The daily business briefing: January 19, 2017
Netflix adds more customers than expected, Theresa May vows U.K. will remain a trade leader after Brexit, and more
Netflix smashes expectations for new customers
Netflix reported Wednesday that it had added a record 7.05 million new customers in the fourth quarter, beating analysts' expectations. The company signed up 5.12 million new customers abroad, smashing predictions of 3.78 million, and 1.93 million in the U.S., beating expectations of 1.38 million. The streaming video service's stock jumped to a record high on the news.
Theresa May says U.K. will remain 'world leader' after Brexit
British Prime Minister Theresa May said Thursday at the World Economic Forum in Davos, Switzerland, that the U.K. would continue to be a "world leader" on trade after its exit from the European Union. May's speech to business leaders and politicians came after EU leaders said a post-Brexit trade deal would be "difficult" for Britain and the EU. May also warned that leaders need to address "division and despair" being caused as inequality increases under globalization. "Talk of greater globalization can make people fearful," she said. "For many it means their jobs outsourced and their wages undercut. It means having to sit back as they watch their communities change around them."
American launches no-frills fares to compete with budget airlines
American Airlines announced Wednesday that it was introducing no-frills fares for travelers willing to go without advanced seat assignments and access to overhead bins for their carry-on luggage. The move is aimed at competing with budget carriers, such as Spirit and Frontier airlines. These low-cost carriers often offer the lowest ticket prices but charge passengers for amenities, such as carry-ons, that other airlines provide as part of a standard economy ticket price. American is offering the fares in 10 markets in February. United also is launching no-frills fares this quarter.
Feds sue largest student loan servicer
The federal Consumer Financial Protection Bureau on Wednesday sued student loan servicer Navient Corp., accusing the company of cheating borrowers. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs," CFPB Director Richard Cordray said in a statement. "Too many borrowers paid more for their loans because Navient illegally cheated them and today's action seeks to hold them accountable." Navient, formerly part of Sallie Mae, is the nation's largest servicer of student debt, handling private and federal loans worth more than $300 billion for more than 12 million borrowers. Navient denied the allegations and said they were politically motivated.
Trump pays his $25 million Trump University settlement
Donald Trump quietly paid out $25 million this week to settle litigation against his now defunct Trump University, meeting a Wednesday deadline and putting the matter behind him ahead of his Friday inauguration. The money will go toward settling three lawsuits that said Trump University misled students into thinking they would learn useful real estate investment expertise from instructors handpicked by Trump. The settlement was reached on Nov. 18. The money went into an escrow account, and it will be distributed after a final approval hearing set for March 30.