Sat, Jan 26, 2013 - Page 15 News List

World Business Quick Take

Agencies

RETAIL

Starbucks profits rise 13%

Starbucks Corp, the world’s largest coffee-shop operator, said profits rose 13 percent in its fiscal first quarter, meeting analysts’ forecasts, as sales increased in the Americas and fell in Europe, the Middle East and Africa. Net income increased to US$432.2 million, or US$0.57 a share, from US$382.1 million, or US$0.50 a share a year earlier, the Seattle-based company said on Thursday in a statement. Analysts estimated US$0.57 cents, the average of 27 estimates compiled by Bloomberg. Chief executive officer Howard Schultz has tried to boost US sales by expanding beyond coffee with the company’s own juice, baked goods and tea. Schultz is also closing stores in Europe as he attempts to turn around the business there. Sales at stores open at least 13 months in the Americas rose 7 percent in the quarter, while dropping 1 percent in Europe, the Middle East and Africa.

UNITED STATES

Fed targets unemployment

Federal Reserve Chairman Ben Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record US$3 trillion as he shows no sign of softening his effort to bring down 7.8 percent unemployment. The Fed is purchasing US$85 billion of securities every month, using the full force of its balance sheet to stoke the economic recovery. The central bank began US$40 billion in monthly purchases of mortgage-backed securities in September last year and added US$45 billion in Treasury securities to that pace this month. The Fed’s total assets climbed by US$48 billion in the past week to US$3.01 trillion as of Wednesday, according to a release from the central bank on Thursday in Washington.

FINANCE

Morgan Stanley cuts costs

Morgan Stanley gave chairman and chief executive officer (CEO) James Gorman a compensation package for last year that is 30 percent less than his 2011 award, excluding a new incentive package, a person familiar with the decision said. Gorman, 54, will get stock options valued at US$2.6 million, according to a filing on Thursday with the US Securities and Exchange Commission. He also will receive a US$2.6 million deferred cash bonus in addition to his US$800,000 salary, said the person, who asked not to be identified because Gorman’s total pay has not been announced. That totals US$6 million, down from US$8.56 million on a comparable basis for 2011. Morgan Stanley cut costs last year by 2 percent as revenues climbed 6.9 percent, excluding charges or gains related to changes in the price of the firm’s own debt. However, return on equity was 5 percent, below Gorman’s goal of 15 percent.

TELECOMS

Nokia to axe dividends

Finnish mobile phone maker Nokia Oyj plans to axe its annual dividend payment for the first time in the company’s recorded history to shore up its cash position against falling sales and buy time for a turnaround. Nokia, which earlier this month announced it had returned to underlying profitability for the first time in a year, said the suspension of the dividend would give it “strategic flexibility.” Nokia said it had paid a dividend every year since 1989, but did not have records for earlier periods in its history, which goes back over 100 years. The company ended the year with net cash of 4.4 billion euros (US$5.88 billion), down 22 percent on a year earlier, but up on the previous quarter and above the market estimate of 3.4 billion, mostly due to Nokia Siemens Networks, its telecoms equipment venture with Siemens.

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