Airlines whipsawed by costly fuel, Japan disaster
DALLAS (AP) _ Already struggling with high fuel prices, the big U.S. airlines now face a drop in demand for flights to Japan, a lucrative route and gateway for travel to Asia.
The airlines' response: They're raising fares and eliminating unprofitable flights.
Delta Air Lines Inc. said Tuesday that it will reduce flying to Japan by up to 20 percent through May because of falling demand as the country recovers from the March 11 earthquake and tsunami. Delta said the cuts will cost it $250 million to $400 million in lost profit.
Delta will also reduce flying across the Atlantic and within the United States in the second half of this year. It won't grow as much as planned in Latin America and the Pacific.
American Airlines said Tuesday that it suffered "a modest decline" in revenue from the disruption of travel to Japan and bad weather at home. Still, American plans to push ahead with its joint venture with Japan Airlines next month.
United and Continental announced Monday that they too will slow their plans for adding international flights and make deeper cuts in the U.S.
Fed says 2010 payment to government sets record
WASHINGTON (AP) _ The Federal Reserve is paying a record $79.3 billion to the U.S. government after the central bank earned a record amount of money last year from programs aimed at boosting the economy.
The Fed says its payment to the Treasury Department for 2010 is 67 percent higher than $47.4 billion it paid in 2009, the previous record.
The central bank earned a record $81.7 billion last year from its massive holdings of securities, which were purchased to help stabilize the financial system and pull the economy out of the recession. A portion of those earnings go toward funding the Fed, which receives no appropriations from Congress. Any money left over is turned over to the Treasury Department.
Leonard Green firm considering offer for BJ's
NEW YORK (AP) _ Investment firm Leonard Green & Partners LP said in a filing Tuesday with the Securities and Exchange Commission that it is considering buying warehouse club operator BJ's Wholesale Club.
Leonard Green, which holds 9.3 percent of BJ's outstanding shares, said it is examining confidential information from BJ's.
BJ's, based in Westborough, Mass., operates 190 warehouse stores in 15 states from Maine to Florida. It reported this month that its fiscal fourth-quarter net income fell 81 percent from a year earlier as its expenses rose. But its adjusted profit beat expectations.
Walgreen fiscal 2Q profit climbs but shares tumble
INDIANAPOLIS (AP) _ Walgreen Co. said Tuesday that its fiscal second-quarter earnings climbed 10 percent, but company shares tumbled after results were released and analysts said they expected more from the largest U.S. drugstore operator.
The Deerfield, Ill., company said its gross profit margin _ which measures gross profit over net sales _ stayed flat at 28.8 percent after expanding the past few quarters.
Walgreen also met Wall Street earnings expectations when many analysts thought they would beat the consensus, said another analyst, Jeff Jonas of Gabelli & Co.
Shares dropped 6.6 percent, or $2.76, to close at $39.21 Tuesday.
Discover posts 1Q profit as payment habits improve
NEW YORK (AP) _ Discover Financial Services on Tuesday said higher card use and fewer unpaid customer balances helped it post better-than-expected first-quarter profit.
The Riverwoods, Ill.-based credit card company earned $459 million, or 84 cents per share, for the three months ended Feb. 28. That reversed a year-ago loss of $122 million, or 22 cents per share.
Analysts, on average, were expecting profit of 60 cents per share, according to data provided by FactSet.
Tween Brands to limit toxic cadmium in its jewelry
LOS ANGELES (AP) _ In the first settlement of its kind, national jewelry seller Tween Brands Inc. will effectively eliminate the toxic metal cadmium from the bracelets, necklaces and other items it sells.
The agreement covers jewelry sold in California, but given the size of the state's market, it becomes company policy nationally. It covers jewelry intended for children, teens and adults, expanding the age range from the preteen girls who had been the focus of concern after high levels of cadmium in jewelry surfaced over the past year.
Sprint CEO: 'Concerned' about AT&T-T-Mobile deal
NEW YORK (AP) _ Sprint Nextel Corp. CEO Dan Hesse said Tuesday that he's concerned that AT&T Inc.'s deal to buy T-Mobile USA would hurt his company and the industry, as the biggest two players strengthen their dominance.
The $39 billion deal was announced Sunday, but is expected to take more than a year to close, after scrutiny by regulators.
AT&T and Verizon Wireless already have two-thirds of U.S. wireless subscribers, and would have three-quarters if the deal goes through.
Sprint, the No. 3 carrier, has been struggling for years due to the troubled acquisition of Nextel. Last year, its subscriber numbers started improving, but it still has a hard time luring high-paying subscribers from AT&T and Verizon, both of which now sell the popular iPhone. T-Mobile has the same problem.
Portugal braces for govt collapse over debt vote
LISBON, Portugal (AP) _ Portugal's government is on the verge of collapse after opposition parties withdrew their support for another round of austerity policies aimed at averting a financial bailout.
The expected defeat of the minority government's latest spending plans in a parliamentary vote Wednesday will likely force its resignation and could stall national and European efforts to deal with the continent's protracted debt crisis.
The vote comes on the eve of a two-day European Union summit where policymakers are hoping to take new steps to restore investor faith in the fiscal soundness of the 17-nation eurozone, including Portugal.
Former Pfizer CEO saw 2010 compensation swell
INDIANAPOLIS (AP) _ Former Pfizer Inc. Chairman and CEO Jeffrey B. Kindler may have left the world's largest drugmaker abruptly last December, but he didn't leave empty-handed thanks to a compensation package valued almost $22 million.
Kindler received a 60 percent increase last year over his 2009 compensation, according to an Associated Press analysis of a Pfizer regulatory filing Tuesday.
The New York-based drugmaker gave Kindler a salary and performance-related bonus totaling $4.9 million, a $4.5 million severance payment and more than $12 million in stock and option awards. The company also will continue his health coverage for 12 months "at active employee rates," the filing said.
By The Associated Press
The Dow Jones industrial average dipped 17.90 points to close at 12,018.63. The broader Standard & Poor's 500 index fell 4.61, or 0.4 percent, to 1,293.77. The Nasdaq composite index fell 8.22, or 0.3 percent, to 2,683.87.
Benchmark West Texas Intermediate for May delivery rose $1.88 to settle at $104.97 per barrel on the New York Mercantile Exchange. In London, Brent crude gained 73 cents to settle at $115.64 per barrel.
In other Nymex trading for April contracts, heating oil added 2.37 cents to settle at $3.0762 per gallon and gasoline gained almost a penny to settle at $3.0045 per gallon.
The April contract for West Texas Intermediate crude climbed $1.67 to settle at $104 per barrel on its final day of trading.