Business news in brief

Saturday, April 6, 2013

QUOTE OF THE DAY

“[Ray] Lane is clearly the fall guy for the botched Autonomy acquisition. When he was announced as the chairman, we were pleased with that decision, but at this time it’s in the best interest of the company to move on.” Bill Kreher, Edward Jones & Co. analyst, on Hewlett-Packard Chairman Ray Lane’s resignation

Active U.S. rig count drops to 1,738

HOUSTON - Oilfield services company Baker Hughes Inc. said Friday the number of rigs actively exploring for oil and natural gas in the U.S. dropped by 10 this week to 1,738.

The Houston-based company said in its weekly report that 1,357 rigs were exploring for oil and 375 for gas. Six were listed as miscellaneous. A year ago, there were 1,979 rigs.

Of the major oil- and gas-producing states, Oklahoma lost 13 rigs, Pennsylvania dropped six, West Virginia lost two and North Dakota decreased by one. Louisiana gained four rigs, Texas and Wyoming each added two and New Mexico and Colorado each increased by one. Alaska, Arkansas and California remained unchanged.

The rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

Random House gets OK to buy Penguin

Bertelsmann SE’s Random House won European Union approval to buy Pearson Plc’s Penguin unit to create the largest book publisher in the U.K. and the U.S.

The European Commission said the deal wouldn’t raise competition concerns because the combination would face strong rivalry from several large and many other smaller publishers, according to a statement.

“The commission’s investigation revealed no evidence that the transaction would lead to risks of coordination among publishers in relation to the acquisition of authors’ rights and the sale of English language books to dealers,” regulators said.

The joint venture, named Penguin Random House and to be based in New York, will be 53 percent-owned by Guetersloh, Germany-based Bertelsmann, with London-based Pearson holding the remainder, the companies said in October.

Bertelsmann Chief Executive Officer Thomas Rabe said the venture will control about 25 percent of the industry.

Pimco manager: U.S. growth 2%, tops

Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said the U.S. economy won’t expand more than 2 percent this year even with one or two quarters of faster growth.

“A 2 percent ‘new normal’ economy is the best we can expect,” Gross said in a radio interview with Tom Keene after a report showed employers hired fewer workers than forecast in March and a decline in the size of the labor force pushed the unemployment rate down to a four-year low. “The sun isn’t going down, but there’s certainly an element of dusk to it.”

Pimco, based in Newport Beach, Calif., in 2009 coined the term “new normal” to describe an era of lower returns, heightened government regulation and shrinking U.S. clout in the world economy following the 2007-2009 financial crisis. In a March report, Pimco said U.S. growth will be 1.5 percent to 2 percent for the full year because of slower expansion in the first half of 2013 triggered by fiscal policy tightening.

Pimco, a unit of Munich-based insurer Allianz SE, managed $2 trillion in assets as of Dec. 31. Gross runs the $289 billion Pimco Total Return Fund.

Wal-Mart, Sears portrait studios close

ST. LOUIS - A financially troubled St. Louis-based company is abruptly shuttering its more than 2,000 portrait studios that are found nationwide in locations such as Wal-Mart and Sears stores.

CPI Corp. said in a two-paragraph statement on its website that it’s saddened by the announcement and that it is trying to fulfill as many customer orders as possible. It urges customers with questions to contact their local store.

The Associated Press left messages with CPI seeking comment early Friday.

CPI has struggled in recent years as the popularity of digital photography cut into its sales.

The company last month announced in a federal securities filing that it has received a fourth forbearance agreement from its lenders, and that it had until today to meet its loan obligations.

Lehman trustee wants $25 million more

Lehman Brothers Inc. brokerage trustee James Giddens has asked a judge to approve almost $25 million in fees and expenses for the period from March to June 30, according to a filing in federal court in Manhattan.

Giddens and his law firm have so far received $212.7 million in fees and expenses for work on liquidating the brokerage since September 2008.

After 4 ½ years, the defunct firm’s hedge fund and bank creditors are still awaiting their first payment. This month, Giddens will ask a bankruptcy judge to let him put $15.7 billion into a fund for customers, out of the $25.7 billion he is holding. He has said that customers will be paid in full.

KFC adds deep-fried boneless chicken

NEW YORK - Fast-food chain KFC is introducing deep fried boneless chicken pieces on April 14 as an alternative to its traditional breast, thigh and drumstick pieces.

The new offering reflects the growing popularity of nuggets and strips that are easier to eat on the go. KFC said nearly four out of five servings of fried chicken in the U.S.

are now boneless.

Based on customer trends, the company says chicken with bones could eventually be pushed off its menu.

The new boneless, skinless pieces are about twice the size of KFC’s crispy strips and come in white or dark meat.

Spokesman Rick Maynard said it took two to three years to develop its version of boneless chicken, which he said performed strongly in test markets including Oklahoma City and Omaha last year. He said the new boneless pieces will also replace the chicken filets used in sandwiches.

KFC has more than 18,000 restaurants around the world, including more than 4,500 in the U.S. Its parent company Yum Brands Inc. also owns Taco Bell and Pizza Hut, which have also been introducing major new menu offerings in recent months.

Shares of Yum Brands fell 76 cents, or 1.1 percent, to close Friday at $66.97 as the broad market indicators sagged on weaker than expected U.S. job growth in March.

Business, Pages 28 on 04/06/2013