Ford stock falls after company misses expectations
DEARBORN, Mich. (AP) — Ford Motor Co. is the most profitable it’s been in a decade, since the days when Americans were snapping up SUVs. But maintaining that momentum — and meeting the high expectations of buyers, workers and investors — will be a big challenge in the coming year.
Ford got a taste of that Friday. Despite reporting a profit for 2010, the company’s stock fell more than 13 percent to close at $16.27. Investors were disappointed that the results fell short of expectations. Ford also posted an 80-percent drop in fourth-quarter net income, missing forecasts and ending two years of better-than-expected results.
It was clear Ford won’t have much room for error as it tackles nagging problems, from the huge loans it took out to fund its turnaround to its upcoming labor talks to its stodgy, slow-selling Lincoln brand.
Workers saw 2 percent rise
WASHINGTON (AP) — Workers saw their wages and benefits rise slightly faster in 2010 than 2009, but the gain was still the second-lowest increase in nearly three decades.
Wages and benefits increased 2 percent last year after a 1.4 percent increase in 2009, the Labor Department reported Friday. Both years were the smallest gains on Labor Department records that go back 28 years.
The modest gains reflect a severe recession which pushed millions out of work and depressed the bargaining power of those with jobs. While weak wage gains mean low inflationary pressures, it also leaves households with less income to boost consumer spending.
Analysts believe labor costs will be constrained as long as unemployment remains elevated. The unemployment rate in December stood at 9.4 percent. Many economists believe it will still be around 9 percent a year from now.
The Labor Department’s Employment Cost Index measures wages, salaries and benefits — which include health insurance and pensions.
Fitch downgrades Egypt outlook
CAIRO (AP) — Fitch Rating on Friday revised down its outlook for Egypt, dropping it to "negative" as mass protests in the country turned violent, engulfing the capital and other cities in a serious challenge to President Hosni Mubarak’s 30-year rule.
Fitch said it was holding steady Egypt’s other ratings, including its long-term foreign currency issuer default rating, which was held at the investment grade BB+. The revision comes after the Egyptian stock exchange’s benchmark EGX30 plummeted about 17 percent in two days, a drop fueled by investor panic over the Tunisia-inspired protests that erupted Tuesday in the Arab world’s most populous nation. The demonstrations have focused on the economic disparity in the country, spiraling food prices and the grinding poverty that afflicts nearly 40 percent of Egypt’s 80 million people.
Analysts have downplayed the likelihood that President Hosni Mubarak’s regime would be ousted as a result of the protests. But the mass rallies in which tens of thousands have clashed with riot police have pushed to the surface latent concerns about Egypt and raised questions about the economic impact on the country.
The unrest appears to have already hit at least one U.S. oil company. Apache Corp., which has extensive operations in Egypt, has seen it’s shares slide about 7 percent, wiping out $3 billion in market value, since Thursday in a drop analysts linked to the unrest in Egypt.
Chevron exiting coal mining
CHEYENNE, Wyo. (AP) — Petroleum giant Chevron Corp. said Friday it plans to get out of the coal industry by the end of the year.
The decision came after the company determined that new coal technologies were developing too slowly to make staying in the industry a good strategy, Chevron Mining Inc. spokeswoman Margaret Lejuste said.
One of the technologies is known as coal-to-liquids, in which coal is processed into diesel, gasoline or other fuels.
Chevron intends to sell off three coal mines in Wyoming, New Mexico and Alabama. The sites include the company’s open pit mine outside Kemmerer in western Wyoming, which has been on the market for about a week.
Sara Lee to split into 2 businesses
PORTLAND, Ore. (AP) — Sara Lee Corp. is splitting into two public companies, completing its evolution from conglomerate to a smaller business more tightly focused on food and drinks.
The company said Friday that the deal is the best way to provide shareholder value in the long-run. Stockholders will receive a special $3 dividend and their shares will split to give them an interest in each company.
Sara Lee, based in Downers Grove, Ill., will keep its name and current location with one company, which will concentrate on its North American retail and food service businesses. That includes brands such as Jimmy Dean, Ball Park and Hillshire Farm, as well as Sara Lee frozen desserts. These operations generated about $4.1 billion in revenue during Sara Lee’s latest fiscal year.
A second company, which has not been named but is being called CoffeeCo, will focus on the company’s international bakery and beverage businesses.
The split, expected to conclude next year, will complete Sara Lee’s multi-year transformation from a maker of everything from shoe polish to cheesecake into a company devoted solely to food and beverages.
Goldman Sachs boosts pay for Blankfein, 4 others
NEW YORK (AP) — Goldman Sachs Group Inc. has more than tripled the salary of CEO Lloyd Blankfein to $2 million, and also granted raises to four other top executives.
The investment bank said in a Securities and Exchange Commission filing on Friday that its board’s compensation committee set the new base salary for Blankfein, effective Jan. 1. His previous salary had been $600,000.
The committee set salaries at $1.85 million for four other executives. They are Chief Operating Officer Gary Cohn; Chief Financial Officer David Viniar and Vice Chairmen Michael Evans and John Weinberg.
The filing didn’t elaborate on the reasons for the raises. The salaries don’t include other forms of compensation the executives can receive, such as stock options.