Home lending hit 16-year low in 2011: regulators

WASHINGTON, Tue Sep 18, 2012 – The volume of home lending dropped 10 percent last year to the lowest level since 1995, highlighting the government’s uphill battle to prop up the still-struggling housing sector.

The Federal Financial Institutions Examination Council, a group of U.S. regulators, published data on Tuesday showing 7.1 million home loans were made in 2011, down from 7.9 million the previous year.

The data, which includes mortgages, refinancing and home improvement loans, showed that loans to purchase a home, as well as refinancings, fell.

Refinancing of home loans dropped 13 percent during the year, while new mortgages dropped 5 percent, FFIEC said in a statement.

However, the Federal Reserve, one of the regulators involved in collecting the data, noted that refinancing activity surged late in the year as interest rates fell.

The Fed’s analysis highlighted the government’s struggle to prop up the still-depressed housing market, which has held back the economy’s recovery from the 2007-2009 recession.

Groupon hits low on Evercore downgrade, $3 price target

SAN FRANCISCO, Fri Aug 17, 2012 – Groupon Inc. shares slumped to a new low on Friday after an analyst raised concerns about the future effect of slowing growth on the daily deal company’s large cash position.

Groupon shares were down 8.0 percent at $4.60 in early afternoon trading on Friday, after sinking to a record low of $4.51 earlier in the day.

The declines added to a swoon in recent weeks that has enveloped not just Groupon, but several consumer Internet and social media stocks including Facebook Inc./and Zynga Inc.

Groupon’s losses on Friday came after Evercore Partners analyst Ken Sena downgraded shares of the largest daily deal company and set a $3 price target on the stock.

Groupon missed Wall Street’s second-quarter revenue expectations earlier this week. Gross billings, which reflect the money Groupon collects from consumers who buy its daily deals, fell during the second quarter, the company also said.

“We see potential for future cash burn assuming billings declines persist,” Sena wrote in a note to investors.

Groupon has more than $1 billion in cash and the company generates a lot of working capital because it collects money upfront from customers who buy its vouchers and it then takes at least 30 days to pay merchants their share.

Facebook shares drop 4 percent, hit another low

SAN FRANCISCO, Fri Aug 17, 2012 – Facebook Inc. shares sank as much 4.3 percent on Friday to set a new low, a day after early investors got the green light to sell for the first time.

More than 270 million shares owned by the early investors became available for trade on Thursday after a 3-month curb on sales ended. That’s more than one-half the 421 million shares sold in its initial public offering on May 18.

Facebook hit a low of $19.01 Friday morning and were down almost exactly 50 percent from the $38 offering price at its May IPO. At midday, the stock had eased to $19.15, off 3.5 percent.

Nearly 62 million shares of Facebook traded hands in the first two hours of trading on Friday.

More than 1.4 billion additional shares held by early investors and Facebook employees are set to become available for trading by year’s end, adding further pressure on shares of the once high-flyer.

Facebook, the world’s No. 1 Internet social network founded by Mark Zuckerberg in his Harvard University dorm room, became the only U.S. company to debut with a market value of more than $100 billion.

But investors have grown disillusioned with Facebook’s inability to articulate a plan to reverse slowing revenue growth.

Cigna profit misses Wall Street target as earnings slip in segment

PHILADELPHIA, Thu May 3, 2012 – Insurer Cigna Corp. posted a lower-than-expected first-quarter profit on Thursday, as earnings slipped in its segment offering disability and life coverage policies.

Cigna is the latest health insurer to miss Wall Street’s earnings target in the period, following Aetna Inc., Coventry Health Care and Humana Inc.

Cigna did raise its full-year earnings forecast.

Net income fell to $371 million, or $1.28 per share, from $413 million, or $1.51 per share, a year earlier.

Excluding special items, Cigna’s earnings of $1.28 per share fell 2 cents below the analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Revenue jumped 25 percent to $6.79 billion, helped by the acquisition of Medicare specialist HealthSpring.

Profit in the main healthcare segment rose 6.5 percent to $262 million, helped by rising membership in its plans.

But earnings in its disability and life segment fell 16 percent to $65 million. The company cited strategic investments in its disability management programs as a factor pushing down profit.

Cigna forecast 2012 earnings of $5.20 to $5.55 per share. It previously projected $5.00 to $5.40. Analysts have been looking for $5.41.

AOL profit drops, but beats Wall Street expectations

NEW YORK – AOL Inc. posted a drop in fourth-quarter profit, but beat Wall Street forecasts as a rise in display advertising offset an ongoing decline at its Internet dial-up business.

Earnings fell to $22.8 million, or 23 cents a share, from continuing operations from $66.2 million, or 60 cents a share, a year earlier.

Analysts on average expected AOL to post a profit of 16 cents a share, according to Thomson Reuters I/B/E/S.

Revenue dipped by 3 percent to $576.8 million.

AOL, whose media assets include Huffington Post and TechCrunch, said total advertising revenue rose by 10 percent to $331.6 million.

Overall display advertising – representing big splashy ads that appear on Web pages and command higher rates – rose 15 percent.

Subscription revenue from AOL’s dial-up Internet access unit declined by 18 percent.

Bank of America, under pressure, drops $5 debit card fee plan

NEW YORK ― Bank of America Corp is dropping plans to charge a $5 monthly fee for debit card use, the bank said in a statement on Tuesday.

The second-biggest U.S. bank said the move was in response to customer feedback and competition. Bank of America was under pressure to make the change as rivals backtracked from plans to charge customers for using their debit cards.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, the bank’s co-chief operating officer, said in a statement.

JPMorgan Chase & Co and Wells Fargo & Co last week decided to cancel test programs, while SunTrust Banks Inc and Regions Financial Corp said on Monday they would end monthly charges and reimburse customers.

Bank of America had planned to start charging customers next year. Banks began crafting the monthly charges to make up revenue lost to a law that slashes the fees they charge retailers when consumers swipe their cards. The fees sparked a firestorm of criticism from consumers and politicians, and many smaller banks and credit unions shunned the practice.

Bank of America began softening its stance on the fee last week. The Charlotte, North Carolina, bank planned to give customers more ways to avoid the charge, such as maintaining minimum balances, having a paycheck direct-deposited or using their Bank of America credit card.

The reversal is another embarrassing about-face for Bank of American CEO Brian Moynihan. This spring, he signaled plans for a modest dividend increase this year, only to have the Federal Reserve Board deny the request.