Editor’s Note: This is the Paw Print Rewind, a daily recap of the top news headlines.
Disney wins Anaheim, CA tax break extension
Disney has won a 30-year renewal of a special tax exemption for visitors to its Anaheim, CA attractions, as part of a planned $1 billion+ expansion of Disneyland.
The five-member City Council voted 3-2 to allow the company to go ahead with the expansion in exchange for a continued waiver of any future admissions tax the city might impose on entertainment venues.
The three hotels Disney operates within its resort, as well as the surrounding hotels that cater to theme park visitors also generate roughly $110 million a year in “Transient occupancy” tax revenues paid to the city of Anaheim, according to the Southern California city.
“Chaining the hands of future residents on their ability to impose taxes will jeopardize the city’s financial health.”
-Tom Tait, Anaheim mayor; to the Orange County Register
Disney plans to break ground by the end of 2017 and finish construction by 2024. The project will support an average of 2,600 local jobs a year and lead to the creation of 2,100 permanent jobs, according to a study commissioned by the Burbank CA-based company.
The project will include the addition of a 5,000-space parking deck.
Technical issues take down NYSE for over three hours
The New York Stock Exchange was forced to suspend trading for several hours.
The exchange reopened at 3:10PM ET after being halted shortly after 11:30AM ET because of an internal technical issue related to a software update.
The glitch caused communication problems between one of its trading units and stock exchange customers as they began connecting to the exchange at 7AM ET, according to the NYSE.
The exchange attempted to fix the problem before the market’s 9:30AM ET open, according to the NYSE.
Trading in NYSE-listed stocks continued uninterrupted on other exchanges.
“It’s not a good day, and I don’t feel good for our customers who are having to deal with the fallout.”
-Thomas Farley, NYSE president to CNBC
“This is one of the rare cases where the fragmented markets we live in actually serve a purpose. If this happened at [the London Stock Exchange], you would just be sitting staring at a blank screen.”
-Dave Nadig, FactSet Research Systems director
Microsoft hangs up Nokia business, cuts 7,800 jobs
Microsoft will cut 7,800 jobs (nearly seven percent of the company’s workforce), and write down about $7.6 billion related to its Nokia phone business.
Most of the job cuts will be in the phone hardware business, with about a third being in Finland, where the Redmond, WA-based company will shut down a product development unit, according to Finnish broadcaster YLE.
“Overall, we believe [Microsoft CEO Satya] Nadella’s proactive approach at cleaning up the Nokia acquisition is a positive ‘tipping of the hand’ around Microsoft’s future focus on software.”
-Daniel Ives, FBR Capital Markets analyst
GM recalls Hummer models after fires burn three people
General Motors is recalling nearly 200,000 older Hummer SUVs, mainly in the United States, to fix problems that led to 42 vehicle fires and three people being burned, according to the company.
These fires are linked to the heating, cooling, and ventilation systems in 2006-2010 Hummer H3s and 2009-2010 Hummer HT3s.
194,993 affected vehicles are in the United States, with most of the remaining 31,386 vehicles in the Canada and Mexico.
Alcoa reports slightly higher quarterly net profit
Alcoa has reported slightly higher net profits in its last quarter.
The metals company reported quarterly net profit of $140 million, up over one percent from the $138 million made a year ago. Profit per share slipped from $0.12 to $0.10, because of an increase in outstanding shares.
Excluding special items, Alcoa reported earnings per share of $0.19.
The special items included a $143 million charge related to restructuring the New York-based company’s business portfolio.
Revenue for the quarter was $5.9 billion, compared with $5.84 billion a year earlier.
Coty buys P&G beauty business for $12.5 billion
Coty is buying Procter & Gamble’s beauty business for $12.5 billion.
The company will become the world’s No. 1 perfume maker ahead of L’Oreal and No. 3 make-up provider behind Estee Lauder. It would run the perfume licenses of Gucci, Hugo Boss, and Dolce & Gabbana, as well as make-up brands Cover Girl and Max Factor, more than doubling its size with over $10 billion in combined sales.
“We are getting critical mass around the globe with access to key markets such as Brazil, Japan, and Mexico.”
-Bart Becht, Coty chairman and CEO
“The deal is extremely transformative for Coty, but investors are uncertain of what this means for the company.”
-Neil Saunders, Conlumino CEO
The deal will save $550 million, including $400 million of non-transferred overhead costs, but take on $2.9 billion of the unit’s debt.
The 43 brands being sold generated $5.9 billion (seven percent of P&G’s total fiscal 2013/14 revenue) in sales, and $1.15 billion of adjusted income.
P&G expects to close the deal in the second half of 2016, according to the company, pending regulatory approval.
P&G shareholders would own 52% of the combined company, while Coty’s existing shareholders will own 48 percent.
JAB Holdings, a Cody shareholder that’s the Luxemburg investment company of the German Reimann family, will own a third of the combined organization.
PepsiCo profit, revenue up thanks to higher pricing
PespiCo has reported revenue growth in its Americas beverages business for the second time in nearly four years, helped by higher demand and pricing increases.
The Purchase, NY-based company also raised its full-year adjusted earnings forecast.
Americas beverages business revenue rose one percent to $5.34 billion in the second quarter, helped by a one percent organic volume sales rise and raising product prices overseas to offset the impact of a strong dollar.
The company will report results for its North America beverages business separately starting in the third quarter, instead of grouping it with Latin America beverage sales.
Latin America beverage sales will be reported together with Latin America food sales starting in the next quarter.
North America Frito-Lay snack sales, the company’s second-largest business grew two percent to $3.45 billion in the quarter, selling snacks like its namesake Fritos corn chips, Lays potato chips, Doritos tortilla chips, and Cheetos.
The company raised its 2015 adjusted earnings per share growth to eight percent on a constant currency basis to eight percent ($5 per share) from seven percent.
Net income attributable to PepsiCo rose to $1.98 billion ($1.33 per share) in the quarter that ended on June 13.
Excluding items, the company earned $1.32 per share.
Net income fell 5.7 percent to $15.92 billion as a stronger dollar continued to weigh on overseas sales.
Ford moving Focus, C-Max production from Michigan
Ford will move production of its Focus and C-Max vehicles from its Detroit-area Michigan Assembly Plant in 2018, according to the Dearborn, MI-based company.
“We actively are pursuing future vehicle alternatives to produce at Michigan Assembly and will discuss this issue with United Auto Workers leadership as part of the upcoming negotiations.”
-Kristina Adamski, Ford spokesperson
“We are extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule.”
-Jimmy Settles, United Auto Workers chief liaison; Ford negotiator
Alex Stamos joins Facebook as chief security officer
Alex Stamos has joined Facebook at its chief security officer, according to Stamos.
Stamos served as Yahoo’s chief information security officer since he joined in 2014.
Ramses Martinez will serve as the Sunnyvale, CA-based company’s interim chief information security officer.
At Facebook, Stamos replaces Joe Sullivan, who left the Menlo Park, CA-based social networking company in April to join Uber.
Molycorp loan request refused
Molycorp failed to get approval from U.S. bankruptcy judge Christopher Sontchi to borrow about $44 million at the Greenwood Village, CO-based rare earth producer’s first bankruptcy hearing.
Sontchi agreed with the objection by an Oaktree Capital Management affiliate that Molycorp could not justify its need for the money.
The company sought the money for its operations and to signal to customers and employees that the company would meet its commitments. Molycorp was seeking the money on an interim basis and planned to return to court to seek approval to borrow up to $225 million.
Oaktree argued that Molycorp was essentially two businesses: the Neo developer and distributor, and the Mountain Pass mining operation in California. They argued that it was burdening the profitable Neo business with unnecessary debt to finance Mountain Pass’ development.
“Neo would be wounded, no question. It would not be a fatal blow in and of itself.”
-Michael Doolan, Molycorp chief financial officer