BofA 1Q Profit Doubles; China Mobile Misses Estimates; GM Cutting 1,400 Salary Positions; UBS Selling Brazilian Unit; AIG Gets More Fed Funding; Leading Economic Indicators Fall More Than Forecast; Lilly Beats Estimates; Rubber Prices May Fall on Fading Auto Sales
- First-quarter profit for Bank of America Corp. (BAC) more than doubled, but a surge in troubled loans threw a wet blanket on the bank's earnings report. So far, Bank of America has received $45 billion in government loans, and Chief Executive Kenneth Lewis said on a conference call that "we absolutely don't think we need additional capital," Reuters reported.
- The world's biggest wireless provider, China Mobile Ltd. (CHN), posted a 5.2% gain in net income, but missed analysts' estimates. Some are betting the company will post its first annual profit decline in 10 years, Bloomberg reported.
- Faced with a June 1 deadline to shape up to enter bankruptcy protection, General Motors Corp. (GM) announced 1,600 salaried job cuts taking effect May 1. The cuts are part of GM's plan to reduce its salaried workforce by about 10,000 and about 37,000 hourly jobs worldwide by the end of the year, Reuters reported.
- UBS AG (UBS) yesterday (Monday) agreed to sell its Brazilian operations to Andre Esteves, the former head of the business, for $2.5 billion, Bloomberg reported. The sale, which comes at a "small loss" return-wise, will help UBS reduce risk and raise capital as it tried to pull itself back into profitability.
- American International Group Inc. (AIG) yesterday (Monday) closed a deal to access nearly $30 billion in additional federal funds. AIG said it would issue and sell to the U.S. Treasury 300,000 preferred shares in exchange for up to $29.835 billion, in a filing with the U.S. Securities and Exchange Commission, Reuters reported. The amount was reduced by $165 million in retention bonuses paid to employees of the AIG Financial Products unit last month.
- The Conference Board's index of U.S. leading economic indicators fell more than forecast in March, in what may be a sign the longest recession since World War II will extend into the second half of the year, Bloombergreported. The gauge, which points to the direction of the economy over the next three to six months, fell 0.3% after a 0.2% drop in February. The index hasn't risen since June.
- A stronger dollar helped Eli Lilly & Co. (LLY) report higher-than-expected quarterly profit on Monday. The company reported it was able to control costs and revalue overseas inventory as the strong dollar contributed to increased profitability. Earnings increased to $1.31 billion, or $1.20 per share, from $1.06 billion, or 97 cents per share, in the year-earlier period. The results far exceeded Wall Street forecasts, Reutersreported.
- Rubber prices may be due to drop as much as 35% and tire makers may report a 6.8% sales slump in 2009 as the global recession cuts auto demand, according to the government-funded International Rubber Study Group in Singapore. Rubber prices have been on a tear, rising 42% in the last four-months. Prices are 18% higher than alternatives made from oil and may fall as global tire demand plunges the most in three decades, according to Bloomberg.