Best Buy profit misses estimates; same-store sales fall

RICHFIELD, Minn., Tue Nov 20, 2012 – Best Buy Co. Inc. reported a weaker-than-expected profit and its ninth same-store sales decline in 10 quarters, highlighting the challenges its new chief executive officer faces in trying to turn around the world’s largest consumer electronics chain.

The retailer, which faces cutthroat competition from the likes of Amazon.com Inc., Wal-Mart Stores Inc. and Apple Inc., said its net loss in the third quarter ended on November 3 was $13 million, or 4 cents a share, compared with year-earlier net earnings of $173 million, or 47 cents a share.

Excluding restructuring charges, the company earned 3 cents a share, far below the analysts’ average estimate of 12 cents, according to Thomson Reuters I/B/E/S.

Sales at stores open at least 14 months fell 4.3 percent, including a 4 percent decline at the company’s U.S. unit.

The news came just days before the unofficial start of the holiday season and amid a wide organizational restructuring under new CEO Hubert Joly and a looming buyout proposal by founder Richard Schulze.

Last month, the retailer had warned that earnings and same-store sales would show declines for its third quarter.

Wells Fargo expects net interest decline in third quarter: CFO

SAN FRANCISCO, Tue Sep 11, 2012 – Wells Fargo & Co. expects a decline in its net interest margin in the third quarter as low interest rates continue to squeeze the money it makes from loans, Chief Financial Officer Tim Sloan said.

The decline could be similar to that of a year ago, when the bank’s net interest margin fell from the previous quarter by 17 basis points, Sloan said at an investor conference on Tuesday. A basis point is 1/100th of a percentage point.

In the second quarter, Wells reported a net interest margin of 3.91 percent, flat with the previous quarter. Sloan attributed the estimated decline to lower variable income than in the previous quarter, the running off of higher yielding loans and securities and strong deposit inflows.

U.S. factory activity still slow in August: Markit

NEW YORK, Tue Sep 4, 2012 – The pace of growth in manufacturing remained sluggish in August as exports declined for a third straight month and firms were slow to add new workers, a survey showed on Tuesday.

The final Markit U.S. Manufacturing Purchasing Managers Index stood at 51.5 this month, below a preliminary estimate of 51.9. A reading above 50 indicates expansion.

A slight increase in output and overall new orders helped nudge the index above 51.4, where it stood at the end of July.

But the pace of growth was still one of the weakest since the sector stopped shrinking in October of 2009. New export orders were a drag on activity, as slow or negative growth in Europe and elsewhere sapped foreign demand for U.S. products.

Mark Wingham, Markit economist, said expansion in the sector was “only modest” in August. Without a significant jump in activity next month, “third quarter manufacturing growth will likely be one of the weakest since recovery began.”

Hiring in August was the slowest it’s been since December 2010, which Dobson said partly reflected weak overall trends in output and new orders. The index’s employment component fell to 52.4 from 52.7 in July.

The U.S. government will report employment data for August later this week, and the median forecast of economists polled by Reuters is for a gain of 120,000 jobs, down from 163,000 in July.

Some analysts suspect a number below 100,000 could provoke the Federal Reserve to try to boost overall growth with another round of monetary stimulus when it meets in mid-September.

Manpower profit slumps on Europe, stronger dollar

NEW YORK, Fri Jul 20, 2012 – Global staffing services provider ManpowerGroup on Friday reported sharply lower quarterly profit that beat Wall Street expectations as Europe’s major economies weakened and a stronger dollar reduced results.
Net earnings fell 44 percent to $41 million, or 51 cents per share, from $72.7 million, or 87 cents per share, a year ago.
Excluding one-time reorganization and other charges, Manpower earned 76 cents a share, 5 cents ahead of average analyst estimates according to Thomson Reuters I/B/E/S.
“Europe, which comprises 65 percent of our business, not surprisingly experienced the most decline in the quarter,” CEO Jeff Joerres said.
Sales fell 8 percent to $5.21 billion, meeting Wall Street estimates. Manpower saw double-digit sales declines in France and Italy but smaller drops in northern Europe.
Milwaukee-based Manpower is less reliant on European markets than rival Randstad, but more than Adecco or any of its U.S.-listed peers, according to BMO Capital Markets.
The stronger dollar hurt earnings by 7 cents in the quarter and will affect third-quarter earnings by 8 cents a share, Manpower said. It forecast third-quarter profit of 64 cents to 72 cents a share, while analysts were expecting 79 cents.

Housing starts fall in May, permits up sharply

WASHINGTON, Tue Jun 19, 2012 – Housing starts fell in May although permits to build new homes rose to the highest in well over three years, sending mixed signals about the health of the housing market.

The Commerce Department said on Tuesday that groundbreaking on new homes dropped 4.8 percent to a seasonally adjusted annual rate of 708,000 units.

The reading, which is prone to significant revisions, was below the median forecast in a Reuters poll of a 720,000-unit rate.

Revisions to data from prior months were more upbeat. April’s starts were revised up to a 744,000-unit pace from a previously reported 717,000 unit rate. That was the highest reading since October 2008.

New permits for building homes jumped 7.9 percent to a 780,000-unit pace. That was the highest since September 2008 and well above analysts’ forecasts.

The housing market has shown some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.

Groundbreaking for single-family homes increased 3.2 percent. This segment accounts for most of the market. Starts for multi-family homes, which is one of the Commerce Department report’s more volatile readings, fell 21.3 percent.

Sentiment among home builders touched a five-year high in June, a survey showed on Monday.

Housing starts rebound in April, permits fall however

WASHINGTON, Wed May 16, 2012 – Housing starts rose more than expected in April, according to a government report on Wednesday that offered signs of a nascent housing recovery, even though permits for future building fell after touching a 3½ -year high the prior month.

The Commerce Department said housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units. March’s starts were revised up to a 699,000-unit pace from a previously reported 654,000 unit rate.

Economists polled by Reuters had forecast housing starts rising to 680,000-unit rate. Compared to April last year, residential construction was up 29.9 percent.

The housing market is showing some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.

However, rising demand for rentals, which has seen builders breaking more ground on apartment projects, is helping to stabilize the market.

Housing starts last month rose across the board. Groundbreaking for single-family homes increased 2.3 percent. This segment accounts for most of the market. Starts for multi-family homes advanced 3.2 percent.

Despite last month’s overall jump in starts, they remain less than a third of their peak in January 2006. Residential construction in the first quarter grew at the fastest pace in nearly two years and is expected to contribute to economic growth this year for the first time since 2005.

AllianceBernstein fourth quarter revenue down on redemptions

NEW YORK – AllianceBernstein LP, a New York-based money manager controlled by French insurer AXA, said on Friday that net revenue fell 20 percent in the fourth quarter as clients continued to pull money from its stock funds.

The company, whose shares fell more than 3 percent, also took a $587 million noncash charge related to unrecognized deferred incentive compensation.

Earnings excluding one-time items dropped to $37 million from $139 million a year earlier.

That gave the company earnings per unit of 7 cents. Analysts on average had expected 19 cents, according to Thomson Reuters I/B/E/S.

“The fourth quarter proved to be a difficult finish to a challenging 2011 for our firm,” AllianceBernstein CEO Peter Kraus said in a press release.

AllianceBernstein reported net revenue of $625 million, down 20 percent from a year earlier. Analysts had expected $650 million.

The company reported $406 billion in assets under management at the end of 2011, compared with $478 billion at the end of 2010. Net outflows in the fourth quarter were $13.2 billion.

Shares of AllianceBernstein were down 3.1 percent at $16 in trading before the market opened.

KKR’s earnings plunge on valuations; 2011 dividend at all-time high

NEW YORK – Private equity firm KKR & Co. LP reported a sharp decline in fourth-quarter earnings on Thursday as a drop in carried interest, driven by mark-to-market valuations of its assets, more than offset higher fee revenue that allowed for a record dividend for 2011.

KKR, whose investments include retailer Toys “R” Us Inc, Internet domain registration company Go Daddy Group Inc. and hospital operator HCA Holdings Inc., reported lower economic net income, a measure of its profitability.ENI fell to $285.5 million from $714.6 million a year earlier. After-tax ENI per adjusted unit was 33 cents, down from $1.02.

Net carried interest – KKR’s share of the investment profits of its funds – declined to $54.1 million from $222.7 million. Fee-related earnings were $116.6 million, up from $95.1 million.

A fourth-quarter distribution of 32 cents per common unit brought KKR’s 2011 dividend to 72 cents, an all-time high.

Assets under management were $59 billion at the end of 2011, $2 billion less than a year earlier. This does not include some $6 billion raised by KKR’s 11th North American private equity fund, which is currently on the fundraising trail.

WebMD scraps sale talks, warns of weak 2012 as drug makers pull back

NEW YORK ― Popular health information website WebMD Health Corp. took itself off the auction block and warned investors of lower 2012 profits as its advertisers in the drug industry pull back on spending.

Shares of WebMD, in which activist investor Carl Icahn owns a nearly 10 percent stake, tumbled 29 percent on the news.

WebMD, which had a market value of just over $2 billion as of Monday, also said on Tuesday that its chief executive, Wayne Gattinella, had resigned. Anthony Vuolo, currently chief financial officer and chief operating officer, will serve as interim CEO.

WebMD is one of the best-known websites for consumers seeking health information on everything from allergies to cancer to better eating habits.

The company relies on advertising from drugmakers, who are now trying to curb expenses as they face generic competition to many of their top-selling medicines. WebMD said large advertisers are also facing more competition on their portfolios of consumer products.

“They were growing 20 percent. Now they’re going through a rough patch where revenue is actually declining,” Cowen & Co analyst Kevin Kopelman said. “This isn’t a going concern problem. This is a very strong company with an incredible brand in the U.S. and a huge user base, and they’re generating a lot of money.”

To some extent, WebMD’s status as a premium online brand, and the high advertising rates that it can charge, are forcing more cost-conscious advertisers to look twice at their spending on the site, he said.

A more difficult regulatory environment has also made it tougher for drugmakers to launch new ad programs, Kopelman said, compounding the problems for WebMD.

While a number of new medicines have received U.S. Food and Drug Administration approval for sale in the United States, WebMD said it does not expect advertising behind those drugs to pick up significantly this year.

WebMD is also grappling with competition from myriad other websites that offer health tips and information on illnesses.

WebMD Chairman Martin Wygod said he expects drugmakers, who have been among the biggest advertisers on more expensive media like television, will eventually recognize the value of using outlets online.

“I believe that the pressures facing the pharmaceutical industry will ultimately prove to be the strong catalyst for a meaningful shift by them to digital marketing solutions,” Wygod, who holds a nearly 2 percent stake, said in a statement. “WebMD offers a cost-effective, efficient and highly measurable alternative to traditional detailing to physicians and mass media to consumers.”

For 2012, the company expects revenue to fall between 2 percent and 8 percent, and it expects increased competition in its consumer products market.

New unemployment benefits claims fall 15,000 last week

WASHINGTON ― New claims for unemployment benefits fell by 15,000 last week in the latest sign the labor market was improving and could help the country resist the effects of a likely euro zone recession.

Initial claims for state unemployment benefits dropped to a seasonally adjusted 372,000, the Labor Department said on Thursday. The prior week’s claims data was revised up to 387,000 from the previously reported 381,000.

Economists polled by Reuters had forecast claims falling to 375,000. A Labor Department official said there was nothing unusual in the data, although the figures for three states, including California and Virginia, had been estimated.

Claims have now fallen in four of the last five weeks, and the four-week moving average ― a better measure of trends – fell 3,250 to 376,500, the lowest level since June 2008.

Economists at Goldman Sachs said in December that weekly claims below 435,000 pointed to net monthly gains in jobs.

An improving labor market has boosted the view the economy wrapped up 2011 on better footing, leaving it well positioned to deal with headwinds from Europe’s debt crisis and fiscal tightening at home.

Still, a moribund U.S. housing market and persistently high unemployment threaten the recovery.

In the week ending December 24, the number of people still receiving benefits under regular state programs after an initial week of aid fell 22,000 to 3.595 million. Economists had forecast so-called continuing claims holding about steady at 3.58 million.

As of Dec 17, a total of 7.223 million people were claiming unemployment benefits under all programs, down 8,311 from the prior week.

Data on Wednesday showed U.S. manufacturing growing at its fastest pace in six months during December, capping a late-year upswing.

Fourth-quarter growth is seen topping a 3 percent annual pace, rising from the July-September period’s 1.8 percent rate.