Google joins in Amazon’s spending spree, but to a lesser degree - MarketWatch

MarketWatch First Take

By Therese Poletti

Published: Oct 28, 2019 8:51 pm ET

Earnings from two of tech’s biggest names are hit by return to investing in the future of the businesses

The cost of new hires and real estate added up for Google last quarter.

Alphabet Inc.’s big earnings shortfall was not just the result of its equity investment losses: Continued heavy spending on hiring and real estate by the internet search and advertising behemoth also played a role.

Google’s parent company reported third-quarter profit far lower than Wall Street’s estimates Monday afternoon. Alphabet GOOG+1.97% GOOGL+1.95%  reported net income of $7.07 billion, or $10.12 a share, a year-over-year profit decline of more than 22% that missed estimates by nearly 18%. The stock fell by more than 1% in after-hours trading following the results.

Full earnings results: Alphabet earnings miss estimates, driving shares down

Alphabet executives blamed the profit decline on free spending, a longtime habit for Google that has declined since Chief Financial Officer Ruth Porat arrived from Wall Street. That is the same reason another big name in tech, Amazon.com Inc. AMZN+0.89% gave for its earnings downturn this year, as the two companies battle in new arenas — such as Amazon’s growing ad business and Google’s rising enterprise-cloud offering — for a more promising future.

Hiring was a big part of Google’s spending, Porat said in Monday’s conference call, along with investments in cloud data centers and offices to house all the new employees. Alphabet added 19,724 workers in the past year, and 6,450 in the third quarter.

“Head-count growth on an absolute basis in the third quarter was unusually high, reflecting the addition of new college hires,” Porat said, while promising that employee count will “be in line with growth in 2018.”

The company also said it spent $7.2 billion on capital expenditures, up from $5.3 billion a year ago. The spending this quarter included building out data centers and spending on new offices and campuses in the Bay Area and in Seattle. Technical infrastructure, such as data-center technology, accounted for only 60% of capex in the quarter, Porat said.

“Investments in office facilities included the $1 billion acquisition of a portfolio of buildings in Sunnyvale and in the purchase of two buildings to expand our presence in the Seattle area,” the CFO said.

Going forward, however, Porat said she expects that the primary driver of its capital expenditures will continue to be expanding its data centers and increasing the compute requirements to support machine learning, cloud search and YouTube.

Compared with Google’s rival in Seattle, Alphabet’s spending still seems anemic. Amazon added nearly 100,000 employees in the third quarter, which means that it hired roughly as many people every week as Alphabet did in the entire quarter. It also said it spent $4.7 billion in the quarter on purchases of property and equipment, which ostensibly includes its data center and warehouse build-outs.

Neither company has made a big splash in acquisitions recently, though Alphabet is reportedly eyeing a well-known name: Fitbit Inc. FIT+30.86%  . Reuters on Monday reported that Alphabet was considering purchasing the wearables company to round out its growing hardware offerings, which could lead to a lot more money heading out the door.

Alphabet definitely was on a big spending spree last quarter, and it is worthwhile to keep an eye on Google’s costs as potential antitrust litigation becomes a bigger factor in the next year or two. But if the tech titans are going to keep spending amid tariff fears and whispers of the end of the current tech boom, investing in the future is a much better target than even more stock repurchases.

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2019-10-29 01:51:00Z
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Louis Vuitton owner eyes jewelry icon Tiffany & Co - CNN

LVMH, which is run by billionaire CEO Bernard Arnault and owns brands such as Louis Vuitton and Christian Dior, confirmed its interest on Monday after several media outlets reported over the weekend that it had made a takeover offer for Tiffany.

The French fashion conglomerate acknowledged only that it held "preliminary discussions" regarding a "possible transaction" with Tiffany, adding that "there can be no assurance that these discussions will result in any agreement."

Bloomberg and others have reported that LVMH approached the jeweler with an all-cash proposal earlier this month that would value Tiffany at about $14.5 billion, or $120 a share. That's roughly 20% more than the stock's closing price Friday.

Tiffany (TIF) has brought on advisers to review the offer and so far hasn't responded to LVMH (LVMHF), according to Reuters, which cited anonymous sources familiar with the matter.

Shares of Tiffany skyrocketed nearly 20% in premarket trading Monday, while LVMH stock was up 0.4% in Paris. Tiffany did not immediately respond to a request for comment from CNN Business.

"A takeover of Tiffany could make a lot of sense," analysts at Bernstein wrote in a research note. While Tiffany is one of the world's best-known luxury brands, the analysts said it still has room to grow, particularly in jewelry and watches.

The deal would boost LVMH's presence in the United States, which accounts for about a quarter of its revenue. It would also bolster the French company's jewelry and wristwatch lineup, which include European legacy brands such as Bulgari, Hublot and TAG Heuer. As of January, the jewelry and watch unit only brought in 9% of overall revenue, according to a letter to shareholders.

LVMH is the world's biggest luxury group. The company is home to 75 different brands, and it has for years been the top seller of high-end goods, according to a Deloitte analysis published this year. Last year, the retail giant took in 46.8 billion euros ($51.9 billion) in revenue.

Tiffany has had a more complicated story. The company has long dealt with slumping sales, and in 2017 it replaced its CEO after disappointing financial results. Since then, it has been working to rebrand its image to attract more millennials — adding more products that are designed to appeal to young shoppers, rolling out more targeted marketing and revamping its historic flagship store in New York City to draw in more customers.

In the company's most recent earnings report in August, it said that global sales dropped 3% in the first half of this year. But it also said it enjoyed "strong growth" in mainland China, where the slowing economy has put pressure on the broader luxury sector.

The company's "long-term growth potential in China" is one of the main factors that makes it attractive to buyers, analysts at Cowen wrote in a note on Sunday.

An acquisition of Tiffany would be one of LVMH's splashiest deals to date. In 2017, the company took over Christian Dior for $13 billion, and last year it snapped up the ritzy Belmond hotel chain for $2.6 billion.

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2019-10-28 11:34:00Z
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2 Passive Ways to Boost Your Social Security Benefits - The Motley Fool

Chances are, Social Security will be a substantial source of income for you once you retire, so the higher those benefits are, the less financial stress you'll grapple with. Now you'll often hear that you should make an effort to boost those benefits as much as possible. But actually, in some cases, you can raise those benefits by taking no action at all. Here are a couple of passive ways to get more money from Social Security during your golden years.

1. Don't file early

The Social Security Administration lets you start collecting benefits at age 62, but you won't get the full monthly benefit you're entitled to until you reach full retirement age, or FRA. Your FRA is determined based on your year of birth, as follows:

Year of Birth	Full Retirement Age
1943-1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 or later	67

DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.

Filing early will generally result in a permanent reduction in benefits. You'll lose 6.67% a year for the first 36 months you claim benefits ahead of FRA, and then 5% a year for each 12-month period thereafter. In other words, filing for Social Security three years early will slash your benefits by 20%. Filing four years early will result in a 25% reduction, while filing five years early will lead to a 30% cut. But if you sit back, do nothing, and wait until FRA to file, you'll get more money than you would by filing sooner. And if you delay benefits past FRA, you'll permanently boost them by 8% a year in the process, up until age 70.

IMAGE SOURCE: GETTY IMAGES.

2. Don't retire early

Your Social Security benefits are calculated based on your 35 highest-paid years of wages. But most people earn more at the end of their career than they do at the beginning, which means that if you hold off on retiring and stay in the workforce later in life, you might boost your benefits by virtue of replacing some lower-earning years with higher earnings.

Imagine you started working full-time at age 22, and you're thinking of retiring at age 57. In doing so, you'll still have a full 35 years of work under your belt; you won't risk having any zeros factored into your benefits equation, which is what happens to people who don't put in a full 35 years in the workforce. But if you earned $25,000 a year at age 22, and you're earning $125,000 a year now, by not retiring, you'll have the potential to replace some years of lower income with a higher income. (Keep in mind that when determining your benefits, the Social Security Administration does adjust earlier earnings for inflation; but a $25,000 salary earned 35 years ago still can't compare to $125,000).

Get the most out of Social Security

Even if you amass a healthy amount of savings for retirement, there's a good chance you'll still need your Social Security income to pay for extra expenses or enjoy the luxuries you've been looking forward to all your life. The good news is that you have the power to increase your benefits by not taking action -- by letting your benefits grow rather than claiming them early, and by staying in the workforce rather than marching into your boss's office and resigning.

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2019-10-28 10:36:00Z
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Luxury goods firm LVMH eyes Tiffany takeover - BBC News

Luxury goods firm Louis Vuitton (LVMH) has confirmed it has held "preliminary discussions" about buying US jeweller Tiffany,

The statement followed reports that LVMH had made a $14.5bn (£11.3bn) offer to buy the company.

"The LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany," it said.

LVMH is owned by France's richest man, Bernard Arnault.

It produces a wide range of luxury goods including clothing, cosmetics, perfumes, drinks and fashion accessories, including its signature Louis Vuitton handbags.

It also owns brands such as Christian Dior, Givenchy and Kenzo, as well as many of the best-known champagne brands, including Dom Pérignon and Moët & Chandon.

Global demand for its products has held up well in recent years, but the same cannot be said for Tiffany, which has seen worldwide sales fall this year.

LVMH said there was "no assurance" that its talks with Tiffany would produce an agreement.

The announcement by LVMH came after media reports that the firm had submitted a preliminary, non-binding offer to Tiffany earlier this month.

The offer is said to value Tiffany at about $120 a share.

Analysts say LVMH is keen to expand in the US, where Tiffany is based.

LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores, while Tiffany employs more than 14,000 people and operates about 300 stores, including its flagship outlet on Fifth Avenue in New York.

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2019-10-28 10:38:09Z
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Luxury goods firm LVMH eyes Tiffany takeover - BBC News

Luxury goods firm Louis Vuitton (LVMH) has confirmed it has held "preliminary discussions" about buying US jeweller Tiffany,

The statement followed reports that LVMH had made a $14.5bn (£11.3bn) offer to buy the company.

"The LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany," it said.

LVMH is owned by France's richest man, Bernard Arnault.

It produces a wide range of luxury goods including clothing, cosmetics, perfumes, drinks and fashion accessories, including its signature Louis Vuitton handbags.

It also owns brands such as Christian Dior, Givenchy and Kenzo, as well as many of the best-known champagne brands, including Dom Pérignon and Moët & Chandon.

Global demand for its products has held up well in recent years, but the same cannot be said for Tiffany, which has seen worldwide sales fall this year.

LVMH said there was "no assurance" that its talks with Tiffany would produce an agreement.

The announcement by LVMH came after media reports that the firm had submitted a preliminary, non-binding offer to Tiffany earlier this month.

The offer is said to value Tiffany at about $120 a share.

Analysts say LVMH is keen to expand in the US, where Tiffany is based.

LVMH has 75 brands, 156,000 employees and a network of more than 4,590 stores, while Tiffany employs more than 14,000 people and operates about 300 stores, including its flagship outlet on Fifth Avenue in New York.

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2019-10-28 09:41:01Z
52780420006188

US business hiring falls to a 7-year low - Fox Business

Fox News Contributor Deroy Murdock responds to minority hiring surpassing white hiring in August.

Later this week the government will release the monthly jobs report for October at a time when a new survey says business hiring is slowing.

Continue Reading Below

Hiring by U.S. companies has fallen to a seven-year low and fewer employers are raising pay, a business survey has found.

Just one-fifth of the economists surveyed by the National Association for Business Economics said their companies have hired additional workers in the past three months.

That is down from one-third in July. Job totals were unchanged at 69 percent of companies, up from 57 percent in July. A broad measure of job gains in the survey fell to its lowest level since October 2012.

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The hiring slowdown comes as more businesses are reporting slower growth of sales and profits.

Business economists also expect the economy's growth to slow in the coming year, partly because tariffs have raised prices and cut into sales for many firms.

Perhaps because of concerns over a weakening economy, businesses are less likely to offer higher pay, even with unemployment at a 50-year low. Just one-third of economists said their firms had lifted pay in the past three months, down from more than half a year ago.

Companies are also cutting back on their investments in machinery, computers, and other equipment. The proportion of firms increasing their spending on such goods is at its lowest level in five years, the survey found.

WHERE ARE ALL THE JOBS? THESE SECTORS HIRED THE MOST IN SEPTEMBER

Sales are also growing more slowly. Just 39 percent of economists said they rose in the past three months, down from 61 percent a year earlier. And only 38 percent said they expect sales to rise in the next three months, also down from 61 percent a year ago.

Many business economists blamed President Trump's tariffs on steel, aluminum, and on most imports from China for worsening business conditions. Thirty-five percent said the duties have hurt their companies, while just 7 percent said they had a positive effect.

Of those who said tariffs had impacted their companies, 19 percent said they had lowered their sales and 30 percent said the duties pushed up costs.

The U.S. economy likely added 90 thousand new nonfarm jobs this month according to economists surveyed by Refinitiv, down 46 thousand from September’s tally of 136 thousand jobs. It would mark the slowest growth since the addition of 62 thousand payrolls in May, and would be well below the average monthly gain of 161 thousand this year.

Two-thirds of the economists surveyed now forecast that the economy will grow just 1.1 percent to 2 percent from the third quarter of 2019 through the third quarter of 2020.

A year ago, they were more bullish: Nearly three-quarters forecast growth of 2.1 percent to 3 percent from the third quarter of 2018 through the third quarter of 2019.

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The NABE surveyed 101 economists at companies and trade associations from Sept. 26 through Oct. 14.

The Associated Press contributed to this article.

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2019-10-28 06:43:48Z
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A scam targeting Americans over the phone has resulted in millions of dollars lost to hackers. Don't be the next victim. - CNN

The woman was a scammer, and Gunst was just the latest target in a growing trend that's left thousands of Americans frustrated, broke, and without a clue how to get their money back.

The over-the-phone scheme is a type of phishing scam.

And in the last year, a whopping 26,379 people reported being a victim of some sort of phishing scam. Together they reported nearly $50 million in losses, according to the FBI's 2018 Internet Crime Report.

While the number of reported scams increased slightly from the 25,344 phishing scams reported to the FBI in 2017, the losses skyrocketed by nearly $20 million.

They are not going away anytime soon, as scammers are getting more clever and devious in their phishing attempts. Here's how you can avoid being the next person to fall for one.

How it works

Gunst ignored the first call from the scammer -- he didn't recognize the number. But the same number called him again, and as a business owner accustomed to unknown numbers, he decided to pick up.

Gunst says the woman on the other end claimed she worked with the bank, and someone had attempted to use his card in Miami. Gunst, who lives in San Francisco, told the caller it wasn't him.

Still, having received legitimate calls from his bank regarding attempted fraud in the past, Gunst still did not suspect anything unusual.

Then it got weird.

After confirming that he did not use his card in Miami, Gunst says the caller told him that the transaction had been blocked, and then asked him for his member number.

Gunst then received a legitimate verification pin from the bank's regular number via text, which he promptly read back to the caller -- not realizing that it was a password reset code.

The person on the line -- a scammer -- was in. She could access his account and began to read off recent transactions that Gunst had actually made, lending a bit more credibility to the call.

Then came the next question, which immediately set off a red flag: "We now want to block the pin on your account, so you get a fraud alert when it is used again. What is your pin?"

Gunst hung up. That's a number no bank would ever ask for. He quickly called the fraud department at his bank, and began to rethink how the call went awry.

"The problem is the text should say what its purpose is," Gunst later explained to CNN of the verification pin, which he tweeted about in a widely-read thread. "'Someone is trying to reset your password. Don't give this number to everyone.' But it didn't. It was just a generic pin."

He said that was a lesson for the bank to learn from.

The 'hack' used social engineering

Hackers may use what's known as social engineering to try and obtain or compromise information about you, which could then be used to gain access to something such as your bank account.

What that means is simple: they tricked you, or someone who knows you, to compromise your account.

CNN reporter Donie O'Sullivan recently agreed to allow Rachel Tobac, a cybersecurity executive and hacker who specializes in social engineering, to hack him as a means to show how a scam can work. She was able to get his home address, phone number, have his hotel points transferred over to her and even change his seat on an upcoming flight.

And she was able to do this largely by using information that he posted online on social media: an Instagram check-in at a hotel and a tweet about a piece of furniture.

How? Both the hotel and the furniture company handed his personal details to the hacker over the phone.

It's not always your fault

Companies that don't have the proper security procedures in place can often leave themselves and their customers vulnerable to a social engineering attack.

A small company could easily be tricked into giving up personal customer information over the phone if a clever hacker has just enough information to seem credible.

Small banks and companies have been known to put out member newsletters or even hold member appreciation events where it's posted on social media and people are invited to accept or decline the invitation, according to Ron Schlecht, managing partner of security firm BTB Security.

A savvy hacker could've used that information to find members of that bank and use social engineering to find information such as their home addresses and phone numbers in order to phish them.

"It's unclear at this point where this happened, but there's no doubt in my mind that they knew that I was a customer of that bank and they thoroughly understood the security procedures of that bank," Gunst says. "It was rather targeted."

While it's possible that Gunst's bank was compromised, Schlecht says that "it's more likely that they disclosed information without really knowing it was bad to do so."

Spotting the scam

There are a number of clues out there that should raise your suspicions.

"If you've been randomly selected for a big prize, vacation, or to enjoy great savings or if all of a sudden the IRS, Medicare, or Social Security Administration needs to get a hold of you for a warrant or penalty, take a deep breath and consider the legitimacy of the call," Schlecht said.

He offered a simple rule: "Very broadly, if something seems too good to be true or too bad to be true, it probably is. Chances are that you haven't entered into a drawing, specifically sought out services, or even have an idea that you've done some misdeed."

Phishing scams are common, but particularly clever phishing attempts can deceive even those who are aware of them.

In the moment, with the scammer on the other end putting pressure on you to verify or give up information, it's easy to make a mistake or overlook a detail or clue that may hint at a scam.

Knowing the procedures your bank or institution takes with fraud attempts can be helpful in spotting a scam, but it's not foolproof. Gunst has received multiple calls from his bank for real fraud attempts in the past, and he says that the scammer stuck to the pattern very closely. He said it was a "very clever trick."

"When I read that thread now, that's one red flag after another," Gunst says. "But it's hard to express the social engineering component of it. My guard wasn't up in the way it should've been."

The FBI warned of scammers spoofing legitimate FBI phone numbers in August, so it's clear that you truly can't trust any inbound call no matter what the caller ID says. Your best bet at staying safe would be to hang up and to call the phone number your bank or institution has listed.

"Zero trust always wins," Schlecht said. "You can't verify that they are who they say they are, so call them after the notification instead of interacting with an inbound call."

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https://www.cnn.com/2019/10/27/business/phishing-bank-scam-trnd/index.html

2019-10-27 09:22:00Z
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