April 27, 2024

Monsanto Logs $126 Million Profit, Topping Expectations

Monsanto also announced 14 areas of advancement in its research and development platforms, noting progress in corn, soy, cotton, wheat and canola.

The results exceeded the company’s raised forecast offered last month. Monsanto shares rose 5.5 percent to close at $76.68 on the news.

Monsanto, the world’s largest seed company, said net income for the first quarter totaled $126 million, up from $9 million a year before, while earnings per share rose to 23 cents from 2 cents a year earlier. Analysts had expected 16 cents a share.

The first quarter, which ended Nov. 30, is typically the weakest for Monsanto, coming at the end of fall harvest and before spring planting. But the growing corn business in Latin America is helping the quarterly results, company officials said.

“We’ve seen a very strong start to the year, with real growth in Latin America and early orders in the United States that underscore our sustained momentum carrying into 2012,” Hugh Grant, Monsanto’s chairman, said in a statement.

An increase in customer prepayments for the spring selling season helped lift free cash flow to $856 million, up from $500 million a year before.

One disappointment for the company is the performance of its vegetable seed business. Those sales dropped to $157 million from $183 million a year before, despite efforts to expand that business into one of the company’s top three platforms.

Mr. Grant said softness in the European market was primarily to blame, and he said the company’s outlook for full-year vegetable seed business was “conservative.”

Monsanto officials said they were hopeful of that they could commercialize the company’s new drought-tolerant corn. They are pursuing international approvals after recently receiving approval from American regulators.

The company, which is based in St. Louis, affirmed its forecast of free cash flow for the 2012 fiscal year in the range of $1.3 billion to $1.5 billion, reflecting an investment of $600 to $700 million in capital expenditures.

And Monsanto said it expected full-year earnings per share for 2012 to come in at the high end of its forecast for $3.39 to $3.44.

Article source: http://feeds.nytimes.com/click.phdo?i=9a87baef1f928fd7cb279badbe940647

DealBook: British Tax Office Assailed for ‘Cozy’ Ties With Big Companies

LONDON — Goldman Sachs, Vodafone and other big businesses were treated too favorably by British tax officials, potentially costing the nation billions of pounds of revenue as a result, according to a government report released on Tuesday.

The report did not say how much the deals — often struck at expensive restaurants — cost the government. But the government said there were 2,700 unresolved cases with big companies, with potential tax of £25 billion ($39 billion) as of March 31.

The finding comes at a time when spending cuts and tax increases are squeezing households as part of a government austerity plan to reduce the national budget deficit.

Partly based on information from a whistle-blower at Goldman Sachs, the report paints a damning picture of tax officers who attend lunches and dinners with company officials while negotiating tax deals. One senior tax official had as many as 107 such meals in two years, according to the report.

“The department’s working practices must be seen by the taxpaying public to be absolutely impartial,” Margaret Hodge, a member of Parliament and the chairwoman of the committee of public accounts, said in a statement. “The impression being given at the moment is quite the opposite, of far too cozy a relationship between Her Majesty’s Revenue and Customs and large companies.”

The tax office rejected the conclusion of the report, saying it was “based on partial information, inaccurate opinion and some misunderstanding of facts.”

The report did not identify any companies, but Mrs. Hodge mentioned two names in a BBC interview on Tuesday that had been previously cited in newspaper reports: Goldman Sachs and the British telecommunications giant Vodafone.

Vodafone called the allegations “unjust, unwarranted and based on gross untruths.” Goldman Sachs declined to comment.

Some economists have said corporate tax revenue is already expected to shrink in the coming years as company earnings decline with the weak economy, making it harder for the government to plug the deficit hole. Prime Minister David Cameron’s government had pledged earlier this year to be more aggressive in going after individuals evading taxes.

The report also pointed to tax officers’ lack of accountability to taxpayers, Parliament or anyone else. It said the deals with companies were made behind closed doors and without public scrutiny.

“It is absurd that we had to rely on the media and the actions of a whistle-blower to find out about the details of individual settlements,” Mrs. Hodge said, criticizing the tax office for failing to cooperate fully with the committee investigation.

“On the Goldman Sachs deal we had minutes of a meeting held in H.M.R.C. where the chief lawyer called the deal unconscionable,” Mrs. Hodge told BBC Radio 4, referring to the tax office’s own lawyer.

The report singled out David Hartnett, the permanent secretary for tax, for favoring corporate taxpayers in his negotiations and overseeing a mistake in calculating the amount of interest owed on late tax payments. Mr. Hartnett announced this year that he planned to retire in 2012.

Mr. Hartnett admitted to a Parliamentary committee in September that tax officials had failed to follow correct procedures when agreeing to two major tax deals, but he did not provide any names. Newspapers have reported that the errors involved Vodafone, which paid £1.25 billion to settle a tax dispute, and to Goldman Sachs.

Mrs. Hodge called for changes in the way tax officials deal with corporate taxpayers, including managing their relationships with large companies better to “avoid the perception of conflicts of interest.”

“What we’ve uncovered,” she said, “was really a very uncomfortable state of affairs.”

Article source: http://feeds.nytimes.com/click.phdo?i=ad7b0660baf47a9295427c7f2591bd2f

U.A.W. Reports Contract Talks Are ‘Very Close’

Meanwhile, there appeared to be little additional progress in parallel talks with Chrysler, though union and company officials are continuing to meet.

“Labor agreements of this magnitude undergo numerous changes and revisions as the language becomes finalized,” Joe Ashton, the U.A.W. vice president in charge of dealings with G.M., wrote in an update posted online. “I am very optimistic that the negotiations process is entering its final stage.”

He concluded, “I truly believe that a settlement is within reach.”

Bargainers from G.M. and the union reconvened at 9 a.m. Friday, 12 hours after adjourning Thursday evening.

“We’ve made great progress,” Jordana Strosberg, a G.M. spokeswoman, said in an e-mail.

The union has agreed to a day-by-day extension at G.M. to complete the outstanding issues separating the two sides, including job commitments in plants, signing bonuses for workers and a pay increase for entry-level employees.

The union’s president, Bob King, has been conducting parallel talks with G.M. and Chrysler, the two Detroit automakers that were bailed out by the Obama administration in 2009.

But Chrysler abruptly asked for a weeklong contract extension on Wednesday night after Mr. King did not attend a scheduled session with Chrysler’s chief executive, Sergio Marchionne.

Instead, Mr. King seeks to set a pattern on wages and bonuses at G.M., and then try to match it at Chrysler and Ford.

The union cannot strike either G.M. or Chrysler as a condition of their federal aid packages. That is not the case with Ford, which turned itself around without government assistance.

It is not unusual for the union to grant a contract extension if it is close to a deal with one automaker. G.M. has been determined to be the first company to settle and establish a cost structure that will help its comeback.

Article source: http://feeds.nytimes.com/click.phdo?i=76f51eb1d84e30440f43ecae7ec5635f

Smelling an Opportunity

Undeterred, Procter Gamble is taking a shot at it, again. Having persuaded Americans to buy synthetic laundry detergent, fluorinated toothpaste and disposable diapers, P. G. believes it has finally cracked the code on the dry cleaning business, too.

Where other dry cleaning entrepreneurs have tried to come up with clever business models for dry cleaning, P. G.’s primary innovation is in the brand name itself: Tide Dry Cleaners, named after its best-selling laundry detergent.

With more than 800,000 Facebook fans and legions of loyal customers, Tide will draw people into the franchise stores, and superior service — which includes drive-through service, 24-hour pickup and cleaning methods it markets as environmentally safer — will keep them coming back, company officials predict.

“The power of our brands represents disruptive innovation in these industries,” said Nathan Estruth, vice president for FutureWorks, P. G.’s entrepreneurial arm. “Imagine getting to start my new business with the power of Tide.”

And the lure of its fragrance. P. G. plans to infuse the stores and its dry cleaning fluids with the scent of the brand that’s been cozily familiar to generations of households.

Among the Tide believers is Rick DeAngelis, a 40-year-old who is planning to open a franchise in suburban Cincinnati next year.

“It’s been a trusted name in laundry for 60 years,” he said. “It’s almost synonymous with laundry.”

Already, some local dry cleaners are complaining about the new gorilla on the block, backed by a corporation with roughly $80 billion in annual net sales.

Robert Tran, who owns Monroe Dry Cleaning here in Mason, said his business was off more than 50 percent since a new Tide store opened down the street at the end of October. Customers are being drawn to the Tide store by discounts and giveaways, like P. G. products and gift cards, he said.

“There is no way I can afford that,” he said. “All my customers just left without giving me a chance to say, ‘Hey, check the quality.’ ”

But for Tide to become synonymous with dry cleaning too, P. G. will have to overcome problems that have undone other upstarts. The dry cleaning industry has been roiled by unemployment and economic woes, and hurt by a continuing trend toward more casual work clothes.

Competition is fierce, and customers can be prickly: woe to the dry cleaner that ruins a favorite dress, even if it was cheaply made and bought decades ago.

Sanjiv Mehra, who oversaw a short-lived effort by Unilever to break into the dry cleaning business about a decade ago, said the key to success was figuring out a way to do it cheaper or significantly better than the mom-and-pop stores that dominate the industry. At the end of the day, Unilever decided that it couldn’t do either.

“It comes back to, are you fundamentally changing the economics of the business?” he said, adding that P. G.’s marketing muscle could be the difference. “That’s where they will make a lot of money if they do this right.”

Payam Zamani, co-founder of Autoweb.com, a site for car buyers, who later founded PurpleTie dry cleaners, said he tried to do for dry cleaning what Blockbuster did for video stores, offering efficient and better quality than neighborhood dry cleaners. He said it was hard for his stores to compete with owner-operated stores with little overhead and low-wage employees.

“People were more interested in cheaper service, not better service,” Mr. Zamani said.

P. G. has dabbled in dry cleaning before. In the late 1990s it introduced Dryel, an at-home dry cleaning product that rattled local dry cleaners, who feared they would lose business. But Dryel was considered a disappointment, and P. G. sold it in 2008.

In 2000, it opened several stores in suburban Atlanta, called Juvian, that offered at-home pickup and delivery of laundry and dry cleaning. The stores were eventually closed.

The idea for Tide Dry Cleaners came from P. G.’s FutureWorks, a unit that comes up with ways to expand famous brands like Pampers, Oil of Olay and Crest.

Many of those brands are experiencing robust growth in developing markets, but finding new ways to increase revenue in saturated markets like the United States is more challenging.

This article has been revised to reflect the following correction:

Correction: December 10, 2010

An article on Thursday about Procter Gamble’s opening of a dry cleaning chain under the name of its Tide detergent brand described imprecisely the cleaning method it uses. While the “Green Earth” technology used at Tide Dry Cleaners is marketed as being environmentally better than perchloroethylene, a common dry cleaning solvent that is a likely carcinogen, it is not necessarily “environmentally benign.” (Some studies have found that silicone-based dry cleaning solvents like Green Earth persist in the environment in detectable amounts and have produced cancer in laboratory rats.)

Article source: http://feeds.nytimes.com/click.phdo?i=bea835efdf7025b5b1392cbb82d376c1