tv Nightly Business Report PBS April 14, 2015 6:30pm-7:01pm PDT
this is "nighlty business " with tyler and sue herera. >> some of the most widely owned stocked issues cards to investors. too nice? larry finch tells some to stop being so generous with shareholders. crunch time for those who still haven't filed taxes. all of that and more tonight on "nighlty busin for tuesday, april 14th. >> good evening and welcome. it was report card time for three douf components and the results weren't so bad. jp morgan chase bea components and so did johnson and johnson
and after the bell it was intel's turn. after returning elements in time of 41 cents a share. it was roughly flat with a year ago. investors initially like what they saw sending shares higher after the report. one of the biggest challenges for the intel is the showing demand for personal computers, main stay of the service. the pc service took a hit and the ceo stacy smith said the prediction our prediction for 2015 is th pc marker will be down. and we're planning for it to be more plat than a growth market. >> josh lipton with more on where the market is headed and how it might impact intel.
>> the p market is making headlines for all of the wrong reasons. forcing investors to decide whether pc-sent rick companies are still smart places to commit capital. worldwide pc shipments dropped 7% from a year ago to 68 million units during the quarter of 201 to research firm idc. one dig change last -- big change, la ended support for xp forcing companies to upgrade computers. and th wind isn't as big this year. and that is a problem for a range of companies, including intel. the tech giant controls the market for pc chips which accounts for more than 60% of the sales. microsoft is another company that could suffer if pc demand continues to weaken. analysts at ubs see meaningless
declines in the first quarter but they still see it as a buy based in value. some analysts argue that the pc market will pick up this year because they think window's 10, the new version of the operating system due out l encourage pc demand in the second half. >> we're in this air gap right now in 1 q and maybe in 2 q here. we don't think investors should look at the pc market more broadly and these these are good representations of natural demand. >> but analysts at idc think it will drop 5% despite a potential boost of window 10, but investors will have a better indication of who is right when microsoft reports earnings next week. for "nighlty business rep i'm josh lipton in san
francisco. du component johnson and johnson reported earnings beating expectations but revenue fell 4% from a year ago. and the health care company lowered financial guide sans from a year ago in part from the stronger dollar. they finish the day slightly lower. mike terrell has more. >> currency strikes again but this year investors from johnson and johnson, falling 7% in the first quarter. operationally though the picture is better. the business grew by 3%. analysts say j&j's underlining business is in line with expectation. the consumer unit saw growth from tylenol and motrin coming back from recalls that took them off of store shelves. and neutrogena and novemberino and listerine had growth. and j and j grew the fastest
with new medicines like invokeana and zer elto and other things for inflammatory diseases. >> j and j's performance is driven by say strong pharmaceutical business. people are concerned about that going forward. they have competition in hepatitis c and concerns about rammic aid which is 15% of the company's business as it relates to patent disputes as well as bio similars. >> and as investors question the pharma business it is the company's medical devices unit that is lagging. it was the only unit of the three to decline on an operational business in the first quarter. in march they sold courtis to health for $2 billion. >> they have been focused on getting out of the lower, slower-growth, lower operating margin portion of the business and will they in fact do m&a and
pharma. >> as j&j slims down the question is will it expand in othe the company has more than $30 billion in cash causing some analysts to wo whet plans to make a large acquisition. we may get more insight next month when it hosts the analyst month focusing on the fastest part of the business. for "nighlty business report," i'm megan torrell. >> and markets biggest buy reported a better than expected profit of nearly $6 billion on the investment banking and asset banking and mortgage banking sending shares up 1.5%. and wells fargo fargo reported a decline in profits from a year ago. the first drop in more than four years. the largest lender cited a rise in employee costs as mar pressure from low interest rates. still the company cfo said
business is solid. >> we put $5.8 billion in earnin for the quarter which is our second highest quarter on record. the first quarter of last year had a special item go through to give us an extra penning of earnings. so from our perspective spect lack lar earnings. there aren't many companies thate $5.8 billion in a quarter. >> that may be but shares felt about three quarters of a percent. >> and stocks were high because of those earning reports and a rise in oil reports lifting sharesd mobile. and biggest monthly gain in a year. and the consumer price index rose for the first time since october. up .2%. at the close. the dow jones industrial average gained to finish at 18,036.
and nasdaq was off 11 points and s&p added 3. and the futures rose on a report by the "wall street jo that the iran oil minister has asked opec to cut the daily production of oil by at least 5% ahead of opec's next meeting in june. that pushed prices higher senting west texas intermediate above $3 a barrel. and they are watching developments on capitol hill where a senate panel voted to approve a bill to give congress a vote on any final nuclear deal with iran. >> the international monetary fund i growth for the u.s. economy, the reason the strengthening dollar. the ifm predicts the economy will grow 3.5% this year and next down slightly from the january forecast. but the agency's chief economist still describes the u.s. economy as robust. >> it is clear that the u.s.
economy is in fairly good shape and the fundamentals are good and the banks are in decent shape, corporations have cash and households have dwee creased debt. so the elements you need for sustained growth are there. >> as for europe the imf said that ethan's economy will expand with the global economy growing 3.5% in 2015, just about in line with last year. the european union is ready to report abt trust charges against google and the charges could come tomorrow and will accuse them of abusing dominant position on internet searches in europe. >> and now china, meeting with chinese officials, coming at a time of heightened tensions over cyber threats which said must be addressed. a report over in beijing. >> penny pritz ger is on a presidential trade mission in china.
traveling with 24 companies through multiple cities across the country with the goal to find business opportunities in china's massive clean energy markts. her visit comes after president obama met with jinping in november back in the summit with they agreed to reduce carbon emissions and tackle climate change. and it comes at a time when american companies have been complains about what they see as an increasingly hostile business environment. they concerned about cyber theft as well as intellectual property violations. the secretary said these her discussions with japanese counterparts and hope they will become a problem with trade and investment. >> it is a problem and they recognize they have a problem, but china is becoming an innovation economy and they realize they've got to -- they put rules in place and they have to enforce the rules and they've
tly enforce them and that is what we've talking about. but it is a problem. >> the secretary is optimistic about the potential for china's market. from here she saids to shanghai and to the south before heading home at the end of the week. for "nighlty business report," i'm eunice un in beijing. and today the president said he plans to drop cuba from the list of state sponsors of terrorism. that marks another step in his efforts to improve economic relations with the island nation. a s ahead, are u.s. companies issuing too many u.s. dividends at the head of growth. the head of a top u.s. asset manager thinks so.
walmart prevails in a shareholder case we told you about last week. a court in philadelphia overturned a district court ruling that would he required the world largest retailer that include a shareholder proxy that the fcc had declined to include. it called for the company's board to set policy on selling assault-style weapons. >> the fcc refused to include it on the grounds that if approved it could interfere with the walmart day-to-day operations. results from csx, the railroad reports an increase of $0.45 a share, a penny better than estimates. and revenues were higher than a year ago. they said freight volumes grew and were able to charge higher rates and that pushed shares higher. and the company announcing a $2 billion share bu and a
dividend mark to 18 sents a share. morgan brennan shows us with the report. pretty good report this time around. >> pretty good report. but the strong dollar and low energy prices specifically cheal gas did cut into the volume marley for coal which is one of the biggest businesses for railroad particularly easter railroads like csx and that is a head wind. but the good news is despite that we did see overall volume increase and see other types of goods moving across the rail network and the stronger prices and that is why the earning beat for csx. and they are the first to report for q did they do better than expected or are we going to see this play ought across the other railroads. and we saw others warn earnings on monday night so it could be an play in terms of
what the earning look like and how much the coal effects these. and morgan will keep us updates. morgan raiding the rails. and we begin tonight's market focus. two companies in discussions over a deal to create a networking behemoth and a potential merger for noka tell. shares of nokia off to 7.$96 and alta tell off to 4.$93. avon considering a sale and exploring strategic alternatives. the beauty products company canceled the analyst meeting because they are looking at their structure. today at 9.$15. an executive at jcpenney accidentally e-mailed
information to an analyst and exposed before it was supposed to be and it was good news. they have seen same-store sales rise. but today investors hit sell. they were off at 9.$15. proctor and gamble chief is preparing to step down according to the "wall street journal. the consumer products giant could see a change at the top this summer. fractions were higher today. and zillow saw shares sell after offering investors weak guidance. saying profit and sales for the year would be well below wall street estimates. shares fell more than 1% to 95.$65. and larry fink has a message for other chief executives stop worrying about the short-term. as first reported by the new york times he sent a letter to the nation's 500 largest s saying too many firms
are paying dividends and buying back in stock to keep shareholders plaque ants. they steps, fink contends may be doing harm and offering investors a disservice. professor at the university stern school of business mr. eggers welcome back. does mr. fink have it right, partly right, mostly right, what? >> i think in general he has this right. there is a significant difference in the incentives for short-term versus long-term shareholders. especially if wet ts like innovation and r&d. so to the extent that companies feel the need to return capital to shareholders they would have been spending on innovation or growth efforts that will help long-term shareholders and long-term growth of the company, then getting the money back to shareholders is a bad plan as far as long-term shareholders like most mutual fund investors would be. at the same time if the company is sitting on the cash l cases like
apple and many companies have bn doing, then returning the capital isn't a bad sign for future growth but still can be -- but by the shareholders as opposed to the company expective, then maybe we are taking the wrong view as how the growth prospect should be managed and how much does this do with activism becoming so popular in the last couple of years. sometimes successfully for shareholders and other times an extremely messy process? >> so activism is a big issue for many boards and ceo's to deal with. it has been on the rise. maybe specifically around certain issues. spinoffs being a benefit. but in many cases the return of capital hasn't been as beneficial. shor it may look good but long-term it isn't a good thing for the firms. and yeah to the extent that ceo's are trying to respond to activist shareholders or ward off attempts to do something with the capital by returning some of it earlier, that may not
be the right strategy for firms. >> where do you come down -- we've sort of detoured to a discussion of activism. where do you come down on it? is it mostly constructive and helpful or is it mostly deinstructive? >> so in general i would say that most of the activism out there that goes beyond the monitoring of the ceo to make sure that they are not engaging in kind of self interested behavior tend to be value-destroying bec for the most part there is no way they have better information about how to run the company than the ceo does. if they really have better information, then the board should be firing the ceo and bringing in somebody new. that ceo better have a different perspective. the shareholder activism exists as a check for ceo self interested behavior and from that point of view it can be helpful but as far as directing strategy that is the job of the ceo and the board of directors. >> and there fink advocated
holding on to a stock for a longer period of time and a change in the capital gains rate if a does so and what is your take on that. >> >> that would encourage the type of behavior he is look forge. discouraging short-ter ownership of the stock but we are taking about the change of one year to three years and the true short-term investors holding less than a year any way wouldn't be effected at all, only people holding longer than a year but less than three. i don't have the data in front of me but my guess is that is not the bigger population we're thinking about. i think we're looking at this short-term three months, six month, eight month, versus the long-term, 20 year plus pee so i'm not sure it would have the big impact fink is looking for. >> j.p. eggers new york univer stern school of business. >> coming up tax day is almost
upon us and it is not just the government that is after your money. a look at the top tax scams and what you can do to protect yourself. here is what to watch tomorrow. the federal reserves beige book is out and it could offer insight into the u.s. economy which frankly has felt beige lately. the bank mario drag will face questions after that and we'll have plenty of earning reports but the big one to watch is bank of america and that is on the agenda for wednesday. >> the labor department rowe posed new retirement rules for
new protection for savers. the new rules which we have discussed here on "nighlty business would require a fiduciary standard deterring brokers to high stream products. but overly strict rules could limit the availability of high risk products. one day to go until the tax deadline and the irs is warning some to be re -- be aware of tax related scammers. and more on the threat and what you can do to protect yourself and your money. >> watch out for scammers. that is the message today from the irs as tax season comes to a close. officials there put together their annual dirty dozen list of the worst scams taking advantage of taxpayers today. and they say an old-fashioned scheme is back in a big way. phone scams. which crooks pretend to be irs agents to bully people into giving up personal information
or even hard-earned cash. >> we're seeing this in every part of the country. it is an amazing phenomenon. we have thousands and thousands of complaints about it. it is an aggressive scam and continues to grow. >> and also in the top three, a cyber crime tech called phishing. phony emails demanding pernal information. and a big generating revenue is identity threats, where criminals file boke us tax returns and pockets the refunds the irs sends along. how can you protect yourself? the irs said to watch out for phones and e-mails coming out of the blue. >> the best advice is if you get a call out of the blue from the irs threatening you, the best advice is to hang out. >> and there are a number of scams, including fake charities, and tax return preparer f and watch ot for preparers who charge fees based on a percentage of the prefund that
goes to the preparers as if you need anyth to stress you out during this time. the irs warns of other scams as w for the full list find it out at nbr.com. >> a two-thirds of the total tax returns, the agency expects to receive this year. if you are one of the millions of americans that have yet to file we have tips for you. joining us now is sharon epperson. >> what are last minute mistakes that you can avoid that will end up costing you money. >> you don't want to leave my money on the table. make sure you can get every tax break together. and everybody thinks you can itemize. but sometimes the standard deduction is best for you. check to see if your home is paid off and if you live in a state that doesn't have intox tax, you may be kay with a -- be okay with standard deduction. and think about the state tax refund if you do get a refund
you don't need to declare it all. you feed to figure out how much is taxable. and that is something to consider. and the last thing is the investments that didn't so well and the ability to carry forward and that is something people need to know. >> the losses that you took and realized in the tax year 2014. >> and past years too. >> if you can't get it done you can file for an automatic extension but that doesn't mean you don't have to pay what you owe. >> exactly. >> i remember the words an extens t is not an extension in time to pay. and if a take an extension or not, what if i find myself owing tax and short of cash to pay it. >> and that is a lot of people. they want you to pay something up front. and if you can't do that you can enter into an installment. you can go online and file a payment agreement and you can file but the penalty of not filing is so much greater and
once you set up the installment you will be facing penalties but these less steep an if you didn't file. >> or pay as much as can you and then go into the installment plan because you do get charged interest for what you owe. >> you do get interest. >> and the penalties pile up month by month. >> and they are steep. >> and what about next year. and let's put it all behind us. say we've done everything right and we've filed and we are done but we're looking ahead to next year. >> this is the time to look at your documents and figure out if you did owe or if you got a big refund you need to do something differently with your with holding. if you are self-employed, that means to change your estimated tax payments and make sure you make the estimated tax payments but if you get a form from your employer then this is the time to go back and look at the w-4 form and see what you can withhold whether you are doing the right allowances and people say i put in zero and i still owe this money.
realize you can have even more money taken out on a monthly basis. >> so up your with holding. >> and a good time to do budget tweaking because you have your numbers in front of you and you know what you are spent. we have to leave it there but it is a good time. >> sharon thanks. >> that is "nighlty business " for tonight. i'm sue herera thanks for joining us. >> and i'm tyler mathisen. thank you for joining us.
hollar: tonight on "revolutionaries"... rometty: i think, in my own career, i've worked globally i've worked locally. i was able to run industries and i was able to run technology. i was able to do start-ups and i was able to scale businesses. you know, that's a lot of things to do in one place. hollar: one technology company has survived and grown through a century of dramatic change. that company is ibm, and its leader is ginni rometty. tonight, we talk with ibm's chairman and c.e.o. about the company's storied history and her vision for a challenging future. major funding for "revolutionaries"