.

Urban Outfitters, which operates its teen and young adult-oriented namesake location as well as Free People and Anthropologie stores, has reported strong revenue growth despite economic uncertainty that has pressured sales at many retailers.

Meanwhile, retailers that cater to teens and young adults are facing stiff competition from fast-fashion retailers like Forever 21 Inc. and H&M Hennes & Maurtiz AB. This shift has hurt sales at Abercrombie & Fitch Co. and other traditional teen retailers. Weak traffic at malls has also concerned observers, though Urban Outfitters as a whole continues to report improving sales.

For the quarter ended April 30, Urban Outfitters’ posted a profit of $37.5 million, or 26 cents a share, down from $47.1 million, or 32 cents a share, a year earlier.

Revenue rose 5.9% to $686.3 million.

Analysts polled by Thomson Reuters expected a per-share profit of 27 cents and sales of $680.2 million.

Gross margin narrowed to 34.8% from 36.8%, primarily due to expenses related to new stores and a decline in same-store sales at the Urban Outfitters brand. Lower merchandise margins at the company’s namesake brand amid lower sales also contributed to the overall gross margin decline.

Selling, general and administrative expenses climbed 7.7% amid increased marketing expenses which the company said drove higher e-commerce traffic.

Shares slipped 2.6% to $35.19 in recent after-hours trading. Through Monday’s close, the stock has fallen 19% in the last 12 months.

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Medient Studios, Inc. (OTCQB: MDNT)

Medient Studios, Inc. (OTCQB: MDNT) is an entertainment content creation company with a strong presence in North America, Europe and India. Medient’s management team has approximately 150 years of experience in the motion picture industry and is responsible for producing and/or financing over 250 movies. Medient is realigning the content creation process to enable efficiencies of scale and eliminate process waste by building a fully integrated movie and game production facility and campus on a 1550 acre property in Effingham County, Georgia. Once operational this production facility will be the largest of its kind in the United States.

The Company has produced a broad spectrum of films across various genres. These include such films as Bombay Boys, a genre-defining Indie film that carried Indian cinema beyond the “song and dance” routine of Bollywood, and the award-winning Malayalam film Aakshagopuram, which bought together talent from India and the UK and set a new benchmark in East – West collaboration.  Storage 24, a British horror film starring BAFTA award winner Noel Clarke was produced by Medient and released in 2012 by Universal Pictures.

Medient’s latest film, Yellow, is directed by Nick Cassavetes (The Notebook) and premiered to rave reviews and audience acclaim at the 2012 Toronto International Film Festival (“TIFF”). Critic reviews from TIFF included “surreal imagination”…”bizarre parallel realities”…”wildly inventive”…and “a cinematic trip of mind-bending proportions”

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Inception Mining Inc – IMII

Inception Mining Inc. is engaged in identifying, exploration, acquisition and development of mineral properties. The company has focused on historical mining properties and patented mining claims that have been the subject of historical exploration and mining, thus having significant supporting data justifying further development. The company has developed an internal model for analyzing opportunities coupled with an experienced management team from multiple disciplines. This allows for a fresh look at these claims which is unbiased by small miner pre-conceptions. Management is focused on a non-operator model, utilizing existing resources, contract miners, operating toll processing facilities and independent geological consultants. Theirs is a low overhead financial model with management’s primary concern on production and resultant profitability.

The company intends to acquire several properties with a combination of cash and equity. The Obvious Questions: Are there hi-grade deposits still to be discovered? Most hi-grade surface ore bodies were discovered years, even decades, ago as a result of the prolific prospecting interests of thousands of independent miners. Almost every discovery of gold was traced back to its origin geological structure and investigate. Thousands of those sources were opened and mined, extracting free gold. However, even in the early 1900’s when costs were almost negligible compared to today, mines became unprofitable, further complicated by the existence of refractory type ores that existed in combination and the miners had no way or lack of infrastructure to process and recover the gold. Many of these mines were shuttered and or mined until the late 30’s when all non-essential mining was halted. The upcoming War Production Board (WPB) Limitation Order No. 208 which closed down most of the active gold mines in the United States. The emphasis during the war was on mining base metals and other strategic metals which included minerals needed for the war effort. A severe shortage of skilled labor developed in the nonferrous metal mines. This was due in part to the expanding need for the nonferrous metals and in part to a depletion of mining manpower as a result of the military draft and the attraction of higher wages paid by other industries. Coupled with controlled pricing related to the gold standard, the mines were never viewed as economical. Inception has diligently pursued the acquisition and examination of multiple historical claims and analyzed to fit their  model. Their project list starts with what they  believe will be the foundation of a very exciting endeavor; the “Up & Burlington” patented mining claims near Salmon, Idaho.


Inception is in negotiations with a new mill to process its ore. The facility has over 2000 tons per month excess capacity including crushing, grinding, floation, CIP circuit and electro winning recovery. A new gravity circuit is being considered. Transport costs are reasonable and well offset by the resultant capex savings and non-existent permitting requirements on the part of the company.

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