Daily Archives: January 4, 2012

Tim Howard scores…

Tim Howard makes Premier League history

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Aubrey O’Day, Clay Aiken Join ‘Celebrity Apprentice’

http://www.mtv.com/news/articles/1676719/celebrity-apprentice-cast-list.jhtml

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Adele Starts 2012 Topping Billboard Albums Chart Once Again

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(BN) Groupon’s Drop Below IPO Price Reflects Daily-Deal Risks: Tech

Groupon’s Drop Below IPO Price Reflects Daily-Deal Risks: Tech

Jan. 4 (Bloomberg) — Groupon Inc.’s shares, which have fallen below the company’s initial public offering price, show that both merchants and investors are having second thoughts about the nascent daily-deal industry.

About half the businesses that have offered an online deal- of-the-day in the past aren’t planning to do so again in the next six months, according to a survey published on Jan. 2. The study, by Susquehanna Financial Group and daily-deal aggregator Yipit, showed that merchants were concerned about a low rate of repeat business from new customers gained through such offers.

“The risk factors are enormous” for daily-deal companies, said Sucharita Mulpuru, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. “Their cost of merchant acquisition is going to get higher over time.”

To keep growing, the industry, which researcher BIA/Kelsey estimates may more than double to $4.17 billion by 2015, will probably agree to charge businesses less. Groupon, in fact, said in a June IPO filing that offering merchants more favorable terms may cut into its profits.

Margins are already shrinking. The amount of billings Groupon booked as revenue narrowed to 37 percent in the third quarter from 42 percent in the prior period and 44 percent in the first quarter. Groupon attributes the decline to getting into new products, such as travel and event tickets.

On a day when most company stocks rose, Chicago-based Groupon fell 6.6 percent yesterday to $19.27 after the release of the Susquehanna and Yipit survey, which collected data from more than 100 merchants. By contrast, the Nasdaq Composite Index rose 1.7 percent. Groupon’s decline was the stock’s second drop below the $20 IPO price since its Nov. 3 debut.

Merchant Feedback

Groupon is the biggest Internet-deal provider, delivering discounts on restaurants, hotels, spa treatments, and other goods and services. Rivals include Washington-based LivingSocial and Seattle-based Amazon.com Inc., and Groupon also lists Google Inc. and Microsoft Corp. as competitors in its prospectus.

While 80 percent of the survey’s respondents were satisfied with daily-deal companies, about 52 percent of merchants said they’re not planning to offer a discount through such sites in the next six months.

“People are scrutinizing it a little more because of all the merchant feedback,” said Herman Leung, a Susquehanna analyst based in San Francisco. He has a “neutral” rating on Groupon’s stock. “About 76 percent of the merchants plan to do zero or one deal over the next six months. They’re seeing sufficient demand on their own as the economy is getting better.”

Julie Mossler, a spokeswoman for Groupon, declined to comment.

Small Business Market

Groupon created the online daily-deal market in 2008 and in the first three quarters of 2011 featured deals from more than 190,000 merchants worldwide, according to its prospectus. That leaves plenty of room for growth, as there were 5.9 million businesses with employees in the U.S. alone in 2009, according to the U.S. Small Business Administration.

Brendan Lewis, a spokesman for LivingSocial, said that even within the Susquehanna and Yipit survey, the numbers are encouraging.

“It shows the vast majority of merchants who have run deals are happy with their experience, and nearly half plan to run another deal in the immediate future,” Lewis said in an e- mail. “You’d be hard-pressed to find an 80 percent satisfaction rate among merchants for any other marketing channel in use today.”

Still, LivingSocial put off its IPO plans last year as Groupon and other Internet companies faced turbulent debuts in the public markets. The company instead lined up $400 million in private funding at a valuation of about $6 billion, a person with knowledge of the matter said in December.

Post-IPO Scrutiny

Staying private has allowed LivingSocial to shore up its finances without the scrutiny of the public markets. Groupon, meanwhile, has been criticized for its ballooning marketing expenses, which have led to rising losses.

The company has more than 10,000 employees, up from 37 in June 2009. It spent $613.2 million on marketing in the first nine months of last year, resulting in a net loss of $238.1 million. Marketing costs will increase in the coming months as stores become less inclined to offer Groupons because they aren’t seeing users return, Mulpuru said.

“It’s been like a marketing blitzkrieg that’s grown the business to the size that it is,” Mulpuru said. “They were using investor money to subsidize these offers for so long. Then what merchants start recognizing is, ‘We’re just not getting new customers.’”

To contact the reporters on this story: Ari Levy in San Francisco at alevy5 Danielle Kucera in San Francisco at dkucera6

To contact the editor responsible for this story: Tom Giles at tgiles5

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(BN) December U.S. Retail Sales Estimate Is Increased by ICSC Amid Discounting

Retail Forecast for December Raised at ICSC on Discounts

Jan. 4 (Bloomberg) — Retail sales at stores open more than a year may have gained as much as 4.5 percent in December, more than previously estimated, as U.S. shoppers pursued holiday discounts, a trade group said.

Same-store sales in December were earlier projected to have advanced as much as 4 percent, the International Council of Shopping Centers said in a statement today. Sales at retail chains last week rose 5.3 percent from a year earlier, according to the New York-based researcher.

Sales in the last two weeks of December increased from a year earlier as retailers extended hours and benefited from Christmas Eve falling on a Saturday, providing a strong end to a holiday season that already had exceeded some forecasts. Macy’s Inc., Gap Inc. and Target Corp. also offered discounts on already marked-down merchandise in the week after Christmas.

“The last few weeks of December helped to lift the full- month performance above our earlier expectation,” Michael Niemira, chief economist at the ICSC, said in the statement.

The National Retail Federation last month raised its forecast for the holiday shopping season after steeper discounts and earlier opening hours contributed to a record $52.4 billion in sales during the Thanksgiving weekend. The Washington-based group said sales may increase 3.8 percent to a record $469.1 billion in November and December, up from a previous projection for a 2.8 percent gain.

‘Pent-Up Demand’

The increase would be higher than the 10-year average of 2.6 percent growth and slower and than last year’s 5.2 percent increase.

Store and online sales on Dec. 26 soared to an estimated $29 billion from $20 billion last year, said Craig Johnson, president of consulting firm Customer Growth Partners.

“There was a level of pent-up demand, and people decided the deals were worth taking,” Johnson said in a telephone interview from New Canaan, Connecticut, before today’s results were announced.

Sales for the week ending Dec. 24 increased 4.5 percent from a year earlier, the ICSC said Dec. 28. Unemployment at the lowest in more than two years boosted consumer confidence to an eight-month high in December.

The ICSC’s numbers are based on the ICSC-Goldman Sachs Weekly Chain Store Sales Index.

To contact the reporter on this story: Ashley Lutz in New York at alutz8

To contact the editor responsible for this story: Robin Ajello at rajello

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(BN) Orders to U.S. Factories Rise the Most in Four Months as Recovery Quickens

Demand for U.S. Factory Goods Rises by Most in Four Months

Jan. 4 (Bloomberg) — Orders to American factories rose in November by the most in four months, showing gains in manufacturing will help the economy grow.

Bookings for factory goods rose 1.8 percent after a revised 0.2 percent drop the prior month, data from the Commerce Department showed today in Washington. Demand for aircraft, autos and metals compensated for a drop in computers and electronics.

Improving consumer spending combined with lean inventories indicate production will continue to increase, bolstering economic growth in early 2012. Slowing demand for capital goods like computers is a sign business investment will cool this year, reflecting concern over a slowdown in global growth and a less advantageous government tax credit.

“Manufacturing is holding up fairly well,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Business investment has been very strong during this recovery, so some softening isn’t surprising.”

Economists forecast factory orders would rise 2 percent, according to the median of 57 projections in a Bloomberg News survey. Estimates ranged from gains of 0.9 percent to 3 percent. October was previously reported as a 0.4 percent decrease.

Stocks held earlier losses after the figures, with the Standard & Poor’s 500 Index declining 0.5 percent to 1,271.2 at 10:26 a.m. in New York. The yield on the benchmark 10-year Treasury note climbed to 1.96 percent from 1.95 percent late yesterday.

Durable Goods

Orders for goods meant to least at least three years increased 3.7 percent, in line with the 3.8 percent increase estimated by the government on Dec. 23.

Demand for capital goods excluding aircraft and military equipment, a measure of future business investment, fell 1.2 percent, the same as previously estimated. The decrease followed a 0.9 percent decline in October.

Shipments of such equipment, which are used in calculating gross domestic product, dropped 0.8 percent, marking the third consecutive decrease.

Bookings for commercial aircraft, which is often volatile, jumped 74 percent after dropping 14 percent. Demand for automobiles and parts climbed 0.9 percent and demand for metals rose 4.6 percent. Orders for computers and electronic products fell 4.3 percent.

Boeing Orders

Boeing Co., the largest U.S. aircraft maker, said it received 96 orders in November, up from 7 the prior month and the most since August.

“2012 will be a more challenging economic environment,” David Anderson, chief financial officer at Honeywell International Inc., said on a Dec. 15 conference call. “It’s pretty clear that we’ll experience European recession. We expect emerging regions, including China, India, and the Middle East, to continue to grow low double-digits in 2012.”

Bookings for non-durable goods, including petroleum and chemicals, rose 0.3 percent, today’s report showed.

Inventories climbed 0.5 percent in November, indicating factories were already ramping up production to restock warehouses. Manufacturers had enough goods on hand to last 1.34 months at the current sales pace, up from 1.33 in October.

Auto Sales

A reviving auto industry is boosting the U.S. economy. Light-vehicle sales ran at a seasonally adjusted annual rate of 13.6 million in November, the fastest since August 2009, according to Autodata Corp.

General Motors Co., the largest U.S. carmaker, posted November sales growth of 7 percent versus a year earlier, partly due to Americans replacing older vehicles.

“Given recent sales trends and consumer confidence numbers, we’re feeling pretty good about where the industry is going,” Don Johnson, vice president at GM for U.S. sales, said on a conference call last month.

Manufacturing in the U.S. grew in December at the fastest pace in six months, bolstered by gains in production and orders, the Institute for Supply Management’s factory index showed yesterday. The Tempe, Arizona-based ISM’s measure climbed to 53.9 last month from 52.7 in November. A reading higher than 50 signals growth.

Manufacturing figures from around the world yesterday showed the industry is surviving the strains from Europe’s sovereign debt crisis. India’s manufacturing grew at the fastest pace in six months and a Chinese factory gauge rose by more than economists had forecast.

Still, the Federal Reserve’s gauge of factory output on Dec. 15 declined in November for the first time in seven months, reflecting a slowdown in auto production that may have been due to parts shortages caused by flooding in Thailand.

To contact the reporter on this story: Bob Willis in Washington at bwillis

To contact the editor responsible for this story: Christopher Wellisz at cwellisz

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(BN) Bank Earnings Increase 57% in Analyst Forecasts That Proved Wrong in 2011

Bank Earnings Jump 57% in Analyst Forecasts Proved Wrong in 2011

Jan. 4 (Bloomberg) — Analysts’ failure to foresee declining earnings per share for the biggest U.S. banks last year hasn’t stopped them from predicting an even bigger profit surge for 2012.

The six largest lenders, including JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc., may post an average profit increase of 57 percent this year, according to 184 analysts’ estimates compiled by Bloomberg. A year ago, analysts predicted profit at the banks would climb 32 percent in 2011. Instead, earnings per share probably fell 18 percent as the economic recovery analysts counted on never took hold.

Improved trading results, more investment-banking deals, expense-cutting measures and lower credit costs will lead to the increase in earnings that didn’t materialize last year, analysts say. That may provide a boost to stock prices after financials were the worst-performing industry in the U.S. in 2011.

“The banks could get some positive operating leverage in 2012 from trading normalizing and expenses normalizing,” said Chris Kotowski, an Oppenheimer & Co. analyst in New York who estimates at least an 18 percent earnings-per-share increase for each of the six banks. “It’s not like all the news on the banks was uniformly bad all the time. The market had a bigger freakout than the companies did.”

‘More Optimistic View’

Banks’ trading results were decimated as Europe’s sovereign-debt crisis deepened, protests helped topple governments in the Middle East and Africa, and an earthquake and tsunami in Japan triggered a nuclear meltdown. The U.S. economy, measured by gross domestic product, probably expanded 1.8 percent last year, according to economists’ estimates compiled by Bloomberg, instead of the 3.1 percent predicted a year ago.

“Everyone had a much more optimistic view of the economy,” said Paul Miller, a former examiner with the Federal Reserve Bank of Philadelphia and an analyst with FBR Capital Markets Corp. in Arlington, Virginia. “The banks need GDP growth to grow loans. We all thought there would be loan growth, and Europe didn’t help anybody.”

Bank stocks fell along with earnings last year and were the worst performers among 10 industries tracked within the Standard & Poor’s 500 Index. Financials dropped 18.4 percent, led by a 58 percent plunge for Bank of America. Goldman Sachs dropped 46 percent, while New York-based Citigroup Inc. and Morgan Stanley both declined 44 percent. JPMorgan, the largest U.S. bank by assets, was down 22 percent and Wells Fargo & Co. 11 percent. The broader S&P 500 Index was unchanged for the year.

Global stock offerings plunged 29 percent from 2010 and U.S. bond issuance fell 6.7 percent as companies delayed plans to raise capital, according to data compiled by Bloomberg. Fixed-income trading likely dropped 27 percent and equities revenue 3 percent at the 10 biggest investment banks, according to industry consultant Coalition Ltd.

Goldman, Morgan Stanley

The increase in 2012 earnings will be led by Morgan Stanley and Goldman Sachs, which are most reliant on trading and investment-banking revenue, analysts estimate. They predict the New York-based firms will more than double earnings per share in 2012, after missing 2011 targets by the most of the six banks.

Revenue from trading and investment banking may rise about 8.5 percent for the industry, according to Kian Abouhossein, a London-based analyst at JPMorgan. That may help reverse a two- year slide in overall revenue as those areas account for about a quarter of total revenue at the five biggest Wall Street banks.

Reducing Expenses

Any revenue growth may boost the profitability of banks as they also seek to reduce expenses. Bank of America said last year it would chop $5 billion in annual costs, and Morgan Stanley and Goldman Sachs have targeted at least $1 billion. All three firms say they will eliminate positions, part of a wave of more than 230,000 job cuts announced by financial companies worldwide last year.

“The earnings ramp-up is a return to some kind of normalcy in trading activities and deal flow, as well as tighter control on expenses,” said Fred Cannon, an analyst at KBW Inc. in New York. “It would be kind of depressing to forecast financial- market activity in 2012 as being like it was in 2011.”

Banks may also benefit for a third consecutive year from improving credit quality, according to Andrew Marquardt, an analyst at Evercore Partners Inc. in New York. Net write-offs and loan-loss reserves will approach “normalized” levels in 2012, Marquardt estimated in a Jan. 2 note. A decrease in reserves accounts for all of the expected 25 percent increase in earnings per share at Bank of America, he wrote.

Loan Growth

While analysts see a bigger percentage jump in earnings for 2012, they aren’t as optimistic as they were a year ago. The combined $27.84 per share the big banks are expected to earn this year is less than the $34.21 analysts predicted they would produce in 2011 and up from 2010 as the European debt crisis may hurt results.

“I expect more of the same,” Miller said. “Bank valuations could improve, but it’s going to be very slow loan growth, if any at all. Earnings will remain under pressure.”

Jason Goldberg, an analyst at Barclays Plc in New York, wrote in a note yesterday that loan growth probably will accelerate in 2012. Loans at the four largest U.S. banks, net of loan-loss allowances, increased 0.3 percent in the nine months ended Sept. 30, company filings show. That compared with consensus estimates of 2 percent growth at the big banks, Brian Foran, an analyst at Nomura Holdings Inc., wrote in March.

“The risk of not owning U.S. bank stocks is greater than owning them,” wrote Goldberg, who projects an aggregate 21 percent increase in earnings per share for JPMorgan, Bank of America, Citigroup and San Francisco-based Wells Fargo. “Headwinds from 2011 should subside in 2012.”

Bank of America

Bank of America, which was the biggest decliner of 2011 in the Dow Jones Industrial Average and KBW Bank Index, has been hurt by rising costs tied to faulty mortgages. The Charlotte, North Carolina-based lender, led by Chief Executive Officer Brian T. Moynihan, 52, has said it plans to eliminate 30,000 jobs in the next few years.

Bank of America’s 2011 earnings estimates were chopped 54 percent as the lender, the second-biggest in the U.S. by assets, spent more than $10 billion to settle soured-mortgage claims with bond insurers and private-label investors. Morgan Stanley may fall short of 2011 estimates by 72 percent and Goldman Sachs may miss by 69 percent. Estimates for Wells Fargo rose 1 cent, the only increase.

“What has been the biggest pressure is this drop-off in capital-markets activity, and also the inability of BofA to get its mortgage issues behind it,” KBW’s Cannon said.

Even with a projected earnings increase and low valuations, investors should be “cautious” on financials because of uncertainty about Europe, Joseph Tanious, a market strategist at JPMorgan Asset Management in New York, said Dec. 29 on Bloomberg Television’s “In the Loop.”

“If you look at where valuations are right now in financials, it’s hard to ignore them,” Tanious said. “They are very, very attractive. But if we talk specifically about 2012, which we think will be another volatile year, financials, as they performed this year, may in fact lag the broad market.”

To contact the reporters on this story: Michael J. Moore in New York at mmoore55 Dawn Kopecki in New York at dkopecki

To contact the editor responsible for this story: David Scheer at dscheer

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(BN) GM Leads U.S. Automakers in December to Post the Best Sales Year Since ’08

GM, Ford, Chrysler, Nissan U.S. December Sales Exceed Estimates

Jan. 4 (Bloomberg) — General Motors Co., Ford Motor Co., Chrysler Group LLC reported December vehicle sales that beat analysts’ estimates, capping the U.S. auto industry’s best year since 2008.

Auto sales increased as consumer confidence reached an eight-month high in December, and carmakers aired holiday ads and continued promotions begun in late November. The U.S. automakers rallied in 2011, two years after GM and Chrysler emerged from U.S.-backed bankruptcies. Also during the year, GM reclaimed the top spot in world vehicle sales from Toyota Motor Corp., and automakers announced plans to hire or rehire at least 25,000 workers in the U.S. by 2015.

“There is just a tremendous amount of pent-up demand,” Rebecca Lindland, an analyst with IHS Automotive, said today.

GM’s December vehicle sales rose 4.5 percent to 234,351, topping the average 4.4 percent gain of eight estimates. Ford’s December light-vehicle deliveries rose 10 percent to 209,447, exceeding the average estimate for a 7.7 percent gain. Chrysler’s December sales jumped 37 percent to 138,019 cars and light trucks, more than the average 33 percent analyst gain. Nissan Motor Co. also exceeded estimates.

Light-vehicle sales in December may have run at a 13.4 million seasonally adjusted annual rate, the average estimate of 14 analysts, up from the 12.5 million pace a year earlier. The rate may trail the 13.6 million seasonally adjusted pace in November, typically a slow sales month.

GM, Ford

Nissan’s December deliveries rose 7.7 percent to 100,927, which topped the 5 percent gain predicted by the average of five analysts.

GM, the largest U.S. automaker, was paced by a 53 percent increase in sales of the Cruze small car and a 12 percent rise in sales of Silverado pickups.

Ford’s passenger car sales fell 15 percent in December, while SUV sales rose 16 percent, the company said. Ford brand sales for 2011 were above 2 million for the first time since 2007, the Dearborn, Michigan-based company said last week.

Sales of Ford’s Explorer sport-utility vehicle rose 37 percent and its F-Series pickup gained 24 percent. Fusion, the company’s top-selling car, decreased 4.5 percent and its Fiesta small car was down 30 percent.

Chrysler’s Jeep brand had a 41 percent increase, which included gains of 36 percent for Grand Cherokee and 39 percent for Wrangler SUVs.

Toyota deliveries last month may have slid 1 percent and Honda Motor Co. sales may have fallen 15 percent, the averages of five estimates.

Hyundai Motor Co. and affiliate Kia Motors Corp. may have recorded a 27 percent sales gain last month, the average of four analysts’ estimates.

To contact the reporter on this story: Tim Higgins in Southfield, Michigan at thiggins21

To contact the editor responsible for this story: Jamie Butters at jbutters

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Goal Mobile story – Barcelona’s Lionel Messi to miss Copa del Rey clash with Osasuna through illness

Barcelona’s Lionel Messi to miss Copa del Rey clash with Osasuna through illness

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Goal Mobile story – Thomas Vermaelen: Arsenal’s current squad can develop into title winners

Thomas Vermaelen: Arsenal’s current squad can develop into title winners

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Goal Mobile story – Theo Walcott looking forward to Arsenal return for ‘very important’ Jack Wilshere

Theo Walcott looking forward to Arsenal return for ‘very important’ Jack Wilshere

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Goal Mobile story – Former Argentina boss Jose Pekerman to take charge of Colombia – report

Former Argentina boss Jose Pekerman to take charge of Colombia – report

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Goal Mobile story – Arsenal’s Bacary Sagna still haunted by League Cup final loss to Birmingham City: ‘We crapped ourselves & I will never digest how we managed to lose in all my life’

Arsenal’s Bacary Sagna still haunted by League Cup final loss to Birmingham City: ‘We crapped ourselves & I will never digest how we managed to lose in all my life’

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Goal Mobile story – Ajax defender Toby Alderweireld hopeful of winning the Eredivisie

Ajax defender Toby Alderweireld hopeful of winning the Eredivisie

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Goal Mobile story – Dimitar Berbatov insists Manchester United will not be fazed by intense atmosphere at Newcastle

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