American Airlines reports $700M profit
DALLAS -- American Airlines announced $700 million in first-quarter profit on Friday, beating analyst estimates despite a dip in earnings compared to the $932 million the company brought in over the same time period last year.
American saved more than $600 million off its fuel bill on lower oil prices, but it wasn't enough to offset a 4 percent drop in operating revenue, which was $9.4 billion.
The Fort Worth-based company attributed the lower revenue to increasing competition and capacity in the airline industry, softness in its Latin American markets and weaker foreign currencies.
A key measure of how much passengers pay per seat per mile flown dropped by 7.5 percent and is expected to stay down through the year.
The company also saw results fall as it included a $456 million provision for future income taxes and set aside $73 million for its employee profit-sharing program announced last month.
Still, the company's $1.25 earnings per share, excluding special items, beat analyst estimates, which had hovered around $1.19.
Shares of American Airlines Group Inc. fell $1.80, or 4.5 percent, to close Friday at $38.21.
-- The Dallas Morning News
China: Agency in drywall suit immune
NEW ORLEANS -- China's Ministry of Justice has sent back a lawsuit in which thousands of U.S. homeowners say a Cabinet-level agency should pay for damage to their homes from defective drywall made in China.
The ministry said it won't serve the legal papers because the agency is immune to such lawsuits and the legal service would infringe on China's sovereignty.
U.S. District Judge Eldon Fallon has ruled that Taishan Gypsum Co. Ltd. must pay for damages from the drywall it made. He's considering damages for as many as 4,000 homeowners in six states.
The brief letter from Beijing became part of the court record this week, about 21 months after lawyers for the homeowners sued the State-Owned Assets Supervision and Administration Commission, which oversees 117 state-owned companies. It was dated April 8.
An attorney for the homeowners did not immediately respond to a request for comment emailed Thursday.
Fallon ruled in 2010 that Taishan's drywall emitted sulfur gas that damaged the homes of seven "bellwether" plaintiffs from Virginia, making occupants ill, corroding copper, silver and other metals, damaging appliances and electronics, and stinking up the houses so they were "hard if not impossible to live in."
-- The Associated Press
Cost of renting rises 2.6% in March
WASHINGTON -- Americans paid more to rent housing last month, but broader measures suggest that the surging increases of prior years have moderated in much of the country.
Real estate data firm Zillow said Friday that the median U.S. monthly rent rose a seasonally adjusted 2.6 percent in March from a year ago to $1,389. That was slightly more than the year-over-year increase of 2.5 percent in February.
Prices ticked up slightly last month in the Los Angeles, Boston, Phoenix and Portland, Ore., metro areas. Rents fell in Cleveland, Memphis and Oklahoma City.
After sharp increases in 2014 and much of last year, rents cooled between August and February as stepped-up construction put more apartments on the market. For all of 2015, finished construction of multifamily buildings soared 21 percent, according to the Commerce Department.
Until recently, rents had been steadily rising at more than double the pace of wages. But rental increases are now almost identical to the 2.3 percent yearly increase in average hourly earnings tracked by the Labor Department.
There are signs that builders are pulling back on apartment construction. During the first three months of 2016, permits for new apartment buildings fell 5 percent from the same period a year ago, the Commerce Department said this week.
-- The Associated Press
Microsoft drops Google complaint at EU
Microsoft Corp. and Google ironed out differences Friday, days after European Union antitrust watchdogs sent the search-engine company a statement of objections partly triggered by Microsoft-backed lobbying.
Microsoft agreed to "withdraw its regulatory complaints against Google, reflecting our changing legal priorities." The Seattle-based company said Friday it will "continue to focus on competing vigorously for business and for customers."
Alphabet Inc.'s Google was accused on Wednesday of wielding its power as the world's leading phone-software supplier to impose its search and Web programs on billions of mobile users.
The Android software for smartphones has been in the EU's sights since 2013 after an industry group backed at the time by Microsoft and Nokia Oyj filed a complaint with regulators. The EU opened a formal investigation last year that looks at Google's anti-competitive practices on mobile since 2011.
The companies had previously resolved patent disputes.
Google, based in Mountain View, Calif., said the deal will allow the companies to compete "on the merits of our products, not in legal proceedings."
Google spokesman Al Verney didn't immediately comment on the move by Microsoft.
-- Bloomberg News
Fix or swap GE engines, airlines told
Airlines flying Boeing Co.'s 787 Dreamliner jets with the latest General Electric Co. engines were ordered to repair them, or swap out at least one with an older model, in an urgent safety directive issued after an in-flight failure.
A GEnx-1B PIP2, part of a family of engines plagued by issues related to icing, suffered "substantial damage" in the Jan. 29 incident, when ice on the fan blades broke loose, the U.S. Federal Aviation Administration said in an order published Friday in the Federal Register.
"The potential for common cause failure of both engines in flight is an urgent safety issue," the FAA said in its order.
The GEnx, a high-efficiency engine developed for wide-body aircraft, has faced earlier issues with icing. In 2013, the FAA ordered airlines to avoid flying 787 and 747-8 planes equipped with the GE engines near thunderstorms in high-altitude cruise flight. Moisture from the storms could enter the engines and form ice, the FAA said.
The latest issue is unrelated to the 2013 situation. The incident occurred at 20,000 feet, which was lower than previous icing issues encountered by the engine model.
-- Bloomberg News
Business on 04/23/2016