News Archive


Wal-Mart dismisses several China executives to cut costs


(Reuters) – Wal-Mart Stores Inc said it had dismissed several executives in China as part of an effort to lower costs in the country, where it has been grappling with slower sales and tough price competition.

Wal-Mart spokeswoman Brooke Buchanan said several executives were let go to help “create a more efficient structure that positions our business competitively for the future.”

Buchanan did not disclose further details, such as the number of people dismissed or their ranks.

Bloomberg reported earlier that about 30 senior executives, including directors and vice presidents from Wal-Mart China and Sam’s Club China, had been dismissed.

Walmart reported a 0.8 percent fall in China sales during the quarter to Oct. 31, which it attributed to government austerity measures and deflation.

Wal-Mart has faced setbacks in China, including an embarrassing food safety scandal in which its popular “Five Spice” donkey meat was found to have traces of fox meat. It is building its own distribution centers to manage product quality.

Last October Wal-Mart said it planned to open 110 facilities in China between 2014 and 2016, while closing some outlets as part of an overhaul of its business there.

(reporting by Nathan Layne; Editing by David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/GgXys13ZU6c/story01.htm

Exclusive: Apollo Global in the lead to acquire Presidio: sources


(Reuters) – Apollo Global Management LLC (APO.N) is in advanced talks to acquire Presidio Inc in a deal that could value the information technology consulting company at close to $1.3 billion, including debt, according to people familiar with the matter.

Apollo, a New York-based private equity firm, has outbid other buyout firms, as well as Sirius Computer Solutions Inc, a portfolio company of Thoma Bravo LLC, in the auction for Presidio, the sources said this week.

American Securities LLC, the private equity firm that owns Presidio, hired Barclays Plc (BARC.L) and Credit Suisse Group AG (CSGN.VX) earlier this year to explore a sale of the company. The negotiations with Apollo have not yet been finalized, the people cautioned.

The sources asked not to be identified because the sale process is confidential. Apollo and American Securities declined to comment, while representatives for Presidio, Thoma Bravo and Sirius did not immediately respond to requests for comment.

Greenbelt, Maryland-based Presidio deploys and manages technology for customers ranging from retailers to hospitals, by partnering with companies such as Cisco Systems (CSCO.O), EMC Corp (EMC.N), Microsoft Corp (MSFT.O) and EMC Corp’s (EMC.N) VMware.

Presidio, which competes with Computer Sciences Corporation (CSC.N) and Insight Enterprises Inc (NSIT.O), among others, is expected to generate annual revenues of $2.4 billion this year, according to Moody’s Investors Service Inc.

American Securities acquired Presidio in 2011 for an undisclosed amount. It has since expanded Presidio’s offerings though the acquisition of smaller peers, including INX Inc and BlueWater Communications Group LLC.

(Reporting by Greg Roumeliotis and Nadia Damouni in New York)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/J6KHuK8Wfd0/story01.htm

New home sales rise in October, but September revised down


WASHINGTON Nov 26 (Reuters) – Sales of new U.S. single-family homes rose for a third straight month in October, but a downward revision to the prior month’s sales pace indicated the housing market recovery would remain gradual.

The Commerce Department said on Wednesday that sales gained 0.7 percent to a seasonally adjusted annual rate of 458,000 units. September’s sales pace was revised down to 455,000 units from 467,000 units.

Economists polled by Reuters had forecast new home sales rising to a 472,000-unit pace last month.

New home sales, which account for about 8 percent of the housing market, tend to be volatile month to month. Compared to October last year, sales were up 1.8 percent.

Housing remains constrained by slow wage growth, which is resulting in a slow pace of household formation.

Last month, new home sales rose 7.1 percent in the Northeast and surged 15.8 percent in the Midwest. In the populous South, sales fell 1.9 percent and were down 2.7 percent in the West.

With sales rising modestly, the stock of new houses available on the market rose 1.0 percent last month to the highest level since June 2010.

At October’s sales pace it would take 5.6 months to clear the supply of houses on the market, up from 5.5 months in September. Six months’ supply is normally considered a healthy balance between supply and demand.

The median new home price jumped 15.4 percent from a year ago to a record $305,000.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci; Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/L1lXRyOa8dc/story01.htm

Wall Street edges up ahead of market holiday


NEW YORK (Reuters) – U.S. stocks edged up on Wednesday, boosted by tech shares, while the energy sector was once more the largest weight on the market as crude prices continued to flirt with multi-year lows.

Hewlett-Packard, Apple and chipmakers were among the largest advancers, with the PHLX semiconductor index at its highest since mid-2001. Apple gained 0.8 percent while the SOX was last up 1.8 percent.

Trading was relatively light, with some market participants already out for the Thanksgiving holiday. The stock market will be closed on Thursday, while Friday will be a half-day session.

U.S. consumer spending rose modestly in October and a measure of business spending plans fell for a second straight month, but consumer confidence was near a 7-1/2-year high suggesting the economy remains resilient in the face of faltering global demand.

“On balance data was still supportive of reasonable strength in the economy,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois.

He said the optimism on holiday shopping was a reason behind gains in chipmakers. “PC sales have been a drag and there may be some hope we see a pick-up.”

At 2:30 p.m. EST (1930 GMT) the Dow Jones industrial average fell 6.15 points, or 0.03 percent, to 17,808.79, the SP 500 gained 3.24 points, or 0.16 percent, to 2,070.27 and the Nasdaq Composite added 22.38 points, or 0.47 percent, to 4,780.63.

Hewlett-Packard Co rose 3.7 percent to $39.02 as one of the SP 500’s biggest gainers the day after reporting fourth-quarter results.

Deere Co fell 0.8 percent to $87.06 after the farm equipment company forecast a drop in equipment sales in the current quarter, hurt by lower corn prices and falling farm incomes.

Advancing issues outnumbered decliners on the NYSE by 1,765 to 1,245, for a 1.42-to-1 ratio; on the Nasdaq, 1,545 issues rose and 1,121 fell for a 1.38-to-1 ratio favoring advancers.

The SP 500 was posting 51 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 94 new highs and 33 new lows.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Pues23oMZ_Q/story01.htm

U.S. regulator: Chrysler recall delay hikes air bag risk


DETROIT (Reuters) – Chrysler Group LLC must expand its regional recall of vehicles with Takata Corp (7312.T) air bags and begin notifying customers of the action by Monday, the U.S. National Highway Traffic Safety Administration said.

Chrysler’s delay in alerting owners of potential defects in Takata air bags “exacerbates the risk to motorists’ safety,” the NHTSA said in a letter sent on Tuesday to company Chief Executive Officer Sergio Marchionne.

Chrysler, a unit of Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N), was among 10 automakers that in June began recalling vehicles registered in some high-humidity states and U.S. territories because the Takata air bags in those vehicles can rupture and spray metal shards into occupants.

Ruptured inflators in Takata air bags have been linked to at least five deaths in Honda Motor Co (7267.T) cars since 2004.

In June, Chrysler recalled 371,000 Chrysler and Dodge vehicles from model years 2005 to 2008 with the air bags. In a September memo on the regional recalls made public last month, NHTSA estimated that Chrysler would need to replace the air bags in about 441,000 cars.

Chrysler is still reviewing the Nov. 25 NHTSA letter to Marchionne, a company spokesman said on Wednesday.

NHTSA Deputy Administrator David Friedman said “Chrysler is obligated” to expand its recall to coastal areas of Texas, Louisiana, Mississippi and Alabama as well as southern Georgia, Guam, Saipan and American Samoa. Takata had sent NHTSA a report on Nov. 10 that said its air bags in those areas were defective, he said.

So far, Chrysler’s recall has only covered Florida, Puerto Rico, Hawaii and the U.S. Virgin Islands.

Takata told NHTSA it will begin shipping replacement parts to Chrysler on Monday.

Chrysler has said it will wait until Dec. 19 to tell customers because of a lack of replacement parts.

Shares of Fiat Chrysler were down 0.8 percent at $12.55 in morning trade on the New York Stock Exchange. They fell 0.4 percent in Milan.

(Reporting by Bernie Woodall; Editing by Lisa Von Ahn and Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/01E4Y9wNedM/story01.htm

Deere says equipment sales to fall further as farm incomes drop


(Reuters) – Deere Co (DE.N) said it expected equipment sales to fall further as lower grain prices discourage farmers from buying tractors, harvesters and other machinery.

Shares of the world’s largest farm equipment maker fell as much as 4 percent in premarket trading.

Deere’s sales have been hit as bumper corn harvests drive down prices, leaving farmers with less cash to spend on equipment. Corn prices have fallen about 11 percent this year so far, on top of a decline of nearly 40 percent last year.

“The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models,” Chief Executive Samuel Allen said in a statement on Wednesday.

Deere gets more than two-thirds of its revenue from farm and turf machinery.

The Department of Agriculture said on Tuesday that falling grain prices and rising costs would drag down U.S. farm sector profits in 2014 to their lowest since 2010.

Moline, Illinois-based Deere cut its forecast for corn price next year to about $3.45 per bushel from $4.10. It also reduced its estimates for wheat, soybean and cotton prices.

Sale of farm machinery in North America is expected to fall 25-30 percent industry-wide next year, Deere said.

The company has cut jobs and scaled back production of farm equipment to match demand. Deere said in August that it would lay off more than 1,000 employees at five U.S. plants.

“We believe Deere will be aggressive in cutting production – the company plans to cut inventory even against this weak sales forecast – which suggests that (the current quarter) could be a particularly weak quarter,” Jefferies Co analyst Stephen Volkmann wrote in a note.

Deere, which also makes construction equipment, said it expected overall machinery sales to fall about 21 percent in the first quarter ending Jan. 31.

Net income attributable to the company fell to $649.2 million, or $1.83 per share, in the fourth quarter ended Oct. 31 from $806.8 million, or $2.11 per share, a year earlier.

Revenue fell 5 percent to $8.97 billion.

Deere’s shares were down 2 percent at $85.87 in trading before the bell.

Up to Tuesday’s close, the stock had risen about 11 percent from its two year-low of $78.88 touched on Oct. 8.

(Editing by Saumyadeb Chakrabarty, Ted Kerr and Kirti Pandey)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/y5HCipV4Xnw/story01.htm

Ackman’s Pershing Square sees big payoff from Allergan deal


BOSTON (Reuters) – Hedge fund mogul William Ackman told investors they could see a $6 billion payday when he closes the chapter on Allergan Inc., his firm’s biggest bet of 2014.

One week after Allergan agreed to sell itself to rival Actavis Plc., Ackman wrote in his quarterly investment letter that his Pershing Square Capital Management, the Botox-maker’s biggest investor, still owns 26.6 million shares.

At the end of the third quarter Ackman’s $18 billion fund owned 28.87 million Allergan shares, a regulatory filing showed.

While this isn’t the deal the activist investor originally wanted – he had been pushing since April for rival Valeant buy Allergan – it will be lucrative all the same.

“If we hold the shares until transaction closure, we will receive $3.4 billion in cash and 9.81 million shares of Actavis worth $2.6 billion at current value,” the letter said.

Currently Pershing Square’s stake is worth $5.64 billion and the stock was trading at a $15.70 discount to the transaction value, which translates into about a 19 percent annualized return assuming the deal closes next April.

Ackman’s firm is having one of its best years ever with a 35 percent gain for the year through the end of October. The average hedge fund has gained only 2 percent and the broader SP 500 index has gained about 13 percent.

The battle for Allergan has captivated Wall Street for months, with Pershing Square waging court battles and finally winning a special meeting where it planned to replace many Allergan directors. Speculation has mounted recently over what Ackman planned to do with his holding, especially after he announced a stake in animal health company Zoetis Inc two weeks ago.

Sounding a conciliatory note, Ackman said he now supports the Actavis deal and said his team had been impressed with Actavis Chief Executive Officer Brent Saunders and his business plan for the combined company after a recent meeting.

In terms of other investments, Ackman said he still likes his short bet against Herbalife Ltd, which he disclosed publicly for the first time two years ago, and said it paid off well during the third quarter when it added 3.2 percent to the fund’s performance.

He also said he still likes the investment in mortgage companies Fannie Mae and Freddie Mac but cautioned that litigation will likely drag on for some time and that he has committed about 3 percent of the firm’s capital to the bets.

(Reporting by Svea Herbst-Bayliss and Caroline Humer; Editing by Chizu Nomiyama and Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/nQv_tF6qTOY/story01.htm

U.S. consumer sentiment climbs in November


NEW YORK (Reuters) – U.S. consumer sentiment rose in November to its highest level in more than seven years on improvements in the current economic condition, including lower gas prices and improving job prospects, a survey released on Wednesday showed.

The Thomson Reuters/University of Michigan’s final November reading on the overall index on consumer sentiment came in at 88.8, its highest reading since July 2007 on a final basis. The reading was up from the 86.9 the month before but slightly below the preliminary reading of 89.4.

Despite the uptick, it was below the median forecast of 90.0 among economists polled by Reuters.

“Consumers more frequently reported hearing about positive rather than negative economic developments in the November

survey, with reports of improving employment the dominant news item,” survey director Richard Curtin said in a statement.

“While there was no change in evaluations of the current performance of the economy or the year-ahead outlook – both remained at positive levels – the longer term economic outlook improved substantially.”

The survey’s barometer of current economic conditions rose to 102.7 from 98.3, just below a forecast of 103.0.

The survey’s gauge of consumer expectations edged up to 79.9 from the 79.6 in October and was short of the expected 80.8.

The survey’s one-year inflation expectation slipped to 2.8 percent, the lowest year-ahead inflation rate expected since October 2010, from the 2.9 percent in the prior month. The survey’s five-to-10-year inflation outlook was at 2.6 percent from 2.8 percent in October.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6sqhNktoAZE/story01.htm

U.S. FAA proposes requiring fix for Boeing 787 Dreamliner


NEW YORK (Reuters) – The U.S. Federal Aviation Administration proposed requiring a fix for Boeing Co’s (BA.N) 787-8 Dreamliner on Wednesday, a move prompted by “numerous reports of failures of proximity sensors” on the high-tech plane’s wings.

A sensor failure could cause the plane to go off the runway while landing on a short runway or in adverse weather, the FAA said in a proposed airworthiness directive scheduled to be published on Friday.

The directive, if adopted, would affect 15 planes registered in the United States, the FAA said. FAA actions are often followed by non-U.S. airlines. Through the end of October, Boeing has delivered 197 787-8s worldwide.

“We have received numerous reports of failures of the proximity sensor within the slat skew detection mechanism assembly (DMA) leading to slats up landing events,” the FAA said.

“It was determined that the failed sensors had broken magnet wires due to stresses induced by thermal expansion and contraction of an epoxy applied around them,” the agency added.

The new rule would require 787-8 operators to replace the slat skew detection mechanism assembly within two years of the date the directive takes effect. The cost is estimated at $935 per plane.

Boeing did not immediately respond to a request for comment.

The company had advised airlines in March about the problem, in a service bulletin, the FAA said. The FAA action would make action mandatory.

(Reporting by Alwyn Scott; Editing by Chizu Nomiyama and Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/kP-jYOs0uxY/story01.htm