Business Briefs – August 3, 2017

Services Firms Register Slowest Growth in Nearly a Year

WASHINGTON (AP) – U.S. services firms grew last month at the slowest pace since August 2016, a performance consistent with only modest economic growth.

The Institute for Supply Management said Thursday that its services index slipped in July to 53.9 from June’s 57.4. It was the lowest reading since the index registered 51.7 in August 2016. Still, anything above 50 signals growth, and American services companies are on a 91-month winning streak.

Production, new orders, hiring and export orders all grew more slowly in July.

Aetna Trumps 2Q Expectations After Scaling Back ACA Coverage

(AP) – Aetna’s second-quarter profit jumped 52 percent to top expectations, and the nation’s third-largest health insurer raised its 2017 forecast again, this time well beyond analyst projections.

Investors responded by pushing company shares to another all-time high price in Thursday trading.

Aetna added some Medicare customers and grew the health coverage it provides for large employers, but a pullback from the Affordable Care Act’s health insurance exchanges also helped its business improve compared to last year’s quarter.

The insurer’s quarterly earnings jumped to $1.2 billion, from $791 million last year, even though its total revenue slipped and enrollment fell due to pullbacks from the exchanges and the company’s Medicaid business and a pause in a health insurance fee. Health care costs fell 6 percent to $10.58 billion.

Adjusted earnings totaled $3.42 per share. Revenue excluding capital gains came to $15.5 billion.

Avon CEO McCoy Will Leave The Company

LONDON (AP) – Avon’s CEO will leave the company in March as the struggling beauty products maker continues a turnaround campaign.

Sheri McCoy has led the company for five years and sits on the board, but there has been some external pressure from activist investors for a change in leadership.

Avon said Thursday that it has hired an executive search firm to help find McCoy’s successor.

Barrington Capital Group had been pushing for significant action at Avon since 2015, when it sent a letter saying that “significant, immediate changes in leadership and strategic direction are needed.”

Buffett’s Profit Almost Wiped Out On Axalta Deal as Shares Slump

(Bloomberg) – Warren Buffett’s profits from a 2015 investment in Axalta Coating Systems have been fading fast.

Axalta, the maker of paint for autos, plunged nearly 8 percent to close at $29.25 Thursday in New York. Axalta posted a second-quarter net loss of $20.8 million, driven by a writedown of assets in Venezuela. Operating profit of 31 cents a share missed by 8 cents the average estimate of 17 analysts surveyed by Bloomberg.