Southwest Airlines sued by the federal government and Honda is under investigation from the feds.
Trade Deficit Grows
The Commerce Department Tuesday said the U.S. trade deficit increased 7.6 percent to $43.03 billion. That was an increase over the adjusted total for August at $39.99 billion. Economists had predicted the trade deficit would reach $40 billion. The September deficit is larger than the $38.1 billion deficit the government assumed in advance of the Gross Domestic Product estimate for the third quarter that came out last week. The data indicates the estimated 3.5 percent annual growth rate will be trimmed when the government issues its revisions later this month. Exports in September fell 1.5 percent to $195.59 billion, the lowest since April.
Time Profits, Outlook Drop
Magazine publisher Time announced Tuesday its third quarter profits fell to $48 million, or 44 cents per share, from $68 million one year previous. That caused the company to cut its full-year revenue forecast for the second time this year. The forecast is now for $3.27 to $3.3 billion from an initial estimate of $3.3 billion to $3.7 billion. Revenue rose to $821 million, and Wall Street had predicted revenues of $818 million. Time is the largest publishers in the United States, with 90 magazines and 45 websites, including Time magazine, Sports Illustrated and People
Honda Under Investigation
The National Highway Traffic Safety Administration announced it will look into whether Honda failed to report deaths or injuries that came as a result of faulty airbag deployment, a factor in a current large federal review of safety standards industry-wide. The Traffic Administration gave Honda three weeks to product details about how it sought and logged accident reports for more than a decade. The order issued Monday has 34 points to be addressed by the carmaker. U.S. law requires automakers submit to the NHTSA a quarterly report on data from every accident they receive information that involves a death or injury that came from a defect.
Alibaba Reports Strong Revenues
Alibaba Group Tuesday reported quarterly earnings that were in line with analysts' expectations on Tuesday, and revenues came in stronger than expected. The company issued its first earnings report following its IPO in September. The company reported earnings of 45 cents a share, matching estimates, on revenue of $2.74 billion. Analysts polled by Reuters had expected the firm to post revenue of $2.61 billion. The company said gross merchandise volume in the quarter rose 49 percent from the same period last year. Alibaba reported 217 million monthly active users on its mobile commerce apps. Its IPO on the New York Stock Exchange in September came in at more than $25 billion.
Herbalife Comes Up Short
Herbalife Monday reported earnings that missed expectations and issued a sales forecast that did not sound promising. The company reported operating earnings of $1.45 per share, against analysts' estimates of $1.51 per share. Revenue of $1.26 billion missed estimates of $1.32 billion, according to Thomson Reuters data. Herbalife also disappointed with its fourth-quarter earnings guidance, which it now pegs at $1.30 to $1.40 per share, well below analysts' expected $1.69 per share. For 2015 the company forecast sales would be in a range from up 2 percent to down 1 percent. Analysts had expected sales to rise 7 percent.
Southwest Sued by Feds
The Justice Department announced it is suing Southwest Airlines after the two sides failed to reach a settlement over allegations that the airlines repairs to dozens of planes failed to meet safety standards. The lawsuit seeks to enforce a $12 million civil penalty that the Federal Aviation Administration announced this summer. The suit says that starting in 2006 Southwest hired a contractor to make extensive repairs on 44 planes to prevent the aluminum skin from cracking. The FAA says the contractor, Aviation Technical Services of Everett, Washington, failed to follow proper procedures.