c.2013 New York Times News Service
c.2013 New York Times News Service
FED, AWAITING SUSTAINABLE GROWTH, EXTENDS ITS STIMULUS
The Federal Reserve is still waiting for clear evidence that the economy can grow decently without its help. The Fed’s widely expected announcement Wednesday that it would press ahead with its stimulus campaign of asset purchases and low interest rates reflected the reality that the nation’s central bankers gained little clarity in the six weeks since their last meeting, in part because the government shutdown delayed and distorted key economic indicators.
MOBILE ADS FUEL A JUMP IN FACEBOOK’S PROFIT
Facebook, which operates the largest online social network, reported Wednesday that its profits had doubled in the third quarter, to $621 million, after excluding expenses related to stock options. Perhaps most important for Facebook’s future as an advertising-driven company in a world of iPads and Android smartphones, the company noted that mobile ads accounted for 49 percent of its advertising revenue, up from 41 percent in the second quarter. Facebook said prices for mobile ads remained high, and users were clicking on them in their news feeds more frequently.
BRAZILIAN BILLIONAIRE’S ENERGY COMPANY FILES FOR BANKRUPTCY
The flagship company of Brazilian entrepreneur Eike Batista, who once boasted that he was on his way to becoming the richest man in the world, filed for bankruptcy Wednesday. The filing by petroleum company OGX was the culmination of a decline that had been apparent for months. It became nearly certain after OGX missed a $45 million bond payment Oct. 1. According to papers filed with the Court of Justice of Rio de Janeiro, the company’s total debt is 11.2 billion reals ($5.1 billion), making this filing the largest corporate default in the history of Latin America.
INTEL IS SAID TO WEIGH SALE OF ONLINE CABLE TV VENTURE
Intel may bow out of its ambitious cable-television-via-the-Internet venture, known as OnCue, by selling it to Verizon, according to people with direct knowledge of the talks between the two companies. It is possible that Intel will forge ahead with OnCue through a partnership with Verizon, but a purchase by Verizon appears more likely, according to the people, who insisted on anonymity. A deal will most likely be struck by the end of the year. OnCue, as envisioned by Intel, would take the traditional cable television bundle and make it more consumer-friendly by transmitting it via the Internet.
GM AND CHRYSLER COMEBACKS ON DIFFERENT PATHS
General Motors and Chrysler will forever be linked as the two Detroit car companies that needed government bailouts in 2009 to survive. But their comebacks since then have taken different paths, as their third-quarter results showed Wednesday. General Motors, the largest of the domestic automakers, said it earned $698 million in the third quarter, a 53 percent drop from the same period a year ago. By contrast, Chrysler, the smallest U.S. automaker behind GM and Ford, said its earnings had increased 22 percent to $464 million, compared with $381 million in the third quarter of 2012.
PRICEWATERHOUSECOOPERS TO BUY BOOZ CONSULTING FIRM
PricewaterhouseCoopers said Wednesday that it had agreed to buy consulting firm Booz & Co., bolstering its advisory business, a chief source of growth for the firm. Financial terms of the transaction were not disclosed, although Booz & Co. is expected to be PricewaterhouseCoopers’ biggest acquisition in several years. The union of the two firms is likely to bring scrutiny from regulatory agencies around the world as it again raises the issue of an accounting firm’s buildup of a consulting business that could pose conflicts of interest.
RUSSIAN DIAMOND COMPANY ENTERS PUBLIC TRADING
Investors have an opportunity to bet directly on diamond mining, as the Russian government moves to spin off a 16 percent stake in Alrosa. The company, which mines in Siberia, hopes to attract investors as the only large pure-play diamond business. Its principal competitor, De Beers, is a majority-owned subsidiary of Anglo American, a mining company engaged in many sectors. Alrosa priced the shares at 35 rubles, or about $1.09, per common share Monday. The issue raised $1.3 billion. Although it is not Alrosa’s first offering, it is expected to garner greater attention.
PHILADELPHIA INQUIRER MAJORITY OWNERS SEEK TO BUY OUT OTHERS
After nearly a month of upheaval at The Philadelphia Inquirer, including the abrupt firing of the paper’s editor and lawsuits among its owners, the majority owners Wednesday offered to buy out the minority investors. George E. Norcross III and William P. Hankowsky, both majority owners in the Philadelphia Media Network, which also publishes the Philadelphia Daily News and Philly.com, offered to buy out minority investors H.F. Lenfest and Lewis Katz for $29 million, which the majority owners said represented nearly a 12 percent profit in 18 months.