EWS AT A GLANCE
Beer bubbles up, despite downturn
The Beer Institute, a U.S. brewers’ lobbyist group, forecasts industry sales growth of a little more than 1 percent this year, despite the slowing economy. While that “doesn’t sound very dramatic for some people, it’s very good for us,” says Beer Institute president Jeffrey Becker. Year-to-date sales of more expensive foreign imports are down 3 percent, however. The group is seeking a reduction in the 33-cent-per-six pack federal excise tax, which it calls a regressive tax. (Reuters) In other beverage news, Illinois Attorney General Lisa Madigan is demanding that San Francisco-based Doll God LLC stop marketing and selling its Meth Coffee, a drug-themed brand of coffee beans, in her state. (Chicago Sun-Times)
Deutsche Bank profit slips on growing writedowns
Deutsche Bank, Germany’s largest bank, reported a quarterly profit of $1 billion, down 64 percent from $4.2 billion a year ago due to $3.6 billion in new writedowns. (Reuters) The bank’s securities unit posted its second straight quarterly loss. Still, the earnings beat analysts’ expectations. “In the current market, it isn’t a given that a bank remains profitable,” said Juergen Meyer at SEB Asset Management. Deutsche Bank has now written down more than $11 billion in the global financial crisis; globally, financial institutions have lost or marked down $476 billion. (Bloomberg) Of the 62 European banks in the Dow Jones Stoxx banking index, the shares of only one, Switzerland’s Valiant, are up for the past 12 months. (MarketWatch)
Shell reaps benefits of high oil
Royal Dutch Shell, Europe’s largest oil company, reported a 33 percent jump in quarterly profit, to $11.56 billion, as record high oil prices more than offset falling production. Shell said it will invest up to $36 billion this year in finding ways to make up for oil production lost to recent attacks in Nigeria and last year’s forced sale of its share in a Russian project to state-run giant Gazprom. (The New York Times) “These are a good set of numbers,” said analyst Jason Kenney at ING Wholesale Banking. Spain’s Repsol and Italy’s ENI also reported strong earnings today, with Repsol posting an 11 percent rise in profit, to $1.41 billion, and ENI reporting a 52 percent jump, to $5.36 billion. (Bloomberg)
The underreported part-timers
The U.S. unemployment rate is 5.5 percent, not bad for an economic downturn, but that number doesn’t include the 3.7 million Americans whose jobs have been trimmed to part time. That is the largest number of forced part-timers since the government started counting, more than 50 years ago. In all, there are 5.7 million involuntary part-time workers, or 3.7 percent of the U.S. workforce. The upside to cutting hours, ever more popular with employers, is that it reduces cutting jobs. The downside? Smaller paychecks, just as costs are rising. Also, the upside may not last. “The change in working hours is the canary in the coal mine,” said Susan J. Lambert at the University of Chicago. (The New York Times)
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