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The Morning Ledger: Google Walks the Reg FD Tightrope in Analyst Briefings

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Good morning. When Ruth Porat made the move from Wall Street to Silicon Valley to take over as finance chief of Google Inc., she brought with her an openness to analyst briefings that the company had previously avoided, the WSJ’s Alistair Barr reports. Google still doesn’t offer revenue or earnings forecasts, as many companies do. But Ms. Porat is trying to provide insight to help investors better understand how Google runs its business and help analysts more easily build financial models. People familiar with the calls said they usually involve a single analyst talking with Google’s investor relations staff.

The new approach has contributed to recent gains in Google shares, said Mark Mahaney, an analyst at RBC Capital Markets, who participated in an “Office Hours” briefing, as they are being called. Google shares are up about 15% in the past three months, while the tech-heavy Nasdaq Composite Index has dropped about 8%.

But the new initiative, aimed at increasing transparency, also means the company has to be newly cautious about what is disclosed. Holding such calls requires companies to juggle communicating with following securities regulations. Regulation FD, adopted in 2000, bans companies from selectively disclosing material nonpublic information to analysts and other market professionals. The goal is to ensure certain investors don’t get important information before others. However, securities attorneys say executives can avoid problems by only repeating or clarifying information that is already public or adding new, but nonmaterial information.

CFO JOURNAL TODAY

Hefty tax prep weighs down Brazil’s competitiveness. Filing business taxes in Brazil is a cumbersome process, Emily Chasan reports. Brazil has one of the highest tax-compliance burdens in the world, with companies spending 2,600 hours, on average, to prepare and make payments, according to 2015 World Bank figures. That’s the equivalent of one employee working 40 hours a week for more than a year, or 65 weeks.

Buybacks take tumble amid wary debt investors.As debt-fueled share repurchases increasingly worry bond investors, large companies sharply curtailed overall buybacks in recent months, Maxwell Murphy reports. FactSet said companies bought back 2.8% of its aggregate shares outstanding during the year ended in July, which was the smallest showing for the index in more than four years.

Plunging fuel costs help offset stronger dollar at Carnival.Carnival Corp. steamed through tough currency headwinds as lower fuel prices almost offset the pain of a strong dollar against most major currencies. “These two items acted as a hedge of each other,” said Carnival CFO David Bernstein.

THE DAY AHEAD

Gas at the pumps remains in the dumps. U.S. gasoline prices are likely to remain under pressure, as inventories bulge and crude-oil production isn’t falling rapidly enough, Ahead of the Tape’s Spencer Jakab reports. The unofficial end of driving season two weeks ago and planned maintenance at many U.S. refineries may reverse some of last week’s inventory gain in gasoline. That will be seen with inventory data out Wednesday.

CORPORATE NEWS

Volkswagen scandal pressures CEO. The fate of Volkswagen AG’s CEO, who survived a boardroom coup earlier this year, is now in jeopardy over a damaging emissions scandal as former allies and politicians demand to know what happened. U.S. environmental authorities alleged Friday that the automaker installed software some cars that made them appear to run cleaner in emissions tests than they do on the road. On Tuesday, the company revealed that as many as 11 million vehicles world-wide contain the software. “I am endlessly sorry that we have betrayed that trust,” said CEO Martin Winterkorn in a video. The scandal has put European rivals on the offensive, as they scramble to show their own diesel engines meet standards in Europe.

Struggles in China push Cisco to strike deal. Cisco Systems Inc., under pressure in China, plans to announce a partnership with Chinese server maker Inspur Group Co. during Xi Jinping’s U.S. visit. Cisco’s effort to open more doors...


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