chief-executive

You’re the Boss Blog: My Problem With Company Retreats

September 22, 2012 by NewsMaker Leave a Comment

Courtesy of TerraCycle This is not a company retreat.

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Aside from eating rabbit, I think there’s only one thing I’m allergic to: company retreats.

Even in elementary school, I found the idea of team-building games — from trust falls to three-legged races — nauseating. But in a professional environment with a group of adults? I cannot understand why a company would spend money and people’s time at such retreats. Of course, there is an entire industry built around these events, which suggests a question: Do they actually work?

If you look at the Web sites of the companies that manage retreats, they say the goal is to build communication and cooperation and to improve morale and have fun. These sources go on to highlight that a company retreat wouldn’t be complete without “considerations” like a spa evening or a golf outing. The goal, after spending a considerable amount of money and time, is to “stimulate future productivity by helping your employees reconnect and relax.”

Now, I consider myself something of a new age chief executive. Our company prides itself on transparency and accessibility, and we even have a culture of Nerf guns complete with our own chief Nerf gun officer (the C.N.O.). But we are a business, and we come to work to work, not to play or relax. While I am in the business of giving frequent and direct feedback, I am not in the business of giving hugs or focusing on things that don’t drive fundamental and objective productivity. That is not to say that I don’t want all of my colleagues to love their jobs and enjoy their time at the office. Work should be fun, rewarding and enjoyable. It’s what we spend most of our waking lives doing.

I think that if an organization needs a company retreat to rebuild morale or excitement, there is something fundamentally wrong with the organization. The leadership of an organization should always consider the general mood of the staff and try to make real-time changes to improve it. But only to a point. All organizations have grumblers and naysayers, and no matter how many extra hours you give for lunch or how many company retreats you run, that’s not going to change.

Companies also have retreats to rethink the big picture — the vision, mission and path of your business over the coming years. And this has come up a number of times at TerraCycle, as has the idea of running the very retreats I have such distaste for. In the past, as a compromise, I have hosted full-day off-sites at my house for the entire business to discuss these kinds of issues. The cost was always high — primarily the opportunity cost of the entire staff taking a day away from work — and the results were generally modest. People liked the off-sites but didn’t learn much.

When I recently was asked about doing another, we decided that instead of a company off-site we would reduce the meeting to just the senior team and run a one-hour session every month to discuss big-picture issues. The results were significantly better. We came up with a guiding document that crystalized our key challenges for the following year, and we were able to communicate that to the team at large.

In the end I have realized that instead of having lofty, expensive and infrequent company off-sites, it may be better to split the goals into bite-sized chunks. To get staff members interacting with folks they usually wouldn’t spend time with, we throw bi-monthly company parties at someone’s house (cost is usually a few hundred bucks for food and drinks). To keep rethinking the big picture, we run those one-hour monthly meetings with the senior staff and then bring changes to the whole staff when appropriate.

The closest thing we have to an off-site is our annual international week. During this time (usually a week in May) about 30 or so international staff members from our offices outside the United States come to spend the week in Trenton to share ideas and insights, meet their fellow teammates and party. We started holding international weeks three years ago, and it has been a major success.

Since it is a rather big expense — probably more than $35,000 in travel and hotel costs plus the hard-to-quantify expense of having basically the entire company not focused on its work — we take the scheduling of this event seriously. Over the last three years, we have worked harder and harder to make sure the week is well organized and creates as much value as possible. The goal is to work hard on opportunities and challenges and then party together to get to know the person you usually speak to only on the phone.

A critic might ask, isn’t international week a company retreat? And my answer would be no. The goal of this week is to work very hard to create concrete results for the business. Our work days are extended from 9 a.m. to 5 p.m. to 8 a.m. to 6 p.m. And the meetings are never esoteric; they are highly focused on specific issues, for example: “using SAP in your local country” or “how to promote a new waste collection program.”

Most important, there are no trust falls, no ropes courses, and no golf. It’s an exhausting week of hard work with a focus on improving the business. And the response from our team has been overwhelmingly positive.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

Article source: http://boss.blogs.nytimes.com/2012/09/21/my-problem-with-company-retreats/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: chief-executive, company retreat, new age

DealBook: Glencore Says Higher Bid for Xstrata Is Its Final Offer

September 10, 2012 by NewsMaker Leave a Comment

Jack Atley/Bloomberg NewsXstrata’s Mount Isa mine in Queensland, Australia. Glencore adjourned a shareholder meeting on Friday after raising its bid for Xstrata.

LONDON — Glencore International, the world’s largest commodities trader, confirmed its increased all-share offer for the mining giant Xstrata on Monday, which would value the combined company at about $90 billion, but said it would not raise its bid again.

Under the terms of the revised offer, Glencore is now offering 3.05 of its shares for every Xstrata share after shareholders in the mining company balked at Glencore’s initial 2.8 share bid.

The company raised its offer on Friday after several Xstrata shareholders, including the sovereign wealth fund Qatar Holding, said they would vote against the deal if the offer was not increased.

In response to the unrest, Glencore raised its offer, but added in a company statement on Monday that it “will not increase the merger ratio further.”

As part of the new offer, Mick Davis, the chief executive of Xstrata, will become head of the combined company after the deal is completed, but will step down after six months. Mr. Davis will be succeeded by Glencore’s chief executive, Ivan Glasenberg.

Michael Buholzer/ReutersSimon Murray, Glencore’s chairman, left, and Ivan Glasenberg, its chief executive, adjourned a shareholder meeting Friday after Glencore raised its bid for the mining company Xstrata to 3.05 of its shares for every share of Xstrata. The bid had been for 2.8 shares.

Despite the increased offer, some of Xstrata’s shareholders may still hold out for improved terms. Qatar has yet to respond publicly to the newly improved deal, while the the board of Xstrata has said the new price may be too low.

In a move that could placate wary investors, Glencore also confirmed on Monday that the deal would remain a merger.

The company said last week that it wanted the option to restructure the deal as a takeover. The change would have required only 50 percent of Xstrata investors to agree to the deal.

“The new proposal is structured far less aggressively than the straight takeover hinted at on Friday,” Ash Lazenby, an analyst at Liberum Capital in London, said in a research note on Monday. “We expect the revised structuring should get Xstrata board’s recommendation.”

Several hurdles may still block the plan. On Friday, Xstrata warned shareholders about potential problems, highlighting the “significant risk” created if Mr. Davis and his lieutenants did not lead the merged Glencore-Xstrata.

The mining company also said the new ratio offered a premium “significantly lower than would be expected in a takeover.”

On Monday, Xstrata said its board would consider Glencore’s revised bid and decide by Sept. 24 whether to put the offer to its shareholders.

Shares in Xstrata rose 3 percent in morning trading in London on Monday, while stock in Glencore fell about 1 percent.

Article source: http://dealbook.nytimes.com/2012/09/10/glencores-bid-for-xstrata-represents-final-offer/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: chief-executive, shareholders, wary investors

DealBook: Can Square Remain Hip?

August 31, 2012 by NewsMaker Leave a Comment

Square Register uses the company’s reader and an app to turn an iPad into a credit card register.

It’s not exactly a hip question right now. But what exactly is Square?

Excitement is building around the payments company, which is led by Jack Dorsey, Twitter’s co-founder. It’s close to raising $200 million of new capital, and Starbucks said in early August that it was going to use Square’s technology.

Disappointed by Facebook and Groupon, technology industry watchers at least have hope for Square. It’s easy to see how nifty card readers and other innovations can make payments much easier for small businesses and their customers. Meanwhile, the Starbucks deal raises the prospect that other large retailers may partner with Square.

But it may too early to anoint Square as the firm that will lead us into a cashless society. The main issue with Square is that it’s not yet clear what it wants to be.

Yes, on the surface, it’s a company that provides payments to hardware and software to merchants. But it may struggle to achieve burgeoning profits from the payments fees paid by merchants, according to an analysis of the economics of those payments.

Square is almost certainly working to develop a much bigger revenue source. The success of that will likely determine the success or failure of Square.

As innovative as Square is, it cannot easily get around the established fixed costs charged by the payments industry, which comprises processing companies, banks and firms like Visa and MasterCard.

Square charges merchants 2.75 percent of the amount transacted when a card is swiped, or $275 a month. That’s at the low end of the fee scale. But it may also be too low for Square to a profit on payments below $10, which are a big part of Square’s business.

Nebo Djurdjevic, chief executive of Cardis International, shows why. He simply calculates the money Square would take in with a 2.75 percent fee on a transaction and then compares that with the money it would have to pay out in fees to credit card companies and processors. (As a note, Cardis has its own product, which aims to cut the costs of smaller credit card payments.)

On a $5 transaction, Square would get 2.75 percent of $5, or 14 cents. But, citing public fee data, Mr. Djurdjevic calculates that, with a premium Visa card, Square would have to pay out 27 cents in fees. The theoretical loss to Square would therefore be 13 cents. The loss may be lower on other types of cards, according to Mr. Djurdjevic, who nevertheless thinks the Starbucks deal is a positive development for Square.

Square declined to comment on Mr. Djurdjevic’s numbers and their significance for Square’s business model.

The challenging economics won’t be a surprise to Square watchers. Enthusiasts may argue – correctly – that Square will make money on each payment that is over $10. And if Square gets picked up by larger retailers, larger payments may make up a large share of its business. Square may even have software that allows it to reduce slightly the amount it has to pay to card operators.

So what will the big, alternative revenue source be? Recent investors in Square must see one, given that the company now has an estimated valuation of $3.25 billion.

The company probably wants to take all the payment data and use it to help merchants with their marketing. Square might, say, take a cut of any business generated from that marketing. In other words, it may aim to be a more sophisticated version of Groupon. Square’s fans may say that, with a wealth of payments data, the company can do better than Groupon.

The more merchants that use Square’s payments system, the more data it will have. And with its low fees, Square may well draw in large numbers of merchants.

But as Mr. Djurdjevic’s numbers show, those low fees can also generate losses. And it’s not like other companies are standing still. For instance, PayPal and Discover recently announced that PayPal customers will next year be able to use the service in stores, not just online.

In all, it’s too early to tell whether Square is leading us, or itself, into a cashless future.

Article source: http://dealbook.nytimes.com/2012/08/31/can-square-remain-hip/?partner=rss&emc=rss

Filed Under: Business News Tagged With: chief-executive, jack dorsey, profits

DealBook: JPMorgan Trading Loss May Reach $9 Billion

June 28, 2012 by NewsMaker Leave a Comment

Daniel Rosenbaum for The New York TimesJamie Dimon, chief executive of JPMorgan Chase, discussed the trading losses last week before the House Financial Services Committee.

Losses on JPMorgan Chase’s bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.

When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank.

The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.

As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report.

With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion.

Nonetheless, the sharply higher loss totals will feed a debate over how strictly large financial institutions should be regulated and whether some of the behemoth banks are capitalizing on their status as too big to fail to make risky trades.

JPMorgan plans to disclose part of the total losses on the soured bet on July 13, when it reports second-quarter earnings. Despite the loss, the bank has said it will be solidly profitable for the quarter — no small achievement given that nervous markets and weak economies have sapped Wall Street’s main businesses. To put the size of the loss in perspective, JPMorgan logged a first-quarter profit of $5.4 billion.

More than profits are at stake. The growing fallout from the bank’s bad bet threatens to undercut the credibility of Mr. Dimon, who has been fighting major regulatory changes that could curtail the kind of risk-taking that led to the trading losses. The bank chief was considered a deft manager of risk after steering JPMorgan through the financial crisis in far better shape than its rivals.

“Essentially, JPMorgan has been operating a hedge fund with federal insured deposits within a bank,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner.

A spokesman for the bank declined to comment.

In its most basic form, the losing trade, made by the bank’s chief investment office in London, was an intricate position that included a bullish bet on an index of investment-grade corporate debt. That was later combined with a bearish wager on high-yield securities.

The chief investment office — which invests excess deposits for the bank and was created to hedge interest rate risk — brought in more than $4 billion in profits in the last three years, accounting for roughly 10 percent of the bank’s profit during that period.

In testimony before the House Financial Services Committee last week, Mr. Dimon said that the London unit had “embarked on a complex strategy” that exposed the bank to greater risks even though it had been intended to minimize them.

JPMorgan executives are briefed each morning on the size of the trading loss. The tally could shrink if the market moves in JPMorgan’s favor, the people briefed on the situation cautioned.

But hedge funds and other investors have seized on the bank’s distress, creating a rapid deterioration in the underlying positions held by the bank. Although Mr. Dimon has tried to conceal the intricacies of the bank’s soured bet, credit traders say the losses have still mounted.

While some hedge funds have compounded the bank’s woes, others have been finding it profitable to help JPMorgan get clear of the losing credit positions.

One such fund, Blue Mountain Capital Management, has been accumulating trades over the last couple of weeks that might help reduce the risk of the bets made by JPMorgan in a credit index, according to interviews with more than a dozen credit traders. The hedge fund is then selling those positions back to the bank. A Blue Mountain spokesman declined to comment.

As traders in JPMorgan’s London desk work to get out of the huge bet, which started generating erratic losses in late March, the traders based in New York are largely sitting idle, according to current traders in the unit.

“We are in a holding pattern,” said one current New York trader who asked not to be named.

Long before the losses started mounting, senior executives at the chief investment office in New York worried about the trades of Bruno Iksil, according to the current traders.

Now known as the London Whale for his outsize wagers in the credit markets, Mr. Iksil accumulated a number of trades in 2010 that were illiquid, which means it would take the bank more time to get out of them.

In 2010, a senior executive at the chief investment office compiled a detailed report that estimated how much money the bank stood to lose if it had to get out of all Mr. Iksil’s trades within 30 days. The senior executive recommended that JPMorgan consider putting aside reserves to deal with any losses that might stem from Mr. Iksil’s trades. It is not known how much was recommended as a reserve or whether Mr. Dimon saw the report, but the warning went unheeded.

The losses are the most embarrassing fumble for Mr. Dimon since he became chief executive in 2005.

In appearances before Congress, Mr. Dimon has taken pains to assure investors and lawmakers that the overall health of JPMorgan remained strong and that it had more than sufficient amounts of capital to weather any economic dislocation.

Even as he apologized for the trade, calling it “stupid,” Mr. Dimon emphasized to lawmakers that the loss was an “isolated incident.”

The Federal Reserve is currently poring over the bank’s trades to examine the scope of the growing losses and the original bet.

Article source: http://dealbook.nytimes.com/2012/06/28/jpmorgan-trading-loss-may-reach-9-billion/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: chief-executive, credit derivatives, red ink

DealBook: Blog: Senate Banking Hearing on JPMorgan

June 13, 2012 by NewsMaker Leave a Comment

Daniel Rosenbaum for The New York TimesJamie Dimon, chief of JPMorgan Chase, answered questions before a Senate committee on Wednesday.

Jamie Dimon, JPMorgan Chase’s chairman and chief executive, testified before the Senate Banking Committee about the multibillion-dollar trading losses incurred at his firm’s chief investment office.

Mr. Dimon has maintained that the loss was an “isolated event” without broader repercussions for customers or taxpayers. He has said that risk was necessary in banking, and said JPMorgan had the necessary strength to withstand the losses, which could eventually swell to $5 billion.

During the hearing, Mr. Dimon faced questions about how JPMorgan’s chief investment office failed to clamp down on a complex derivatives trade that metastasized into an unwieldy and hard-to-unwind gamble that failed. He addressed queries about whether the firm’s losses should prompt even tougher banking regulations, something Mr. Dimon has long opposed.

Here was DealBook’s live blog of the hearing.

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Article source: http://dealbook.nytimes.com/2012/06/13/live-blog-senate-banking-hearing-on-jpmorgan/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: chief-executive, necessary strength, trading losses

Ford Posts Third-Straight Annual Profit

January 27, 2012 by NewsMaker Leave a Comment

Ford made an accounting adjustment in the fourth quarter worth $12.4 billion that increased its 2011 earnings to $20.2 billion, the second-highest total ever for the carmaker.

The one-time gain, which eliminates most of a tax allowance created when the company was bleeding billions of dollars in 2006, indicates that Ford expects to continue earning substantial profits in the coming years, according to Ford’s chief financial officer, Lewis W. K. Booth.

By region, the company earned an operating profit of $6.2 billion for the year in North America but lost a total of $119 million in its Europe and Asia-Pacific regions. Its fourth-quarter operating profit fell slightly.

“We delivered strong results for the full year as we continued to serve our customers around the world with best-in-class vehicles and make progress toward our mid-decade goals,” Ford’s chief executive, Alan R. Mulally, said in a statement. “Despite the continued uncertainty in the external environment, the strength of our North American and Ford Credit operations allow us to continue to invest for future growth.”

The net profit was equal to $4.94 a share, up from $1.56 a share a year earlier, when Ford earned $6.6 billion.

Excluding the accounting change and other special items, Ford earned an operating profit of $8.8 billion for the year, or $1.51 a share, 6 percent more than its 2010 operating profit of $8.3 billion, or $1.91 a share.

Revenue increased 13 percent to $136.3 billion, but profit margins declined to 5.4 percent, from 6.1 percent in 2010.

The North American results mean 41,600 hourly workers in the United States will receive $6,200 in profit-sharing bonuses for 2011. Those workers already received a $3,750 advance on that amount after signing a new four-year labor agreement last fall and will receive the remaining $2,450 in March.

In the fourth quarter, Ford reported an operating profit of $1.1 billion, or 20 cents a share, down from $1.3 billion, or 30 cents a share, a year ago. Analysts were expecting earnings of 25 cents a share. Including the accounting gain, Ford had net income of $13.6 billion, the most ever for a fourth quarter.

Fourth-quarter revenue rose 6 percent to $34.6 billion.

Ford ended 2011 with $13.1 billion in automotive debt, $400 million more than at the end of the third quarter but $6 billion less than it had a year earlier.

It had $22.9 billion in automotive cash, up $5.6 billion for the year.

Mr. Booth said the challenging economy in Europe and flooding in Thailand hurt fourth-quarter earnings. Commodity costs also ended up being higher than expected, he said.

“The quarter was really driven by North America,” he told reporters at Ford’s headquarters on Friday. “We saw the external environment deteriorate, and that really affected most regions other than North America.”

The accounting gain means that, on paper, Ford has recovered nearly all of the $30.1 billion it lost from 2006 through 2008. In the three years since, the company’s profit totaled $29.5 billion.

Ford created the tax valuation allowance in 2006, when Mr. Mulally joined the company as its performance was in a downward spiral and it mortgaged most assets to raise money. The losses meant Ford could no longer keep many deferred tax assets on its books, but after posting 11 consecutive profitable quarters it was able to release nearly all of that allowance.

With the automotive market in the United States improving, Ford said it expected operating profit to increase in 2012 and for profit margins to be equal to or better than 2011. The company said it planned to contribute $3.5 billion to its underfunded pension plans, including $2 billion in the United States.

Ford sold 11 percent more cars and trucks at American dealerships in 2011, with big gains for its redesigned Explorer sport utility vehicle and year-old Fiesta subcompact car. This year, it is bringing out revamped versions of the Fusion midsize sedan and Escape crossover vehicle, along with several plug-in vehicles and hybrids.

Mr. Booth said Ford would be able to improve its performance in the years ahead not only by increasing sales but also by operating more efficiently, which is a central focus of its turnaround plan, known as One Ford.

“We’re really only at the beginning of getting the benefits of One Ford,” Mr. Booth said.

Article source: http://feeds.nytimes.com/click.phdo?i=4dfa095bed8d9787fdff85fb59ce04cc

Filed Under: Business News Tagged With: chief-executive, credit operations, profit margins

Bucks Blog: Sports Club Switches to Annual Fee in Lieu of Monthly Increases

January 25, 2012 by NewsMaker Leave a Comment

Matthew Peyton for The New York TimesExercising at a New York Sports Club.

Many members who last year joined fitness clubs owned by Town Sports International saw a $29 fee on their bill this month. The fee represents an annual rate lock payment, assessed in lieu of an increase in the members’ monthly dues, the company says.

Town Sports, which owns more than 150 clubs in the Northeast (including New York Sports Club locations in the New York area, as well as clubs in Washington, Boston and Philadelphia), began last May to require new members to agree to an annual $29 fee. The charge is assessed each January and guarantees the member that their monthly dues won’t increase as long as they’re a member.

Previously, according to the company, members signed contracts giving the club the right to increase monthly dues once a year.

The fee isn’t optional. So isn’t it, in effect, a guaranteed rate increase that is just collected in a lump sum?

Prior annual dues increases translated into as much as $4 a month, the company says. But with the new, one-time fee at $29, members are saving money under the arrangement, Bob Giardina, chief executive of Town Sports International said. The funds are invested into equipment at the sports clubs, he said.

The option seems to have been well-received, he said. The clubs have signed up 100,000 members since they began including the fee in the contract that members sign. (The fee only applies to members who have signed up since April 2011; no decision has been made, the company said, about whether to offer the new structure to members who had joined previously. )

What do you think of such a fee? Is it a good deal?

Article source: http://feeds.nytimes.com/click.phdo?i=b620389b975ff1809a353e65e145460f

Filed Under: Your Money Tagged With: chief-executive, contracts, philadelphia

G.M. Regains No. 1 Spot in World Automaking

January 19, 2012 by NewsMaker Leave a Comment

G.M. said Thursday that it sold 9,025,942 vehicles last year, 7.6 percent more than in 2010. Its closest competitor was Volkswagen, whose sales grew 14 percent to 8.156 million, with Toyota falling to third place.

Toyota has not released final sales results for the year but last month it estimated that sales totaled 7.9 million vehicles, a 6 percent drop.

The industry’s sales crown means little beyond bragging rights. But G.M.’s ability to climb back on top, only two years removed from its government rescue and bankruptcy, is certain to bolster morale within the company and strengthen the Obama administration’s argument that its bailout of the industry was worthwhile. G.M. was the world’s largest automaker for more than 70 years before Toyota surpassed it in 2008.

Publicly, at least, G.M. executives have been careful to avoid celebrating amid Toyota’s struggles. Toyota only recently was able to return production levels to normal levels after the earthquake and tsunami in Japan caused major disruptions and parts shortages.

“I want to win in the marketplace, but I want to win against a healthy and vibrant Toyota and Honda,” G.M.’s chief executive, Daniel F. Akerson, said in an interview last year. “Next year, we’ll put the gloves back on, and I’m sure they’ll go right back at us and we’ll go back at them.”

G.M. chose not to highlight its first-place finish Thursday, burying its global sales figures at the bottom of an announcement about its Chevrolet brand selling a record 4.76 million cars and trucks last year.

At the Detroit auto show last week, Mr. Akerson said G.M.’s focus was on increasing profits and margins, but he acknowledged that rising sales were a positive indicator of the company’s progress.

“We’re not going to achieve the financial goals that we want to achieve and have declining market share or declining numbers of units sold,” he told reporters. “It’s one indicator. What’s most important for our owners, our shareholders, is that we produce margins and profits and cash flow.”

G.M. shares were up 0.5 percent, to $24.63 in morning trading Thursday. They have risen about 21 percent so far this month but remain well below the $33 price from G.M.’s initial public offering in November 2010. That is even further below the price needed for the Treasury Department to break even on its investment in the company. The Treasury still owns about 26 percent of G.M.

G.M., whose sales figures include its joint ventures in China, will need to continue increasing its sales to stay on top in the years ahead, if Toyota and Volkswagen are able to meet their ambitious forecasts. Toyota last month said it was aiming to sell 8.48 million vehicles in 2012 and nearly 9 million in 2013, not including some affiliate companies that are included in last year’s 7.9 million figure. Volkswagen is setting a target of 10 million in annual sales by 2018.

Article source: http://feeds.nytimes.com/click.phdo?i=af3237f1034d3371edd0e467ebeb2f89

Filed Under: Business News Tagged With: chief-executive, largest automaker, major disruptions

EBay Reports Stronger Earnings, Fueled by PayPal

January 19, 2012 by NewsMaker Leave a Comment

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.

Article source: http://feeds.nytimes.com/click.phdo?i=7096e68e97cb6a288a511957c85ac394

Filed Under: Business News Tagged With: chief-executive, flea market

Business Briefing | Company News: Walgreen Begins to Offer a Special Prescription Plan

December 31, 2011 by NewsMaker Leave a Comment

Walgreen is introducing a national plan it hopes will minimize customer disruption from its contract battle over payments with its pharmacy benefits manager, Express Scripts. For customers who want to remain, Walgreen’s plan includes a special discount in January to customers for its prescriptions savings club. Though those enrolled in drug plans managed by Express Scripts will have better coverage and pay less by using another pharmacy, Gregory D. Wasson, Walgreen’s chief executive, said the discounts Walgreen would offer through its prescription savings club would be competitive on generic drugs and most therapeutic categories.

Article source: http://feeds.nytimes.com/click.phdo?i=3e348c771e6a8dc8c60ab1dd2661a337

Filed Under: Business News Tagged With: chief-executive, disruption, wasson