Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events that may make your head spin.
1. Show us the cash
Google
The rest of Google's report was relatively encouraging. Total revenue climbed 24%. Paid clicks were up 15%, and the average paid per click was up 4%.
However, Google makes a rare appearance in this weekly column because of what it is not doing with its $30.1 billion in cash, cash equivalents, and short-term marketable securities.
Where is the dividend? Where is the massive buyback? The stock is trading well off its all-time high of $747.24 from three years ago, and it has shed more than 20% of its value this year alone. It's too big to pull off too many more major acquisitions, so it may as well return some of that cash stash to its shareholders.
2. A Yum! move
There's some indigestion at Yum! Brands
Despite posting a higher quarterly profit than Wall Street was expecting, Yum! Brands spooked the pros by projecting a profit of $2.43 a share this year. Analysts were expecting $2.48 a share. In other words, the second half of the year is going to be a challenge on the bottom line.
What's going on here? Are those $2 value meal combos at Taco Bell crimping margins? Are rivals offering $5.99 pizzas nibbling at Pizza Hut's crust? Was KFC's Double Down sandwich really that much of a turnoff?
It could be a combination of many things, but the real head-scratcher is Yum! Brands bellyaching over rising wages in China. It has been a major player in China's economic boom, and higher labor costs naturally will eat into results. However, one can also argue that youthful Chinese employees making more money will spend more of that discretionary income at the growing number of KFC eateries in China.
3. More pain for die-hard gamers
Sales tracker NPD Group put out its June metrics for the video game industry Thursday night, and it's not pretty. Software sales dropped 15%, but hardware sales were up a surprising 5%.
We can't call this a mixed report, though -- at least for the video game makers and retailers. In the past, an increase in consoles was interpreted as indicating a healthy future on the software front. The greater the installed base of gamers, the larger the demand for new titles.
Unfortunately, consoles have become the Swiss army knives of home entertainment. Consoles are now used to stream movies, and older purchases last longer because online connectivity and multiplay features give them a longer shelf life.
Until software sales turn -- if they turn -- this is a sector worth avoiding. GameStop
4. Get it right, comScore
There's a credibility problem at comScore
Over the past few months, comScore has been counting auto-roll slideshows and queries disguised as content links as searches on Yahoo! and Bing. Whether it's deliberate gaming or accidental, it's an oversight that needs to be corrected in comScore's tracking technology. Credibility is crumbling with every passing month.
Until this is corrected, this may as well be the little boy who cried market share.
5. Free us, Prius
The swagger is back at Toyota
A Toyota spokesman told Bloomberg this week that "virtually all" of the accidents being investigated for acceleration problems were the result of driver error.
A little more humility and a little less cockiness is in order, especially because the initial findings still haven't cleared the company of problems with sticky accelerator pedals and chunky floor mats that can jam on the gas.
Toyota has been able to rattle off healthy car sales in recent months as a result of aggressive incentives and drivers moving on. Gloating isn't very becoming, especially until the investigations are finalized.
Which of these five moves do you think is the dumbest? Share your thoughts in the comments box below.
