Briefs

Company News: Banks, German Carmakers, John Thomas, Twitter, Drugmakers


Commercial banks: In a revenue squeeze

Several major U.S. banks posted revenue declines in the most recent quarter. Although they managed to post higher earnings, they depended more on reduced overhead and shrinking reserves for losses on soured loans. At JPMorgan Chase (JPM), income rose 33 percent to a record $6.53 billion, and revenue fell 3.6 percent. Wells Fargo (WFC) posted record income of $5.17 billion, a year-on-year increase of 22 percent, and revenue was down 1.7 percent. Bank of America’s (BAC) net income quadrupled to $2.62 billion, and revenue fell 8.4 percent. Citigroup (C), which is less dependent on U.S. consumers than its rivals, posted a 30 percent rise in income and a 6 percent increase in revenue.

German carmakers: A $25 billion currency hedge

With the yen weakening and Europe’s debt crisis spreading, Volkswagen and its German peers plan to spend more than $25 billion by 2017 to expand production outside their home region and insulate themselves from currency gyrations. BMW will start production of the new X4 sport utility vehicle at its factory in South Carolina, where it already assembles three other SUVs; Daimler is expanding a Mercedes-Benz plant in Alabama; and VW’s Audi is building a $1.3 billion factory in Mexico.

John Thomas Financial: Fraud allegations

John Thomas Financial CEO Anastasios “Tommy” Belesis was cited by the Financial Industry Regulatory Authority for allegedly defrauding customers and intimidating his brokers. The company, which also faces disciplinary action from the Securities and Exchange Commission, artificially inflated the price of a stock it owned, FINRA alleges. The March 4 issue of Bloomberg Businessweek reported that John Thomas’s brokers used high-pressure tactics to push stocks. A spokesman said then that Belesis will defend himself “vigorously.”

Twitter: Looking to add TV shows

Twitter is close to reaching deals with television networks that would bring more high-quality video and advertising to the social-media site, according to people familiar with the matter. Twitter has talked with Viacom (VIAB), which owns MTV and Comedy Central, and Comcast’s (CMCSA) NBCUniversal. Twitter would stream videos on its site and split the ad revenue with the networks, according to one of the sources. The TV push coincides with plans to release a mobile application that lets users stream and share music.

Drugmakers: No generics for OxyContin

The Food and Drug Administration has barred generic drugmakers from selling copies of older versions of the popular painkiller OxyContin that aren’t tamper-resistant. In 2010, Purdue Pharma pulled its original OxyContin formulations and replaced them with a new version that is harder to break up and snort or inject. Purdue’s original OxyContin patent expired April 17. Endo Health Solutions (ENDP) is seeking a similar ruling for its painkiller Opana, which it reformulated with abuse-deterrent features.

On the Move

— Facebook: Former Apple maps exec Richard Williamson hired for mobile software group

— Navistar: Jack Allen named chief operating officer

— Jefferies Group: Fixed-income co-head Robert Harteveldt leaves

Weise_190
Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

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Companies Mentioned

  • JPM
    (JPMorgan Chase & Co)
    • $56.02 USD
    • 0.26
    • 0.46%
  • WFC
    (Wells Fargo & Co)
    • $52.19 USD
    • -0.06
    • -0.11%
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