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American International Group Inc (NYSE:AIG) Announces Much-Awaited Restructuring Plan

By
Carol Harper
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American International Group Inc (NYSE:AIG)

American International Group Inc (NYSE:AIG) revealed the much-awaited restructuring proposal in response to the billionaire and activist investor, Carl Icahn’s, plan to split the company into three. The plan involves the return of capital to its shareholders, and divestitures while GOE reductions and commercial P&C underwriting remain the focus areas for operating enhancements. The insurer also pushes for a modular operating model and legacy portfolio in its organizational changes. The company faced increasing pressure after MetLife Inc (NYSE:MET) announced its plan to split its retail operations in the United States.

Not For Break-Up

American International Group Inc (NYSE:AIG) made it clear that it is not breaking up the company. The insurer said that a near-term break-up would deviate itself from increasing the shareholder value. The company cited that less capital would become available for distribution due to the absence of gains from diversification. If break-up was initiated, the insurance firm fears loss of value from DTA while SIFI designation does not necessarily mean increased compliance costs.

The company said that it would divest 19.9% in United Guarantee through IPO in the current year. That is a first step towards making it as a separate firm, and, at the same time, protects the deferred tax assets value. The insurer indicated its willingness consider the separation of even bigger modular business divisions in the Commercial and Consumer divisions. However, that would be subject to credit risk profile, as well as, the operating results.

Return Of Capital

American International Group Inc (NYSE:AIG) has also pledged to return a minimum of $25 billion to its shareholders by way of dividend and share buyback program. The insurance firm also pledged to slash its general operating expenses or GOE by $1.6 billion while improving its commercial P&C accident loss ratio by six points. The company has not disclosed any time frame to achieve the proposals.

American International Group Inc (NYSE:AIG) also disclosed its intention to divest AIG Advisor Group for undisclosed terms of agreement. Lightyear Capital LLC-affiliated investment funds and PSP Investments were the buyer, and the transaction would close in the June quarter. Its CEO, Peter Hancock, said that the company would continue to undertake the business review and initiate actions to make it a more efficient and less complex firm.

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Cisco Systems, Inc. (CSCO) Terms Arista Networks Inc (ANET)’s Anti-Trust Suit as Distracting

By
Carol Harper
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Cisco Systems, Inc. (NASDAQ:CSCO)

Cisco Systems, Inc. (NASDAQ:CSCO) has not taken the anti-trust suit filing of Arista Networks Inc (NYSE:ANET) lightly and charged them with bogus claims that were either coincidence or accidental. In fact, it was a planned one. The network switch maker blamed its rival of using distracting tactics as the International Trade Commission is expected to pronounce a key ruling this week.

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Repetition Of Claims

Cisco Systems, Inc. (NASDAQ:CSCO) also charged that Arista Networks Inc (NYSE:ANET) has repeated the same claims that it included in the earlier filings. Therefore, it is a smokescreen to sidetrack the issues as the ruling on five of its patents were keenly awaited. The company preferred to take the issue to ITC due to its defined, as well as, accelerated timeframe. The judge would give a ruling as to who infringed the five patents.

The networking switch maker said that if the ITC finds Arista Networks Inc (NYSE:ANET) guilty of infringing any of the patents, then it would face the threat of banning most of its products entering the American market. It was because of this fear that the company was trying to divert the attention. That is because there is also another antitrust claim that will come up for trial in November.

Failed Deadline

Cisco Systems, Inc. (NASDAQ:CSCO) claimed Arista Networks Inc (NYSE:ANET) missed a deadline for modifying their claims in the CLI case in which they previously sought to add additional claims. Therefore, the networking equipment maker believes that the diversion they recently created was nothing new for Arista and that its focus was always to protect its innovation and prevent its rivals from using its copyrighted technology.

Cisco Systems, Inc. (NASDAQ:CSCO)’s Mark Chandler said in a blog that its approach was always consistent. The company encourages competitive, as well as, vibrant industry. He said that the company always looked for fair competition. However, it would not remain silent if anyone misappropriated its technology. He also said that Arista stands apart from the rest of rivals in the industry for the simple reason of copying its CLI sets.

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U.S. Stock Futures Turn Positive As Oil Trades Flat

By
Andy Parker
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After experiencing a steep sell-off yesterday, the U.S. stock markets are less likely to shrug off oil oversupplies concerns today. However, stabilization in the oil prices has led to the reversal in the U.S. stock futures during the pre-opening session, which was pointing to weak opening after both the Asian and European registered a decline for the day.

Massive sell-off yesterday

A day earlier, the Dow Jones Industrial Average dipped by over 200 points, or 1.3% while both Nasdaq and S&P 500 slipped by more than 1.5%. The energy stocks faced most of the heat with the stock prices of major companies declining, a massive oil supply from Iraq along side Iran’s pledge to increase production has kept the world markets anxious.

Ahead of the market opening, Dow Futures crawled into positive zone, adding 25 points, or 0.15%. The S&P futures is also marginally higher by 6 points, or 0.29% while Nasdaq 100 futures is up by 9 points or 0.2%.

Few important events lined up for the day

Apart from this, a number of U.S. based companies are set to publish their quarterly earnings before the opening bell. Few of which, includes Johnson & Johnson (NYSE:JNJ), Lockheed Martin Corporation (NYSE:LMT), 3M Co (NYSE:MMM), Procter & Gamble Co (NYSE:PG), Sprint Corp (NYSE:S) and Coach Inc (NYSE:COH).

Those scheduled to release earnings after the market close are AT&T Inc. (NYSE:T), Apple Inc. (NASDAQ:AAPL) and Capital One Financial Corp. (NYSE:COF). A number of analysts are eagerly awaiting Apple’s results as they anticipate the company to report profits more than $18.2 billion and revenue of $76.4 billion for its previous quarter.

Additionally, some economic data will be published today. The Case-Shiller home price index will be released early morning, which will help market participants gauge the direction of the U.S. housing market. Also, the U.S. Conference Board will report Consumer Confidence Index for the month of January.

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Ford Motor Company (NYSE:F) Sees No Prospects of Seeing Profits in Japan and Indonesia

By
Carol Harper
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Ford Motor Company (NYSE:F)

It is a hard decision taken by Ford Motor Company (NYSE:F) and would not be a surprise for some analysts, as well as, investors. The company indicated that it would wind up its factory in Japan and Indonesia before the end of the current year. The second largest American automaker has obviously thought that there was no point in running the operations in the absence of the prospects of seeing sales improving to deliver profitability in the region.

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Pursued All Possible Option

Ford Motor Company (NYSE:F)’s Asia Pacific spokesperson, Karen Hampton, told Bloomberg that the step was taken after careful consideration of every possible option before it. However, the automaker assured its customers that there would not be any disturbance in offering ongoing support for service or warranties or spare parts to its customers.

Hampton disclosed that it was quite clear that there was no possibility of finding any path to sustained profitability. She said that the company was also at a loss to find any acceptable return for its investments either in Indonesia or Japan in the near-term. However, the company indicated its commitment to serve the international markets. At the same time, Ford Motor Company (NYSE:F) is restructuring some of its business aggressively as it was not able to find any meaningful path to achieve either sales growth or profitability.

Domestic Firm Dominates

The move appeared to have come after Toyota Motor Corp (ADR) (NYSE:TM)’s continued dominance in its home turf. The Japanese firm has also been enjoying its dominance in Indonesia where its affiliate, Daihatsu Motor Co. is ruling the rust. The American firm might have felt that it would be better to invest back at home rather than keep losing its money overseas.

Ford Motor Company (NYSE:F) was not the only one to exit Indonesia. Last year, General Motors Company (NYSE:GM) also took a similar decision to wind up its factory in Southeast Asia’s biggest car market. As the economy was slowing down, the automakers do not see any turnaround in the next couple of years.

Ford has been operating in Japan since 1974. The company has 52 dealerships with 292 people employed. During previous year the company sold close to 5,000 vehicles in Japan with market share of 1.5 percent for newly imported cars.

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Tesla (NASDAQ:TSLA) To Build Electric Car Factory In China To Tab The Largest Auto Market In The World

By
Andy Parker
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Tesla Motors Inc (NASDAQ:TSLA) intends to build an electric car factory in China, with the aim to tap the largest auto market in the world and reap rewards. Since China has the largest global auto sales market, the Californian electric car manufacturer wants to gain a strong foothold there.

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Elon Musk, CEO Tesla, made the announcement a couple of days ahead of his participation in the technology forum to be held in Hong Kong. He was updating media about his perspective on Tesla’s role in Greater China’s auto market. However, the CEO did not reveal the specifics associated with the business and said that the performance of his company was reasonably well in the Mainland China although there have been few hiccups earlier.

Musk said that Tesla wants to invest in a local partner and a location in China for building a car manufacturing plant by the middle of 2016. The key strategy will be to get a waiver on high import duties that are charged by the local governments for all the foreign automakers who intend to do business in China. The company will also try to gain access to the various local incentives that are available for EVs.

Electric cars more in demand in China

Electric vehicles are in high demand in China so Tesla is keen to open its manufacturing unit in the country. However, even Musk admitted that the company would have to overcome many challenges before it becomes a reality.

Tesla Stats

At present, there are 15 stores in seven metro cities, over 1600 destination chargers and 340 Superchargers of Tesla in Greater China. Hong Kong is the city with the highest intensity of rapid changing stations of Tesla with 42 Superchargers. The city also has 75 destination chargers. Last year Tesla sold 2,221 Model S in Hong Kong, almost 80% of the electric vehicle sales made locally and 4.39% of the total global shipment from Tesla.

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Microsoft Corporation (NASDAQ:MSFT) And Smartwatch Vendor Olio Have Signed An Unconcealed-Licensing Agreement

By
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Microsoft Corporation (NASDAQ:MSFT) and smartwatch vendor, Olio Devices LLC, are now reading from the same script after announcing a patent licensing agreement that will cover wearable devices. While many are thirsty for details, the companies decided to not to divulge much information at the time.

Read Now:Serious Security flaws uncovered in IOS, Android and others.

According to a Microsoft spokesperson, the company was not ready yet to issue an additional comment about the deal other than the announcement of its signing. Hence, it is not clear as to whether this is the general Android patent-protection-type agreement.

In ordinary circumstances and after signing an Android licensing agreement, Microsoft is usually very quick to divulge the details. But going by a Microsoft phrase that often accompanies Android patent-licensing deals perhaps Olio’s licensing is a way of making the company’s licensable intellectual property available.

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Apparently, another notable thing is that a majority of employees in Olio previously worked for Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG). On the other hand, Olio iPhone and Android applications are both available, but there is no Windows Phone application.

A page on Olio’s website categorically talks about the Olio Devices applications that include plenty of open source libraries as well as their licenses. And on the list are Google Analytics and GoogleMaps.

Well, with all this unfolding around Microsoft and Olio, it is not easy for readers to deduce what is next. In any case, the question remains as to whether or not the new partnership between the two is meant to bring attention to the growing Android-licensing coffers.

 

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GrubHub Inc (NYSE:GRUB) Unveils $100 Million Buyback Plan

By
Andy Parker
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GrubHub Inc (NYSE:GRUB) intends to return $100 million to its shareholders through shares repurchase program. Additionally, GrubHub will also negotiate a $200 million credit facility to boost its cash position. At the same time, the company is hoping to take advantage of its financial flexibility to drive more long-term growth.

GrubHub Inc (NYSE:GRUB) shareholders have every reason to cheer. The board of the food ordering and delivery company has approved a $100 million buyback plan in a move that the management says is aimed at enhancing shareholder value. But there is more. The management has also received the green light to negotiate a credit facility of up to $200 million and that money will be used to grow the company so that shareholders can expect even more benefits in the future.

According to CEO, Matt Maloney, the buyback approval and the credit facility demonstrate the board’s commitment to maximize value for the shareholders.

Solid 4Q2015

GrubHub Inc (NYSE:GRUB) preannounced its 4Q2015 earnings in which EBITDA is expected to be above earlier guidance and revenue to come at the high end of the guidance. The management expects EBITDA to top the guided range of $23 to $25 million. The topline number is expected to come at the high end of the guidance of $98 to $100 million. Analysts on the average are looking for revenue of $99.3 million. That means that GrubHub is confident in beating consensus estimate for the topline.

New directors

GrubHub Inc (NYSE:GRUB) plans to add two new independent directors to its board. One of the two new directors will replace a board member who is due to step down. However, it remains unknown who is it that is poised to vacate his seat on GrubHub’s board.

The new members joining the board of GrubHub will be sourced from leading companies and the candidates are expected to bring extensive expertise in product development and leadership experience.

The shakeup of GrubHub’s board comes after Bill Gurley recently exited the board to apparently avoid a potential conflict of interest. Gurley is also a board member at Uber, which is expanding into the food ordering and delivery business, which is GrubHub’s domain.

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BBCN Bancorp Inc (NASDAQ:BBCN) Declares $0.11 Per Share Quarterly Dividend

By
Andy Parker
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BBCN Bancorp Inc (NASDAQ:BBCN) said it had a largely successful year in 2015 and looks forward to continued growth in 2016. The management reported 4Q2015 and full-year 2015 earnings that improved from a year ago. At the same time, BBCN Bancorp announced that its board of directors had approved a quarterly cash dividend of $0.11 a share.

Quarterly dividend

The $0.11/share dividend will be paid out to shareholders on February 19. However, the payout will only capture shareholders of record as of February 5. The dividend declaration is part of the efforts by BBCN Bancorp to return value to shareholders. The declaration of the dividend also followed a solid 4Q2015 and fiscal 2015 in which key performance metrics improved, sometimes beyond expectations.

4Q2015 performance highlight

BBCN Bancorp Inc (NASDAQ:BBCN) reported 4Q net income of $22.9 million or EPS of $0.29 after taking into account $1.4 million of expenses linked to the merger with Wilshire Bancorp. In Q3, the company generated net income of $25.1 million or EPS of $0.32. There was no major financial hit in the quarter as in the latest one. A year ago, BBCN Bancorp’s net income was $22.7 million or EPS of $0.29.

As such, net income of $22.9 million in the latest quarter exceeded $22.7 million in the same quarter last year.

Full-year highlights

BBCN Bancorp Inc (NASDAQ:BBCN)’s fiscal 2015 net income of $92.3 million surpassed the annual income of $88.6 million in the previous year. On an adjusted basis, 2015 EPS was $1.16, compared to $1.11 a year ago.

Other metrics

According to BBCN Bancorp Inc (NASDAQ:BBCN)’s CEO, Kevin S. Kim, new loan origination of $550 million hit a record and led to loan receivable jump of 12% compared to 2014. New loan bookings of $1.69 billion also rose 27% over last year’s figure.

BBCN Bancorp Inc (NASDAQ:BBCN) hit the performance milestones despite intense competition in its industry. Following the merger with Wilshire Bancorp, BBCN Bancorp is looking forward to a much brighter future in 2016 and beyond.

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OPEC Blames Nations Outside Cartel For Oil Rout

By
Andy Parker
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It was a short-lived recovery in oil prices, which have again jumped back in sub-30 per barrel territory. A slew of factors are responsible for driving oil prices to lower levels. However, the reluctance of the OPEC (Organisation of the Petroleum Exporting Countries) to address oversupplies combined with the massive output from Iraq are weighing on the commodity.

OPEC pleads co-operation

The global benchmark, Crude Oil Brent is seen trading at $30.52 as it shed nearly 6.3% on Monday while the U.S. Crude Futures (CLH6) for March delivery is hovering near $30.34.

The sentiment around oil has grown negative after the head of OPEC has asked oil-producing countries outside of OPEC to show co-operation. This signals that the OPEC is adamant on its stance to continue with existing oil output. Abdullah al-Badri, head of OPEC, released a statement asking co-operation from non-OPEC members to help contain oil supplies. Al-Badri held non-Opec members responsible for the current oil rout, which has further dampened the expectations of an early resolution.

Reluctant to act on its own

So far, only one of the members of OPEC is willing to consider ways to boost oil prices, according to Indonesia’s OPEC representative. Meanwhile, Iraq is busy pumping out more oil, indifferent to the current oil glut, which has further fueled the concerns over increasing oil supplies. The Iraqi government has reported a record high oil production of 4.13 million barrels per day. Simultaneously, Iran is also keen on loading more oil tankers following the lift of Western sanctions.

Amid these developments, several analysts hold are of the opinion that the oil reserves will rise during the next few months and will start declining from thereon. Given the current oil stockpiles, HSBC has trimmed its price forecast for Brent crude to $45 per barrel from $60 per barrel for the year 2016. Another research firm, UniCredit has also slashed its crude price forecast to $37 per barrel from $52.50 per barrel, signalling more pain ahead for the commodity.

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