Business Highlights

AP News
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Posted: Apr 28, 2016 5:42 PM

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US economy struggles at start of election year

WASHINGTON (AP) — It was not a great start for the U.S. economy. With consumers and businesses turning cautious, the U.S. struggled to grow in the first three months of a presidential election year that is shining the spotlight on the economy's fitful recovery.

Gross domestic product, the broadest measure of economic health, expanded at a paltry annual rate of 0.5 percent in the January-March quarter, the Commerce Department reported Thursday. That is slower than the fourth quarter's 1.4 percent growth rate and marks the weakest performance in two years.

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Comcast buying DreamWorks Animation for about $3.55B

NEW YORK (AP) — Comcast is buying DreamWorks Animation, the film company behind the "Shrek," ''Madagascar" and "Kung Fu Panda" franchises, for approximately $3.55 billion, strengthening its presence in the important and growing business of children's entertainment.

DreamWorks stockholders will receive $41 for each share they own. That's a 24 percent premium to the company's Wednesday closing price of $32.20. The companies put the deal's value at about $3.8 billion.

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Abbott Labs to spend $19.3 billion to buy St. Jude Medical

Abbott Laboratories will spend $19.3 billion to buy St. Jude Medical Inc. in a cash-stock deal that aims to strengthen the medical device maker's stake in cardiovascular care.

The combined company will offer devices in nearly every area of cardiovascular care, competing directly with industry leaders Medtronic Inc. and Boston Scientific Corp. It noted that the acquisition will blend St. Jude's pacemaker and implantable defibrillator business with Abbott's focus on artery-opening stents and heart repair products.

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Shares of Amazon jump on 1Q earnings beat

SEATTLE (AP) — Amazon.com Inc. on Thursday reported better-than-expected first-quarter results fueled by a 28 percent jump in revenue.

Net income totaled $513 million, or $1.07 per share, compared with a loss in the same period a year earlier. The online retailer's revenue rose to $29.13 billion in the period. Both measures exceeded market expectations.

Amazon said sales of its devices such as the Echo smart speaker and Fire TV stick were strong. Its cloud-based services were another bright spot, with revenue up 64 percent to $2.57 billion.

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UPS 1st-quarter profit rises 10 percent, beating forecasts

DALLAS (AP) — United Parcel Service Inc. said Thursday that first-quarter profit rose 10 percent to $1.13 billion, helped by an increase in both ground shipments and next-day air deliveries in the United States.

The company beat Wall Street forecasts for profit, but revenue was lower than expected.

UPS is often considered a bellwether of the economy both in the U.S. and globally because of the number of shipments it handles between businesses and from businesses to consumers.

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Aetna tops Street 1Q forecasts, hikes 2016 forecast

Aetna's first-quarter earnings slid nearly 7 percent as enrollment dipped, but the nation's third-largest health insurer topped Wall Street expectations and hiked its 2016 profit forecast.

The Hartford, Connecticut, company also said Thursday that it remains on track to close its roughly $35 billion acquisition of Medicare Advantage coverage provider Humana Inc. in the second half of the year. Aetna booked $65.4 million in pretax costs in the first quarter from that pending acquisition and other deals.

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Altria profit up 20 percent on higher cigarette shipments

RICHMOND, Va. (AP) — Altria, the owner of cigarette maker Philip Morris USA, said its first-quarter profit rose about 20 percent as it shipped more cigarettes and other tobacco products.

The company said cigarette shipments, including its biggest brand Marlboro, rose 1.2 percent in the quarter from the same time a year ago. Shipments of its smokeless tobacco products, which include its Copenhagen and Skoal brands, rose 7.8 percent.

The company is in the midst of cutting $300 million of costs by the end of 2017, which includes job cuts.

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Ford's 1Q net income doubles on truck, SUV sales

DEARBORN, Mich. (AP) — Ford Motor Co.'s net income more than doubled to $2.5 billion in the first quarter on strong sales of trucks and SUVs worldwide.

The company's pretax profit of $3.8 billion was an all-time record for any quarter. Worldwide sales rose 10 percent to 1.7 million vehicles in the first quarter. Demand for SUVs, trucks and commercial vans was insatiable in North America, China and Europe, offsetting a 29 percent decline in sales in Brazil and weaker sales in the Middle East and Africa.

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Priceline CEO resigns after probe into employee relationship

NEW YORK (AP) — Online travel booking company Priceline said Thursday that its CEO resigned after he had a personal relationship with an employee.

The employee was not under CEO Darren Huston's direct supervision, but a company investigation found the relationship still violated Priceline's code of conduct. A spokeswoman declined to provide more details about the relationship or the investigation.

The company is searching for a permanent successor. In the meantime, Chairman and former CEO Jeffery Boyd will run the company as interim CEO and president.

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Gilead 1Q profit tumbles on slower hepatitis C drug sales

FOSTER CITY, Calif. (AP) — Gilead Science Inc.'s earnings tumbled 17 percent in first quarter as sales of its blockbuster hepatitis C franchise slowed faster than expected, missing Wall Street estimates.

The maker of Harvoni, the first once-daily, single-pill regimen for hepatitis C, said sales of the best-selling drug fell 15 percent to $3 billion in the quarter, with the steepest drop-off in the U.S. That decline was partially offset by slightly higher sales for an older hepatitis C drug, Sovaldi, which grew to $1.28 billion.

Gilead Sciences Inc. has grown into one of the world's biggest drugmakers thanks to its breakthrough treatments for hepatitis C, a liver destroying virus estimated to affect some 185 million people worldwide.

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House GOP seeks to block stricter rule on retirement savings

WASHINGTON (AP) — The GOP-controlled House has voted along party lines to overturn new Obama administration rules requiring stricter standards for brokers regarding retirement investments.

The new rules require brokers to act as so-called fiduciaries that put their clients' best interests first, rather than steering them toward investments with higher fees for the broker.

The vote was driven by Republicans who warn they will limit the options available to investors and could cause brokers to abandon retirement savers with smaller accounts. The White House has promised to defend the rules with a threat to veto Thursday's measure.

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The Dow Jones industrial average sank 210.79 points, or 1.2 percent, to 17,830.76. The Standard & Poor's 500 index slid 19.34 points, or 0.9 percent, to 2,075.81. The Nasdaq composite closed lower for the sixth day in a row, falling 57.85 points, or 1.2 percent, to 4,805.29.

Benchmark U.S. crude oil, which is at its highest prices in almost six months, rose 70 cents, or 1.5 percent, to $46.03 a barrel in New York. Brent crude, the international standard, picked up 96 cents, or 2 percent, to $48.14 a barrel in London. In other energy trading, wholesale gasoline rose 2 cents to $1.60 a gallon. Heating oil rose 3 cents to $1.41 a gallon. Natural gas fell 4 cents to $2 per 1,000 cubic feet.