Morning Market Roundup: U.S. Airways Faring Better Than Most, EU vs. Microsoft, Ford Shutters Belgian Plant
Here’s what’s important in the business world this morning:
U.S. Airways: U.S. Airways made its best profit ever for the 3-month stretch that covers much of the peak summer vacation season.
Net income for the third quarter totaled $245 million, or $1.24 per share, compared with $76 million, or 41 cents per share, a year earlier, the airline said Wednesday.
The results are especially important to U.S. Airways Group Inc. as it pursues a merger with American Airlines. Tempe, Ariz.-based U.S. Airways, the nation’s fifth-biggest airline, is trying to impress American’s creditors that a combined company would be more successful than American can become on its own.
Before gains such as the sale of airport landing slots, U.S. Airways would have earned $192 million, or 98 cents per share, in the third quarter. Analysts were expecting 92 cents per share excluding one-time items.
Revenue rose 3 percent to $3.53 billion but fell short of analysts’ expectations of $3.55 billion.
Ford: Ford Motor Co. will close a car plant in eastern Belgium – one of its main European factories – by the end of 2014, a move that will result in 4,500 direct job losses and 5,000 more among subcontractors.
Exactly half a century after construction on the Genk plant started, Ford told a management council there that production was winding down since slumping European sales has forced a restructuring of its plants.
Ford has been under pressure in Europe due to the region’s dwindling demand for its models and the overall slide of car sales on the continent due to the debt crisis. The company expects to lose more than $1 billion this year in Europe, where it gets a quarter of its sales. Analysts say Ford has more factory capacity than it needs.
The regional authorities in northern Belgium’s Flanders are already looking how to recover money from the €57 million it committed in 2010 to keep Ford rooted there for years to come.
The announcement came barely a month after Ford had given reassurances about production at the Genk plant, Lamers said.
EU & Microsoft: The European Union’s executive arm formally accused Microsoft on Wednesday of failing to comply with a binding agreement to give customers a choice among Internet browsers.
In 2009, the European Commission said it suspected Microsoft of using its dominant market position to foist its Internet Explorer browser on users. In negotiations, Microsoft agreed to create a screen where users could choose among competitors’ browsers. The Commission accepted that concession and made the creation of a “browser choice screen” legally binding.
But in July, the Commission said the screen had not been displayed on many computers between February 2009 and July 2012, and millions of users may have been affected during that period. At the time, Microsoft said that a technical error was responsible.
On Wednesday, the company apologized for the error and said it was working to make sure it didn’t happen again,
Microsoft will now be given four weeks to respond to the formal complaint and can seek an oral hearing. Once it has assessed Microsoft’s defense, the Commission will rule.
The company could face a fine of up to 10 percent of its annual revenue if found in breach of antitrust law.
U.S. Futures: Stock futures are rising ahead of the latest U.S. housing data and on a report from China that could signal a recovery for the manufacturing sector of the world’s second largest economy.
Dow Jones industrial futures are up 43 points to 13,084. The broader S&P futures have gained 6 points to 1,412.80. Nasdaq futures are up 10.75 points to 2,671.25.
A preliminary version of HSBC’s monthly purchasing managers’ index for China rose to a three-month high. The numbers still point to a contraction, but they’re an improvement from numbers last month. A report last week suggested an uptick in retail sales and investment, too.
The U.S. Commerce Department posts the latest data on new home sales at 10 a.m. Eastern and economists expect to see more evidence of a steadily improving market.
The Associated Press contributed to this report.
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voting-for-romney
Posted on October 24, 2012 at 1:49pmJust who was hiding alternative browsers from Microsoft consumers? Microsoft, a private company, is obligated to seek out and obtain stable operating system code from developers it can not vouch for, and integrate it into their operating system, and be expected to keep the operating system secure? That’s like demanding a McDonalds has to make sure they have some menu items and cooks from Burger King, in their restaurant?
That’s like demanding for every six pack of Budweiser, we have to have one can or bottle of Miller?
Meanwhile what is the EU doing about “protecting consumers” from “free” linux operating systems that turn working computers into bricks? Is the EU going to demand that developers of linux software, are not allowed to install and operate that software, unless it can warranty it will not void the warranties of hardware manufacturers
I look at the legal abandonment of Microsoft, and say to myself, why should I develop an operating system, once you start making money, you just become a target of others? Socialism is out of control in this world?
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Cavallo
Posted on October 24, 2012 at 10:44amWhy do Europeans need jobs? They have welfare. Those Ford resources could be better allocated back in the United States where most of us still want to work. It’ll also save Ford the confiscatory European tax rates if it shutters more plants there.
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EqualJustice
Posted on October 24, 2012 at 10:11amDon’t see this story BUT here’s the reason BO did not want his interview released?
“Now, obviously, if somebody believes that the government has been the problem and will remain the problem, and if we just strip down government to defense spending and Social Security and some watered-down version of Medicare and Medicaid, and we shouldn’t be doing anything else, then obviously Mitt Romney is the candidate. There’s no indication, based on either historical evidence or what’s happening around the world, that that’s the recipe for long-term sustainable economic growth.”
http://www.desmoinesregister.com/article/20121024/NEWS09/121024003
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JRook
Posted on October 24, 2012 at 10:08ambeckett, where are the references to a failed strategy on the part of Ford, given the plant closure? You know like how you bash the GMs and Chrysler’s assistance as being a failed policy every time there is any negative news. So was Reagan wrong when he guaranteed loans for Chrysler, with no upside? Oh and he guaranteed loans for Brazil also when they defaulted.
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