Amazon.com second quarter earnings report sees loss, and the International Monetary Fund says there will be less global growth than earlier reported. Here is more news of the day for the busy investor.
Murdoch Creating European Pay-TV Service
Rupert Murdoch’s European TV division, BSkyB, is going to create a new pay-TV service with the purchase of 21st Century Fox’s part in TV services in Italy and Germany. BSkyB will purchase Sky Italia and Sky Deutschland to create the European powerhouse network. The $9.1 billion deal is expected to help Murdoch’s Fox company raise the stakes in a bid to purchase Time Warner. Murdoch’s earlier bid of $75 billion was rejected by the target company. BSkyB, which is in competition with BT Sport, reported flat earnings for the year ending in June and operating profit was down 5.3 percent.
Schiro Resigns from Pepsi and Goldman Sachs Boards James J. Schiro, a board director for both PepsiCo and Goldman Sachs, is leaving both posts as he deals with a type of blood cancer called multiple myeloma. PepsiCo officials told CNBC it would not fill Schiro’s board position, while Goldman Sachs said Adebayo Ogunlesi, a former Credit Suisse investment banker, would assume the role of lead director. Schiro previously served as CEO for both insurance company Zurich Financial Services and accounting firm PriceWaterhouseCoopers. He was elected to the PepsiCo board of director in 2003 and acted as the presiding director from May 2010 to May 2013. He joined Goldman Sachs as a director in 2009 and was the lead director since 2012.
Visa Sees Profit Jump
Visa Inc. saw an 11 percent rise in quarterly profit through June as more customers around the world used plastic instead of cash to make purchases. The world’s largest credit and debit card company saw net income rise to $1.36 billion in the third quarter ending June 30 from $1.23 billion a year ago. Visa recently launched a digital payments service called Visa Checkout and opened a new developers’ center in San Francisco. In the spring of 2014, Visa and Mastercard planned to abandon operations in Russia after a new law there required high security deposits to the central bank to operate. That decision was halted with reports the rule might be amended.
June New Single-Family Home Fall to Three Month Low
Sales of new single-family homes fell 8.1percent in June, and May's previously reported surge was slashed by a record revision, The Associated Press reports. June sales hit a seasonally adjusted annual rate of 406,000, the second-weakest pace of the year, the Census Bureau announced Thursday. May's level was cut to 442,000 from the 504,000 annual pace it reported a month ago. Instead of rising nearly 19 percent from April, May's sales were only up about 8 percent. Sales fell from May in every region, led by a 20 percent decline in the Northeast. 1.9 percent in the West, 8.2 percent in the Midwest and 9.5 percent in the South. The median price of homes sold last month was $273,500, up 5.2 percent from June 2013, but down 3.2 percent from May.
Amazon.com Shares Drop Following Second Quarter Loss
E-commerce giant Amazon.com shares tumbled Thursday following the release of its second quarter earnings statement, which reported a wider-than-expected $126 million loss despite revenue of $19.34 billion. Shares of Amazon dropped 6 percent in after-hours trading. The online retail giant will expand Friday into the crowded and hotly competitive smartphone market with Fire. Last week, it also launched an e-book subscription service, Kindle Unlimited, offering access to 600,000 e-books and audiobooks for $9.99 a month. Reviews for both Fire and the subscription service have been lackluster.
The IMF Downgrades Global Economy Forecast
The International Monetary Fund projected Thursday that the growth of the global economy will be 3.4 percent this year, which is below its April forecast of 3.7 percent. The fund still expects the growth of the world's economy to accelerate slightly to4 percent next year. The drop in this year's estimate for the global economy reflects much slower growth in the United States, The Associated Press reports. The IMF now expects just 1.7 percent U.S. growth this year, which would be the weakest since the recession officially ended five years ago. That's down from its April prediction of 2.8 percent, mostly because of the severe and prolonged winter. But the IMF thinks the U.S. economy rebounded in the April-June quarter at a healthy 3.5 percent annual rate. Growth should remain above 3 percent in the second half of the year, it said in a separate report Wednesday. It is forecasting 3 percent for all of 2015.