Report: Protests in Egypt costing $310 million per day

Egypt’s economy has lost at least $3.1 billion as a result of the political crisis in the country, investment bank Credit Agricole said in a report released on Friday, as tens of thousands of protesters massed in downtown Cairo demanding the president’s ouster.

The unrest that began on Jan. 25 led to the shuttering of businesses and companies, the closure of banks and the stock exchange and the exodus of thousands of tourists as the demonstrations. The ensuing violence almost overnight drove a nation once seen as a pillar of stability to the brink of chaos.

Credit Agricole, in one of the first assessments quantifying the damage to the economy, said the crisis is costing Egypt at least $310 million per day. The bank also revised down its forecast for 2011 GDP growth to 3.7 percent from 5.3 percent and said the Egyptian pound could see a depreciation of up to 20 percent.

The losses are the tip of the iceberg of Egypt’s economic woes.

Any post-crisis government will face major challenges in rebuilding the country’s image and dealing with a range of fundamental economic problems that are sure to be exacerbated by the unrest.

Aetna Inc. sees stock jump on dividend payment news

Shares of Aetna Inc. shot up 11 percent in early trading Friday after the health insurer announced a significantly higher dividend payment for shareholders and predicted its 2011 profit will be much bigger than what Wall Street expects.

The Hartford, Conn., company also said its fourth-quarter net income rose 30 percent due in part to better pricing and a slowdown in health care use that also has helped its competitors in the last few months of 2010.

Aetna will now pay a 15-cent quarterly dividend on April 29 to shareholders as of April 14. Big health insurers normally offer token dividends like the 4-cent annual one Aetna paid Nov. 30, but that started to change last year when competitor UnitedHealth Group Inc. announced a quarterly dividend of 12.5 cents per share.

The steady cash flow from larger dividends can make a company’s stock more attractive to investors.

Looking ahead, the company forecast a 2011 operating profit between $3.70 and $3.80 per share, much higher than the average analyst expectation of $3.27 per share, according to FactSet.

Several analysts said in Friday morning notes they were surprised by Aetna’s 2011 forecast.

Hot sales of iPhones forces Verizon to halt online orders

Verizon Wireless on Friday said its first day of taking online orders for the iPhone produced record sales, and it’s stopped taking orders until Wednesday.

The cell phone carrier said that in just two hours Thursday morning, between 3 a.m. and 5 a.m., more customers had ordered the phone than in the full day of any previous phone launch.

The company didn’t specify how many iPhones had been ordered. It halted orders at 8:10 p.m. Thursday, and said it will resume taking orders at 3 a.m. on Wednesday.

It’s taking orders only from current Verizon subscribers. The phone will be available in stores for the general public next Thursday, but supplies are likely to be tight.

AT&T Inc. has so far been the exclusive carrier of Apple Inc.’s popular phone in the U.S. It activated 15.2 million of them last year. Analyst estimates for Verizon iPhone sales this year vary widely, from 5 million to 13 million. Analysts expect the sales to Verizon subscribers will be strong, but the big question is how many iPhone buyers will be jumping ship from other carriers.

Barclays Capital analyst James Ratcliffe wrote in a research note Friday that he had been expecting that AT&T would still be able to add a net 250,000 subscribers on contract-based plans in the first quarter, but news of the strong iPhone pre-orders on Verizon prompted him to lower that forecast to zero.

Spain’s economy improved in 4th quarter, report finds

Spain’s central bank said Friday the economy grew 0.2 percent in the fourth quarter compared to the third, and that for all of 2010 it contracted less than the government had forecast — good news for a country trying to dispel fears it might need a bailout.

The Bank of Spain said it estimates gross domestic product fell 0.1 percent in 2010, less than the 0.3 percent decline officially forecast in the latest budget.

The bank’s quarterly GDP figures are preliminary. They are usually followed a week later by official numbers from the National Statistics Institute, although these tend to agree with the bank’s.

Spain is struggling to overcome nearly two years of recession prompted in large part by the collapse of a credit-fueled spending spree and real estate bubble.

Tyson income up 86 percent, partly buoyed by cost cuts

Tyson Foods’ net income jumped 86 percent in its fiscal first quarter, helped by improving chicken sales and rising prices for beef and pork, the meat producer said Friday.

Tyson’s shares climbed 6.2 percent to $18.65 in morning trading Friday.

The improvement is a strong signal the meat producer, based in Springdale, Ark., has recovered from an industry downturn brought on by a combination of higher production costs and slumping demand as shoppers cut spending.

CEO Donnie Smith said the company has cut $600 million in annual costs since 2008, when it was first battered by historically high grain prices. Smith said the cuts put Tyson in a good position to handle higher feed costs predicted for 2011, even as demand for chicken is expected to be flat.

The company expects to cut an additional $200 million in costs this year.

Clorox Inc. falls as demand for disinfectants decreases

Clorox Co. failed to clean up in its second quarter but says it sees better times ahead as it expands its product lines, controls costs and raises prices.

The maker of cleaning products, Hidden Valley Ranch salad dressing and other products reported Friday that its net income slid 81 percent on softer sales and a charge to write down the value of its Burt’s Bees business.

Clorox, based in Oakland, Calif., reported net income of $21 million, or 15 cents per share, for the quarter. That’s down from $110 million, or 77 cents per share, in the same period last year.

Excluding a $258 million charge tied to Burt’s Bees, the company earned 68 cents per share, compared with 66 cents per share in the same period last year. Analysts polled by FactSet expected 46 cents per share.

Revenue fell 3 percent to $1.18 billion, narrowly missing analyst expectations of $1.19 billion.

Revenue declined for both Clorox’s cleaning and household segments.

The cleaning business dealt with lower shipments of wipes and other disinfecting products, as concerns about the swine flu virus, which boosted last year’s results, evaporated.

Dow has gain of 2.3 percent for week, closes at 12,092

The Dow Jones industrial average rose 29.89 points, or 0.3 percent, to close at 12,092.15. The Dow climbed 2.3 percent for the week and has posted gains for nine of the last 10 weeks. The average of 30 large company stocks cleared the 12,000 mark Tuesday, the first time it closed above that level since June 2008.

The Standard & Poor’s 500 index rose 3.77 points, or 0.3 percent, to 1,310.87. The Nasdaq composite gained 15.42 points, or 0.6 percent, to 2,769.30.

The S&P 500 rose 2.7 percent for the week and the Nasdaq 3 percent.

Benchmark West Texas Intermediate crude for March delivery fell $1.51 to settle at $89.03 per barrel on the New York Mercantile Exchange. In London, Brent crude lost $1.93 to settle at $99.83 per barrel on the ICE Futures exchange.

In other Nymex trading for March contracts, heating oil fell 5 cents to settle at $2.7167 per gallon and gasoline futures dropped 6.8 cents to settle at $2.4353 per gallon. Natural gas lost 2.7 cents to settle at $4.310 per 1,000 cubic feet.

Bank of America to create new division for foreclosures

Bank of America Corp. on Thursday said it is splitting its mortgage business into two units, with a new division created specifically to handle foreclosures and discontinued loan products.

The bank said the new Legacy Asset Servicing unit will be responsible for resolving issues involving faulty paperwork that led Bank of America to suspend foreclosures in all 50 states in October. After reviewing procedures, it resumed the actions nationwide in December.

The legacy unit will also handle mortgage modifications and buyback claims on bad home loans sold to investors. It will be led by Terry Laughlin, who joined Bank of America in July 2010 as an executive in its mortgage unit handling credit loss mitigation strategies.

The move is the latest in a series of management shifts since Brian Moynihan took over as CEO in January 2010.

Hazardous waste settlement will cost Target $22.5 million

Target Corp. has agreed to pay $22.5 million to settle a multiyear California investigation into the alleged dumping of hazardous waste by the retail chain, according to court documents filed this week.

The settlement, pending final approval by a judge, is part of a bigger push by prosecutors from throughout the state to crack down on environmental violations by big box retailers and follows multimillion-dollar settlements in recent years with Walmart Stores Inc. and Home Depot Inc.

Under the tentative agreement, the Minneapolis-based retail giant admits to no wrongdoing but will pay about $3.4 million to the California attorney general’s office. Smaller sums will go to city attorneys in Los Angeles and San Diego, as well as district attorney’s offices in 20 counties.

Additionally, Target has agreed to implement a statewide program to enforce proper compliance of waste disposal laws, train employees in legal ways to handle hazardous sludge and pay an independent auditor to check compliance for three years.

Closure of two Georgia banks puts 2011 total at 13

Regulators have shut down two small banks in Georgia, bringing to 13 the number of bank failures in 2011 following last year’s tally of 157 amid the sagging economy and mounting bad loans.

The Federal Deposit Insurance Corp. seized American Trust Bank, based in Roswell, with $238.2 million in assets and $222.2 million in deposits; and North Georgia Bank of Watkinsville, with $153.2 million in assets and $139.7 million in deposits.

Renasant Bank, based in Tupelo, Miss., agreed to assume $147.4 million of the assets and all the deposits of American Trust Bank. BankSouth, based in Greensboro, Ga., is assuming $123.9 million of the assets and all the deposits of North Georgia Bank.

 

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