Questions Grow Over Banks As Profit Warnings Pile Up
PARIS (AP) – Questions are growing over the financial health of banks, particularly in Europe and the U.S., as they face a toxic mix of low economic growth, bad loans and squeezed earnings.
France’s Societe Generale became Thursday the latest bank to issue a confidence-shattering profit warning, which helped trigger a new sell-off in financial stocks. The bank saw its share price stumble 12 percent and major rivals like Deutsche Bank and UniCredit saw losses of nearly 10 percent.
European banks are not the only ones to suffer. Japanese bank Mitsubishi Financial fell 7 percent on Thursday. In the U.S., Morgan Stanley, Citigroup and Bank of America are down more than 30 percent so far this year.
Reynolds American 4q Profit Jumps, but Misses Forecasts
NEW YORK (AP) – Cigarette maker Reynolds American’s fourth-quarter profit shot up 89 percent compared to the final quarter of 2014, when earnings fell due to some one-time costs.
The parent of Camel and Pall Mall cigarette maker R.J. Reynolds said Thursday that it earned $279 million in the three months that ended Dec. 31. That’s up from $148 million a year ago when it booked pension charges and other costs ahead of last year’s closing of its $25-billion takeover of Newport seller Lorillard Inc.
Results adjusted for one-time items totaled 48 cents per share in the most recent quarter, and revenue jumped 43 percent to $3.05 billion, spurred in part by the Lorillard deal.
Applications for U.S. Jobless Aid Fell Sharply Last Week
WASHINGTON (AP) – Fewer Americans applied for unemployment benefits last week in a sign of a stable job market despite the slowing global economy hitting stocks and commodities.
Weekly applications for jobless aid fell 16,000 to a seasonally adjusted 269,000, the Labor Department said Thursday. The four-week average, a less volatile measure, declined slightly to 281,250. The number of people receiving benefits has declined 4.6 percent to 2.2 million from a year ago.
PepsiCo’s Revenue in North America Climbs, Helped by Pricing
NEW YORK (AP) – PepsiCo said revenue for its North American snacks and drinks units rose in the fourth quarter, boosted by pricing.
The maker of Frito-Lay chips and Tropicana juice has been retooling its product lineup and rethinking pricing to fetch more money from shoppers. The strategies include the introduction of new lines of Gatorade and Mountain Dew Dewshine, which comes in glass bottles that people might feel is worth a higher price.
The focus on finding novel ways to extract more money from shoppers comes as major packaged food and beverage makers face slowing growth in saturated markets like the United States. Coca-Cola Co., for instance, has been pushing its mini-cans that are seen as more premium offerings.