Panera gets rid of all additives, Dow gets rid of 1,500 jobs, while Disney reports a huge jump in revenues. Here are the top news stories for May 5, 2015.
Trade Deficit Explodes
The Commerce Department Tuesday said the U.S. trade deficit jumped 43 percent in March to $51.4 billion, the largest difference since October of 2008. The March deficit grew as imports rebounded strongly from the downturn caused by the labor dispute at key West Coast ports earlier this year. The 43 percent jump was the largest one-month rise since December of 1996. When adjusted for inflation, the deficit was actually $67.2 billion in March, the largest in eight years.
Good News for Disney
The Walt Disney Co. had a huge earnings report for the fiscal second quarter, with earnings of $1.23 per share, up from the $1.11 a share in the year earlier. Revenues rose to $12.46 billion from $11.65 billion one year ago. The Disney announcement was well above the expectations from Wall Street analysts. The company said parks and resort revenue grew to $3.76 billion in the quarter, while media networks revenue grew to $5.81 billion. Disney’s latest movie release, Marvel’s “Avengers: Age of Ultron” earned $187.7 million in its weekend debut.
FCC Chair Talks
At the TechCrunch Disrupt event in New York Monday, Federal Communication Commission chairman Tom Wheeler said he agreed with the Comcast’s decision to kill the Comcast/Time-Warner Cable merger. He also said the net neutrality decision was the right thing to do. Wheeler said it was a “really good decision” for Comcast to end its $45 billion takeover of TWC. The proposed deal was expected to face a long process to see if it could pass antitrust review. Wheeler said the net neutrality decision, to regulate the internet as a utility, was the correct thing to do. He said he was confident the regulation will prevail despite numerous lawsuits filed against the decision.
Job Cuts at Dow
Dow Chemical will cut between 1,500 and 1,750 jobs, which equals 3 percent of its global workforce, as part of a plan to reduce costs by $1 billion over the next three years. Dow said the job cuts were being made as a result of its decision to sell part of its chlorine business to Olin Corp. for $5 billion. Dow has been cutting its low margin businesses to focus on high growth divisions like packaging electronics and agriculture. Dow said it would record charges of about $330 million to $380 million in the second quarter for asset impairments, severance and other costs. The cost cuts from the eliminated jobs and other transactions were expected to be completed over the next two years, saving $300 million in operating costs a year.
Panera Cleans Up Its Act
Panera Bread continues its effort to improve the ingredients in its food, releasing a list of additives Monday that it is banning from its menu by the end of 2016. The list of banned additives includes more than 80 items that have already been eliminated or are in the process of being removed form food items. The decision affects more than 150 ingredients in Panera products. Starting Tuesday, the company said it will serve “clean’’ salad dressing without artificial additives, and that is one of the most complex processes in the company overhaul of additives. In June of last year, Panera announced it planned to remove a long list of additives from its food by the end of 2016. Panera officials said there would most likely not be an increase in menu prices because of the ingredient change.
Cancer Drug Research Grows
A report from the IMS Institute for Healthcare Informatics Tuesday said spending on cancer medicines grew to $100 billion in 2014, an increase of 10 percent from 2013 and up from $75 billion just five years ago. Targeted therapies aimed at specific cancer drivers now account for almost half of the total spending. IMS said it predicts further growth of 6 to 8u percent through 2018. “Earlier diagnosis, longer treatment duration and increased effectiveness of drug therapies’’ are driving the expenditures on cancer drug research. Forty-five new drugs for cancer appeared on the market between 2010 and 2014.