With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
House Committee Passes Consumer Protection Bill; Treasury: Numerous Fraudulent Claims for Housing Credit; McDonald’s Lovin’ It in Europe; AT&T Profit Dips Slightly; P&G May Buy Sara Lee Division; Nokia Sues Apple Over Technology Used in iPhone; Netflix Profit Soars 48%
The Obama administration’s proposed Consumer Financial Protection Agency gained momentum yesterday (Thursday) after it won a key approval from the House Financial Services Committee in a 39-29 vote to the chagrin of banks and businesses. “The Committee vote today is a rifle shot at abusive financial practices, not a shotgun blast that would hit community banks making an honest living from fair lending practices,” said U.S. Rep Brad Miller, D-NC. “It’s no surprise that the lenders with the worst practices are still fighting tooth and nail against this bill.” Obama lauded the decision
The Internal Revenue Service has identified 167 suspected criminal schemes and almost 107,000 civil violations of the U.S. government’s first-time buyer housing tax credit as of Sept. 30, The New York Times reported, citing a Treasury Department report. Some of the suspected abuses of the popular $8,000 credit may be simple errors, but some were not – such as claims for children as young as 4 years old, government officials said. It’s unclear whether this will affect the attempts of some legislators’ efforts to have the credit extended beyond its Nov. 30 expiration.
Strong global sales helped McDonald’s Corp. (NYSE: MCD) report a 6% jump in profit in the third quarter ended Sept. 30. The company’s net income grew to $1.26 billion, or $1.15 per share, compared to $1.19 billion, or $1.05 per share in the same period last year. McDonald’s saw its same-store sales grow the most in Europe with a 5.8% gain, a 2.5% gain in the United States and a 2.2% increase in Asia/Pacific, Middle East and Africa. Its new third-pound Angus burgers as well as increasingly popular McCafe drinks fueled its growth in the United States, the company said.
AT&T Inc.’s (NYSE: T) profit dropped slightly as consumers continued to cancel their traditional landline phones in favor of cell phones. The company added 2 million wireless subscribers, as well as 3.2 million new activations of Apple Inc.’s (Nasdaq: AAPL) popular iPhone. The company’s net income fell 1.2% to $3.19 billion, or 54 cents per share in the quarter ended Sept. 30, compared to a profit of $3.23 billion, or 55 cents per share in the same period a year ago.
The Procter & Gamble Co. (NYSE: PG) is in talks to buy part of Sara Lee Corp.’s (NYSE: SLE) international household products unit, Bloomberg News reported, citing people familiar with the discussions. P&G is primarily interested in Sara Lee’s air-care business, comprised of Ambi Pur air fresheners, the people said. Sara Lee began selling its non-food divisions earlier this year when it sold its personal care business to Unilever PLC/AG (NYSE ADR: UL, UN) in a $1.9 billion deal. Sara Lee’s air-care unit made up about 20% of its household and body-care segment’s $2.03 billion in sales last year.
Nokia Corp. (NYSE ADR: NOK), the world’s largest cell phone maker, is suing Apple Inc. (Nasdaq: AAPL), claiming it illegally used 10 of its patented technologies to make the iPhone. Nokia claims Apple illegally used its patents for wireless data, speech coding, security and encryption to make the iPhone work on GSM, UMTS or Wi-Fi networks. Nokia has invested more than $60 billion (40 billion euros) in the last 20 years to develop the technologies, which it has licensed to 40 leading mobile phone makers, it said. The Finland-based company decided to file suit after failing to come to terms with Apple over a licensing agreement, a Nokia executive told The New York Times.
DVD rental e-store Netflix Inc. (Nasdaq: NFLX) saw its third quarter profit balloon 48% and the company bumped up its estimate for its total subscriber base for the full year. Netflix’s profit rose to $30.1 million, or 52 cents per share, compared to a net income of $20.4 million, or 33 cents per share in the same period last year. The company now expects to have between 12 million and 12.3 million subscribers by the end of the year, up from a previous estimate of between 11.6 million and 12 million.