Dow Chemical’s first-quarter earnings fell 50 percent after it took a pre-tax charge of $357 million to close some of its plants.
The nation’s largest chemical maker reported income of $412 million, or 35 cents per share, from January to March. That compares with $625 million, or 54 cents per share, for the same part of 2011.
Excluding restructuring costs related to the plant closures and other special items, Dow said it earned 61 cents per share. Revenue was flat at $14.7 billion.
Analysts, who typically exclude special items, expected earnings of 59 cents per share and revenue of $14.96 billion, according to FactSet.
The Midland, Mich., company has benefited from growth in emerging economies in the Asia-Pacific region and Latin America. But sales have weakened in Europe, where a growing debt crisis is pushing parts of the eurozone back into recession. In March, Dow decided to restructure its international business to account for the slowdown in Europe.
Dow cut 900 jobs, closed plants in Charleston, Ill., Portugal, Hungary and Brazil, and it idled operations at a plant in the Netherlands. The changes are expected to cut costs by about $250 million each year.
Dow Chairman and CEO Andrew Liveris said that Western Europe will continue to deal with “recessionary conditions” this year. The economic picture is better in the U.S., thanks to cheap natural gas prices. Natural gas prices have a huge influence on company margins because it’s such a big input in the process.
China’s economy appears to be moderating and Germany is showing signs of improvement, he said.
Shares of The Dow Chemical Co. fell by 59 cent to $35.49 in premarket trading.
Wendy’s gave its new CEO a pay package worth $4.6 million for the last four months of 2011.
Emil Brolick was hired last September after Wendy’s split from fellow fast-food chain Arby’s. The 63-year-old Brolick has been on a mission to reinvent Wendy’s as a higher-end burger chain by improving ingredients and remodeling restaurants.
An Associated Press analysis of a regulatory filing finds Brolick’s compensation included salary of $338,462, a bonus of $500,000, stock and option awards worth $3.2 million and an incentive-based bonus of $533,026.
Other compensation covered legal expenses related to the negotiation of his contract.
Wendy’s previous CEO, Roland Smith, received $16.5 million for the first part of 2011, including $11.3 million in severance pay.
The AP’s calculation includes salary, bonuses, perks and stock and option awards.
Asian stock markets fell Thursday after a weak Spanish bond auction inflamed concerns about the European debt crisis and hopes faded for more help for the U.S. economy from the Federal Reserve.
Japan’s Nikkei 225 index fell 1 percent to 9,717.93, after hitting its lowest intraday point since March 8 at 9,692.70.
Hong Kong’s Hang Seng tumbled 1.5 percent to 20,489.01 and South Korea’s Kospi fell 0.8 percent to 2,002.69. Falling commodity prices dragged Australia’s S&P/ASX 200 down 0.9 percent to 4,296.80.
The debt crisis in Europe flared anew Wednesday after a disappointing auction of government debt in Spain signaled investor confidence in the country’s finances is weakening. The Dow Jones industrial average lost 125 points, and the price of gold plunged to its lowest level since January.
That compounded worries that arose Tuesday, when minutes released from the March meeting of the U.S. Federal Reserve’s Open Market Committee gave no hint of a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy.
The Fed has already carried out two rounds of bond-buying, most recently in August 2010, to drive down long-term interest rates easy pay day loans. Low bond yields generally encourage investors to shift money to buying stocks.
Analysts at Credit Agricole CIB in Hong Kong said in an email that “markets remained under pressure with a further digestion of the Fed’s minutes which shows no hints for QE3.”
The Dow Jones industrial average closed down 1 percent at 13,074.75. The Standard & Poor’s 500 index finished down 1 percent at 1,398.96. The Nasdaq composite index lost 1.5 percent to 3,068.09.
Benchmark oil for May delivery was up 48 cents to $101.95 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.54 to finish at $101.47 a barrel in New York on Wednesday. It had not closed below $102 per barrel since Feb. 15.
In currency trading, the euro rose to $1.3152 from $1.3139 late Wednesday in New York. The dollar fell to 82.22 yen from 82.58 yen.
Companies added 170,000 workers in January, reflecting job gains in services and at small businesses, according to a private report based on payrolls.
The increase was less than forecast and followed a revised 292,000 rise the prior month that was smaller than previously reported, the report from the Roseland, New Jersey-based ADP Employer Services showed today. The median estimate in a Bloomberg News survey of economists called for an advance of 182,000.
French President Nicolas Sarkozy secured a small boost from Moody’s rating agency Monday following a bruising downgrade last week of the way the country had been handling its economy.
Moody’s said Monday it was maintaining France with a top AAA rating and stable outlook for its debt. Rival agency Standard & Poor’s, more downbeat about the prospects for France and Europe as a whole, stripped France of its long-cherished triple A rating last Friday.
In early trading, markets appeared to brush off S&P’s decision to cut the credit ratings of nine European countries, including France. Though the downgrades late Friday had been expected, they served as a reminder that the 17 countries that use the euro as their currency still have a long way to go to get a handle on the two-year debt crisis.
Europe’s economies will likely remain the focus of attention across markets all week as a number of bond auctions are due at the same time as Greece tries to clinch a debt-reduction deal with its private investors.
Sarkozy’s budget minister Valerie Pecresse said Monday she was optimistic that S&P’s knockdown would not lead to a rise in the country’s borrowing costs. A short-term French bond auction later on that day is seen as a test of the impact of the downgrade.
In its announcement, Moody’s cited the French economy’s overall strength but said bleak growth prospects in France and the region present “risks to the French government’s fiscal consolidation plans.”
Moody’s had said in October it was putting France on review, as Sarkozy and other European leaders struggled to find solutions to Europe’s protracted debt crisis.
Moody’s said Monday it “will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU.”
The rating agency detailed the strengths of the French economy, but noted that the country’s debt levels have deteriorated because of the “global economic and financial crisis” and were now among the weakest of all AAA countries.
“France, like other eurozone sovereigns, may face a number of challenges in the coming months. The need to provide additional support to other European sovereigns or to its own banking system cannot be excluded no teletrack payday loan. In that case this could give rise to significant new (contingent) liabilities for the government’s balance sheet,” Moody’s warned.
Moody’s notes the government has less room to maneuver than during the 2008 meltdown. “The domestic and external economic growth outlook presents significant risks to the French government’s fiscal consolidation plans.”
Sarkozy meets later Monday with Spain’s new Prime Minister, Mariano Rajoy, whose country was also downgraded Friday by S&P.
The S&P move was especially brutal for France, one of the world’s biggest economies and a financier of bailouts for smaller, poorer eurozone countries.
Sarkozy has yet to speak publicly about the downgrade, leaving his government ministers to try to calm the public.
Pecresse said on Europe-1 radio Monday that she doesn’t expect “mechanical consequences” of the downgrade because France has “credibility” and is a “sure value.”
She noted that the United States didn’t see its borrowing costs spike after last August’s decision by Standard & Poor’s to strip it of its AAA rating. Like France, the U.S. is rated AA+.
Pecresse and the prime minister promised to continue cost-cutting reforms, despite criticism from the left _ and S&P itself _ that austerity measures alone could crimp growth.
Sarkozy’s challengers for the presidency have seized on the downgrade as what they call evidence that his policies are wrong-headed and ineffective.
Sarkozy hasn’t announced his candidacy but is near certain to seek a second term in two-round elections in April and May. He trails Socialist Francois Hollande in polls and is facing increasing pressure from far-right candidate Marine Le Pen and a centrist, Francois Bayrou.
It will be a bruising battle for Sarkozy, a dynamic leader who has a strong international profile but is widely disliked at home. Leftists say he has coddled the rich, while many of those who supported him in his 2007 campaign say he hasn’t fulfilled his promises.
South Korean consumer confidence fell to a three-month low in December, as concern the political outlook in the North will worsen in the wake of Kim Jong Il
An Egyptian demonstrator was killed early Saturday outside the country’s Cabinet building, where protesters have camped overnight to prevent the entrance of the country’s newly-appointed prime minister, witnesses and a medical official said.
The death came as a wave of protests against military rule was given extra impetus by the Egyptian military’s decision on Friday to appoint a prime minister who served under deposed President Hosni Mubarak.
Hundreds gathered outside the Cabinet to prevent Prime Minister Kamal el-Ganzouri from entering to take up his new post, and clashed with security forces who tried to disperse them.
An Associated Press cameraman saw three police troop carriers and an armored vehicle being chased off by rock-throwing protesters. The security forces fired tear gas in return before leaving the site.
The medical official confirmed that one protester was killed. He spoke on condition of anonymity because he was not authorized to speak to the media. Video clips posted on social networking sites showed protesters rushing to rescue a heavily bleeding man. Witnesses say the protester was killed when a police vehicle ran over him.
Officials say more than 40 people have been killed across the country since Nov. 19, when a small sit-in by protesters injured during the Jan. 25-Feb. 11 uprising was violently broken up by security forces.
Thousands of protesters have filled Tahrir Square, a few blocks from the Cabinet building, throughout the eight days.
(This version CORRECTS Corrects to indicate a police vehicle; adds details and background.)
There was a time not so long ago that seeing a single wind turbine spinning in the distance was a novel experience for most people.
Not so much any more. There are now hundreds of wind turbines scattered across the province, representing 1,700 megawatts of wind capacity in Ontario alone
As the Occupy Wall Street protests draw attention to the struggles of young adults, among others, some parents are determined to spare their children the burden of college loans.
Many worry about the college funds they’ve been able to build. Last quarter, the average mutual fund that invests in stocks lost 17 percent. The average 529 college savings plan, which invests in a mixture of stocks and bonds, lost 8.9 percent, according to a recent Morningstar 529 plan study.
But if you’ve been worried about your losses, you may have more control than you think about the outcome if you pay attention to a few details.
For example, some 529 plans charge high fees and give you little in return. And some require you to get help from a financial adviser, but often parents and grandparents can do better on their own simply by investing directly in a top-quality 529 plan.
As consumers become savvy about their 529 college savings options, they are moving money from expensive and weak 529 plans into those that grow money more effectively. During a recent 12-month period, plans sold by advisers, which are often more expensive, lost more than a percentage point of market share relative to those sold directly to individuals, according to Morningstar cash advance companies.
But how do you know if you are getting a good deal on a 529?
Start your analysis by finding out from your state’s department of education if your home state offers a 529 and whether you get a tax break by investing in it.
Some states will allow you to invest in any 529 outside your state and get a break on your taxes. But most give you a tax benefit only if you choose the 529 in your state. The usual benefit: You can subtract the amount of money you invest in a 529 from your taxable income when you do your tax return. That’s a good deal.
Some states, however, are even more benevolent. Indiana gives its residents a credit of 20 percent on the first $5,000 they invest a year in their state 529. People from Indiana can save up to $1,040 on a $5,000 investment, said Morningstar. Maine gives residents a $500 grant if they open a 529 before their child’s first birthday. Other states such as Illinois offer less
Who feels like a panini?
Sorry, this column isn’t about the panini you eat, rather the one you are — that is if you are a member of the sandwich generation with aging parents or other family members who need assistance and children, often into their mid to late 20s, still partially or completely dependent financially.
In 2002, Statistics Canada estimated that 2.6 million Canadians between the ages of 45 and 64 had children under 25 living with them and approximately 27 per cent of them were also providing some kind of elder care. After the financial collapse and recession the trend has accelerated.
Many of my friends are being sandwiched, as am I. My youngest daughter, nearly 26, is deaf. She’s still at college and may require financial help for some time to come. Until recently, my parents also needed considerable care. My mother died in 2009 and, fortunately, my father is relatively healthy and able to live in a nice retirement home. But now and then, the needs of daughter and father collide with my own busy life and I feel pulled in a dozen directions.
Most of those sandwiched between two generations are baby boomers, the first of whom started collecting their old-age pension in 2011. The advancing wave of this group is bringing with it a whole set of new financial challenges. “My daughter and son have student loans of $42,000 between the two of them. Despite their best efforts they’re semi-employed and living in an expensive city (Toronto),” Helen, 59, emailed recently. Helen is widowed and lives in a small northern Ontario town where jobs are limited. “I have enough to retire in a couple of years but not if I help them, especially if their situations don’t improve pretty fast. But I can’t see turning my back on them.”
The choices being forced on the sandwich generation often leave the caregivers feeling damned if they do or don’t. Should I stop RRSP contributions to help my family? Do I postpone my retirement? Will my employer let me go if I take time off to care for my parents? Should I withdraw from my savings? Do I kick out my kids so I can downsize?
Many of the difficulties facing sandwiched boomers are magnified for entrepreneurs. Even with great employees the buck stops with the boss and stepping away is rarely a satisfactory option.
Winnipeg-based bestselling tax author and president of the Knowledge Bureau, Evelyn Jacks juggled a successful business while being the primary caregiver of two ailing family members and also involved with the care of two others. All four died over an 18-month period. “Caring for the sick and the dying is difficult and exhausting and so sharing the journey with your support network is very important,” she says in retrospect.
“A strategic, consistent and all-inclusive communications plan within the family is very important. When everyone stays in the loop in an orderly way — we used email a lot to cover all the time zones — everyone can seamlessly step in as required. It also means everyone needs to work hard to stay healthy — physically and emotionally — in very stressful times.”
Being sandwiched between the needs of two and sometimes three generations isn’t a new phenomenon. My parents brought “the grannies,” as we called them, from England while I was young. One drank like a fish and gave away money to whomever asked and the other frequently wandered off only to be found settled on someone’s porch happily singing “It’s a Long Way to Tipperary”.
But the extended care-giving facing the boomers is unique because this generation is so large, our parents are living longer and our children carry a far higher student debt load than past generations. According to a 2010 Vanier Institute of the Family Study, university graduates have $18,000 in student loans, not including family debt or lines of credit.
To compound the problem young adults are also earning less relatively. Statistics Canada figures show that the wages of those 20 to 34, across all levels of education levels declined significantly in the 1980s and the trend has continued to present day, though at a slower pace.
These financial and emotional stresses prompted Credit Canada, the country’s leading not-for-profit credit counselling charity, to choose the sandwich generation as the theme for its fifth Credit Education Week — part of November’s Financial Literacy Money, which kicks off on Nov. 14.
“Credit Canada has seen more and more people trying to support their children and aging parents who don’t have the income to support themselves while struggling to pay their own bills including their children’s education,” notes executive director Laurie Campbell.
Credit Education Week Canada has published a very useful magazine, The Sandwich Generation. Among some of the do’s and don’ts to avoid being crippled emotionally and financially:
1. Set up a power of attorney
2. Update wills and ensure health-care directives are in place
3. Consolidate the debts and assets of the elderly to make management simpler
4. Don’t bleed your own savings, especially RRSPs, or increase your debt load (except in the direst circumstances) for the young or the old
5. Don’t allow unemployed kids to hang out at home doing nothing.
6. Don’t excuse siblings or other relatives from their responsibility
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