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The Morning Ledger: Some Companies Get Punished For Thinking Long-Term |
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Apple under CEO Tim Cook has pushed for a long-term perspective on the company’s businesses. PHOTO: MISHA FRIEDMAN/BLOOMBERG NEWS
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Good day. Executives' attempts to redirect the market's focus from short-term to long-term trends can spark a swift, negative response from Wall Street, The Wall Street Journal's John D. Stoll reports.
Bad Apple? Apple Inc. ended its practice of reporting quarterly sales numbers for individual units, saying a 90-day performance for iPhones isn't a proxy for the underlying strength of product lines. Its stock sank 6.6% on the day of the announcement. Apple's decision highlights the challenge for executives trying to justify major capital investments that can take years to pay off in an era when investors are fixated on three-month reporting periods.
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Quarterly focus: Many critics of short-term thinking on Wall Street say the area most in need of immediate change is quarterly earnings. President Trump directed the Securities and Exchange Commission to study a move to six-month reporting following consultations with business leaders, including PepsiCo Inc. Chairman Indra Nooyi.
Private hopes: Barnes & Noble Inc. Chairman Leonard Riggio said in October the bookseller is considering going private because public shareholders may not be patient to weather a costly and extensive turnaround play.
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AutoZone Inc., Avaya Holdings Corp. and Hewlett Packard Enterprise Co. are among the companies reporting earnings Tuesday.
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Long-Term Care Insurance Policies Weigh Down GE, Other Companies |
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GE’s skyrocketing liability is but only one example of an industrywide lapse in judgment when assessing the future cost of such care, industry experts said. Prudential Financial Inc., which stopped issuing long-term care insurance in 2012, recorded a $1.5 billion charge related to its portfolio in the second quarter. Genworth Financial Inc., which is among the roughly dozen companies still offering this type of insurance, has incurred more than $3 billion in losses stemming from these plans.
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Firms Plan to Make Supply Chains More Socially Responsible: HSBC |
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About one-third of businesses plan to alter their supply chains in the next three years to make them more socially and environmentally responsible, according to a global survey released Monday by HSBC Holdings PLC.
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The measures that companies—a total of 8,500 clients of the bank across 34 markets—plan to take vary depending on the sector, reports CFO Journal's Nina Trentmann. Some are switching to renewable energy to reduce their carbon footprint. Others seek to cut down on the amount of goods and components they move when producing an item, HSBC said. Seventeen percent of companies have already reduced the impact of their supply chain on the environment.
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Walt Disney CEO Robert Iger collected $36.3 million in total compensation during the 2017 fiscal year. PHOTO: REUTERS/GARY CAMERON
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Shareholder pushback against Walt Disney Co. Chief Executive Robert Iger’s compensation has led the company to increase the targets he must meet to collect his performance bonus.
Mark Weinberger, the global chairman and chief executive of Big Four accounting firm Ernst & Young LLP, has decided to step down next year.
The swift retreat in U.S. oil prices will test the claim of fracking companies that they can now prosper at $50 a barrel or less, a price level they have found challenging in the past.
GlaxoSmithKline PLC on Monday said it would buy cancer-focused drug company Tesaro Inc. for about $4.16 billion, positioning the health-care giant in a promising but competitive area of medicine.
IKEA plans to open its first U.S. city-center location in Midtown Manhattan as the furniture giant restructures its global operations to adapt to changing consumer behavior.
Question-and-answer website Quora Inc. said hackers had broken into its network and gained access to data belonging to 100 million users.
LuLaRoe LLC’s primary clothing supplier sued the leggings company over $49 million in unpaid bills and accused its top executives of looting its assets to buy exotic cars, private planes and real estate.
Rentokil Initial PLC will offload pension liabilities of £1.5 billion ($1.9 billion) to Pension Insurance Corp., the British pest control company said on Tuesday, as reported by Reuters.
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The American Institute of Certified Public Accountants said its auditing standards board voted to issue a new standard that covers auditor reporting on certain employee-benefit plans.
The standard addresses forming an auditor opinion and reporting on financial statements of employee-benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). The standard includes new requirements for engagement acceptance, audit risk assessment and response, and other items.
The standard does not yet have an issue date, but it is expected to be effective no earlier than for audits of financial statements for periods ending on or after Dec. 15, 2020, the AICPA said.
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The acquisition of Aetna by CVS Health requires court approval to become final. PHOTO: RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS
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A federal judge voiced concern about the U.S. Justice Department’s decision to allow CVS Health Corp.’s nearly $70 billion acquisition of Aetna Inc.—and said he may require CVS to hold Aetna’s assets separately while he considers the settlement between the companies and the government.
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A pair of senior U.S. regulators say they are examining banks’ exposure to risky corporate debt, but stopped short of sounding alarm bells about a lending boom.
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President Trump’s top economic adviser said the administration is looking to eliminate subsidies on electric cars, a move that could hamper the auto industry’s push to broaden the market for battery-powered vehicles.
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The head of Britain’s foreign intelligence agency said the U.K. had a tough decision to make on whether to allow Chinese telecommunications giant Huawei Technologies Co. to supply a 5G mobile network in the country.
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The U.K. government can unilaterally reverse its decision to leave the European Union without consent of other members of the bloc, the European Court of Justice said in an opinion that could add another twist into an already complex path toward Brexit.
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Subindexes for new orders and employment also grew in the ISM’s manufacturing gauge. PHOTO: SCOTT EISEN/BLOOMBERG NEWS
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The Institute for Supply Management's manufacturing index rose to 59.3 in November from 57.7 in the previous month. The uptick in U.S. factory activity came as companies rushed through orders to get ahead of expected tariff increases.
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U.S. Federal Reserve Chairman Jerome Powell said the central bank has made progress in helping promote economic strength and financial stability, but is working to address several remaining challenges.
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U.S. cash and cash equivalents are on track to be some of the best-performing assets in 2018, enticing money managers amid a rare synchronized downturn in stocks, commodities and bond markets.
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Pork companies and hog farmers hope an easing of tariffs on U.S. meat will lift sales to China, even as China is stepping up pork imports because thousands of pigs on the mainland have been infected with African swine fever.
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E*Trade Financial Corp., the New York-based online brokerage, named Chad Turner as Chief Financial Officer on Monday. He succeeds Mike Pizzi, who has served as CFO and Chief Operating Officer since September.
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Mr. Pizzi's role has been elevated to include technology in addition to his current oversight of the finance and operations organizations, and Mr. Turner will report to Mr. Pizzi, the company said. Mr. Turner was most recently overseeing the forecasting and performance analysis functions at E*Trade, and prior to that served as vice president, accounting. Compensation details were not available.
Sonoco Products Co., the Hartsville, S.C.-based maker of industrial and consumer packaging products, said Senior Vice President and CFO Barry Saunders plans to retire, effective March 1, 2019. Julie Albrecht will succeed Mr. Saunders as vice president and CFO, effective the same date.
Ms. Albrecht joined the company in March 2017 and has served as corporate vice president, treasurer and assistant CFO. Mr. Saunders has served as CFO since May 2011, and has worked in leadership positions across the company's finance group. He joined Sonoco in 1989. Compensation details were not available.
Sage Group PLC, a U.K.-based enterprise software provider, appointed Jonathan Howell as CFO, effective Dec. 10. Mr. Howell joins from Close Brothers Group PLC, where he served as finance chief, and prior to that was CFO of the London Stock Exchange Group PLC. He has been a non-executive director and chairman of the audit and risk committee at Sage since 2013. Mr. Howell replaces Steve Hare, who became CEO in November.
Mr. Howell will receive a basic annual salary of £535,000 and a pension contribution of 10% of salary. He is also eligible for bonus payments and long-term incentive rewards, the company said in a filing.
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