Category: Latest Headlines

UnitedHealthcare protests $40.5B Humana contract; Roadhouse dives 12% on Q2 report; Trump eats KFC with metal utensils — Internet howls; and Taco Bell workers in Calif. gone after cop-taunting report

A news summary focused on 10 big employers; updated 5:09 p.m.

HUMANA: UnitedHealthcare has filed a formal protest against a Defense Department decision to award the next round of Tricare contracts to Humana and another competitor. The Pentagon selected Humana Government Business to manage the brand new East region, a consolidation of the North and South regions, in a contract worth as much as $40.5 billion. Health Net Federal Services got the West region contract. Humana manages the current South region and Health Net the North (Military Times).

Humana and Aetna logos 250Also, Humana and Aetna announced this morning a deal to sell some of their Medicare Advantage assets to Molina Healthcare for $117 million in cash, in the health insurers’ latest effort to win Justice Department approval for their proposed $37 billion merger. The transactions are subject to the successful completion of the merger, plus approvals from regulators. Under the deal, Molina would get about 290,000 Medicare Advantage members in 21 states, the two companies said, “preserving robust competition for seniors choosing to receive Medicare coverage through Medicare Advantage plans and addressing a key concern of the U.S. Department of Justice in its challenge to the Aetna-Humana transaction” (press release). Today’s announcement followed a July 21 DOJ lawsuit against the two companies to block their tie-up over fears it would be anticompetitive and raise consumer prices.

Aetna, meanwhile, reported better-than-expected second-quarter results this morning, in a report where it also became the last of the five major national health insurers to project a loss on Affordable Care Act plans for 2016. The Hartford-based insurer said it would re-evaluate its participation in the business and cancel a planned expansion. It also said it was setting up a $65 million reserve to account for expected losses on individual plans over the rest of this year (Wall Street Journal).

Kent Taylor
Taylor

TEXAS ROADHOUSE shares fell sharply, closing at $41.80, down 12.4%, or $5.90, after the Louisville-based steakhouse chain reported disappointing second-quarter results yesterday after stock markets had already closed (Google Finance). Founder and CEO Kent Taylor discussed the results with Wall Street analysts in a transcript (Seeking Alpha). The chain has nearly 500 company-owned and franchised restaurants in 49 states plus five foreign countries with 48,000 employees. About 500 of those workers are in Louisville; more about Texas Roadhouse.

FORD said total truck sales, including pickups and vans, grew 5% in July versus a year ago with 87,104 sold. Overall company U.S. sales were down 3%, with 216,479 total vehicles sold (press release). Shares closed at $11.94, down 4.3%, or 53 cents (Google Finance). Ford’s Kentucky Truck Factory employs about 5,100 workers, producing F-250 and F-550 Super Duty pickups, plus Expeditions, and Lincoln Navigators.

KFC: The World Wide Web is chowing down on a photo of GOP White House nominee Donald Trump eating a KFC meal last night aboard his gold-plated private jet, using real cutlery (as opposed to the plastic utensils most everyone else uses or, let’s be clear, hands). Trump tweeted a photo of the moment near 10:30 p.m.; see Tweet, above. “It’s tiny finger lickin’ good,” wrote the New York Daily News, which then went on to quote one Twitter user saying: “Eating KFC with a fork and knife is like eating a candy bar with chopsticks.”

Britain’s Telegraph was even more over-the-top pretend aghast: “What kind of madman — what kind of abominable lizard in an orange human skin suit, a Sunny Delight scare story incarnate — would eat a biscuit with a knife and fork? The same madman who was last night pictured eating a bucket of KFC with a knife and fork, that’s who.” And then there was the whole KFC vs. Popeyes vs. Bojangles’ contretemps (Daily NewsTelegraph and Daily Caller). Here’s yet more news coverage — plus, all the Twitter reaction.

TACO BELL: In California, several employees in northwest Bakersfield no longer work at a Taco Bell there after reports they had taunted a local police officer last week, according to the manager of the outlet. A customer had told a local TV station he could hear the employees making “oink oink” sounds and laughing while the officer was ordering. The manager said the employees no longer work there; he could not say how many employees were involved (Kern Golden Empire).

Brown-Forman discloses director election tally, and support wasn’t uniform across the board

Garvin Brown IV
Brown

The director-by-director vote tallies filed today with the Securities and Exchange Commission followed last Thursday’s annual meeting, where the Louisville-based spirits giant said only that the full slate of 12 directors had been re-elected.

As is often the case, directors received varying degrees of support. Here’s the tally of “for” votes each one got; names are listed in order of those getting the highest to lowest share of all eligible votes. Board Chairman George Garvin Brown IV won the most: 95.72%.

Brown-Forman vote tally

The Brown family controls the nearly 150-year-old company through their 67% ownership of all voting class A shares.

Updated 8:40 p.m. Also today, Garvin Brown and newly re-elected Director Augusta Brown Holland were among a group of officers and executives who filed updated stock ownership notices with the SEC. The 22 separate Form 4 documents are in the SEC filings section of the company’s investor relations webpage.

Roadhouse whiffs Q2 sales, and shares plunge 8%; McD done with antibiotics-fed chicken; Kindred closes $39M Arkansas deal; and Pizza Hut workers in S.C. score $50 touchdown

A news summary focused on 10 big employers; updated 8:11 p.m.

TEXAS ROADHOUSE said today it missed second-quarter revenue estimates, and also disclosed that same-store sales in the current quarter had slowed vs. Q2. The results were released after markets closed. In after-hours trading, shares tumbled 7.9% to $43.94. The Louisville-based steakhouse chain said earnings were 47 cents per share on revenue of $508.8 million. Wall Street had forecast EPS of 45 cents and $509.8 million in revenue (Investors Business Daily and press release). Today’s report came less than a week after several analysts downgraded Roadhouse’s stock, sending shares down 6%.

KFC bucket of chickenKFC: Raising pressure on KFC to follow suit, McDonald’s said today it’s completely stopped buying chickens raised with antibiotics meant for humans, a step completed months ahead of schedule. The chain previously estimated the change would be completed by March 2017 (CNBC). The longtime KFC critic on the issue, the Natural Resources Defense Council, reiterated its call for the Yum unit to stop buying from chicken suppliers using antibiotics. “KFC,” the group said today, “stands out as the signature chicken purveyor that is far behind” (NRDC).

KINDRED and the Arkansas Department of Health said they had completed a previously announced agreement for the Louisville hospital and nursing company to buy the state agency’s in-home health care operations for about $39 million. The deal includes licenses to provide home health, hospice and personal care services throughout the state. Kindred won the award through a bidding process (press release).

AMAZON shares shot up to a new record high today — $770.50, up 1.5% — before closing lower at $767.74. The retailer’s stock is now up 43% from a year ago vs. a much smaller 3% for the broader S&P 500 index (Google Finance). Amazon employs 6,000 workers in the Louisville area at mammoth distribution centers in Jeffersonville, and in Bullitt County’s Shepherdsville. (More about Amazon.)

Ford DAV car
One of the newest DAV vans.

FORD received a city building permit today to proceed with $14 million of planned improvements at its Kentucky Truck Plant on Chamberlain Lane (Courier-Journal). Also today, the automaker said it donated another eight vans to the DAV Transportation Network, a volunteer group that takes ill and disabled veterans to VA medical centers across the country. The automaker said today it has now given 207 vehicles to the group over the past 20 years; the program dates back 94 years to when founder Henry Ford provided Model Ts as transportation for disabled vets (press release). In Louisville, Ford employs nearly 10,000 at its truck and vehicle assembly factories; more about its local operations.

Cam Newton
Newton

PIZZA HUT employees in Spartanburg, S.C., didn’t learn the mysterious customer in black who showed up 15 minutes after closing time for a cheese pizza was Carolina Panthers quarterback Cam Newton until after he’d driven away. But he did leave a big tip last Thursday, paying $50 for the pie. “It definitely came in handy,” manager Amanda McCluney told WCNC, “because I was actually short $50 because I’m moving and I needed that to go towards my U-Haul and my storage unit” (WCNC).

In other news, U.S. Senator Mitch McConnell said there’s a “great likelihood” that he’ll seek a seventh term in 2020. “I’m at the top of my game,” McConnell, 74, told WKYT in Lexington. “I think I’ve been effective in serving our people, and there’s a great likelihood I’ll run again” (Associated Press via ABC). In office since 1985, the Republican is Kentucky’s longest-serving U.S. senator (Wikipedia).

Taco Bell’s new Cheetos burrito looks like ‘Donald Trump exploded’; Jack’s Chris Fletcher recalls distillery as a ‘magical place’; and why Goldman downgraded Ford shares

A news summary focused on 10 big employers; updated 1:29 p.m.

proxy
The new $1 sandwich will be tested in Cincinnati next month.

More than two weeks before Taco Bell even starts testing a new Cheetos-stuffed burrito in Cincinnati, social media is having a field day — and handing the Yum division a public relations bonanza. Attorney Marcy Wagman Rauer told Huffington Post the $1 sandwich looks like “Donald Trump exploded.” And everyone was retweeting San Diego musician Danny Ellis’ marijuana-inspired conclusion that it looks  “like a stoner’s dream date with death.” The chain had tested the “Cheetos Crunchwrap Slider” earlier this year in Canada, but this is the first time the snack’s being used on its menu in the U.S. (Huffington Post).

Cheetos and Trump
A hairy comparison?

In the Ohio test market, the Cincinnati Enquirer’s Ben Goldschmidt says to forget the November elections. “Sure,” he wrote yesterday, “we’re in a swing county in a swing state in a bonkers election year, but . . . we will decide for the nation if the cheesy powder of Cheetos successfully meshed with molten queso, or if it’s just an uninspiring, soggy lump in a burrito.” Much more news coverage.

Sadly, Taco Bell ranks only fourth of 10 places for potheads with the munchies, according to Stoner Days. The line-up:

  1. In-N-Out
  2. Del Taco
  3. Jack in the Box
  4. Taco Bell
  5. McDonald’s
  6. Burger King
  7. Arby’s
  8. Starbucks
  9. Chipotle
  10. Subway

Road warriors take note: Google says there are 10 Taco Bells in Cincinnati.

Taco Bells Cincy map

To be sure, it wasn’t all good news yesterday for the Yum division. In California, Taco Bell is investigating reports employees taunted a Bakersfield police officer Thursday night by making “oink, oink” sounds and laughing at the cop in the drive-thru. “Taco Bell does not tolerate discrimination in any way,” the company told 23 ABC. “We are deeply appreciative of the men and women who have taken the oath to serve and protect our communities” (23 ABC).

The chain is still smarting from an incident two weeks ago in Alabama, where a cashier refused to serve two sheriff’s deputies; the chain apologized and fired the employee, but not before it was slammed across the Internet.

Chris Fletcher
Fletcher

BROWN-FORMAN: Jack Daniel’s assistant master distiller Chris Fletcher remembers long weekends walking through Continue reading “Taco Bell’s new Cheetos burrito looks like ‘Donald Trump exploded’; Jack’s Chris Fletcher recalls distillery as a ‘magical place’; and why Goldman downgraded Ford shares”

UPS hits Q2 forecasts; Papa John’s hikes dividend 14%; it’s National Chicken Wing Day at KFC; and Franklin Circuit judge blocks new UofL board, casting school into more turmoil

A news summary focused on 10 big employers; updated 4:56 p.m.

UPS just reported second-quarter results that were in line with Wall Street’s forecasts. The shipper — Louisville’s single-biggest private employer — reported net income of $1.27 billion, or $1.43 a share, up from $1.23 billion, or $1.35 a share, in the year-earlier period. The FactSet consensus of analysts was for earnings per share of $1.43.

Revenue was $14.6 billion, up from $14.1 billion in the year-earlier period and in line with the FactSet consensus of $14.6 billion. The shipper reiterated its full year EPS guidance of $5.70 to $5.90, compared to the FactSet consensus of $5.80 (MarketWatch and press release). UPS shares closed at $108.10, down 63 cents. The company employs 22,000 workers at the Worldport hub at Louisville International Airport — the biggest fully automated package handling facility in the world.

John Schnatter
Schnatter

PAPA JOHN’S late yesterday boosted its quarterly dividend by a whopping 14%. The new 20-cents-a-share payout, up from 17.5 cents a share, will be paid Aug. 19 to shareholders of record as of Aug. 8 (press release). The pizza giant’s shares closed today at $73.95, up 30 cents. On an annual basis, the 10 cents-per-share hike is worth another $1,045,598 to founder and CEO John Schnatter. His 10,455,981 shares — the most owned by anyone — are now worth $770 million. Shareholders proxy report lists all major holders.

KFC: In the U.K. and Ireland only today, fast-chicken giant KFC today will give away a year’s supply of hot chicken wings to one very lucky winner and their best mate in a promotion celebrating National Chicken Wing Day. “All you need to do is follow KFC on Twitter and then tell them why your best mate is, well, the best, using the hashtag ” (Metro). But don’t hesitate: You must enter by midnight tonight U.K. time, which is six hours ahead of Eastern Time.

TACO BELL: The world’s media outlets are now devoting wall-to-wall news coverage to Taco Bell’s new Cheetos-stuffed burritos debuting in the middle of August in Cincinnati. Behold the $1 sandwich in all its orange glory:

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AMAZON spent $3.9 billion in the second quarter on its distribution network, Continue reading “UPS hits Q2 forecasts; Papa John’s hikes dividend 14%; it’s National Chicken Wing Day at KFC; and Franklin Circuit judge blocks new UofL board, casting school into more turmoil”

Kindred to open new hospital in Tacoma; Amazon’s Q2 beats top and bottom; orange you glad: Taco Bell’s burrito + Cheetos = ‘peak stoner’; and Ford’s stock dives 8% on poor results

A news summary focused on 10 big employers; updated 7:25 p.m.

KINDRED said it would build a 60-bed inpatient rehabilitation hospital in Tacoma, Wash., in a new joint-venture partnership with CHI Franciscan Health. The new hospital will care for adults recovering from stroke, neurological disease, injury to the brain or spinal cord and other long-term illnesses or injuries. The Louisville-based hospital and nursing home giant will manage the day-to-day operations at the new facility. Subject to regulatory and other approvals, Kindred expects the hospital to open by the first quarter of 2018.

In its Seattle market, Kindred already operates two transitional-care hospitals, two nursing centers, two co-located hospital-based sub-acute units, and it provides home health and hospice services. CHI Franciscan is affiliated with Catholic Health Initiatives, the third-largest nonprofit health system in the nation, with operations in 19 states (press release). Kindred has more than 2,200 employees in Louisville, and 102,000 company-wide. More about Kindred.

UPS is considering a $106 million expansion of its ground hub in Lexington (Herald-Leader).

AMAZON: The retailer just reported second-quarter financial results that beat Wall Street’s forecasts on the top and bottom lines. It earned $1.78 a share on sales of $30.4 billion. Analysts were expecting $1.11 EPS on revenue of $29.6 billion, according to FactSet (MarketWatch and press release). The company’s stock rode a roller coaster in extended trading: Shares are now up 2.7%, or $20.34, to $722.

GE CEO Jeffrey Immelt bought 50,000 shares of company stock at $31.45 a share on Tuesday, for a total cost of $673,000 — a bullish sign he thinks the stock may be headed higher (Reuters). Shares closed today at $31.25, barely changed.

Cheetos bagTACO BELL is introducing its latest mash-up experiment, the Cheetos Burrito, mid-August in Cincinnati for $1. This is the second version sold by the Yum unit; it rolled one out last spring, the Cheetos Crunchwrap Slider,  that GrubStreet dismissed as the “height of laziness” (GrubStreet). According to the Orange County Register, it’s a burrito “stuffed with crunchy Cheetos, buttery white rice, seasoned beef and nacho cheese” (Register). We can only imagine how the concoction will taste, muses Uproxx. “Will the Cheetos inside get soggy and soft? Or will they maintain that crunch that everyone loves?” Its verdict is already in: “Peak Stoner” (Uproxx).

FORD‘s stock fell 8.2%, or $1.13, closing at $12.71 a share on weak second-quarter financial results. Revenue totaled $39.49 billion and adjusted earning per share came in at 52 cents, below the FactSet consensus of 60 cents. But that’s a beat on the consensus revenue forecast of $36.31 billion, according to analysts surveyed by Thomson Reuters (press release and MarketWatch).

BROWN-FORMAN: How one bourbon distillery makes its handcrafted barrels (Al.com).

In other news, embattled University of Louisville president James Ramsey agreed to resign yesterday, effective immediately, in a deal with the school’s trustees where he’ll be paid $690,000 in severance, the equivalent of about two years of his university salary only. Provost Neville Pinto will lead the university until a new president is selected.

James Ramsey
Ramsey

Chairman Ulysses “Junior” Bridgeman said the board rejected Ramsey’s proposal to serve for up to one year as interim president. Bridgeman indicated that at one point the board considered firing Ramsey, 67, outright (Courier-Journal).

His exit caps a tumultuous period where Gov. Matt Bevin fired the previous board of trustees last month because, he said, it had become too dysfunctional to deal with multiple scandals on Ramsey’s watch.