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Hiring business drives LinkedIn’s revenue beat

(Reuters) – Corporate networking site LinkedIn Corp (LNKD.N) reported better-than-expected quarterly profit and revenue as more businesses used its services to hire staff.

The company’s hiring business has been thriving as employers find its services more helpful in assessing a candidate’s suitability for a role.

Strong growth in the hiring business and rapid expansion in international markets such as China are considered by analysts to be the main growth drivers for the company in the next few quarters.

“In third-quarter, about 75 percent of new members came to LinkedIn from outside the U.S., with China providing particular strength,” Chief Executive Jeff Weiner said.

“China has become the second-largest contributor to new sign-ups on a daily basis, after only the United States,” Weiner said on a conference call with analysts.

The company launched a Chinese language “beta” version of its main website in February to expand in the world’s largest internet market by users, looking to replicate its success in the United States internationally.

Revenue at LinkedIn’s hiring business, called Talent Solutions, rose 45 percent in the third quarter ended Sept. 30, representing 61 percent of total revenue.

LinkedIn, however, forecast on Thursday current-quarter results below expectations, sparking a brief selloff that sent the company’s shares down as much as 11 percent in extended trading.

But the shares soon reversed course to trade up 3 percent at $209.12 as investors focused on the handy third-quarter beat.

BMO Capital Markets analyst Daniel Salmon said investors chose to focus on customer growth in the third quarter in the company’s corporate solutions business, rather than the weak revenue forecast.

LinkedIn’s net loss attributable to stockholders widened to $4.3 million, or 3 cents per share, in the quarter, from $3.4 million, or 3 cents per share, a year earlier. Excluding items, LinkedIn earned 52 cents per share.

Revenue rose 45 percent to $568.3 million.

Analysts on average had expected a profit of 47 cents per share on revenue of $557.6 million.

For the fourth quarter ending December, LinkedIn forecast adjusted earnings of about 49 cents per share and revenue of between $600 million and $605 million.

Analysts on average were expecting a profit of 52 cents per share on revenue of $611.6 million, according to Thomson Reuters I/B/E/S.

On revenue forecast missing the estimate, BMO’s Salmon said it was more likely that the expectations were a little higher.

Up to Thursday’s close, the stock had fallen more than 6 pct this year, underperforming the 7.9 percent rise in the broader SP 500 index .SPX.

(Reporting by Arathy S Nair and Lehar Maan in Bangalore; Editing by Maju Samuel and Saumyadeb Chakrabarty)

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Western Union beats as more people use Web, mobile money transfer

(Reuters) – Western Union Co (WU.N), the world’s largest money-transfer company, reported a better-than-expected quarterly profit as lower prices drew more customers, particularly to its digital money transfer business.

Revenue at the company’s digital business, which includes and mobile money transfer, jumped 21 percent in the third quarter, accounting for nearly 6 percent of total revenue.

Western Union has cut prices and invested heavily in its online and mobile businesses to better compete with fast-growing rivals such as MoneyGram International Inc (MGI.O), Xoom Corp (XOOM.O) and privately owned Boom Financial Inc.

The move is starting to pay off as the company has been eating into the market share of online rivals such as Xoom, by offering highly competitive foreign exchange rates and lower transaction fees.

The company said on Thursday it plans to increase its spending on digital and mobile business, compliance and cyber security in the fourth quarter.

“Our previous pricing and other strategic actions in Europe and in Russia have helped drive good results,” Chief Executive Hikmet Ersek said on a post-earnings conference call.

Growth in transactions in Europe and Russia, which account for more than a fifth of Western Union’s total revenue, rose 10 percent during the quarter.

“We believe market has shown fairly stable pricing recently,” Chief Financial Officer Raj Agrawal said, adding that the company expects pricing actions to be modest for the remainder of the year.

Western union’s third-quarter transaction volumes rose 5 percent. Remittances increased about 5 percent to $22.1 billion.

Revenue from the company’s consumer-to-consumer business rose 2 percent to $1.15 billion.

Western Union forecast full-year earnings of $1.50 per share, the top end of its previous projection of $1.45-$1.50 per share.

Net income for the quarter ended Sept. 30 rose 9 percent to $234.1 million, or 44 cents per share.

Analysts on average had expected earnings of 38 cents per share on revenue of $1.43 billion, according to Thomson Reuters I/B/E/S.


Money transfer companies such as Western Union and MoneyGram International Inc (MGI.O) have been forced to spend more to meet stricter compliance requirements to prevent money laundering through their payment systems.

Western Union said it expects compliance costs to be about 3.5 percent of full-year revenue.

Ersek said compliance, retail agent commissions and certain other costs had risen but the company was managing “discretionary expenses very tightly.”

Western Union was probed by the Federal Trade Commission and a U.S. district court over fraud-induced money transfers in February.

Englewood, Colorado-based Western Union’s shares were up about 3 percent at $17.15 after the bell on Thursday.

(Editing by Saumyadeb Chakrabarty)

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Trade, defense buoy U.S. economy, but some weakness creeps in

WASHINGTON (Reuters) – A smaller trade deficit and surge in defense spending buoyed U.S. economic growth in the third quarter, but domestic demand slipped, hinting at some loss of momentum.

Gross domestic product grew at a 3.5 percent annual pace, the Commerce Department said on Thursday. However, the pace of growth in business investment, housing and consumer spending slowed from the second quarter.

“The report was broadly constructive, but with weakness emerging in housing and consumption spending, we expect the pace of growth to slip further in the fourth quarter,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

Despite decelerating from the second quarter’s robust 4.6 percent growth rate, it was the fourth quarter out of five that the economy has expanded at or above a 3.5 percent clip.

Signs the economy has moved to a healthy growth track have done little to bolster Obama’s Democrats, who look to lose control of the Senate in mid-term elections on Tuesday that will be importantly shaped by voters views on jobs and growth.

The third-quarter gain in output outstripped economists’ expectations, but growth in domestic demand braked to a 2.7 percent pace after a brisk 3.4 percent gain in the April-June period, giving the report a softer tenor.

A separate report from the Labor Department showed first-time applications for unemployment benefits rose marginally last week, but a measure of underlying trends hit its lowest level since May 2000 in a show of labor market strength.

The data came one day after the Federal Reserve ended its asset purchasing program and said there was sufficient underlying strength in the economy to continue whittling away at unemployment.

The dollar rose against a basket of currencies on the growth data, and U.S. stocks gained. Prices for U.S. Treasury debt also were trading higher.


A narrowing trade gap accounted for the bulk of the rise in GDP last quarter, adding 1.32 percentage points to growth.

Imports fell at their fastest pace since the fourth quarter of 2012 as demand for overseas oil waned. And while export growth softened from the second quarter’s double-digit pace, it remained strong even in the face of slowing economies in the euro zone and China.

Government spending also provided a boost to GDP, with defense spending adding 0.66 percentage point to growth. The 16 percent growth rate of defense spending, its fastest in five years, reflected stepped-up spending on ammunition and jet fuel.

Economists said the purchases were likely related to the ongoing air strikes against Islamic State militants in Syria and Iraq.

“In this case we shouldn’t expect complete payback in the GDP numbers, but even so, some modest pullback in government spending seems likely this quarter,” said Michael Feroli, an economist at JPMorgan in New York.

A slowdown in inventory building weighed on growth, and economists warned that pressure would likely persist into the fourth quarter.

Growth estimates for the final quarter of the year are currently ranging between a 2.5 percent and 3 percent pace.


Growth in business investment slowed in the third quarter, with spending on equipment falling short of expectations even as it remained strong. Data on Tuesday suggested equipment spending could slow further in the fourth quarter.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, decelerated to a 1.8 percent growth pace from the second-quarter’s 2.5 percent rate.

The slower pace of consumer spending helped keep inflation under wraps, with two price indexes in the GDP report slowing sharply.

Declining gasoline prices and accelerating job growth, which is expected to lift wages, will provide tailwinds for consumer spending that should keep growth on track in the fourth quarter.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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U.S. regulator to Takata: Give us faulty air-bag documents

DETROIT (Reuters) – U.S. auto safety regulators on Thursday ordered Japanese supplier Takata Corp (7312.T) to provide documents and answer questions under oath related to the government’s ongoing probe of potentially defective Takata air bags in millions of U.S. vehicles.

The National Highway Traffic Safety Administration sent a special order to the supplier’s American unit, TK Holdings Inc, ordering delivery of the documents by Dec. 1.

Takata spokesman Alby Berman said on Thursday the company “is cooperating fully with NHTSA and is working to meet their requests.”

For the past 18 months, Takata has been besieged by chronic, widespread problems with defective inflators in its air bags, which can explode with excessive force and spray metal shards into vehicle occupants.

Since 2008, 10 global vehicle manufacturers that use Takata air bags have recalled more than 10 million cars in the United States and more than 17 million worldwide to replace inflators that have been linked to at least four deaths and numerous serious injuries.

In June, NHTSA launched its probe of whether Takata air bag inflators made from 2000 to 2007 were properly sealed or subject to other defects. It also asked the automakers to recall air bags in certain regions, such as Florida and Puerto Rico, where the parts were exposed to higher moisture and humidity that could cause deterioration of the explosive material inside.

Critics have said Takata and NHTSA have not moved fast enough on the issue.

On Thursday, lawyers for U.S. consumers asked a federal judge in Miami to speed up a class action against Takata and four automakers, saying public safety was at stake.

U.S. District Judge James Lawrence King scheduled a Dec. 8 hearing on whether Takata and the automakers should turn over internal company documents to the consumers’ lawyers.

One safety advocate criticized NHTSA for moving so slowly on issuing the special order, saying such moves typically occur within 30 days of the launch of an investigation.

“The big question is why didn’t they send it sooner?” said Clarence Ditlow, executive director of the Center for Auto Safety, which has been pushing for NHTSA to broaden the regional recalls to a national campaign.

“You cannot get to the bottom of this defect unless you have the facts, and to delay five months in sending out that letter is inexcusable,” he added.


NHTSA Deputy Director David Friedman said the safety agency was forcing Takata to supply the documents and answer questions under oath as part the agency’s probe. “We expect Takata’s full cooperation as we work to keep the American public safe,” he said in a statement.

NHTSA officials, including Friedman, were due to meet with Takata executives later on Thursday.

In the special order signed by Chief Counsel Kevin Vincent, NHTSA ordered Takata to produce documents relating to communication between the Japanese company and its rivals, as well as its customers, related to ruptured air bags.

NHTSA also asked the supplier for any documents related to manufacturing issues connected with problems in production of air-bag inflators, including documents cited in an Oct. 17 Reuters article about manufacturing problems at the Japanese company’s Mexico inflator plant.

The safety agency specifically asked for any documents cited by Reuters, including a March 2011 email from then-supervisor Guillermo Apud titled “Defectos y defectos y defectos!!!!”

In the email, Apud, who has since been promoted to engineering manager at Takata’s Monclova, Mexico, plant and previously declined to comment to Reuters, said, “A part that is not welded = one life less, which shows we are not fulfilling the mission.” He also described in one instance finding chewing gum in an inflator.

NHTSA also asked Takata for a list of every death or injury, lawsuit or claim relating to ruptured air bags.

Takata also was ordered to provide details on its inflator production capacity to replace millions of potentially defective parts already recalled, as well as its ability to expand manufacturing capacity to meet the recall needs.

NHTSA asked Takata whether other inflator makers can build replacement parts to speed the recall process.

TRW Automotive (TRW.N) Chief Executive John Plant said Tuesday his company had been contacted by Takata about helping with the recalls, but had not seen any extra business as a result.

Autoliv (ALV.N) CEO Jan Carlson said last week his company had picked up business due to Takata’s struggles.

(Additional reporting by Eric Beech in Washington, Bernie Woodall in Detroit and David Ingram in New York; editing by Nick Zieminski and Matthew Lewis)

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Conoco sees third-quarter profit rise, 2015 capex seen lower

(Reuters) – ConocoPhillips (COP.N), the largest U.S. independent oil and gas company, on Thursday reported higher third-quarter profit after the sale of its Nigerian unit and said overall spending would decline next year, partly in response to falling crude oil prices.

Crude oil prices have tumbled more than 20 percent in recent weeks as global demand slows and supplies rise. Crude traded in New York fell to a more than two-year low on Monday at $79.44 a barrel but recovered a bit to above $81 on Thursday.

Conoco expects to spend less than $16 billion next year, down from the $16.7 billion projected for 2014, Ryan Lance, the chief executive officer, told investors on a conference call to discuss earnings.

Over the last several years, Conoco has shed lower-margin assets, directing more capital to projects like shale drilling in Eagle Ford area in south Texas and the Bakken formation in North Dakota that offer higher returns and faster production growth.

Even with a drop in spending, the company expects to meet its forecast to boost oil and gas output 3 percent to 5 percent in 2015, Lance told investors.

Conoco will continue to invest near current levels in Eagle Ford and Bakken, but has the flexibility to pare spending in exploration and on less-developed fields in such places as the Permian Basin in West Texas and western Canada, it said.

“Beginning in 2015 capital in our major projects begins to taper off,” said Lance, “We have significantly more flexibility to ramp up or down our capital as circumstances dictate.”

Profit rose to $2.7 billion, or $2.17 per share, from $2.5 billion, or $2.00 per share, in the 2013 third quarter.

Excluding items such as the proceeds from the sale of its Nigerian business in July and a tax benefit, Conoco had a profit of $1.29 per share. Analysts, on average, expected $1.20, according to Thomson Reuters I/B/E/S. The proceeds from the Nigerian sale were $1.4 billion.

ConocoPhillips had third-quarter oil and gas production from continuing operations, excluding Libya, of 1.473 million barrels oil equivalent per day (boed), up 25,000 boed from a year ago.

For the fourth quarter, Conoco forecast production from continuing operations rising to 1.545 million boed to 1.575 million boed, excluding Libya. Previously, it said it would produce as much as 1.590 million boed to 1.640 million boed.

The production cut is due in part to third-party infrastructure constraints in Malaysia and a depressed market for the natural gas liquid (NGL) ethane in the United States, according to analysts at Wells Fargo.

Shares of Conoco rose 0.8 percent to $71.32 in afternoon trading.

(Reporting by Anna Driver in Houston; Editing by W Simon, JS Benkoe and Terry Wade)

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Wal-Mart to close 30 underperforming stores in Japan, take charge

(Reuters) – Wal-Mart Stores Inc (WMT.N) said on Thursday it would close 30 underperforming stores in Japan, scaling back in what was once considered one of the retailer’s most promising markets and highlighting the hurdles it faces to securing growth overseas.

Wal-Mart said the 30 stores operate under the Seiyu brand, and the closure is part of a revamp that will include remodels and other investments. The closures represent 7 percent of Wal-Mart’s 434 stores in Japan.

Wal-Mart first invested in Seiyu in 2002 and took full control of the company in 2008 with the aim of employing its low-cost model to win share from entrenched rivals like Aeon Co (8267.T) and Seven i Holdings Co (3382.T).

But the closures show how Seiyu has sometimes struggled to meet the notoriously picky tastes of Japanese consumers and leverage its scale to drive out competition via lower prices to the extent that it has in the United States.

Walmart spokesman Randy Hargrove said that overall the company’s Japan operations were performing well, with sales and profits expected to grow for a sixth consecutive year in 2014. He said Seiyu’s online revenues were growing at a fast clip.

Wal-Mart estimated that the store closures would result in charges of about 4 cents to 5 cents of diluted earnings per share, which it will record over the next several quarters.

Wal-Mart said that it would invest in upgrading its fresh and deli categories and remodel about 50 stores in 2015. It said it would also increase its fulfillment and service operations to meet growing demand for online delivery in the Tokyo area.

The changes come as Wal-Mart is trying to find new growth overseas, where it operates around 6,000 stores and generates about a third of its overall sales. In the company’s fiscal second quarter ended Aug. 1, net revenue of the international division rose 3.1 percent, with China the only major market where same-store sales failed to grow.

The last new market entered by Wal-Mart was South Africa, in 2011, and the company’s pace of overseas growth has slowed over the past few years.

(Reporting by Nathan Layne; Editing by Leslie Adler)

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Raymond James reports strongest recruiting year since 2009

NEW YORK (Reuters) – Brokerage and investment bank Raymond James Financial Inc just completed its best broker recruiting year since 2009, the firm reported on Thursday.

The firm added a net of 68 U.S.-based advisers in the fiscal year ending Sept 30, 2013, bringing the total to 6,265 advisers. Actual recruitment was far higher, but many new hires were offset by brokers retiring and moving to other firms, said Paul Shoukry, Raymond James’ vice president of finance and investor relations.

“Just looking at the net addition of 68 advisors really understates the growth we had in the year,” Shoukry said in an email to Reuters.

In 2009, Raymond James reported its U.S.-based sales force rose by 300 advisers to a net total of 4,781 financial advisers from the year before.

That year, the firm added hundreds of so-called “breakaway advisers” who, frustrated by the global financial collapse and a flurry of bank mergers, had defected from the larger securities brokerages in search of smaller, independent firms.

According to Reuters’ records of publicly announced adviser moves, Raymond James hired at least 80 financial advisers and managers who managed more than $2 billion in assets since the start of the fiscal year.

Reuters records show at least four advisers left Raymond James since Sept. 30, 2013, who managed a combined $614 million in assets at the firm.

Reuters tracks the moves of advisers who either manage at least $100 million in client assets or produced $1 million in annual revenue for their firm.

These records also show that Raymond James remains attractive to breakaway advisers. Of the 80 brokers that joined the firm this fiscal year, nearly all came from the four big securities brokerages: Bank of America’s Merrill Lynch, Morgan Stanley, Wells Fargo Co’s Wells Fargo Advisors and UBS AG’s UBS Wealth Management Americas.

Raymond James Chief Executive Officer Paul Reilly said new brokers were attracted to his firm’s trading and investment technology, growing brand recognition and “steady culture” of the firm, unlike larger brokerages, because there is little turn over or changes in leadership. He made the comments during an earnings call the day after the firm released its fiscal fourth quarter earnings.

(Reporting By Elizabeth Dilts; Editing by Bernard Orr)

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Efforts to replace Fed hawks Plosser, Fisher pick up speed

(Reuters) – Two regional Federal Reserve banks have taken steps to replace their hawkish presidents, Charles Plosser and Richard Fisher, whose departures early next year could change the tenor of debate within the U.S. central bank’s policy-setting committee.

The Philadelphia Fed said on Thursday it had hired executive search firm Korn Ferry to find a successor to Plosser, 66, who will retire on March 1 after more than eight years at the helm. A committee of Philadelphia Fed directors working with Korn Ferry will consider “a diverse group of candidates from inside and outside” the Fed, it said.

Fisher, 65, will retire by April after about a decade as the Dallas Fed’s president.

Last month, Fisher told Reuters he assembled an advisory committee to search for his successor consisting of three former chairmen of the Dallas Fed – Hunt Oil’s Ray Hunt, who hired Fisher in 2005; Southwest Airlines co-founder and former CEO Herb Kelleher; and Jim Hackett, former CEO of Andarko Petroleum. The Dallas Fed’s current board chair, Mike Ullman, and its vice chair, Renu Khator, are also on the committee.

Plosser and Fisher, both members of the Fed’s policy-making committee this year, have been strident advocates of ratcheting down the central bank’s extraordinary stimulus in the post-financial crisis era.

Despite having dissented against a September policy decision to telegraph ultra-low interest rates for a long while to come, Plosser and Fisher on Wednesday backed the Fed’s latest policy statement, which struck an optimistic tone on inflation and the labor market.

Under mandatory retirement rules, Fisher needs to retire by the end of April, while Plosser could have stayed on until 2016.

(Reporting by Jonathan Spicer and Ann Saphir; Editing by Paul Simao)

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Whirlpool wins first trial over ‘moldy’ washers

NEW YORK (Reuters) – Whirlpool Corp was found not liable Thursday by a U.S. jury in the first lawsuit to go to trial accusing the company of selling front-loading washing machines containing a design flaw that made them prone to developing mold.

The jury cleared Whirlpool following a three-week trial in federal court in Ohio, according to lawyers for approximately 150,000 residents in that state who were part of the class action against the company.

The class plaintiffs were all Ohio residents who had purchased one of 20 models of front-loading Whirlpool Duet washing machines between 2001 and 2009. They said in their lawsuit that a defect in the machines caused residue to accumulate, leading to mold and musty odors.

The plaintiffs said they were not warned about the problem until after they had purchased the machines and were forced to undertake costly and time-consuming measures to remedy them.

Benton Harbor, Michigan-based Whirlpool has denied that it is liable, and said in court filings that more than 95 percent of customers who had purchased one of the machines had never complained about a mold or odor problem.

In a statement, Eric Sharon, a litigation counsel at Whirlpool, called it a major victory for the company. “While other companies might have opted to settle this case out of court, Whirlpool firmly believed in the rule of law and that the facts were in our corner.”

A lawyer for the plaintiffs, Jonathan Selbin, said he was disappointed with the verdict and intends to appeal. He noted in an email to Reuters that it was the first of what would likely be dozens of trials over the machines.

“Until Whirlpool takes responsibility for selling defective washers, the fight will continue,” he said.

The company had fought fiercely against a court order that allowed the Ohio consumers to sue as a group, rather than pursue their claims individually. Whirlpool argued that since many of the customers did not actually suffer any harm and had purchased a range of different machines, they did not have enough in common to sue as a group.

The company appealed the class certification decision to the U.S. Supreme Court twice. Although the high court originally vacated the decision and sent it back to a lower appeals court for further consideration, the appeals court upheld class certification once again and the Supreme Court denied further review.

The Ohio suit is among 11 that have been consolidated in the Ohio federal court, according to court statistics, and there are additional lawsuits filed in other states.

The case is Glazer v. Whirlpool, U.S. District Court for the Northern District of Ohio, No. 08-65000.

(Reporting by Jessica Dye; Editing by Alexia Garamfalvi and Steve Orlofsky)

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