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Deere honors CEO’s request to cut his bonus by 25%

Deere & Co. Chief Executive Sam Allen asked the company’s board to cut his cash bonus for 2014 by 25% in the wake of tough conditions in the farm equipment market and the company’s flagging stock price, Deere said in regulatory filing Friday.

The Moline, Ill., company said the board honored Mr. Allen’s request, “resulting in total payments …. of $1.8 million less than the amounts he would have otherwise earned” for meeting the company’s performance goals.

Mr. Allen’s total compensation for the company’s fiscal year ended Oct. 31 rose 5.9% from last year to $20.3 million. Much of the increase stemmed from a change in the value of his pension and deferred compensation, which rose to $3.14 million from $1.19 million in 2013. Excluding the pension, Mr. Allen’s compensation, which also includes awards of stock and options, fell 4.6% to $17.1 million.

His base salary rose 4.1% to $1.49 million, but his incentive-based bonus slipped 19.5% from 2013 to $5.39 million. Without the voluntary reduction, his Mr. Allen’s bonus would have climbed 7.3% to $7.19 million.

Falling crop prices and the curtailment of generous U.S. tax deductions for farmers investing in new machinery have damped demand for farm machinery, particularly for large, high-horsepower models in the U.S. and Canada where Deere dominates the market.

Deere, the world’s sales leader in farm tractors and harvesting combines, reported a 9% decrease in farm machinery sales in fiscal 2014 to $26.4 billion, while operating profit from farm equipment dropped 22% to $3.65 million. Overall net income for the year slipped 10.6% to $3.16 billion, or $8.63 a share, from $3.54 billion, or $9.09 a share in 2013.

For fiscal 2015, Deere forecast profit at $1.9 billion, implying earnings per share of $5.35 to $5.50.

Since the start of the year, Deere stock has slipped 1.1%, while the broader market S&P 500 index is up 11.5%. Deere shares Friday closed 0.58% higher at $90.06.

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SOURCE: http://www.marketwatch.com/story/deere-honors-ceos-request-to-cut-his-bonus-by-25-2014-12-19

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Redbox raising DVD rental price by 25%

Redbox is raising its DVD rental price by 25%, in a move that could improve the company’s stagnant bottom line and help the Outerwall Inc. unit invest in new technology.

At the same time, Redbox OUTR, +7.33% is launching a recommendation engine similar to the one that has contributed to the success of competitor Netflix Inc. NFLX, -1.05% by steering customers to movies and TV shows they are likely to enjoy.

“Creating a business plan that allows us to make these investments in the future is important,” said Redbox President Mark Horak, who said the company also is investing in mobile technology and the more efficient stocking of its kiosks, which are located in grocery stores and other businesses.

Beginning Dec. 2, DVD rentals will cost $1.50 a night, up from the current $1.20. Blu-ray disc rentals will rise to $2 a night, from $1.50, a 33% increase.

Much of Redbox’s appeal rests in its low prices, making increases risky. However, the fee still will be about one-third of video-on-demand rentals, which typically cost at least $5 for new releases.Subscription streaming services like Netflix, meanwhile, offer mostly older titles, not the recent releases available from Redbox.

An expanded version of this report appears at WSJ.com.

SOURCE: http://www.marketwatch.com/story/redbox-raising-dvd-rental-price-by-25-2014-11-24-81031518

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Perry Ellis earnings hurt by shipping delays

Perry Ellis International Inc. said delays in shipping at West Coast ports hurt its third-quarter results, as the struggling clothing company continues to be beset by pressures to explore a buyout.

Though the company’s loss narrowed, sales dropped and results missed expectations.

The company’s shipping snaufus echo issues faced by Ann Inc., which owns the Ann Taylor and Loft stores, and other apparel companies this fall.

The twin ports at Los Angeles and Long Beach handle the lion’s share of imports from Asia arriving at the West Coast. But they have been hit by labor and equipment issues, and the troubles are adding weeks to deliveries during the peak season for imports as retailers stock up ahead of the holidays.

Beyond those pressures, The Wall Street Journal reported last week that Sequential Brands Group approached Perry Ellis about a possible takeover in light of the Florida-based company’s difficulty remaining competitive. The company has said it is running a review of its brands and plants to exit low-growth businesses.

Perry Ellis, which became popular in the 1990s, is more recently seen as a dusty brand in the fashion community, especially compared with other brands that emerged around that time.

Meanwhile, Legion Partners LLC and the pension-fund giant California State Teachers’ Retirement System, or Calstrs, made public this week a letter they had sent a letter to the company’s board a month ago, urging it to run a formal sales process. Together, they own about 6.3% of the company.

In all, Perry Ellis posted a loss for the quarter ended Nov. 1 of $437,000, or three cents a share, narrowing from a year-earlier loss of $3 million, or 20 cents a share. Excluding special items, earnings rose to 3 cents a share from a loss of 15 cents the year before.

Sales dropped 5% to $211 million from $222 million the year earlier.

Analysts had expected a profit of 6 cents on revenue of $215 million, according to Thomson Reuters.

In the most recent quarter, increases in the accessories and international segments offset planned reductions in the Perry Ellis and Rafaella collection sportswear. In addition, there was strength in the Original Penguin brand and the Callaway golf brand.

The company backed its guidance for the year.

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SOURCE: http://www.marketwatch.com/story/perry-ellis-earnings-hurt-by-shipping-delays-2014-11-20

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Mallinckrodt sales boosted by product acquisitions

Mallinckrodt Pharmaceuticals PLC said growth in its specialty pharmaceuticals segment, driven mostly by acquisitions, led to a 45% jump in revenue in its September quarter.

The results beat expectations.

Mallinckrodt, like many other companies, has sought to grow through acquisitions. The pharmaceuticals company, which spun off from Covidien PLC, closed its $5.8 billion deal to buy Questcor Pharmaceuticals Inc. in August. It had earlier purchased pain-treatment company Cadance Pharmaceuticals Inc. for $1.3 billion in cash.

The results in the latest quarter were driven by two new injections added to the portfolio through these acquisitions, as well as continuing strength in the base specialty controlled substance generics portfolio.

For the fourth quarter ended Sept. 26, the company reported a loss of $352 million, or $4.14 a share, compared with a year-earlier profit of $33.5 million, or 58 cents a share.

But excluding restructuring charges and a write-down in the global medical imaging segment, the company posted earnings of $1.68 a share, compared with 98 cents a share a year earlier.

Revenue rose to $789 million from $545 million.

Analysts had recently projected $1.41 a share in earnings and $758 million in revenue, according to Thomson Reuters.

Revenue in Mallinckrodt’s specialty pharmaceuticals business rose 86% to $565 million. Sales in the medical imaging segment, however, declined 6.8% to $213 million.

For 2015, it predicts per-share earnings, excluding special items, will grow nearly 40% to $6.70 to $7.20 with revenue up nearly 50% to $3.65 billion to $3.75 billion. Analysts are calling for $6.78 a share on revenue of $3.7 billion.

Shares have soared 70% this year.

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SOURCE: http://www.marketwatch.com/story/mallinckrodt-sales-boosted-by-product-acquisitions-2014-11-19

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Brown Shoe profit boosted by wholesale business

Brown Shoe Co. said its fiscal second-quarter profit rose 18% after its wholesale business and Famous Footwear chain reported higher sales.

The company’s per-share earnings outpaced market expectations, leading Brown Shoe to raise its outlook for the year. It now expects earnings between $1.50 and $1.60 a share, up from its prior forecast of $1.47 to $1.57 a share. It backed its revenue outlook.

Brown Shoe, which operates more than 1,200 stores, is in the midst of a three-year revamp spurred by lackluster sales at its discount-footwear chain, Famous Footwear. The plan includes closing struggling stores and ridding itself of some assets.

At Famous Footwear, quarterly sales edged up 1.4% to $393.6 million. The wholesale unit’s sales climbed 7.7% to $194.3 million, while specialty retail sales fell 9.5% to $48 million.

Famous Footwear sales, excluding newly opened or closed stores, ticked up 1.6%, with performance during the quarter driven by canvas products. During the period, the company closed or relocated 16 stores and added 17 new stores.

For the quarter ended Aug. 2, Brown Shoe reported earnings of $18.1 million, or 41 cents a share, up from $15.4 million, or 35 cents a share, a year earlier. Excluding charges related to business exits, cost reductions and other items, earnings were 33 cents a share last year.

Sales rose 2.3% to $635.9 million. Analysts polled by Thomson Reuters expected earnings of 35 cents a share on revenue of $638 million.

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SOURCE: http://www.marketwatch.com/story/brown-shoe-profit-boosted-by-wholesale-business-2014-08-27

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Caterpillar raises quarterly dividend by 17%

Caterpillar Inc. on Wednesday said it raised its dividend to 70 cents a share, an increase of 17%.

The move means the company’s dividend yield will be about 2.6%. It will be payable to shareholders of record at the close of business July 21, the heavy-machinery maker said in a news release.

“Despite business and economic uncertainties around the world, our balance sheet has remained strong–the strongest it’s been in more than two decades–positioning us to perform through the cycles,” Chairman and Chief Executive Doug Oberhelman said in a press release.

The dividend increase comes after Caterpillar said in May that its global retail machinery sales for the three months through April fell 13% compared with the year-ago period, as the company contends with particularly weak demand beyond North America.

The company in April posted an increase in its first-quarter profit as it benefited from cost cutting, but its outlook for mining-equipment sales declined.

Caterpillar last raised its dividend a year ago, boosting the payout by eight cents to 60 cents a share. The company said the payout has more than tripled since 1998.

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SOURCE: http://www.marketwatch.com/story/caterpillar-raises-quarterly-dividend-by-17-2014-06-11-13485342

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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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SOURCE: http://www.marketwatch.com/story/netapp-profit-bolstered-by-lower-expenses-2014-05-21

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Sysco earnings hurt by weather woes

Sysco Corp. is trying to persuade customers that intense competition necessitates its planned merger with rival US Foods Inc. But its ever dwindling profit margins may speak louder than words.

Sysco, the biggest U.S. food distributor, on Monday reported its net profit fell 10% in the latest quarter despite a 3.2% increase in revenue to $11.28 billion. The company blamed “unusually severe” winter weather in January and February for exacerbating the higher delivery expenses and slow sales growth in the restaurant industry that have long been weighing on Sysco’s profits.

Regulators are currently reviewing Sysco’s proposed $3.5-billion acquisition of US Foods, number two in the industry. The combined company would have more leverage to negotiate prices on the food and supplies it distributes to restaurants, hospitals and other institutions. Some smaller customers and rival distributors have expressed worry about the increased buying and pricing power the combined company would have, given its roughly 25% share of industry sales.

Houston-based Sysco has said it would pass on the cost savings to its customers, which it says is necessary to compete with specialty distributors and carryout retailers like Restaurant Depot. Sysco says such rivals are eating away at its sales to smaller restaurants, which carry higher profit margins for it than large chains.

Despite the weakness of the first two months, Sysco said March and April sales trends have been significantly stronger. Its shares rose nearly 3% in midday trading Monday.

Sysco executives said the acquisition of US Foods remains on track to close in the fall.

Executives have acknowledged that the merged company likely would lose some customers who are skeptical of the combined entity’s clout or who are wooed by rivals that swoop in while Sysco and US Foods are distracted.

But Chief Executive Bill DeLaney said meetings with customers have gone well. “They have a lot of questions. And as you can imagine, one of their key questions is to what extent this will disrupt service,” he said. “As time has gone on, we have been able to explain the reasons for the merger and the opportunities and some of the challenges that come with that in the early days of the transition.”

Higher inflation in meat and dairy will help Sysco’s revenue in the current quarter, but that pressures gross margin and poses a threat to customers.

“It’s challenging at times to pass that along as fast as you might like to the customers; sometimes that’s not even the right thing to do,” Mr. DeLaney said, explaining that salespeople instead can work with customers to add more poultry to their menus when beef costs are high, for instance.

“We don’t want to see a lot of inflation…it’s not good for our customers,” he said. “But I think we’ll manage it well…and I think some of this will be with us for a while.”

For the quarter ended March 29, Sysco reported a profit of $180.9 million, or 31 cents a share, down from $201.4 million, or 34 cents a share, a year earlier. After adjusting for certain merger- and legal-related expenses, earnings fell to 38 cents from 40 cents a share.

Analysts’ had expected a 39 cent per-share profit and $11.38 billion in revenue, according to a poll by Thomson Reuters.

Ben Fox Rubin contributed to this article.

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SOURCE: http://www.marketwatch.com/story/sysco-earnings-hurt-by-weather-woes-2014-05-05

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Chevron earnings hit by lower production

Chevron Corp. said its first-quarter profit fell 27% as revenue slipped amid lower oil prices and production.

The results fell short of expectations.

“Our first quarter earnings were down from a year ago, primarily due to lower prices and volumes for crude oil,” Chairman and Chief Executive John Watson said.

The company CVX -0.18% said its global oil-equivalent production for the period fell to 2.59 million barrels a day from the year-earlier tally of 2.65 million, as normal field declines and unplanned downtime related to poor weather–mainly in Kazakhstan–more than offset production increases in Nigeria, Angolia and the U.S.

Chevron–the second-biggest U.S. oil company in market value behind Exxon Mobil Corp.–had warned last month that production would drop year-over-year as severe weather led to downtime in the U.S., Canada and Kazakhstan, among other regions.

The company also said in April that U.S. oil prices fell 3.2% during the quarter, compared to a year earlier, to $91 a barrel. International prices fell 2.9% to $99 a barrel.

Chevron reported earnings of $4.51 billion, or $2.36 a share, down from $6.18 billion, or $3.18 a share, in the year-earlier period.

Revenue fell 6.3% to $53.27 billion.

Analysts polled by Thomson Reuters had expected per-share earnings of $2.51 and revenue of $57 billion.

Chevron earlier this week said it boosted its quarterly dividend by 7% to $1.07 a share.

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SOURCE: http://www.marketwatch.com/story/chevron-earnings-hit-by-lower-production-2014-05-02

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Glaxo profit slides by almost a third

LONDON– GlaxoSmithKline PLC’s first-quarter profits slid by almost a third, the company said Wednesday, a week after it announced a series of multibillion-dollar asset swaps with Novartis AG to bolster its consumer-health and vaccines businesses.

The U.K. drug maker’s profits were dented by asset disposals, currency pressures and falling sales of its established respiratory drugs in the U.S. They highlight the pressures facing Glaxo and the reasons behind its acquisition of Novartis assets to boost growth.

Chief Executive Andrew Witty refused to comment on any speculation that Glaxo could step in with a “white knight” offer for fellow U.K. drug maker AstraZeneca PLC, after the latter declined a takeover bid from Pfizer Inc. in January.

However, he said Glaxo’s strategy was firmly focused on closing the Novartis deal and on its own drug-development pipeline. Mr. Witty has in the past ruled out signing large traditional merger-and-acquisition deals.

“What we’re focused on is ensuring that our organization is not distracted in the core [research and development] business,” Mr. Witty said on a conference call Wednesday.

“We committed ourselves last week to a very, very major transaction with Novartis,” he added.

Sales at Glaxo fell 14% to GBP5.61 billion ($9.45 billion) from GBP6.47 billion in the same quarter of the previous year, missing market expectations. Sales were hurt by wholesalers and retailers destocking Glaxo’s asthma drugs after stocking up the previous quarter, and the exclusion of Glaxo’s best-selling drug–the asthma treatment Advair–from U.S. prescribing lists in January.

Respiratory drugs are Glaxo’s biggest profit driver, and the disposal of its cancer-drug business to Novartis will increase this reliance.

Sales of Advair–responsible for just under a fifth of Glaxo’s total sales–fell 15% at constant exchange rates in the first quarter, against increased competition in the U.S. and Europe.

“Inevitably, in the short run, we will have volatility,” said Mr. Witty, as Glaxo tries to boost sales of its new asthma treatments Breo and Anoro, the latter launched in the U.S. last week, to make up for falling Advair sales. Uptake of Breo in the U.S. has so far been disappointing.

Glaxo’s profit attributable to shareholders fell 30% to GBP668 million in the first quarter, from GBP961 million in the same quarter of the previous year. Its core earnings per share–a measure that excludes legal costs, asset impairments, profits on asset disposals and restructuring costs–fell to 21.0 pence from 26.9 pence in the same quarter of the previous year, in line with analysts’ expectations.

Mr. Witty said Glaxo was continuing to evaluate the options for its “established-products portfolio”–a collection of its older drugs facing generic competition, responsible for 14.5% of its total sales.

Glaxo last year announced the sale of a portfolio of thrombosis drugs for GBP700 million. Mr. Witty said it was “highly likely we’ll do more transactions,” although he said these would be more likely for its portfolio of drugs in the U.S. and Europe rather than its established drugs in emerging markets.

The deals signed with Novartis last week, worth more than $20 billion in total, will see Glaxo sell its high-margin cancer-drug business to its Swiss rival and bulk up its own businesses in consumer health and vaccines, both lower-margin businesses but with more reliable cash flows.

Glaxo reiterated its guidance for a 4%-to-8% increase in core earnings per share at constant exchange rates this year. Its shares fell 1.5% in afternoon trading in London.

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SOURCE: http://www.marketwatch.com/story/glaxo-profit-slides-by-almost-a-third-2014-04-30

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