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CEO At Santander Resigns Post CEO At Santander Resigns Post

April 29, 2013- Banco Santander CEO Alfredo Saenz resigned ahead of Spain financial regulators making a decision over whether he should be banned from the banking industry due to a criminal conviction.

Saenz, who along with Emilio Botin, the executive chairman of Santander, is credited with creating the transformation of the bank from a domestic lender to the biggest lender in the eurozone by value. His resignation is effective immediately and Javier Marin will replace him. Marin is a 46-year old and directed the insurance and private bank arm of the bank.

Saenz’s departure is an unexpected twist in the legal battle that has been long running and has dogged the most powerful bankers in Spain for close to two decades. The move gives the Bank of Spain the opportunity to dodge making the big decision on barring him from the industry.

Under the rules currently in Spain, the central bank is forced to ban all bankers from working in upper management positions if they have been convicted of a criminal offense. That was likely to apply to Saenz after the Supreme Court in Spain overruled in February a governmental pardon that had earlier been granted to Saenz.

On 1994, Saenz received a conviction for making false accusations that dated back to when he led Banesto. Saenz has been second in command at Santander since it purchased Banesto in 2002.

Santander announced that Saenz informed its board on Monday of his decision to step down on a voluntary basis as the CEO and a member of the board, noting that the assets at the bank had close to quadrupled in his tenure.

Last year Saenz one of the highest paid bankers in Spain earned $10.7 million.

U.S. Economy Grows but at less than Stellar Pace U.S. Economy Grows but at less than Stellar Pace

April 28, 2013 - The sluggish recovery in the U.S. keeps catching a break, but not a good one. The continual spending cuts by the federal government and the slowdown in investments by businesses thwarted any hope for a stronger growth in the economy during the first three months of 2013.

During the first quarter of this year, the economy in the U.S. grew by an annualized rate of 2.5%, said a report from the Commerce Department on Friday.

The improvement was substantial from the 0.4% increase during the fourth quarter of 2012, when smaller stockpiling by businesses and deep cuts in the defense budget slashed any growth. Even though the growth was higher than the previous quarter, it was still below the average set by market analysts at 3%.

As was expected, farms as well as other businesses filled their inventories to start the year, which accounted for a large part of the acceleration of the nation’s GDP, or the total value of goods and services, which were produced in the U.S.

More than two-thirds of the U.S. economy is made up of consumer spending, which was robust during the quarter. Even though taxes cut into workers paychecks, people continued to buy more vehicles and other long term products.

Spending for services, which includes utilities, healthcare and insurance all increased during the quarter at its fastest pace in 8 years. The private economy remains tough, but the public sector has proven to be a bigger drag on the economy than was previously feared.

Following a drop in the fourth quarter of an annualized rate of more than 7%, government investment and spending fell by 4.1% during the first quarter of 2013. Expenditures in National defense fell 11.5% during the first three months of 2013 after plummeting by 22.1% during the last quarter of 2012.

 

Novartis Accused of Paying Kickbacks by U.S. Novartis Accused of Paying Kickbacks by U.S.

April 28, 2013 - Prosecutors in the U.S. allege that Novartis, the Swiss drug maker, gave physicians fishing trips and provided them with lavish dinners so they would prescribe their medications.

Novartis says the money was to pay doctors to speak at different educational programs throughout the U.S. However, prosecutors counter that many of the meetings were held at Hooters restaurants.

The U.S. unit of the pharmaceutical giant is accused by federal prosecutors of offering the dinners and fishing trips so doctors would prescribe their brand name medications for treating hypertension and other sicknesses.

On Friday, a civil fraud suit was filed against Novartis in Manhattan in federal court. The fishing trips included ones to the Florida coast, while dinners were Manhattan’s Nobu and in different Hooters in the U.S. One outing was alleged to have been held at a fishing lodge known for its salmon in Alaska.

The Friday lawsuit was the second prosecutors from the federal government have brought against the U.S. arm of the Swiss pharmaceutical giant in just the last week.

Novartis disputes the prosecutors’ claims. On Friday, in a statement that was emailed, Novartis said a defense against the litigation would take place. The statement said the physician speaker program have become a customary and accepted practice in the pharmaceutical industry.

For years, drug companies have paid physicians to speak at meetings with other doctors about their new drugs. The meetings, say members of the industry, are only for educational purposes, but U.S. authorities have for many years scrutinized the payments.

Authorities in the U.S. allege the payments at times are nothing more than a kickback to convince doctors to give prescriptions out for certain medications.

Authorities said Novartis spent close to $65 million and held over 38,000 speaker programs over a period of nine years that ended in late 2011, for three hypertension drugs and one drug for diabetes.

Burger King Profits Climbs during First Quarter Burger King Profits Climbs during First Quarter

April 28, 2013 - Burger King Worldwide announced on Friday that its profit in the first quarter more than doubled due to lower expenses that were able to offset same-stores’ negative sales and revenue that was weaker.

Last June, the company became public again following its acquisition by 3G Capital a private equity firm from Brazil in October of 2010. Since that time, Burger King has tried to change its menu to attract a broader base of customers to help it compete better with McDonald’s is chief rival.

During the first quarter of this year, Burger had a profit of $35.8 million equivalent to 10 cents per share, compares to a profit last year during the same quarter of $14.3 million or just 4 cents per share. Revenue was down by 42% to end the quarter at $327.7 million amidst transactions including global refranchising and same store sales that were weaker than expected.

Wall Street analysts had estimated earnings of 17 cents per share and revenue exceeding $307 million. Comparable stores revenues dropped 1.4% in comparison to an increase of 4.6% last year during the same quarter.

In Canada and the U.S., same store revenue was down by 3%, while in Africa, the Middle East and Europe saw minimum growth of just 0.8%. In the Asia-Pacific area, same store revenue was up 2.7%.

Total expenses and operating costs dropped by 54% on lower administrative and payroll expenses and lower food costs. However, property and franchise expenses were up more than 53%.

Daniel Schwartz an executive at the fast food chain will become its CEO July 1. Current CEO Bernardo Hees will take the top spot at H.J. Heinz, the ketchup maker that 3G Capital along with Berkshire Hathaway purchased for $23 billion.

Southwest Airlines Earns more than Analyst’s Estimates Southwest Airlines Earns more than Analyst’s Estimates

April 26, 2013- Southwest Airlines Co. earned more than what Wall Street expected during the first quarter of 2013, but company officials said on Thursday the federal spending cuts might hurt April’s revenue. Higher airfares helped the airline, as its one way fare averages more than $150, an increase of 4% over last year.

The airline released some details changes for its Atlanta operation, were it its competing with Delta Air Lines.

Southwest did not fly into Atlanta prior to buying AirTran Airways. The Hartsfield Jackson International Airport in Atlanta is the busiest in the world and AirTran uses the airport as its hub, where passengers connect to other flights. However, starting in the fall, Southwest will convert to a point-to-point operation in Atlanta, which will serve people from, or going to the city. Officials at Southwest said the change should make the Atlanta operation more efficient and boost traffic there.

Net income, for the first quarter at Southwest, dropped by 40% to just over $59 million or 8 cents a share. The quarterly earnings were down from the $98 million or 13 cents a share from the same quarter a year ago. However, last year during the first quarter the airline earned $116 million in onetime earnings from fuel hedging.

Without taking into account special items, Southwest has earnings of just 7 cents a share, which topped the forecast by analysts of 2 cents a share and reversed an adjusted 2 cents a share loss from last year.

Revenue was $4.09 billion, which was 2% higher than the same quarter last year. Shares of Southwest remained steady on Thursday to close at $13.42. March’s revenue was weaker, said Southwest officials, as well as the beginning of April’s due to the results of the federal budget cuts that went into effect March 1.

Durable Orders Fall in U.S. by more than 5% Durable Orders Fall in U.S. by more than 5%

April 25, 2013 - Durable Goods orders for March in the U.S. dropped by 5.7%, the largest drop in the past seven months, which adds to evidence that U.S. manufacturing has cooled off during the latter part of the first quarter this year.

Lower prices in commodities and weak markets overseas, have slowed the demand for companies like Caterpillar, Inc, indicating a cooling of manufacturing the last month of the first quarter.

Durable goods orders, which are bookings for products meant to last a minimum of three years dropped following a revised gain of 4.3% for February.

The February gain was less than what had been originally estimated, reported the U.S. Commerce Department on Wednesday.

The category that is less volatile that excludes equipment for transportation dropped unexpectedly for the second straight month. Companies are feeling a pinch, with customers reining in their spending on inventories and equipment due to concerns that the federal budget cuts that took effect across the board in March and slower growth internationally will slow down the largest economy in the world.

However, gains in auto and housing are helping others and supporting even more expansion. Most stocks were up on Wednesday, which extended a rally in the S&P 500 for the fourth consecutive day, as companies from Apple to Boeing reported their earnings.

While the data about orders indicated a cooling of business investment during the first quarter following a climb of 11.8% based on an annualized rate in the final quarter of 2012, it is still a rising trend.

Overseas, the latest figures for early in the second quarter showed that Europe was not making much progress in emerging from its deep recession.

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