News Archive


BofA likely to hold vote this year on Moynihan chairmanship: source


NEW YORK Bank of America (BAC.N) is likely to hold a shareholder vote this year to determine whether Chief Executive Brian Moynihan should be allowed to retain his title of chairman of the bank’s board, a person familiar with the matter said on Friday.

In October, Moynihan was named chairman in addition to CEO, a move that angered some investors. Many corporate governance advocates argue that CEOs should not head their boards, to ensure that directors offer sufficiently independent oversight.

Bank of America announced just before its annual meeting in May that it would allow shareholders to hold a vote on whether Moynihan should retain the chairmanship.

The bank at the time said the vote would take place no later than its 2016 annual meeting. In a proxy filing on Friday, Bank of America disclosed that shareholders of record on Aug. 10 would be able to vote on the matter in a special meeting, but did not give a specific date.

The bank did not give a specific date because the Securities and Exchange Commission must first review the proxy, the person familiar with the matter said. An SEC spokeswoman had no immediate response.

If shareholders vote not to allow Moynihan to keep both titles, the board will “promptly implement a plan to transition from the current board leadership structure to an independent chairman structure,” the proxy said on Friday.

(Reporting by Dan Freed; Editing by Dan Wilchins and Jonathan Oatis)

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

Uber valued at about $51 bln after latest funding round: WSJ


Uber Technologies Inc has closed a new round of funding that values the online taxi-hailing company at nearly $51 billion, the Wall Street Journal reported, citing people familiar with the matter.

Uber raised close to $1 billion in the round, bringing its total funding to more than $5 billion, WSJ reported on Friday, citing one of the people.

Investors in the latest round include Microsoft Corp (MSFT.O) and the Indian media conglomerate Bennett Coleman Co’s Times Internet, the report said.

However, Bloomberg, citing a person with knowledge of the matter, reported that Microsoft was considering the investment and hasn’t made a final decision.

“We filed to authorize this new funding more than two months ago,” Kristin Carvell, a spokeswoman for Uber said in an email.

“We aren’t commenting on additional speculation,” she said.

Uber said in March that Times Internet would invest “well under” one billion rupees ($16 million) as part of a “strategic partnership”.

Times Internet is the digital arm of Bennett Coleman Co, which also runs India’s largest English language daily, “Times of India”.

Uber said on Thursday it would invest $1 billion in India over the next nine months, as it looks to expand its services in its biggest market outside the United States.

Uber, which already has investors such as Google Inc (GOOGL.O) and Alibaba Group Holding Ltd (BABA.N), operates in 57 countries.

Times Internet couldn’t be reached for comment outside regular business hours. Microsoft declined to comment.

(Reporting by Kshitiz Goliya and Subrat Patnaik in Bengaluru; Editing by Saumyadeb Chakrabarty and Siddharth Cavale)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/pkVwd2IFGR8/story01.htm

Liquidity risks overhang high-yield ETFs


NEW YORK Shareholders in the AdvisorShares Peritus High Yield ETF who sold in late 2014 are probably not the last to pay up for liquidity risk, a growing hazard for some fixed-income investors bracing for the first Federal Reserve interest rate hike in nearly a decade.

ETFs created in recent years and dealing in often illiquid or thinly traded junk bonds, emerging-markets debt and bank loans are an untested market force that may increase selling pressures in a market turndown, analysts say.

The Peritus fund’s holders had a rough ride when its heavy holdings of energy-sector junk bonds were badly stung by falling world oil prices.

The ETF’s holders exited in droves, accelerating trading volumes and forcing Peritus (HYLD.P) to sell illiquid securities into declining markets at discounted prices.

Its $1.1 billion of assets nearly halved in five months, and a normally negligible gap between the worth of its holdings and its share price on exchanges swelled to nearly 7.0 percent and worsened returns for sellers.

“There were buyers, though buyers at a very discounted rate, given what was going on,” said Noah Hamman, chief executive at AdvisorShares. “I was unhappy about some of the discounts we saw.”

Federal Reserve interest rate increases historically exacerbate bond market volatility but this time, investors are worried that hikes may more severely rattle markets, including increasingly risky junk bonds.

Fixed-income high yield ETFs have grown to $37 billion in assets, up from about $10 billion five years ago, according to Lipper, a Thomson Reuters company.

Hedge funds are reportedly readying to profit from a market crisis aggravated by illiquidity, and investors such as Carl Icahn and Bill Gross have raised concerns about liquidity.

The worst mistake investors could make, though, is to try to trade during this type of volatility, especially if they’re on a long-term horizon, analysts said.

“The biggest risk is for investors trying to trade through the temporary liquidity mismatches,” said fixed income strategist John Gabriel at Morningstar Inc in Chicago.

“If you are not trading, you can sit on the sidelines and just watch.”

Wealth advisers should use junk-bond ETFs for holdings that clients will not need for five years, so investors can wait out sell-offs that produce unusual discounts and avoid locking in losses, Gabriel said.

Peritus, now a $350 million fund, was so stressed last year that its normally narrow bid-ask spread widened more than 10 times in early December, according to Thomson Reuters data.

Some of Peritus’ energy holdings barely traded in late 2014, making more likely the liquidity-related difficulties that can depress returns for investors obliged to cash out when NAVs are depressed.

Peritus’s holdings of Quicksilver Resources Inc 7.0 percent USU7486PAA76 last year traded about a dozen times, while its Talos Production LLC 9.75 percent USU83041AA81 didn’t trade at all, according to Thomson Reuters and FINRA data.

The Peritus portfolio late last year held under 100 securities and bank loans, making it less diversified than other larger ETFs which have had less dramatic liquidity episodes.

The SPDR Barclays High Yield Bond Fund ETF (JNK.P), ordinarily carries a small premium over its net asset value, but traded nearly 1.0 percent below the value of its often thinly traded holdings in May 2013, when bonds sold off fiercely on fears the Fed would end massive bond buying.

Still, outsized discounts in high-yield ETFs in recent years tended to be short-lived, so shareholders should listen to wealth advisers urging patience, according to Matthew Tucker, head of Americas iShares Fixed Income Strategy at BlackRock.

And Richard Bernstein, who runs his own investment firm in New York, said investors should “embrace” the illiquidity, because ETFs trade independently of the underlying asset.

“An ETF investor can exit the investment regardless of whether the underlying market is active,” he wrote in late July. “Longer-term investors should probably not worry about short-term disparities between an ETF’s price and the underlying NAV because the two tend to roughly equate over time.”

(Additional Reporting By Jessica Toonkel in New York; editing by Clive McKeef)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/o5x59k8fR6w/story01.htm

Apple, BMW in courtship with an eye on car collaboration


FRANKFURT/SAN FRANCISCO BMW (BMWG.DE) and Apple (AAPL.O) may rekindle a courtship put on hold after an exploratory visit by executives of the world’s top maker of electronic gadgets to the headquarters of the word’s biggest seller of premium cars.

Apple Chief Executive Tim Cook went to BMW’s headquarters last year and senior Apple executives toured the carmaker’s Leipzig factory to learn how it manufactures the i3 electric car, two sources familiar with the talks told Reuters.

The dialogue ended without conclusion because Apple appears to want to explore developing a passenger car on its own, one of the sources said.

Also, BMW is being cautious about sharing its manufacturing know-how because it wants to avoid becoming a mere supplier to a software or internet giant.

During the visit, Apple executives asked BMW board members detailed questions about tooling and production and BMW executives signaled readiness to license parts, one of the sources said. News of the Leipzig visit first emerged in Germany’s Manager-Magazin last week.

“Apple executives were impressed with the fact that we abandoned traditional approaches to car making and started afresh. It chimed with the way they do things too,” a senior BMW source said.

The carmaker says there are currently no talks with Apple about jointly developing a passenger car and Apple declined to comment. However, one of the sources said exploratory talks between senior managers may be revived at a later stage.

It is too early to say whether this will be a replay of Silicon Valley’s Prometheus moment: The day in 1979 when Apple co-founder Steve Jobs visited Xerox’s Palo Alto Research Center where the first mouse-driven graphical user interface and bit-mapped graphics were created, and walked out with crucial ideas to launch the Macintosh computer five years later.

BMW has realized next-generation vehicles cannot be built without more input from telecoms and software experts, and Apple has been studying how to make a self-driving electric car as it seeks new market opportunities beyond phones.

STAFF CHANGES

Since the visit, there has been a reshuffle at the top of BMW, with Harald Krueger, appointed BMW Chief Executive in May, in favor of establishing his own team and his plans for BMW by year end, before engaging in new projects, a person familiar with his thinking told Reuters.

A further complication was the departure of BMW’s board member for development Herbert Diess, who played a leading role in initial discussions with Apple. He defected to Volkswagen (VOWG_p.DE) in December.

Diess, who declined to comment for this piece, oversaw the development of BMW’s “i” vehicles which are built using light weight carbon fiber, using a radical approach to design and manufacturing.

Car technology has become a prime area of interest for Silicon Valley companies ranging from Google Inc (GOOGL.O), which has built a prototype self-driving car, to electric car-maker Tesla Motors Inc (TSLA.O).

Diess has said the German auto industry needs to undergo radical change because consumers are demanding more intelligent cars and anti-pollution rules mean the next generation vehicles will increasingly be low emission electric and hybrid variants.

In 2030, only two generations of new cars away in auto manufacturing time scales, only a third of vehicles will be powered by a conventional combustion engine alone, experts predict.

“It means that in two cycles we will shut down two thirds of our engine manufacturing,” Diess told a panel discussion in July last year, adding that the value chain for new electric cars is already shifting, with vehicle batteries made mainly in Asia.

“The second part is that the car will become intelligent, part of the Internet,” Diess continued. “And the strong players in this area are in the United States, in the software development area. We will surely need to find alliances in this field.”

Germany has two years to prove that it can hold its own against new entrants when it comes to shaping the future of luxury vehicles, Diess said.

THEM AND US

Carmakers including BMW have already developed next generation self-driving cars, vehicles which need permanent software updates in the form of high-definition maps allowing a car to recalculate a route if it learns about an accident ahead. The technology is moving ahead faster than the legal and regulatory rules which would allow large-scale commercial availability.

Earlier this year, BMW’s new RD chief Klaus Froehlich said his company and Apple had much in common, including a focus on premium branding, an emphasis on evolving products and a sense of aesthetically pleasing design.

Asked, in general terms, whether a deeper collaboration beyond integration of products like the iPhone would make sense, Froehlich initially said BMW would not consider any deal that forces it to open up its core know-how to outsiders.

“We do not collaborate to open our eco systems but we find ways, because we respect each other,” Froehlich told Reuters.

BMW will keep in mind the needs of the customer, and what the company’s core strengths are, when it considers the merits of entering any strategic collaboration, Froehlich added.

Peter Schwarzenbauer, BMW’s management board member in charge of the Mini brand as well as digital services declined to comment on possible talks with Apple in an interview earlier this year.

But he said: “Two worlds are colliding here. Our world, focused on hardware and our experience in making complex products, and the world of information technology which is intruding more and more into our life.”

The winners will be those companies that understand how to build intelligent hardware, he said, adding it made sense for carmakers and tech firms to cooperate more closely.

“We need to get away from the idea that it will be either us or them … We cannot offer clients the perfect experience without help from one of these technology companies,” Schwarzenbauer said. That dialogue is well underway, he stressed.

With $202.8 billion in cash, Apple has the resources to enter the automotive market on its own, said Eric Noble, president of the Car Lab, a consulting firm in Orange, Calif.

The tech giant would have an edge on the dashboard, its CarPlay infotainment system connecting iPhones to cars, but would be at square one with the rest of the car, Noble said.

If Apple decided to sell a car it could make sense to find a partner to help with industrial scale production, retail and repair, since demand for such a vehicle could be high.

There are no estimates for potential Apple car sales but the brand and its products command a loyal following. So if only 1 percent of Apple’s annual iPhone customers decided to order a car, it would need to make 1.69 million vehicles.

That’s more than the 434,311 vehicles Jaguar and Land Rover produced last year. Even BMW Group, which made just over 2 million cars last year, would struggle to free up capacity.

(Additional reporting by Eric Auchard; editing by Philippa Fletcher)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/2ja_gapS7x0/story01.htm

Uber, driver attorneys maneuver toward crucial hearing


SAN FRANCISCO Uber Technologies Inc is jostling with drivers suing for reimbursement of their expenses in advance of an important hearing next week in the fight over whether drivers are independent contractors or employees entitled to benefits.

Three drivers sued Uber in a federal court in San Francisco, contending they are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.

If allowed to proceed as a class action, the 2013 lawsuit could cover more than 160,000 California drivers and give plaintiffs leverage to negotiate a settlement.

Now, both sides are trying to demonstrate to U.S. District Judge Edward Chen that they command the support of drivers in the run-up to a hearing on class certification next week. In court filings, Uber cited written statements from more than 400 drivers supporting the company, with some arguing they prefer the flexibility of Uber’s current model.

That prompted attorneys for the three plaintiffs to call some of the drivers cited by Uber, according to court filings. Some of them said Uber did not tell them they could obtain mileage reimbursement should the case succeed.

“I would like to have my expenses reimbursed should I be entitled to obtain them under the law,” driver Daniel Beltran said in a sworn statement filed in court.

Uber fired back late on Thursday, saying it did not mislead anyone.

“Uber and its counsel were careful to ensure that all drivers with whom they spoke were well informed of the reasons for the conversation and the fact that it was completely voluntary,” the company said in a court filing.

One of the fastest-growing sharing-economy companies, Uber operates in 57 countries, with an estimated value of more than $40 billion.

The results of Uber’s legal battle could reshape the sharing economy, as companies say the contractor model allows for flexibility that many see as important to their success. An ultimate finding that drivers are employees could raise Uber’s costs beyond the lawsuits’ scope and force it to pay Social Security, workers’ compensation, and unemployment insurance.

In June, a California labor commissioner ruled that an Uber driver was an employee, not a contractor.

The hearing on class certification is scheduled for Thursday. The case in U.S. District Court, Northern District of California is Douglas O’Connor et al vs. Uber Technologies Inc, 13-3826.

(Editing by Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/cCBPcwb6zfY/story01.htm

U.S. wage growth brakes in second-quarter; consumer sentiment slips


WASHINGTON U.S. labor costs in the second quarter recorded their smallest increase in 33 years as workers earned less in commissions and bonuses, in what appeared to be a temporary wage growth setback against the backdrop of diminishing labor market slack.

The surprisingly smaller rise reported by the Labor Department on Friday did little to temper expectations that the Federal Reserve is set to raise interest rates later this year. The job market is fast approaching full employment.

“Labor market fundamentals are improving, job openings are at record highs, and slack on a steady downtrend. This is precisely how the Fed will interpret this report, even if the numbers here are atrocious,” said Eric Green, chief economist at TD Securities in New York.

The Employment Cost Index, the broadest measure of labor costs, edged up 0.2 percent in the second quarter, the Labor Department said. That was the smallest gain since the series started in the second quarter of 1982 and followed a 0.7 percent rise in the first quarter.

The weakness in compensation was concentrated in sales, information and wholesale trade, occupations where workers are likely to receive incentive pay. Commissions and bonuses helped lift worker compensation at the start of the year.

Excluding commissions, compensation was up 0.6 percent in both the first and second quarters, according to TD Securities.

Economists had forecast the employment cost index, widely viewed by policymakers and economists as one of the better measures of labor market slack, rising 0.6 percent in the second quarter.

At 5.3 percent, the unemployment rate is close to the 5.0 percent to 5.2 percent range that most Fed officials consider consistent with full employment.

That tightening of the labor market, which is expected to eventually translate into faster wage growth, has helped to hold consumer sentiment at lofty levels over the past eight months.

SENTIMENT STILL HIGH

In a separate report, the University of Michigan’s consumer sentiment index slipped to 93.1 in July from 96.1 in June. Still, the index was up 13.8 percent compared to July of last year.

Households expected their incomes to rise over the next two years, in sharp contrast with another confidence survey published earlier this week that had suggested a deterioration in consumers’ perceptions of the labor market.

“On balance, the Michigan survey suggests that consumer sentiment remains broadly stable,” said Jesse Hurwitz, an economist at Barclays in New York.

Stocks on Wall Street were marginally higher, while the dollar fell against a basket of currencies. Prices for longer-dated U.S. Treasury debt rose.

In the second quarter, wages and salaries, which account for 70 percent of employment costs, rose 0.2 percent. That was also the smallest increase on record and followed a 0.7 percent increase in the first quarter.

Private sector compensation failed to rise for the first time on record. Compensation in the services sector nudged up 0.1 percent in the second quarter after rising 0.6 percent in the prior period.

Compensation in the goods producing sector rose a solid 0.7 percent after increasing 0.5 percent in the first quarter.

“If we took this as a sign of things to come in the labor market, we might have to rethink the timing and pace of Fed rate hikes. However, this report seems to be out of tune with other indicators and anecdotal evidence,” said John Ryding, chief economist at RDQ Economics in New York. 

In the 12 months through June, labor costs rose 2.0 percent, the smallest 12-month increase since last year and a further slip below the 3 percent threshold that economists say is needed to bring inflation closer to the Fed’s 2 percent medium-term target.

Benefits rose 0.1 percent in the second quarter, but economists said that was mostly because of changes to the definition of retirement benefits.

A third report from MNI Chicago showed factory activity in the Midwest jumped to a six-month high in July. The Chicago Business Barometer rose to 54.7, the first gain since April, from June’s reading of 49.4. A reading above 50 indicates expansion in the region’s manufacturing sector.

Both production and new orders expanded at the fastest pace since the beginning of the year. A special survey question on wage growth showed that 40 percent of respondents said wages had grown by 1 percent to 2 percent over the past year.

About 19 percent of respondents reported wages were up 3 percent to 4 percent and nearly a quarter said that wage growth was unchanged over the year.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bDg4Nvt1Wt8/story01.htm

U.S. employment costs post smallest gain on record in second-quarter


WASHINGTON U.S. labor costs in the second quarter recorded their smallest increase in 33 years amid tepid gains in the private sector, but it likely was a temporary setback against the backdrop of diminishing labor market slack.

The unexpectedly smaller rise reported by the Labor Department on Friday will probably not dampen speculation that the Federal Reserve is set to raise interest rates later this year. The U.S. labor market is fast approaching full employment.

The Employment Cost Index, the broadest measure of labor costs, edged up 0.2 percent, the Labor Department said. That was the smallest gain since the series started in the second quarter of 1982 and followed a 0.7 percent rise in the first quarter.

“This data has periodically proved to be very lumpy and the sharp deceleration is inconsistent with other measures of wage inflation that are trending higher, not falling off a cliff,” said Eric Green, chief economist at TD Securities in New York.

Economists polled by Reuters had forecast the employment cost index, which is widely viewed by policymakers and economists as one of the better measures of labor market slack, rising 0.6 percent in the second quarter.

U.S. stock futures rose slightly after the data, while prices for U.S. Treasuries traded higher. The dollar fell against a basket of currencies.

The deceleration in labor costs likely does not suggest a material slowing in wage growth, as commissions inflated worker compensation at the start of the year. Labor market slack has diminished significantly over the last few years, which is expected to start putting upward pressure on wages.

“This is precisely how the Fed will interpret this report, even if the numbers here are atrocious. The broader trends are still unquestionably favorable,” Green said.

At 5.3 percent, the unemployment rate is close to the 5.0 percent to 5.2 percent range that most Fed officials consider consistent with full employment. The ECI is also considered a better predictor of core inflation.

Wages and salaries, which account for 70 percent of employment costs, rose 0.2 percent in the second quarter, also the smallest increase on record. They had increased 0.7 percent in the first quarter.

Private sector wages and salaries were up 0.2 percent after gaining 0.7 percent in the prior quarter. Overall private sector compensation failed to rise for the first time on record.

Compensation in the services sector nudged up 0.1 percent in the second quarter after rising 0.6 percent in the prior period. Compensation in the goods producing sector rose a solid 0.7 percent after increasing 0.5 percent in the first quarter.

In the 12 months through June, labor costs rose 2.0 percent, the smallest 12-month increase since last year and further below the 3 percent threshold that economists say is needed to bring inflation closer to the Fed’s 2 percent medium-term target.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bDg4Nvt1Wt8/story01.htm

UPS bolsters full-truckload business with $1.8 billion deal


United Parcel Service Inc (UPS.N) said it would buy Coyote Logistics from private equity firm Warburg Pincus for $1.8 billion to expand its full-truckload services, the latest deal in a rapidly consolidating logistics industry.

Coyote Logistics connects customers to its network of more than 35,000 trucking operators in North America and caters to the food and beverage, consumer goods, paper and packaging, industrial as well as retail markets.

Brokers such as Coyote Logistics and XPO Logistics Inc (XPO.N) have reported rapid revenue growth in the past few quarters as the demand for trucks jumped due to widespread bottlenecks on rail networks.

“This deal shouldn’t move the needle at UPS, but could support shares of smaller brokers near-term by driving further consolidation speculation,” Susquehanna Financial Group analyst Bascome Majors wrote in a note on July 22, when Bloomberg reported of a possible UPS-Coyote Logistics deal.

The U.S. freight market is estimated to be worth $300 billion, with full-truckload shipping accounting for just over half of that, according to logistics company G-Force Shipping.

Third-party logistics providers have recently been snapped up in a series of deals, including XPO Logistics’ purchase of France-based Norbert Dentressangle SA and Goldman Sachs’ (GS.N) acquisition of Neovia Logistics LLC.

PricewaterhouseCoopers said in a recent report it was optimistic about the MA outlook for the U.S. transportation and logistics industry this year.

“The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments,” UPS Chief Executive David Abney said.

UPS, whose full-truckload business is smaller than its less-than-truckload services, said on Friday it has worked with Coyote Logistics in the past to add capacity during peak holiday shipping seasons.

Chicago-based Coyote Logistics, which reported revenue of $2.1 billion last year, is the sixth-largest U.S. truckload services provider, according to research firm Armstrong Associates Inc.

C.H. Robinson Worldwide Inc (CHRW.O) is the largest, followed by XPO Logistics.

UPS said it expects the deal to close within 30 days and add to its earnings in 2016.

The company’s shares rose 1.2 percent to $102.63 in morning trading on Friday.

BofA Merrill Lynch and UBS were financial advisers to UPS, while Goldman Sachs Co, Credit Suisse, Morgan Stanley and Wells Fargo Securities advised Coyote.

(Editing by Saumyadeb Chakrabarty and Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/n8__GCyPs4U/story01.htm

Tumbling oil prices slam profit at Exxon Mobil, Chevron


Weak oil prices CLc1 shriveled quarterly profit at Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N), compelling both companies to rethink operations and plan for what many expect to be a sustained period of cheap crude.

Earnings at Exxon and Chevron, two of the world’s largest oil producers, also missed analysts’ expectations, adding to concerns that perhaps executives had not acted quickly enough to mitigate the impact of an over-50-percent drop in oil prices since last summer.

The results also highlighted how smaller and more nimble U.S. shale oil companies had slashed costs faster and more aggressively than global majors. Some shale producers have cut back drilling by 60 percent or more.

Exxon’s profit fell by more than half, with the biggest drop in its exploration and production business, where earnings slumped by nearly $6 billion

Chevron’s profit plunged 90 percent, a starker drop and one exacerbated by a $2.22 billion loss in its exploration and production division.

Though production grew at both companies, they missed the estimates of many analysts who had expected the energy giants to pump more.

Shares of both fell about 4.6 percent in morning trading.

Still, the two companies benefited from their refining divisions, which make gasoline and other fuels.

Refining units tend to be far more profitable when oil prices are low, providing Chevron and other integrated energy companies with an internal hedge during times when core operations, such as oil production, are weighed down by weak prices.

Both companies stressed their ability to weather the price doldrums and emerge stronger.

Chevron’s Chief Executive John Watson, for instance, bluntly described the results as “weak.” He laid off 2 percent of its staff earlier this week.

“I think in general the industry is putting a sharper pencil to cost cutting,” said Brian Youngberg, senior oil company analyst at Edward Jones in St Louis. “I think they are realizing the days of $100 a barrel (oil) are over.”

Youngberg added that Exxon’s U.S. operations were particularly weak, but that it was good to see the company was finally improving its oil and gas production.

(Reporting by Ernest Scheyder in Williston, N.D., and Anna Driver in Houston; Editing by Terry Wade and Bernadette Baum)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/dut4kNVKwK8/story01.htm