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3M revenue growth slows, misses Wall Street target

(Reuters) – Diversified manufacturer 3M Co (MMM.N) reported lower-than-expected quarterly sales on Thursday, hurt by declines in its consumer business and slowing growth in Latin America.

Revenue rose 2.5 percent to $7.57 billion in the fourth quarter, below the analysts’ average estimate of $7.71 billion.

Analysts expressed disappointment in the region that includes Latin America and Canada, where sales growth slowed significantly, and in the decline in revenue in the consumer business, which includes stationery and office supplies.

Shares of 3M fell 1.9 percent to $127.77 in morning trading.

“Maybe this is a read-through that we’re still in a slow-growth environment,” said Morningstar analyst Adam Fleck, noting that 3M’s revenue increase had slowed from 5.6 percent in the third quarter.

The company, whose products include Post-it notes and film for flat-panel televisions, backed its 2014 financial targets, including revenue growth of 3 percent to 6 percent.

3M said fourth-quarter net income rose to $1.1 billion, or $1.62 per share, from $991 million, or $1.41 per share, a year earlier.

The results were in line with the analysts’ average estimate, according to Thomson Reuters I/B/E/S.

However, Sanford Bernstein analyst Steven Winoker said earnings had benefited from a lower-than-expected tax rate, and he described the results as an “operational miss.”

Sales in Latin America and Canada increased 2.2 percent after rising 10.5 percent in the third quarter and 8.5 percent in the second quarter. On a conference call, executives said weak sales in Venezuela had brought down results in the region.

Last month, 3M said it would spend $5 billion to $10 billion on acquisitions through 2017, including possible “multibillion-dollar” transactions. It also expects to pay $17 billion to $22 billion for share repurchases in that time.

(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn)

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JetBlue says it acquires slots at Reagan National Airport

(Reuters) – JetBlue Airways (JBLU.O) said on Thursday it won takeoff and landing rights at Reagan National Airport near Washington that American Airlines Group (AAL.O) was required to shed under an agreement with the U.S. government.

New York-based JetBlue said in a statement it was told its bid for 12 slot pairs at Reagan National was accepted, with a final agreement subject to approval of the U.S. Justice Department.

It also said American had agreed to the permanent transfer to JetBlue of eight other slot pairs at Reagan National that JetBlue has been operating temporarily since 2010.

American’s former parent, AMR Corp, and US Airways Group agreed to give up 52 pairs of takeoff and landing rights, or 104 slots, at Reagan National Airport as well as certain other assets under a settlement of an antitrust lawsuit by the U.S. Justice Department seeking to block their combination.

The merger, completed in December, formed the world’s largest airline.

JetBlue added that once its agreement for the slots is approved, it expects to add 12 new roundtrip flights at Reagan National.

It said it plans to provide non-stop flights to cities it does not currently serve. With the new slots, JetBlue plans to operate up to 30 roundtrips per day at Reagan National, compared with 18 currently.

Southwest Airlines (LUV.N) also said it bid for Reagan National slots and Virgin America VA.UL has also said it was interested in airport assets that are available as a result of the American merger settlement.

(Reporting by Karen Jacobs in Atlanta; Editing by Sophie Hares)

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MasterCard suffers setback in fight to keep fees

LUXEMBOURG (Reuters) – MasterCard’s (MA.N) five-year battle to keep multi-billion-euro cross-border card fees was dealt a blow on Thursday when an adviser to Europe’s top court backed efforts to reduce such charges.

The legal opinion follows a European Commission ruling that said MasterCard’s cross-border “interchange” fees – levied on retailers’ credit and debit card transactions – broke antitrust rules and had to be changed.

Mastercard challenged this but the court adviser’s recommendation now means it is likely to fail.

The EU antitrust regulator says such fees cost businesses across Europe 10 billion euros ($13.64 billion) a year.

Many consumer rights campaigners argue these hidden costs, charged when banks process payments by, for example, a German visiting London, are passed on to the consumer.

“I propose that the court should dismiss the main appeal (by MasterCard) and the cross-appeals,” Advocate General Paolo Mengozzi at the EU Court of Justice said in his opinion.

The court, which will issue its judgement in the coming months, follows such advice in the majority of cases.

The opinion represents a setback to the world’s second-largest credit and debit-card company after Visa (V.N). Mastercard says such interference would actually lead to higher costs for consumers and encourage the black economy.

The advice may also bolster support for proposed European Union rules to cap charges on card payments that have yet to be approved by EU countries and the bloc’s parliament.

That crackdown is part of the Commission’s push to boost e-commerce in the 28-country bloc and reduce costs for business.

Interchange fees are collected and kept by banks processing payments using cards. While MasterCard does not benefit directly from the charge, it fears a crackdown will discourage lenders from issuing its cards.


MasterCard, which faces increasing competition from rival payment schemes such as eBay’s (EBAY.O) PayPal, was critical of the decision.

“Practical experience in countries such as Spain, Australia and the United States shows that capping interchange shifts the costs for transactions from retailers on to consumers,” MasterCard President Javier Perez said in a statement.

“A one-size-fits all approach to interchange across Europe will drive the cost of cards up for consumers … and ignores the very different market realities across European countries,” he said.

EU retail lobby EuroCommerce, whose 1997 complaint triggered the first regulatory investigation into MasterCard, welcomed the recommendation.

“This should be another reason for the European Parliament to go forward with regulation on interchange fees,” said Ruth Milligan of EuroCommerce.

MasterCard has said the value of cross-border card transactions is less than 5 percent of all purchases made by cardholders. A lower court threw out its challenge in 2012.

In the long-running dispute with the European Commission about such charges, MasterCard has made some concessions.

It agreed to reduce its debit card charges to 0.20 percent of a transaction and 0.30 percent for credit cards, pending this court ruling.

Rival Visa Europe, Europe’s largest card network and the European licensee of Visa, has offered similar concessions.

($1 = 0.7329 euros)

(Editing by John O’Donnell and Pravin Char)

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Jobless claims rise more than expected

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend suggested the labor market continued to heal.

Initial claims for state unemployment benefits increased 19,000 to a seasonally adjusted 348,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 3,000 more applications received than previously reported.

Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 330,000 in the week ended January 25.

The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, edged up 750 to 333,000.

A Labor Department analyst said claims for Louisiana were estimated because of inclement weather, adding there were no special factors affecting the state level data.

Last week’s claims data include the Martin Luther King Jr Day and filings tend to be volatile around federal holidays.

Job growth slowed sharply in December, but economists shrugged off the surprise meager increase in payrolls, pointing to freezing temperatures that hit sectors such as construction and transportation.

Federal Reserve officials also appeared to dismiss the slowdown in payrolls, saying at the end of a two-day policy meeting on Wednesday that the labor market on balance showed further improvement.

The U.S. central bank announced another reduction to its monthly bond purchases on Wednesday.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 16,000 to 2.99 million in the week ended January 18.

The so-called continuing claims have been elevated in recent weeks and some economist say the cold weather could be preventing many recipients from going out to search for work and companies to delay hiring.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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Time Warner Cable lays out operating plan as it fends off takeover

(Reuters) – Time Warner Cable Inc, trying to fend off a takeover bid, posted better-than-expected quarterly results on Thursday and said it aims to increase the company’s sales while also investing more in its technology over the next three years.

Shares rose $1.39 or 1 percent, to $133.49 per share.

“We are geared up to manage this company for the long haul,” said CEO Rob Marcus, in his first conference call since he took over on January 1.

When asked about Charter’s $132.50 rejected bid earlier in January, Marcus reiterated that Time Warner Cable is only interested in an offer above $160 per share, and would be “willing to engage” if a deal drives more shareholder value than the company can create on its own.

“We said the price it would take to transact would be $160 and this is specific to Charter, $100 in cash, $60 in Charter stock,” Marcus added.

The company, which is trying to convince investors it can do a better job at operating its business than its suitor Charter Communications Inc, unveiled a plan aimed at improving the company’s spotty customer service and investing more in its technology.

Time Warner Cable said it would increase annual capital expenditures to $3.7 billion to $3.8 billion over the next three years, which should allow the company to improve its cable systems, invest in infrastructure and replace older equipment.

Macquarie analyst Amy Yong said this capital investment is 5 to 10 percent above her own estimates and said it will help Time Warner Cable speed up plans to upgrade its cable systems.

“Rather than smoothing this out over time, they’re pulling the spending forward and finishing up their digitization plan,” Yong said, referring to Time Warner Cable’s plan to convert its systems to a digital signal.

The company expects to generate revenue of $25.7 billion, and adjusted operating income before depreciation and amortization of $9.4 billion, by 2016. These goals are marginally above Street estimates, according to MoffettNathanson Research analyst Craig Moffett.

Analysts liked Time Warner Cable’s plan but cautioned it would not be a quick turnaround.

“The strategy shift and the guidance is encouraging. However, it will take some time for management to recover investor confidence in their ability to execute,” said New Street Research analyst Jonathan Chaplin.

Moffett said, “the question that remains is whether any of this is enough.” He expects Charter to sweeten its bid above $140 and receive some cash from Comcast after the deal. Reuters has reported Comcast is interested in buying some of Time Warner Cable’s markets such as New York City.


Marcus also dismissed the notion that Time Warner Cable lags Charter operationally. Charter’s campaign for investor support to its $37.3 billion bid has focused on how Charter could run Time Warner Cable better under its CEO Tom Rutledge (For more on Rutledge, see: [ID:nL2N0KX2O9])

Charter has been quick to point out that Time Warner Cable suffers from one of the industry’s poorest customer service records, has lost subscribers at a higher rate than other large operators, and lags in the roll out of new technology.

Time Warner Cable released a presentation showing how it has higher margins than Charter and offers more products and a better business services unit, which is the fastest growing area in the cable industry right now.

A Charter spokesman did not immediately respond to a request for comment on the presentation.

The company said revenue would rise 4 percent to 5 percent this year, above the roughly 2 percent analysts are expecting, according to Thomson Reuters I/B/E/S. Its free cash flow this year will be flat at $2.5 billion.

The company said it lost 217,000 video subscribers in the quarter, which was an improvement from the third quarter when it lost more than 300,000 subscribers, but was worse than Wall Street estimates of a loss of 206,200 subscribers.

Time Warner Cable’s finance chief Arthur Minson said on the call that some of Time Warner Cable’s subscriber numbers in 2013 were “dismal” but said the company was now seeing some momentum in 2014.

In the fourth quarter, the U.S. cable operator added 39,000 net residential Internet subscribers, a turnaround from a weak third quarter when it lost 24,000 subscribers.

Net income attributable to Time Warner Cable rose 5 percent to $540 million, or $1.89 per share, in the fourth quarter, from $513 million, or $1.68 per share, a year earlier.

Revenue rose about 2 percent to $5.58 billion.

Analysts on average expected earnings of $1.73 per share on revenue of $5.56 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Liana B. Baker; additional reporting by Neha Alawadhi in Bangalore; Editing by Savio D’Souza and Nick Zieminski)

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Colgate-Palmolive profit beats estimates due to cost cuts

(Reuters) – Colgate-Palmolive Co (CL.N), the world’s largest toothpaste maker, reported a better-than-expected quarterly profit as cost cuts offset the negative impact of a stronger dollar.

Colgate’s gross margins rose in the fourth quarter as it cut costs by negotiating better lease terms with suppliers, using cheaper raw material and reducing packaging material in products.

“The company continues to deliver solid results, despite macro challenges – which is impressive,” JPMorgan analyst John Faucher wrote in a note.

Launch of higher-margin products, redesigning of some brands and introduction of successful regional products in other markets helped the company grow its sales.

Colgate, which controls about 45 percent of the global toothpaste market, said it expected its 2014 adjusted earnings to be in line with analysts’ estimates.

Analysts on average are expecting a profit of $3.08 per share in 2014, according to Thomson Reuters I/B/E/S.

Colgate Chief Executive Ian Cook said he expected the company’s organic sales, which strip out the impact of acquisitions, divestitures and foreign exchange, to grow 5-7 percent in 2014.

Gross margins are expected to increase by 75-125 basis points, he told analysts on a conference call. The company reported gross margins of 58.6 percent for 2013.

Foreign exchange fluctuations are expected to hurt sales by 3 percent and profit by 4-5 percent in 2014, Cook said.

Faucher said Colgate’s profit guidance was “fine,” as there were concerns that a stronger dollar would have a greater impact on the company’s profit.

Rival Procter Gamble Co (PG.N) said last week that it would not change its 2014 forecast and that it expected organic sales to grow 3-4 percent.


Colgate’s organic sales rose 6.5 percent in the fourth quarter ended December 31, led by growth in emerging markets.

In Latin America, its biggest market by sales, organic revenue rose 12.5 percent mainly due to new products such as Colgate Luminous White Advanced and Colgate Total Professional Gum Health.

Organic revenue in Asia, including India and China, grew 9 percent due to higher sales of products such as Darlie Expert White toothpastes and Palmolive Naturals White + Milk bar soap.

The company said its global volumes grew 6.5 percent, but pricing was flat.

Pricing is expected to rise about 2 percent in 2014, Colgate said.

Net profit fell to $564 million, or 60 cents per share, in the fourth quarter from $598 million, or 63 cents per share, a year earlier.

The company earned 75 cents per share, excluding a $133 million aftertax charge related to restructuring.

Revenue rose 2 percent to $4.36 billion. Foreign exchange fluctuations hurt sales by 4.5 percent in the quarter, the New-York based company said.

Analysts on average had expected earnings of 74 cents per share on revenue of $4.38 billion.

Colgate’s gross profit margins rose to 58.9 percent in the fourth quarter from 58.4 percent a year earlier.

The company’s shares were little changed at $61.37 on Thursday afternoon on the New York Stock Exchange. The stock rose as much as 4 percent earlier in the day.

(Editing by Kirti Pandey)

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Visa profit beats Street on increased use of cards

(Reuters) – Visa Inc’s (V.N) chief executive urged U.S. merchants and banks to hasten the adoption of a more secure technology for credit and debit cards after security breaches at several retailers.

Banks and retailers have been dragging their feet over the upgrade and have been at odds over who should bear the cost, which experts have said could be as much as $10 billion.

Visa and MasterCard Inc (MA.N) have been pushing for merchants and issuers to meet an October 2015 target date to accept cards with an embedded chip to hold information, rather than rely on the easily copied magnetic strips.

Analysts have estimated that only 60 percent of U.S. point-of-sale terminals would meet the target date.

“Unfortunately many merchants and issuers and both of their lobbyists are attempting to assign blame in the press and not reacting in a particularly constructive manner,” Charlie Scharf said in a post-earnings conference call.

“It is in all of our best interest that change quickly.”

Last month Target Corp (TGT.N), the third-largest U.S. retailer, said about 40 million credit card records and 70 million other records containing data on its customers were stolen in a security breach.

Luxury retail chain Neiman Marcus NMRCUS.UL and Michaels Cos Inc, the biggest U.S. arts and crafts retailer, have said they were victims of cyber attacks.

Most Americans have been victims of data theft, but that hasn’t stopped them from using credit cards and social media sites or shopping online, according to a Ipsos/Reuters poll of 8,308 Americans.

About 64 percent of the victims said the experience had not deterred them from using their credit or debit cards.


Visa, the world’s largest credit and debit card company, reported a better-than-expected rise in quarterly profit as more people used cards instead of cash to make payments.

Net income attributable to Visa rose 9 percent to $1.41 billion, or $2.20 per Class A share, in the first quarter from $1.29 billion, or $1.93, a year earlier.

Total operating revenue increased 11 percent to $3.16 billion in the quarter ended December 31.

Analysts on average had expected earnings of $2.16 per share on revenue of $3.13 billion, according to Thomson Reuters


Foster City, California-based Visa said total volume grew about 7 percent to $1.84 trillion, helped by a strong holiday shopping in the United States.

Visa shares were up 2 percent at $221.80 in morning trading on Thursday on the New York Stock Exchange. MasterCard shares were also up 2 percent at $79.19.

Shares of Visa, a component of the Dow Jones industrial average .DJI, have gained about 44 percent last year, outperforming the 27 percent rise in the broader Dow Jones index.

(Editing by Don Sebastian and Savio D’Souza)

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Alibaba rival files for U.S. IPO of up to $1.5 billion

(Reuters) –, China’s second-largest e-commerce company, filed for a U.S. listing of its shares, following market leader Alibaba Group Holding Ltd in tapping into rising investor enthusiasm around China’s booming online retail market.

Appetite for Chinese technology stocks recovered in 2013 after a series of accounting scandals dried up U.S. listings in 2011 from a high of 40 in 2010., which filed a placeholder of up to $1.5 billion on Thursday, has grown exponentially over the past years and said in December it would top its 100 billion yuan ($16.5 billion) annual sales target in 2013.

China’s business-to-consumer e-commerce sales may surpass $180 billion this year due to rising internet penetration, expanding middle-class incomes and a steadily improving distribution network, according to New York-based market research firm eMarketer.

This potential has attracted global retailing giants such as Wal-Mart and Amazon Inc to China, which is soon expected to overtake the United States as the world’s biggest online retail market.

“Investors are very hungry for the piece of consumer e-commerce space in China,” Francis Gaskins, a partner at IPO research company told Reuters and other web-based retailers, however, operate in the sizeable shadow of Alibaba, which controls nearly 80 percent of the country’s internet shopping market. Alibaba is expected to go public this year in what is billed as the biggest IPO since Facebook Inc’s 2012 float., earlier known as 360Buy, has raised $2.23 billion in the past six years from investors including the Ontario Teachers’ Pension Plan and Saudi billionaire Prince Alwaleed bin Talal’s Kingdom Holding Co

The company’s founder and CEO, Richard Liu, has a 46 percent stake in Other shareholders include hedge fund Tiger Global Management and DST Global funds.

STRONG GROWTH has tried to differentiate itself by operating its own network of couriers and warehouses, a factor it says ensures timely and efficient delivery.

Alibaba still depends on merchants and external courier firms for their logistics., which listed BofA Merrill Lynch and UBS Securities LLC as underwriters to the offering, posted a profit for the first nine months of 2013 after a string of losses, according to the IPO filing. (

It had 35.8 million active customer accounts and processed 211.7 million orders in the first nine months of 2013. Total net revenue jumped 70 percent to $8 billion in the period.

In September 2011, IFR, a Thomson Reuters publication, said was planning to raise $4-$5 billion through a U.S. IPO.

Local media reports in late 2012 valued the company at $7.3 billion after a $400 million round of funding.

Expectations have been building for months around Hangzhou-based Alibaba, with bankers predicting an IPO that could raise up to $15 billion and value the company at more than $100 billion – sums that have drawn comparisons to the frenzied Facebook offering in 2012., like a number of other Chinese companies listing in the United States, relies on a little-tested legal structure called “variable interest entity” (VIE) that gives an investor economic interest but no ownership.

The structure helps companies bypass Chinese government bans on foreign ownership in some business sectors.

Shares of Chinese car sales website Autohome Inc, which also has a VIE structure, surged as much as 83 percent when they listed in December.

JD.Com’s filing with the U.S. Securities and Exchange Commission did not reveal how many American Depositary Shares the company planned to sell, their expected price or the exchange on which it would list them.

(Additional reporting By Neha Dimri in Bangalore; Editing by Saumyadeb Chakrabarty and Don Sebastian)

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Wireless mergers to invite scrutiny, says U.S. antitrust chief: NYT

(Reuters) – It will be difficult for the U.S. justice department to approve a merger between any of the top four U.S. wireless phone companies, said William Baer, assistant attorney general for the antitrust division, the New York Times reported.

Baer’s comments come amid speculation that T-Mobile US Inc (TMUS.N) and Sprint Corp (S.N) might consummate a deal in coming months.

He said any deal would face intense scrutiny because consumers have enjoyed “much more favorable competitive conditions” since the division blocked a proposed merger between ATT Inc (T.N) and T-Mobile in 2011, the NYT reported. (

“It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers,” he told the newspaper, without referring to any specific deal.

Baer is expected to warn antitrust lawyers at a meeting of the New York State Bar Association on Thursday that the antitrust department too often sees merger proposals that include little more than token efforts to deal with competitive issues, the paper reported.

Such deals are often attempts to eliminate a big market participant, Baer is expected to say, while giving up something to a tiny competitor that does not play a significant role in industry competition, the NYT reported.

(Reporting by Shubhankar Chakravorty in Bangalore; Editing by Kirti Pandey)

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