March 21, 2023

Economix Blog: Mixed-Race America



Dollars to doughnuts.

That map is from a new Census Bureau report about the population of mixed-race Americans, which grew 32 percent from 2000 to 2010. The population of single-race Americans, by contrast, grew 9.2 percent.

As a share of the total population, mixed-race Americans are still a tiny minority, just 2.9 percent, or about nine million people.

As you can see in the map, the states with the highest share of residents who report being of more than one race are Hawaii (23.6 percent), Alaska (7.3 percent), Oklahoma (5.9 percent) and California (4.9 percent).

Four distinct mixed-race combinations represented about 92 percent of all mixed-race people: people who reported being both white and black totaled 1.8 million; white and “some other race,” 1.7 million; white and Asian, 1.6 million; and white and American Indian and Alaska native, 1.4 million.

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Tivo’s Quarterly Revenue Rises on Higher Subscriptions

(Reuters) – Tivo Inc reported a higher quarterly revenue as subscriptions of its trademark digital video recorders rose 41 percent.

Revenue rose 7 percent to $65.3 million.

Net loss widened to $27.7 million, or 23 cents per share, in the second quarter, from $19.6 million or 17 cents per share, a year earlier.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila)

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EBay Reports Stronger Earnings

SAN FRANCISCO — EBay’s net income soared in the fourth quarter, in large part because of the sale of its remaining investment in Skype and continued success of PayPal.

But financial results released Wednesday by the company showed that eBay’s core retailing business, what it calls Marketplace, finally seems to be making the turnaround that John Donahoe, eBay’s chief executive, has been promising investors. Four years ago, he outlined a plan to revive the company’s marketplace business by investing in new technologies, freshening the Web site and recasting it as an online outlet mall rather than a flea market.

In the fourth quarter, its marketplace business pulled in $1.7 billion in revenue, a 16 percent jump from the same period a year ago and four times faster than the same quarter a year ago. “EBay’s results look workmanlike and impressive,” said Jordan Rohan, an analyst at Stifel Nicolaus.

“We’re gearing our whole company to help retailers in this new multichannel world. EBay marketplace is one part of that equation,” Mr. Donahoe said in an interview after the announcement. “But the simple fact is that more and more people are using our mobile payment systems.”

The payments unit, which consists almost entirely of PayPal, was responsible for more than 36 percent of the company’s fourth-quarter revenue — $1.24 billion — which grew 28 percent from the same period a year ago.

EBay said net income in the fourth quarter rose to $1.98 billion , or $1.51 a share, from $559 million, or 42 cents a share in the same quarter a year ago. Excluding Skype and other items such as stock-based compensation expenses, eBay reported profit of $788.6 million or 60 cents a share, for the three months ending Dec. 31.

The company said revenue climbed 35 percent to $3.4 billion from the same period in 2010. But income and revenue were higher than the consensus estimates of analysts.

EBay’s future growth will continue to depend on the success of PayPal, and particularly its new mobile payment business. Last year, the company projected that its mobile payment volume would hit $1.5 billion in 2011. It later increased that estimate to $3 billion, but Wednesday reported it was $4 billion for the year, more than five times its payment volume in 2010. The company now projects that mobile payment volume will reach $7 billion in 2012.

But the company’s earnings report comes on the heels of news this month that Scott Thompson, PayPal’s president, left the company to join Yahoo as its chief executive. Under Mr. Thompson’s leadership, PayPal more than doubled its user base and revenue. And Mr. Thompson’s departure came as eBay faces new competition in the mobile space. Mobile payment start-up Square, Google’s mobile payment product, Google Wallet, and Isis, a joint mobile payment venture by ATT, T-Mobile and Verizon, all recently entered the mobile payment space.

“Scott’s departure was a surprise,” Mr. Donahoe acknowledged in an earnings call. “But PayPal has never been stronger and PayPal leadership has never been stronger.”

Mr. Donahoe, who will serve as interim president, said he will worry about succession in February.

“The whole organization is really focused on our 2012 plan,” he said. “We won’t skip a beat.”

But the company advised investors that the current quarter’s results would be lower than analyst forecasts. For the current quarter, eBay said it expected revenue between $3.05 billion and $3.15 billion , slightly below analyst estimates of $3.18 billion. The company said that was because it plans to make investments this quarter in data centers and infrastructure for the year. For the full year, eBay said it expects revenue in the range of $13.7 billion to $14 billion , at or slightly higher than the $13.7 billion analysts have forecast.

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Media Decoder Blog: The Times E-Mails Millions by Mistake to Say Subscriptions Were Canceled

4:28 p.m. | Updated The New York Times said it accidentally sent e-mails on Wednesday to more than eight million people who had shared their information with the company, erroneously informing them they had canceled home delivery of the newspaper.

The Times Company, which initially mischaracterized the mishap as spam, apologized for sending the e-mails. The 8.6 million readers who received the e-mails represent a wide cross-section of readers who had given their e-mails to the newspaper in the past, said a Times Company spokeswoman, Eileen Murphy.

“We regret that the error was made, but no one’s security has been compromised,” she said.

The e-mail urged recipients to reconsider subscribing to the Times at “50% off for 16 weeks.” The false message sent off a flood of Twitter reactions and lit up the Times switchboard.

The Times official Twitter feed sent this message: “If you received an email today about canceling your NYT subscription, ignore it. It’s not from us.”

Those initial comments raised questions in some readers’ minds about whether hackers might have had access to their credit card and personal information, a misimpression that Ms. Murphy said the company was now working to correct.

She said the e-mail was sent by a Times employee, and not the third-party Epsilon Interactive, the service The Times uses to communicate with subscribers.

The Times is the nation’s third-largest newspaper in Monday to Friday print subscriptions, after The Wall Street Journal and USA Today, and No. 1 in Sunday subscriptions, with 1.65 million customers receiving the Sunday print edition, according to the Audit Bureau of Circulations. The Web site had 32.3 million unique viewers in November.

Late Wednesday afternoon, the company sent an e-mail to recipients of the erroneous note to explain the error. Around that time, a short notice to readers appeared on the home page.

“It’s in our interest now to make sure people understand the correct situation,” Ms. Murphy said.

In comments posted on The Times Web site, as well as on Twitter, readers wrote that they wanted in on the deal being offered in the mass e-mail. “Still wanna give me 50% off?” one reader asked via Twitter.

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For Jobs and Housing, Some Hopeful Signs

Separately, a Commerce Department report said that builders started slightly fewer homes in October but submitted plans for a wave of apartments, a mixed sign for the struggling housing market.

Weekly applications for jobless benefits dropped by 5,000 to a seasonally adjusted 388,000, the Labor Department said Thursday. It was the fourth decline in five weeks.

The four-week average, a less volatile measure, dropped to 396,750. That is the first time the average been below 400,000 in seven months.

Applications need to consistently drop below 375,000 to signal sustained job gains. They have not fallen that low since February.

The job market “is still weak but there are hopeful signs of some modest improvement,” Steven A. Wood, an economist at Insight Economics, said in a note to clients.

The number of people receiving benefits also fell to the lowest level since September 2008, when Lehman Brothers collapsed and the financial crisis intensified.

The benefit rolls fell 57,000 to 3.6 million in the week ended Nov. 5. That is one week behind the applications data. The figure is the lowest since Sept. 20, 2008.

That does not include about three million additional people receiving extended benefits from emergency programs put in place during the recession. All told, 6.8 million people received benefits during the week ended Oct. 29, the latest data available.

A rebound in manufacturing could lead to more hiring. Factory output grew in October for the fourth straight month, the Federal Reserve said Wednesday. Production of trucks, electronics and business equipment all rose.

Another report on Thursday from the Commerce Department showed that home builders broke ground on a seasonally adjusted annual rate of 628,000 homes last month. That is roughly half the 1.2 million that economists equate with a healthy housing market.

But building permits, a gauge of future construction, rose nearly 11 percent. The increase was spurred by a 30 percent increase in apartment permits, which reached its highest level in three years.

Over the last year, apartment permits have surged roughly 63 percent. Permits for single-family homes have increased just 6.6 percent in that span.

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their homes. The surge in apartment construction may help increase economic growth, but it has not been enough to offset the steep declines in single-family homebuilding.

Construction starts of single-family homes, which make up about 70 percent of residential home construction, rose nearly 4 percent last month. Starts for apartments, a more volatile category, fell more than 13 percent.

Over all, homebuilding dipped in 2009 to just 554,000 homes, the lowest levels in 50 years. Last year the figure rose to roughly 587,000 homes and this year may not be much better.

Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent.

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Fair Game: Inciting a Revolution: The Investor Spring

Mr. O’Donnell, a retired chief executive of the J. Walter Thompson Company, and a man who picks his own stocks, figured that if Twitter, Facebook and other social media could help oppressed citizens in Tunisia and Egypt rally for change, they could help disenfranchised individual investors too. You know, the folks who own shares in publicly traded companies but rarely get a say in how those companies are run.

Mr. O’Donnell found a group of like-minded people at the InvestorVillage Web site. All of them own shares in the Celgene Corporation, a bio-pharmaceutical company based in Summit, N.J., and all of them have been dismayed by what they see as outsize executive pay at the company, whose stock price has returned little over the last five years.

Celgene shares were trading at about $59 on Friday — roughly where they were at the end of 2006. Given that this is a drug stock, there have been many ups and downs over that time, of course. But returns have been slim for shareholders who held on throughout that period.

Mr. O’Donnell has owned Celgene’s shares for almost six years. He hastens to note that this is a well-managed company, with fine operational performance and plenty of promise. Nevertheless, he says: “A lot of frustration has emerged regarding shareholders’ lack of returns relative to management’s pay packages. The stock has been roughly flat, in spite of executional excellence. In the meantime, the C-suite has been richly rewarded.”

While Celgene’s executive pay was relatively stable from 2007 to 2009, last year it ramped up considerably, according to company filings. The top four executives received a total of $24.6 million in 2010, up 30 percent from the amount paid to the four highest-paid executives during the previous year.

The company’s stock price, by comparison, rose a mere 5 percent last year.

MR. O’DONNELL has tapped into an issue that concerns many individual investors but which many feel powerless to change. Yes, individuals get to cast their votes at annual stockholder meetings. But such votes can seem like exercises in futility for investors, because companies need not bow to investors’ wishes.

With last year’s Dodd-Frank legislation and regulatory rules requiring that companies put their pay practices to an advisory vote of shareholders at least once every three years, Mr. O’Donnell thought 2011 could be the moment to rally investors on the issue. An Investor Spring, as it were, just in time for Celgene’s annual meeting on June 15.

Reaching out to fellow holders, Mr. O’Donnell quickly hit pay dirt. David Sobek, an associate professor of political science at Louisiana State University, agreed to develop a Web site,, to attract other dissatisfied Celgene investors.

“I saw this as a collective action problem,” Mr. Sobek says. “How do you get a bunch of people with similar interests organized? Before the Internet, just tracking down fellow shareholders was almost impossible. But we have been able to organize people in a way that we didn’t think would be possible, and that in itself is a victory.”

To keep the group from being hijacked by gadflies, the organizers specifically asked those interested in joining to refrain from “personally directed or emotional attacks” because they would “detract from the possibility that our concerns will be seriously considered by existing directors and/or institutions.”

After several months of outreach, Mr. O’Donnell and Mr. Sobek say that they received commitments from investors holding 2.7 million shares. These investors have promised to vote against Celgene’s pay practices and all directors up for re-election who have sat on the board’s compensation committee.

They also said they would vote to require the company to put its compensation practices to a shareholder vote once a year, rather than once every three years as management recommends. With approximately 461 million shares outstanding, 2.7 million shares voted against management’s proposals and board members will by no means be enough to prevail. Institutional shareholders control roughly 90 percent of Celgene’s shares, and these investors typically vote with management.

Still, voting as a bloc might get the group of disgruntled investors more attention from Celgene’s board and management. Representatives of the group say they want Celgene’s board to re-examine its pay practices and align them more with shareholder returns. One concern: the company’s increased use of restricted stock in the last two years, rather than equity grants that are more closely aligned with a rising share price. Also disturbing to some investors is the fact that Celgene has a poison pill in place, an antitakeover device that shareholders view as entrenching management.

In its filings, Celgene describes the financial measures its board uses to assess its executives’ performance. These measures include growth in earnings per share and revenues — though they are not calculated using generally accepted accounting principles. The company also says it emphasizes long-term growth in shareholder returns.

Asked about the investor group and its rumblings, Brian Gill, a Celgene spokesman, responded that the company’s shares have been a top performer in the sector over the last 10 years. The company’s pay practices, he says, receive good grades from institutional proxy advisory services.

“We all feel the frustration of a company that continues to deliver these industry-leading operational financial results but at the same time exists in an environment where health care reform and austerity issues also impact the valuation,” Mr. Gill says. “We take every investor’s comments and recommendations seriously.”

THE outcome of the investor vote won’t be known until June 15, of course. Many of the investors who have joined to vote their shares expect to attend Celgene’s annual meeting.

“This is a test case to see how far one can go with this,” Mr. O’Donnell says. “It seems like it’s worth a shot. Maybe the individuals in the C-suite will have a greater sense of empathy for the collective individual investor. It will be interesting to see how it pans out.”

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Starbucks’s Profit Gains 20%

The company said it earned $261.6 million, or 34 cents a share, for the quarter, which ended April 3, meeting analysts’ average expectations. The profit was up from $217.3 million, or 28 cents a share, a year earlier.

Revenue rose nearly 10 percent to $2.79 billion, beating expectations for $2.73 billion, according to FactSet.

Starbucks said the underlying health of its business had never been better, despite the challenges of higher costs and a weak economy. The results showed the company’s strength.

The company, based in Seattle, now expects to earn $1.46 to $1.48 a share for the year, up from $1.44 to $1.47 a share.

But that is just short of Wall Street’s average forecast for $1.49 a share, and Starbucks shares dipped 69 cents, to $35.92, in after-hours trading.

The company said the new forecast accounted for a still bigger increase in commodity costs than it foresaw in January. It now says those rising costs will cut earnings for the year by 22 cents a share, up from 20 cents a share. The 2-cent difference reflects an expectation that dairy and fuel costs will keep rising, Starbucks said.

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