Alcoa reports Q2 losses
Alcoa Inc opened the second-quarter earnings season on Monday with a US$2 million loss. The aluminum maker is the first of what is expected to be a number of companies reporting lower results because of a sluggish global economy. Revenue fell 9 percent to US$5.96 billion, primarily because of an 18 percent drop in aluminum prices from a year ago. On a per share basis, Alcoa broke even. The results included one-time items of US$63 million. Excluding those, Alcoa earned US$61 million, or US$0.06 a share, compared with a net income of US$322 million, or US$0.28 per share, a year ago. Analysts surveyed by FactSet expected Alcoa to earn US$0.05 per share on revenue of US$5.83 billion. Analysts typically exclude one-time items.
M&S sales hit by wet season
Bellwether British retailer Marks & Spencer (M&S) posted its worst underlying quarterly sales performance in three-and-a-half years after the wettest April and June since records began hammered trade in womenswear. Marks & Spencer, which sells clothes, footwear and houseware, as well as upmarket food, said sales at UK stores open more than a year fell 2.8 percent in the 13 weeks to June 30, its fiscal first quarter, in the firm’s worst quarterly drop in sales since the third quarter of the 2008-2009 fiscal year. The outcome compared with analysts’ consensus forecast of a fall of 3 percent, according to a company poll of 12, and a decline of 0.7 percent in the fourth quarter of the previous year when the retailer erred by running out of best-selling women’s knitwear and footwear lines.
US consumer loans rise
US consumers stepped up their borrowing in May, helped by the largest one-month gain in credit card debt in more than four years. However, overall credit card use was still well below where it was just before the Great Recession began. The US Federal Reserve said on Monday that consumer borrowing rose by US$17.1 billion in May from April. The increase drove total borrowing to a seasonally adjusted US$2.57 trillion — just below an all-time high of US$2.58 trillion reached in July 2008, seven months after the recession began. Borrowing has increased steadily over the past two years, but most of the gain has been driven by auto and student loans. The category that measures activity in those loans increased by US$9.1 billion in May to a record US$1.7 trillion. A measure of credit card debt increased by US$8 billion in May, the biggest one-month jump since November 2007, but overall level rose to just US$870 billion.
Pepsi, Theo Mueller team up
Global drinks and snacks giant PepsiCo said on Monday it would enter the fast-growing US yogurt market this month, teaming up with a German dairy company to introduce premium European products. PepsiCo, the US maker of Pepsi-Cola, Frito-Lay chips and Quaker Oats granola bars, announced a joint venture with Theo Mueller Group, the largest privately held dairy business in Germany. The yogurt roll-out marks the first time either company has offered dairy products in the world’s largest economy. The US yogurt market is booming, with brands and types proliferating in store dairy aisles as part of growing consumer demand for natural foods. PepsiCo said the “spoonable” US yogurt market was projected to grow to US$9 billion in 2016, from US$5.7 billion last year.