Thursday, June 19, 2008

Fedex Look Carefully

Fedex (FDX) released numbers and confirmed that the economy is slowing down. The cost of fuel is up and business is tough. To those who are surprised well what can we say? They are struggled with the Kinko’s thing and are rebranding it as Fedex Office. Non cash write downs now. Cash costs attributable to rebranding soon to appear.

Management rightfully notes that the cost of fuel is up dramatically. Q4 comparable comparisons indicate a 53% increase. Year over year shows 28%. They claim to fuel surcharge customers but appear to be unable to stem the flow of red ink.

Check this cost. Purchased Transportation is up 23% in Q4 and for the year they are up 10%. Last fiscal year they spent $2.7 billion. The spend is clearly increasing. Next to no comment on this point. You have got to be feeling a little naked on that one.

Wednesday, June 18, 2008

BCE Sweats it Out

BCE Enterprises (BCE) was in court yesterday along with the supposedly aggrieved bond holders. The Supreme Court justices seemed ready for the lawyers and closely questioned all involved. A decision is reserved and will probably be released later this week. My bet is that it will be after market close on Friday. This will allow the market to digest the news over the weekend Bar B Q.

My spies tell me to pay attention to how the justices reacted to the original non inclusion of clauses relating to debt to equity and take over provisions. They did not miss the fact that what is normally included in other bond deals was specifically not included in this one. The bondholders agreed to a scenario that allowed these events. The Justices may have connected those dots.
Therefore the call should be in favour of the deal going down.

Tuesday, June 17, 2008

Hershey Looks for the Sweet Spot

Hershey today announced something called “New Consumer-Centric Approach and Allocates Resources Behind Core Brands to Drive Long-Term Net Sales and Earnings Growth”. Hey guys you are a chocolate company. If it does not taste good the consumer will not buy it. That is truly consumer centric if you have not already noticed.

The problem with this announcement and the analyst meeting that will be webcast is that no real information will be offered. From a commercially competitive point of view there is only so much of the kimono that will be opened up.

In reading the press release it appears that they have identified the United States as a key market with growth opportunities. Later they speak of international opportunities. Every market and product manager must fight like hell; but are they betting on black and red and hoping to beat the house.

Monday, June 16, 2008

Threesomes Rarely Work For Long - Google/Yahoo/Microsoft

OK so maybe Microsoft (MSFT) pulled away from Yahoo (YHOO) and Google (GOOG) thinks it may now control the on line ad world. Carl Icahn wants to administer a corporate spanking to Yahoo. Balmer is looking pretty good for not overpaying (a rarity in M&A) Google is probably thinking now what. Because if we control everything there are no more excuses.

These three have formed a threesome just through their implied powers, attributes and other fantasies held by the marketplace. The financial press and media are looking at these three as they relate to one another. No one industry in the history of business and commerce has allowed a combined entity this powerful to survive for long. The simple reason is that it will have too much power over marketing.

The western world and increasing parts of the developing world are consumer driven. This means marketing is key. Millions of highly skilled professionals cannot be replaced by Google’s Algorithm (s). By virtue of the fact that there is a logic in the algorithm, refined and updated as it is, means that your product marketing strategy will be define by what Google says is working and not working.