Archive for December, 2010

Toll Bros posts profit, but contracts slip

Thursday, December 2nd, 2010 | Finance News

NEW YORK (Reuters) – Toll Brothers (TOL.N) posted a quarterly profit on Thursday, helped mainly by cost cuts and an income tax benefit, and shares of the largest U.S. luxury builder rose more than 1 percent.

The company reported earnings of $50.5 million, or 30 cents per share, for the fourth quarter ended on October 31, compared with a year-earlier loss of $111.4 million, or 68 cents per share.

The number of net signed contracts fell 27 percent to 558 units as demand for new homes remained soft.

"2010 was another challenging year for our company and our industry as the persistent drag of high unemployment, reduced home equity, weak consumer confidence and frustration with the nation's economic and political climate outweighed the appeal of historic low interest rates and tremendous home affordability," Chief Executive Officer Douglas Yearley Jr. said.

A 13 percent drop in selling, general and administrative expenses and a $59.9 million tax benefit boosted the Horsham, Pennsylvania-based builder's quarterly numbers.

Revenue fell 17 percent to $402.6 million, but beat the analysts' average estimate of $393.8 million, according to Thomson Reuters I/B/E/S.

Write-downs on land that had lost value fell to $27 million from $85.5 million.

Tax refunds are bolstering a balance sheet that was already strong, Credit Suisse analyst Dan Oppenheim wrote in a note to clients.

"Toll's strong balance sheet should enable it to continue pursuing attractive opportunities on both land and distressed investments," Oppenheim said.

Toll shares, which lost 15 percent of their value in the last six months, were up 1.5 percent at $18.74 in premarket trading.

(Reporting by Helen Chernikoff; Editing by Maureen Bavdek and Lisa Von Ahn)

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Pepsi looks to buy Wimm-Bill-Dann in $5.4 billion deal

Thursday, December 2nd, 2010 | Finance News

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MOSCOW (Reuters) – PepsiCo is to pay $3.8 billion for a 66 percent stake in Wimm-Bill-Dann from a group of shareholders, in a deal it said gave the Russian juice and dairy producer an enterprise value of $5.4 billion.

PepsiCo will offer to buy the remaining shares following completion of its controlling stake, in a deal that will move the U.S. beverage company closer to building a $30 billion nutrition business by 2020.

The price of $33 per American depositary receipt represented a 32 percent premium to the 30-day average trading price of Wimm-Bill-Dann's U.S.-listed shares.

The deal will see PepsiCo, which already owns Lebedyansky, overtake Coca-Cola Co as Russia's biggest juice maker -- the spot it lost earlier this year when its U.S. rival bought Nidan, Russia's fourth-largest juice maker.

The deal will raise PepsiCo's annual global revenues from nutritious and functional foods to nearly $13 billion from around $10 billion.

Wimm-Bill-Dann's Moscow-listed shares soared 40 percent on news of the acquisition.

"This is an unprecedentedly high price for the Russian food market as the Russian consumer market as a whole. Wimm-Bill-Dann has been valued at a multiple of 18 times 2010 EBITDA, which suggests there is an enormous interest from western strategic investors," Renaissance Capital analyst Natalya Zagvozdina said.

(Reporting by Maria Kiselyova; Additional reporting by Maria Plis; Editing by Dan Lalor)

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Diller steps down as IAC CEO, Malone swaps stake for cash

Thursday, December 2nd, 2010 | Finance News

NEW YORK (Reuters) – Barry Diller is stepping down as chief executive of IAC/InterActiveCorp, the company said, adding it had bought out one of its largest shareholders, John Malone's Liberty Media Corp.

IAC said on Thursday Liberty had sold its entire equity stake in IAC in exchange for $220 million in cash and the Evite and Gifts.com businesses. The online businesses will become part of Liberty's Interactive unit.

Liberty's stake had included 60 percent of voting rights of all classes of IAC stock, which had been represented by Diller -- a long-time business associate of Malone, the cable television pioneer.

The two media moguls fell out in a 2008 court case over how Diller used Malone's voting rights in IAC.

Diller, 68, will remain as chairman and senior executive, while the company has appointed former Match.com Chief Executive Greg Blatt, 42, to be IAC's new chief executive.

"It's been clear to me for some time that this company needs a full-time, aggressive and aspirational executive in the CEO role," said Diller, adding that he's "not going anywhere".

Following the transaction, Diller's voting rights will be reduced to just 34 percent -- though it will be the largest individual voting stake in the company.

IAC said that Diller has been granted the right to increase his voting stake to around 41 percent within the next nine months -- which would give him more control of the business.

The transaction effectively ends a major part of a 17-year business engagement between Malone and Diller that began when Diller joined Silver King Communications.

Both men remain on the boards of several companies that were spun off from IAC in 2008, including Ticketmaster, now part of Live Nation Entertainment.

While Diller has always said he remains good friends with Malone there was more evidence of the tensions that can arise in business when Diller suddenly stepped down in October as chairman of Live Nation and was replaced on an interim basis by Malone.

"While I'll continue my association with Dr. Malone in Expedia, and as significant shareholders of the multiple spun-off companies, Liberty's exit from IAC is a turning point," Diller said in a statement.

IAC owns Web businesses including search businesses like Ask and Citysearch and dating sites like Match.com and Chemistry. It has also announced plans for a joint venture with its Daily Beast media site with weekly print magazine Newsweek.

(Reporting by Yinka Adegoke)

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