Dunkin' Donuts Faces A Lawsuit Over Unjust Taxation

Outlets in New Jersey and New York have been charging the customers with extra

Dunkin’ Brands Group Inc.’s most popular brand Dunkin’ Donuts has been under the mighty pen of the lawyers. A lawsuit has been filed against the parent company which states that several stores in New York and New Jersey have been charging sales tax to customers which is generally qualifies for exemption falling under the ambit of non-taxable item.

The Wall Street Journal reported that the lawsuits claim that the customers in Fort Lee, New York City and other places have been charged unjust extra tax. The amount of the tax is 7% in New Jersey and 8.875% in New York City. The tax is imposed on the consumers on the purchase of packaged coffee and bottled water.

New Jersey Division of Taxation has forwarded in its sales tax guide that bottled water and packaged coffee are exempt from the implication of sales tax. Journal reported that the in the federal suit that was filed in Manhattan against the coffee shop’s parent company excerpt from comparable tax guidance from New York is attached which quotes that packaged coffee is exempt from the sales tax.  

In the complaint filed by the lawyers Carl J. Mayer of Princeton and Ted M. Rosenberg of Moorestown the lawyers has stated that the tax is disguised as “sales tax” on “customers’ receipt.” The lead plaintiffs are Fort Lee’s Ron and Carol Frate.

The lawyers reported that they seek for the certification of lawsuit as “class actions.” Mayer says that the number of New Jersey residents affected by the unjust tax is in thousands. He said that his firm carried out the experiment to find out the practice of the wrong taxation. He said that the firm sent customers to buy packaged coffee and water from around “couple of dozen” Dunkin’ Donuts operating around the state. He further confirmed that a large number of stores have been charging the extra 7%.

On the matter, a spokesperson from the Dunkin’ Donuts recorded his statement: “Dunkin’ Donuts has over 1,000 restaurants in New Jersey and New York that are owned and operated by individual franchisees, who are expected to comply with all applicable state and federal laws, including those relating to taxation,” he further added, “We are in the process of reaching out to the franchisees identified in the complaint in order to determine whether these taxes were charged to the customers.”

However, the lawyers have accused the company for willfully charging the extra tax from the customers. When asked why a company would possibly do that? The plaintiff’s attorney couldn’t provide a coherent reason.

Just a week ago, Dunkin’ Brands Group Inc. announced its earning which represents the falling sales in U.S. stores. The future is likely to tell how the lawsuit will have impact on the sales of the company when the customers will be told that they have been wrongly charged for the last three years. Reportedly, the restaurant chain has collected almost $14 million –$10 million from New York based customers and $4 million from the shoppers in New Jersey –as a result of this unlawful extra charge. At the market which closed on Tuesday, DNKN stock price stood at $40.84.

CVS Unveils Its Fourth Quarter Earnings

All thanks to new acquisitions, the biotech giant has declared high profit and bolstering sales

CVS Health has declared its fourth quarter earnings. The results carried high profits and sales for the biotech giant. Although the company’s front-end stores’ sales fell down a bit however the soaring sales of prescription drugs balanced the downfall.

The quarterly earnings were significantly in line with Street’s expectations. The biotech titan’s PBM (Pharmacy Benefits Management) business and drugstores performed phenomenally during the quarter and covered a lot number of patients.

Woonsocket based organization’ recent acquisition of Omnicare Inc. and Target Corporation were catalysts in bolstering the revenue of the company. Target Corp’s pharmacy business provided the organization around 1,700 new locations to expand its business while through Omnicare Inc.’s business of distributing drugs to nursing homes and the likes, the biotech giant was able to cover a lot more patients.   

For the period ended as at Dec 31, the $96 billion organization posted the profit of $1.5 billion going up from last year’s $1.32 and an EPS of $1.34 stronger than the last year’s $1.14. Against the analysts’ forecasted revenue of $41.13 billion, the company posted the quarterly revenue of $41.15 billion growing up by 11%. Retail business sales grew to $19.9 billion up by 12.5%. Although front-end sales declined by 0.5% however the overall stores sales increased by 3.5%.

Maintaining sustainable profit is quite challenging for the company as many consumers (patients) are covered through federal Medicare and Medicaid programs. Such federally administered programs carry lower reimbursement rates so the company is subjected to sell the product on lower margins than the private insurers.

However, private insurers too are trying to reduce the exorbitant costs from their drug plans. According to Wall Street Journal, last month, Indiana based health insuring firm, Anthem Inc. declared that it will drop its longtime benefits manager, Express Scripts Holding Co., a St. Louis, Missouri based firm if it wouldn’t deliver the savings of more than $3 billion on drug prices.  

This dispute has opened the way for CVS to grab the golden opportunity however the company chose to remain silent when asked about its plan to pursue the valuable contract. The only comment which was given on the matter was head of CVS’s Caremark business, Jonathan Roberts’, which went like: “We’re not really seeing any repercussions or halo to pricing in the marketplace from that event, but I think it continues to be competitive.”   

According to Journal, the sales of retail pharmacy rose by 5% on same-store basis. The retail pharmacy sales include both pharmacy sales and prescription volumes. Other pharmacy-services businesses reported an increase of around 11% in sales and reached at $26.5 billion.

Talking about this year’s guidance, the company has projected the earnings for first quarter around $1.14 per share to $1.17 per share. The projected earnings fall a bit lower than the Thomson Reuters’ analysts’ expectations of $1.18 per share.

As at the market which closed on Tuesday, CVS Health Corp. stock stood at a price of $90.50. Earlier, during Tuesday trading, the stock traded up by 2%.    

Boeing Plans To Set Up A Production Plant In India

Boeing is planning to have its own production plant in India for its product, F/A-18 Super Hornet

Boeing Corporation is taking geographical boundaries into consideration and is planning a construction of a production plant in India for its product, F/A-18 Super Hornet. The aerospace giant is having meetings with the Indian government for this plan and has further plans of making billion of dollar investment in the country.

If Boeing’s meetings and plans will be successful, the company will benefit immensely from this development, mainly because of the cheap labor the country has to offer, and even talented. Lower cost does not mean the workers of the country are any less skilled than others around the world.

The F/A-18 of the aircraft company is a twin engine, fighter plan, with features such as landing and taking off from a plane carrier. The aerospace company is not being hesitant to set a strong foothold in India, and is making everything possible for this to happen. A campaign that was launched by the government of India called, ‘Make in India’ is what is attracting many foreign companies to establish their businesses in the region.

The production plant plan of the aerospace company will have enough room in case of growth and demand of the product rising. Once the plant is set, the organization will have even more chances of expansion in the country and forming different categories of alliances. The aircraft manufacturer is hoping that the population of the country will grow to 1.6 billion, which mean a wider audience and market for the company.

India’s aviation business is expected to expand by 2030, and becoming the largest market according to International Air Transport. Boeing is aware of this analysis and is not willing to stay behind and is trying to gain access of the market before any of its rival step their game up.  However the company has to sadly wait for this to happen as the deal is going to be dependent on the government of India and the United States, and will have to take extra care with it is having negotiations or discussions with both these governments as a political outburst takes very less flames to happen.

Boeing’s biggest rival in the market, Airbus has already entered the country, since 1980 through an agreement with Hindustan Aeronautics Limited for the construction of its A320 doors. The aerospace giant has to hurry up before other companies get their hand on the cheap and skilled labor of the country before it does. Airbus already has an upper hand because it knows how to function in the region since it has been working there for very long time.

Microsoft To Conduct A Critical Test On Chinese Populace

Microsoft to conduct The Turing test on the Chinese masses

A report was published by The Business Insider regarding Microsoft Corporation where the giant is coming up with a Turing test which will help them to determine if humans can judge which messaging is reaching them by a human and a chatbot- a machine configured message.

Back in 1951, Mr. Alan Turing came up with a theory known as the Imitation Game which was conducted to gauge which was more intelligent, a computer or a human. The idea behind this concept was that an individual would get a message, will he be able to judge if it is from a machine or a human. If the answer is machine then it will be deduced that computers are smarter. This test is now known as the Turing Test.

Quite recently in the Chinese market it was deduced that the local populace are getting attracted to an advanced digital assistant known as the Xiaoice. This is quite similar to the story depicted in the movie, Her. Xiaoice which is pronounced as “Shao-ice” is a chatbot that is designed by the Windows 10 giant for its users in China. The platform comprehends all the queries it gets from its users and then responds in a manner that is extremely humanly. The software is designed in a manner that it actually learns from the human beings which is in accordance to the response generated by humans in various situations. This is done by going through the data on social forum along with other exchanges that take place amongst humans on the Internet allowing it to develop empathy.

The chatbot has been successful in provider better insights regarding the human psychology. Yongdong Wang, a renowned Chinese researcher stated, “Xiaoice is teaching us what makes a relationship feel human,” however, it is now making the entire human race quite vulnerable.

 At this point of time, The Turing test will tell us about the human race in general. It will gauge if humans are actually okay with sharing their planet with machines that have human like abilities such as talking. Moreover, they can also play and compete with humans in general.

Our lives are becoming increasingly digitized which has resulted in a world which is dependent on machinery for most of its task. The Turing test will produce accurate results regarding the hypothesis however, machines have somehow or the other become extremely important in our everyday life which is actually quite alarming.

The growth in terms of artificial intelligence can be gauged from the fact that the search engine giant’s artificial intelligence platform is all set to compete with the world champion of the Go board game. The game actually has “10 to the power 700 possible moves”. Thus, if artificial intelligence has become so powerful that it cracks at such a high level then just imagine how things will be when Xiaoice takes in Google’s AI and make all your important life decisions that are in an empathetic manner.

Verizon Communication's CEO Shows Interest In Yahoo! Inc.

The telecommunication giant is planning on buying on the internet search engine giant as it would help it grow with the help of AOL.

Lowell McAdam, the chief executive officer and chairman of Verizon Communication has shown interest in buying the ever struggling Internet search engine giant Yahoo! Inc. The CEO talked about biding on the search engine company in talks with CNBC’s Jim Cramer from on “Mad Money”. It was about time a knight in shining armor rescued the failing business.

Lowell believes that if the telecommunication company decided to take over the struggling giant it was just to enhance its business operations. While showing interest to Jim Cramer at ‘Mad Money’ the CEO further stated this acquisition would be completely in line with the telecom corporation’s three tier strategy which includes ‘developing platforms to increase subscriptions’, ‘with the help of establishing greater connectivity expanding its business’ along with ‘owning content that facilitates the ecosystem’.

Previously, the wireless network corporation had acquired AOL at a price of $4.4 billion in a buyout in May 2015 and it believes that buying Yahoo! Inc. would prove to be quite beneficial for the business as its assets along with AOL could combine under a joint leadership. Previously, rumors of Verizon buying the search engine business has surfaced, which the telecom business completely denied but looking at the interest that Lowell showed in the company clearly justifies those rumors.

The telecom giant is indeed interested in buying Yahoo as it would help the company grow further in terms of mobile advertising and live video streaming on cellphones. The buying out news makes more senses as the search engine business recently posted lower than expected earnings results for the fourth quarter and almost zero growth under the supervision and leadership of the current chief executive officer, Marissa Mayor.

According to the earnings report for the fourth quarter, the internet giant reported a decline of 15% in the revenue generation which amounted to over $1 billion. The analysts at Wall Street had hoped that the company will report fairly acceptable figures for the quarter but it failed to do so and performed below the expectations which ultimately questioned the CEO’s plan on turning things around for the corporation. These declining numbers simply forced Marissa Mayor to cut the company’s workforce by as much as 15%.

At this point in time, this potential acquisition deal does not seem like a bad idea at all as it might work on in the favor of the both the companies. Even though Yahoo! Inc. has managed to underperform for a long time and has lost much of its credibility in the face of Google and Microsoft Corporation, it still remains in the household of over 200 million monthly active users.

 On the other hand, Verizon stock is being traded at a share price of $50.04 which indicates a decline of 1.82%. During the previous trading session, the highest level at which the stock price was seen at was $50.80 and the lowest at which the share price was seen at was $50.02. The 52-week high was reported to be $51.20 and the one year low was reported to be $38.06. Additionally, the earnings per share reported by Verizon was $4.37 with a price to earnings ratio of $11.45.

Facebook Mobile Ads Generate 80 Percent Revenues

Facebook mobile business is now a massive $13 billion business and is accountable for 80% of total revenues

Facebook Inc.’s mobile ads are a massive $13 billion business. As of now, only the likes of Google lead the advertisement market whereas the likes of Yahoo are trying to chase the market leaders. A few years ago when the firm decided to go public, it was worried about keeping up with the transition to mobile. At that time, the founder Mark Zuckerberg stated that his project is not really into building a mobile business regardless of the fact that its mobile app already became the most used segment then.

Since then, the not-so-much-interested-in-mobile business has made it one of the biggest revenue sources in the sector. On the other hand, its rival ‘Twitter’ wants to be like Facebook in terms of mobile ads business but it is miserably failing. Sources suggest that in the last four quarters, the social media giant has managed to generate $13.2 billion in mobile ad revenues. When the company first started ‘trying’ its mobile ad business, it disclosed its success in terms of percentage with respect to the overall revenue.

The percentage amount has steadily jumped in the past years. Initially, it was just 3% in the second quarter of 2012, but now it has risen to nearly 80% in the last quarter of its fiscal year. The overall ad business is skyrocketing and the results have been more than good for FB, which is the main reason for its mobile ad business boom.

The transition to mobile has been immense for Facebook in a very short span of time. The social media network’s overall business – including desktop ads, payments, and mobile ad business – covers for almost three quarters of the total revenue. To be precise, the firm generated $17.9 billion in TTM revenues.

Apart from this, Facebook continues to focus on its diversified offerings of products – including Facebook, WhatsApp, Instagram, and Messenger – as well as its brand portfolio, which mostly belongs to the future trends, such as Oculus. Regardless of the fact that the company has a lot on its plate, it will keep accelerating its success on mobile platforms in the coming times.

Its success on mobile platforms can be determined from its accomplishments. WhatsApp officially announced that it has reached 1 billion monthly active users, which was Mark Zuckerberg’s mission. Sources suggest that the founder will now be thinking about monetization of popular messaging service to remain on top of the game.

Yahoo To Cut 15% Of Workforce By The End Of 2016

Yahoo is working on a new strategic plan according to which it will cut 15% of its workforce and additionally close down five units.

Surprisingly, Yahoo! Inc. reported better than expected results for the fourth quarter of fiscal year 2015. During the after hour trading, the stock of the search engine company went down by 1% only. Despite of the fact that it reported better than expected financial results, it provided a poor guidance for the upcoming quarters, which results in the decline of the stock, but the chief executive officer of Yahoo, Marissa Mayer has a revival plan to bring the company back on track.

According to the earnings call, the company reported non-GAAP earnings per share of $0.13. The EPS was completely in line with the estimations of the analysts. However, analysts had predicted the technology giant to report revenue of $1.19 but it managed to beat the consensus of analysts and reported revenue of $1.27 billion for the latest quarter.

The revenue reported by the tech organization reflected a 2% year-over-year growth; additionally the EX-TAC revenue was seen at $1 billion, which indicated a 15% year-over-year decline. The company reported a net loss of $4.35 billion for the year 2015. A number of people stated that this net loss was mainly due to the $4.5 billion goodwill impairment charge. This means that the business paid more for the startup businesses that it acquired during the year. Revenue for 2015 stood at $4.96 billion, which reflected 8% year-over-year growth.

Since the past two years, revenue growth has been flat according to the collected Yahoo statistics. The traffic acquisition cost (TAC) is fairly increasing due to the deals that have been struck with Microsoft Corporation and Mozilla.

According to the guidance provided by the company for the year 2016, the full revenue is likely to be somewhere between $4.4 billion and $4.6 billion. This estimation by the organization is low in comparison to the estimations of analysts, as they are expecting revenue to be $4.78 billion for the year.

Yahoo! Inc. stated that in the first quarter of fiscal year 2016, the technology business is likely to report revenue of somewhere between $1.05 billion and $1.09 billion – which does not live up to the expectations of analysts yet again.

CEO Marissa Mayer said during the earnings call that the New Year will be a transition year for the organization in which the earnings and the revenue is likely to decline but will return to a normal to modest growth in 2017 and 2018. Additionally, she also suggested a new strategic plan that will transform it to bring better days.

As per the strategic plan, the company is expected to close down 5 units and probably cut down 15% of its workforce in the end of 2016 – this indicates that ever since 2012, the total workforce cut will be of 42%. With this cut in the workforce, the business will be able to maintain its focus on its profitable segments.