Retailers faced soft September sales and JPMorgan reports a loss. Good news is that US has become the top energy producer.
Retailers post soft September sales
Retailers posted soft sales gains in September despite back-to-school promotions. The Wall Street Journal reports that for the few companies that still report monthly results, same store sales came in below expectations. Gap reported a 3 percent decline, short of the 1.6 percent growth that was expected. Banana Republic slipped 5 percent despite expectations for a 1.6 percent increase and Old Navy recorded a 2 percent decline. The nine retailers tracked by Thomson Reuters posted a 1.6 percent growth in September same-store sales versus the 5.5 percent increase posted a year ago. The soft sales have created worry for retailers regarding the holiday shopping season.
Del Monte sells consumer products division for $1.68 billion
Del Monte Foods is selling its long-held canned fruits and vegetables business to Del Monte Pacific, the Asian company that already sells food under the Del Monte brand in the Philippines and India. The New York Times reports that Del Monte is selling the business for $1.68 billion to focus on what is now their biggest business, pet food. About half of its $3.7 billion in revenue comes from sales of brands such as Meow Mix and Kibbles ‘n Bits. Del Monte will rename itself to reflect its focus on pet products.
US will be top energy producer in 2013
The US will pass Russia and Saudi Arabia as the top energy producer in 2013, according to a report by the Energy Information Administration. Since 2008, US petroleum production has increased 7 quadrillion Btu, with growth in Texas and North Dakota. USA Today indicates that natural gas production has increased by 3 quadrillion Btu over the same period, with much of the growth in the eastern US. Saudi Arabia’s energy output is mostly petroleum, while the US is a mixture of natural gas and oil. In 2011 and 2012, Russia and the US were roughly even, however, in 2013 the US is expected to outproduce Russia by 5 quadrillion Btu. Gasoline prices have fallen to an average cost of $335 compared to $3.81 a year ago.
North Dakota pipeline spills 20,000 barrels
A pipeline owned by Tesoro Logistics LP has leaked more than 20,000 barrels of crude oil into a wheat field in North Dakota, according to the Wall Street Journal. This is the largest spill in the Bakken shale since the drilling began in 2006. Tesoro indicates that the faulty segment of the line has been shut down and the spill didn’t cause any injuries or pollute water sources. Clean up costs are estimated at $4 million. Shares of Tesoro Logistics fell 1.1 percent on Thursday.
VW plant in Tennessee faces dispute regarding unions
The UAW has been trying hard to get recognition from Volkswagen to represent workers at its VW plant in Chattanooga. State officials and right-to-work groups, however, are determined to stop the union. According to the New York Times, VW and its German labor leaders are proposing a solution that is common in Europe but has not been tried in the US auto industry. VW is proposing a “works council”, a committee of hourly and salaried employees that give labor a voice at the management table. Unlike a union, the works council cannot negotiate contracts. It remains unclear what the resolution will be for the 1600 hourly workers at the Tennessee plant.
JP Morgan Chase reports Q3 loss
Legal challenges forced the US’s largest bank to pay more than $9 billion in charges and to post a loss of $380 million in the third quarter. CNBC reports that the bank disclosed that it currently holds $23 billion in legal reserves to help pay any future claims. Excluding legal costs, JPMorgan earned $1.42 a share on revenue of $23.9 billion. Analysts had expected JPMorgan to report a quarterly profit of $1.20 per share.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.