QUOTE OF THE DAY “Rates are shooting up in the private market
and regular commercial loans are being pulled back very quickly.All industrial
businesses [in China] run on credit, so as
soon as you close that down, they just stop producing and selling stuff.” Anne Stevenson-Yang, research director at J Capital Research Article,1DArch Coal to sell 3 mines to cut costs
Arch Coal Inc., one of the most indebted U.S. coal producers, agreed to sell three Utah mines from its most profitable division for $435 million as the company tries to cut costs amid falling coal prices.
The company will sell the Sufco, Skyline and Dugout Canyon mines and 105 million tons of reserves to closely held Bowie Resources LLC, Arch said in a statement Friday. Arch said it will record a $120 million pretax gain from the deal.
Arch has posted two straight net losses and its debt has risen after a slump in U.S. consumption of coal to generate electricity and a slowdown in demand for metallurgical coal used in steelmaking.
The transaction will allow St. Louis-based Arch to focus on the most “value-enhancing” parts of its business, such as its lower-cost thermal coal operations and Appalachian metallurgical-coal mines, Chief Executive Officer John W. Eaves said in the statement.
Shares of Arch Coal rose 5 percent to close Friday at $3.78.
- Bloomberg NewsCBS unit files for IPO in breakup plan
CBS Outdoor Americas Inc. filed for an initial public offering as part of parent company CBS Corp.’s plan to split off the billboard division.
The offering size, $100 million, is a placeholder amount that may change. A portion of the proceeds will be used to repay a CBS note, the company said in a regulatory filing. CBS will own about 80 percent after the offering and distribute the stock to its investors.
CBS said in January that it planned to convert the outdoor advertising business into a real-estate investment trust. The structure has become a popular tool for companies to lower taxes and improve returns for investors.
The trusts don’t pay federal income taxes, with the understanding that they distribute at least 90 percent of taxable earnings to shareholders as dividends.
The Internal Revenue Service is weighing whether to narrow the legal definition of real estate for the purposes of converting to a trust.
CBS shares rose 7 cents to close Friday at $48.87.
- Bloomberg NewsNike’s China revenue forecast to decline
Nike Inc., the world’s largest sporting-goods company, reduced its annual forecast for sales and earnings and said revenue in China would decline in the next two quarters.
Revenue for the year ending in May will rise at a high single-digit percentage rate while earnings per share will gain by a low double-digit percentage, Chief Financial Officer Don Blair said during a call with analysts Thursday.
In March, Nike forecast sales would gain as much as low double digits and that profit would increase by a midteens percentage.
Nike’s sales in China, where it got 9.7 percent of its revenue in its most recent fiscal year, have been deteriorating as the economy’s growth slows and it discounts apparel that didn’t have the proper fit and sophistication for the nation’s shoppers. In May, Nike replaced its top executive in the country, and the company also is working on improving the presentation of its products at retailers there, Blair said.
Nike’s business in China is “still a work in progress,” Chris Svezia, an analyst for Susquehanna Financial Group in New York, said in an interview. “There was some hope that they were turning the corner.”
Shares of Nike, based in Beaverton, Ore., rose $1.36, or 2.2 percent, to close Friday at $63.68.
- Bloomberg NewsStrong recovery boosts Japan’s premier
TOKYO - Japan’s economy strengthened in May as factory output rose the most since December 2011, retail sales climbed and consumer prices halted a six-month slide, bolstering Prime Minister Shinzo Abe’s push to end deflation.
Consumer prices excluding fresh food were unchanged from a year before as a weakening yen sent utility costs up at the fastest pace in almost five years. Prices excluding fresh food and energy fell 0.4 percent in May from a year earlier, the Statistics Bureau in Tokyo reported Friday. Industrial production advanced 2 percent from April, driven by demand from power companies. Retail sales gained 1.5 percent from the previous month.
The data offer evidence to the prime minister that his reflationary strategy is paying off as he campaigns to strengthen his political position before next month’s upper house election. They may also ease pressure on Bank of Japan Governor Haruhiko Kuroda to add monetary stimulus after a sell-off in stocks.
“The policies of the government and [Bank of Japan] are working in terms of reflating the economy,” said Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo. At the same time, “for Japan to recover from two decades of deflation, it will require a few years of good economic performance.” - The Associated Press
Business, Pages 26 on 06/29/2013