AP Sources: Parts problem hurts Ford Focus sales
DETROIT (AP) _ Ford can't make enough Focus cars to keep up with rising demand because of equipment problems that have caused a shortage of dashboards, two people familiar with the situation told The Associated Press.
Machinery that makes the skin that covers dashboards at a Ford parts factory outside Detroit works intermittently. That is forcing the company to take the unusual and costly step of flying in parts from Europe to keep its assembly lines moving, the people said. Despite those efforts, the Focus plant near Detroit can't run at full speed, they said.
The problem comes at a time when high gas prices and shortages of Japanese small cars have driven up demand for the Focus. Dealers say they're having trouble getting the newly redesigned compacts, and they've been forced to put customers on waiting lists.
The people, who didn't want to be identified because they're not authorized to speak about the matter, said Ford is working to fix the equipment problem at the parts plant in Saline, Mich., but so far the company hasn't found a solution.
Ford spokesman Todd Nissen said company policy is not to comment on internal workings at its plants. But he said the Saline factory continues to make dashboards for the Focus.
Applications for unemployment aid drop below 400,000
WASHINGTON (AP) _ The number of people seeking unemployment benefits dropped last week to the lowest level since early April, a sign the job market may be healing after a recent slump.
The Labor Department said Thursday that weekly applications fell 24,000 to a seasonally adjusted 398,000. That's the first time applications have fallen below 400,000 in 16 weeks.
The four-week average, a less volatile measure, dropped to 413,750, the lowest since the week of April 23.
Contracts to buy homes rose in June for second month
WASHINGTON (AP) _ The number of people who signed contracts to buy homes rose for a second month in June. But the gain was not enough to signal a rebound in the weak housing market.
The National Association of Realtors reported Wednesday that its index of sales agreements for previously occupied homes rose 2.4 percent in June to a reading of 90.9. A reading of 100 is considered healthy by economists. The last time the index reached that level was in April 2010, the final month when buyers could qualify for a federal tax credit.
Contract signings are typically a reliable indicator of where the housing market is headed. That's because there's usually a one- to two-month lag between a sales contract and a completed deal.
But the Realtors group says a growing number of buyers have canceled contracts ahead of closings after appraisals showed the homes were worth less than they bid. A sale isn't final until a mortgage is closed.
Big Oil reaps big profit in second quarter as fuel price soar
NEW YORK (AP) _ Big Oil continued to make big money in the second quarter.
Industry giants Exxon Mobil and Royal Dutch Shell on Thursday reported a surge in earnings, helped by higher prices for oil, gasoline and other fuels. Even BP, still paying for the Gulf oil spill, made more than $5 billion in the quarter.
The windfall drew jeers from environmental groups that oppose tax subsidies for the industry. They said it shows the industry doesn't need extra help from the government, especially at a time when lawmakers need to chop billions of dollars from the budget.
President Obama said in April that he wanted to cut roughly $4 billion in government subsidies for oil companies. The industry argues that doing so will discourage oil companies from developing fields in the U.S.
Argus Research analyst Phil Weiss noted that oil profits appear huge in comparison to almost any other industry, but they're relatively tame when considering how expensive it is to extract oil from the ground. Exxon, for example, earned $10.7 billion after taking in a whopping $125.5 billion from April to June. That's a profit margin of less than 10 percent, much lower than margins for pharmaceutical, technology or service companies, Weiss said.
Starbucks third-quarter net income up 34 percent
SEATTLE (AP) _ Starbucks Corp. says stronger sales helped drive its third-quarter net income up 34 percent to beat expectations.
The coffee giant said Thursday after the markets closed that it drew more customers around the globe and those customers spent more, despite the continued difficult economy.
Starbucks, based in Seattle, said it earned $279.1 million, or 36 cents per share, for the quarter that ended July 3. That's up from $207.9 million, or 27 cents per share, earned in the same quarter last year.
Revenue rose 12 percent to $2.93 billion.
Analysts on average were expecting earnings of 34 cents per share on revenue of $2.83 billion, according to FactSet.
DuPont second-quarter earnings rise, raises year view
NEW YORK (AP) _ DuPont Co. said Thursday its second-quarter earnings rose 5 percent as the impact of surging revenue was partly offset by acquisition costs. The chemical maker also raised its outlook for the year.
DuPont attributed its results to strong sales in its agriculture, performance chemicals and safety and protection units, as well as benefits from its acquisition of Danisco, a Danish food additives maker.
The Wilmington, Del., company said its net income rose to $1.22 billion, or $1.29 per share, in the three months ended June 30. That's up from $1.16 billion, or $1.26 per share, a year ago.
Revenue rose 19 percent to $10.26 billion from $8.62 billion a year ago. DuPont said most of that jump _ 11 percent _ can be attributed to higher prices for its products. Two percent was attributable to higher sales volume, while currency benefits and product shifts also drove revenue.
Analysts polled by FactSet expected earnings of $1.34 per share on revenue of $9.83 billion.
Colgate profit up but costs still pressure margins
NEW YORK (AP) _ Colgate-Palmolive Co. said Thursday that higher revenue in Latin America fueled its second-quarter earnings, underscoring how American companies are increasingly relying on foreign markets as recession-weary U.S. customers get tapped out.
The New York company, best known for its toothpaste and dish soap, also noted that it had raised prices by 6.5 percent in Latin America, where customers are more willing to absorb the extra expense. It lowered prices in North America by 4.5 percent by offering discounts, which also helped it head off competitors who are scrapping "for pieces of a smaller pie," said CEO Ian Cook.
However, Cook also said he expects U.S. prices to increase in the second half of this year. The company hopes that focusing on higher-end products, such as toothpaste for sensitive teeth, and more advertising will entice U.S. customers to keep buying.
J&J cuts maximum Tylenol dose to prevent overdoses
TRENTON, N.J. (AP) _ Johnson & Johnson said Thursday that it's reducing the maximum daily dose of its Extra Strength Tylenol pain reliever to lower risk of accidental overdose from acetaminophen, its active ingredient and the top cause of liver failure.
The company's McNeil Consumer Healthcare Division said the change affects Extra Strength Tylenol sold in the U.S. _ one of many products in short supply in stores due to a string of recalls.
Starting sometime this fall, labels on Extra Strength Tylenol packages will now list the maximum daily dose as six pills, or a total of 3,000 milligrams, down from eight pills a day, or 4,000 milligrams. Beginning next year, McNeil will also reduce the maximum daily dose for its Regular Strength Tylenol and other adult pain relievers containing acetaminophen, the most widely used pain killer in the country.
Besides Tylenol, acetaminophen is the active ingredient in the prescription painkillers Percocet and Vicodin and in some nonprescription pain relievers, including NyQuil and some Sudafed products. It's found in thousands of medicines taken for headaches, fever, sore throats and chronic pain.
But people taking multiple medicines at once don't always realize how much acetaminophen they are ingesting, partly because prescription drug labels often list it under the abbreviation "APAP."
By The Associated Press(equals)
The Dow Jones industrial average fell 62.44 points, or 0.5 percent, to close at 12,240.11. The Standard & Poor's 500 fell 4.22, or 0.3 percent, to close at 1,300.67. The S&P 500 has fallen for the past four days. The Nasdaq composite index edged up 1.46, or 0.1 percent, to 2,766.25.
On the New York Mercantile Exchange, benchmark West Texas Intermediate crude rose 4 cents to settle at $97.44 per barrel. In London, Brent crude gave up 7 cents to settle at $117.36 per barrel.
Natural gas prices fell 7.4 cents to settle at $4.244 per 1,000 cubic feet. In other Nymex contracts for August, heating oil rose 2 cents to settle at $3.1144 a gallon and gasoline lost 1.93 cents to settle at $3.0638 a gallon.