Chain ends tobacco sales
CVS Caremark Corp will stop selling tobacco products at its 7,600 stores by Oct. 1, the company said on Wednesday, making it the first national drugstore chain in the US to take cigarettes off the shelves. Public health experts hailed the precedent-setting decision by the No. 2 US drugstore as a step that could pressure other retailers to follow suit. With pharmacies taking on a larger role in the US healthcare system with walk-in clinics and services such as managing health plans, many experts say they should no longer offer unhealthy products like tobacco. CVS expects the decision to hurt profits initially, along with a US$2 billion hit to annual sales. However, the company, whose Caremark unit is a pharmacy benefits manager for corporations and the US government’s Medicare program, believes the move will boost its appeal as a healthcare provider.
Mexico’s rating upgraded
Mexico became only the second country in Latin America to earn a coveted “A” grade sovereign rating after Moody’s upgraded it on Wednesday, citing major economic reforms that Mexican President Enrique Pena Nieto has pushed through its congress. Mexican debt rallied and the peso currency also firmed after the upgrade, which should help to lower the country’s borrowing costs. The Moody’s Investors Service decision came after Pena Nieto broke through gridlock in a divided congress to push through Mexico’s most significant economic reforms since the NAFTA trade deal with the US and Canada in the 1990s. Moody’s upgraded Mexico’s sovereign rating to “A3” from “Baa1,” with a stable outlook. Only a few other emerging markets such as Chile, Poland and Malaysia have earned an “A” rating.
Daimler reports strong Q4
Daimler AG, the third-largest maker of luxury vehicles, posted a 45 percent surge in fourth-quarter profit as customers scooped up the new Mercedes-Benz CLA coupe and revamped flagship S-Class sedan. Earnings before interest and taxes from ongoing operations rose to 2.53 billion euros (US$3.42 billion) from 1.74 billion euros a year earlier, the Stuttgart, Germany-based manufacturer said in a statement yesterday. That beat the 2.37 billion-euro average estimate of 15 analysts compiled by Bloomberg. Revenue gained 7.6 percent to 32.1 billion euros. Daimler today forecast a “significant” increase in this year’s operating profit from continuing operations on demand for the new GLA compact sport-utility vehicle and redesigned C-Class sedan, Mercedes’s best-selling model, coming to market later this year. Zetsche has vowed to regain the top spot in luxury-car sales by 2020.
Bank misses estimates
Credit Suisse Group AG, the second-biggest Swiss bank, posted fourth-quarter profit that missed analysts’ estimates after taking legal provisions related to US tax and mortgage matters. Net income was 267 million Swiss francs (US$295 million), the Zurich-based bank said yesterday in a statement. That compared with a SF263 million profit a year ago and a SF398 million average estimate of 12 analysts surveyed by Bloomberg. Credit Suisse set aside SF514 million to cover potential costs related to a Securities and Exchange Commission investigation into whether the bank helped US clients evade taxes, as well as mortgage-related litigation. The bank had already put aside SF295 million in provisions for US tax matters in the third quarter of 2011.