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MEMC CEO Forgoes Bonus; Money Will Go to Retrain Workers
Last Thursday, MEMC Electronic Materials (WFR) announced that CEO Ahmad Chatila won't be accepting a $500,000 bonus for 2009. Instead, the money will go to retraining 450 workers that will be laid off from two plant closings. This story somehow has flown under the radar and did not get the attention it deserves.Like many companies last year, MEMC did not meet its performance targets for 2009. And still no different than many other companies, it, too, decided to award more than $600,000 in bonuses, using "discretionary authority." These bonuses were awarded "in consideration of achievement of individual performance objectives."
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CIT Group to Repay 'High-Cost' Debt
Late Monday, the Board of Directors at CIT Group (CIT) announced that it plans to repay $750 million of what it terms "high-cost" debt. The first part of this payment will be made Tuesday, totaling $750 million of its $7.5 billion first lien credit facility. The repayment will come on a pro rata basis among the outstanding tranches, and it will be subject to a 2% payment premium. The company will prepay this debt from its available company cash, which is more than $5 billion.
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Which Super Bowl Ad Won the Night?
So, on Friday I took a look at the potential of some Super Bowl advertisements, which leaves today to digest the commercials and say who we thought had the best commercial.
First things first, congratulations New Orleans -- what a win. Second of all, I need to make an editorial comment before I reveal my thoughts on the best commercial: what's up with all the guys in their underwear? I saw enough tighty whities in the span of two minutes during the first half to last the rest of my life. I know one thing, I am not going to go to CareerBuilder.com or wear Dockers thanks to the visage of pasty white men in their underwear standing at the water cooler or singing about pants.
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JockStocks: Super Bowl Commercials, a Preview
Who's ready for some football? The Super Bowl is this weekend, and you know what that means -- commercials that we will all be talking about on Monday morning. In fact, we all know someone who says they watch the game for the commercials.
CBS announced earlier this week that it sold out all the in-game spots, but a few pre- and post-game spots remained. How much money did this make for CBS (CBS)? Roughly $200 million, and that is a low-end estimate. We all know why advertisers flock to the Super Bowl, as more than 98.7 million viewers tuned in last year. No matter who is in the Super Bowl, people watch the game and the commercials -- and eventually they may buy the products from the ads.
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Surprise Drop in the Unemployment Rate Is No Reason to Celebrate
Well, this was a nice surprise ... the unemployment rate fell to 9.7% in January from 10% in December, according to the Labor Department. This is good news, as expectations were for the unemployment rate to hold at 10% -- so some people are finding some jobs somewhere.
That said, the number of nonfarm payrolls dropped by 20,000 while expectations called for a gain of 25,000. With stock futures limiting some of their early morning losses, it looks as if investors and analysts are holding on to the unemployment rate news rather than the news that more jobs were lost than expected.
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Google to Team Up with the National Security Agency
Internet search behemoth Google (GOOG) is looking for ways to help ward off cyberattacks, and it appears that they have turned to the National Security Agency (NSA).
According to the Washington Post, an agreement between the two is being finalized. The agreement would help Google with its recent "corporate espionage attack" that it believes originated in China. This attack targeted the company's computer networks. The alliance would help Google, and its users, from any future attacks.
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GlaxoSmithKline Benefits from the Flu During the Fourth Quarter
GlaxoSmithKline (GSK) announced Thursday that fourth-quarter earnings rocketed 66% thanks to sales of its swine flu vaccine. GSK earned 1.63 billion pounds in the quarter ($2.6 billion) compared to 982 million pounds a year earlier. Excluding restructuring charges, GSK saw profit increase to 1.8 billion pounds, which was slightly above analyst estimates. The company's vaccine sales increased 78% to 1.5 billion pounds, in part due to swine flu vaccine sales. Full-year profits checked in at 5.5 billion pounds, or $8.7 billion.All wasn't well with the quarter for GSK. The pharmaceutical firm saw generic competition take a 4% chunk out of its U.S. sales. In addition, GSK announced plans to trim its research and development program, but did not specify how many jobs it would cut.
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McDonald's Placed on Goldman Sachs' Conviction Buy List
Goldman Sachs has elevated McDonald's (MCD) to conviction buy from buy and upped its 12-month price target to $75 from $73.
According to the brokerage, McDonald's is weathering the current economic crisis thanks to a combination of positive same-store sales and accelerating margin gains. Goldman added that consensus estimates underappreciate this fact, which should bring about some upward earnings revisions during 2010.
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Private Sector Jobs Drop to Two-Year Low
Private-sector firms in the United States cut 22,000 jobs in January, according to ADP data. This is the 24th straight monthly decline in job losses. The 22,000 jobs lost was the fewest since January 2008, when 22,000 jobs were added. Digging into the report, the service sector actually added 38,000 jobs, while good-producing industries slashed 60,000. ADP added that 7.5 million private-sector jobs have been lost thus far during the recession.This data comes two days before the Bureau of Labor Statistics reports its estimate of January nonfarm payrolls. Forecasts call for an addition of 25,000 jobs, but the unemployment rate is expected to stay at 10%.
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Baidu.com Could Benefit from Google's Misfortunes
Yesterday was a good day for Baidu (BIDU), the Chinese Internet search portal, after some Wall Street analysts noted that the departure of Google (GOOG) from China could "benefit Baidu tremendously."
BIDU has traded well in the United States, hovering in the upper reaches of the $380 region -- but GOOG's decision to operate in China without censoring local search results after recent cyber attacks pushed BIDU as high as $470 before the stock settled into the lower $400s.
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Rio Tinto Scores an Upgrade from Citigroup
Early Tuesday morning, Rio Tinto (RTP) was upgraded to buy from hold at Citigroup. The brokerage attributed the upgrade of the Spanish miner to attractive valuations and upgrades to RTP's iron ore prices. Citigroup believes that the recent share price correction has shifted the mining preference back to RTP. The ratings house also likes RTP's strong cash generation in iron ore and copper, its balance sheet deleveraging potential, and its growth options.
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Starbucks Recalls Glass Water Bottles
I couldn't make this stuff up, and I'm not sure that many people could have or would have. That said, Starbucks (SBUX) announced a recall of its glass water bottles on Thursday. The glass bottles were not recalled because of some harmful substance that started to seep into the water from the glass, or because the water in the glass bottles was contaminated. No folks, the glass bottles were recalled because (wait for it) the glass bottles could shatter, causing lacerations to the hands.
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Honeywell International Reports a Drop in Quarterly Profit
Honeywell International (HON) on Friday released fourth-quarter earnings of 91 cents per share, or $698 million, compared to 97 cents per share a year ago. Quarterly sales dropped to $8.1 billion from $8.7 billion a year ago. Honeywell beat consensus earnings estimate by a penny per share, but sales came in shy of expectations for $8.2 billion. "Honeywell continues to execute well, as evidenced by our strong fourth quarter finish and record free cash flow generation in 2009," chairman and CEO Dave Cote noted. "Despite a challenging year, we delivered on our financial commitments, while continuing to invest in new products." Cote added the company has "strong momentum entering 2010."
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Did Steve Jobs Pull a Fast One at the iPad Unveiling?
Just when you have had enough of hearing about Apple's (AAPL) iPad, I have something else for you. It seems Steve Jobs may have issued a bit of a surprise at yesterday's iPad unveiling. The surprise? The price. According to the ValleyWag blog, some Apple bigwigs were told that the price of the iPad was pegged at $399 -- not the $499 that Steve Jobs revealed.
Is this true? It wouldn't be the first time that a rumor like this circulated. The first comment brings up the rumor that the Macintosh was set to carry a price tag of $999, but that Steve Jobs pulled a fast one -- doubling the price thanks to the marketing of the computer. Is this a substantiated story? No, it ranks up in the pantheon of lore like the cocaine in Coca-Cola.
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Oil Futures Up on Obama's State of the Union Address
Last night was President Obama's first State of the Union address. Already, the oil market is benefiting from the speech, as it gave a sense of optimism for the economy, according to some analysts. That is, if you can call a 23-cent jump in futures a benefit. The speech stressed job creation and the belief that the worst of the economic crisis is over, which has trickled over to investors (and who said trickle-down economics don't work?). Combine last night's Presidential address with the Federal Reserve's decision to leave monetary policy unchanged and you have the makings of a temporary bump for the market.
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