Monthly Archives: December 2016

Business Orders Exceed Predictions in November

Analysts are hopeful that the economy is rebounding steadily as corporate investment is stabilizing, signaled by a better than expected uptick in business equipment orders.
November’s figures for non-defense capital goods, not including aircraft, climbed by 0.9 percent, the highest since August, and higher than was forecast. A Bloomberg survey predicted 0.4 percent growth.

“There’s some early evidence that business investment may be stabilizing,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Investment has been a sore spot for the U.S. economy for a little bit now. Going forward we should see investment pick up.”

November posted orders for communications equipment growth by 6.7 percent, which was the highest since the beginning of 2015. Orders for machinery went up by 1.3 percent, the most since January.

Bookings for military capital equipment went up by 29.1 percent. Non-defense durable goods (items that are meant to last at least three years) fell by 6.6 percent.

Healthier Eating Trends Forcing Companies to Re-Brand and Re-Formulate

Limited Edition Mini Trix Cereal Closeup. Photo by
theimpulsivebuy.

As consumers begin to move away from prepared and processed foods and towards fresher, more wholesome ingredients, giant companies like General Mills and ConArgra Brands have had to make changes to keep market share.

General Mills has been steadily removing synthetic dyes from their breakfast cereals such as Trix for years, and are finally seeing a turnaround in sales. Sales of their reformulated cereals are up by 3 percent in the US in the last reported quarter. However, the good news comes with bad as sales of yogurt is in decline.

The company is adding products perceived as healthier, such as organic yogurt and completely new products such as yogurt snacks and drinks which are not packaged in traditional yogurt cup packaging.

This week General Mills will be presenting their successes and failures to their investors. They are expected to report underwhelming earnings of 87 cents per share on $4.23 billion in revenue, down from $4.42 billion one year ago.

ConArgra has been down-sizing, spinning-off its commercial foods operation and selling its private label business. Chief Executive Sean Connolly, who joined ConAgra less than two years ago, explained that off-loading divisions will allow the company to concentrate on building up their older brands which had lost their appeal.

Reddi-wip is now advertising that it is made with “real-cream” in place of hydrogenated oils, and that there is no artificial growth hormone is found in the ingredients. Hunt’s has been bragging that it steams off the tomato skins rather using a chemical process. ConAgra state’s on the Hebrew National Website that there are no artificial flavors, filler or byproducts, because “The shorter the ingredients list, the better.”

Later this week ConAgra is expected to report flat earnings of 45 cents per share on $2.11 billion in revenue for the last quarter reported.

Newell Buys Sistema: Will Keep Company in New Zealand

Brendan Lindsay, founder and 90 percent owner of kitchen plastics company Sistema, said yes to Newell’s second offer to purchase his company for $660 million.
In 2014 Lindsay turned down a similar offer because Newell would not commit to keeping the factory and its 700 jobs at home in New Zealand. This year, after visiting Sistema’s spanking new facility, Newell, which has a US market capitalization of $22 billion, cooperated with all of Lindsay’s demands.

“There’s a 20-year lease on the building, guaranteed employment for 700 staff with all their [existing] employment conditions. It’s business as usual, nothing changes,” Lindsay said. “The way I look at it, this is my baby and it’s time for new parents. And it’s the best deal for Sistema because why would you give your baby to parents you didn’t like or trust?”