Business news briefs: Plunging aluminum prices hit Alcoa's Q2 profits
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Alcoa Inc., the biggest U.S. aluminum producer, kicked off the second-quarter earnings season Monday by reporting a net loss of $2 million, or 0 cents per share, reflecting the sting of slumping aluminum prices. The loss compared to a profit of $322 million, or 28 cents per share, in the second quarter of 2011. Excluding special items, the New York-based company earned $61 million, or 6 cents per share, slightly above analysts' consensus estimate of 5 cents. Analysts had lowered their projections considerably in the last month as aluminum prices continued to fall. Sales were $5.96 billion, higher than Wall Street estimates of $5.81 billion, but down 9 percent from $6.59 billion in the April-June quarter last year. The company reiterated its expectation that overall aluminum demand will grow 7 percent this year, turning a worldwide supply surplus into a deficit. The results were announced after the market closed.
U.K. sporting goods retailer JJB Sports said its sales have been slower than expected since April, with poor weather and poor sales of items connected to the European soccer championships. Sales at stores open at least a year fell 8 percent in the 22 weeks ended July 1, the company said. Dick's Sporting Goods, based in Findlay, announced in April that it had made a strategic investment in the struggling U.K. chain.
NiSource Inc.'s midstream subsidiary has entered into a joint venture with the Houston, Texas-based Hilcorp Energy Co. to construct new gas pipeline and processing facilities in Northeast Ohio and Western Pennsylvania, the companies announced Monday. The first phase, worth about $300 million, is planned for later this year. NiSource also will work with Hilcorp on developing the natural gas liquid potential in the region.
Health insurer WellPoint Inc. will raise its stake in the Medicaid market with its $4.46 billion acquisition of Medicaid coverage provider Amerigroup Corp. WellPoint, the nation's second-largest insurer, said Monday that it will spend $92 per share in cash for Virginia Beach, Va.-based Amerigroup Corp. Medicaid enrollment is expected to expand after 2014 due to the federal health care overhaul. The transaction still needs approval from regulators and Amerigroup stockholders, but it is expected to close in 2013's first quarter.
Americans stepped up their borrowing in May, helped by the largest monthly gain in credit card debt in more than four years. But overall credit card use is still well below where it was just before the Great Recession began. The Federal Reserve says consumer borrowing rose $17.1 billion in May from April. A category that includes credit card debt increased by $8 billion. That brought the level for that measure to $870 billion, below the more than $1 trillion in debt that Americans took on before and shortly after the recession began.
Samsung Electronics Co. won a legal ruling after a U.K. judge said its Galaxy tablets aren't "cool" enough to be confused with Apple Inc.'s iPad. The design for three Galaxy tablets doesn't infringe Apple's registered design, Judge Colin Birss said Monday in London in a court fight between the world's two biggest makers of smartphones. Consumers aren't likely to get the tablet computers mixed up, he said because the Galaxy tablets "do not have the same understated and extreme simplicity which is possessed by the Apple design. ... They are not as cool."
More than 11,000 Isuzu SUVs are being recalled because parts in the rear suspension can rust and break away from the frame. The recall affects Amigos from the 1998 to 2001 model years and Rodeo Sport SUVs sold as 2001 and 2002 models, the National Highway Traffic Safety Administration reported. In rare cases when the rust is so severe that a rust-resistant compound or reinforcing bracket won't work, Isuzu will buy the vehicles back based on the Kelley Blue Book private party sale price.
The Federal Trade Commission said Monday that a company marketing prepaid phone cards agreed to stop misleading claims, pending a trial. The FTC said it tested 169 of DR Phone Communications' cards and found that all of them failed to deliver the number of minutes advertised. In addition, the company, which also does business as Drphonecom.com, allegedly failed to adequately disclose additional fees.
Campbell Soup Co. is looking to court a new generation of consumers with baby carrots, premium juices and refrigerated salad dressings. The Camden, N.J.-based company said Monday that it will buy natural foods maker Bolthouse Farms in a $1.55 billion cash deal from private equity firm Madison Dearborn Partners LLC. Campbell, which already buys carrots from Bakersfield, Calif.-based Bolthouse for its soups and juice concentrates, expects the acquisition to close late this summer.
Paul Tucker, the Bank of England's deputy governor, told U.K. lawmakers on Monday that he had not given any hint to Barclays that it should manipulate reports of its borrowing costs. Barclays has been fined $453 million by U.S. and British agencies for feeding false data into calculations of the London interbank offered rate (LIBOR), a key market index that influences the costs of a wide range of financial instruments, including mortgages. LIBOR is not based on actual transactions, but daily submissions are supposed to reflect each bank's judgment of the rate it would pay if it were borrowing money.
First Published July 10, 2012 12:00 am