The maker of Robert Mondavi wine and Svedka vodka says it had a profit of $279.8 million for its fourth quarter, reversing a year-ago loss, as it saw stronger wine sales in North America.
Constellation Brands said Thursday its revenue edged up 1 percent to $715.3 million. A double-digit rise in North American wine sales helped offset the impact of the divesture of much of its Australian and British wine business. Spirits sales rose 3 percent.
Net income equalled $1.32 per share. A year earlier, the company lost $51 million, or 23 cents a share, on sliding sales of spirits and beer and lingering weakness in the North American wine market.
Excluding items, the Victor, N.Y., company earned 35 cents per share. Wall Street expected 26 cents, according to FactSet.
Market research firm Gartner Inc. has reduced its PC shipment forecast for this year and next, predicting the growing popularity of tablet computers such as Apple Inc.’s iPad will cut into the demand for consumer laptops.
Gartner said Thursday that it expects global PC shipments of 387.8 million in 2011, up 10.5 percent from 2010. Previously, Gartner predicted 15.9 percent growth.
In 2012, Gartner now thinks 440.6 million PCs will be shipped, up 13.6 percent from 2011 Online payday loans. Its earlier estimate called for 14.8 percent growth.
Gartner said that while consumer laptop shipments have climbed an average of 40 percent annually in the past five years, the availability of Internet access on various mobile devices means that consumers are not as tied to laptops for getting on the Web.
Shoppers can expect some higher prices as the makers of toothpaste, soap and other everyday household products see their profit margins pinched by rising ingredient costs.
Both Procter & Gamble Co. and rival Colgate-Palmolive Co. reported lower profits Thursday and posted revenue below expectations for the last quarter. They both said commodity costs were rising more than expected. P&G said it was adding $1 billion in costs for the year, double what it anticipated.
P&G, which counts Pampers diapers, Gillette shavers and Crest toothpaste among its brands, said fast-rising costs for materials and fuel would probably mean some price increases, with hikes already planned for its Duracell batteries in March.
Colgate-Palmolive President and CEO Ian Cook said the price increases would run 1 to 2 percent and be “appropriate.”
Consumers can expect to see not only household product makers, but beverage, food and other companies try to pass along increases, said Jack Russo, an Edward Jones analyst. That will test whether they are feeling confident enough about the economy to pay higher prices again for their favorite brands.
“That’s the million-dollar question,” Russo said, adding that P&G and Colgate were better positioned than many because of their solid reputations and relationships with retailers, and presences in emerging markets that are growing more quickly than sluggish developed countries.
However, while some consumers are willing to pay more for whiter teeth or a clean shave, they still appear to be drawn to lower prices for other everyday items. P&G reported ’strong growth” for Charmin Basic, a lower-priced version of its toilet paper brand.
S&P analyst Tom Graves cut Colgate stock from a “Hold” to a “Sell” recommendation, citing the sales shortfall and “a challenging commodity cost environment.” And S&P lowered P&G from “Buy” to “Hold.”
Richard Fleming plans to leave his post as chief executive of the Regional Chamber and Growth Association by year’s end, the organization announced today.
Fleming has led the RCGA, the St. Louis area’s chamber of commerce, since 1994.
Fleming will remain in the post until his successor is selected, and will help in the selection, said Bob Reynolds, RCGA board chairman, and chairman of electrical supplier Graybar.
In a press release, Reynolds said that Fleming “wants a new challenge in his career. He has our full support.
Allies of the man who the international community says won Ivory Coast’s disputed presidential election called Sunday for a general strike that would last until the incumbent hanging on to power concedes defeat and leaves office.
It was the latest form of pressure to force Laurent Gbagbo from the presidency nearly a month after the United Nations said his political rival, Alassane Ouattara, won the runoff vote. Gbagbo has refused to leave despite international calls for his ouster, and West African leaders say they now will remove him by force if he fails to go.
Djedje Mady, the head of Ouattara’s electoral coalition, said it called on “all Ivorians and those who live in Ivory Coast and believe in peace and justice to cease all their activities on Monday, December 27, 2010, until Laurent Gbagbo leaves power.”
The U.N. has said at least 173 people have been killed in violence over the vote, heightening fears that the country once divided in two could return to civil war. The toll is believed to be much higher, though, as the U.N. mission has been blocked from investigating other reports including an allegation of a mass grave.
On Sunday, the interior minister appointed by Gbagbo accused the U.N. of only telling half the story.
“The government of Ivory Coast denounces the lack of objectivity and balance in the procedures carried out by the U.N. Human Rights Council,” said Emile Guirieoulou, the interior minister. He said that at least 36 of the victims were police or other security forces who “were targeted by gunfire coming from the protesters.”
Guirieoulou also alleged that the thousands of refugees arriving in Liberia had fled violence perpetrated by rebels who support Ouattara. The U.N. refugee agency says at least 14,000 people have fled the violence and political chaos in Ivory Coast, some walking for up to four days with little food to reach neighboring Liberia. At least one child drowned while trying to cross a river.
Gbagbo has been in power since 2000 and had already overstayed his mandate by five years when the long-delayed presidential election was finally held in October. The vote was intended to help reunify the country, which was divided by the 2002-2003 civil war into a rebel-controlled north and a loyalist south.
Instead, the election has renewed divisions that threaten to plunge the country back into civil war. While Ivory Coast was officially reunited in a 2007 peace deal, Ouattara still draws his support from the northern half of the country, where residents feel they are often treated as foreigners within their own country by southerners.
The U.N. certified Ouattara as the winner of the Nov. 28 runoff vote, but a Gbagbo ally overturned those results by throwing out half a million ballots from Ouattara strongholds in the north. The move angered people who had waited for years as officials settled who would be allowed to vote in the long-delayed election, differentiating between Ivorians with roots in neighboring countries and foreigners.
For nearly a month, Gbagbo has now defied calls from the U.N., United States, former colonizer France, African Union and European Union to step aside and hand over power to Ouattara.
West African leaders from the regional bloc ECOWAS late Friday threatened a military intervention if Gbagbo does not step down. On Sunday, Sierra Leone’s information ministry said that three leaders from the region would pay him a visit.
“In the spirit of brotherliness in Africa, three presidents have been nominated by their colleagues to confront Mr. Gbagbo in Abidjan to encourage him to leave office without delay,” the ministry said. “The three presidents can fly back with Mr. Gbagbo, as all ECOWAS countries are prepared to grant him asylum.”
Gbagbo has shown few signs that he plans to go, though, and his security forces have been accused of being behind hundreds of arrests, and dozens of cases of disappearance and torture in recent weeks.
In recent days, the United Nations has expressed alarm about the actions of men who are believed to be Gbagbo loyalists. The world body reported Thursday that heavily armed forces allied with Gbagbo, who were joined by masked men with rocket launchers, were preventing people from getting to the village of N’Dotre, where the global body said “allegations point to the existence of a mass grave.”
While the threat of a military intervention creates pressure on Gbagbo, Africa security analyst Peter Pham said there are “serious doubts that ECOWAS has the wherewithal to carry it out.”
“None of the ECOWAS countries has the type of special operations forces capable of a ‘decapitation strike’ to remove the regime leadership,” said Pham, who is the senior vice president of the National Committee on American Foreign Policy in New York. “That leaves the rather unpalatable option of mounting a full-scale invasion of the sort that would inevitably involve urban fighting and civilian casualties.”
Pham also said there is “little chance” that the U.N. would allow its peacekeepers to get involved in such an effort. “The precedent would make it very difficult to get future agreement for deployment of such missions by host countries,” he said.
Diplomatic pressure and sanctions have left Gbagbo increasingly isolated, though he has been able to maintain his rule for nearly a month since the disputed vote because he still has the loyalty of security forces and the country’s military.
Even that, though, may disappear if he runs out of money to pay them. Gbagbo’s access to the state funds used to pay soldiers and civil servants has been cut off and only Ouattara’s representatives now have access to the state coffers.
Senior diplomatic sources, speaking on condition of anonymity because of the sensitivity of the issue, say that Gbagbo only has enough reserves to run the country for three months.
Bank of England policy maker Adam Posen said policy makers shouldn’t “overreact” to inflation, which may slow below 1 percent in two years.
The bank’s Monetary Policy Committee “would only make things worse by making policy looking in the rear-view mirror, trying to make up for past mistakes,” Posen said in a speech today in Billericay, England. “If we allow for even just some exchange-rate pressure upwards on prices over this period as well, underlying U.K. inflation has stayed well below target.”
U.K. inflation has exceeded the government’s 3 percent limit for nine months, and an increase in value-added tax on sales in January may add to prices in 2011. Posen said Britain’s economy still has a “large” amount of slack in the aftermath of the recession and the largest government budget squeeze since World War II will slow inflation.
“Neither our forecast nor our policy going forward should overreact reflexively to that above-target inflation, even though it will persist for the next few months after the coming VAT rise,” Posen said.
Posen’s analysis leads him “to a forecast for U.K. inflation well below that of the November Inflation Report, and more importantly a forecast that at the target horizon of two- plus years, annual CPI inflation will be significantly below target (perhaps by 1 percent or more),” he said.
Price Expectations
Consumer prices rose 3.3 percent from a year earlier in November, the highest since May. Consumers’ inflation expectations reached a two-year high in November in a GfK NOP Ltd. survey for the Bank of England released today.
The large amount of slack in the economy will still curb consumer-price gains, Posen said.
“Financial crises in advanced economies do not destroy enough productive capacity to offset the disinflationary fall in demand,” he said. “For the U.K. today, this would suggest that a sizable output gap still exists, exerting downward pressure on inflation, all else equal.”
The bank’s nine-member committee kept its bond-purchase plan unchanged at 200 billion pounds ($312 billion) this month and held its benchmark interest rate at a record low of 0.5 percent. Minutes of the central bank’s Nov. 4 decision showed policy makers split three ways, with Andrew Sentance calling for higher rates to combat inflation and Posen pushing for more stimulus to sustain the recovery. The rest voted for no change.
Minutes of this month’s decision are due Dec. 22.
Oil, gold and silver prices started out the session soaring for a second day in a row Tuesday. But commodities took a breather as the euro’s upward push lost steam.
The European currency had been getting a boost from signs that European debt problems may be easing: The Irish parliament is close to approving an emergency budget that will get that country back on track. And European finance ministers say they have sufficient reserves to help Spain and Portugal if those countries need it.
Earlier in the session, the U.S. dollar dropped 0.6% against the euro. But the euro pulled back in afternoon trading, falling 0.3% versus the greenback. Commodities, including oil, gold and silver, are priced in dollars, so a weaker greenback boosts prices.
Crude prices reversed direction as well, slipping 69 cents to settle at $88.69.
Prices had jumped 1.5% in the morning and crossed $90 per barrel for the first time since October 2008. The big gains came as stocks rallied, following President Obama’s compromise with Republican lawmakers to extend the Bush-era tax cuts for two years. Crude has been on the rise since Nov. 23, gaining more than 10% during the two-week period.
"It looks like we’re just taking a breather from a pretty good run," said James Williams, president and energy economist at WTRG Economics. "There’s some profit-taking, as well as people saying maybe this agreement on the tax cuts isn’t as rosy as we thought and folks considering whether $90 crude is really sustainable in a weak economy — and of course we still have lots of concerns about Europe."
Gold also eased, slipping $7.10 to settle at $1,409 after surging to record levels above $1,432 an ounce earlier in the session.
Meanwhile, silver closed off session highs. The precious metal finished 4 cents higher after surging to fresh 30-year highs of $30.75 per ounce in earlier trading.
Facebook Inc. has reportedly acquired online content publishing software start-up Chai Labs Inc.
The All Things Digital blog of the Wall Street Journal reported the deal on Sunday, saying it is likely to be in the $10 million range and is most likely a talent buy rather than a new product play by the Palo Alto social networking company.
Mountain View-based Chai Labs was founded by Gokul Rajaram, who is a former Google Inc. (NASDAQ:GOOG) AdSense executive.
Regulatory filings show that it raised $1.1 million in funding last year and $1.3 million in 2008. Among the advisers list on its website are Netscape Communications Corp. founder Marc Andreessen, LinkedIn Inc. founder Reid Hoffman and Excite co-founder Joe Kraus.
Chai Labs' technology helps publishers and journalists launch content websites.
Maintenance and procedural problems at a Gilead Sciences Inc. manufacturing and distribution facility could land the HIV drug maker a warning letter from the Food and Drug Administration.
In a Securities and Exchange Commission filing Monday, Foster City-based Gilead (NASDAQ: GILD) said a routine FDA inspection of its San Dimas facility in February raised concerns from the agency about maintenance of aseptic processing conditions in the manufacturing area for its AmBisome anti-fungal product. The agency also cited environmental maintenance issues in the warehouse, batch sampling and the timeliness of completion of annual product quality reports.
Gilead, which said it has addressed all of the FDA’s concerns, learned in May that the agency “may be considering” issuing a warning letter as a result of the inspection, according to the SEC filing guaranteed payday loan.
A warning letter could hurt Gilead’s ability to receive export certificates or approvals of regulatory applications associated with “the products at issue,” the company said, and “decrease our revenues and harm our business.”
Gilead makes AmBisome and Cayston, a recently approved inhaled drug to treat cystic fibrosis symptoms, at San Dimas. It also fills and finishes Macugen, an injectable drug marketed by Eyetech Inc. to treat age-related macular degeneration, at the facility.
AmBisome had sales of $155.2 million in the first half, Gilead’s largest-selling drug outside of its antiviral products.
Sales may have risen only slightly on Black Friday as U.S. shoppers sought deals on electronics, toys and clothes, but retailers appeared to have been better-prepared to protect margins against tepid results.
At the start of the U.S. holiday shopping season on Friday and through the weekend, both discount chains like Wal-Mart Stores Inc and higher-end stores like Saks Inc seemed to have lured more spending and avoided steep discounts, retail consultants and executives said on Sunday.
Specialty apparel chains, however, may face another tough year as they relied on heavy promotions to draw shoppers.
“Going through the mall on Friday, the stores that had not been doing as well — AnnTaylor, Limited, Gap — were very aggressively promoting,” said Jeff Edelman, director of retail and consumer advisory services at RSM McGladrey.
“Saks, which had low inventories, Bloomingdale’s, which had low inventories, were maybe 25 percent off or 30 percent off, and it was on selected items,” he said. “It’s not as if the entire store was on sale as it was last year.”
Edelman expects holiday sales to be flat this year, but he said he expected profits for most retailers to be higher.
For a graphic on U.S. holiday sales trends, click here
For a Reuters Insider segment on holiday sales, click on link.reuters.com/wuj63g
Data released on Saturday showed that sales rose a scant 0.5 percent on Black Friday, the day after Thanksgiving. Shoppers interviewed across the country said they were lured by bargains, but many said they would stick to their budgets and avoid purchases if they could not find a good deal.
Bill Taubman of Taubman Centers Inc said that anecdotally in his 24 malls, it appeared that traffic and spending rose in the high single-digit to low double-digit percentage range on Friday. On Saturday, business slowed, and it appeared to rise in the mid to low single-digit range.
“You’re seeing a little bit of a barbell — the low end of stores are clearly recovering and the high-end stores are also recovering against a low base,” he said.
That does not mean consumer spending is rebounding to levels in 2007, before a global financial crisis and recession.
“You’re clearly down on a two-year run rate,” Taubman said. But he added, “margins are going to be extremely good because (retailers) have been careful about what they bought.”
ShopperTrak said retail sales rose to $10.66 billion on Black Friday, which often is the single-busiest shopping day of the holiday season and can set the tone for the weeks leading up to Christmas on December 25.
In 2008, Black Friday sales measured by ShopperTrak rose 3 percent compared with the prior year’s Black Friday. Last year’s entire holiday season marked the worst performance in nearly 40 years. The firm stuck by its forecast for total holiday sales to rise 1.6 percent this year compared with 2008.
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