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Archive: January, 2012

POSTED: Wednesday, January 25, 2012, 3:27 PM

Apple's profits ($13 billion, after taxes) were greater than Google's sales ($11 billion) last quarter. Verizon, the fastest-growing retailer of Apple phones, actually lost money (-$2 billion, on record sales of $28 billion) last quarter. Apple today matches ExxonMobil as the world's most valuable company (both worth about $416 billion on the stock markets) on expectations it will keep making more and more money.

How does Apple profit while Verizon loses? "With all those iPhones, the question is profitability," writes analyst Craig Moffett in a report to clients of Bernstein Research. The price" of retailing Apple products is "high subsidies" and low profit margins. "All those iPhones!" juice sales, but higher texting and voice transmission costs and the "endeless string of Apple upgrade cycles" keep Verizon (and AT&T) smartphone profits low. Smartphone sales "have lagged projections," and one-time upgrades are no substitute.

Selling Apple smartphones "helped further accelerate wireless growth at Verizon... but at a steep margin price," agrees Zhiping Zhao, in a report for bond researchers CreditSights Inc. The cost of updating all those Apple products without selling a lot of new ones means "returning the wireless margin to pre-iPohne levels may be challenging."

Joseph N. DiStefano @ 3:27 PM  Permalink | 0 comments
POSTED: Wednesday, January 25, 2012, 1:04 PM

The first Marshall's clothing store in Center City Philadelphia will replace the Staples at 1046 Market Street in Center City's shopping district.

Metro Commercial Real Estate broker Donna Drew sold Marshall's owner TJX Cos. of Massachusetts on the 26,000 sq.ft. site after Staples declined to renew its lease with landlord Jenel Management Corp. of New York. Staples is consolidating to its stores at 15th and Chestnut and on Delaware Ave.

Metro boss Steve Gartner called the switch "a net win for Center City" since Marshall's isn't already in the neighborhood and "everyone shops at Marshall's." The Marshall's in my neighborhood devotes a majority of its space to modestly priced women's clothing and housewares, but also features small men's clothing, book, toy and appliance departments.

Joseph N. DiStefano @ 1:04 PM  Permalink | 0 comments
POSTED: Wednesday, January 25, 2012, 12:12 PM

Chemical maker PQ Corp. must pay ex- R&D professionals Bonnie Marcus and Roman Wypart at least $2.9 million ($1.9 million in lost wages, $150,000 for "emotional distress" and more than $800,000 in liquidated damages due to willful violations, plus possible future interest, fees and costs) for firing them in violation of the federal Age Discrimination in Employment Act, says a three-judge panel of the US Court of Appeals, Third Circuit, in Philadelphia. PQ had no comment.

According to the decision: PQ (formerly Philadelphia Quartz Co., founded in 1831 and run for most of its history by Philadelphia's Elkinton family) was bought by JPMorgan in 2005 and turned over to CEO Mike Boyce, who fired 30 employees three months after his arrival in a cost-cutting "reduction in force."

Among those laid off were Marcus, a manager in the former PQ Research and Development Department in Conshohocken, and Wypart, a scientist who reported to her. They won a 2009 verdict on their complaint under federal and state law, though Judge John P. Fullam cut millions from the original "distress" part of the award.  

Joseph N. DiStefano @ 12:12 PM  Permalink | 0 comments
POSTED: Wednesday, January 25, 2012, 10:39 AM

American private equity and hedge fund managers have done well despite the weak economy of the past decade. But are their millions, taxed at lower rates than earned income, justified by the creation of jobs and economic opportunities - or are they just enriching fund bosses like would-be President Mitt Romney?

“If you change the law, we’ll pay the taxes,” David M. Rubenstein, co-founder of Carlyle Group, one of the biggest US private investment firms, told the World Economic Forum, the annual gathering of Western financial and political elites in Davos, Switzerland. NYTimes report here.

"But don’t criticize (GOP Presidential candidate Mitt Romney) for paying the taxes that the law requires him to pay," Rubenstein added, according to Bloomberg here. Romney says he paid less than 14% of his $21M+ income to the federal government last year.

Joseph N. DiStefano @ 10:39 AM  Permalink | 0 comments
POSTED: Wednesday, January 25, 2012, 10:02 AM

The good news: Marcellus shale drilling and other construction jobs are propping up the Pennsylvania economy, the Federal Reserve Bank of Philadelphia says here in its December jobs report.

"Natural resources, mining and construction sector(s) added the most jobs in Pennsylvania," especially construction, writes the Fed. "Manufacturing, professional and business services, and government employment [which had been falling] also experienced strong gains."

By contrast, "financial activities and leisuer and hospitality employment fell."

Joseph N. DiStefano @ 10:02 AM  Permalink | 0 comments
POSTED: Tuesday, January 24, 2012, 2:39 PM

Neil Perry, the Scranton native and ex-McDonald's advertising man who founded what's now the Poptent Media ad company in Conshohocken five years ago, has a list of big-company clients -- Anheuser-Busch, Avaya, Dell Computer's Latitude-brand laptop computers, GlaxoSmithKline, Johnson & Johnson, Jaguar/Land Rover - but his new deal with yogurt-maker Dannon is sweet: The video, with actor John Stamos, is running in the Super Bowl, the ad industry's top showcase.

"It is a big deal. Like we got an Academy Award. Definitely a fun time here," Perry told me.

PopTent is different from traditional ad firms because it relies, not completely on its 50 employees (also in San Clemente, Sao Paolo, Chicago, and "soon New York"), but also on "up to 43,000 creators," mostly young people with digital cameras, from moonlighting wedding photographers to boutique design firms to a literal handful of fulltime job-shoppers Perry says earn over $100,000 a year from PopTent business. Perry and his team call their method "crowdsourcing."

Joseph N. DiStefano @ 2:39 PM  Permalink | 0 comments
POSTED: Tuesday, January 24, 2012, 11:19 AM

First Sealord Surety Inc., a Villanova-based company that wrote construction surety bonds insuring building contractors in Philadelphia and other regional markets against loss, has been downgraded to C ("weak") from A- ("excellent") by insurance rating firm A.M. Best & Co., in part because First Sealord's sale to U.K.-based Torus National Insurance Co., announced last month, has so far failed to close. 

UPDATE: "Torus has elected to terminate its agreement to acquire First Sealord Surety," Torus spokeswoman Laura Molloy just confirmed to me.

EARLIER: The steep downgrade won't help the company's position in what is already a slow construction market. "In speaking with the company yesterday, I understood they are not writing any new bonds," Gordon McLean, senior financial analyst at A.M. Best, told me. McLean and his colleagues cited the "increased uncertainty" of the Torus deal as well as their "increased expectation of significant financial deterioration" at First Sealord.

Joseph N. DiStefano @ 11:19 AM  Permalink | 0 comments
POSTED: Tuesday, January 24, 2012, 10:18 AM

"The Israeli-born wife of casino mogul Sheldon Adelson is matching her husband and placing her own $5 million bet on a super PAC supporting Newt Gingrich in the upcoming Florida primary," reports the nonprofit Center for Public Integrity here.

"The gift came from Miriam Adelson, according to sources familiar with husband Sheldon’s previous $5 million donation to the super PAC 'Winning Our Future.'...

"The second $5 million infusion the pro-Gingrich PAC [has collected] from the physician-wife of the 78-year-old Adelson could be crucial to Gingrich’s chances of winning the Jan. 31 primary... In South Carolina, Sheldon Adelson’s $5 million donation to the PAC basically bankrolled its hard-hitting [anti-Mitt Romney] ad blitz, which totaled almost $3 million, according to Federal Election Commission records...

Joseph N. DiStefano @ 10:18 AM  Permalink | 0 comments
About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph at or 215 854 5194.

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