Financial News

Let’s be honest, academic types are known for many things. Efficiency is not the first that comes to mind.

That is unless they work at Southern Methodist University, which University Business magazine is recognizing as a “Model of Efficiency” in streamlining its business operations.

To be exact, the magazine is recognizing the university’s efforts to do away with hard copy postings for jobs internships. Instead, the university is replacing the process with an online program called SaddleUp that allows students and alumni to connect with employers online.

University Business magazine chooses stellar programs using its Higher One’s ‘Models of Efficiency’ program that identifies schools that find innovative and cost-effective ways to manage business operations No teletrak payday loan.

SMU caught the magazine's eye since the university’s Hegi Career Center used to have to post jobs and internships manually on its Web site. Employees there also had to make photocopies of each job for distribution. When the school purchased new software, they were then able to allow students to self-register online and search for jobs without the extra paperwork. Because of this change, the wait time for job postings has been reduced from six weeks to six hours.

No other Texas universities ranked on the “Model of Efficiency” list.

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BCSB Bancorp Inc. swung to a profit of $607,000, or 14 cents a share, during the third quarter. That compares with a loss of $418,000, or 20 cents a share, the parent company of Baltimore County Savings Bank posted in the year-ago period.

BCSB Bancorp (NASDAQ: BCSB) said non-performing assets, consisting primarily of commercial loans, increased to $13.9 million as of June 30, up from $8.3 million on Sept. 30, 2009. That was also up from $2.4 million on June 30, 2009.

“Although our troubled loans have risen, asset quality remains strong overall,” Joseph J no fax payday loans. Bouffard, BCSB Bancorp’s CEO, said in a statement. “Management continues to be proactive in establishing what are believed to be appropriate reserve levels. We remain very well capitalized and are favorably positioned to weather these difficult economic conditions.”

BCSB Bancorp operates 18 branches in Baltimore City, and Baltimore, Harford and Howard counties.

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The drugmaking arm of Johnson & Johnson said late Thursday that it is laying off hundreds of workers at the manufacturing plant at the center of a recall of millions of units of children’s Tylenol, Motrin and other over-the-counter drugs.

Johnson & Johnson’s (JNJ, Fortune 500) McNeil Consumer Healthcare division said 300 of more than 400 positions at the Fort Washington, PA facility will be eliminated as the company conducts a complete quality overhaul at the facility.

McNeil halted all production at the Fort Washington plant in early May this year after it recalled about 135 million bottles of children’s and infant’s Motrin, Tylenol, Benadryl and Zyrtec drugs made at the plant, due to quality concerns. The facility is the company’s only plant that makes its liquid pediatric non-prescription drugs.

McNeil is also currently under investigation by the Food and Drug Administration and lawmakers over a string of recalls of its products over the past year, including the latest recall of children’s drugs.

McNeil, which submitted what it called its "comprehensive action plan on quality improvement" for the Fort Washington plant to the FDA on Thursday, also said it will make a "significant investment in re-fitting its Fort Washington manufacturing facility with new equipment, and will reorganize the plant’s operations." As a result, the company anticipates that the plant will be out of service for a "protracted period of time."

The company said it is taking steps to expedite production of many of the products that were previously produced at Fort Washington by utilizing other Johnson & Johnson plants.

However, McNeil had previously announced that most of the products made at the Fort Washington plant will not be available in stores before the end of the year. 

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Smallwood Drive is no longer the top-rated elementary school in Western New York, but it still ranks first among the region's public elementary schools.

Right behind on the latter list are Maple East of Williamsville, Charlotte Avenue of Hamburg and Ledgeview of Clarence.

Here are the 20 public schools with the highest rankings this year. Each is followed by its position in the overall standings:

• 1. Smallwood Drive School (Amherst), 2nd overall

• 2. Maple East ES (Williamsville), 3rd overall

• 3. Charlotte Avenue ES (Hamburg), 4th overall

• 4. Ledgeview ES (Clarence), 5th overall

• 5. South Davis ES (Orchard Park), 7th overall

• 6. Maple West ES (Williamsville), 8th overall

• 7. Country Parkway ES (Williamsville), 13th overall

• 8. Tapestry CS (Buffalo), 14th overall

• 9. Eggert Road ES (Orchard Park), 16th overall

• 10. Harris Hill ES (Clarence), 18th overall

• 11. Ellicott Road ES (Orchard Park), 20th overall

• 12. Sheridan Hill ES (Clarence), 21st overall

• 13. Forest ES (Williamsville), 22nd overall

• 14. Clarence Center ES (Clarence), 23rd overall

• 15. Prospect ES (Attica), 24th overall

• 16. Dodge ES (Williamsville), 26th overall

• 17. Charles A. Lindbergh ES (Kenmore-Tonawanda), 27th overall

• 18. Errick Road ES (Niagara-Wheatfield), 28th overall

• 19. Armor ES (Hamburg), 29th overall

• 20. Parkdale ES (East Aurora), 31st overall

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Lowe’s Cos. Inc. reports a 2.7 percent increase in earnings to $489 million, or 34 cents per diluted share, in its first fiscal quarter ended April 30.

In the same period last year, the Mooresville-based home-improvement retailer earned $476 million, or 32 cents per diluted share.

The company exceeded analysts’ consensus estimate of 31 cents per share for the latest quarter.

Revenue grew 4.7 percent to $12.4 billion, up from $11.8 billion.

Sales at stores in operation for at least a year increased 2.4 percent.

“Consumers are showing signs of re-engagement in home improvement, including discretionary projects and purchases of bigger-ticket products, which had taken a back seat during the worst of the economic downturn,” says Chief Executive Robert Niblock. “This, combined with the government stimulus programs and favorable weather in March and April, drove solid quarterly sales and earnings that exceeded our guidance.

Lowe’s says it expects to earn 57 cents to 59 cents per diluted share in its second quarter ended July 30, up from 51 cents per diluted share a year ago.

Lowe’s opened 11 stores in the latest quarter. As of April 30, the company (NYSE:LOW) had 1,721 stores in North America.

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The economy has made a sharp U-turn in the past couple of months, and better days for American businesses and workers are around the corner.

But don’t take my word for it. Take Warren Buffett’s. And Jamie Dimon’s. And Jack Welch’s. All three tell me that in the past four to eight weeks, they’ve seen a real change in their businesses, and that indicates better news for the nation’s economy. They should know.

Warren Buffett has been focusing on the data from BNSF Railway, which he recently acquired. At the start of the recession three years ago, Burlington Northern felt the pain early when retailers stopped ordering goods, automakers stopped shipping cars, and homebuilders stopped needing so much lumber. The railroad started storing thousands of idle railcars; now those cars are being called back into service. And that’s an incredibly important sign.

But that’s not his only hint.

Buffett’s Berkshire Hathaway (BRKA, Fortune 500) conglomerate encompasses some 80 different businesses, and he’s seeing strength everywhere: from the number of hours customers fly at NetJets to the amount (and cost) of jewelry they buy at Borsheim’s.

But the most important place he’s seeing it is at Iscar, an Israeli-based manufacturer of metalworking tools he bought in May 2006. Iscar’s cutting tools are used on aircraft, auto, and other assembly lines, and the company’s sales volume is popping. "You can just feel the pulse of industry quickening," Buffett says.

Jamie Dimon, whose J.P. Morgan Chase (JPM, Fortune 500) was the fortress that withstood the great financial disaster, counts millions of Americans as customers. And he’s seeing a turn in the very recent data as well. After soaring to a record high of 9.3%, credit card charge-offs for the industry are dropping to more normal levels of 5% to 6%.

But his most important indicator may be the anecdotal evidence that a hiring boom is on the horizon. Dimon travels the country constantly for lunches or dinners with business leaders, meeting with groups of 20 to 250 people at a time. They may be people who run small or large businesses, they may be venture capital investors, they may be clients of the firm’s massive private banking group.

But everywhere lately, the reaction is the same. When he asks how many of them are going to be hiring in the next 12 months, a third of the hands in the room go up. That’s from virtually none a year ago. "The strength and resilience of the American economy may surprise people," Dimon says. "The odds of a potential upturn are stronger than people think."

And then there’s Jack Welch, who spent 20 years at the helm of the nation’s largest industrial conglomerate, General Electric (GE, Fortune 500). These days Welch is a special partner at private equity firm Clayton Dubilier & Rice, which has investments in everything from Hertz rental cars to TruGreen, a lawn service company.

He told Squawk Box recently that customers across the board are flooding back. "People who have jobs are now feeling more secure about keeping them and are therefore spending," Welch says. "And people who don’t have jobs are becoming more hopeful as they see glimmers of hiring."

So if these business leaders are that confident, why are there still so many doubters out there? Americans are still reeling from the economic collapse, and some fret that another crisis is lurking. Call it a case of post-traumatic financial crisis syndrome.

"When fireworks go off now, people are expecting that it’s a nuclear bomb," Buffett says. It’s a natural reaction, but a dangerous one. That mentality exacted a painful cost for investors who followed their gut and got out of stocks as the Dow fell below 9000, then 8000, then 7000. Since then stocks have rebounded 65% off their lows. And if you were waiting on the sidelines until things looked more stable, then you missed the party.

It’s a lesson to us all. While there are still plenty of concerns out there — from a stubbornly high unemployment rate to continuing commercial real estate land mines — I’ll follow the lead of those on the economic frontlines. And I can’t think of three better generals than Buffett, Dimon, and Welch.  

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The price per gallon of gasoline in Georgia increased 2 cents since last week, AAA Auto Club South reported.

Georgia's average price per gallon is now $2.72, compared with $2.70 last week, $2.65 a month ago and $1.93 a year ago.

The national average price of regular retail gasoline is $2.82.

News of a global economic recovery caused the market to rally on optimism fuel demand will spike this year and pushed the price of crude oil on Thursday to $84.87 on the New York Mercantile Exchange during the shortened trading week last week.

A pick-up in manufacturing jobs and production was reported in the United States, China, Japan, and Europe and is viewed as evidence of a rebound in international trade. In addition, U.S. companies added 162,000 jobs in March, with fewer Americans filing for unemployment according to the U.S. Labor Department.

“We will most likely see crude oil stay above $80 a barrel for quite some time, causing retail gasoline prices to steadily increase into the summer,” said Jessica Brady, AAA spokeswoman, in a statement. “It's a bull market right now and investor confidence is high that fuel demand is on the rise, even though it may be a while before we see if fundamentals support the move higher.”

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Despite whatever Benjamin Franklin might have had to say on the subject of earned pennies, a general-purpose gift card saved is money wasted. And new federal regulations aren’t likely to change that.

New gift card rules announced by the Federal Reserve on Tuesday rankle some consumer groups because they curtail — but don’t eliminate — the practice of slapping some consumers with fees for not spending balances fast enough.

The rules, which apply to cards purchased after Aug. 22, prohibit gift card issuers from charging fees in the first year after a card was purchased and, after then, from charging more than one fee in a month. The cards also can’t expire in fewer than five years, and all terms and conditions needs to be disclosed at the time of purchase.

That isn’t enough, according to consumer groups that for years have pushed for tougher rules in two categories of gift cards. Consumers spend an estimated $50 billion annually in traditional store-credit cards — those that can be spent only at one retailer — and so-called general purpose cards, which are branded with credit card logos and can be used wherever that credit card is accepted.

The store cards rarely carry fees, and expiration dates on those cards seldom are less than five years. That’s because retailers want to bring cardholders to the stores, where they are likely to spend above and beyond their card balances.

General purpose cards are another story. Because these cards aren’t designed to drive traffic to any one retailer, these cards make their money from the consumers themselves. A $100 card might cost a couple of dollars more at the time of purchase, plus card holders might have to pay additional service fees, inactivity penalties or other monthly charges that can range from less than $1 to more than $10.

Consumer groups have long characterized those post-purchase fees as excessive.

Those groups scored a victory last year, when Congress passed landmark credit card reform. A provision in the CARD Act set minimum gift card restrictions, and it empowered the Federal Reserve to go further, including capping the size of inactivity and service fees that can be charged to card balances one year after the cards are issued.

But the Fed didn’t expand on the rules required by Congress. "Basically, it’s still anything goes," said Michelle Jun, a lawyer for Consumers Union, the non-profit group that publishes Consumer Reports magazine.

Consumers Union, based in Yonkers, N.Y., objects to post-purchase fees and believes any charge for the gift card should be assessed only on the front end — at the time of purchase no fax pay day loans. That way, she said, consumers won’t be penalized for holding onto a card for more than a year.

"If you are giving this as a gift, you don’t expect for the value of your gift to be whittled away by someone else," Jun said.

Linda Sherry, national priorities director of the advocacy group Consumer Action, said post-purchase service fees were little more than a money grab. After all, she said, most "spend-anywhere" cards generate money at the time the cards are sold and through fees charged to those retailers where the cards are used.

Consumer Action, based in San Francisco, opposes all post-purchase fees and card expirations, Sherry said, because the group believes most consumers treat the spend-anywhere cards as a cash equivalent.

Although the fee restrictions cover both retail and general-purpose gift cards, chain stores generally don’t include service fees on their cards. However, fees are common with general purpose cards.

General purpose cards represent a $4 billion segment of the $50 billion gift card industry, according to a study from the Consumer Federation of America released in October.

But the growing sales of those spend-anywhere cards would have been cut short by caps on service fees, said Judith Rinearson, a lawyer for the Network Branded Prepaid Card Association and a partner in the New York office of St. Louis-based Bryan Cave.

Rinearson said consumer groups’ preference for rolling into the purchase price the full cost of the cards would raise prices significantly for card holders who exhaust balances within the first year.

"The consumer groups — for reasons I don’t understand — have this visceral hatred of gift cards," Rinearson said.

"They would make it more expensive for everyone because a small percentage of consumers might pay more on the back end."

Rinearson is generally supportive of the new rules, but she said the industry would struggle to comply with disclosure language that will require card issuers to disclose many rules and conditions on the cards themselves.

Jon Galloway, a spokesman for Missouri Treasurer Clint Zweifel, said the new rules wouldn’t change a state requirement that requires card issuers to surrender the balances of expired or inactive gift card accounts to the state’s unclaimed assets fund. In the fiscal year that ended June 30, Missouri claimed $1.02 million in gift card credit.

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Australian manufacturing expanded at the fastest pace in more than two years, adding to evidence of economic rebound that may prompt the central bank to boost borrowing costs tomorrow for the fourth time in five meetings.

The performance of manufacturing index rose to 53.8 points in February from 51.0 in January, according to an Australian Industry Group and PricewaterhouseCoopers survey released in Canberra today.

A reading above 50 signals manufacturing is expanding and gives central bank Governor Glenn Stevens more scope to increase the benchmark lending rate tomorrow by a quarter percentage point to 4 percent, as forecast by 14 of 19 analysts surveyed by Bloomberg News. Australia’s economy probably grew the most in 1 1/2 years in the fourth quarter, a separate analysts’ survey ahead of a report on March 3 shows.

“While there is a lot of ground lost over the past two years still to be recovered, overall, conditions do appear to be improving,” AIG Group Chief Executive Officer Heather Ridout said payday loans. “The combination of rising new orders and production augers well for the industry in coming months.”

The manufacturing survey, which is similar to the U.S. ISM index, asked more than 200 companies about production, new orders, deliveries, inventories and employment.

A gauge of production rose 4.2 points to 55.7, the sixth increase in seven months, today’s report shows. Growth was strongest among manufacturers of textiles and paper, as well as publishing companies. An index of orders was little changed at 56 in February.

Today’s survey also shows that companies related to consumer spending have weakened.

“The impact of the strong Australian dollar and higher interest rates are posing formidable headwinds to growth while high interest rates are also dampening demand,” Ridout said.

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Japan’s economy grew faster than economists anticipated last quarter, reducing the risk of falling back into a recession even as deflation intensifies.

Gross domestic product rose at an annual 4.6 percent pace in the three months ended Dec. 31, the Cabinet Office said in Tokyo today, more than the 3.5 percent median estimate of economists surveyed. The GDP deflator, the broadest measure of prices in the economy, fell a record 3 percent.

Exports led the expansion, aided by a global recovery that prompted manufacturers from Panasonic Corp. to Nissan Motor Co. to raise their profit forecasts this month. An increase in consumer spending may not last as government stimulus measures fade and households expect prices to keep falling along with their wages, said economist Hiroshi Miyazaki.

“The benefits from the global recovery are spilling over,” said Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. “The economy will keep recovering even if the government does little to fight deflation, but the risks are heightening that growth ahead will be slow.”

The yen traded at 90.15 per dollar at 3:20 p.m. in Tokyo from 90.03 before the report. The currency has gained 5 percent in the past six months, eroding exporters’ earnings. The Nikkei 225 Stock Average fell 0.8 percent, extending this year’s losses to 5.1 percent.

The world’s second-largest economy expanded 1.1 percent from the previous quarter, today’s report showed, more than the 0.9 percent median estimate of economists surveyed.

Revised to Zero

Third-quarter GDP was revised to zero from an annualized 1.3 percent growth, reflecting a change in how the Cabinet Office calculates exports and imports on a seasonally adjusted basis to account for the global trade collapse in 2008.

Overseas shipments increased 5 percent from the previous three months, the report said. Net exports, or shipments minus imports, added 0.5 percentage point to growth.

“Risks for a double-dip recession are receding,” Finance Minister Naoto Kan told reporters in Tokyo today. “We’re starting to see some bright signs emerge from the clouds, but we can’t be complacent.”

The GDP deflator’s year-on-year decline was the biggest since records began in 1955. Without adjusting for price changes, Japan grew an annualized 0.9 percent from the previous quarter.

The Bank of Japan, amid pressure from politicians, stepped up its fight against deflation in December, saying it “does not tolerate” price declines. Governor Masaaki Shirakawa and his colleagues, who will decide policy on Feb. 17-18, will keep the benchmark interest rate at 0.1 percent for all of 2010, according to all 17 economists surveyed by Bloomberg last month.

‘More Pressure’

“It’s likely that the Finance Ministry will put more pressure on the BOJ to implement more accommodative policies, highlighting today’s figures that point to deflation,” said Miyazaki at Shinkin Asset business cards. “That pressure is likely to run the BOJ into a corner.”

Compounding the woes from deflation, in the past month Standard and Poor’s has warned that the nation’s debt rating may be cut and Toyota Motor Corp., the country’s biggest automaker, has recalled 8 million vehicles because of accelerator and brake problems.

Kan said yesterday that the government will next month begin debating whether to overhaul the sales tax amid concerns about the widening deficit.

Chief Cabinet Secretary Hirofumi Hirano said today that the government must do its utmost to avoid another recession. Prime Minister Yukio Hatoyama, whose Democratic Party of Japan faces an upper-house election in July, received parliament’s approval for a 7.2 trillion yen ($80 billion) stimulus package last month.

Spearheading Revival

Asia spearheaded the export revival, led by China, Japan’s biggest overseas customer, which grew the most since 2007. U.S. demand is also improving after the nation’s GDP expanded the most in six years last quarter. Still, a report last week showed Europe’s economy almost stalled in the period, underscoring the frailty of the world recovery.

Panasonic, the world’s largest maker of plasma televisions, raised its operating profit forecast by 25 percent this month. Flat-panel TV sales rose 48 percent from a year earlier, driven by purchases in regions including China and South America.

Nissan Motor predicted a return to profit this fiscal year, scrapping an earlier loss estimate, citing government incentives that boosted demand for vehicles in China and Japan. The country’s third-largest carmaker expects net income of 35 billion yen in the year ending March 31, compared with an earlier forecast of a 40 billion yen loss.

A separate report today showed industrial production growth in December was revised to 1.9 percent from 2.2 percent.

Consumer Spending

Spending by consumers, which accounts for more than half of the economy, rose 0.7 percent in the fourth quarter, today’s report showed. Business investment climbed 1 percent, the first positive reading in seven quarters.

The gain in capital spending “signals a turning point in the economy toward a sustainable recovery,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo.

Even as exports improve, Japan’s expansion may lose momentum as the effects of stimulus spending at home fade.

“Consumption has been sluggish if you exclude purchases of autos and flat-panel televisions, which have received a direct boost from government stimulus,” said Ryutaro Kono, chief economist at BNP Paribas in Tokyo. “Many households perceive income declines since late 2008 not just as a result of the economy’s growth cycle but as permanent declines.”

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