MasterCard: Spending Abroad Lifts Results
MasterCard (MA) beat Wall Street expectations when it posted a 15 percent increase in net income, to $518 million, for the third quarter. The world's second-biggest payments network says spending on MasterCard- and Maestro-branded cards climbed 7.9 percent globally, led by Asia and Latin America. Stateside, purchases with MasterCard-branded debit cards jumped 32 percent, a sign that U.S. consumers are switching from cash to plastic. MasterCard and Visa (V) are watching to see how the Federal Reserve interprets the new mandate it received from Congress as part of the financial regulatory overhaul to cap the fees the companies charge merchants on debit-card transactions.
Kellogg: The Cereal Maker's Sales Keep Sliding
Kellog (K) reported a 6.4 percent drop in third-quarter profits, to $338 million. The culprit: falling sales in North America, which accounts for about two-thirds of revenue. Kellog trimmed its 2010 earnings forecast in October, citing heightened competition and slumping demand following a June recall of 28 million boxes of Froot Loops, Honey Smacks, Apple Jacks, and Corn Pops. One risk on the horizon, analysts say, is that strapped consumers will trade down to private-label brands as Kellogg and rival General Mills (GIS) dial back on promotions.
General Motors: IPO Plans Are in High Gear
General Motors plans to raise as much as $10.6 billion in an initial public offering that will pare back the U.S. and Canadian governments' stakes in the bailed-out carmaker, according to a Securities and Exchange Commission filing. GM, which is 61 percent owned by the U.S. Treasury, will offer 365 million shares priced at $26 to $29. A road show to market GM to investors in North America and Europe got under way on Nov. 4, one day after the automaker reported a better-than-expected 3.5 percent increase in U.S. auto sales for October.
Metro-Goldwyn-Mayer: The Studio Files for Bankruptcy
Metro-Goldwyn-Mayer, distributor of the James Bond and Rocky movies, filed for bankruptcy on Nov. 4 after rejecting a $1.7 billion takeover bid by Lions Gate Entertainment (LGF) and billionaire Carl Icahn. The Hollywood studio, which foundered after a leveraged buyout, has creditor support for a prepackaged bankruptcy plan to extinguish about $4 billion of debt and install managers from Spyglass Entertainment. Under the plan, creditors will swap their debt for stock in a streamlined company.
Apple: Return On Cash is Nano-Sized
Apple (AAPL) earned 0.75 percent on its $51 billion in cash and investments in its last fiscal year, according to a regulatory filing. That's a lower return than a typical U.S. savings account and pales next to the roughly 10 percent investors would have earned from the Standard & Poor's 500-stock index over that time. Apple does not pay a dividend. In a conference call last month, CEO Steve Jobs said: "We'd like to continue to keep our powder dry because we do feel that there are one or more strategic opportunities in the future."
On the Move
— Accor: CEO Gilles Pelisson replaced with Denis Hennequin, formerly of McDonald's (MCD)
— YouTube (GOOG): Co-Founder Chad Hurley steps down from top job
— Lloyds Banking Group (LYG): António Horta-Osório of Santander (STD) named CEO