Boeing third quarter profit beats expectations; defense strong

CHICAGO, Wed Oct 24, 2012 – Boeing Co. posted stronger-than-expected results for the third quarter on Wednesday and raised its forecast for the full year, as its defense business improved and commercial aircraft deliveries surged.

The company said it earned $1.0 billion, or $1.35 a share, compared with $1.1 billion, $1.46 a share, a year ago. Revenue rose to $20.0 billion from $17.7 billion.

Analysts surveyed by Thomson Reuters I/B/E/S had expected Boeing to post earnings per share of $1.13 for the quarter that ended Sept. 30.

“They were obviously strong in defense, which is certainly good to see,” said Ken Herbert, an analyst at Imperial Capital LLC.

Defense revenue fell 4 percent $7.8 billion, compared with a year ago, but margins widened to 10.5 percent from 10 percent.

Those shifts reflected contraction of defense spending – a growing trend as the United States and Europe cut budgets – but also showed Boeing’s ability to be “very aggressive” in cutting costs, Herbert said. “They’re ahead of the curve compared with their peers.”

Lockheed Martin raises forecast, earnings beat view again

BETHESDA, Md., Wed Oct 24, 2012 – Lockheed Martin Corp., the largest U.S. weapons maker, on Wednesday posted an 11 percent increase in third-quarter earnings, beating expectations by a wide margin, and raised its full-year forecast.

Lockheed warned that revenues would ease slightly in 2013, pulled lower by a mid-single-digit decline in sales at its information systems and global solutions business.

It raised its 2012 earnings forecast to a range of $8.20 to $8.40 from a range of $7.90 to $8.10.

It said business segment operating profit would remain above 11 percent next year.

Lockheed, which receives more than 80 percent of its revenue from the U.S. government, said its preliminary 2013 forecast assumed that Congress and the White House would avert additional defense cuts that are due to take effect next year.

If the cuts go into effect, the company said they would have a material effect on its results.

Net earnings per share rose 11 percent to $2.21 in the third quarter, from $1.99 in the year-earlier period, but they fell from $2.38 in the second quarter.

Analysts surveyed by Thomson Reuters I/B/E/S expected third-quarter earnings per share of $1.85 on revenues of $11.17 billion.

Lockheed, which builds F-35 and F-16 fighter jets, Aegis missiles and new coastal or littoral warships, said revenues dropped 2 percent to $11.87 billion in the third quarter ended Sept. 30, from $12.1 billion in the third quarter of 2011.

Ex-Goldman director Gupta awaits sentence in insider case

NEW YORK, Wed Oct 24, 2012 – The sentencing on Wednesday of fallen Wall Street titan Rajat Gupta for insider trading could come down to whether a judge agrees that his lifetime of charity counts against sending him to prison.

The former Goldman Sachs Group Inc. board member was convicted in June of leaking boardroom secrets to hedge fund manager Raj Rajaratnam, his friend and former business associate, at the height of the financial crisis.

Gupta, 63, is to be sentenced by Manhattan U.S. District Judge Jed Rakoff, who oversaw the four-week trial. The former Goldman director, who also once ran the McKinsey & Co consulting firm and sat on the boards of Procter & Gamble Co and American Airlines, is the most influential corporate figure to be convicted in the recent crackdown on insider trading.

Indian-born Gupta had moved in elite business and philanthropic circles for decades until he became ensnared in the Rajaratnam case.

Gupta’s lawyers have requested that he be spared prison, citing his work with groups such as the Bill & Melinda Gates Foundation on fighting disease in developing countries. Bill Gates, Microsoft Corp’s co-founder, and former United Nations Secretary-General Kofi Annan are among the luminaries who have urged Rakoff to be lenient.

As one alternative to prison, the defense proposed “a less orthodox” plan in which Gupta would live and work with Rwandan government officials to help fight HIV/AIDS and malaria in rural districts, court papers said.

Federal prosecutors, however, argue that Gupta should serve eight to 10 years in prison. Gupta repeatedly flouted the law and abused his position as a corporate board member, they said.

 

Corzine, banks push to end MF Global fraud lawsuit

NEW YORK, Mon Oct 22, 2012 – Jon Corzine’s lawyers say allegations that he fraudulently ran MF Global Holdings Ltd. make “no sense” and that a lawsuit seeking to hold him and others responsible for the futures brokerage’s bankruptcy must be thrown out.

Corzine, former colleagues and several banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., filed papers on Friday night to dismiss investor litigation over MF Global’s collapse. The company’s Oct. 31, 2011, bankruptcy was Wall Street’s biggest meltdown since 2008.

Plaintiffs led by the Virginia Retirement System and the province of Alberta, Canada, have accused MF Global in the U.S. District Court in Manhattan of inflating its ability to manage risk, obscuring risks from a big bet on European sovereign debt and improperly accounting for deferred tax assets.

But lawyers for Corzine, MF Global’s former chairman and chief executive officer, said there was no securities fraud. They said the allegations merely suggested that Corzine mismanaged the company, was too optimistic, or failed to predict a liquidity squeeze prompted in part by credit rating downgrades.

Corzine’s lawyers also said the former New Jersey governor’s ownership of 441,960 MF Global shares, including some bought in August 2011 when the exposure to European sovereign debt had peaked, showed that he had no motive to commit securities fraud.

“Plaintiffs have not alleged any facts from which it could be inferred that Mr. Corzine knew prior to Oct. 30, 2011 that MF Global would not be able to survive,” Corzine’s lawyers wrote. “Plaintiffs’ theory that Mr. Corzine had fraudulent intent or participated in a fraud makes no sense.”

Overseas Shipholding may file for bankruptcy

NEW YORK, Mon Oct 22, 2012 – Debbt-laden Overseas Shipholding Group Inc , the world’s No. 2 independent tanker operator by fleet size, said it was evaluating options including filing for bankruptcy protection and may have to restate results for at least three years.

Shares of the company, which had estimated debt obligations of $2.24 billion as of June 30, fell as much as 66 percent to a life low of $1.02 on Monday morning.

The stock lost more than a third of its value last week on speculation that talks with lenders had stalled.

Shares of Nordic American Tanker Ltd., Teekay Tankers Ltd., DHT Holdings Inc. and Top Ships Inc. were down between 3 and 8 percent.

Financial statements for at least the three years ended December 2011 should no longer be relied on, Overseas Shipholding said in a regulatory filing on Monday.

Overseas Shipholding said it was reviewing a tax issue arising from the fact that while the company is domiciled in the United States, it has substantial international operations.

Allen Andreas, a director and member of the audit committee, resigned on September 27 over disagreements with the board in reviewing the tax issue, the company said in a filing.

The company had yet to determine if it would need to restate its results for the years in question.

Global Hunter Securities suspended coverage on Overseas Shipholding on Monday, saying it could no longer rely on the company’s financial statements, and noting that there was no clarity on the specifics of the tax issue.

FedEx to add 20,000 seasonal workers; sees shipping up 13 percent

MEMPHIS, Tenn., Mon Oct 22, 201 – FedEx Corp said on Monday it plans to hire 20,000 seasonal workers, the same as last year, to handle holiday shipping volume that it expects will be up more than 13 percent.

An ongoing increase in e-commerce and last-minute orders amid a slow-growing economy will mean more deliveries for companies like FedEx that can handle fast shipments.

FedEx, which is closely watched as an indicator of consumer demand and economic health, anticipates handling more than 280 million shipments during the holiday season between Thanksgiving and Christmas.

The company said the impact of an increase in holiday shipments was included in its fiscal 2013 earnings outlook.

For the second time this year, FedEx cut its forecast for global growth in 2013, citing slower growth in China, recession in some European economies and high energy prices.

FedEx can add the same number of seasonal workers as last year because it has been hiring staff throughout 2012, especially at the Ground and SmartPost divisions that will handle the bulk of the holiday volume, said T. Michael Glenn, executive vice president of market development and corporate communications.

December 10 is expected to be its busiest day ever with some 19 million shipments – a 10 percent increase from last year. E-commerce will drive the shipping volume on so-called “Green Monday,” which falls on the second Monday of December and kicks off the heaviest online shipping week of the year.

Nissan recalls new Altima in U.S. on loose steering bolts

FRANKLIN, Tenn., Mon Oct 22, 2012 – Nissan Motor Co is recalling 13,919 of its top-selling Altima sedans in the United States because bolts that may not have been tightened properly during production could fall off, increasing the risk of a crash, according to U.S. safety regulators.

The Altima sedans are from the from the 2012 and 2013 model years and were made at the Nissan plant in Canton, Mississippi, from May 10 to July 26, Nissan North America told the National Highway Traffic Safety Administration.

“Some of the subject vehicles may have been manufactured with four transverse link bolts and two power steering rack bolts that were not torqued to the proper specification,” Nissan told regulators in a letter NHTSA showed on its website.

As a result, the bolts may shake loose during driving, the letter states, and drivers may notice rattling noise.

There was no mention of any injuries or crashes as a result of this issue on the NHTSA website.

Through September, in the U.S. market, 27 percent of the vehicles Nissan sold were Altima sedans.

Altima sales through September were up 17 percent from last year, at 234,040.

Altima owners will be asked to bring their cars into Nissan dealerships, where the bolts will be torqued to the proper specification, NHTSA said. The cars are under warranty protection.

“Based on engineering judgment, it was determined that if a loose bolt falls out completely, the driver may experience difficulty in controlling the direction of the vehicle,” Nissan told NHTSA.

Nissan said that on July 26, the last day the vehicles involved in the recall were produced with the potential problem at the Canton plant, workers noticed the issue during a routine test.

On Sept. 21, Nissan confirmed that some of the subject vehicles were at its dealers. On Oct. 3, it decided a safety defect existed and a recall would be conducted.

Owners will begin to be notified on Oct. 29, Nissan told NHTSA.

Caterpillar cuts outlook, sees global economy weakening

PEORIA, Ill., Mon Oct 22, 2012 –  Caterpillar Inc., the world’s largest maker of tractors and excavators, slashed its 2012 forecast for the second time this year as it warned the global economy was slowing faster than it had expected.

The company’s retail dealers are selling off inventories, rather than buying new machines, forcing Caterpillar to idle some production, executives said on Monday.

“As we’ve moved through the year, we’ve seen continued economic weakening and uncertainty,” CEO Doug Oberhelman said in a statement.

Caterpillar does not expect improvement in overall economic growth until the second half of 2013, Oberhelman added.

The statement came despite better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment to repair crumbling infrastructure. Europe and parts of Latin America remained tough regions for Caterpillar.

Toy maker Hasbro profit tops estimates; sales miss

Pawtucket, R.I.,,Mon Oct 22, 2012 – Hasbro Inc. topped Wall Street profit expectations on Monday as better inventory management helped offset weak sales at the second-largest U.S. toymaker.

The news came after larger rival Mattel Inc. also reported a higher-than-expected quarterly profit, helped by price increases and cost controls. The maker of Barbie dolls and Hot Wheels cars said it was well-positioned for the holidays.

Hasbro, whose brands include Monopoly, G.I. Joe, Nerf and Mr. Potato Head, has been working with its U.S. retail partners to better manage inventories this year. It has been trying to shift toy deliveries closer to peak demand periods.

It struggled during the 2011 holiday season when demand in the United States and Canada tapered off after a strong start to what is typically the biggest selling season of the year.

On Monday, Hasbro CFO Deborah Thomas said it plans to step up its marketing efforts in what she described as “an environment of significantly lower U.S. retail inventory.”

The toymaker said it expects to “grow revenues and earnings per share” for the full year 2012, excluding the impact of foreign exchange.

Net profit in the third quarter fell to $164.9 million, or $1.24 a share, from $171.0 million, or $1.27 per share, a year earlier. Analysts on average expected $1.20 per share, according to Thomson Reuters I/B/E/S.

The weakening euro zone is the “most significant” risk to the company’s 2013 outlook, executives said. In an interview with CNBC, Oberhelman said, though, that China appeared “to be on the edge of something of a recovery.”

Shares fell 1.1 percent to $82.92 in premarket trading.

For the third quarter, the company posted profit of $1.7 billion, or $2.54 per share, compared with $1.14 billion, or $1.71 per share, in the year-ago period.

Excluding one-time items, the company earned $2.26 per share. By that measure, analysts expected $2.22, according to Thomson Reuters I/B/E/S.

Chevy says 2014 Corvette will debut in January

DETROIT, Thu Oct 18, 2012 – An all-new 2014 Chevrolet Corvette, the seventh generation of the uniquely American sports car in six decades, will make its debut Jan. 13 on the eve of the North American International Auto Show, General Motors’ Chevrolet brand said on Thursday.

Eagerly awaited by auto enthusiasts, the new Corvette – dubbed C7 by the faithful but known to GM and its suppliers by the development code Y1X – is widely expected to have a radically restyled exterior, a more upscale interior, a lighter chassis, and a more efficient engine and transmission.

There will be a 6-month gap between the 2014 Corvette new C7 and the current C6 version, a Chevrolet spokesman said in an email. GM will stop building the 2013 model in early February, and is due to start producing the 2014 model in volume in July.

The first of the new C7 Corvettes is expected to roll off the line in Bowling Green on June 30 – 60 years to the day that the first 1953 model was produced, according to two suppliers familiar with the automaker’s plans but are not authorized to speak on behalf of GM.

The C7′s formal unveiling in mid-January also marks the anniversary of the Corvette’s debut in January 1953 as a GM Motorama “dream car” concept in New York. Since then, GM has built and sold more than 1.5 million Corvettes, although annual sales have slowed in recent years as higher vehicle prices, rising fuel and insurance costs, and growing competition from Europe and Asia have eroded its once fiercely loyal owner base.