[ {"id":"a98cf395-e706-54ad-b38d-b92db3d7e7ac","type":"article","starttime":"1487732400","starttime_iso8601":"2017-02-21T21:00:00-06:00","priority":0,"sections":[{"markets-and-stocks":"business/investment/markets-and-stocks"}],"flags":{"ap":"true"},"application":"editorial","title":"Raven Industries Gets Back on Track","url":"http://qctimes.com/business/investment/markets-and-stocks/article_a98cf395-e706-54ad-b38d-b92db3d7e7ac.html","permalink":"http://qctimes.com/business/investment/markets-and-stocks/raven-industries-gets-back-on-track/article_a98cf395-e706-54ad-b38d-b92db3d7e7ac.html","canonical":"http://news.lee.net/business/investment/markets-and-stocks/raven-industries-gets-back-on-track/article_7de94626-9951-503e-8872-5b0365600472.html","relatedAssetCounts":{"article":0,"audio":0,"image":1,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"newsfeedback@fool.com (Steve Symington)","prologue":"Raven Industries (NASDAQ: RAVN) announced strong fiscal third-quarter 2017 results last Wednesday, demonstrating improvements in growth on both its top and bottom lines. And with shares of the mini-industrial conglomerate up more than 20% since then, investors are rightly cheering the update.","supportsComments":false,"commentCount":0,"keywords":["wire"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"images":[{"id":"6622aa47-3311-5fe3-b831-95ec8d1ef186","description":"","byline":"","hireswidth":null,"hiresheight":null,"hiresurl":null,"presentation":null,"versions":{"full":{"type":"image/jpeg","width":"580","height":"270","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/6/62/6622aa47-3311-5fe3-b831-95ec8d1ef186/58ad028c8ef17.image.jpg?resize=580%2C270"},"100": {"type":"image/jpeg","width":"100","height":"47","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/6/62/6622aa47-3311-5fe3-b831-95ec8d1ef186/58ad028c8ef17.image.jpg?resize=100%2C47"},"300": {"type":"image/jpeg","width":"300","height":"140","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/6/62/6622aa47-3311-5fe3-b831-95ec8d1ef186/58ad028c8ef17.image.jpg?resize=300%2C140"},"1024":{"type":"image/jpeg","width":"1024","height":"477","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/6/62/6622aa47-3311-5fe3-b831-95ec8d1ef186/58ad028c8ef17.image.jpg"}}}],"revision":1,"commentID":"a98cf395-e706-54ad-b38d-b92db3d7e7ac","body":"
Raven Industries (NASDAQ: RAVN) announced strong fiscal third-quarter 2017 results last Wednesday, demonstrating improvements in growth on both its top and bottom lines. And with shares of the mini-industrial conglomerate up more than 20% since then, investors are rightly cheering the update.
\u00a0
But perspective is in order. It's been an odd several months for Raven Industries since the company\u00a0announced solid fiscal second-quarter 2017 results this past August. In September, the company revealed\u00a0that it wouldn't be able to file that quarter's Form 10-Q with the SEC in a timely fashion, leaving it temporarily non-compliant with Nasdaq listing rules.\u00a0And though Raven subsequently received an extension from the Nasdaq, giving it until early March to come into compliance, the same went for last week's third-quarter report, which was originally supposed to be filed with the SEC by mid-December.\u00a0
\u00a0
Before we talk about what caused those delays, let's\u00a0take a closer look at Raven Industries' fiscal third-quarter performance.
\u00a0

Raven's engineered-films division delivered significant profitability improvements this quarter. IMAGE SOURCE: Raven Industries.

Raven Industries results: The raw numbers

Metric

Fiscal Q3 2017*

Fiscal Q3 2016

Year-Over-Year Growth

Revenue

$72.5 million

$67.6 million

7.3%

Net income (loss)

$5.7 million

($6.2 million)

N/A

Earnings (loss) per diluted share

$0.16

($0.17)

N/A

*For the quarter ended Oct. 31, 2016. Data source: Raven Industries, Inc.\u00a0

What happened this quarter?

What (else) management had to say

To Raven's credit, it kept investors in the loop on its journey back to compliance, notably with updates on its expected filing timelines along the way. And during Raven's most recent\u00a0conference call, CEO Dan Rykhus elaborated:

During the third quarter, we undertook a review of several specific controls within our framework and the overall framework. As the company has grown through acquisition and experienced significant changes over the past two years, the complexity of the business has grown. This necessitates a stronger awareness of risk and additional controls commensurate with these new risks that are calibrated for the changing dynamics the business has experienced and may experience in the future. As a result, to the reassessment of our internal control framework, we've brought in experienced external consultants, including another large international and reputable accounting firm, and we are adding additional resources to our team. The organization is aligned to remediate the material weaknesses identified and to enhance our internal control framework. Remediation efforts begin in the third quarter of fiscal year 2017, continue in earnest today, and will be diligently executed until they are completed.

Rykhus also added color on the company's recent operational improvements and business momentum:

We are pleased with the continued improvement in financial performance in the third quarter. Strong performances in both applied technology and engineered films\u00a0are continuing, and momentum is building for these divisions. Sales growth in these two divisions [is] resulting in strong incremental margins and driving growth in their division profits. [...]\u00a0These growth trends continue to strengthen even further in the fourth quarter.

Looking forward

Raven typically does\u00a0not\u00a0provide financial guidance. But with the caveat that it still doesn't plan to do so going forward, the company made a rare exception this time, given its recent extenuating circumstances. More specifically, Raven expects revenue for the current fiscal year 2017 to end at roughly $277 million, including $105 million from applied technology, $138 million from engineered films, and $34 million from Aerostar. And looking forward, as Rykhus noted, both applied technology and engineered films are expected to end the year strong and continue their momentum into fiscal 2018.

All things considered -- however uneasy it might have made investors along the way -- it's encouraging that there were no drastic, business-altering financial restatements as Raven Industries hammered out its internal audit process. But investors should still keep their eyes peeled for any updates as Raven completes the remediation process to improve its internal control framework.

In the meantime, given the\u00a0big improvements in both sales and profitability from Raven's two core segments -- and assuming that momentum is sustainable as management suggests -- it was no surprise to see the market bidding up Raven Industries stock following its report.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Raven Industries. The Motley Fool has a disclosure policy.

"}, {"id":"f9ee9971-ffc3-5fea-ad46-41b9ac861f5f","type":"article","starttime":"1487730480","starttime_iso8601":"2017-02-21T20:28:00-06:00","lastupdated":"1487734363","priority":0,"sections":[{"markets-and-stocks":"business/investment/markets-and-stocks"}],"flags":{"ap":"true"},"application":"editorial","title":"AT&T Thinks You Want More Targeted Advertising","url":"http://qctimes.com/business/investment/markets-and-stocks/article_f9ee9971-ffc3-5fea-ad46-41b9ac861f5f.html","permalink":"http://qctimes.com/business/investment/markets-and-stocks/at-t-thinks-you-want-more-targeted-advertising/article_f9ee9971-ffc3-5fea-ad46-41b9ac861f5f.html","canonical":"http://news.lee.net/business/investment/markets-and-stocks/at-t-thinks-you-want-more-targeted-advertising/article_f1bc5e93-124b-5469-8265-b2e9b46b041c.html","relatedAssetCounts":{"article":0,"audio":0,"image":1,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"newsfeedback@fool.com (Evan Niu, CFA)","prologue":"AT&T (NYSE: T) is looking to circumvent a review from the Federal Communications Commission regarding its pending merger with Time Warner (NYSE: TWX), hoping to eliminate one of the many regulatory hoops it will need to jump through. The Department of Justice will definitely be reviewing the merger, but Ma Bell hopes to sidestep the FCC since there aren't expected to be any FCC license transfers and Time Warner does not offer any FCC-regulated services to consumers.","supportsComments":false,"commentCount":0,"keywords":["wire"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"images":[{"id":"e0e210db-792a-5316-8a04-2d80111fe003","description":"","byline":"","hireswidth":null,"hiresheight":null,"hiresurl":null,"presentation":null,"versions":{"full":{"type":"image/jpeg","width":"580","height":"326","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/e/0e/e0e210db-792a-5316-8a04-2d80111fe003/58ad028f8586f.image.jpg?resize=580%2C326"},"100": {"type":"image/jpeg","width":"100","height":"56","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/e/0e/e0e210db-792a-5316-8a04-2d80111fe003/58ad028f8586f.image.jpg?resize=100%2C56"},"300": {"type":"image/jpeg","width":"300","height":"169","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/e/0e/e0e210db-792a-5316-8a04-2d80111fe003/58ad028f8586f.image.jpg?resize=300%2C169"},"1024":{"type":"image/jpeg","width":"1024","height":"576","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/e/0e/e0e210db-792a-5316-8a04-2d80111fe003/58ad028f8586f.image.jpg"}}}],"revision":2,"commentID":"f9ee9971-ffc3-5fea-ad46-41b9ac861f5f","body":"

AT&T (NYSE: T) is looking to circumvent a review from the Federal Communications Commission regarding its pending merger with Time Warner (NYSE: TWX), hoping to eliminate one of the many regulatory hoops it will need to jump through. The Department of Justice will definitely be reviewing the merger, but Ma Bell hopes to sidestep the FCC since there aren't expected to be any FCC license transfers and Time Warner does not offer any FCC-regulated services to consumers.

Last month, Senator Al Franken asked AT&T to justify the purported benefits to consumers to assess if an FCC review was necessary. AT&T and Time Warner responded (link opens PDF) last week, outlining a slew of ways that American consumers may benefit, including through more targeted advertising.

HBO is one of Time Warner's most valuable assets. Image source: HBO.

\"Giving consumers what they want\"

I may be wrong, but I'm pretty sure more targeted advertising is at the top of nobody's wish list, unless you're an advertiser or an advertising company. AT&T and Time Warner state: \"Put simply, this merger is about giving consumers what they want.\" That primarily refers to a wider range of bundles that include telecommunications services combined with content, noting that vertical integration facilitates greater innovation. The pair then proceeds to provide a few examples of what that innovation might look like (emphasis added):

  • short-form programming optimized for presentation on mobile devices;
  • interactive and personalized methods of viewing sports and other live events;
  • more relevant advertising in ad-supported video services;
  • integration of professionally produced content with virtual reality or augmented reality services;
  • services that encourage consumers to combine professionally produced content with their own creative content and share the results on social media; and
  • greater choice, convenience, and value in programming bundles.

The thing is that most of these examples can be pursued without an $85 billion merger, so they don't help justify the acquisition. Fortunately, Franken isn't buying what the pair are selling, saying the response \"does little to address\" his concerns.

While AT&T says it will be better able to compete with larger cable companies, which should theoretically result in reduced prices, it fails to acknowledge the anti-competitive implications of its \"zero-rating\" policies, which it has already in place for its new DIRECTV Now service, itself a result of AT&T's 2014 acquisition of DIRECTV. Specifically, owning the content gives AT&T a powerful differentiating factor, and even if it didn't increase prices -- a pretty big if\u00a0-- competing service providers would likely be forced to increase their prices out of economic necessity if they wanted to compete with a zero-rated HBO Now, for instance.

Just because AT&T and Time Warner don't compete directly doesn't mean that a merger is good for consumers.

10 stocks we like better than AT and T

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Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.

"}, {"id":"c005f97c-137a-5dc8-9e84-161d03d9664c","type":"article","starttime":"1487729560","starttime_iso8601":"2017-02-21T20:12:40-06:00","lastupdated":"1487731736","priority":0,"sections":[{"business":"business"}],"flags":{"ap":"true"},"application":"editorial","title":"House GOP scales back income tax cut plan, waits to vote","url":"http://qctimes.com/business/article_c005f97c-137a-5dc8-9e84-161d03d9664c.html","permalink":"http://qctimes.com/business/house-gop-scales-back-income-tax-cut-plan-waits-to/article_c005f97c-137a-5dc8-9e84-161d03d9664c.html","canonical":"http://www.apnewsarchive.com/2017/House-Republicans-have-significantly-revised-their-income-tax-cut-plan/id-54650cefb96c4d86957d3a6eb0aaaaab","relatedAssetCounts":{"article":0,"audio":0,"image":0,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"By DAVID EGGERT\nAssociated Press","prologue":"LANSING, Mich. (AP) \u2014 Michigan House Republicans on Tuesday significantly revised their income tax cut plan, proposing to drop the 4.25 percent rate to 3.9 percent over four years and no longer calling for the tax to be phased out entirely over decades.","supportsComments":false,"commentCount":0,"keywords":["wire","business","government and politics","education","social affairs","state legislature","state governments","legislature","legislation","higher education"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"revision":8,"commentID":"c005f97c-137a-5dc8-9e84-161d03d9664c","body":"

LANSING, Mich. (AP) \u2014 Michigan House Republicans on Tuesday significantly revised their income tax cut plan, proposing to drop the 4.25 percent rate to 3.9 percent over four years and no longer calling for the tax to be phased out entirely over decades.

Legislation that cleared a committee last week would have cut the tax to 3.9 percent in 2018, saving taxpayers $680 million in the next fiscal year and $1.1 billion the following year, according to the nonpartisan House Fiscal Agency. The bill also would have eliminated the tax by 2057.

Under the new version \u2014 which Republican Gov. Rick Snyder remains concerned about for budget reasons \u2014 the tax would drop by one-tenth of a percentage point annually from 2018 through 2020 and then 0.05 percentage points in 2021, a slower return to the 3.9 percent rate that was in effect in 2007. An existing law that provides for potential year reductions starting in 2023 \u2014 if general funds outplace inflation by a minimum amount \u2014 would stay intact.

A final vote was not taken, an indication that the proposal may not yet have had enough support to pass the House and go to the GOP-led Senate. The House could vote as early as Wednesday, however.

Snyder issued a statement Tuesday night saying he appreciates that House leaders took seriously his concerns, \"but I still have a billion dollars' worth of concerns because there has been no plan presented as to how this will affect residents and their communities statewide.

\"Half of a billion dollars will come due in 2019 and over one billion by 2022, years in which we have planned funding specifically to invest in modernizing our state's infrastructure,\" the statement said. \"I'd like to see a public plan as to how this will be paid for before I can lend my support to the new proposal.\"

The bill sponsor, Republican Rep. Lee Chatfield of Levering, said the revisions are \"about what's simple vs. what's complicated. We believe the solution that's put before us ... achieves the simple goal of providing tax relief across the state.\" He questioned the \"presupposition\" that reducing \"work taxes\" would hurt the budget.

\"I think this is a great way to grow our economy,\" Chatfield said.

The House Fiscal Agency estimated that the bill now would cut revenue in the $10.5 billion general fund by $195 million in the next budget, growing to a $1.1 billion reduction in the 2021-22 fiscal year when fully implemented.

Before the changes were made, more than half of Michigan's 15 university presidents lobbied against the legislation outside the House chamber. State support for the schools is down $363 million, or nearly 19 percent, from 15 years ago. Average tuition costs were sixth-highest in the country last year, according to the Michigan League for Public Policy.

\"Our fear is that if the resources available to state government are constrained by such a large tax cut, we won't be able to maintain accessibility to a great public higher education at the same costs now. Families are already struggling to pay for college, and we don't want to make those challenges greater,\" said University of Michigan-Ann Arbor President Mark Schlissel. He urged lawmakers to \"slow down\" and fully consider the consequence of a tax cut that would \"have a profound and adverse impact on our state's future.\"

Democrats unsuccessfully tried to amend the bill to keep the tax at 4.25 percent for people making more than $70,000 or to move to a different type of graduated income tax.

Earlier Tuesday, Snyder noted at a Michigan Farm Bureau that as part of laws that raised fuel taxes and vehicle registration fees to improve roads and bridges, $600 million annually will eventually be shifted from the general fund toward transportation and homeowners and renters will get $200 million in tax relief a year. He said the current \"one-time\" budget surplus should instead be put into savings.

\"I'm not sure where you get a billion dollars a year in the next year or the next several years without making huge cuts to things,\" Snyder said.

___

Online:

House Bill 4001: http://bit.ly/2kqZL3Y

___

Follow David Eggert on Twitter at https://twitter.com/DavidEggert00 . His work can be found at http://bigstory.ap.org/author/david-eggert

"}, {"id":"d96c384c-19c5-5ace-9c34-f54779fd25c2","type":"article","starttime":"1487727960","starttime_iso8601":"2017-02-21T19:46:00-06:00","lastupdated":"1487733393","priority":0,"sections":[{"markets-and-stocks":"business/investment/markets-and-stocks"}],"flags":{"ap":"true"},"application":"editorial","title":"Amazon Forced to Backtrack on Free Shipping Minimum","url":"http://qctimes.com/business/investment/markets-and-stocks/article_d96c384c-19c5-5ace-9c34-f54779fd25c2.html","permalink":"http://qctimes.com/business/investment/markets-and-stocks/amazon-forced-to-backtrack-on-free-shipping-minimum/article_d96c384c-19c5-5ace-9c34-f54779fd25c2.html","canonical":"http://news.lee.net/business/investment/markets-and-stocks/amazon-forced-to-backtrack-on-free-shipping-minimum/article_e94f551b-648b-54ed-b89c-5cab8edd3bb0.html","relatedAssetCounts":{"article":0,"audio":0,"image":1,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"newsfeedback@fool.com (Timothy Green)","prologue":"One year ago, nearly to the day, Amazon.com (NASDAQ: AMZN) raised the free shipping minimum order size for non-Prime customers to $49, up from $35. This increase not only aimed to keep a lid on Amazon's shipping costs, which have been growing faster than revenue in recent quarters, but it also made Amazon Prime more attractive on a relative basis.","supportsComments":false,"commentCount":0,"keywords":["wire"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"images":[{"id":"f5867a2a-f981-5bd8-804e-b2239161b100","description":"","byline":"","hireswidth":null,"hiresheight":null,"hiresurl":null,"presentation":null,"versions":{"full":{"type":"image/jpeg","width":"580","height":"211","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/f/58/f5867a2a-f981-5bd8-804e-b2239161b100/58acf4cc86ec3.image.jpg?resize=580%2C211"},"100": {"type":"image/jpeg","width":"100","height":"36","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/f/58/f5867a2a-f981-5bd8-804e-b2239161b100/58acf4cc86ec3.image.jpg?resize=100%2C36"},"300": {"type":"image/jpeg","width":"300","height":"109","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/f/58/f5867a2a-f981-5bd8-804e-b2239161b100/58acf4cc86ec3.image.jpg?resize=300%2C109"},"1024":{"type":"image/jpeg","width":"1024","height":"373","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/f/58/f5867a2a-f981-5bd8-804e-b2239161b100/58acf4cc86ec3.image.jpg"}}}],"revision":2,"commentID":"d96c384c-19c5-5ace-9c34-f54779fd25c2","body":"

One year ago, nearly to the day, Amazon.com (NASDAQ: AMZN) raised the free shipping minimum order size for non-Prime customers to $49, up from $35. This increase not only aimed to keep a lid on Amazon's shipping costs, which have been growing faster than revenue in recent quarters, but it also made Amazon Prime more attractive on a relative basis.

Amazon has now, without any sort of announcement, backtracked on that increase. The company has lowered the free shipping minimum back to $35, a boon for customers unwilling to fork over the $99 annual fee for Amazon Prime. But this move is unlikely to be a simple case of Amazon putting the customer first. The e-commerce giant is beginning to face a level of competition that it has yet to experience, with Wal-Mart (NYSE: WMT) leading the charge.

Image source: Amazon.

Wal-Mart's big bet on free shipping

Wal-Mart spent two years testing a Prime-like service of its own, but the company recently scrapped that idea and instead adopted a simpler strategy. Wal-Mart now offers free two-day shipping on orders over $35, with millions of eligible items and no fees. This matches the policy of Jet.com, which Wal-Mart acquired last year for $3.3 billion.

The timing of Amazon's retreat, less than one month after Wal-Mart's shift in strategy, is unlikely to be a coincidence. Wal-Mart's e-commerce business is far smaller than that of Amazon's, but its growth has reaccelerated in recent quarters. Global e-commerce sales grew by 20.6% year over year during Wal-Mart's third quarter, up from just 7% growth during the first quarter. The addition of Jet.com as well as major initiatives like online grocery have fueled the resurgence.

With Jet.com CEO Marc Lore now in charge of Wal-Mart's e-commerce operation, it should be no surprise that the company is getting aggressive. For Wal-Mart free two-day shipping on orders over $35 will be expensive, but it makes Amazon's non-Prime free shipping offer look far less generous. Even with the lower $35 minimum, Amazon's free shipping still promises delivery in five to eight business days.

This move from Wal-Mart also makes Prime appear less attractive, although Prime includes a long list of perks that have successfully kept subscribers on board so far, and it has no minimum order size. Wal-Mart is betting that a $35 minimum is low enough to convince shoppers that the benefits of Prime don't justify the cost.

Image source: Wal-Mart.

Amazon still has some major advantages. Its selection of products is far larger, with 50 million items eligible for Prime, up 73% from 2015. Prime Now gives subscribers free two-hour delivery on a variety of items in select cities. And Prime Video has become extensive enough to pose a legitimate threat to streaming giant Netflix.

But for shoppers only wanting the lowest price and fast free shipping, Amazon Prime has lost some of its luster thanks to Wal-Mart.

How does this end?

Amazon's strategy of continually making Prime more feature-packed has worked wonders so far. But as the gap between Prime's shipping benefits and those offered for free by Amazon's competitors shrinks, one has to wonder whether the company can keep it up. While plenty of Prime members wouldn't dream of leaving due to the added benefits beyond free shipping, whether those perks will be enough in a world where free two-day shipping is becoming table stakes is anyone's guess.

Wal-Mart's move will undoubtedly force other retailers to make their own free shipping offers more generous. And while Amazon's response so far has only affected its non-Prime shipping, I won't be surprised if the company ramps up its efforts to make Prime appear like a better deal. A quicker roll-out of Prime Now, perhaps.

One thing Amazon is unlikely to do is make its non-Prime free shipping much better. Moving to faster shipping would risk cannibalizing Prime, which has acted as the company's growth engine in recent years. This makes Amazon a less attractive place to shop for anyone who has no intention of joining Prime.

Of course, history shows that underestimating Amazon has always been a mistake. But it's clear from Wal-Mart's free shipping push that competition is only going to get fiercer.

Find out why Amazon is one of the 10 best stocks to buy now

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*Stock Advisor returns as of February 6, 2017

Timothy Green has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Netflix. The Motley Fool has a disclosure policy.

"}, {"id":"145d498e-dda6-5232-97a3-2cdb9970774f","type":"article","starttime":"1487727660","starttime_iso8601":"2017-02-21T19:41:00-06:00","lastupdated":"1487733393","priority":0,"sections":[{"markets-and-stocks":"business/investment/markets-and-stocks"}],"flags":{"ap":"true"},"application":"editorial","title":"Netflix Wants to Steal a Play Out of Disney's Book","url":"http://qctimes.com/business/investment/markets-and-stocks/article_145d498e-dda6-5232-97a3-2cdb9970774f.html","permalink":"http://qctimes.com/business/investment/markets-and-stocks/netflix-wants-to-steal-a-play-out-of-disney-s/article_145d498e-dda6-5232-97a3-2cdb9970774f.html","canonical":"http://news.lee.net/business/investment/markets-and-stocks/netflix-wants-to-steal-a-play-out-of-disney-s/article_f6330e7e-ac7d-59ad-9940-6bd9b6bf459a.html","relatedAssetCounts":{"article":0,"audio":0,"image":1,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"newsfeedback@fool.com (Adam Levy)","prologue":"Over the last few years, Netflix (NASDAQ: NFLX) has grown into a content-producing powerhouse. While it's no Time Warner (NYSE: TWX) or Disney (NYSE: DIS), Netflix's original content budget is swelling, and some of its shows have permeated pop culture. To capitalize on that trend, Netflix is reportedly exploring licensing its intellectual property for merchandising, according to Bloomberg.","supportsComments":false,"commentCount":0,"keywords":["wire"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"images":[{"id":"8f6de26d-f5e2-50c3-a228-789592db38e2","description":"","byline":"","hireswidth":null,"hiresheight":null,"hiresurl":null,"presentation":null,"versions":{"full":{"type":"image/jpeg","width":"580","height":"326","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/8/f6/8f6de26d-f5e2-50c3-a228-789592db38e2/58acf4d1848e2.image.jpg?resize=580%2C326"},"100": {"type":"image/jpeg","width":"100","height":"56","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/8/f6/8f6de26d-f5e2-50c3-a228-789592db38e2/58acf4d1848e2.image.jpg?resize=100%2C56"},"300": {"type":"image/jpeg","width":"300","height":"169","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/8/f6/8f6de26d-f5e2-50c3-a228-789592db38e2/58acf4d1848e2.image.jpg?resize=300%2C169"},"1024":{"type":"image/jpeg","width":"1024","height":"576","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/8/f6/8f6de26d-f5e2-50c3-a228-789592db38e2/58acf4d1848e2.image.jpg"}}}],"revision":2,"commentID":"145d498e-dda6-5232-97a3-2cdb9970774f","body":"

Over the last few years, Netflix (NASDAQ: NFLX) has grown into a content-producing powerhouse. While it's no Time Warner (NYSE: TWX) or Disney (NYSE: DIS), Netflix's original content budget is swelling, and some of its shows have permeated pop culture. To capitalize on that trend, Netflix is reportedly exploring licensing its intellectual property for merchandising, according to Bloomberg.

Both Disney and Time Warner have had a ton of success with licensing and merchandising. Disney's consumer products segment generated $1.5 billion last quarter alone, roughly equal to 60% of Netflix's total revenue. Video games and other licensing opportunities accounted for 13% of Warner Bros.' revenue through the first nine months of 2016.

Merchandising provides the dual benefit of a new revenue stream plus another marketing angle for Netflix.

Image source: Netflix.

Producing shows in-house is the key

Last year, Netflix started producing more of its original shows itself instead of contracting a production studio. \"Over the long run, we believe self-producing is less expensive (including cost of capital) than licensing a series or film, as we work directly with the creative community and eliminate additional overhead and fees,\" management wrote in its third-quarter letter to shareholders. \"In addition, we own the underlying intellectual property, providing us with global rights and more business and creative control.\"

Image source: Hot Topic.

That last line is a key part of the value of spending more up-front for shows like Stranger Things. Last year, Netflix conducted a test by licensing Stranger Things to Hot Topic for tee shirts, mugs, hats, and jewelry. Producing more shows in-house opens up more revenue-generating opportunities like that.

On the company's third-quarter earnings call, Chief Content Officer Ted Sarandos said, \"Our financial preference, of course, is to produce it through our studios. And when that opportunity will continue to present itself, we're going to increasingly do that as well.\"

That's not always possible, though, since Netflix is primarily focused on providing the best viewing experience for its users whether it can own the intellectual property or not. In fact, several of Netflix's most popular original series license IP from Disney's Marvel.

Free marketing

As Netflix produces a growing number of originals in-house, its licensing opportunities expand as well. It could provide a small revenue boost for the company, but it largely defrays the additional up-front costs of producing the shows in-house. More valuable to Netflix is the additional marketing merchandising can provide.

Disney has become a well-oiled machine when it comes to using merchandise as a marketing tool. Leading up to the release of The Jungle Book last year, it made special sections in its theme park stores for Jungle Book-themed merchandise well before the film's release date. Combined with its other marketing efforts, The Jungle Book went on to gross nearly $1 billion at the box office.

While Netflix doesn't have the existing infrastructure of an entertainment giant with its own theme parks and stores like Disney, or even Time Warner, it can still enjoy a marketing boost from merchandise. Successful merchandise sales provide social proof that a series is worth signing up to Netflix and spending the time watching the show. It's a bit different and likely more effective than the traditional brand advertising Netflix currently uses.

Marketing costs reached nearly $1 billion last year, up 20% from 2015. If Netflix can curb some of the net costs of advertising with merchandising, that could help it grow net income at a faster clip -- not through a significant increase in revenue, but by a reduction in costs.

10 stocks we like better than Netflix

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Netflix wasn't one of them! That's right -- they think these 10 stocks are even better buys.

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*Stock Advisor returns as of February 6, 2017.

Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.

"}, {"id":"5efc7094-3eec-50d4-88da-035a1b3be3ba","type":"article","starttime":"1487727246","starttime_iso8601":"2017-02-21T19:34:06-06:00","lastupdated":"1487729874","priority":0,"sections":[{"business":"business"}],"flags":{"ap":"true"},"application":"editorial","title":"The Latest: Snyder still has concerns with income tax cut","url":"http://qctimes.com/business/article_5efc7094-3eec-50d4-88da-035a1b3be3ba.html","permalink":"http://qctimes.com/business/the-latest-snyder-still-has-concerns-with-income-tax-cut/article_5efc7094-3eec-50d4-88da-035a1b3be3ba.html","canonical":"http://www.apnewsarchive.com/2017/Gov-Rick-Snyder-still-has-concerns-about-the-fiscal-implications-of-an-income-tax-cut-after-House-Republicans-revised-their-legislation/id-092d3d2ad2304e80abc0ef716c16bbbe","relatedAssetCounts":{"article":0,"audio":0,"image":0,"link":0,"vmix":0,"youtube":0,"gallery":0},"prologue":"LANSING, Mich. (AP) \u2014 The Latest on the Michigan House's consideration of income tax cut legislation (all times local):","supportsComments":false,"commentCount":0,"keywords":["wire","business","government and politics","state taxes","government taxation and revenue","government finance","government business and finance","state governments","legislation","legislature","state legislature","bills"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"revision":4,"commentID":"5efc7094-3eec-50d4-88da-035a1b3be3ba","body":"

LANSING, Mich. (AP) \u2014 The Latest on the Michigan House's consideration of income tax cut legislation (all times local):

8:30 p.m.

Gov. Rick Snyder still has concerns about the fiscal implications of an income tax cut after House Republicans revised their legislation.

The Republican governor issued a statement Tuesday night saying he appreciates that House leaders took seriously his concerns. But he says he still has \"a billion dollars' worth of concerns because there has been no plan presented as to how this will affect residents and their communities statewide.\"

Snyder notes that reducing the 4.25 percent income tax to 3.9 percent over four years would reduce revenues by $500 million in 2019 and more than $1 billion by 2022 \u2014 years when more money will be spent to improve roads and bridges.

House Republicans on Tuesday decided to phase in the tax cut over four years instead of implementing it one year. They also dropped their push to eliminate the tax over decades.

___

4:45 p.m.

House Republicans have significantly revised their income tax cut plan, proposing to drop the 4.25 percent rate to 3.9 percent over four years and no longer calling for the tax to be phased out entirely over decades.

Legislation that cleared a committee last week would have cut the tax to 3.9 percent in 2018. Under changes to the bill made Tuesday, the tax would drop by one-tenth of a percentage point annually from 2018 through 2020 and 0.05 percentage points in 2021.

A final vote on the measure was not taken, as it appeared majority Republicans did not yet have enough support to send the bill to the GOP-controlled Senate.

Gov. Rick Snyder has expressed \"serious concerns\" with cutting the income tax.

___

2:05 p.m.

The leaders of Michigan's 15 public universities are lobbying against an income tax cut they worry would lead to state funding cuts.

At least half of the school presidents stood outside the House chamber Tuesday, pressing lawmakers to oppose the legislation that cleared a committee last week.

University of Michigan President Mark Schlissel said families already are struggling to afford college, and \"we don't want to make those challenges greater.\"

The bill could be voted on as early as Tuesday. It would drop the 4.25 percent income tax to 3.9 percent in 2018 and then reduce it by one-tenth of a percentage point annually until the tax's elimination.

Schlissel says Michigan must \"invest in the common good\" and a major tax cut would have a \"profound and adverse impact.\"

"}, {"id":"c613cc40-0859-5f30-a4d8-7cbd2005587f","type":"article","starttime":"1487726280","starttime_iso8601":"2017-02-21T19:18:00-06:00","lastupdated":"1487733394","priority":0,"sections":[{"markets-and-stocks":"business/investment/markets-and-stocks"}],"flags":{"ap":"true"},"application":"editorial","title":"Lumber Liquidators Holdings Inc. Stock Up 17% After Earnings: Here's What You Should Know","url":"http://qctimes.com/business/investment/markets-and-stocks/article_c613cc40-0859-5f30-a4d8-7cbd2005587f.html","permalink":"http://qctimes.com/business/investment/markets-and-stocks/lumber-liquidators-holdings-inc-stock-up-after-earnings-here-s/article_c613cc40-0859-5f30-a4d8-7cbd2005587f.html","canonical":"http://news.lee.net/business/investment/markets-and-stocks/lumber-liquidators-holdings-inc-stock-up-after-earnings-here-s/article_ae794f09-90a6-5174-bfc7-04241c686a5b.html","relatedAssetCounts":{"article":0,"audio":0,"image":1,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"newsfeedback@fool.com (Jason Hall)","prologue":"What","supportsComments":false,"commentCount":0,"keywords":["wire"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"images":[{"id":"7a4a66f9-b122-565e-9b26-d7d60e9b75c5","description":"","byline":"","hireswidth":null,"hiresheight":null,"hiresurl":null,"presentation":null,"versions":{"full":{"type":"image/jpeg","width":"580","height":"387","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/7/a4/7a4a66f9-b122-565e-9b26-d7d60e9b75c5/58acf4d4c67e4.image.jpg?resize=580%2C387"},"100": {"type":"image/jpeg","width":"100","height":"67","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/7/a4/7a4a66f9-b122-565e-9b26-d7d60e9b75c5/58acf4d4c67e4.image.jpg?resize=100%2C67"},"300": {"type":"image/jpeg","width":"300","height":"200","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/7/a4/7a4a66f9-b122-565e-9b26-d7d60e9b75c5/58acf4d4c67e4.image.jpg?resize=300%2C200"},"1024":{"type":"image/jpeg","width":"1024","height":"683","url":"http://bloximages.chicago2.vip.townnews.com/qctimes.com/content/tncms/assets/v3/editorial/7/a4/7a4a66f9-b122-565e-9b26-d7d60e9b75c5/58acf4d4c67e4.image.jpg"}}}],"revision":2,"commentID":"c613cc40-0859-5f30-a4d8-7cbd2005587f","body":"

What

Shares of hardwood flooring specialty retailer\u00a0Lumber Liquidators Holdings Inc.\u00a0(NYSE: LL) were up 16.8% at market close on Feb. 21, following the release of the company's fourth-quarter and full-year 2016 results today.\u00a0

The company said revenue was up 4.3% to $245 million in the quarter, with much of that figure coming from the 2.8% jump in sales open at least 13 months. After seeing comparable-store sales decline every quarter for more than a year, the company has now delivered two consecutive quarters of comparable sales growth. Gross margin was 32.9%, a sharp improvement from 23% in the year-ago quarter.\u00a0

Lumber Liquidators' sales have improved over two consecutive quarters. Image source: Getty Images.

So what

Lumber Liquidators also delivered operating results that the market seems to have viewed in a favorable light. SG&A expenses increased $4.2 million in the quarter, which works out to 20 basis points as a percentage of total revenue.\u00a0And while expenses remain high, the breakdown of these costs offers some reason to be optimistic. Management said it spent $5.5 million more on store-related payroll, including store staffing and installation/pro sales teams, and it also increased advertising spending by $1.5 million.

In other words, there's some indication that the inflated legal and settlement expenses related to the company's product issues are beginning to fall, allowing the company to dedicate more of its resources to growing sales.\u00a0

Now what

Despite the improved sales, Lumber Liquidators is still operating at a loss. The company reported a net loss of $5.5 million, or $0.020 per share, in the fourth quarter, and a full-year loss of $68.6 million, or $2.51 per share. And while legal expenses -- $3.4 million in the fourth quarter -- related to its ongoing litigation have fallen a little recently, these costs will continue to weigh on the bottom line until the company can reach resolution on those cases.

The good news is, the company does have some wiggle room, with $10 million in cash and $91 million available on its revolving credit facility, to ride out a few more quarters of negative cash flows as it invests in restarting growth.

Looking for more on Lumber Liquidators' earnings results? Stay tuned for a deeper dive in coming days.\u00a0

10 stocks we like better than Lumber Liquidators

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Lumber Liquidators wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017

Jason Hall owns shares of Lumber Liquidators. The Motley Fool recommends Lumber Liquidators. The Motley Fool has a disclosure policy.

"}, {"id":"45e42b81-2e91-50b9-8fd6-49c65a0a5b8e","type":"article","starttime":"1487726108","starttime_iso8601":"2017-02-21T19:15:08-06:00","priority":0,"sections":[{"business":"business"}],"flags":{"ap":"true"},"application":"editorial","title":"Colstrip owner pushes for tax break to keep plant units open","url":"http://qctimes.com/business/article_45e42b81-2e91-50b9-8fd6-49c65a0a5b8e.html","permalink":"http://qctimes.com/business/colstrip-owner-pushes-for-tax-break-to-keep-plant-units/article_45e42b81-2e91-50b9-8fd6-49c65a0a5b8e.html","canonical":"http://www.apnewsarchive.com/2017/Montana-lawmakers-say-Talen-Energy-is-pushing-for-a-tax-reduction-to-keep-two-units-of-the-Colstrip-power-plant-open-until-2022/id-9f8e6759c3a443d6884a47edd83c6792","relatedAssetCounts":{"article":0,"audio":0,"image":0,"link":0,"vmix":0,"youtube":0,"gallery":0},"byline":"By MATT VOLZ and MATTHEW BROWN\nAssociated Press","prologue":"HELENA, Mont. (AP) \u2014 Talen Energy is pushing Montana lawmakers for a tax break worth millions to keep two units of the coal-fired Colstrip power plant open, with one Republican leader saying Tuesday the units could close within the year without some form of assistance.","supportsComments":false,"commentCount":0,"keywords":["wire","business","general news","fossil fuel power generation","electric power generation","electric utilities","energy industry","utilities","state taxes","government taxation and revenue","government finance","government business and finance","government and politics","state governments","energy policy","government policy","state legislature","legislature","energy and utilities regulation","industry regulation","government regulations"],"internalKeywords":["#lee"],"customProperties":{},"presentation":null,"revision":1,"commentID":"45e42b81-2e91-50b9-8fd6-49c65a0a5b8e","body":"

HELENA, Mont. (AP) \u2014 Talen Energy is pushing Montana lawmakers for a tax break worth millions to keep two units of the coal-fired Colstrip power plant open, with one Republican leader saying Tuesday the units could close within the year without some form of assistance.

House Speaker Austin Knudsen, R-Culbertson, said the $10 million coal severance tax reduction proposed by the company isn't likely in a tight budget year. But he and state Sen. Duane Ankney, R-Colstrip, said talks are continuing to look for a solution to keep Talen from shutting two of the four Colstrip units down early.

\"If the parties can't figure something out, I think they probably will close within the year,\" Knudsen said. \"I think it's real.\"

Colstrip is the second-largest coal-fired power plant in the West and a major economic driver in southeastern Montana. But in recent years, the plant has been beset by decreased demand, increased regulation and lawsuits.

A legal settlement last year requires the two older Colstrip units, which were built in the 1970s and are owned by Talen and Puget Sound Energy, to close by July 2022. The two newer units, which are owned by Talen, Puget Sound and four other companies, would not be affected.

Talen is the operator of the plant, but it is seeking to exit from that role by next year.

The problem now is keeping the two older units running until 2022, Ankney said. The idea of a $10 million tax break isn't feasible when the state Legislature is focused on shoring up a budget shortfall, and it could cause legal problems if the of other companies aren't also reduced, but another solution has not yet been found, he said.

\"We're still looking,\" Ankney said. \"They can't take revenue out of this stream right now.\"

Knudsen said several proposals are floating around, and the matter is being given a high priority because the owners of the two Colstrip units are losing money. Talen was recently bought by Riverstone Holdings, and the new owners appear to be genuinely interested in finding a solution, he said.

\"We've been trying to figure out what's real, what's posturing, what are the issues, who are all the players and what, if anything, can the state do to help keep this thing open,\" Knudsen said.

Spokesmen for Talen Energy and Puget Sound did not immediately respond to a request for comment.

Environmental advocate Anne Hedges said it would be a \"slippery slope\" to give Talen any kind of bailout and the state should instead look for clean energy businesses that could fill the gap when the shutdown occurs.

\"Regardless of the amount of money that is necessary to give to Talen to keep the plant open, that money is better spent attracting new businesses to the area that will be in it for the long run,\" said Hedges, a lobbyist with the Montana Environmental Information Center.

___

Brown reported from Billings.

"} ]