‘Strategic Imperatives’ Drive IBM’s Q2 Growth

IBM’s “strategic imperatives” segment has passed a fiscal milestone, accounting for more than half of quarterly revenue for the first time as the company delivered a third straight quarter of revenue growth.For the second quarter, IBM rose 4% to $20 billion, topping analysts’ estimates of $19.85 ...

By Matthew Heller • July 19, 2018

How Important Are Intangible Asset Impairments?

In July 2017, PayPal Holdings acquired Canadian payment-processing company TIO Networks for $238 million. The purchase price consisted of $66 million of technology and customer-related intangible assets, net assets of approximately $2 million, and initial goodwill of approximately $170 million.A ...

By Olga Usvyatsky • July 19, 2018

SEC Eases Equity Compensation Disclosure

The U.S. Securities and Exchange Commission has adjusted its rules governing disclosure of employee stock compensation to reflect changes in the labor market.Securities Act Rule 701 exempts non-reporting companies from disclosing stock issued as compensation to employees if the aggregate sales pr...

By Matthew Heller • July 19, 2018

Strong Demand Fuels United Earnings Beat

United Continental reported better-than-expected quarterly earnings as strong demand for air travel helped offset rising fuel costs.The No. 3 U.S. airline’s fuel expenses surged 43% to $2.39 billion in the second quarter, weighing on its net profit, which fell nearly 17% to $684 million.But reven...

By Matthew Heller • July 18, 2018

Netflix Shares Dive as Subscriber Adds Miss

Netflix shares tumbled in after-hours trading Monday after the company reported lower-than-expected subscriber growth, sparking fears that its expansion is slowing.For the second quarter, Netflix added 5.2 million streaming users, well short of the 6.2 million it estimated in April. The additions...

By Matthew Heller • July 17, 2018

BofA Sees Higher Profit On Lower Costs, Taxes

Bank of America reported second-quarter profit of $6.8 billion, up from $5.1 billion a year ago. The bank, the second largest in the U.S. by assets, reported earnings of 63 cents per share, compared with expectations of 57 cents per share, according to analysts surveyed by Reuters.BofA said quart...

By William Sprouse • July 16, 2018

Wells Misses Estimates With Broad Weakness

Wells Fargo on Friday reported lower-than-expected quarterly results, with declines in revenue and profit across its business segments, but the bank appears to be making progress cutting costs as part of its turnaround effort.For the second quarter, Wells Fargo posted adjusted earnings of $1.08 p...

By Matthew Heller • July 13, 2018

How to Forecast Growth in the Age of the Overnight Policy Whipsaw

International trade wars used to brew over the course of decades. Today, they are launched overnight. And that’s wreaking havoc on many companies’ ability to accurately forecast growth.As a case in point, look no further than the chronology of events surrounding the introduction of new U.S. tarif...

By Brian Peccarelli • July 12, 2018

Five Keys to Succeeding as CFO of a PE-Backed Company

For a CFO, navigating new institutional ownership is “a whole new world.” And often, not a welcoming one.Why? There are many reasons, but chief among them is also the simplest: CFO business-as-usual is not PE-backed CFO business-as-usual. Institutional ownership comes with meaningful strategic an...

By Ayla Queiroga and Jason Madden • July 11, 2018

Finance Execs Fearful of Spending Tax-Cut Proceeds

Spending habits are hard to break, even if you’re a treasury and finance professional.A new survey from the Association for Financial Professionals shows that, despite the U.S. corporate tax cuts, 40% of respondents anticipate no change in the level of spending at their organizations. One reason:...

By Vincent Ryan • July 11, 2018

Working Capital Scorecard: Suppliers Can Wait

The 2018 CFO/The Hackett Group Working Capital ScorecardCompanies’ liquidity is at record levels in the United States. According to the 2018 CFO/Hackett Group Working Capital Scorecard, cash on hand for the 1,000 largest U.S. companies rose by a whopping 17%, or $154 billion, in 2017. Much of tha...

By Ramona Dzinkowski • July 10, 2018

Ex-ITT Execs Fined in Student Loan Fraud Case

The former chief executive and the former CFO of ITT Educational Services have agreed to fines and other sanctions to settle charges that they hid the “abysmal” performance of two student loan programs from investors.The settlement wraps up a fraud case that the U.S. Securities and Exchange Commi...

By Matthew Heller • July 9, 2018

Study Pans Disclaimers on Forward-Looking Statements

They are among the most common of corporate communications to investors: forward-looking statements about company prospects, accompanied by warnings that these projections could differ materially from actual future results.Commonplace though such cautionary disclaimers are, there is much controve...

By David McCann • July 5, 2018

Metric of the Month: Uncollectible Balances

More than half of organizations consider customers’ adherence to payment terms to be a key indicator of the credit function’s performance. But all too often, organizations take an unrealistically optimistic outlook on past-due receivables — even when deep down, they know that the likelihood of co...

By Perry D. Wiggins • July 5, 2018

Dow Chemical Fined $1.75M Over CEO’s Perks

Dow Chemical has agreed to pay $1.75 million to settle charges that it failed to properly disclose around $3 million in perks for former CEO Andrew Liveris in its proxy statements.The U.S. Securities and Exchange Commission said Dow applied an incorrect standard in deciding not to disclose perks ...

By Matthew Heller • July 5, 2018

SEC Wants the Power to Limit the Size of Whistleblower Awards

The Securities and Exchange Commission apparently thinks the federal government is paying some whistleblowers too much for revealing corporate malfeasance.So, the SEC is proposing amendments to rules governing the whistleblower program. Among other things, the changes would give commissioners mor...

By William Sprouse • July 2, 2018

Balancing Act: CFOs Must Meld Innovation and Control

Risk and caution. Speed and patience. Creativity and restraint. Innovation and control. Life, and business, are made up of finding the shifting balance between extremes and knowing when to drift toward one pole or the other.Tom Crawford As a former CFO, I firmly believe that the role of finance g...

By Tom Crawford • July 2, 2018

Key Inflation Rate Hit Fed’s Target Level in May

The personal consumption expenditures (PCE) index ticked up to 0.2% in May as core inflation hit 2%, the Federal Reserve’s long-run target, for the first time since April 2012.Economists had not expected its key measure of inflation to hit 2% until later this summer, though Fed Chairman Jerome Po...

By William Sprouse • June 29, 2018

Amazon to Buy Online Pharmacy Company PillPack

Online giant Amazon.com has reached an agreement to acquire PillPack, the online pharmacy that offers pre-sorted doses and home delivery, the companies said. Terms of the deal were not disclosed, but TechCrunch, citing sources close to the deal, said the price tag was just under $1 billion.The d...

By William Sprouse • June 28, 2018

The 2018 CFO State Tax Survey: Land of Confusion

The 2018 CFO State Tax Survey(Jump to the survey results at bottom of page.)The preparation of state income tax returns has in recent years evolved into a more complex endeavor. Now, uncertainty over how states will respond to the federal Tax Cuts and Jobs Act (TCJA), as well as fallout from a U....

By David Katz • June 28, 2018

Auto Groups: Trump Tariffs Would Cost Jobs, Hurt Consumers

The Association of Global Automakers (AGA) and the Alliance of Automobile Manufacturers (AAM) spoke out against possible Trump administration tariffs on imported cars Wednesday, saying the levies could dramatically increase prices and cost hundreds of thousands of jobs.Last Friday, President Dona...

By William Sprouse • June 27, 2018

Meeting the Tax Reform Challenge Through Automation

At its core, innovation is about solving problems and building solutions to address common challenges. At the risk of stating the obvious, the enactment of the most comprehensive tax reform in more than 30 years has created a host of new challenges for companies.Technology — including artificial ...

By Michael Shehab • June 26, 2018

AT&T to Buy Adtech Firm AppNexus

AT&T has reached an agreement to buy the digital ad platform and global advertising marketplace AppNexus, the companies said. Financial terms were not disclosed; however, last week The Wall Street Journal reported the companies were in talks for a deal valued at about $1.6 billion.The transac...

By William Sprouse • June 25, 2018

Red Hat Shares Dive on Disappointing Guidance

Red Hat shares had their worst trading day since 2006 after the enterprise software company issued lower-than-expected second-quarter guidance.The stock plunged 14.2% to $142.14 on Friday even though Red Hat’s first-quarter earnings beat analysts’ estimates. Before Friday’s tumble, the shares wer...

By Matthew Heller • June 25, 2018

Internet Sales Tax Ruling Seen Boosting States

The U.S. Supreme Court decision allowing states to force online retailers to collect sales taxes may not lead to immediate credit rating upgrades for states but should provide a welcome financial boost over the long term, according to S&P Global ratings.The court on Thursday revived a South D...

By Matthew Heller • June 22, 2018