Skip to Content
Global News Select

Warning Signs in the Best-Managed Companies — -2-

Molson said in a statement that it has delivered more than $700 million in savings from 2017 to 2019, and is on target to generate $600 million in savings from 2020 to 2022. In addition, the company a year ago launched a revitalization plan to drive top-line growth. "The decisions we've made over the past year, and quick actions and investments we are making, helped us beat top- and bottom-line expectations last quarter, and we believe will ensure the Molson Coors Beverage Co. is built to succeed well into the future," the company said.

Owens Corning Inc.

Red Flag: Financial Strength

Mr. Campagna at ISS EVA says Owens Corning is in a good, profitable business, but over the past few years the company has seen its sales growth erode to the point where sales are now in decline. That was one contributing factor for Owens Corning's red flag in financial strength, where it ranked in the 22.2nd percentile.

Although consumers have been flooding home-improvement stores during the pandemic, Owens Corning, the maker of products such as roofing materials and Pink Panther-colored insulation, has been losing ground to competitors.

"As simply as I can put it, they're selling less things, less often [and] at lower prices," says Mr. Campagna.

In a statement, Owens Corning said: "In 2020, we have continued to execute well while adapting to dynamic and challenging market conditions that impacted our first-half results. We are encouraged by the recovery in many of our key markets and delivered strong financial results in the third quarter. We believe Owens Corning is well-positioned to capitalize on near- and longer-term opportunities to drive attractive returns for our shareholders."

Philip Morris International Inc.

Red Flag: Customer Satisfaction

Philip Morris International, which sells products such as Marlboro cigarettes outside the U.S., returns with another red flag for customer satisfaction this year, settling in the 2.3rd percentile. Its ranking was affected by a low quality gap score from wRatings. Mr. Williams, CEO of wRatings, says Philip Morris has continued to struggle to "break away from an industry that is seen as unhealthy," and he expects the company to have a low quality gap score until it expands its smoke-free product lines.

A spokesman for Philip Morris said in a statement that the company's goal "is to switch the world's one billion smokers, who don't quit, to better alternatives as quickly as possible. Replacing cigarettes with scientifically substantiated smoke-free products is at the very core of our corporate strategy and sits atop our sustainability priorities. We are disrupting our own company to move faster toward this ambition."

Verizon Communications Inc.

Red Flag: Customer Satisfaction

Like AT&T, Verizon Communications' low customer-satisfaction score -- it sits in the 24.1st percentile -- can be attributed to the low scores seen industrywide for providers of pay-TV and internet service, according to Mr. VanAmburg at ACSI. He also notes that being one of the biggest players in the wireless industry -- alongside AT&T -- has made it ripe for criticism. Now that T-Mobile, known for putting up high marks for customer satisfaction, has merged with Sprint, which is known for just the opposite, he says it will be interesting in years to come to see how the combined company's customer-satisfaction numbers compare with Verizon's and AT&T's.

Verizon didn't respond to requests for comment.

Workday Inc.

Red Flag: Financial Strength

The management-software company Workday put up a red flag for financial strength, landing in the 18.6th percentile, in part due to a below-average economic profit score. But Mr. Cleary at ISS notes that Workday is in a very different place than some of the other companies with red flags for financial strength.

Workday, he notes, is a young company, it is growing at a healthy clip and its profit is being held back not by lagging sales -- in fact, sales are growing steadily -- but by significant investment in property, plant and equipment and research and development, which isn't uncommon for growth-stage companies.

"They're still in that growth stage," he says, "where they're investing lots of capital, trying to get scale and grab market share before stabilizing."

Workday didn't respond to requests for comment.

Mr. Kornelis is a writer in Seattle. He can be reached at reports@wsj.com.

 

Corrections & Amplifications

This item was corrected on Dec. 16, 2020 to show that AT&T/DIRECTV ranked first (in tie with another company) among TV providers nationally in J.D. Power's 2020 TV-service provider satisfaction study. An earlier version incorrectly implied that AT&T/DIRECTV held the No. 1 spot on its own.

(END) Dow Jones Newswires

December 12, 2020 10:26 ET (15:26 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.