Briefs

Briefs


 

Airlines: Benefits from an FAA Shutdown

The partial shutdown of the Federal Aviation Administration may give U.S. airlines an extra $1.3 billion in revenues. Congress’s stalemate over FAA funding suspended the agency’s authority to collect taxes on airline tickets. Once the shutdown started at midnight on July 22, most airlines, including United (UAL), Delta (DAL), and Southwest (LUV), raised the base price of fares, keeping the total cost customers pay the same as before the shutdown but pocketing the money that used to go to taxes. The FAA expects to lose about $30 million a day in taxes until Congress returns from summer recess on Sept. 7. The Treasury Dept. is studying whether the FAA can retroactively collect the lost taxes.

 

Eastman Kodak: Trying to Prevent a Takeover

Eastman Kodak (EK) is building defenses against a possible hostile takeover. The Rochester (N.Y.)-based company’s share price has plunged 54 percent this year. Kodak on Aug. 1 adopted a so-called poison pill that would be triggered if an investor or group accumulates a stake of 4.9 percent or more. Under such a scenario, shareholders as of Aug. 11 would be given the right to purchase one newly issued preferred share for each regular share they own. This would effectively raise the cost for any party attempting a takeover.

 

Universal: Misfire on a Would-Be Blockbuster

Judging from the box office take on opening weekend, Cowboys & Aliens could deliver disappointing returns to Universal, Relativity Media, and DreamWorks, which financed the space invaders Western. The film, which cost $163 million to make plus an additional $100 million to promote, generated $36.4 million in U.S. and Canadian theaters during its opening three-day weekend, according to Box Office Mojo. Paramount Pictures, which will distribute the movie abroad, isn’t on the hook for production costs.

 

Research In Motion: Rivalry Heats Up

Canada’s Research In Motion (RIMM) announced its biggest product launch on Aug. 3, with three new models, including a touchscreen version of the BlackBerry Bold. Even with the latest news, RIM stock has shed more than half its value this year as investors question the smartphone maker’s ability to keep pace with Apple (AAPL) and Android (GOOG) devices. With RIM possibly facing its first sales drop in nine years, it’s cutting 2,000 jobs and bracing for a new threat in September: the release of yet another iPhone.

 

MasterCard: Spending on Cards Boosts Profits

MasterCard (M)’s better-than-expected earnings validated Chief Executive Officer Ajay Banga’s strategy of expanding into international markets, boosting the stock nearly 14 percent on Aug. 3. Banga has been leading MasterCard’s charge into emerging markets via acquisitions. MasterCard reported a 33 percent jump in profits for the quarter, powered by a 16 percent increase in spending on MasterCard- and Maestro-branded debit cards and credit cards around the world.

 

On the Move

— Morgan Stanley: W. Grant Gregory to head North America investment banking group

— Fiat-Chrysler: CEO Sergio Marchionne says he may retire after 2015

— Thomas Cook: CEO Manny Fontenla-Novoa steps down

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

Race, Class, and the Future of Ferguson
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • UAL
    (United Continental Holdings Inc)
    • $48.51 USD
    • 0.50
    • 1.03%
  • DAL
    (Delta Air Lines Inc)
    • $40.4 USD
    • 0.48
    • 1.2%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus