Disney announces more "Frozen'' coming, General Motors cuts its powertrain warranty, and Intel reports severe cut in its revenue forecast. Here are the top news stories for March 13, 2015.
Household Net Worth Reaches Record
The Federal Reserve Thursday announced that the household net worth in America rose by $1.5 trillion in the fourth quarter of last year to a record $83 trillion. The gains were the result of a surging real estate market, as household real estate holdings rose to their highest level since 2007. Real estate equity levels also hit the highest mark since 2007. The central bank also reported that debt had increased by 4.7 percent, the most since 2012. That debt included households, government and corporations.
Cutting the Powertrain
General Motors Thursday announced it plans to cut its powertrain warranty on Chevrolet and GMC vehicles for the 2016 model year because the higher warranty does not sell cars. The five-year 100,000 mile powertrain coverage that has been in place for a decade will be reduced to five years and 60,000 miles for the 2016 models. “"We talked to our customers and learned that free scheduled maintenance and warranty coverage do not rank high as a reason to purchase a vehicle among buyers of non-luxury brands," GM said in a statement. “We will reinvest the savings we will realize into other retail programs that our customers have told us they value more.” A powertrain warranty offers repairs to the engine and transmission at no cost to the consumer.
Federal Deficit Trimmed in February
The federal government ran a slightly smaller deficit in February than a year ago but the imbalance through the first five months of the budget year is still running ahead of last year, the Associated Press reports. The Treasury Department announced Thursday that the deficit in February was $192.3 billion, down from a deficit of $193.5 billion a year ago. For the first five months of this budget year, the deficit totals $386.5 billion, up 2.7 percent from a deficit of $376.4 billion during the first five months of the 2014 budget year. The Congressional Budget Office is forecasting a deficit of $486 billion for the entire budget year, which ends Sept. 30. This is up 0.6 percent from the 2014 deficit of $483.4 billion. The 2014 deficit was the smallest annual imbalance in six years.
“60 Minutes” Target Gets off the Floor to Defend Products
Retailer Lumber Liquidators said Thursday it will pay for the safety testing of laminate floors for customers to help ease concerns raised by a recent report on “60 Minutes.” The piece said that the company’s laminate flooring made in China contained high levels of the carcinogen, formaldehyde. The report that aired earlier this month also said the company's laminate flooring fell short of California's standards, something the company denies. Lumber Liquidators has said that it complies with all regulations for its products. In the nine days following the broadcast, Lumber Liquidators says sales at stores open at least a year - a key gauge of a retailer's health because it excludes the volatility from stores recently opened or closed - fell nearly 13 percent but sales are returning to normal levels. The company will provide an update on its net sales for the first quarter on April 2. Shares of Lumber Liquidators Holdings Inc. have plunged almost 50 percent in just one month and are down almost 70 percent over the past 12 months. Shares rose 12.8 percent, to $36.94 in afternoon trading Thursday.
Goodbye, Mr. Chips?
Intel Corp slashed nearly $1 billion from its first-quarter revenue forecast, Reuters reports. The chipmaker's shares are down more than 5 percent. Fewer companies than Intel had expected replaced desktop PCs running on outdated Microsoft operating systems, leading to weak demand for its chips. Intel also cited "challenging" macroeconomic and currency conditions, particularly in Europe. Though dominant in the market for chips used in PCs, Intel has been slower than rivals such as Qualcomm Inc. to adapt in recent years to the growing popularity of laptops and tablets. The company did not receive an expected bump in demand from small- and medium-sized businesses once Microsoft Corp wound down support for its Windows XP operating system last April.
More “Frozen” Coming
The Walt Disney Co. announced Thursday it plans to create a sequel to the huge animated hit “Frozen’’ from December of 2013. At the company’s annual shareholders meeting in San Francisco, Disney officials made that decision official, as the company hopes to follow up on the $1.3 billion made at the global box office by the story of Elsa and Anna. “Frozen” produced one of the most significant merchandising streams in company history. A short follow-up to the “Frozen” story is being shown now as a preview cartoon prior to the showing of Disney’s live-action remake of “Cinderella”, which opened Friday.