Business news in brief

Wells Fargo called costliest to students

NEW YORK -- Wells Fargo charges students the most in fees on average to have a bank account, according to a government report.

The report from the Consumer Financial Protection Bureau and released late Friday showed that students paid an average of $46.99 in fees to Wells Fargo over 12 months. That's nearly double the fees charged students by TCF National Bank and U.S. Bank, which ranked second and third.

The bureau report focused on what are known as college-sponsored accounts, for which a bank often pays money to a college or university to market their accounts to students when they arrive on campus. College-sponsored accounts have been controversial for some time, since a college's endorsement of a product tends to carry weight with students and parents when they are searching for a good or service.

In fact, the bureau report found that banks that paid marketing fees to colleges and universities were often the ones charging students higher fees. Banks that paid colleges to promote their products had an average fee of $36.52 while banks that didn't do paid promotions had an average fee of $11.93. The fees calculated by the bureau included both account maintenance fees and overdraft fees.

In total, the bureau examined 573 colleges and universities over the 2016-2017 academic year and found that students collectively paid $27.6 million in fees to banks.

-- The Associated Press

FedEx shares tumble after exec's exit

FedEx Corp. tumbled to the lowest in 18 months after Bank of America Corp. said a surprise executive departure from the courier's air-freight division signaled a key financial goal is at risk.

Bank of America analyst Ken Hoexter cut his recommendation on FedEx to neutral and lowered his price target 28 percent after the resignation of David Cunningham as head of FedEx's Express unit. Hoexter also cited a "decelerating global economy" as he estimated that the division would miss its target of increasing profit by more than $1 billion by 2020.

Cunningham's departure after a tenure of just two years "could signal a reduction or delay in its profit improvement target," Hoexter said Monday in a note to clients. "This is a rapid and, in our view, out-of-character change for a company that is still operated by its founder, chairman and CEO Fred Smith."

The analysis spurred concerns among investors about the outlook for FedEx, which is an economic bellwether as the world's largest cargo airline. Citigroup Inc. analyst Christian Wetherbee said last week that Cunningham's exit, which was announced Dec. 7, increased the likelihood of a disappointing forecast from FedEx when the company reports quarterly results on Dec. 18 amid the peak holiday shipping season.

FedEx declined to comment on the personnel change or the analysts' remarks.

The shares closed at 4.2 percent to $192.93 in New York after sliding to as little as $188.51 for the lowest intraday price since May 2017.

-- Bloomberg News

Some GoPro production to leave China

GoPro Inc. will move most of its U.S.-bound camera production out of China by next summer, becoming one of the first brand-name electronics makers to take such action to minimize the impact of the escalating trade war.

"Today's geopolitical business environment requires agility," GoPro Chief Financial Officer Brian McGee said in a statement Monday. "We're proactively addressing tariff concerns." The company is still deciding where to put the manufacturing operation.

Cameras headed for other countries will continue to be made in China, GoPro said.

The trade war between the world's two biggest economies has made more than $250 billion of goods from China more expensive for Americans, from component pieces to electric scooters, and U.S. President Donald Trump has threatened to place tariffs on all goods coming from China. Trump and China's President Xi Jinping agreed on Dec. 1 to hold off on increasing tariffs for 90 days. But the arrest of Huawei Technologies Co. CFO Meng Wanzhou at the behest of U.S. authorities has stoked renewed fears of a further escalation.

GoPro shares closed down 1 percent, to $4.92 in New York. They have declined 35 percent so far this year.

-- Bloomberg News

Goodyear halts Venezuela operations

VALENCIA, Venezuela -- Goodyear Tire & Rubber Co. is halting production in Venezuela, making it the latest international corporation to abandon the South American nation in economic crisis, officials said Monday.

Spokesman Eduardo Arguelles told The Associated Press that Goodyear-Venezuela had made the "difficult decision" to no longer produce tires in the country, which has seen a severe economic contraction.

"Our goal had been to maintain its operations, but economic conditions and U.S. sanctions have made this impossible," Arguelles said.

The company had endured tens of millions in losses in recent years as the Venezuelan bolivar plummeted in value against the U.S. dollar. The company based in Akron, Ohio, moved to deconsolidate its Venezuelan subsidiary in the fourth quarter of 2015, but continued to operate with a staff of about 1,100 from the depressed industrial city of Valencia.

Workers who arrived at the plant Monday were stunned to find it was no longer in operation.

"They closed doors without saying anything," said Luis Aponte, a union worker who said government workers were on site assessing the situation.

-- The Associated Press

Siris, Elliot bid $4.4B for Travelport sale

Paul Singer's Elliott Management Corp. and Siris Capital agreed to buy Travelport Worldwide Ltd. in a deal valuing the company at $4.4 billion, nine months after Singer bought a stake and urged management to consider a sale.

Travelport investors would get $15.75 a share in cash, the Langley, U.K.-based company said Monday. That's 2.3 percent more than the stock's Friday closing price in the U.S. Elliott is making the bid through private-equity arm Evergreen Coast Capital. The price includes the assumption of about $2 billion of debt.

While the company's board has approved the transaction unanimously, Travelport has the right to actively seek an alternative buyer through Jan. 23.

Travelport is one of three large global distribution systems for the travel industry, alongside Sabre Corp. and Amadeus IT Group SA. It provides distribution, technology and payments solutions for travel and tourism companies.

-- Bloomberg News

Business on 12/11/2018

Upcoming Events