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Cullen/Frost profit rises in line with forecasts


Cullen/Frost Bankers Inc. CFR, -0.33% on Wednesday said its profit rose 16% in the most recent period, as net interest income and average deposits rose.

The San Antonio financial holding company also unveiled changes in its executive ranks, as Phil Green moves on from his nearly 20-year tenure as financial chief to president. Mr. Green will replace Dave Beck, who will retire this year after 39 years with the company, Cullen/Frost said.

Jerry Salinas, the company’s treasurer for 18 years, will become the new chief financial officer.

Meanwhile, Cullen/Frost boasted that the Texas economy outpaced the growth in the broader U.S. last year, resulting in strong loan growth and record earnings.

“As the economy recovers, we are reaping the benefit of our consistent and focused efforts to grow the company through the downturn,” Dick Evans, the company’s CEO, said in a news release.

Cullen/Frost posted fourth-quarter earnings of $72.7 million, or $1.11 a share, up from $62.6 million, or 99 cents a share, a year earlier.

Analysts had projected $1.11 a share in earnings.

Net interest income on a taxable-equivalent basis rose 15% to $212.6 million in the period. Average loans rose 17% to $10.9 billion, while average deposits surged 18% to $23.7 billion.

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SOURCE: http://www.marketwatch.com/story/cullenfrost-profit-rises-in-line-with-forecasts-2015-01-28

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Progressive profit jumps on higher net premiums


Progressive Corp. said its fourth-quarter earnings rose 23% as the home and auto insurer benefited from higher net premiums and paid out a smaller portion of those premiums to cover claims.

The company has largely posted solid results lately, with higher net premiums written and more aggressive advertising spending helping the bottom line.

Progressive is the fourth-largest auto insurer in the country and offers coverage for cars, trucks, boats and recreational vehicles. Last month, Progressive said it planned boost its stake in American Strategic Insurance and eventually acquire the entire company, as part of the auto insurer’s efforts to expand its home insurance offerings.

Overall, Progressive reported a profit of $370.2 million, or 63 cents a share, up from $299.8 million, or 50 cents a share, a year earlier.

The latest period included net realized investment gains of $26.2 million, while the year-earlier period included net realized investment gains of $77 million.

Net premiums written reached $4.61 billion, while net premiums were $4.94 billion, an increase of 14% for each. Excluding an additional week in the latest period, the growth on both measures was 6%.

Analysts polled by Thomson Reuters expected per-share profit of 45 cents and net premiums written of $4.47 billion.

Progressive’s combined ratio, or the portion of premiums used to cover claims, fell to 90.9% from 93.8%.

For December, Progressive reported that the number of policies in force rose 2% for both its auto and personal lines from the year-earlier period.

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SOURCE: http://www.marketwatch.com/story/progressive-profit-jumps-on-higher-net-premiums-2015-01-28

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Rio Tinto reports record Australia iron-ore volume


SYDNEY– Rio Tinto PLC dug up record volumes of iron ore in Australia last year, adding to a ballooning global glut that has driven down prices of the commodity to their lowest level since 2009.

On Tuesday, Rio Tinto reported an 11% rise in full-year production of iron ore to 295.4 million metric tons, slightly ahead of its target of 295 million tons. The Anglo-Australian mining company also produced more copper despite the softening price of the industrial metal.

Rio Tinto has been expanding its operations in the Pilbara iron-ore mining hub of northwest Australia in a bet that China will need more of the commodity to make steel for its skyscrapers and for industries such as auto manufacturing, even as its economy slows. China buys three in every five tons of iron ore traded by sea, with Australia its biggest supplier.

But the strategy of swamping the market with more iron ore it isn’t without its critics, including Glencore PLC, which approached Rio Tinto’s board about a takeover in July. Several major banks, including Citigroup and UBS, recently scaled back their forecasts for iron-ore prices. Citi now estimates a full-year average of just US$58 a ton this year.

Executives at Rio Tinto, which runs the world’s No. 2 iron-ore business by volume, behind Brazil’s Vale SA, shrug off the impact of rising supplies. They say the scale of Rio Tinto’s business and ore quality allows the company to produce material profitably and at a significantly lower cost than competitors.

It now expects to dig up 330 million tons from the Australian operations it controls in 2015, the company said Tuesday.

Rio Tinto aims to increase production of iron-ore in the Pilbara to at least 350 million tons by 2017 and has spent billions of dollars to build more berths at its Cape Lambert port and expand rail lines in the Pilbara. If management applied the brakes, one of Rio Tinto’s competitors would simply take the opportunity to grab a bigger market share, Andrew Harding, the company’s iron-ore chief, has said previously.

Analysts expect profits from iron-ore mining to provide Rio Tinto with the firepower for a multibillion-dollar capital return to shareholders in February, when it announces its full-year earnings.

Still, iron ore was one of the worst-performing commodities of 2014, and few analysts expect a recovery anytime soon. Prices tumbled to around US$70 a ton from more than US$130 at the start of last year, triggered largely by the surge in supply from Australian mines. Rio Tinto’s Australian competitors, BHP Billiton Ltd. and Fortescue Metals Group Ltd., also raised production sharply.

BHP Billiton, the world’s third-largest iron-ore miner, is due to report its production figures for the six months through December in a regulatory filing Wednesday.

Analysts are also raising concerns about the ongoing strength of Chinese demand. Although China imported record volumes of iron ore last year, it also increased exports of finished steel products. That has led some analysts to question whether China’s own demand for steel has softened.

Rio Tinto recorded mixed output for its other divisions. Mined copper output rose 4% in 2014 to 603,100 tons.

Semisoft and thermal coal production, meanwhile, fell to 25.1 million tons, down 6%.

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SOURCE: http://www.marketwatch.com/story/rio-tinto-reports-record-australia-iron-ore-volume-2015-01-19

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J.C. Penney is resurrecting its catalog


A half-decade after killing off its hefty catalog to focus on the Web, J.C. Penney Co. is bringing it back, armed with data showing that many of its online sales came from shoppers inspired by what they saw in print.

The new, 120-page book will feature items from Penney’s home department and will be sent to select customers in March, the first time the struggling department store chain has sent out a catalog since 2010.

The move highlights an oddity of the digital age. While shoppers are increasingly buying everything from shoes to sofas to cars over the Internet, they still like browsing through the decidedly low-tech artifacts of page and ink.

Catalog mailings are down considerably from 2007, when they peaked at 19.6 billion, according to the Direct Marketing Association. But in a sign the decline may have bottomed out, mailings grew in 2013 for the first time in six years to 11.9 billion.

The call to bring back the catalog was made by Chief Executive Myron “Mike” Ullman, who is trying to return the retailer to health after a disastrous overhaul under former Apple Inc. executive Ron Johnson.

It also was Mr. Ullman who decided during his first turn as Penney’s chief to stop publishing it. In an interview, he said he thought at the time that catalog shoppers would migrate online. But the company eventually learned that a lot of what they thought were online sales were actually catalog shoppers using the website to place their orders.

“We lost a lot of customers,” Mr. Ullman said.

Penney launched its catalog in 1963 and enthusiastically embraced the medium. The company published three “Big Books” each year, some topping 1,000 pages, and supplemented them with dozens of smaller catalogs dedicated to niche areas such as school uniforms, kitchen products and window coverings. After Sears stopped publishing its main catalog in 1993, Penney was left as one of the largest catalog retailers in the country.

The Internet then took its toll, as did the recession. Catalogs can be expensive to produce and distribute, making them a target for cost cutters. They can also be annoying. Some 44% of consumers say they want to get fewer of them in the mail, according to retail consultancy Kurt Salmon. Penney stopped mailing the Big Book in 2009 and phased out distribution of 70 smaller catalogs a year later.

Now, retailers are rediscovering the books as a branding tool that can drive sales. According to Kurt Salmon, 31% of shoppers have a catalog with them when they make an online purchase.

J. Crew Group Inc., Williams-Sonoma Inc., Bloomingdale’s, and Saks Fifth Avenue are ardent mailers. Even retailers grounded in the digital world are taking part. Bonobos, a men’s retailer with roots in the Web, mailed its first catalog in March 2013.

“At the time, everyone said digital was the future and catalogs were old time,” said Craig Elbert, Bonobos’s vice president of marketing. “We found that the catalog allowed us to tell a fuller narrative about the brand and our products in a way that we were struggling to do online.”

The catalog delivered another benefit: It ferreted out its best customers.

“Our catalog customers tend to spend more,” Mr. Elbert said. “And our catalog customers who make purchases at our brick-and-mortar stores are our best customers overall.”

Bonobos plans to mail 10 catalogs in 2015, up from eight last year.

The catalog format has changed from the old-style yearbook of products into lifestyle magazines that allow retailers to showcase their wares and build their brands. A case in point: The books that Restoration Hardware Holdings Inc. mailed to customers this spring featuring glossy interiors and profiles of designers and craftsman.

The mailing was also a reminder that retailers can go too far. Restoration Hardware’s direct-mail onslaught included 13 different catalogs–as thick as a phone book in total and spanning a cumulative 3,300 pages–overwhelming shoppers’ mailboxes and spawning a Facebook page devoted to stopping the mailings.

Restoration Hardware declined to comment.

Penney hasn’t yet reported fourth-quarter results, but earlier this month it said a better-than-expected holiday meant sales growth should come in at the high end of a forecast range of 2% to 4% from a year ago. The company continues to claw its way back from the devastating sales decline that followed Mr. Johnson’s experiments in marketing and merchandising. Sales in Penny’s last full year, ended Feb.1, 2014, totaled $11.86 billion. By comparison, they totaled $17.76 billion for the fiscal year ended Jan. 29, 2011.

Home goods have historically been among the top selling items in Penney’s catalogs–one reason Penney is dedicating its new catalog to that area. Another reason is that the home category accounts for 40% of online sales.

Rather than blanketing America with the new books, Penney plans a targeted mailing of its former home shoppers.

“We are trying to get back those lapsed customers,” Mr. Ullman said.

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SOURCE: http://www.marketwatch.com/story/jc-penney-is-resurrecting-its-catalog-2015-01-19-144852655

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ZTE’s 2014 unaudited net profit rises 94%


HONG KONG–China’s ZTE Corp. (0763.HK), a major supplier of telecommunications network equipment, said its unaudited net profit for 2014 rose 94% on stringent cost controls and continued growth in demand for mobile services.

The Shenzhen-based company, which also sells mobile phones, said Monday in preliminary results that its unaudited net profit for last year was 2.64 billion yuan ($425 million), compared with CNY1.36 billion in the previous year.

The company posted a 7.99% rise in unaudited operating revenue to CNY81.24 billion in 2014, compared with CNY75.23 billion the previous year, as major Chinese telecom operators ramped up their investments to build faster fourth-generation long-term-evolution networks in China.

Strong demand for mobile handsets in overseas markets also contributed to the rise, ZTE said.

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SOURCE: http://www.marketwatch.com/story/ztes-2014-unaudited-net-profit-rises-94-2015-01-19

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Linear Technology profit rises 18%


Linear Technology Corp. said its earnings rose 18% with a boost from stronger revenue in the quarter ended December.

The chip maker’s shares rose 2.9% to $46.50 in recent after-hours trading as earnings beat expectations.

Linear Technology is a maker of analog chips. Such chips are designed for specific tasks, such as monitoring temperature or regulating voltage, and used in a broad range of sectors.

The Milpitas, Calif., company’s bookings declined slightly although they improved as the quarter progressed, Chief Executive Lothar Maier said. Linear Technology’s industrial end-market showed the most strength, he added.

Mr. Maier said “As is typical, we expect our major end-markets to improve during the second half of our fiscal year,” which ends in June.

For the period ended Dec. 28, Linear Technology reported a profit of $123.6 million, or 51 cents a share, up from $104.8 million, or 44 cents a share, a year earlier. Analysts polled by Thomson Reuters expected per-share profit of 49 cents.

Revenue increased 5.4% to $352.6 million. The company had expected growth of 4% to 8%.

Gross margin edged up to 75.4% % from 75.3%.

For the quarter ending in March, Linear Technology forecast revenue growth of 4% to 7% over the latest quarter, implying a range between $366.7 million and $377.3 million. Analysts polled by Thomson Reuters expected revenue of $364 million.

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SOURCE: http://www.marketwatch.com/story/linear-technology-profit-rises-18-2015-01-13-174855144

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Forest City plans to convert to REIT status


Forest City Enterprises Inc., the real estate developer whose holdings include Brooklyn’s Barclays Center arena, plans to become a real-estate investment trust.

REIT status allow companies to cut their tax rates and has become a popular avenue even for less traditional real-estate companies. Cell-tower, prison and billboard operators, among others, have sought REIT status in recent years.

REITs pay little or no corporate income tax on their earnings, as long as they earn the bulk of their income from rent paid on real property and 90% of those earnings are distributed to investors as dividends.

Forest City owns, develops and manages commercial and residential real estate, focusing on core markets like New York, San Francisco, Boston and Washington, D.C.

The company said the move is expected to take effect for the taxable year beginning Jan. 1, 2016.

On Nov. 3, Forest City said its third-quarter operating funds from operations rose 44% to $61.6 million, reflecting factors include a strong performance from office properties and lower interest expenses.

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SOURCE: http://www.marketwatch.com/story/forest-city-plans-to-convert-to-reit-status-2015-01-13-17485235

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GameStop sees strong holiday demand for videogames


GameStop Corp. said Tuesday that consumer demand for videogames was strong during the holiday period and it expects that trend to continue into the first quarter.

The bullish comments sent shares up about 10% after hours.

The company reported, however, that its same-store sales fell 3.1% for the nine weeks ended Jan. 3, as total sales fell 6.7% to $2.94 billion.

November comparisons were hurt by the 2013 launches of the PS4 and Xbox One consoles, with same-store sales posting a 12% decline in November and a 4.4% increase in December.

The company, which backed its earnings forecast, said figures were hurt by the strong the U.S. dollar, noting that the total sales decline was 4% on a constant-currency basis.

The retailer in November offered a downbeat forecast for the holiday quarter, saying it expected to post $2.08 to $2.24 a share in earnings, along with a range of between a 5% decline and 2% growth for same-store sales. On Tuesday, GameStop said it expects a same-store sales decline of 1% to 2.5%.

The company has benefited from demand for next-generation consoles from Microsoft Corp., Sony Corp. and Nintendo Co. Yet, casual gamers have been drawn more to digital diversions on their phones in recent years, while the biggest game publishers are relying more on distributing content through online channels.

GameStop has sought to address concerns about its brick-and-mortar business model by selling more downloadable content and refurbishing and re-selling mobile devices such as smartphones and tablets.

-Michael Calia contributed to this article.

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SOURCE: http://www.marketwatch.com/story/gamestop-sees-strong-holiday-demand-for-videogames-2015-01-13

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Steve Madden cuts earnings targets again


Steven Madden Ltd. warned its performance over the holiday quarter was slower than expected amid weakness at its newly acquire Dolce Vita brand, challenges caused by production delays on goods from Mexico and added air freight costs tied to the West Coast port slowdown.

Those challenges prompted the footwear and accessories retailer to slash its earnings outlook for 2014, a move that comes after a number of retailers have touted strong holiday results in recent days.

“Fourth quarter was a challenging period,” Chief Executive Edward Rosenfeld said. “Our financial performance was below our expectations.”

The New York-based footwear-and-accessories company had already lowered its guidance for the year in October and saw weakness in its 2013 earnings. Other retailers have pointed labor to and equipment issues at the ports in Los Angeles and Long Beach, which have added extra weeks to delivery times.

For 2014, the company now expects earnings of $1.75 to $1.76 a share, down from its October outlook of $1.81 to $1.86 a share.

Net sales for 2014 were $1.3 billion, up 1.6% compared with 2013 and on par with analyst predictions. Retail comparable-store sales fell 8.1%.

In the fourth quarter, Steve Madden clocked sales of $342.6 million, flat from the same period last year, and slightly above the $339 million that analysts forecast. Sales in the wholesale division fell 0.9% to $270.9 million, though retail net sales grew 3.2% to $71.7 million.

Meanwhile, retail comparable-store sales for the quarter fell 2.3%.

The company operates over 100 retail stores, while its whole distribution includes department and specialty stores, luxury retailers and mass merchants. The company has been focusing on acquisitions lately, buying footwear company Brian Atwood, joining with Juicy Couture, and purchasing the shoe brand Dolce Vita for $60.3 million.

Shares of Steve Madden, inactive premarket, are down about 10% in the last 12 months through Thursday’s close.

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SOURCE: http://www.marketwatch.com/story/steve-madden-cuts-earnings-targets-again-2015-01-09

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Acuity Brands sales, profit jump on LED demand


Acuity Brands Inc. said its earnings rose in the most recent period as demand for LED lights continued to bolster the company’s sales.

The results topped analysts’ expectations.

Strong demand for renovations and retrofits has helped buoy the company’s results. Chief Executive Vernon J. Nagel said in a news release Friday that the company’s performance through December reflected overall positive trends in the industry.

With construction improving in U.S. nonresidential markets, Acuity could also see increased business for new lighting projects and energy-efficient lighting.

Sales of LED products rose more than 70% in the most recent period compared with the year-ago period, and they accounted for about 42% of total sales.

For the quarter ended Nov. 30, the company posted earnings of $51.1 million, or $1.17 a share, up from $44.5 million, or $1.03 a share, in the prior-year period.

Revenue rose 13% to $647.4 million.

Analysts had projected $1.13 a share in earnings for the fiscal first quarter and $639 million in revenue, according to Thomson Reuters.

Acuity said sales volume grew 14% thanks to broad-based growth across the company’s categories. The growth was offset slightly by an unfavorable change in the mix of products sold and product prices, the company said, adding that foreign-exchange pressures had a negative impact to a smaller degree.

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SOURCE: http://www.marketwatch.com/story/acuity-brands-sales-profit-jump-on-led-demand-2015-01-09

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