Delta to cut capacity by as much as 4%

  • Updated: January 22, 2013 - 7:04 PM
Delta to cut capacity by as much as 4%

Delta Air Lines plans to cut seating capacity by as much as 4 percent as it works to curb labor and fuel costs that crimped fourth-quarter earnings. International capacity will shrink by 3 percent to 5 percent through March, while domestic capacity will fall by 1 percent to 3 percent, Delta said. The moves help the second-largest carrier maintain pricing power as a sluggish economy limits its ability to raise fares after the holiday travel spike. Profit in the fourth quarter, excluding some items, was $238 million, or 28 cents a share, the Atlanta-based carrier said in the statement. Higher wages and salaries and an 18 percent jump in fuel damped earnings for the world's second-largest carrier. Net income fell 98 percent to $7 million, or 1 cent a share, from $425 million, or 50 cents, a year earlier. Revenue increased 2.4 percent to $8.6 billion.

Per-click payment rate bedevils Google

When Google announced fourth-quarter earnings Tuesday, investors were watching for signals of its progress in the evolution to a mobile world. They received a disappointing sign: The price advertisers paid Google each time someone clicked on an ad decreased 6 percent from a year ago, falling for the fifth consecutive quarter, year over year. It has been declining in large part because mobile ads cost advertisers less, and more people are using Google on mobile devices and fewer on desktop computers. The company reported fourth-quarter revenue of $14.42 billion, an increase of 36 percent over a year ago. Net revenue, which excludes payments to the company's advertising partners, was $11.34 billion, up from $8.13 billion. Net income rose 13 percent to $10.65 a share. Shares of Google fell slightly during the day but were up 4 percent in after-hours trading.

Japan's central bank battles deflation

Japan's central bank on Tuesday set a 2 percent inflation target and made an "open-ended" pledge to buy a potentially unlimited amount of government bonds to bolster its economy. The Bank of Japan's new inflation target -- double its previous goal -- is aimed at intensifying its long battle against deflation and stagnation. Japan, the world's third-largest economy, saw negative growth in the third quarter of last year and is most likely to report further contraction for the fourth quarter. The country has been in mild deflation for months, with its consumer price index, excluding food and energy, posting monthly changes of zero to negative 0.2 percent since early last year. The Bank of Japan's pledge to buy assets, known as quantitative easing, will involve total monthly purchases of 13 trillion yen, or about $147 billion.

Corn syrup consumption declines

Consumption of high-fructose corn syrup, used in products from soft drinks to ketchup and linked to obesity, is falling in the United States as health-conscious consumers drink less soda. The amount of corn devoted to the sweetener this year will fall to its lowest level since 1997, according to the U.S. Department of Agriculture. Corn costs have tripled since 2004. Americans consumed an average of 131 calories of the corn sweetener each day in 2011, down 16 percent since 2007, according to the most recent USDA data. Consumption of sugar, also blamed for weight gain, rose 8.8 percent to 185 calories daily, the data show. Even with the increase in sugar use, total U.S. sweetener production remains down 14 percent from a 1999 peak, according to the USDA. Soft drinks are the major driver of high-fructose corn syrup use. Consumption, which peaked in 1998 at 54 gallons a person, plummeted 21 percent by 2011, according to Beverage Digest.

Verizon loses $4.22 billion in 4th quarter

Verizon Communications on Tuesday reported a fourth-quarter loss of $4.22 billion, or $1.48 a share, more than double the loss a year ago. Damages from superstorm Sandy cost 7 cents a share, and pension charges reduced earnings by $1.55 a share, Verizon said. Revenue climbed to $30.05 billion, a 5.7 percent increase from a year ago. Analysts had expected adjusted earnings of 50 cents a share, compared with actual adjusted earnings of 45 cents a share, and revenue of $29.75 billion, according to Thomson Reuters. The company said its wireless business was growing, however. Over the quarter, it sold 9.8 million smartphones, compared with 7.7 million in the same quarter a year ago, and added 2.1 million contract subscribers, the most valuable type of customer, versus 1.2 million a year ago.

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