Procter & Gamble CEO defends plan at staid shareholder meeting

CINCINNATI, Tue Oct 9, 2012 – Procter & Gamble Co.’s CEO stood behind the company’s plan for increasing profit and sales at a drama-free annual meeting notable for the absence of William Ackman, the activist investor who has pushed hard for change in recent months at the world’s largest maker of household products.

Chief Executive Bob McDonald defended the strategy of developing major new products while the company at the same time seeks to cut $10 billion in costs.

Tuesday’s meeting, held in P&G’s hometown of Cincinnati, came as something of a respite for McDonald months after Ackman’s Pershing Square Capital Management took a stake in P&G, putting pressure on the CEO and the board to improve performance.

McDonald, who has been at the helm since July 2009, is refocusing on core categories, countries and innovations with both the $10 billion restructuring and a strategy laid out in June that homes in on the company’s 40 biggest businesses, 20 biggest new products and 10 key developing markets.

Ackman, who disclosed his stake in the maker of Tide detergent and Crest toothpaste too late to have any proposals on the agenda, was not in attendance, and only one shareholder referred to him, asking why it took the investment of an activist to boost P&G’s stock.

“If we remain focused on the plan I talked about, the 40/20/10 plan, with improved innovation from discontinuous innovation, with productivity improvement, then we are all convinced that shareholders will get an increase in value and the stock will reflect that,” McDonald replied, without mentioning Ackman directly. “We are focused like a laser, we are holding our own feet to the fire to do this.”

GM names Robert Ferguson Cadillac global brand chief

Tue Oct 9, 2012 – General Motors Co. has created the new position of global brand chief for Cadillac as the U.S. automaker looks to broaden global demand for the luxury line of vehicles.

Robert Ferguson, who assumes the position immediately, will lead Cadillac’s worldwide growth and development, and report directly to Chief Executive Dan Akerson. GM has designated Cadillac and Chevrolet as its two global brands.

Ferguson, 53, will be responsible for marketing, brand management and advertising for Cadillac in markets around the world. Responsibility for sales is also expected to shift to Ferguson at the start of 2013, GM said on Tuesday.

“The opportunity to strengthen and grow Cadillac is ours for the taking,” Ferguson said in a statement.

Ferguson’s new job comes at a time when GM’s luxury brand is planning its most extensive round of product launches and upgrades in its history, including the new ATS small luxury sedan.

Cadillac executives said the brand should be challenging foreign automakers for the top spot in U.S. luxury auto sales in a few years, a position it had not held in 15 years.

Twitter’s Jack Dorsey cuts back on executive chairman role

SAN FRANCISCO, Tue Oct 9, 2012 – Twitter founder and Executive Chairman Jack Dorsey said on Tuesday that he trimmed his role at the microblogging service months ago as he devoted the majority of his time to Square, the payment start-up where he is chief executive.

Dorsey transferred all of his employee supervision to Twitter Chief Executive Dick Costolo in January as part of a pre-arranged transition process, Dorsey disclosed on his Tumblr blog.

“We haven’t talked about this publicly because it’s not what people using Twitter every day care about,” Dorsey wrote.

Dorsey took to his personal blog to clarify his role at Twitter, the messaging service he invented in 2006, after The New York Times reported he had taken on a diminished role at the company after employees complained that he was “difficult to work with.”

Dorsey was previously Twitter’s CEO until 2008, when he was pushed out by Twitter co-founder Evan Williams. He launched Square that year.

Dorsey returned to his current role at Twitter in March 2011. He caused a stir within Silicon Valley last November when he said at a conference that he worked 8 hours at each company – totaling 16 hours every day – by being “very disciplined.”

NuPathe to cut half its jobs to conserve cash

CONSHOHOCKEN, Pa., Tue Oct 9, 2012 – NuPathe Inc. said it would cut half of its workforce to reduce costs and focus on the regulatory approval of its experimental migraine patch.

The company said it will reduce expenses related to the marketing of the pain patch and on earlier-stage drug candidates.

NuPathe has 37 employees, according to Thomson Reuters data.

It also plans to delay the application for its experimental treatment for schizophrenia and bipolar disorder until it finds a partner.

NuPathe is trying to raise about $28 million in a proposed financing and expects the cost cut initiatives, along with the proceeds, to be sufficient to fund operations into the fourth quarter of 2013.

The company, which has a market capitalization of about $55 million, had cash and cash equivalents of $7.5 million as of June 30.

In July, the U.S. Food and Drug Administration accepted a resubmission of the company’s approval application for the migraine patch, called NP101.

NuPathe shares closed at $3.71 on Monday on the Nasdaq.

Geithner welcomes India’s new drive for reform

WASHINGTON, Tue Oct 9, 2012 – U.S. Treasury Secretary Timothy Geithner welcomed New Delhi’s new-found appetite for economic reform on Tuesday, barely three months after Washington had voiced concern about India’s deteriorating investment climate.

Hailing the latest reforms as “significant,” Geithner told a news conference with Indian Finance Minister P. Chidambaram in New Delhi that the policies offered “a very promising path to improving growth outcomes for the Indian economy.”

India’s economic growth has slowed to its lowest in nearly three years and earlier on Tuesday the International Monetary Fund (IMF) sharply cut its projection for GDP growth to 4.9 percent in 2012, one of the lowest official forecasts so far.

“The recent reforms advanced by Prime Minister (Manmohan) Singh and Minister Chidambaram will help provide a foundation for stronger economic growth, an increase in investment, and more widespread gains in income,” Geithner said.

Regulatory uncertainty and policy gridlock have battered foreign corporate investment towards India over the past year, adding to dramatic slowdown in growth.

AEG auction starts; Anschutz seeks bids in $10 billion range

NEW YORK, Tue Oct 9, 2012 – Billionaire Phil Anschutz has kicked off the auction of his Anschutz Entertainment Group, with an expectation that the sports and entertainment giant should draw bids in the $10 billion range, higher than previously believed, according to sources familiar with the situation.

The initial, 25-page AEG information memorandum that describes the business but has no financial information was expected to go to “dozens” of potential buyers on Monday, the sources said. The initial group of recipients is expected to include rich individuals, rivals, sovereign wealth funds, real estate firms, and private equity firms, they said.

Anschutz is likely to start signing non-disclosure agreements and send out the books with financial details by the end of the month, the sources said.

The list of potential bidders includes trade buyers such as Liberty Media Corp.; investment companies such as Guggenheim Partners LLC; private equity firms such as Thomas H. Lee Partners LP, Bain Capital LLC and Colony Capital LLC; and rich individuals such as Los Angeles biotech billionaire Patrick Soon-Shiong, sources have previously said.

Bidders are likely to need to come up with bids in the “high single digit, low double digit” billion dollars to proceed to the next round, the sources said, signaling that Anschutz has a higher price expectation than previously believed.

Sources close to potential buyers had said last month that the company could fetch between $6 billion and $8 billion in a sale.

“The Anschutz Co has no comment on the sales process beyond its press release announcing the sales process,” it said in a statement on Monday. As a private owner, the Denver-based billionaire has the final say in any deal.

Anschutz said last month that it was exploring a sale of AEG and had hired Blackstone Advisory Partners to advise it on the process.

AEG, which has around 25,000 employees, has developed more than 100 entertainment venues globally, in some of the world’s largest cities such as Los Angeles, London, Berlin and Shanghai. These include the Staples Center in Los Angeles, The O2 Arena in London and the Mercedes-Benz Arena in Shanghai.

The company also owns sports assets that include the Los Angeles Galaxy Major League Soccer team, possibly best-known for its star David Beckham, and a stake in the National Basketball Association’s Los Angeles Lakers.

SEC sues ex-Detroit officials, adviser on ‘lavish gifts’ conflicts of interest

WASHINGTON, Wed May 9, 2012 – U.S. securities regulators on Wednesday charged the former Detroit mayor and treasurer along with the city’s public pension investment adviser with devising a secret exchange of “lavish gifts” to influence the pension fund’s investments.

The Securities and Exchange Commission’s case, filed in a U.S. district court in Michigan, alleges that ex-Mayor Kwame Kilpatrick and former Treasurer Jeffrey Beasley solicited $125,000 worth of perks paid for by advisory firm MayfieldGentry Realty Advisors LLC.

The SEC claims that MayfieldGentry’s CEO, Chauncey Mayfield, in turn recommended $117 million worth of investments in a real estate investment trust controlled by his firm.

The SEC said these alleged conflicts of interest were never disclosed.

Wholesale inventories data points to first quarter GDP downgrade

WASHINGTON, Wed May 9, 2012 – Stocks of unsold goods at wholesalers rose modestly in March, according to government data on Wednesday that suggested a downward revision to the initial first-quarter growth estimate.

Wholesale inventories increased 0.3 percent to a record $480.4 billion, the Commerce Department said, after an unrevised 0.9 percent rise in February.

The increase was half what economists polled by Reuters had expected, leaving them to conclude that the government would likely lower its first-quarter GDP estimate to an annual pace of 1.9 percent from the 2.2 percent rate it reported last month.

The change in inventories is a key component in the calculation of GDP. However, the actual size of the revision would be depend on data next week on overall business inventories for March.

Trade data for March to be released on Thursday will also have an impact on the first-quarter GDP estimate. The government used estimates for both business inventories and the trade balance for its first GDP estimate, published last month.

Economists said the wholesale numbers, particularly the ex-autos component that goes into the GDP calculation, had come in softer than the government’s assumptions.

Macy’s maintains outlook for full year, disappointing Wall Street

NEW YORK, Wed May 9, 2012 – Macy’s Inc. kept its full-year profit forecast despite reporting better-than-expected first-quarter earnings on Wednesday, disappointing Wall Street and putting pressure on the retailer’s shares.

Macy’s, which also owns the upscale Bloomingdale’s chain, has handily outperformed its mid-tier competitors in the last year, winning shoppers away from chains such as J.C. Penney Co. Inc. and Kohl’s Corp.

CFO Karen Hoguet told analysts on a conference call that Macy’s has seen an uptick in sales in areas where a store competes directly with Penney, which in February implemented a new pricing strategy that largely gets rid of sales events. Analysts have said such changes would hurt Penney at least initially.

Macy’s often raises its full-year profit forecast after reporting such strong numbers.

When Barclays Capital analyst Robert Drbul asked Hoguet why the company had not done so this time, she said the “guidance for the year was more aggressive than usual.”

Macy’s gross profit margin edged down in the first quarter, largely because of shipping costs linked to its rising Internet sales. Sales growth in April, which had been expected to be weaker than in March because of an early Easter, came in below what Wall Street was expecting.

Morningstar analyst Paul Swinand said that Macy’s long winning streak may have led analysts to get ahead of themselves.

Macy’s shares last week rose to $42.17, their highest level since July 2007, making them vulnerable to a sell-off. On Wednesday morning, the shares fell as much as 6.3 percent to $37.02 on the New York Stock Exchange before paring some of those losses to be down 3.4 percent to $38.18 in early afternoon trading.

AOL quarterly profit beats Wall Street forecast; display ads dip

DULLES, Va., Wed May 9, 2012 – AOL Inc. reported better-than-expected quarterly revenue and profit on Wednesday, although lower premium ad sales in the United States and subscriptions dragged total revenue down.

The company said first-quarter revenue fell 4 percent to $529.4 million, beating analysts’ average forecast of $526.5 million.

Total advertising revenue grew 5 percent on strong growth in third-party network ads and international growth.

But display advertising – big splashy units on Web pages that command high prices – hit a hurdle in the United States, where it fell 1 percent.

“I wasn’t surprised that much,” said Benchmark analyst Clayton Moran about AOL’s display ad revenue. “We saw similar weakness from Facebook and Yahoo.”

“It could be an industry thing or that Google is gaining so much (ad revenue) share that other parties are losing,” Moran said.

Late in April, Facebook reported its first quarter-to-quarter revenue drop in at least two years, blaming it on seasonal advertising trends.

Since its spinoff from Time Warner in 2009, AOL has been attempting to transform into a media destination dependent on advertising revenue, while at the same time winding down its lucrative dial-up service.

The company has snapped up a host of high-profile media properties, like the Huffington Post and TechCrunch, and has poured millions of dollars into a network of neighborhood news sites called Patch.

In the meantime, AOL has agreed to sell the majority of its patents for approximately $1 billion to Microsoft, which in turn is selling them to Facebook.

The company faces a looming proxy fight with one of its largest shareholders, Starboard Value. Starboard contends that AOL is not doing enough to return value to shareholders and has nominated a slate of three directors to the AOL board.