Flexjet aims to expand to Europe in '16
Flexjet, the biggest challenger to Warren Buffett's NetJets luxury aviation unit, plans to expand to Europe next year, possibly through an acquisition.
After increasing overseas flights by adding longer-range planes such as the Gulfstream G450, the Richardson, Texas-based company now seeks a European base to provide more global service, Chief Executive Officer Michael Silvestro said.
"It's a priority, so I think in 2016 you'll see us make a move," Silvestro said Thursday in a telephone interview. "We feel like we've got great opportunities in the international market."
Europe's economy is beginning to rebound after climbing out of a recession in 2012, potentially rekindling demand for private flying. Flexjet competes with NetJets, a unit of Buffett's Berkshire Hathaway Inc., in selling ownership shares in aircraft to wealthy individuals and corporate clients in exchange for flight time.
-- Bloomberg News
Nike stock rises as profit tops forecasts
Nike Inc. stock rose the most in a year on Friday after the world's largest maker of athletic gear beat first-quarter earnings estimates, helped by higher prices and a lower tax rate.
Profit rose to $1.34 a share, excluding some items, the Beaverton, Ore.-based company said Thursday in a statement. Analysts estimated $1.19 on average, according to data compiled by Bloomberg.
Chief Executive Officer Mark Parker, who was tapped this year to succeed Nike co-founder Phil Knight as chairman, has expanded the shoemaker's offerings of women's apparel and bolstered its online operations. The company also increased its gross profit margin last quarter, with help from higher selling prices, and benefited from broad-based revenue growth. Nike's effective tax rate was 18.4 percent, compared with 21.7 percent a year earlier.
"They've had a really nice run," said Rob Plaza, an analyst at Key Private Bank. Investments the company has made in cutting production and distribution costs are paying off, and expanding the gross margin has been "a big driver of the stock."
The shares rose $10.21, or 8.9 percent, to close Friday at an even $125. Nike had already climbed 19 percent this year through Thursday's close.
-- Bloomberg News
Split seen at Puerto Rico creditor group
A group of hedge funds holding $5.2 billion of Puerto Rico debt disbanded as creditors prepare for talks to restructure the island's obligations in smaller alliances, said two people with knowledge of the matter.
The group, which counted more than three dozen firms as members, had begun losing support as some broke off to form more nimble coalitions, said the people, who asked not to be named because the information isn't public. The breakaways from the group started after Gov. Alejandro Garcia Padilla said in June that the government's debts were "not payable."
The creditors had joined to structure and fund a debt package that they thought would help the U.S. territory bridge its budget gap before longer-term measures alleviated the deficit. The hedge funds, sometimes referred to as the "ad hoc group," had been negotiating since at least February with Puerto Rico officials over the sale of $2.9 billion of new petroleum-tax bonds, people with knowledge of the matter said at the time.
Stephanie Dodge, a spokesman for the group at Hamilton Place Strategies, declined to comment.
-- Bloomberg News
Tobacco firm raps heat-not-burn device
The tobacco industry's united front is being tested as Imperial Tobacco Group PLC takes a swipe at Philip Morris International Inc.'s new cigarette alternative.
The Marlboro maker claims its iQOS product -- a black pen-shaped device that heats capsules containing tobacco -- is safer than smoking because combustion isn't involved. Imperial researchers tested the so-called heat-not-burn gadget and found evidence that some of the processes within a burning cigarette are still occurring.
"There's a lot of black crud in the iQOS device after using it," said Steve Stotesbury, the U.K. company's head of scientific regulatory affairs, speaking in an interview at an industry conference in Bologna last week. "It smells like an ashtray."
The war of words is unusual, as tobacco companies normally stand together to ward off attacks from anti-smoking activists and public-health authorities who seek to place more restrictions on smoking. The dispute also comes as the world's largest cigarette-makers pursue different paths to develop healthier alternatives to smoking as sales of conventional cigarettes dwindle. Imperial is the only big industry player to turn its back on heat-not-burn technology, focusing on nicotine vapor instead.
-- Bloomberg News
Reduced profit outlook hits Pier 1 stock
Pier 1 Imports Inc. stock tumbled as much as 21 percent Friday after the home-furnishings chain lowered its profit forecast, blaming a buildup of inventory and heavy reliance on discounts.
The company now expects earnings of 56 cents to 64 cents a share this year, down from a previous forecast of 87 cents, according to a statement on Thursday. Pier 1's second-quarter profit and sales also missed analysts' estimates.
Chief Executive Officer Alex Smith is working to eliminate a glut of products. He's working to improve an outdated supply chain and seeking ways to cut costs. Comparable-store sales grew 2.5 percent last quarter, missing the average estimate for a 4.5 percent gain.
"We are disappointed with our second-quarter sales and earnings results," he said in the statement. "Operating with elevated inventories has been a challenge."
The stock dropped to as low as $6.84 in New York on Friday, the biggest intraday decline since February. The stock fell $1.06, or 12.2 percent, to close at $7.61.
-- Bloomberg News
Business on 09/26/2015