Business News You Need Today: Aug. 4, 2010
GM, Ford Report Higher Sales: Automakers reported mixed results for July sales, as a softening economy held back consumers from making some big-ticket purchases. But domestic icons General Motors and Ford Motor (F) reported overall sales were higher than a year ago. Sales surged as much as 142% at GM's Cadillac and Buick divisions, while Chevrolet and GMC had more modest gains. Overall, GM reported a 5.4% rise, with Ford advancing 3.1% for the month. Chrysler Group sales moved up 5%. Japanese car makers Toyota Motor (TM) and Honda Motor (HMC) both reported lower sales than July 2009, when the federal government's "cash-for-clunkers" program was just getting underway.
BP's Leaking Well Nearly Plugged: The latest attempt by BP (BP) to seal its broken well in the Gulf of Mexico appears to be working and is being monitored, CNN reported early Wednesday. Known as "static kill," the procedure, which began Tuesday afternoon, involves pumping heavy drilling mud down from above to push oil back into the well reservoir. In a statement, BP said, "The well pressure is now being controlled by the hydrostatic pressure of the drilling mud, the desired outcome of the static kill procedure," CNN reported.
Job Gains, Job Cuts: Payroll-firm Automatic Data Processing (ADP) reported Wednesday that nonfarm private employment rose by 42,000 last month, after adjusting for seasonal anomalies, higher than analyst estimates of a gain of 25,000. The ADP National Employment Report also revised upward previous estimates for June. Employers added 19,000 jobs, the survey said, up from the 13,000 initially reported. A second report, by outplacement firm Challenger, Gray & Christmas, showed employers planned to shed 41,676 workers last month, a 6% increase from June and the third consecutive month of planned cuts. Still, Challenger said, downsizing activity remains at its lowest level since before the 2001 recession. Both surveys come ahead of the federal government's latest Employment Situation Report on Friday.
Intel Reaches Deal With Feds: Intel (INTC) will learn this morning whether the Federal Trade Commission plans to impose stiff restrictions on the world's largest chipmaker. Regulators around the world have been battling Intel for its business practices, which they say hurt consumers. The FTC is due to report the settlement it reached with the California company, which could lead to lower prices for consumers.
Toyota Reverses Quarterly Loss: Toyota Motor (TM) reported Wednesday it swung back to profit in its first fiscal quarter, earning $2.2 billion, as the world's largest automaker benefited from improved global sales. The Japanese company revised its full-year earnings forecast and said it now plans to sell 7.38 million cars and trucks worldwide through next March, up from a previous estimate of 7.29 million vehicles.
Earnings Season: Media company AOL (AOL) recorded a $1.06 billion net loss, or $9.89 a share, in the second quarter, after taking a $1.4 billion accounting charge. The New York-based company also reported continued erosion in advertising revenue and in its subscription dial-up Internet business. AOL, the publisher of this website, reported its quarterly results Wednesday before stock markets opened in New York. Meanwhile, former AOL parent, Time Warner (TWX), reported a 7.2% rise in profits. The media giant earned $562 million, or 49 cents a share, in the three months ending June, topping analyst estimates of 45 cents a share. Other companies due to report earnings today include News Corp. (NWS), Prudential Financial (PRU) and oil rig operator Transocean (RIG).
Borders May Bid For B&N: There appears no end to the layoffs at struggling bookseller Borders Group (BGP), which reportedly recently endured its fourth round of cuts just this year. As DailyFinance's Sarah Weinman reports, Borders' dire straits may prompt Chairman Bennett LeBow to throw a Hail Mary pass by making a bid for rival Barnes & Noble (BKS), which has put its self up for sale.
TV Host In Hot Water: Pity the fool that must endure the wrath of Hell's Kitchen host Gordon Ramsay, known for his volatile temper and tyrannical rants aimed at aspiring chefs. It seems Ramsay himself is subject of scrutiny by New York state tax officials who are demanding $2 million in three tax bills related to his New York restaurant, reports Luxist's Deidre Woollard. Ramsay owes nearly $378,000, according to state records. A Ramsay spokesman confirmed tax money is owed the state, and that the company is looking to resolve the issue.