Archive for the ‘Accounts Receivable’ Category

For months we have known that sales were down. How could we forget? The automakers have been crying for a bailout. So…

U.S. auto sales plunged by 36 percent in December led by outsized declines at Chrysler LLC, Hyundai Motor (005380.KS) and Toyota Motor Corp(7203.T) as the battered industry closed out its weakest year since 1992 in its largest single market.

Chrysler’s sales dropped by 53 percent in December, a month when the automaker and larger rival General Motors Corp (GM.N) fought to clinch a $17.4 billion bailout from the U.S. government.

Meanwhile, Toyota, the global industry leader, posted a sales drop of 37 percent for the month, its worst U.S. sales decline since at least 1980.

Why is this news? Didn’t we already know it was going to be this bad?

Best Buy did better than expected in the third quarter, their profits dropped 77%, they announced a plan to offer employee buyouts, and investors are happy. Read these two accounts of the same story.

Reuters:

Best Buy Co (BBY.N) reported better-than-expected quarterly results on Tuesday and plans to offer employee buyouts and trim back store openings as consumers cut spending, sending shares up 17 percent.

Associated Press:

Best Buy Co. Inc. , the nation’s biggest consumer electronics retailer, said Tuesday that its third-quarter profit sank 77 percent as it faced dramatic changes in consumer spending.

Isn’t the difference amazing? Why does the AP always start their articles so negatively?

I’ve confused. If this is a Windows world we live in, how could PC sales drop 24 percent? Do people hate Vista that much? Is that why they stopped buying new PC’s? Heck, I bought a new PC and I stuck with Windows XP. Is it my fault their profits dropped?

Microsoft Corp. declined 5 percent in extended trading after it reported an 11 percent drop in third-quarter profit and forecast earnings that may miss analysts’ estimates as Windows software sales fell.

Net income dropped to $4.39 billion, or 47 cents a share, from $4.93 billion, or 50 cents, a year ago. Revenue was little changed at $14.5 billion, matching analysts’ estimates and disappointing investors looking for more after industry reports showed better-than-expected demand for personal computers.

The world’s biggest software maker said sales of Windows for PCs sank 24 percent and revenue from its online advertising unit came in at the low end of its projections. Microsoft’s report contrasted with positive comments from chipmaker Intel Corp. and computer company International Business Machines Corp.

When Microsoft makes less money, you know somethings up with the economy.

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Color me shocked. I am totally amazed. While Ford made money last quarter, their plan didn’t really work. Their plan to cull the assembly line workers with buyouts and such fell short, but they still made money.

Ford Motor Co. surprised Wall Street on Thursday with a $100 million profit in the first quarter as strong results from Europe and South America helped offset the impact of a slumping U.S. economy that cut car and truck sales in its main market.

The company also said Thursday its latest round of early retirement and buyout offers netted 4,200 hourly workers, fewer than Ford had targeted.

Ford says it earned 5 cents per share in the January-March period. The No. 2 U.S.-based automaker lost $282 million, or 15 cents a share, in the same period last year.

That is quite a turnaround. While the rest of the year will be quite a challenge, they must be commended for turning things around.

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Is tomorrow a do-or-die day for Yahoo?

After two years of crumbling profits, Yahoo Inc. can’t afford another letdown Tuesday when the Internet icon reports its first-quarter earnings.

Although they only cover a three-month period, the results could determine the Sunnyvale-based company’s fate as it grapples with an unsolicited takeover offer from Microsoft Corp.

If Yahoo bounces back to exceed analysts’ modest expectations, it could be a springboard to a higher bid from Microsoft or provide more credence to management’s argument that the company will be better off remaining independent.

There may be some reason for hope since asian stocks did remarkably well today, but then again, Citigroup is selling $6 billion in shares and National City raised $7 billion in capital but still posted a loss.

Tomorrow might just be an interesting day afterall!

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If there’s no market for your service, why would people want it?

Bank of America (BAC.N) is considering scrapping the sale of its equities prime brokerage unit after receiving lukewarm interest from potential bidders, the Financial Times reported on its Website on Sunday.

Citing people close to the situation, the newspaper said no final decision on the prime brokerage unit, which has been up for sale for more than three months, had been made.

Competition for the prime brokerage unit, which is believed to have had revenue of more than $180 million last year, weakened this month after JPMorgan Chase’s & Co’s (JPM.N) cut-price acquisition of Bear Stearns Cos Inc (BSC.N), the FT said.

This is much like taking the for sale sign out of the window of your 1975 Pinto. Was anyone really interested in purchasing it anyway?

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I don’t get it. How exactly are they having trouble keeping their brand in front of customers? They sponsor NASCAR for Pete’s sake.

Sprint Nextel Corp posted a $29.45 billion quarterly loss on Thursday due to a huge goodwill write-off and forecast deepening customer losses, sending its stock down as much as 13 percent to a five-year low.

The No. 3 U.S. mobile service said it would stop paying dividends for the foreseeable future, and Chief Executive Dan Hesse said it would take many quarters to turn the company around and rebuild its brand.

I still don’t get it. Are they having trouble getting their name out there? Do customers just hate their phones? What is it?

Sprint has been losing ground to rivals amid network and customer service problems.

Ahh. See, that explains it. You can spend millions of dollars to get your name out there every week, but if your network has issues and your customer service sucks, you will still have problems. Now that they have stopped paying dividends, how can they justify sponsoring the top level NASCAR cup races with investors?

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Project Lifeline? Hahaha. Yeah. If you wait for the boat to sink and the passengers to drown, what’s the point of throwing in a lifeline?

Six top mortgage companies on Tuesday launched a new program aimed at staving off foreclosure for seriously delinquent borrowers in the hopes that new, more affordable loan terms can be worked out.

“Project Lifeline,” backed by the U.S. Treasury and Department of Housing and Urban Development, would pause foreclosure proceedings for borrowers more than 90 days in arrears while servicers determine whether they could make payments under new terms, the lenders said in a statement.

While it’s nice to think they are trying to help homeowners keep their homes, they’re really just making sure the government doesn’t start regulating the hell out of them.

Think about it. If they help ma and pa who are in a subprime mortgage by allowing them to refinance into a traditional fixed rate mortage, how are ma and pa going to pay that higher mortgage? They couldn’t afford the interest only they were paying in the first place.

Pay no attention to the window dressing, look inside for the real picture.

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One-third of all of Countrywide’s sub-prime mortgage loans are delinquent. Holy smoke! That’s a lot more than they led everyone to believe.

Countrywide on Tuesday reported a loss of $422 million in the fourth quarter and revealed that an astounding one-third of its investment portfolio’s sub-prime mortgage loans are delinquent.

The loss threw cold water on Countrywide chief operating officer Steve Sambol’s confident assurances to investors in October that, “We view the third quarter of 2007 as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008.” Seen in this light, Countrywide’s fourth-quarter loss, compared to a $621 million profit a year ago, is what the numerous class action attorneys circling Countrywide (CFC, Fortune 500) will surely call “an unfavorable fact.” Countywide finished 2007 with a loss of $704 million.

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Countrywide’s eye-popping 33% delinquency rate on its sub-prime mortgage book also represents a decline from the third quarter, where “only” 29.6% of sub-prime paper was delinquent.

The figures obscure a central fact, however: Countrywide’s portfolio of sub-prime loans consist of those that were not previously written down, or could not be sold or securitized. In other words, this portfolio is likely to get much, much worse.

That percentage is bound to increase by huge margins over the course of the next few months. What on Earth would possess Bank Of America to absorb that kind of debt? Everyone knows those foreclosures will not sell anywhere near the value of the home. Are they looking for huge tax write-offs in the next few years? I just don’t get it.

You know things are ‘iffy’ with the economy when other countries start getting nervous about how things are going. Sure, if the economy gets worse the total exports from China will be reduced, but I hardly think people will stop buying items made in China, unfortunately.

China’s central bank on Sunday poured cold water on the idea that the country’s economy can decouple from the United States.

China’s exports will be badly hit if U.S. consumption weakens, Zhang Tao, deputy head of the international department of the People’s Bank of China, told a financial forum.

Not to sound rude, but I wish people would learn to cut their consumption of Chinese made products because it makes sense rather than being forced too. With all of the trouble with Chinese made toys over the course of the past year I don’t understand why more people haven’t stopped purchasing things “Made In China”.

But as far as the economy is concerned, if things start to look bad and people are forced to reduce spending, they will be more likely to purchase items made in China. They’ll claim they are being thrifty and stretching their money because when they buy things made in China they think they’re doing the right thing getting more for their dollar.