The daily business briefing: April 14, 2016
Bank of America profit falls as trading slumps, Delta's stock climbs as earnings beat expectations, and more
1. Bank of America profit falls as trading slows
Bank of America on Thursday reported a 13-percent drop in first-quarter earnings, largely due to a trading slowdown. Its stock fell by about one percent in pre-market trading. The No. 2 U.S. bank by assets reported earnings of 21 cents per share, down from 25 cents a year earlier but a penny above Wall Street's expectations. Bank of America was the second big bank to report earnings — JPMorgan Chase reported a 7 percent profit drop that also was better than expected.
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2. Delta stock rises as it narrowly beats expectations
Delta Airlines reported first-quarter profits that beat analysts' forecasts, sending its stock rising by 1.9 percent in pre-market trading on Thursday. Earnings increased to $1.21 a share from 90 cents a share in the same period a year ago. Adjusted earnings were $1.32 per share, beating the FactSet consensus of $1.30. Delta's passenger revenue has been rising domestically but falling internationally. Its stock had fallen 5.2 percent this year through Wednesday's close.
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3. Energy giant Peabody files for bankruptcy
Peabody Energy Corp., the world's largest private-sector coal producer, filed for U.S. bankruptcy protection on Wednesday. The company was not able to come up with the money to service $10 billion in debt due to a steep decline in coal prices. Peabody's bankruptcy is one of the biggest since falling energy and metal prices began squeezing the commodity sector in mid-2014. The St. Louis-based company had planned to sell mines in New Mexico and Colorado but the deals fell through.
4. Regulators flunk five big banks' living wills
U.S. regulators ordered five of the eight banks deemed "too big to fail" to revise their plans for a bankruptcy by Oct. 1. A day earlier analysts had said only four of the banks were expected to get failing marks for their so-called living wills. The banks included JPMorgan Chase, Wells Fargo, Bank of America, State Street Corp, and Bank of New York Mellon. The Federal Reserve and the Federal Deposit Insurance Corporation could impose sanctions, such as greater capital requirements, on banks that don't meet the deadline.
5. BlackRock says falling fees hurt profit
BlackRock, the world's largest money manager, reported Thursday that its quarterly profit fell partly due to a market-driven reduction of fees. The New York-based firm confirmed that it was streamlining to "simplify our organization" and save money by increasing efficiency. The Wall Street Journal reported in March that BlackRock was cutting 400 jobs, or about three percent of its staff.
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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