Wells Fargo Profit Gets Boost From Cost Cutting

Wells Fargo’s profit jumped 32% in the third quarter, suggesting its cost-cutting efforts are making some headway as it seeks to rebound from its fake accounts scandal.Wells Fargo took encouragement from the bank’s latest quarterly results, which also showed a beat on revenue. “These results refl...

By Matthew Heller • Oct. 12, 2018

Flaunting Strong Earnings Damages Stock Price

A company has had a good year, and wants to make sure investors know it. So the headline of its press release announces, “Earnings Per Share up 16.5%” — which, the release reports, is a record.What could be more natural for a company to do than highlight impressive earnings?But, according to new ...

By David McCann • Oct. 9, 2018

Metric of the Month: Cycle Time to Prepare the Financial Forecast

Financial forecasting is a high priority for CFOs, and doing it more efficiently and accurately is an admirable goal. Yet so much has been written about forecast accuracy that it is has become one of the myths of modern finance. When managers chase accuracy, the mere act of forecasting often caus...

By Perry D. Wiggins • Oct. 8, 2018

Costco Warns of Material Weakness in Controls

Costco reported better-than-expected quarterly results but its disclosure of a weakness in its information technology drove its shares down more than 2% in extended trading Thursday.For the fourth quarter, the warehouse shopping leader earned $2.34 per share, an increase of 13.4% on the year-ago ...

By Matthew Heller • Oct. 5, 2018

U.S. Factory Orders Continue Growth

U.S. factory orders grew 2.3% in August, according to the latest data released by the Commerce Department. It was the largest monthly increase since September 2017.August’s orders were seen by analysts to have been buoyed by demand for aircraft. Orders for defense aircraft and parts rose 17% in A...

By William Sprouse • Oct. 4, 2018

Is Sustainability Fading from Board Agendas?

In 2016, BDO asked corporate directors whether they believed that disclosures regarding sustainability matters — like corporate social responsibility and the impact of climate change — were important to understanding a company’s business and provided meaningful information to investors.Three quar...

By David McCann • Oct. 1, 2018

KPMG Grows In-House RPA Expertise

For a large finance department where everyone is very busy and working long hours, a dictate to take on responsibility for coding bots to automate hundreds of processes may trigger a bit of resistance.Still, gaining knowledge about robotic process automation programming, maintenance, and tracking...

By David McCann • Oct. 1, 2018

Ex-Salix CFO Fined $1M for Misstating Inventory

The former CFO of Salix Pharmaceuticals has agreed to pay $1 million to settle charges that he lied to analysts and investors by significantly understating the amount of Salix drugs that wholesaler customers held in inventory.The U.S. Securities and Exchange Commission said Adam Derbyhire failed ...

By Matthew Heller • Oct. 1, 2018

Special Report: The New Digital Workforce

In a few years, robotic process automation may very well merge with or be rendered moot by artificial intelligence. But for now RPA, as it is known, commands the attention of enterprises and their finance teams to a degree few relatively new technologies have.Management consulting firm McKinsey s...

By David McCann • Sept. 28, 2018

The CFO Journey: From Archivist to Strategist to … Futurist

As organizations face an onslaught of fast-moving, high-impact technological advances — artificial intelligence and blockchain, to name two — it falls to finance  leaders to lay the groundwork for their companies’ transformations to fully digitized business models.A recent survey conducted by CFO...

By CFO Editorial Staff • Sept. 26, 2018

Michael Kors Agrees to Buy Versace

Michael Kors, the luxury goods maker, has reached a deal to acquire fashion house Gianni Versace for about $2.12 billion, the companies announced.The companies said the deal will allow them to expand the number of stores, grow online sales, and increase geographic diversity. They expected the com...

By William Sprouse • Sept. 25, 2018

Five Firms Fined for Filing Incomplete 10-Qs

The U.S. Securities and Exchange Commission has sanctioned five public companies for filing quarterly reports containing financial statements that had not been reviewed by an independent external auditor.Rule 8-03 of Regulation S-X requires that an issuer must have an independent registered publi...

By Matthew Heller • Sept. 24, 2018

Institutional Investors Put Private CFOs in the Public Eye

In 1996, more than 7,400 companies were listed on the major U.S. stock exchanges; today the number is less than half of that. There are many reasons for the decline, but among the more consequential is the emergence of crossover investing.Crossovers are traditional institutional investors that al...

By Jeff Majtyka and Willa McManmon • Sept. 21, 2018

Are Your Portfolio Reviews Timely, Objective, and Thorough?

In October 2017, Honeywell announced not one but two divestments representing close to $7.5 billion in revenues. It planned to execute each via a tax-free spin-off and receive total dividends of $3 billion at closing.For most companies, a single carve-out would be a major undertaking. For Honeywe...

By Jeffrey R. Greene, EY, Jeff Wray, and EY • Sept. 21, 2018

Under Armour Sets Aside $10M To Cover Job Cuts

Under Armour announced it was cutting about 400 jobs and setting aside $10 million to cover associated severance costs as it looks to increase efficiency.“In our relentless pursuit of running a more operationally excellent company, we continue to make difficult decisions to ensure we are best pos...

By William Sprouse • Sept. 20, 2018

SeaWorld Fined $4M for Hiding ‘Blackfish Effect’

SeaWorld Entertainment and its former chief executive have agreed to pay $5 million to settle charges that they misled investors about the negative impact on its business of a documentary film about alleged mistreatment of orcas at its theme parks.The U.S. Securities and Exchange Commission said ...

By Matthew Heller • Sept. 20, 2018

Oracle Shares Dip on Another Revenue Miss

Oracle shares fell more than 4% in after-hours trading Monday as another quarterly revenue miss raised investor concerns over the company’s shift to cloud computing.For the first quarter, the database software giant earned an adjusted 71 cents per share on revenue of $9.19 billion, up 1% on the y...

By Matthew Heller • Sept. 18, 2018

Which Acquisitions Will Generate Negative Stock Returns?

It’s no secret that a substantial percentage of acquisitions fail to deliver expected synergies.That risk increases if the companies are comparable in size or if the acquired business is material to the acquiring company. For example, the 2001 merger of Hewlett-Packard and Compaq Computer arguabl...

By Audit Analytics and Olga Usvyatsky and Nicole Hallas • Sept. 14, 2018

What’s Up with M&A in the Age of Tax Reform?

When the most substantial tax overhaul in 30 years was approved in late 2017, many investors thought the changes could usher in an explosion of mergers and acquisitions and lead to thriving, expanding businesses.By now, however, it’s clear that the impact of tax reform on M&A is more nuanced....

By PricewaterhouseCoopers and Bob Saada and David Hall • Sept. 11, 2018

Sonos Shares Dive on First Earnings Since IPO

Sonos’ first quarterly earnings report disappointed investors as revenue declined 6%, sending shares of the maker of high-end speakers tumbling in after-hours trading Monday.The stock had jumped 13.3% to $21.24 in the regular session, its best day since Sonos went public last month. But after the...

By Matthew Heller • Sept. 11, 2018

GameStop Misses Estimates, Exploring Sale

GameStop reported quarterly earnings that missed analysts’ estimates but confirmed it was exploring a “possible transaction” with third parties.For the second quarter, the world’s largest video game and gaming console retailer earned an adjusted 5 cents per share, down from 15 cents a year earlie...

By Matthew Heller • Sept. 7, 2018

SEC: Telecom Firm Artificially Boosted Revenue

How many ways can one company artificially inflate its revenue?Tangoe, a former publicly held company that helped large organizations analyze and monitor their telecommunications assets and manage related costs, did it in seven different ways over three years:1) counting customers’ prepayments fo...

By Vincent Ryan • Sept. 5, 2018

Tax Officers Take On New Role as Communicators

What image of corporate tax officers springs to mind? The erstwhile stereotype of round, rimless glasses peeking out beneath green eyeshades? Or perhaps simply that of an inconspicuous functionary toiling in silence behind the scenes?The reality is the opposite — especially now, with companies’ m...

By David McCann • Sept. 5, 2018

Workday Tops Estimates With 28% Sales Surge

Enterprise software company Workday reported better-than-expected quarterly earnings, although costs related to its acquisition of Adaptive Insights weighed on margins.Workday’s second-quarter report was its first since it bought Adaptive Insights, which provides cloud software for business plann...

By Matthew Heller • Sept. 5, 2018

Dollar Tree Misses on Flat Family Dollar Sales

Dollar Tree shares dropped more than 15% last week after the discount retailer reported lower-than-expected earnings amid flat sales for its Family Dollar unit.For the second quarter, Dollar Tree’s net income rose to $274 million, or $1.15 per share, from $234 million, or 98 cents per share, in t...

By Matthew Heller • Sept. 4, 2018