BUSINESS BRIEFS
Suffering banks show credit crisis is far from over
Associated Press
NEW YORK — There are new signs that the worst of the global credit crisis is yet to come, and that banks and brokerages caught up in the market turmoil may lose $1 trillion by the time it has passed.
Major U.S. investment banks this week announced yet another painful quarter amid the implosion of mortgage-backed securities and risky credit investments. Regional banks have scrambled to secure fresh capital to stay in business, and by yesterday there was new talk that embattled investment bank Lehman Brothers might be forced into a sale.
With each passing quarter, Wall Street's top bankers have indicated that the worst of the market turmoil was over — only to face more pain months later.
The uncertainty has caused already battered investors to lose confidence in financial companies, and expectations have increased that more layoffs, asset sales and capital raising will be needed in the weeks ahead.
FEDEX POSTS LOSS, GRIM '09 OUTLOOK
MEMPHIS, Tenn. — FedEx Corp. reported a fourth-quarter loss yesterday and offered a gloomy outlook as it wrestles with a slumping U.S. economy beset by soaring fuel costs and falling prices for homes.
FedEx, considered a bellwether for the broader U.S. economy, predicted 2009 earnings of $4.75 to $5.25 per share, well below Wall Street expectations of $5.92 a share.
The international package delivery company expects to earn 80 cents to $1 per share in the first-quarter of the current fiscal year. Analysts forecast $1.27 per share.
FedEx posted a loss for the just-ended fourth period of 78 cents a share, or $241 million, compared with a profit of $610 million, or $1.96 per share, for the same quarter last year.
Excluding one-time charges, FedEx earned $1.45 per share for the fourth quarter. Revenue rose 8 percent to $9.87 billion from $9.15 billion a year earlier.
AIRLINES CONTINUE JOB, CAPACITY CUTS
DALLAS — Airlines executives are continuing to cut jobs and consider new fees on passengers as they battle high fuel prices that could result in record losses for the nation's carriers.
Executives from United Airlines gave more details on plans to shed up to 1,600 salaried jobs at an investors' conference in New York yesterday.
Chief Financial Officer Jake Brace said United will also cut union jobs — pilots, flight attendants and mechanics — once a reduced flying schedule for fall and winter is completed.
Delta Air Lines Inc. said it would cut domestic capacity another 3 percent later this year, on top of a previously announced 10 percent reduction.
The carrier said this year's fuel costs would rise $4 billion from 2007.
Continental Airlines Inc., which boasts about still serving meals in coach, is studying whether it will join the chorus of carriers charging to check a first bag, according to its CEO.
PORTS STILL IRONING OUT NEW CONTRACT
LOS ANGELES — West Coast port workers and shippers have reached a tentative agreement on healthcare benefits, but both sides continue to negotiate wage, workplace safety and other issues in their ongoing contract talks.
Neither the Pacific Maritime Association or the International Longshore and Warehouse Union provided specific details on the proposed healthcare package reached on Friday.
Negotiations began in March. The union and shippers are trying to reach a new deal before the current contract expires July 1. The three-year pact would cover some 26,000 workers working at 29 ports in California, Oregon and Washington.
"There are important issues that remain outstanding and we're working hard to get them resolved as soon as possible," ILWU spokesman Craig Merrilees said.
Longshore workers handle everything from operating cranes at port marine terminals to clerical work such as coordinating truck cargo deliveries.
