The U.S. government has revised the GDP for Q4 2013 to 2.4%. This is a big decrease from the original 3.2% the government reported last month. It is also a big drop from the Q3 GDP. In the third quarter, real GDP increased 4.1 percent.
The official report from the Bureau of Economic Analysis (BEA) can be found here (PDF). The BEA says, "With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated."
The BEA attributes the deceleration in real GDP growth to reduced private inventory investment and a larger decrease in spending by the federal government.
Stocks are up following the news today. Forbesreports that analysts were expecting the downward revision.
The stock market is struggling to find solid ground this year and continues to slip. The DOW lost 326 points today (2.08%). The Nasdaq fell 2.61%. This has been a bad start to February after a January that was also not good for investors. The DOW was down over 5% in January, which CNN/Money says was the worst month since January 2009.
A weak U.S. manufacturing report is getting blamed for today's slide. People will be watching Friday's jobs report very closely for more signs on whether or not the economy is starting to slip back into a recession. Sam Stovall, chief equity strategist at S&P Capital IQ, believes we won't slip beyond the 10% zone. He thinks worldwide economic growth will continue to advance this year. Take a look:
Apple has reported the results from its fiscal Q1 2014 quarter, which ended December 28, 2013. The company reported quarterly revenue of $54.5 billion and profit of $13.1.
Apple also released a data summer sheet to go with its earnings release. Revenue is up 6% in Q1 2014 compared to Q1 2013. Total iPhone units sold was up 7%. iPad and Mac sales also increased during the time period. The iPod units sold tumbled by 52% - Apple sold over 6,000 them in its Q1 2014 quarter compared to 12,600 in Q1 2013.
The number of iPhones sold fell short of analysts expectations. CNBC reportsreports that Apple also provided revenue estimates for the current quarter of $42 to $44 billion, which is under analysts projections of $46.12 billion.
Suntory, a a Japanese brewing and distilling company, has announced plans to acquire Beam in a $16 billion deal. The $16 billion valuation includes Suntory taking on Beam's debt. Beam's products include Jim Beam, Canadian Club whiskey, Pinncale vodka and more. The deal is expected to in the second quarter of 2014. Suntory will acquire Beam shares for $83.50 per share. The transaction consideration represents a 25% premium to Beam's closing price of $66.97 on January 10, 2014. The deal has been approved by the board of directors from both companies.
Nobutada Saji, president and chairman of Suntory's Board, said in a statement, "I am delighted that we can announce this agreement with Beam, a company with a portfolio of leading global brands, including Jim Beam and Maker's Mark, and a strong global distribution network. I believe this combination will create a spirits business with a product portfolio unmatched throughout the world and allow us to achieve further global growth. We are particularly excited about the prospect of working more closely with Beam's excellent management and employees who will play an integral part in the growth of the business."
Suntory and Beam already have some relationships. Suntory distributes Beam products in Japan and Beam distributes Suntory's products in Asia. Reuters reports that the combined entity will be the third largest whiskey company according to International Wine & Spirit Research.
Kodak rang the opening bell this morning at the NYSE. Kodak President and CEO Antonio M. Perez (4th from right) is pictured above with Kodak Chairman of the Board James V. Continenza (left of Perez) and Kodak customers and employees. The company is celebrating its return to the NYSE.
Perez said in a statement, "This bell ringing is a symbol of Kodak’s remarkable transformation,” said Antonio M. Perez, Kodak’s President and Chief Executive Officer. “It’s a new year, with a new company, a new stock and a new start. We are a B2B company focused on innovating for our customers and delivering value to our shareholders. This bell ringing has extra significance for everyone at the new Kodak because we are reaffirming our strong connections with our customers by having some of them join us at this event
Kodak emerged from reorganization after bankruptcy on September 3rd. The company began trading on the NYSE under the new KODK symbol on November 1st. KODK shares have been up considerably since late November. You can view a chart here.
Henkel Opens World's Largest Adhesives Factory in Beijing
Henkel has opened the world's largest adhesives factory in Shanghai. The factory, called the Dragon Plant, opened on September 18, 2013. The massive factory features 150,000 square meters of space. The Dragon Plant's annual output is forecast to reach up to 428,000 metric tons of adhesives.
Kasper Rorsted, Chairman of the Management Board of the Henkel Group, said in a statement, "This new adhesives factory will contribute significantly to the achievement of our strategy 2016: It will enable our Adhesives business to expand and leverage its global reach, and win market share in emerging market."
Henkel says the new plant is part of its plan to "consolidate and optimize its global production network." About 600 people will work at the plant. The plant has green features, such as condensed water recovery systems, which cuts the water usage in half. Another feature is special translucent roofs which let more daylight in and reduce electricity usage for lighting. There is also a system for recovering waste heat.
Facebook Shares Briefly Climb Back Above May 2012 IPO Price
Facebook's stock briefly climbed above its IPO price of $38 earlier today. Shares have since falled below $37 a share. Facebook [FB] has been climbing since it reported better than expected for its second quarter last week.
Facebook's mobile advertising has been growing and is now 41% of its total ad revenue. An early concern for the company was that they could not monetize mobile users. Facebook also recently announced a Mobile Games Publishing pilot program, which will help developers distribute games and generate ad revenues from games. Facebook will take a cute of the revenues.
Facebook still has a big problem, which is that is may be very over priced based on its P/E. Facebook trades at a P/E of 168.77. By comparison, Apple has a P/E of 11.29 and Yahoo has a P/E of 7.6.
Bloomberg is reporting that Hulu is in talks with Time Warner Cable. TWC would acquire 25% of a stake in Hulu, making it a partner with Walt Disney, Comcast and 21st Century Fox.
This latest news follows Hulu's announcement that it had canceled an auction. The Hollywood Reporterreports that Hulu canceled the auction despite a final bid of $1 billion from DirecTV. Hulu also said that $750 million would be invested into the site by its three current owners owners - 21st Century Fox, NBCUniversal and The Walt Disney Company.
Robert A. Iger, Chairman and CEO, The Walt Disney Company, said in a statement, "Hulu has emerged as one of the most consumer friendly, technologically innovative viewing platforms in the digital era. As its evolution continues, Disney and its partners are committing resources to enable Hulu to achieve its maximum potential."
Hulu launched its service and 2008 after a private beta test in 2007.
Motorola has an updated logo. The logo features a rainbow of colors in the circle around the M. The Vergenotes that the font has also changed. The word "motorola" is in lower-case, which is something we do not care for. The name of a brand or company should be capitalized.
Google's acquisition of Motorola was completed last month. It was a huge $12.5 billion purchase.
The Dow had its worst day of the year. The Dow fell 353 points. Stocks are down about 5% since last month's highs. The drop comes amidst some good economic sings. A CNBC report ties the Dow drop directly to a statement by Bernanke on Wednesday. CNBC also reports that signs the Fed may pull back on its easy money policies caused the dollar and interest rates to rise. Take a look:
Krispy Kreme [KKD] shares climbed 21% Friday to $17.32. KKD shares climbed after it reported its financial results for its first quarter of fiscal 2014. Krispy Kreme says same store sales climbed 11.4%, its 18th consecutive quarterly increase. Operating income climbed 40% from $10.8 millio to $11.5 million.
The doughnut company also raised its outlook for the full fiscal year. It raised its fiscal 2014 earnings from between $0.53 and $0.57 to between $0.59 and $0.63 per share. Bloomberg says analysts had expected 58 cents on average.
James H. Morgan, chairman, president and ceo of Krispy Kreme, said in a release, "Our exceptional performance in the first quarter is a testament to both the strength of our brand and the dedication of our team members and franchisees worldwide. It is also evidence of our ongoing momentum which we believe will make this another outstanding year at Krispy Kreme. We continue to believe we are in the very early stages of developing Krispy Kreme's long-term potential as we continue to execute on our strategic priorities, demonstrate our capability to grow same store sales, generate significant operating cash flow, and increase earnings over the long term."
Fool.com reports that Krispy Kreme's rising sales and earnings may already be "baked into the price."
Angela Merkel Tops Forbes List of 100 Most Powerful Women
Forbes has announced its 10th annual ranking of the World's 100 Most Powerful Women. Angela Merkel is #1 for the third straight year. She is followed by Brazilian President Dilma Rousseff, Melinda Gate, MIchelle Obama and Hillary Clinton. Hewlett-Packard CEO Meg Whitman (No. 15) is the subject of the cover story, "The Reluctant Savior."
Newcomers on the list include outh Korean President Park Geun-hye (No. 11); Lockheed Martin CEO Marillyn Hewson (No. 34); Tory Burch CEO Tory Burch (No. 69); Spanx founder Sara Blakely (No. 90) and Baidu CFO Jennifer Li (No. 98).
The Dow Jones industrial average broke the 15,000 milestone today. This is the first time in history the Dow has closed over 15,000. The official closing amount was 15,056.20. The Dow was up over 87 points on the day. CNBC says the milestone means gains could keep coming in the days ahead.
Jason Weisberg, Seaport Securities, also believes the marker is a sign the markets will go higher and that this is a real rally. Take a look:
Warren Buffett has joined Twitter. His verified account is @WarrenBuffett. His first tweet was, "Warren is in the house." Buffett then linked an essay of his on CNN/Money about why women are the key to America's prosperity.
Buffett has quickly garnered over 200,000 followers and probably will add hundreds of thousands more in the coming days.