Excerpt from today's One Page Annotated Wall Street Journal Summary
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Symantec Is in $1 Billion IRS Dispute
- Summary: The IRS is attempting to collect over $750 million in back taxes from Symantec's Veritas unit, plus over $300 million in penalties. The dispute is over transfer pricing: Veritas has an Irish subsidiary (which pays low taxes) and pays licensing fees to its US parent; the IRS claims the licensing fees were too low.
- Comment on related stocks/ETFs: Negative for Symantec (SYMC). But numberous other US tech companies have Irish subsidiaries and could be vulnerable to increased scrutiny of transfer pricing. They include Microsoft (MSFT) and Google (GOOG).
Red Hat's Profit Rises 11% Amid Open-Source Demand
- Summary: Red Hat's results for the quarter ending May 31st: Revenue up 38% to $84 million, net income of $13.8 million versus $12.4 million a year earlier, EPS of $0.07, unchanged from a year earlier, missed consensus estimates of $0.09.
- Comment on related stocks/ETFs: Red Hat for the first time included stock options expenses, of $7.6 million. Details in the full Red Hat conference call transcript.