Continue reading Car rental companies want TARP money

Car rental companies want TARP money originally appeared on BloggingStocks on Thu, 29 Jan 2009 15:45:00 EST. Please see our terms for use of feeds.

Yesterday no fewer than 20 companies around the world announced 40,000 layoffs. As I posted, that's the flip side of the great inflation report that came out this week. And those 40,000 are among the first of 2.1 million U.S. jobs that are forecast to disappear in 2009 -- particularly if the $825 billion stimulus plan does not pass.

Here are some of yesterday's cuts from the U.S. companies:

• Circuit City Stores is liquidating and taking 30,000 jobs along for the ride
• Hertz Global Holdings Inc. (NYSE: HTZ) is eliminating 4,000 jobs worldwide due to a drop in travel demand.
• WellPoint (NYSE: WLP) the second-largest U.S. health insurer, will end 1,500 jobs, which include 600 workers and 900 open positions.
• Clear Channel (NYSE: CCO) -- the largest U.S. radio broadcaster -- will lay off 1,500 employees on January 20.

Continue reading 40,000 jobs lost in one day as deflation's vicious cycle accelerates

40,000 jobs lost in one day as deflation's vicious cycle accelerates originally appeared on BloggingStocks on Sat, 17 Jan 2009 11:10:00 EST. Please see our terms for use of feeds.

Yesterday, several of America's largest and most well-know companies cut people at an alarming rate. The liquidation of Circuit City could put a total of 30,000 employees onto the street. Pfizer (NYSE: PFE) cut 2,400 sales people. AMD (NYSE: AMD) cut more than 1,000 people. Hertz (NYSE: HTZ) said it will let 4,000 people go, and Wellpoint (NYSE: WLP) will fire more than 1,000 people.

Bloomberg reported that GE (NYSE: GE) might fire up to 11,000 people in its financial unit.

So, in one day, as many as 60,000 people were out of work. A look at the activity shows why it will be so hard to arrest the drop in jobs. The companies involved in downsizing yesterday range from big pharma to transportation to tech to retail. The 24 hours were, in essence, a cross-section of the entire American economy suffering under the weight of the recession.

Economists say there cannot be a recovery with a reversal of the fall in unemployment. Unfortunately, addressing the cause of joblessness is has moved well beyond saving the retail industry and Detroit. Industry by industry, the entire system has become diseased.

Douglas A. McIntyre is an editor at 247wallst.com.

An unimaginable day of layoffs originally appeared on BloggingStocks on Sat, 17 Jan 2009 08:40:00 EST. Please see our terms for use of feeds.

This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 20 top spokesperson fiascos.

When I was growing up in the 1970s and 1980s, I remember watching O.J. Simpson in Hertz (NYSE:HTZ) ads dash through the airport on my television screen as a spunky old woman yelled "go, O.J., go." It seems like these spots were always featured during breaks of favorite ABC TV shows "Charlie's Angels", "The Love Boat" and "Fantasy Island." I even imitated O.J. when I went to the airport, much to the horror of my parents. I thought that, next to TV private eye Jim Rockford, Simpson was the coolest guy in the world.

Of course, no one realized at the time that Simpson's nice-guy image was an act. When he led police on his infamous low-speed chase through the freeways of Southern California, people saw O.J. running again -- this time from the law, under suspicion for the murder of his wife and waiter Ron Goldman. Again, people thought about Hertz. When he was acquitted, people thought about Hertz. For people my age (40), O.J. and Hertz will be forever linked. That's the power of branding.

About the only thing O.J, is endorsing these days is plastic football helmets and old pictures of himself, which is the root of his current legal troubles in Las Vegas. People are less interested in him in that world. At least one sports memorabilia dealer has his O.J. Simpson-autographed merchandise on sale.

To be fair, Hertz severed its ties to Simpson when allegations of domestic abuse first surfaced in 1992. Since then, advertisers do a much more thorough background check on their celebrities before hiring them to tell us how we should spend our discretionary income. We are a nation of sheep. The problem is that we as Americans continue to look to our celebrities before making important decisions, which is a pity.

Read the entire series

Spokesperson fiasco #1: O.J. Simpson and Hertz, together forever originally appeared on BloggingStocks on Tue, 22 Jul 2008 10:30:00 EST. Please see our terms for use of feeds.

Hertz finds a new revenue stream ... not a moment too soon! originally appeared on BloggingStocks on Mon, 07 Jul 2008 15:34:00 EST. Please see our terms for use of feeds.

I'm pleased that Hertz is getting out of the gas gouging business. Maybe that field has just gotten too competitive lately. It's getting harder to shock Americans with preposterous gas prices. Rental car companies have been charging insane gas rates -- almost what you'd pay in Europe at the pump -- for years. Consumers think of it as their evil little profit center, like phone charges at hotels.

In a story at USAToday, the industry claims that it's only overcharging to scare people into bringing the car back full, so they don't have to hassle with storing the fuel and filling up cars. So why don't they charge that rate for prepaid gas? USAToday did a survey and found that rental car companies sold pre-paid gas at about $4 a gallon, but charged about $8 when someone returned the car less than full.

Continue reading Hertz giving up on fuel gouging, more rental car companies may follow

Hertz giving up on fuel gouging, more rental car companies may follow originally appeared on BloggingStocks on Wed, 18 Jun 2008 16:00:00 EST. Please see our terms for use of feeds.

While Scotts Miracle Gro Co. (NYSE: SMG) Monday blamed a slow start to spring and recalls for a drop in second-quarter profits, Pilgrims Pride Corp. (NYSE: PPC) said its second-quarter loss widened due to rising feed costs and a restructuring charge. And analysts expect lower consumer spending on leisure travel and a drop in business travel to drag on Avis Budget Group Inc. (NYSE: CAR) first-quarter results when it reports on Tuesday.

Discounting charges, Marysville, Ohio-based Scotts reported it made $77.7 million, or $1.19 per share for the quarter ended March 29, two cents better than the forecast of analysts surveyed by Thomson Financial. Revenue fell 4% to $958 million. The company also warned that profits would likely fall below Wall Street forecasts for the year.

Pilgrim's Pride, the nation's largest chicken producer, lost $111.5 million, or $1.67 per share, in the three months ended March 29 compared with a loss of $40.1 million, or 60 cents per share, a year earlier. Revenue rose to $2.10 billion. Analysts had expected a loss of 81 cents per share on $2.09 billion in sales. The company said feed costs would probably push the company to another loss in the current quarter as well.

Analysts expect Parsippany, New Jersey-based Avis to break even on a per share basis, on $1.37 billion revenue. In last year's first quarter, the company posted profit of 12 cents per share. It's unclear how much of an effect the current economic conditions will have on Avis's full-year 2008 results, but in April, rival Hertz Global Holdings Inc. (NYSE: HTZ) managed to post an adjusted quarterly profit that beat Wall Street predictions.

Shares of Scotts ended the day up 1.2%, but fell nearly 12% in after-hours trading to $30.00. Pilgrim's Pride fell less than 1% during the day, then another 1.1% after hours to $23.59. Avis also continued its slide into after-hours trading, down to $13.49.

Scotts, Pilgrim's Pride and Avis slide on tough conditions originally appeared on BloggingStocks on Mon, 05 May 2008 18:05:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Citigroup upgraded shares of Yahoo! (NASDAQ: YHOO) to Buy from Hold as they believe Microsoft (NASDAQ: MSFT) is unlikely to walk away from Yahoo! and that there is potential Microsoft could bid $34/share.
  
• Credit Suisse upgraded Cigna (NYSE: CI) to Outperform from Neutral citing the company's favorable business mix.
  
• Stephens upgraded shares of Aegean Marine (NYSE: ANW) to Overweight from Equal Weight on valuation as they see an attractive entry point at current levels.

• JMP Securities raised D.R. Horton (NYSE: DHI) to Strong Buy from Outperform and Pulte Homes (NYSE: PHM) to Outperform from Market Perform.
  
• Goldman added Hertz Global (NYSE: HTZ) and Electronic Arts (NASDAQ: ERTS) to its Conviction Buy List.

Analyst upgrades: YHOO, CI, DHI, HTZ and ERTS originally appeared on BloggingStocks on Tue, 25 Mar 2008 11:22:00 EST. Please see our terms for use of feeds.

Lots more quarterly reports rolled out this past week, and here are some highlights of earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) reported more losses and more job cuts.
• Alvarion Ltd.'s (NASDAQ: ALVR) record quarter fuels speculation of a Cisco (NYSE: CSCO) buyout.
• Avon Products Inc.'s (NYSE: AVP) profit rose 61%, buoyed by strength in emerging markets.
• Chevron Corp. (NYSE: CVX) fell short of expectations due to tighter margins.
• CIGNA Corp. (NYSE: CI) had a solid quarter but warned about 2008 earnings.
• Clorox Co. (NYSE: CLX) blamed profit loss on materals costs, and announced acquistion of Burt's Bees.
• Colgate-Palmolive Co. (NYSE: CL) beat estimates by a penny and had strong sales overseas.
• Crocs Inc. (NASDAQ: CROX) beat earnings estimates and revised its full-year forecast.
• Dell Inc. (NASDAQ: DELL) announced it would restate revenues, ahead of its November quarterly report.
• Exxon Mobil Corp. (NYSE: XOM) missed expectations, also due to tighter margins.
• Given Imaging Ltd. (NASDAQ: GIVN) cited FDA approval delays for disappointing results.
• Hertz Global Holdings Inc. (NYSE: HTZ) posted record revenues and appointed a new CFO.
• Humana Inc.'s (NYSE: HUM) positive surprise lifted the share price to a new all-time high.

Continue reading Earnings highlights: Crocs, Exxon, Kraft, P&G, Sirius, and others

Earnings highlights: Crocs, Exxon, Kraft, P&G, Sirius, and others originally appeared on BloggingStocks on Sat, 03 Nov 2007 10:10:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• American Technology downgraded both AVX Corp (NYSE: AVX) and Vishay Intertechnology Inc (NYSE: VSH) to Sell from Buy after channel checks suggested weaker than expected demand for the June quarter from Europe, EMS, and distribution.

• Sanders Morris believes investors should take profits in Buffalo Wild Wings Inc (NASDAQ: BWLD), cutting shares to Sell from Buy, and sees limited catalysts on the horizon that could drive shares higher.

• Morgan Stanley downgraded car rental companies Avis Budget Group (NYSE: CAR), Dollar Thrifty Automotive (NYSE: DTG) and Hertz Global Holdings (NYSE: HTZ) to Underweight from Equal-Weight to reflect weak Q2 rental prices.

• Lehman downgraded Amgen Inc(NASDAQ: AMGN) to EqualWeight from Overweight.

• Caris cut Limited Inc (NYSE: LTD) to Below Average from Average.

• Goldman downgraded Nvidia Corp (NASDAQ: NVDA) to Neutral from Buy.

• Soleil downgraded Cinemark Holdings Inc (NYSE: CNK) to Hold from Buy.

Analyst downgrades 6-25-07: AMGN, BWLD, LTD and NVDA originally appeared on BloggingStocks on Mon, 25 Jun 2007 11:19:00 EST. Please see our terms for use of feeds.

Hertz: Private equity's nice ride originally appeared on BloggingStocks on Mon, 21 May 2007 16:33:00 EST. Please see our terms for use of feeds.

Rental car market ready to roll originally appeared on BloggingStocks on Mon, 29 Jan 2007 08:15:00 EST. Please see our terms for use of feeds.

Yet again, Merrill Lynch & Co, Inc. (NYSE:MER) had a strong quarter, with net income surging 68% to $2.35 billion. There was strength in trading, asset management and of course, investment banking.

But there was another key source of income: investments in buyout deals. And, according to a recent piece in the Wall Street Journal [a paid service], it does pose serious risks.

True, it's lucrative. After all, Merrill also scores big fees on the private equity transactions. Yet, Merrill is making some big bets. For example, it shelled out $1.5 billion for its stake in HCA. This is a hospital chain that must deal with unpredictable government regulations. Also, the deal was done at a fairly high valuation.

So far, though, Merrill's private equity forays have been getting nice returns, especially with the Hertz Global Holdings, Inc. (NYSE:HTZ) deal. But there are many things that can go wrong: a botched deal; a credit crunch; a recession; a bear market.

Interestingly enough, back in the early 1990s, Merrill left the buyout business. Yes, it was because of some ill-conceived deals.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

WSJ: does Merrill Lynch have a private equity time bomb on their hands? originally appeared on BloggingStocks on Thu, 18 Jan 2007 13:29:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Deutsche Bank initiated shares of Constellation Energy Group (NYSE: CEG) with a Buy rating and $78 target; the firm said valuation is compelling as the market has barely priced in the valued of BED, the merchant plants and the PV of the current backlog.

• Wachovia started shares of Hertz Global Holding (NYSE: HTZ) with a Market Perform rating. They see limited upside to shares due to broader economic concerns.

• Merrill Lynch initiated shares of Winnebago (NYSE: WGO) with a Neutral rating, saying shares are fairly valued.

• UBS initiated shares of KBR, Inc. (NYSE: KBR) with a Neutral and $26 target.

Analyst initiations 1-8-07: Constellation Energy & Hertz take top honors originally appeared on BloggingStocks on Mon, 08 Jan 2007 11:45:00 EST. Please see our terms for use of feeds.

Despite a comeback of the IPO market, it was still tough for the Hertz (NYSE:HTZ) offering. Initially, the company tried to price its IPO at $16 to $18 per share. However, it was only able to fetch a final offering price of $15.

The stock has since sputtered -- and this week it broke its offering price, falling to a low of $14.55.

Then again, Hertz Global Holdings, Inc. has become a poster child for the private equity crowd. In other words, the company's investors -- Clayton, Dubilier & Rice and Carlyle Group -- were able to get a big cash-out, and within about a year.

Private equity investors bought Hertz from its struggling corporate parent, Ford Motor Company (NYSE:F). The equity investment was about $2.3 billion, and about $3 billion was borrowed. There was also $10 billion on the balance sheet.

For their efforts, the private equity investors paid themselves a $1 billion dividend -- and then also got an extra $222 million payout because of the IPO.

Keep in mind that when a solid company is spun-off from a lumbering parent it often presents opportunities for public investors. After all, with better focus, there may be improved performance.

But, in the case of Hertz, the private equity investors were able to get a head-start, making it hard for investors to get much benefit going-forward. At least it was a good deal for somebody.

Tom Taulli is the author of various books, including the Complete M&A Handbook. He also operates InvestorOffering.com.

Hertz still hurts investors originally appeared on BloggingStocks on Tue, 28 Nov 2006 14:50:00 EST. Please see our terms for use of feeds.

Market observers are always looking for a top. It is that one moment, that one symbolic act, that one windfall beyond belief or act of such stupidity that tells folks that things have gotten as crazy as they are going to get. And it's all downhill from here.

It's the day when irrational exuberance gets drunk on hubris. And a terrible hangover follows.

Well, I have seen the top, and it happened this week.

Was it the announcement that Wall Streeters were going to get $30 billion in bonuses in their Christmas stockings this year? Nope.

Was it the Hertz IPO, you ask, where investors fleeced Ford Motor company (NYSE:F) and made $2 billion in about thirty minutes? No sirree.

Was it Google Inc.(NASDAQ:GOOG) buying YouTube, Inc. for about $10 million dollars per day that the company existed ? Nyet.

Was it the announcement of more than $50 BILLION DOLLARS of deals in one day, which occurred on Monday ? Wrong again!

Continue reading We've reached the market top: Tom Cruise meets private equity

We've reached the market top: Tom Cruise meets private equity originally appeared on BloggingStocks on Tue, 21 Nov 2006 16:35:00 EST. Please see our terms for use of feeds.

Cramer already endorsed the NYMEX (NMX) IPO and the KBR (KBR) IPO, but he panned the Hertz (HTZ) IPO.

Cramer said the IPO to avoid this week is Hertz (HTZ). He thinks this one can burn you. This is where the sellers of the IPO make a lot of money, but the new buyers can be left holding the bag. He thinks it can end up being just like the Seally Corp. (NYSE:ZZ) IPO and he won't touch it with a pole.

He said the first thing is to do no harm. He won't use the Vonage Holdings (NYSE:VG) or the Burger King Holdings (NYSE:BKC) deal, but he thinks it will be a disappointment.

This was sold to a private equity group for $15 Billion and the new sale is 27% being sold. They have increased the debt and knocked down earnings. The $16 Billion of the IPO, but over $900 million of the IPO is funding a special dividend and another $400 million is essentially another dividend. The 3 firms also have 7 of 9 board seats and this is one that you need to avoid.

He thinks it won't go above $20.00 after the IPO any time soon and the downside is just too hard to calculate.

Cramer: The Hertz IPO could hurt you! originally appeared on BloggingStocks on Wed, 15 Nov 2006 09:10:00 EST. Please see our terms for use of feeds.

Huge Hertz private equity deal going public originally appeared on BloggingStocks on Tue, 14 Nov 2006 11:15:00 EST. Please see our terms for use of feeds.

As the Private Equity deal juggernaut continues at a record pace, the Justice Department continues to send out letters in their probe of PE competitive behavior. The Wall Street Journal reported today that Merrill Lynch & Co., Inc. (NYSE:MER) has joined this inauspicious list. Other letters in the same form, I am sure, will be received by other players. Any Justice Department investigation is bad news and a distraction, and I am sure there is concern throughout the PE industry.

The question at hand is whether PE firms, in pursuing the "club" deals (many firms getting together to pursue a large target, like a bunch of hunters combining to wrestle an elephant) are "colluding" to bring down prices for the assets they are pursuing, thereby undertaking anti-competitive and thus illegal behavior. The Journal speculates that the Hertz transaction is under particular scrutiny. This was not only a large club deal but one where the buyers made a lot of money VERY quickly. To the Justice Department, I am sure, the fact that big bucks were made in short order MUST mean illegal activity. The Federal Government seems to frown upon large scale success, and therefore must investigate.

I have not seen any of these love letters and can only speculate about the investigation, but the facts of life in Private Equity do not support a case for collusion.

Continue reading More scrutiny for private equity firms

More scrutiny for private equity firms originally appeared on BloggingStocks on Mon, 06 Nov 2006 16:23:00 EST. Please see our terms for use of feeds.